SVB Failed! Silicon Valley Bank.

[AzureRanger]

Yes but right now is the worst time to be holding bonds. These higher rates are going toil the bond market as we're now seeing. Right now the T bills are paying 5.25% for short terms so it's a good place to park money short term.

Exactly why a ladder of short term Treasuries has made sense over the past year.

PSA: Never heed investment advice from me or anyone else on the internet.....especially on a pickup truck forum!

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[AzScorpion]

Exactly why a ladder of short term Treasuries has made sense over the past year.

PSA: Never heed investment advice from me or anyone else on the internet.....especially on a pickup truck forum!

lol I actually started a thread a while back here and said the same. I 100% agree laddering is the way to go especially now with rates changing weekly. I still think we're in for a LONG bumpy ride because we've had 15-20 years of free (0% fed funds) money. They're not going to get this under control and bring rates down in 1-2 years. The only ones telling you this are the ones who want your money to play with. Honestly I hope this continues for a long time! It's about time us that saved and did the responsible thing get some good safe returns (interest rates) for a while.

 

[AzScorpion]

PSA: Never heed investment advice from me or anyone else on the internet.....especially on a pickup truck forum!

One person I'd never listen to in the big mouth Jim Cramer. IIRC back in early '08 he was telling everyone one that Lehman Brothers was a good buy and looked what happened. Now just last month he said the same with SVB and now this.

https://fortune.com/2023/03/10/svb-...uenberg-620-billion-hole-banks-balance-sheet/

In February, CNBC’s Mad Money host Jim Cramer recommended SVB to his viewers on live television when it was still trading at $320 a share.

 

[Fordup]

This is just a warning shot. With auto loan defaults heading up to record levels and credit card debit heading up to record levels also it's time to prepare for what could come next. March can be a nasty month for adjustments even in good times. Don't listen to my investment advice though because I lost my shirt in telecom when it crashed and my job had me in a blackout period.

 

[AzureRanger]

One person I'd never listen to in the big mouth Jim Cramer. IIRC back in early '08 he was telling everyone one that Lehman Brothers was a good buy and looked what happened. Now just last month he said the same with SVB and now this.

https://fortune.com/2023/03/10/svb-...uenberg-620-billion-hole-banks-balance-sheet/

I only watch him with the sound muted. I'm a retired banker....the CEO of one of the banks I worked for used to say that "there is nothing like a warm, thick blanket of capital to get you through a cold winter". Wise man.

 

[AzScorpion]

This is just a warning shot. With auto loan defaults heading up to record levels and credit card debit heading up to record levels also it's time to prepare for what could come next. March can be a nasty month for adjustments even in good times.
Don't listen to my investment advice though because I lost my shirt in telecom when it crashed and my job had me in a blackout period.

You're right I think it'll get ugly for a while but I don't think we'll see the same scenario as '08. There was way to much money lent out then (sub prime mortgages) where this isn't the case now. I hate to say it but I will laugh a little (ok a lot) at those who payed $10k, $20K or more for Broncos when now they're worth msrp.

 

[AzScorpion]

I only watch him with the sound muted. I'm a retired banker....the CEO of one of the banks I worked for used to say that "there is nothing like a warm, thick blanket of capital to get you through a cold winter". Wise man.

Very wise man! Some of my employees use to tell me I was to obsessed with making and saving money. Well my blanket is nice and warm right now and they're freezing. ?

 

[AzureRanger]

Very wise man! Some of my employees use to tell me I was to obsessed with making and saving money. Well my blanket is nice and warm right now and they're freezing. ?

Literally, if they still live in Massachusetts!

 

[Fordup]

You're right I think it'll get ugly for a while but I don't think we'll see the same scenario as '08. There was way to much money lent out then (sub prime mortgages) where this isn't the case now. I hate to say it but I will laugh a little (ok a lot) at those who payed $10k, $20K or more for Broncos when now they're worth msrp.

There is one threat here that was not in 08. The threat of WAR that could change everything in an instant.

 

[Fordup]

Sounds like bank runs have started on other institutions over this collapse on the west coast.

 

[AzScorpion]

Sounds like bank runs have started on other institutions over this collapse on the west coast.

I'm sure it'll cause a chain reaction of paranoia for some. I haven't kept my money in a bank in a long time as I don't trust them and always use credit unions. I was using a smaller local one back east with a AAA+ rating but changed over to Navy Federal CU about 4 years ago, I was able to get in being a family member.

 

[dtech]

Gotta pay the piper at some point, yrs of excessive money supply and low interest rates, not a big fan of the fed, decades back recessions and nationwide calamaties meant belt tightening and pain, recent yrs the answer is print more money and dole it out at low rates, recent hikes in interest rates are going to mean some casualties and looks like it's going to get worse.

 

[dtech]

IMO fed has too much power over the economy, it's morphed over time into being a reactive org instead of proactive money mgmt and establishing guard rails, more interst rate hikes may be counter productive, I mention the past economic cycles , boon and bust periods but economic equilibrium returned but not overnight. Skeptical that continued rate hikes is the best course

 

[AzScorpion]

Digging a little deeper on another early retirement forum I'm on it looks like this could hurt many small companies. If SVB finances you, they require you to have accounts there. Those companies could have lost funds in this failure because 93% were over the FDIC insurance limit and will now be treated as creditors. The rest that are insured will have access to their money on Monday.

https://www.fdic.gov/news/press-releases/2023/pr23016.html

All insured depositors will have full access to their insured deposits no later than Monday morning, March 13, 2023. The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.

 

[Fordup]

IMO fed has too much power over the economy, it's morphed over time into being a reactive org instead of proactive money mgmt and establishing guard rails, more interst rate hikes may be counter productive, I mention the past economic cycles , boon and bust periods but economic equilibrium returned but not overnight. Skeptical that continued rate hikes is the best course

The Fed actually has too much power when it comes to manipulating the facts. That usually just delays the reality and creates a worse situation in the end.

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