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Financial system collapse (wall-street stocks)......

SilverPlatinumSilverPlatinum Posts: 205 ✭✭✭
edited March 15, 2023 6:44AM in Precious Metals

wow, watching the bank stocks collapsing on CNBC makes me more confident holding physical precious metals.......
At least no one can force me to sell my precious metal for $1, I can always ask whatever price I want......

«1345

Comments

  • RonBRonB Posts: 628 ✭✭✭✭✭

    The SVB financial bank collapse will affect 1000 startups, a third will not be able to make payroll next week. Thousands of jobs will be affected.

    One commenter calls it an extinction level event, that could set back innovation by 10 years.

    Collector of Classic US Coins
  • SilverPlatinumSilverPlatinum Posts: 205 ✭✭✭

    I could not understand how the government let it collapse, the bank was established in 1983, they are spending lots of money here and there, you might as well save this bank and prevent the side effects.
    I personally learned a lot today from this, and will never trust any stock from now on (especially bank stocks), if I would trade stocks, I will be a day trader, in and out on the same day........And I will invest more in physical precious metals.

  • RonBRonB Posts: 628 ✭✭✭✭✭
    edited March 10, 2023 2:32PM

    Keep in mind SVB Silicon Valley Bank is a niche bank that services primarily startups with venture capital loans so it does not really have any effect on regular banks. SVB is FDIC insured so accounts up to $250k are covered.

    There will be a natural contagion effect to regular bank stocks which could present a buying opportunity. I believe this whole event will be short lived, someone will eventually buy out SVB.

    Collector of Classic US Coins
  • SilverPlatinumSilverPlatinum Posts: 205 ✭✭✭

    Lehman Brothers, SilverGate Bank, and now SVB Silicon Valley Bank .
    Who is next...........
    I will never trust any bank from now on............

  • RonBRonB Posts: 628 ✭✭✭✭✭

    This is interesting..

    Collector of Classic US Coins
  • HigashiyamaHigashiyama Posts: 2,133 ✭✭✭✭✭

    @RonB said “One commenter calls it an extinction level event, that could set back innovation by 10 years.”

    Apologies for sounding rude, but that ‘commenter’ is clueless.

    Higashiyama
  • derrybderryb Posts: 36,031 ✭✭✭✭✭
    edited March 13, 2023 7:41PM

    @SilverPlatinum said:
    Lehman Brothers, SilverGate Bank, and now SVB Silicon Valley Bank .
    Who is next...........
    I will never trust any bank from now on............

    seriously, moved everything to my local credit union last week

    The decline from democracy to tyranny is both a natural and inevitable one.

  • GoldFinger1969GoldFinger1969 Posts: 1,167 ✭✭✭✭

    @SilverPlatinum said:
    wow, watching the bank stocks collapsing on CNBC makes me more confident holding physical precious metals.......
    At least no one can force me to sell my precious metal for $1, I can always ask whatever price I want......

    Actually, FDR once told Americans to sell their gold at below-market prices.

    Bank stocks are not collapsing, a selloff in reaction to SIVB.

  • GoldFinger1969GoldFinger1969 Posts: 1,167 ✭✭✭✭

    @RonB said:
    The SVB financial bank collapse will affect 1000 startups, a third will not be able to make payroll next week. Thousands of jobs will be affected.

    One commenter calls it an extinction level event, that could set back innovation by 10 years.

    Hyperbole. The whole thing will be mopped up in a few days.

    Whoever buys SIVB has a great in with Silicon Valley. I bet it's either JP Morgan Chase or Goldman Sachs. Maybe California wants a California bank to buy them, but they spit the bit on oversight.

  • GoldFinger1969GoldFinger1969 Posts: 1,167 ✭✭✭✭
    edited March 10, 2023 7:32PM

    @SilverPlatinum said:
    I could not understand how the government let it collapse, the bank was established in 1983, they are spending lots of money here and there, you might as well save this bank and prevent the side effects.
    I personally learned a lot today from this, and will never trust any stock from now on (especially bank stocks), if I would trade stocks, I will be a day trader, in and out on the same day........And I will invest more in physical precious metals.

    No offense, but you didn't learn anything today. :)

    You don't trust stocks -- but you will daytrade ? Yeah, daytrading is a proven method of generating long-term returns over buy-and-hold. :D

    You're not "investing" in PMs -- you're speculating/gambling with them.

    Banking has become much less volatile over the years. Bank failures are much fewer in number.

    And the government doesn't "let a bank collapse" -- it just does, the government just mops it up and makes for an orderly transition (Bear Stearns) and/or liquidation (Lehman Brothers).

  • GoldFinger1969GoldFinger1969 Posts: 1,167 ✭✭✭✭

    @SilverPlatinum said:
    Lehman Brothers, SilverGate Bank, and now SVB Silicon Valley Bank .
    Who is next...........
    I will never trust any bank from now on............

    Right, because this is 1932-33 with 3,500 bank failures....10 a day....for 2 years running. :)

  • GoldFinger1969GoldFinger1969 Posts: 1,167 ✭✭✭✭

    @derryb said:

    @SilverPlatinum said:
    Lehman Brothers, SilverGate Bank, and now SVB Silicon Valley Bank .
    Who is next...........
    I will never trust any bank from now on............

    moved everything to my local credit union last week

    CU's have worse financials in many cases. I used to deal with them.

  • GoldFinger1969GoldFinger1969 Posts: 1,167 ✭✭✭✭

    @derryb said:

    @Higashiyama said:
    @RonB said “One commenter calls it an extinction level event, that could set back innovation by 10 years.”

    Apologies for sounding rude, but that ‘commenter’ is clueless.

    a month ago jim Cramer was calling it strong buy. he should start his own inverse leveraged ETF.

    He did get that one wrong, not sure what he said on "Mad Money" but maybe I'll catch an update on CNBC.

  • rte592rte592 Posts: 1,387 ✭✭✭✭✭

    @derryb said:

    @SilverPlatinum said:
    Lehman Brothers, SilverGate Bank, and now SVB Silicon Valley Bank .
    Who is next...........
    I will never trust any bank from now on............

    moved everything to my local credit union last week

    I've been thinking about doing the same with wells Fargo.
    Have to keep a minimum of$1500 in checking and never pays any interest.
    The account is 30+ years old.
    The only thing it has going for it is wells Fargo's are most everywhere in travel.
    I dumped another bank account with AEA credit union 10 years ago that started pulling some crazy crap and wanting to charge me to have my money in an account there. That account was almost 30 years old and my longest running account.
    They quit paying anything for interest as well and I was always having to move money in and out to satisfy the criteria for no fees.
    They were always donating to different organizations...where the bank should have be paying some sort of interest to the shareholders.
    It's not rocket science,but a bank should serve it's members first and foremost.
    My fico score went up 20 points when I closed that account.

  • dcarrdcarr Posts: 7,900 ✭✭✭✭✭

    The monetary tide has been going out, at the Federal Reserve's helm.
    Now that naked swimmers such as SVB are starting to show their "stuff", the FED may be forced to reverse course on interest rates sooner than they have been indicating.

  • dcarrdcarr Posts: 7,900 ✭✭✭✭✭

    @GoldFinger1969 said:

    @SilverPlatinum said:
    wow, watching the bank stocks collapsing on CNBC makes me more confident holding physical precious metals.......
    At least no one can force me to sell my precious metal for $1, I can always ask whatever price I want......

    Actually, FDR once told Americans to sell their gold at below-market prices.

    Bank stocks are not collapsing, a selloff in reaction to SIVB.

    FDR didn't just "tell" people to turn in their gold, he ordered them to do so under threat of criminal prosecution.

  • dcarrdcarr Posts: 7,900 ✭✭✭✭✭

    @GoldFinger1969 said:

    You're not "investing" in PMs -- you're speculating/gambling with them.

    The same is true for every stock "investor" who buys stock without taking any role in running the company.
    If the only reason to buy a stock is because you think you will be able to sell it to someone for more in the future, that is purely speculation.

  • bidaskbidask Posts: 13,824 ✭✭✭✭✭

    jpm @130 ...bac @ 30 ...blk @636 are BUY BUY BUY

    I manage money. I earn money. I save money .
    I give away money. I collect money.
    I don’t love money . I do love the Lord God.




  • derrybderryb Posts: 36,031 ✭✭✭✭✭

    safety first, gains second

    The decline from democracy to tyranny is both a natural and inevitable one.

  • HigashiyamaHigashiyama Posts: 2,133 ✭✭✭✭✭

    @dcarr said " (a) The same is true for every stock "investor" who buys stock without taking any role in running the company.
    (b) If the only reason to buy a stock is because you think you will be able to sell it to someone for more in the future, that is purely speculation."

    This is an interesting statement; it would make for an excellent discussion in a finance class. With some caveats and clarifications, I tend to agree with it.

    Regarding (a), it's absolutely true that investors with a talented management team who can support the strategy/operations of companies they invest in should achieve superior results. There are quite a few counterexamples, though the ones I can think of are perhaps more in the category of "failed acquisitions" than "failed investments".

    I was about to disagree with (b), until I reread the "if the only reason" preface. Certainly investors who undertake relatively dispassionate fundamental analysis will achieve better results than investors who buy and sell based on gut feeling and emotion. This will be true of equities or PM. A lot of people buying stocks or gold/silver are engaging in pure speculation. Among amateur investors (and I don't mean to use amateur in a pejorative sense here), I suspect that you'll find that most buyers of PMs are doing no real analysis; I guess (and this statement is speculative!), a somewhat higher percentage of stock buyers are doing some real analysis, or at least are diversifying, with the knowledge that they don't have the background/tools to do their own analysis.

    Higashiyama
  • jmski52jmski52 Posts: 22,269 ✭✭✭✭✭

    The monetary tide has been going out, at the Federal Reserve's helm.
    Now that naked swimmers such as SVB are starting to show their "stuff", the FED may be forced to reverse course on interest rates sooner than they have been indicating.

    The Fed isn't really interested in stemming inflation. The Fed is a privately-held, for-profit consortium/cartel that has it's own interests in mind, and not anyone else's. They will be scooping up smaller banking institutions who don't qualify for tbtf - at fire sale prices.

    most buyers of PMs are doing no real analysis; I guess (and this statement is speculative!), a somewhat higher percentage of stock buyers are doing some real analysis, or at least are diversifying, with the knowledge that they don't have the background/tools to do their own analysis.

    Yeah, there's alot of financial illiteracy going around these days. Most serious buyers of pms have done more than an analysis - they've lived it for decades. And serious buyers of stocks or bonds or any other financial instruments ought to at least know what a sensitivity analysis is, and how to incorporate it into their own portfolio. But, I'm sure that's not the case, especially when it's just so easy to turn into Jim Cramer.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • HigashiyamaHigashiyama Posts: 2,133 ✭✭✭✭✭

    @jmski52 said: "Most serious buyers of pms have done more than an analysis - they've lived it for decades." Yes, though as a baby-boomer who came of age during stagflation, I need to work hard to make sure that this experience does not too strongly color my judgment.

    Regarding "And serious buyers of stocks or bonds or any other financial instruments ought to at least know what a sensitivity analysis is" Yes, although even a lot of professionals desperately want things distilled into a single number. Making good decisions in the face of a high degree of uncertainty (and being flexible enough to adjust over time) is ultimately what differentiates the winners from the losers.

    Higashiyama
  • jmski52jmski52 Posts: 22,269 ✭✭✭✭✭

    though as a baby-boomer who came of age during stagflation, I need to work hard to make sure that this experience does not too strongly color my judgment.

    Experience is a pretty good teacher.

    Making good decisions in the face of a high degree of uncertainty (and being flexible enough to adjust over time) is ultimately what differentiates the winners from the losers.

    Sometimes, doing nothing is the optimal move. Congress is a perfect example - they always feel compelled to "do something", when all that happens is that they add more layers of senseless complexity to an existing problem.

    Q: Are You Printing Money? Bernanke: Not Literally

    I knew it would happen.
  • SilverPlatinumSilverPlatinum Posts: 205 ✭✭✭

    @GoldFinger1969: Whoever buys SIVB has a great in with Silicon Valley. I bet it's either JP Morgan Chase or Goldman Sachs. Maybe California wants a California bank to buy them, but they spit the bit on oversight.

    AMEN, that they can find an angel buyer, shareholders are suffering on Yahoo message board, people invested since years just to see their investment gone in less than 24Hours.........

  • RonBRonB Posts: 628 ✭✭✭✭✭

    Silicon Valley Bank staff offered 45 days of work at 1.5 times pay, FDIC email shows.. (Reuters)

    https://www.reuters.com/markets/us/svb-financial-collapse-repeat-pix-2023-03-11/

    Collector of Classic US Coins
  • derrybderryb Posts: 36,031 ✭✭✭✭✭

    some days peanusts, some days only shells

    The decline from democracy to tyranny is both a natural and inevitable one.

  • SilverPlatinumSilverPlatinum Posts: 205 ✭✭✭

    Breaking news for Silicon Valley Bank:
    Elon Musk May Buy Failed Silicon Valley Bank. Tesla’s CEO says he's open to the idea of ​​Twitter acquiring the California bank that was shut down on March 10 by regulators.
    Elon Musk says he is interested in playing the role of white knight. That's what he just said on Twitter, when a user floated the idea that Twitter, which he owns, should acquire what was left of Silicon Valley Bank.
    This scenario would allow the billionaire to realize his ambition to transform the platform into a mega app called X, which would offer financial and other services.

  • RonBRonB Posts: 628 ✭✭✭✭✭

    Hedge funds offering to buy startup deposits stuck at Silicon Valley Bank, Semafor reports. Reuters

    https://www.reuters.com/business/finance/hedge-funds-offering-buy-startup-deposits-stuck-silicon-valley-bank-semafor-2023-03-11/

    Collector of Classic US Coins
  • GoldFinger1969GoldFinger1969 Posts: 1,167 ✭✭✭✭

    @dcarr said:

    @GoldFinger1969 said:
    You're not "investing" in PMs -- you're speculating/gambling with them.

    The same is true for every stock "investor" who buys stock without taking any role in running the company.
    If the only reason to buy a stock is because you think you will be able to sell it to someone for more in the future, that is purely speculation.

    Nonsense....it's participation in the real economy, where you get growth in capital and dividends. Going back decades, this amounts to about 7% in real terms, plus an inflation adjustment of about 3% (hence the 10% long-term number you all see).

    Businesses grow and expand. Your stock does the same.

    I enjoy collecting and I have some gold bullion but they are NOT investments.

  • GoldFinger1969GoldFinger1969 Posts: 1,167 ✭✭✭✭

    @jmski52 said:
    Yeah, there's alot of financial illiteracy going around these days. Most serious buyers of pms have done more than an analysis - they've lived it for decades. And serious buyers of stocks or bonds or any other financial instruments ought to at least know what a sensitivity analysis is, and how to incorporate it into their own portfolio. But, I'm sure that's not the case, especially when it's just so easy to turn into Jim Cramer.

    Cramer is actually a super-sharp guy. Made 20% a year for his clients for 18 years. His former column at RealMoney.com and his mornign commentaries are very useful. His "Mad Money" show is more for entertainment.

  • GoldFinger1969GoldFinger1969 Posts: 1,167 ✭✭✭✭
    edited March 11, 2023 9:57PM

    @RonB said:
    Hedge funds offering to buy startup deposits stuck at Silicon Valley Bank, Semafor reports. Reuters

    https://www.reuters.com/business/finance/hedge-funds-offering-buy-startup-deposits-stuck-silicon-valley-bank-semafor-2023-03-11/

    Of course.....they'll get at LEAST 95 cents on the dollar in 6 months, a year at worst. At 80 cents that's a near-risk free 18% for a year or 35% for 6 months. Hedge funds are SALIVATING at taking advantage of depositor stupidity.

    I wouldn't sell, even if I was a desperately stuck depositor who needed the funds, for less than 90 cents on the dollar and ONLY for funds for the next 3-6 months.

    If you DON'T NEED the $$$ until later this year or 2024 or beyond, just WAIT for the FDIC to send you a check.

  • GoldFinger1969GoldFinger1969 Posts: 1,167 ✭✭✭✭

    @SilverPlatinum said:

    @GoldFinger1969: Whoever buys SIVB has a great in with Silicon Valley. I bet it's either JP Morgan Chase or Goldman Sachs. Maybe California wants a California bank to buy them, but they spit the bit on oversight.

    AMEN, that they can find an angel buyer, shareholders are suffering on Yahoo message board, people invested since years just to see their investment gone in less than 24Hours.........

    The shareholders are probably toast. Maybe they get warrants or something to realize hidden value in some of the more illiquid assets.

    I sold my SIVB shares a few weeks ago. Thought about nibbling on the preferreds but passed.

  • GoldFinger1969GoldFinger1969 Posts: 1,167 ✭✭✭✭
    edited March 11, 2023 10:21PM

    @RonB said:
    Silicon Valley Bank staff offered 45 days of work at 1.5 times pay, FDIC email shows.. (Reuters)

    https://www.reuters.com/markets/us/svb-financial-collapse-repeat-pix-2023-03-11/

    Friend of a friend works in the NY branch. Given pink slip on Friday. Terms as you quoted.

    State of shock. Has worthless stock......YOU ALWAYS sell your stock and RSUs and options as soon as you can if you work at a company.....otherwise, you're DOUBLING DOWN with both $$$ and your employment.

    Just had dinner with my brother-in-law.....works for a software company in the Valley....wants $90-$120 for his stock that was $180 18 months ago.....I told him to SELL THE BLEEPIN' stock and if he is still there in a year or 2 years or 5 years or 10 years then sell the new stock/RSUs/options at that time or better yet over time.

    Says he'll "lose out" if the stock goes back to $180/share. Duh.....and if it NEVER gets there or the company IS sold -- but you're FIRED first ?????

    He has up to next Wednesday to sell shares and will be selling at $60 or better. :)

  • dcarrdcarr Posts: 7,900 ✭✭✭✭✭

    @GoldFinger1969 said:

    @dcarr said:

    @GoldFinger1969 said:
    You're not "investing" in PMs -- you're speculating/gambling with them.

    The same is true for every stock "investor" who buys stock without taking any role in running the company.
    If the only reason to buy a stock is because you think you will be able to sell it to someone for more in the future, that is purely speculation.


    Nonsense....it's participation in the real economy, where you get growth in capital and dividends. Going back decades, this amounts to about 7% in real terms, plus an inflation adjustment of about 3% (hence the 10% long-term number you all see).

    Businesses grow and expand. Your stock does the same.

    I enjoy collecting and I have some gold bullion but they are NOT investments.

    Nonsense ?

    Reddit folks creating a "short squeeze" in a non-dividend stock such as AMC is the most pure form of speculation there is.

    There is nothing wrong with "speculating". But buying a stock, solely on the belief that you can sell it to someones else for more later, is certainly not "investing".

  • OnastoneOnastone Posts: 3,744 ✭✭✭✭✭

    This emailed from our local bank letting us know our money is safe with them.

    "This was a dramatic week for a normally staid banking industry. Crypto currency bank Silvergate announced its self-liquidation on Wednesday. On Friday, California-based Silicon Valley Bank, which focused on banking for high-tech companies, failed. Silicon Valley Bank experienced a run on deposits and was taken over by the Federal Deposit Insurance Corporation (FDIC) in less than 48 hours. Silicon Valley Bank started the week as the 16th largest bank in the country, with $209 billion in assets, making this the second largest bank failure in United States history."

    Does anyone know what the largest bank failure was?

  • GoldFinger1969GoldFinger1969 Posts: 1,167 ✭✭✭✭

    @dcarr said:
    Nonsense ?
    Reddit folks creating a "short squeeze" in a non-dividend stock such as AMC is the most pure form of speculation there is.
    There is nothing wrong with "speculating". But buying a stock, solely on the belief that you can sell it to someones else for more later, is certainly not "investing".

    You can sell it to someone for more later (usually) because it is MORE VALUABLE. A bar of gold is no more valuable in 10 years than it is today.

    A share of Microsoft is more valuable today than 10 years ago.

    Lightning-strikes baloney like Reddit and WallStreetBets fail more often than not because it is gambling pure-and-simple.

  • GoldFinger1969GoldFinger1969 Posts: 1,167 ✭✭✭✭

    @Onastone said:
    Does anyone know what the largest bank failure was?

    Washington Mutual in 2008. Bought by JP Morgan Chase.

  • dcarrdcarr Posts: 7,900 ✭✭✭✭✭

    @GoldFinger1969 said:

    @dcarr said:
    Nonsense ?
    Reddit folks creating a "short squeeze" in a non-dividend stock such as AMC is the most pure form of speculation there is.
    There is nothing wrong with "speculating". But buying a stock, solely on the belief that you can sell it to someones else for more later, is certainly not "investing".

    You can sell it to someone for more later (usually) because it is MORE VALUABLE. A bar of gold is no more valuable in 10 years than it is today.

    A share of Microsoft is more valuable today than 10 years ago.

    Lightning-strikes baloney like Reddit and WallStreetBets fail more often than not because it is gambling pure-and-simple.

    "Gambling" ?
    Actually more like speculation (which has been my point).

    Very few people are actually "investors".
    Everybody else is "speculating".

  • derrybderryb Posts: 36,031 ✭✭✭✭✭

    FED fears bank failures more than anything. They errode confidence in the FED's ponzi scheme banking system, economic and financial leadership and eventally in the currency itself. 2009 was just aglimpse of how far the FED will go to avioid bank runs.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • RonBRonB Posts: 628 ✭✭✭✭✭

    Dow futures jump 250 points as regulators announce backstop of SVB depositors:

    https://www.cnbc.com/2023/03/12/stock-market-futures-open-to-close-news.html

    Collector of Classic US Coins
  • PillarDollarCollectorPillarDollarCollector Posts: 4,607 ✭✭✭✭✭
    edited March 12, 2023 4:38PM

    This is not the end it has been bad many times during my life and it always comes back up. Otherwise it is the end of life as we know it and we are not there yet.

    Same during my parents lives and same during my grand parents lives ups and downs and sometimes really bad then all comes back into order over time.

    Collecting interests: Mexico & Peru early milled 1 reales + 1796-1891 US dimes

    Sports: NHL & NFL

    Thank you Lord for another beautiful day!!!

  • PillarDollarCollectorPillarDollarCollector Posts: 4,607 ✭✭✭✭✭
    edited March 12, 2023 4:53PM

    Have to keep most of us (95% or more) in the slave lane and make sure not many make it out of that lifestyle. Gotta cut the excessive fat somewhere and continue the daily rat race.

    Have to wake up nice and early everyday to make sure the RING gets to Mordor before sundown!!!

    Collecting interests: Mexico & Peru early milled 1 reales + 1796-1891 US dimes

    Sports: NHL & NFL

    Thank you Lord for another beautiful day!!!

  • derrybderryb Posts: 36,031 ✭✭✭✭✭
    edited March 13, 2023 7:04PM

    We now have the second and third largest bank failures in US history within a couple of days of each other. It's a real shame that the few here who warned of this were called names by some of the others. I wonder what other conspiracy theories will unfold as being reality in the coming days.

    the real conspiracy theory is the selling of the US economy as being strong.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • blitzdudeblitzdude Posts: 5,297 ✭✭✭✭✭

    @dcarr said:

    @GoldFinger1969 said:

    @dcarr said:
    Nonsense ?
    Reddit folks creating a "short squeeze" in a non-dividend stock such as AMC is the most pure form of speculation there is.
    There is nothing wrong with "speculating". But buying a stock, solely on the belief that you can sell it to someones else for more later, is certainly not "investing".

    You can sell it to someone for more later (usually) because it is MORE VALUABLE. A bar of gold is no more valuable in 10 years than it is today.

    A share of Microsoft is more valuable today than 10 years ago.

    Lightning-strikes baloney like Reddit and WallStreetBets fail more often than not because it is gambling pure-and-simple.

    "Gambling" ?
    Actually more like speculation (which has been my point).

    Very few people are actually "investors".
    Everybody else is "speculating".

    Gutter hoarders are the speculators/gamblers. Wake up man!!

    The whole worlds off its rocker, buy Gold™.

  • derrybderryb Posts: 36,031 ✭✭✭✭✭
    edited March 13, 2023 7:51PM

    @RonB said:
    Keep in mind SVB Silicon Valley Bank is a niche bank that services primarily startups with venture capital loans so it does not really have any effect on regular banks. SVB is FDIC insured so accounts up to $250k are covered.

    There will be a natural contagion effect to regular bank stocks which could present a buying opportunity. I believe this whole event will be short lived, someone will eventually buy out SVB.

    SVB failed because they parked the majority of their depositors’ money ($119.9 billion) in US GOVERNMENT BONDS.

    "bonds lose value as interest rates rise. And this is what happened to Silicon Valley Bank."

    Look for government bond losses to cause further bank failures. Had it not been repeal of the Glass Steagl Act, banks would not be allowed to invest depositors money. The kicker is that Gov. Bonds are supposed to be "safe." LOL

    So yes, the FED will choose to shore up bonds (using lower interest rates) in lieu of attacking inflation. Got gold (or silver)?

    Look for
    1. further bank failures (are Alley Bank or First Republic Bank next?)
    2. More fear from depositors (withdrawals) which will lead to further bank insolvency
    3. FED reversal. Forget pivot
    4. Lower US bond prices
    5. Higher bullion and crypto prices

    The decline from democracy to tyranny is both a natural and inevitable one.

  • dcarrdcarr Posts: 7,900 ✭✭✭✭✭

    What I gather from the article, along with some of my own thinking about the situation, is that SVB didn't really fail because of the unrealized bond losses. They failed due to the bank run that occurred when SVB reported those unrealized losses. Had they been able to remain solvent, holding the bonds to maturity would have avoided losses. But forced selling of the bonds due to the ongoing bank run exacerbated the losses.

    Anyway, once interest rates started climbing, it was only a matter of time until some entity failed in one way or another. And now more to come, probably.

  • derrybderryb Posts: 36,031 ✭✭✭✭✭

    @dcarr said:

    What I gather from the article, along with some of my own thinking about the situation, is that SVB didn't really fail because of the unrealized bond losses. They failed due to the bank run that occurred when SVB reported those unrealized losses.

    And what makes it different for the remaining banks, most of whom are also experiencing the same unrealized losses? Should they falsify their reporting of the losses? What happens when they report the truth?

    Look for a sudden change in reporting requirements.

    The decline from democracy to tyranny is both a natural and inevitable one.

  • dcarrdcarr Posts: 7,900 ✭✭✭✭✭
    edited March 13, 2023 7:45PM

    @blitzdude said:

    @dcarr said:

    @GoldFinger1969 said:

    @dcarr said:
    Nonsense ?
    Reddit folks creating a "short squeeze" in a non-dividend stock such as AMC is the most pure form of speculation there is.
    There is nothing wrong with "speculating". But buying a stock, solely on the belief that you can sell it to someones else for more later, is certainly not "investing".

    You can sell it to someone for more later (usually) because it is MORE VALUABLE. A bar of gold is no more valuable in 10 years than it is today.

    A share of Microsoft is more valuable today than 10 years ago.

    Lightning-strikes baloney like Reddit and WallStreetBets fail more often than not because it is gambling pure-and-simple.

    "Gambling" ?
    Actually more like speculation (which has been my point).

    Very few people are actually "investors".
    Everybody else is "speculating".

    Gutter hoarders are the speculators/gamblers. Wake up man!!

    If you look at what I wrote recently, you will see that I wrote that there is nothing wrong with speculating (so long as you understand the risks that you are undertaking and are able to cover any losses).

    This is why I do not advocate using "leverage" when speculating since that makes you a weak hand that can't ride out downturns.

    PS:
    If you expect to make a financial gain by buying precious metals, that is a speculation.
    If you buy gold (and/or silver) for the purpose of diversification of assets and for protection from economic turmoil, that is like buying insurance (so it is neither a "speculation" nor an "investment").

  • dcarrdcarr Posts: 7,900 ✭✭✭✭✭

    @derryb said:

    @dcarr said:

    What I gather from the article, along with some of my own thinking about the situation, is that SVB didn't really fail because of the unrealized bond losses. They failed due to the bank run that occurred when SVB reported those unrealized losses.

    And what makes it different for the remaining banks, most of whom are also experiencing the same unrealized losses? Should they falsify their reporting of the losses? What happens when they report the truth?

    Look for a sudden change in reporting requirements.

    Yes, I am sure that SVB executives wish now that they had not reported the bond losses, especially since there would have been no losses had they been able to hold the bonds to maturity.

    The US Treasury and FED are probably very worried about this situation. So I would not be surprised to see a change in reporting requirements and reserve requirements. I would expect the changes would allow financial institutions to omit such requirements on the US Treasury Bond portions of their portfolios.

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