A lot more complicated than that Dirt!!

FDIC insurance covers up to $250,000 of deposits, all of which will be made available by Monday morning. But most of SVB's customers are companies with much higher balances, and it's not yet clear how much money they'll be able to draw and when.

In its statement, the FDIC said only that those in excess of $250,000 will receive "an advance dividend within the next week."
Timing: One big reason this weekend matters so much is that the next pay period for many companies is next Wednesday, March 15.

The best-case scenario is that another financial institution steps up and agrees to buy SVB, thus automatically strengthening its balance sheet.

Such a purchase presumably would facilitate the reopening of client accounts, and also calm nervous investors who've been dumping shares of SVB rivals like First Republic and PacWest.
It also could reopen venture lending, which is a key financing tool to many startups.
The worst-case scenario is that the market opens Monday and SVB remains a ward of the state, with no white knight on the horizon.

All eyes then would turn to the FDIC, to see exactly what those "advance dividends" look like, and if they'll be sufficient to cover expenses. If payrolls are missed, the pain could spread from boardrooms to kitchen tables.
What we're watching: Some companies may begin to seek out alternate financing, such as loans from other banks, to tide them over.

No one currently knows if companies ultimately would be able to access all of their money. That includes the FDIC, which had not compiled that information at the time of its takeover.
The bottom line: SVB has melted down. The question now is if the fallout will continue.

Monday and through next Wednesday or so will tell the story. I just hope in the best-case scenario happens and it is rescued.

That bank cannot come near covering the amount of monetary deposits starting from 250k and going up.
I read rumblings of a government bail…… print more money against valu we don’t have to replace money that the bank lent out for valu it didn’t have. What a tangled web we weave.

Osky

So they own mostly MBS's not treasuries?

It doesn’t matter whether it is mortgage backed securities or treasuries. They are long dated bonds (think 20+ years) at incredibly low (less than 3%) interest rates that in todays world is not competitive as compared to alternatives

If you actually own stock of SVB it is a bad deal, worry, and if you own stock with other companies, you will still have/own your stock with them. Then the markets affect them just like any other stocks in the up and downs.

Lets think back to the collapse of Bear Stearn's and then Lehman Brothers....2008.

The government stepped in and bailed out Bear Stearn's and GM. This was a terrible message to send because it reinforced that 'moral hazard' message that government is the lender of last resort. So go ahead and take irrational risks.

The next thing that happened is that Lehman collapsed and government did nothing. But JP Morgan stepped up to buy the assets of Lehman. That strengthened the capital structure and made Lehman depositors whole or close to it.

The next thing that happened was that the Government tried to pin the blame for Lehman...on JP Morgan. So why did the government bail out Bear Stearn's but not Lehman ???

Guess which bank was the custodian for all the union pension funds in a lot of the country..............If you said Bear Stearn's you'd be correct. Lets also remember that 200 years of contract law that was thrown out when the company..GM , was given to the union workers at GM and the bond-holders were told to pound sand.

Now ask, who makes up the main voting constituency in Silicon Valley ???


What do you think the odds are of government bailing out all those solar panel start-up companies that have funds sitting in SVB accounts ?

What other bank is going to step up and put itself in the government cross hairs by bailing out SVB ?

Seems to me that I recall the treasury secretary in 2008 forcing Bank of America to buy the failing Merrill Lynch. Then the government prosecuted B of A for doing so.

There is clearly some gross mis-management of SVB bank. Thank God they had an active DEI section in their management division. That the bankers themselves were incompetent is more than offset by the fact that no woman or minority investor was harmed and their carbon footprint was very small.

While there is plenty of blame at the bank management level, the overwhelming majority of blame belongs on the federal government and decades of insane monetary and fiscal lunacy.

I hope government allows the market to work in this case and does not compound the problem by bailing these folks out.

Isn't Freddy and Fannie still in conservatorship?

Yes

Lets think back to the collapse of Bear Stearn's and then Lehman Brothers....2008.

The government stepped in and bailed out Bear Stearn's and GM. This was a terrible message to send because it reinforced that 'moral hazard' message that government is the lender of last resort. So go ahead and take irrational risks.

The next thing that happened is that Lehman collapsed and government did nothing. But JP Morgan stepped up to buy the assets of Lehman. That strengthened the capital structure and made Lehman depositors whole or close to it.

The next thing that happened was that the Government tried to pin the blame for Lehman...on JP Morgan. So why did the government bail out Bear Stearn's but not Lehman ???

Guess which bank was the custodian for all the union pension funds in a lot of the country..............If you said Bear Stearn's you'd be correct. Lets also remember that 200 years of contract law that was thrown out when the company..GM , was given to the union workers at GM and the bond-holders were told to pound sand.

Now ask, who makes up the main voting constituency in Silicon Valley ???


What do you think the odds are of government bailing out all those solar panel start-up companies that have funds sitting in SVB accounts ?

What other bank is going to step up and put itself in the government cross hairs by bailing out SVB ?

Seems to me that I recall the treasury secretary in 2008 forcing Bank of America to buy the failing Merrill Lynch. Then the government prosecuted B of A for doing so.

There is clearly some gross mis-management of SVB bank. Thank God they had an active DEI section in their management division. That the bankers themselves were incompetent is more than offset by the fact that no woman or minority investor was harmed and their carbon footprint was very small.

While there is plenty of blame at the bank management level, the overwhelming majority of blame belongs on the federal government and decades of insane monetary and fiscal lunacy.

I hope government allows the market to work in this case and does not compound the problem by bailing these folks out.[/quote]



I have to agree with you on that!! We will see what takes place by late mid-week and see who might steps in and buy in, this failing bank. If Any?
Buying a failing company can be a boom or a bust all depends on the think tank of the interested parties. Time will tell soon. I do believe the Fed Gov might get involved for political interests of the party of the state. IMO

But you think they're going to do the exact opposite?

Well it sure wouldn't surprise me to see them do exactly that. Even though Yellin says there is no systemic risk (and she is probably right in that assessment) there is some political and financial risk to the dominant party in this geographic area and the sector (greens) that most of these investment dollars are in.

I think we can usually expect government to do exactly the expedient but wrong thing.

So if the government is running the the GSE's I guess this applies, especially when the FED buys so many MBS's. Not to mention all the government guaranteed loans.

"This was a terrible message to send because it reinforced that 'moral hazard' message that government is the lender of last resort. So go ahead and take irrational risks."

I don't see how you will ever put this genie back in the bottle.

Agreed. And the more often it happens the more it will be expected to happen

It's a safe bet that we are all thinking that.

So.....To explain this to a trapper. It's a repeat of NAFA....only bigger.

SVB is not a traditional bank offering checking and savings to us average folks on the street. This bank served businesses, a lot of start up businesses. I read that 99% of their accounts exceeded the FCIC guarantee amount. So this was not typical family type accounts.

And they apparently tied up a bunch of their assets in long range, low interest T-bills when the interest rate was practically zero before bidenomics kicked in and caused the rise in rates that devalued their long term strategy by significant amounts. They were probably over extended on some loans that went south also and caused their credit ranking to go down. And that made their investors nervous and started a run of withdrawals. And as said before, these were large sums in accounts and when the percentage of withdrawals continued to climb, approaching 40%, they did not have the available cash to cover. They can not meet their obligations.

That is a trait of fiat currency. Predictable.

Yellen said there is no systematic risk? Someone remember what Bernanke said?

Let's hope Powell sticks to his guns.

He won't.

I agree although my radar has been up for a long time.