So much for the bloodbath. All my ETFS are higher than or hovering around what I paid for them on Friday. I guess I should be looking at individual stocks.
So much for the bloodbath. All my ETFS are higher than or hovering around what I paid for them on Friday. I guess I should be looking at individual stocks.
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Music was better when ugly people were allowed to make it.
Screw the two banks, there's money to be made.
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Music was better when ugly people were allowed to make it.
Shit is rigged
It absolutely is
Actually, I heard the bank was investing in government bonds which are normally a safe and guaranteed ROI, but because of inflation and the ever increasing interest rate hikes from the Fed, SVB's bond holding became worth less and less because the newer bonds coming out were getting better returns, so they needed to sell off their holding at a loss.
Godfather (03-15-2023), lost in melb. (03-17-2023)
Kevin O'Leary was just on with Neil Cavuto on Fox Business and O'Leary said it was due to the stupid loans they made, and they shouldn't have been bailed out at all. The banks should've been allowed to fail.
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Music was better when ugly people were allowed to make it.
Some people are blaming Crypto. A lot of people are blaming Biden's far left economic policies.
And of course, the left is blaming Trump.
Last edited by DemonGeminiX; 03-14-2023 at 08:19 PM.
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Music was better when ugly people were allowed to make it.
I think that's a really good description of what happened, I was more joking about the market in general being rigged
I'm less familiar with how banking analyzes risk but just finished a course on insurance risk and minimum capital tests (MCT or Solvency II requirements it's sometimes called) so we stay solvent.
Basically if equity investments impact your capital requirements at a 1.35 capital requirement ratio, real estate investments are less risky at a 1.25 ratio, and government bonds are about 1:1 or maybe 1:15. Sitting on cash actually hurts you ratios so you need to invest or loan most of it (I think it's fair to say that's how banks work in a capitalist economy and 'create' money but that's probably an oversimplification). Doesn't mean you can't make bad rookie mistakes and put short term deposits into long term options and thus created a cash flow crisis like SVB did. Banks have failed for this before, placing way too much faith in bonds and stable interest rates. I believe a few failed in the 80's the same way. It's not always about being low risk, you need to be diversified too.
Optically I can see why the US government will take heat over a 'bailout.' The thing is, from my understanding this is not a corporate bail out of SVB and their management, but they are backstopping private individuals and depositors at SVB. I think I can agree or at least understand that type of backstop/bailout or whatever you want to call it. And if I banked there myself I definitely would Makes me want to open an account with a second bank frankly.
Last edited by Godfather; 03-15-2023 at 03:13 AM.
Teh One Who Knocks (03-15-2023)
I don't know if they exist in Canada like they do in the States, but for primary banking, I far prefer using a credit union over a bank. They are 'owned' by the depositors and almost always you will get better interest rates from a credit union than from a traditional bank. I have my primary checking and savings at one credit union and my truck is financed through another one. Plus I have a couple of other savings account to squirrel away cash for a rainy day at a couple of other credit unions.
Ya not a bad idea. Up here our 'big 4' banks are so huge and very resilient, probably the strongest industry in the country so I've always used a big-4 because it's convenient and they do have near infinite services to offer... but I may open an account at a local credit union just to satisfy the tin-foil hat guy inside me
I haven't been with a bank in over 30 years. All of my junk's with a credit union. Checking, savings, credit card.
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Music was better when ugly people were allowed to make it.
What's nice is, it's a lot easier to join a credit union now than it used to be. They used to be really strict on who could join and open an account. But now, they make it pretty easy and you can definitely find multiple ones that you can qualify for membership with.