Stock Trading: try to reduce exposure to companies with CEOs who are on ketamine 24/7

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Stock Trading: try to reduce exposure to companies with CEOs who are on ketamine 24/7

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nnnotime: Sep 30, 2001; Hesitate, and you will be lost.

Treasury Secretary Yellen said this Sunday morning there would be no bailout for SVIB, but they are concerned about the bank's depositors and will try to meet their needs. Not sure what the details are for Yellen's plans.

# ? Mar 12, 2023 17:13

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# ? Jun 4, 2024 23:17

Tokyo Sex Whale: Oct 9, 2012; "My butt smells like vanilla ice cream"

nnnotime posted:

This banker Chris Whalen thinks the Fed is also to blame for SVIB's collapse. He doesn't appear to be fan of the Federal Reserve's policies or Powell.
Seems to know the banking system and how banks like SVIB interact with the Federal Reserve.

https://www.youtube.com/watch?v=vU1g7ZUQkWI

He's an old-head who was required reading during the GFC. That was a better time, back when everybody had a blog instead of a substack for $300/year. I'm not all the way through the video but this is bullshit because it's not like they can't hedge interest rate risk. SVIB didn't, which is exactly what you'd do if you just assumed if anything went tits up you'd get bailed out.

nnnotime posted:

Treasury Secretary Yellen said this Sunday morning there would be no bailout for SVIB, but they are concerned about the bank's depositors and will try to meet their needs. Not sure what the details are for Yellen's plans.

I mean the sensible thing would be to give the uninsured depositors a bridge loan to cover payroll until dividends are paid out if they can't find a buyer but everybody's been conditioned over 15 years that step 1 is some sort of massive intervention to make sure no one ever has to take a loss on assets.

# ? Mar 12, 2023 17:33

Baddog: May 12, 2001

shame on an IGA posted:

0.03-0.42% of total deposits, every year

https://www.fdic.gov/deposit/insurance/assessments/proposed.html

drat.

# ? Mar 12, 2023 17:33

DapperDraculaDeer: Aug 4, 2007; Shut up, Nick! You're not Twilight.

nnnotime posted:

This banker Chris Whalen thinks the Fed is also to blame for SVIB's collapse. He doesn't appear to be fan of the Federal Reserve's policies or Powell.
Seems to know the banking system and how banks like SVIB interact with the Federal Reserve.

https://www.youtube.com/watch?v=vU1g7ZUQkWI

The Fed did exactly what it said it was going to do over the past year or so. This poo poo is dumb and gently caress that guy. Its just another reminder that so many of the public facing figures involved in finance have a vested interest in manipulating public opinion in a manner that is often not in our best interest and most certainly has no interest in the truth.

# ? Mar 12, 2023 17:52

pmchem: Jan 22, 2010

from another forum (not SA/twitter/reddit), 10-yr SVB employee taking questions:

quote:

Did the employees see risk and or implosion happening months before? When the Fed started raising interest rates and openly said they were going to keep doing so?

Sadly no, most werent aware of any of this. The executives were trying to raise capital since 2022 once interest rates were rising to make up for the lack of liquidity. The executives, especially the CFO and CEO were aware this was a huge risk well before the tipping point. Sadly if VCs hadn't initiated the bank run we would've been fine and would have more than likely raised enough funds to cover the liquidity shortfall.

What was the timeline/sequence of events for you Wednesday - Friday? Did they communicate with you at all?

Wednesday: Cryptic email from CEO and an ad-hoc townhall was scheduled for everyone to attend. This is where the CEO said 'remain calm' and essentially when you hear the boss say that the exact opposite happens.
Thursday: Word gets out from VCs to clients to pull funds immediately - bank run starts and billions of assets leave the bank. Stock price tanks. Everyone was in a 'wtf' mode.
Friday: becomes cleat to everyone how the bank hosed up and now we're immediately shutdown by the FDIC and by late Friday afternoon we're told we're employees of the FDIC for the next 45 days.

Not much more information has been communicated to us. Our client-facing folks have been dealing with a lot of poo poo from all this, I feel really badly for them. I know the call center is operating BAU this week, and weekends.

How upset is the employee base with Treasury/ALM/C-suite? Insane that the company was printing money and didn�t spend 2022 rebalancing assets.

Frustrated to say the least - they were responsible for this mess, especially the CEO for lobbying the trump admin in 2017 to reduce the regulation on large financial institutions. Had those regs till been in place they would have noticed this problem well before it would be an issue. Because the threshold was raised from 50B to 250B SVB no longer qualified to be 'stress tested'. If it were this would have been avoided altogether. CEO is a piece of poo poo. The org thought highly of him until that point.

Do you feel SVB, Peter Thiel, or none of the above is responsible?

Personal opinion is that this could have been avoided had the bank run not happened. They were actively trying to raise funds to cover the liquidity shortfall. Given another week without panic all would have been well and it wouldn't even be a story. So VCs are definitely at fault for the majority of this, and the other for the CEO/CFO/etc making this dumb decision to begin with. CEO also lobbied the trump admin to relax regulations so that SVB would be exempt from stress testing (and they got their wish) which would have avoided this to begin with.

# ? Mar 12, 2023 21:47

Subvisual Haze: Nov 22, 2003; The building was on fire and it wasn't my fault.

Nobody could have predicted that the zero percent interest rates might at some point increase, causing long-duration bonds purchased at zero rates to decrease in value.

# ? Mar 12, 2023 21:58

pmchem: Jan 22, 2010

SBNY closed by the feds

additional fed measures underway to protect deposits at all banks

# ? Mar 12, 2023 23:24

Tokyo Sex Whale: Oct 9, 2012; "My butt smells like vanilla ice cream"

pmchem posted:

SBNY closed by the feds

additional fed measures underway to protect deposits at all banks

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm

quote:

Washington, DC -- The following statement was released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg:

Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.

After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.

Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.

The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today's actions demonstrate our commitment to take the necessary steps to ensure that depositors' savings remain safe.

Futures are loving this but it's really not a bailout, it's spreading the losses in the banking system across the banking system and the banking system has a lot of unrealized losses.

# ? Mar 12, 2023 23:39

pmchem: Jan 22, 2010

https://twitter.com/stevehouf/status/1635048569379127296

this is designed to solve all the balance sheet duration risk issues across the industry

# ? Mar 12, 2023 23:49

mrmcd: Feb 22, 2003; Pictured: The only good cop (a fictional one).

pmchem posted:

https://twitter.com/stevehouf/status/1635048569379127296

this is designed to solve all the balance sheet duration risk issues across the industry

hell yeah a TARP sequel.

# ? Mar 12, 2023 23:55

Elephanthead: Sep 11, 2008; Toilet Rascal

We are looking for the guys that did this.

# ? Mar 13, 2023 00:45

DapperDraculaDeer: Aug 4, 2007; Shut up, Nick! You're not Twilight.

pmchem posted:

from another forum (not SA/twitter/reddit), 10-yr SVB employee taking questions:

Is this actually someone that had inside info on what's going on or just some worker drones perspective? Because the whole "VCs caused this by inspiring a bank run" narrative doesn't hold water very well. People were calling SVB out on Twitter as early as January. Sounds like those VCs sidn't cause the collapse, they were just the first to realize how bad things were and got the gently caress out.

# ? Mar 13, 2023 01:08

LostCosmonaut: Feb 15, 2014

oh no, the tech dipshits are losing money, we must save them!
but where will that money come from?
lol, lmao

# ? Mar 13, 2023 01:17

mrmcd: Feb 22, 2003; Pictured: The only good cop (a fictional one).

Do not fret, for the NY Times is already hard at work selling Tech TARP to the American people.

# ? Mar 13, 2023 01:59

pmchem: Jan 22, 2010

DapperDraculaDeer posted:

Is this actually someone that had inside info on what's going on or just some worker drones perspective? Because the whole "VCs caused this by inspiring a bank run" narrative doesn't hold water very well. People were calling SVB out on Twitter as early as January. Sounds like those VCs sidn't cause the collapse, they were just the first to realize how bad things were and got the gently caress out.

dunno his exact job title. not C-level, but not customer service either. just shared it as a legit take from a long-time employee

LostCosmonaut posted:

oh no, the tech dipshits are losing money, we must save them!
but where will that money come from?
lol, lmao

well, it's not coming from taxpayers

# ? Mar 13, 2023 02:00

Tokyo Sex Whale: Oct 9, 2012; "My butt smells like vanilla ice cream"

mrmcd posted:

Do not fret, for the NY Times is already hard at work selling Tech TARP to the American people.

Here's the loving thing that was going to save the world, probably.

# ? Mar 13, 2023 02:03

mrmcd: Feb 22, 2003; Pictured: The only good cop (a fictional one).

Tokyo Sex Whale posted:

Here's the loving thing that was going to save the world, probably.

Lol it's an app connected subscription garbage can

# ? Mar 13, 2023 02:05

DapperDraculaDeer: Aug 4, 2007; Shut up, Nick! You're not Twilight.

mrmcd posted:

Do not fret, for the NY Times is already hard at work selling Tech TARP to the American people.

Is this written by the guy that flipped the gently caress out when ChatGP told him it loved him, because apparently he though it was actually sentient rather than the worlds most sophisticated ELIZA bot? Because boy howdy is that guy something special. Hes their chief tech reporter too.

# ? Mar 13, 2023 02:13

MetaJew: Apr 14, 2006; Gather round, one and all, and thrill to my turgid tales of underwhelming misadventure!

Tokyo Sex Whale posted:

Here's the loving thing that was going to save the world, probably.

A countertop composter would be pretty dope if it wasn't a Composter as a Service business model with proprietary cartridges that only they can sell you until the business goes under.

# ? Mar 13, 2023 08:36

gay picnic defence: Oct 5, 2009; I'M CONCERNED ABOUT A NUMBER OF THINGS

Sounds like a complicated and expensive version of Bokashi

# ? Mar 13, 2023 08:53

Tokyo Sex Whale: Oct 9, 2012; "My butt smells like vanilla ice cream"

It also doesn�t really compost, you could do the same thing by running your garbage through a food processor then sticking it the oven for 5 hours. The subscription pods are to add back some of the bacteria it�s cooking out. It�s extremely Silicon Valley home environmentalism.

JPM is extending credit lines to First Republic and it�s still down big pre-market. This is potentially a good BTD.

# ? Mar 13, 2023 10:49

pseudanonymous: Aug 30, 2008; When you make the second entry and the debits and credits balance, and you blow them to hell.

DapperDraculaDeer posted:

Is this written by the guy that flipped the gently caress out when ChatGP told him it loved him, because apparently he though it was actually sentient rather than the worlds most sophisticated ELIZA bot? Because boy howdy is that guy something special. Hes their chief tech reporter too.

Remember that google engineer a few months ago who decided their bot was as sapient too?

Like they�ve never heard of a Chinese room. Or maybe just no one has ever loved them.

# ? Mar 13, 2023 15:06

mrmcd: Feb 22, 2003; Pictured: The only good cop (a fictional one).

Picked up a small position in SCHW. Pulled their call reports, and at the end of last quarter between 25% and 35% of their deposits were covered by available for sale (marked to market) securities in all of their banks. Plus they have a much broader customer base, generally bigger balance sheets, (I'm guessing) lots of flexibility in where withdrawals come from with their multibank sweeping model. Seems the panic selling of all banks makes it a good bargain, even if earnings do take a hit for a quarter. The discount is already so deep compared to a week ago a rough quarter or two might as well be priced in.

I'm also a huge idiot though so feel free to tell me why I'm wrong.

# ? Mar 13, 2023 16:08

Red: Apr 15, 2003; Yeah, great at getting us into Wawa.

mrmcd posted:

Picked up a small position in SCHW. Pulled their call reports, and at the end of last quarter between 25% and 35% of their deposits were covered by available for sale (marked to market) securities in all of their banks. Plus they have a much broader customer base, generally bigger balance sheets, (I'm guessing) lots of flexibility in where withdrawals come from with their multibank sweeping model. Seems the panic selling of all banks makes it a good bargain, even if earnings do take a hit for a quarter. The discount is already so deep compared to a week ago a rough quarter or two might as well be priced in.

I'm also a huge idiot though so feel free to tell me why I'm wrong.

I thought the same thing, but another dumb panic could just as easily trigger another run, and then

You could lower your cost basis some more?

(Edit: Ah, gently caress it, I bought in a little)

Red fucked around with this message at 17:39 on Mar 13, 2023

# ? Mar 13, 2023 17:24

Bremen: Jul 20, 2006; Our God..... is an awesome God

I just got offered 5.4% on an 18 month CD from Schwab, which seems like quite a jump over similar offerings. I'm not really super financially savvy, but could that be related? Banks suddenly worried about liquidity?

# ? Mar 13, 2023 17:33

pmchem: Jan 22, 2010

Bremen posted:

I just got offered 5.4% on an 18 month CD from Schwab, which seems like quite a jump over similar offerings. I'm not really super financially savvy, but could that be related? Banks suddenly worried about liquidity?

Yes, definitely. You will see deposit interest rates almost everywhere creep up too.

What are the terms on that CD? Can you redeem early without penalty? That rate seems really incredible but I haven�t been CD shopping.

# ? Mar 13, 2023 17:42

drk: Jan 16, 2005

Bremen posted:

I just got offered 5.4% on an 18 month CD from Schwab, which seems like quite a jump over similar offerings. I'm not really super financially savvy, but could that be related? Banks suddenly worried about liquidity?

Given that rates have fallen across the board over the past few days, 5.4% on a CD looks like a very good deal.

edit: for reference, a 2 year treasury was yielding over 5% last Thursday, but is at about 4.1% today.

# ? Mar 13, 2023 17:44

GoGoGadgetChris: Mar 18, 2010; i powder a
granite monument
in a soundless flash

showering the grass
with molten drops of
its gold inlay

sending smoking
chips of stone
skipping into the fog

I'm getting an absurd amount of correspondence from First Republic Bank, including having a 'Senior Relationship Manager' assigned to me in order to handle and questions or transactions

Weird stuff

# ? Mar 13, 2023 17:46

Bremen: Jul 20, 2006; Our God..... is an awesome God

pmchem posted:

Yes, definitely. You will see deposit interest rates almost everywhere creep up too.

What are the terms on that CD? Can you redeem early without penalty? That rate seems really incredible but I haven�t been CD shopping.

Uh, I'm embarrassed to say I don't really know how the details work. It's non-callable and matures on 9/23/24, which is really all I looked at. CUSIP is 15987UAV0 if someone more savvy wants to look.

# ? Mar 13, 2023 17:46

Head Bee Guy: Jun 12, 2011; Retarded for Busting; Grimey Drawer

so, is first republic a buy?

# ? Mar 13, 2023 17:46

Baddog: May 12, 2001

Head Bee Guy posted:

so, is first republic a buy?

Has the messaging made anyone feel more comfortable about their bank not going under? I guess it was supposed to make you feel better about your deposits, but everyone hates the thought of maybe having their money in the one bank that is gonna be the exception.

# ? Mar 13, 2023 17:50

Sundae: Dec 1, 2005

Head Bee Guy posted:

so, is first republic a buy?

I wouldn't touch poo poo related to any floundering bank right now, good buy or not, because bank runs and financial panic are not rational. However, I am not a degenerate gambler and also don't do short-term trading anyway so YMMV. :v:

# ? Mar 13, 2023 17:53

Tokyo Sex Whale: Oct 9, 2012; "My butt smells like vanilla ice cream"

Bremen posted:

I just got offered 5.4% on an 18 month CD from Schwab, which seems like quite a jump over similar offerings. I'm not really super financially savvy, but could that be related? Banks suddenly worried about liquidity?

Absolutely and the moral hazard introduced by yesterday�s Fed/FDIC/Treasury actions is that you should definitely chase deposit yield because the government is going to cover it.

If this isn�t over and there are real bank runs keep your eye out on deals for brokered CDs.

# ? Mar 13, 2023 17:53

Bremen: Jul 20, 2006; Our God..... is an awesome God

Tokyo Sex Whale posted:

Absolutely and the moral hazard introduced by yesterday�s Fed/FDIC/Treasury actions is that you should definitely chase deposit yield because the government is going to cover it.

If this isn�t over and there are real bank runs keep your eye out on deals for brokered CDs.

The chances of me buying a CD worth over 250k are... well, let's say very low, so I didn't hesitate to jump on it. That's the nice thing about not investing millions at a time, I don't have to worry about the bank runs even without the new optics!

# ? Mar 13, 2023 18:03

Toxic Mental: Jun 1, 2019

MeetKevin eating good with 6 videos in the last 24 hours alone

# ? Mar 13, 2023 18:13

TheKevman: Dec 13, 2003; I thought Mad Max: Fury Road was

so you should probably ignore anything else I say

Toxic Mental posted:

MeetKevin eating good with 6 videos in the last 24 hours alone

I take all my financial planning and advice from a guy with a face that looked like he thought he had a $20 in his wallet but doesn't know where it went.

# ? Mar 13, 2023 19:09

pmchem: Jan 22, 2010

thinkin' about investing in IBKR tomorrow, anyone care to make an argument against them?

long thesis: high ROI, low PEG trailing metrics. has perfectly managed duration risk by using t-bills as assets, and been vocal about it in earnings calls, avoiding the trap other financials find themselves in right now. would potentially benefit from any client moves away from scwhab. advertises on bloomberg radio all the time for RIA/institutional clients and it seems to be paying off, with YoY revenues all up despite the opposite happening for retail brokerages like HOOD. it just seems to be a well-managed business that is caught in the wash during this SVB crisis? some daytrader goons have used ibkr.

bear thesis: while it had a recent a recent all time high, it was at 52 in the middle of last year and share count has went up, not down, since then. Chairman continues to sell his massive pile of shares. Recent high margins may not be sustainable. Low dividend, share count not decreasing, basically makes this a bet on a stock market tradin' growth stock going into a recession. some daytrader goons have moved away from ibkr.

someone roast this company

# ? Mar 13, 2023 19:15

Baddog: May 12, 2001

Bremen posted:

I just got offered 5.4% on an 18 month CD from Schwab, which seems like quite a jump over similar offerings. I'm not really super financially savvy, but could that be related? Banks suddenly worried about liquidity?

I threw a chunk into this, thanks!

(you don't need a special invite, its available today as a brokered CD)

# ? Mar 13, 2023 19:31

Leperflesh: May 17, 2007

Here's a really good article about exactly why SVB's balance sheet was turbofucked:
https://www.investing.com/analysis/disastrous-risk-management-is-not-the-feds-fault-200636146

The gist of it is that SVB did not hedge its enormous bond portfolio. At all.

quote:

The problems? SVB had a gigantic investment portfolio as a % of total assets at 57% (average US bank: 24%) and 78% was in Mortgage-Backed Securities (Citi or JPM: around 30%)�

�and most importantly, they DID NOT hedge interest rate risk at all!

The duration of their huge portfolio before and after interest rate hedges was�the same?!

Effectively, there were NO hedges.

This means SVB was not applying basic risk management practices and exposing its investors and depositors to a gigantic amount of risk.

Economically speaking, a $120 billion bond portfolio with a 5.6y non-hedged duration means that every 10 bps move higher in 5-year interest rate lost the bank almost $700 million.

100 bps? $7 billion economic loss. 200 bps? $14 billion economic loss. Basically, the entire bank�s capital was wiped out.

# ? Mar 13, 2023 19:36

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# ? Jun 4, 2024 23:17

drk: Jan 16, 2005

That is crazy that as the Fed continuously hiked rates in 2022 SVB actually increased their portfolio duration and eliminated the (minimal) duration hedging they had.

Really, really hard to understand

# ? Mar 13, 2023 19:45

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > Stock Trading: try to reduce exposure to companies with CEOs who are on ketamine 24/7

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