They didn't even have a risk officer to manage their finances for 8 whole entire months. Maddening stuff.
SVB loss was the reason the technology-focused lender attempted a $2.25 billion stock sale last week using Goldman Sachs as an adviser
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You just made the case for banking regulation, something SVB lobbied against and won in 2018.
When the cat's away, the mice will play. Yup.
Owen Lucas
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Wasn't this obvious to anyone and everyone that rates are going up? I mean it's been in the news for over a year and they didn't think they should shore up their position until last minute? Maybe working some back channels asking for help instead of having a stock selloff that would trigger a public reaction was short sighted?
An attempt for other failing banks to get bailed out too or something more sinister?
There was not a single event or practice that led to the collapse.
Was the asset allocation out of balance? You can make that case now.
Did the C-Level know? Of course they did. They knew far earlier than 1 year; with inflation on the rise, it was only a matter of time before the Fed took action and as you point out, rates have been on the rise making existing assets less valuable in the near term. But that alone did not cause the collapse. SVB was solvent.
Bond funds have been taking it in the shorts for the last few years; prognosticators have been saying underperforming bond funds are positioned for better performance for some time... Still waiting.
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It wasn't a very logical move...
Like any business, some fail, there are over 4,000 banking institutions in the USA why would anyone think they are different from any other business?
Sometimes businesses fail but when a bank does it becomes a media circus. Banks fail every year and more during economic changes. This is all part of bringing inflation down. The weak and mismanaged will fold. Stupid for the Fed to step in and bailout them out at public expense and it WILL be public expense by the FED raising costs on well run healthy banks to pay higher FDIC insurance premiums for bailing out businesses that knowingly knew they weren't insured, I mean, what the heck!?!?!
But no sense fighting the system!
Worked out good for me so far buying Schwab stock 5 minutes before the close on Monday
(fingers crossed)
Sometimes businesses fail but when a bank does it becomes a media circus. Banks fail every year and more during economic changes. This is all part of bringing inflation down. The weak and mismanaged will fold. Stupid for the Fed to step in and bailout them out at public expense and it WILL be public expense by the FED raising costs on well run healthy banks to pay higher FDIC insurance premiums for bailing out businesses that knowingly knew they weren't insured, I mean, what the heck!?!?!
But no sense fighting the system!
Worked out good for me so far buying Schwab stock 5 minutes before the close on Monday
(fingers crossed)
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Sure it does. Every moment of every day all over the world. "Real Value" is created when labor and resources are made into something (a good or service) that meets the needs of others. It doesn't have to be a tangible thing and a service is just as real as a good. If I have something you want or need or can provide a service you want or need then it has value. As the population grows more labor and more resources can be made into something others need and thus the economy adds "value". If productivity increases then more labor and resources are used to make something someone else wants or needs and value is added to the economy. Innovation that either increases the productivity of something or creates demand for something altogether new creates value. A central bank MUST increase the money supply as this increased value is generated or the money supply will become so scarce that it hampers economic activity. Now the rate of value creation and money creation needs to be carefully considered and increasing the money supply faster than new value is added has problems, but to say, "....economy does not create real value," is patently incorrect. The issue is money is being created faster than value is being added to the economy.
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I just wanted to touch on a few things.
1. Inflation is a measure of increased economic activity. You can not have a growing economy without inflation. Stagflation is a measure of no increased economic activity. Deflation is a measure of decreased economic activity. There is no reality where inflation is zero and the economy grows. Too much is bad but not enough is worse.
2. With population increases the economy HAS to grow, the money supply has to increase, and therefore there has to be inflation and therefore the purchasing power of your money has to decrease over time.
3. I understand that a dime in 1910 bought you a three-course meal that now costs $150 due to the devaluation of currency over time but people also make A WHOLE LOT MORE dimes now than they did in 1910.
4. The end result of the above is things cost more, the purchasing power of money is less, but I have more money and so my overall lifestyle is unchanged. Actually, my lifestyle compared to 1910 is substantially better in every way. What's not to love about right now?
Is it a 1:1 relationship between currency devaluation to increases in how much we make? On average, clearly not, but it also depends on how you choose to make money. Those of us embracing the "service economy" tend to do much better than those embracing the manufacturing economy but participation in the service economy also tends to require more education, training, and expertise and that's the catch. IMO that is why people lament the loss of manufacturing jobs here in the US.
1. Inflation is a measure of increased economic activity. You can not have a growing economy without inflation. Stagflation is a measure of no increased economic activity. Deflation is a measure of decreased economic activity. There is no reality where inflation is zero and the economy grows. Too much is bad but not enough is worse.
2. With population increases the economy HAS to grow, the money supply has to increase, and therefore there has to be inflation and therefore the purchasing power of your money has to decrease over time.
3. I understand that a dime in 1910 bought you a three-course meal that now costs $150 due to the devaluation of currency over time but people also make A WHOLE LOT MORE dimes now than they did in 1910.
4. The end result of the above is things cost more, the purchasing power of money is less, but I have more money and so my overall lifestyle is unchanged. Actually, my lifestyle compared to 1910 is substantially better in every way. What's not to love about right now?
Is it a 1:1 relationship between currency devaluation to increases in how much we make? On average, clearly not, but it also depends on how you choose to make money. Those of us embracing the "service economy" tend to do much better than those embracing the manufacturing economy but participation in the service economy also tends to require more education, training, and expertise and that's the catch. IMO that is why people lament the loss of manufacturing jobs here in the US.
...I don't know, Pablo. I wake up every day and most days seem like all the previous days. I go to work or go to the gym or do whatever, I come home, and I genuinely enjoy my life. My kids, wife, and I are happy and healthy. I make a great living. No one is suppressing my opinions. No one is telling me to be quiet. No one is disallowing me to do what I want to do. I transfer money all the time. I pay my taxes. If this is supposed to be bad or horrible I don't see it. If this is the rest of my life then I will have lived a great life. What more do I want?
Happiness is a choice. Being content is a choice. I can say that as a former stressed-out pessimist who chose to see the bad in everything. I'm much happier this way. If I'm just happy with delusion I really don't see the downside.
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Well because you only think of yourself and perhaps you think in such a conformist way and how pop culture wants you to think, you simply don't notice. Plus you probably mainly get your news from ABCNNBCBS.
Perhaps, but I love my life and it is subjectively a great life. What would be the advantage of being a non-conformist? I'd see the "truth" and what? Be miserable and discontent fighting the power which is a fruitless endeavor anyway? I take charge of what I can control in my life, I don't sweat the things that are out of my control, and it is a very satisfying life.
You asked.
Well allow me to put it this way, if we are not even allowed to express our POV I don't see how we will ever solve any of our pressing problems. If the press, for example, holds back on facts and truths or just lies to us, how will we ever get back on a correct or proper path?
It's not my nature to be a non-conformist. And I am not in any way miserable or unhappy. I too take control of my own life, but I also have concerns for the future generations. The easy path would to be to ignore the facts and the truth.
I don’t think that one has to be miserable by knowing the truth or that blissful ignorance will provide happiness.
I have no complaints either, I live a happy life, but I’m not going to pretend that our liberties and rights aren’t being infringed or straight up attacked.
That’s foolish and not a grown up way of going about our lives. Sometimes we have to face adversity. Perpetual happiness is a fools errand.
I have no complaints either, I live a happy life, but I’m not going to pretend that our liberties and rights aren’t being infringed or straight up attacked.
That’s foolish and not a grown up way of going about our lives. Sometimes we have to face adversity. Perpetual happiness is a fools errand.
SVIB had all kinds of structural issues. If they focused half their energy they used for "the agenda", they may have had better business sense.
Neither do I - I hope from my posts it is at least somewhat obvious I'm in the game thinking about what's going on in the world. I don't live in a bubble nearly as much as I implied in my response to Pablo and that was more of a "for-the-sake-of" argument looking at what's the real downside to living in a bubble? Happiness for whatever finite time you're here should be the goal IMO. I also do tend to focus on what I have control over and less on what I don't. On a day-to-day basis I don't let "the truth" as defined above get me down. I think about it but I don't let it be a source of hate or unhappiness and I see A LOT of people who can't seem to separate their happiness from their perception of the truth. I don't feel like I'm being attacked from all angles. I also think worldview matters as I don't have a long list of grievences but many Americans do. Someone made mention of where I get my news from (I don't believe I've ever said) but I can say after watching Fox News for 10 mins I hate everyone and feel like I'm under attack. That's not my worldview at all and so if you ask me if things are ok my answer is yes. I will wake up tomorrow, see the injustices in the world, but go about what will likely be a great day.
FWIW....I mostly just read the WSJ these days and I have little interest in the "culture wars" news media.
I've come to the conclusion that both right and left are just sides of the same coin. If one stakes their beliefs on only one side, doesn't matter which one, they will most likely always be anxious about something. Both side sell fear to the masses IMO.
There is a middle. It may not make sense to either side but I can say I have no right to dictate to a woman her reproductive rights regardless of my belief on when life begins. I do not understand gender fluidity/identity issues and I've always just felt male but it's also no skin off my nose to call someone whatever they want to be called. I like women and really don't care who you want to sleep with so long as it's consensual. I believe in social safety nets for the truly down and out but I also see the unbelievable abuses every day when people with cash businesses have their kids on Medicaid and drive to their appt in an Escalade. I already won the genetic/geographic lottery being a white male born in the US but that doesn't mean I feel ashamed of my ethnicity or guilty for who I am. I don't own a gun but I understand why people do and while it's not my cup of tea I support your right to own. I could go on and on...and I believe in the absence of the polarizing "culture war" news media most Americans would identify somewhere center of right or left.
I live in an incredible time and place, because of all the opportunity. In just about anywhere else, perhaps even time, anyone who made as many mistakes as I would be relagated to a pretty rough life.
Due to the CA promise of cheap excellent education (cut waaaay back nowadays but still available) and high tech opportunity, things have changed and my life blossomed.
Now I have the opportunity to pay forward my good fortune. And that makes me happy. Way more than any Corvette or Tesla.
If my dirt poor farmer grandparents had not rode a small boat in 1913 from Ukraine to Yonkers, NY I would likely have a Russian madman trying to kill me. So yeah, I got no compalints.
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I used to rip it up in Yawnkers!
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