SG Talk

$200B for small bank....major contagion but may be tip of the iceberg

A bank used by many VCs. Last decade, VC throw money like drain water. Not so simple

Dow dropped how many points ?

VC stands for Viet Cong?

not venture capitalist hor

Dow dropped 345 points not so fierce, Mon see how loh!

That hope this won’t lead to collapse of a bigger bank.

I think big banks also kena loans that go bad due to interest rates up. 

.

Tip of the iceberg. Fed hikes broke many companies jn coming months we will see a sudden wave.

If I have money in US institutes I would take out.

One tea****** always post about CCP banks collapse, how come never alert us to this angmo bank collapse?

Some people think SVC is small bank no big deal are missing the big picture. All the effects caused by sharpest interst rate hikes ever is like plunging a dagger to the heart of the economy. The victim does not die immediately eyes still open yhen suddenly collapse

Why last night Dow didnt crush but actually went up 100pts?
I was having profit but end up cutting loss!

Just like Financial Crisis people don't run don't take precaution until too late they keep thinking bull run around corner.

You think it only one or 2 banks?....No.

What happen is many banks took depositor money just like SVC to buy high yielding MBS(mortgage back securities) ...there are many bank stocks collapsing right now...below is just one.



What has happened  ...many don't understand but let me explained clearly.

Many US banks bought MBS (mortgage backed securities) these pay high interest and using depositors money to buy they can earn the extra interest.....how much did they buy almost $3 Trillion.



As Fed hike rates, the price of these MBS goes down because investors demand higher yield on  these as interest rate goes up.

This means the banks suffer losses. About 400B in losses are now on books of commercial banks. SVC because of use by crypto users and collapse of FTx resulted in withdrawals it had to sell its MBS and realise losses ...this cause the collapse.

Many banks now have a big hole. The US housing market has fallen sharply just like during financial crisis.....expect more bank problems and problems to spread.

Those who last few yrs advocate buying US stocks are clueless of the underlying financial problems.

MBS index chart below.


Not only does Fed has to stop hikes they need to cut fast to prevent this collapse...but they will fail to take the right actions in the name of fighting inflation.

(11-03-2023, 05:31 AM)ysh02 Wrote: [ -> ]Dow dropped 345 points not so fierce, Mon see how loh!

WHAT IS 34 PT ?
MANY TIMES DROPPED >1K STILL RECOVERD

(11-03-2023, 10:25 AM)talky Wrote: [ -> ]WHAT IS 34 PT ?
MANY TIMES DROPPED >1K STILL RECOVERD

345pts after a 500pts drop....whole week of drops ...in case you never notice.

Sure small drop don't do anything until big drops come then regret...already problem signs are very very clear.

Since rate hikes I have consistently warned to get out....

Any one noticed China sell US T bond ?...so far China still buying using USD ?....maybe until they sell than we panic...

What happens when over leveraged economy hike rates so rapidly..

Many high debt companies are on borrowed time as they borrowed on cheap rates and need to roll over at much higher rates.

There is a delayed effect but collapse will come.

Due to Fed interest hikes US treasure bonds fell in price creating losses of $620B in US banks.

This is much larger than financial crisis.

When, hopefully not this year as our PE coming Sep new President hold two keys to the safe..

Understand this new crisis clearly.

1. Banks big and small when they take in depositors money use it for lending and also buying treasuries e.g govt and non govt bonds when are safe and gives a return

2. Fed hike rates at record pace to fight inflation. These rate hikes cause the market value of treasuries and needs to go down. How much are the losses ? $600B

3. For SIVB Bank because of slowdown in state up activity companies were withdrawing there deposits at a fast rate. This forced the bank to liquidate its bonds at a loss resulting in collapse.

The next shoe to fall is the thousands of companies that have to refinance their debts this year. They enjoy record low jnterest rates now have to refinance at record rates.

This will cause many companies to collapse.

The US Fed is cause of all these problems. They flooded the economy with QE and low interest rates during pandemic in an excessive manner that cause bubbles and inflation.

Now they are reversing .....

beri frightening frightNight-ed one shot 62% down..
all leg soft....kalunsoon TiLoBuay

IAM on at least 2 computer
i forget which password is for which computer liaoLo
liaoLo siHo.

Supposed not serious enough, Dow dropped not so much come Mon maybe rebound liow! Think a little positive .

Don't worry. Though it has knock-on effects, the US is still mighty because of the weapon economy.

(11-03-2023, 09:42 AM)sgbuffett Wrote: [ -> ]Some people think SVC is small bank no big deal are missing the big picture.

SVB is not really that small. It is the 16th largest (according to TV news; 18th according to wikipedia) bank in USA.

(11-03-2023, 06:31 PM)ysh02 Wrote: [ -> ]Supposed not serious enough, Dow dropped not so much come Mon maybe rebound liow! Think a little positive .

Remember in 2008 bear stearns collapse ...like nothing 
a few days later stock market recover....6 months later fall 50%.

Be early don't be complacent and brush off events ....stock market full of optimistic complacent people.

So we must start slowly selling our holding and buy back min three months later....
Repeat of Yr 2008 coming so becareful ....if new president is who we don't know too!