OutSyed The Box
Saturday, March 11, 2023
TOP URGENT BREAKING NEWS : AMERICAN BANKING SYSTEM COLLAPSING, WALL STREET ALSO CRASHING
Widespread Panic Hits US Banks as Fears of a Systemic Liquidity Crisis Cause a Massive Bank Run
BANK RUN USA PANIC - Second USA Bank Collapses in 3 Days, Run of Withdrawals Causes Liquidity Crisis
Dow Jones on Fri suffered biggest weekly loss since June
after regulators closed Silicon Valley Bank to protect deposits
SVB closed by regulators, deposits under control of regulators
Silicon Valley Bank 18th largest bank in the USA
beleaguered bank's efforts to secure funding had failed
collapse following Fed's aggressive pace of rate hikes
The turmoil in banks triggering systematic banking crisis
contagion swept through banking sector
widespread fears of spillover into broader banking sector
Signature Bank closed 23% lower
First Republic Bank fell more than 14%Dow Jones Industrial fell 345 points
Nasdaq Composite down 1.8%, S&P 500 fell 1.5%.
By Syed Akbar Ali at March 11, 2023 
Does Ah Mok and Syed Kotak realise that a number of China banks had to be bailed out by the Beijing Government during 2022's China property crisis ? They were heavily exposed to China developers who faced a massive liquidity jam and bond default at the time, and there were runs on these regional banks when they suspended payments to depositors attempting to withdraw their cash.
ReplyDeleteThere was no systemic collapse of the China banking system, and there is very, very unlikely to be a systemic collapse of the US banking system.
Silicon Valley Bank had a massive tripling of its deposits in the last 2 years during the Covid crisis and accompanying Tech bubble and when the depositors even more quickly tried to withdraw, the bank faced a massive liquidity crisis.
This is a specific case that is not the situation with the large systemic US Banks.
The Federal Reserve has played cool on the case. This is NOT a Bear Sterns or Lehman Brothers moment.
Wakakakaka…
DeleteYr understanding of the SVB crisis. Wow!
What can a known nothing dickhead explains ANYTHING but regurgitates what it has chosen to read. W/O scamming analysis too.
1st - magnitude of the default. Check a bank of current market value (64B) trying to raise 22B by additional share offering!
2nd - FedRes' higher interest rates eroded the value of long-term bonds that SVB and other banks gobbled up during the era of ultra-low, near-zero interest rates. SVB's $21 billion bond portfolio was yielding an average of 1.79% — the current 10-year Treasury yield is about 3.9%.
Note: most of the major banks r facing the same problem. Thus the lost of confidence in their shares, leading to a Wall Street banking share bloodbath when SVB crisis explodes.
3rd - venture capitals began drying up, forcing startups to draw down funds held by SVB. So the bank was sitting on a mountain of unrealized losses in bonds just as the pace of customer withdrawals was escalating.
Note: same situation to other banks that r not depending on VC BUT facing massive drawdowns of funds by depositors to meet fiscal needs.
4th - to avoid contagion spills over to other financial institutions, California regulators intervened, shutting the bank down and placing it in receivership under the Federal Deposit Insurance Corporation.
This is just window dressing. The causes of the financial crisis have not been addressed. SVB is just the first sacrificial lamb that might not calm the agitated financial players/depositors!
Monday opening of the NYSE would be a good indicator of how well the US financial market is going to response!
Mfer, same same as in those Chinese banks under duress?