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They Took A Risk As Owners Of Those Securities, They Will Take The Losses

A report from ABC 7. “The feds shut down New York-based Signature Bank to protect investors following the collapse of the Silicon Valley Bank. Signature Bank is a big cryptocurrency lender in New York. On Sunday, the Federal Deposit Insurance Corporation (FDIC) took over its assets worth more than $110 billion and more than 88 billion in deposits. Signature is now the third largest bank to fall into financial failure in U.S. history.”

From Bloomberg. “The positive effect from the American regulators’ overnight support actions in the banking system quickly evaporated on Monday morning, with stocks signaling that fallout from the incident is far from over. First Republic Bank remained under pressure, with shares plunging 70% in US premarket trading even after the lender moved to try and quell concern about its liquidity after the failure of SVB. PacWest Bancorp lost more than 40%, Western Alliance Bancorp sank 30%, Charles Schwab Corp. dropped about 20% and Zions Bancorp fell 15%. Comerica Inc. slid 7%.”

“Most large US banks also erased earlier gains in US premarket trading, with JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. all trading lower. ‘We’re seeing a liquidity withdrawal, the classic thing that you’d expect following a credit event like what’s happening at SVB,’ said Haig Bathgate at Atomos Investments. ‘People get scared, reduce exposure to equities and move into government bonds. They’re wondering if anyone else will be in this position as these things don’t tend to happen in isolation.'”

From Cryptopolitan. “The employees of First Republic Bank are preparing themselves for the worst as the bank is on the verge of going out of business. The Federal Deposit Insurance Corporation of the United States has reached a settlement with First Republic Bank, and as a result, the bank is no longer processing any wire transfer transactions. Reports of First Republic Bank’s collapse have been circulating on social media. Twitter user @APAbacus has claimed that the bank is on the verge of bankruptcy, and staff is bracing for the worst on March 12.”

“These banks have shown contracting margins over the past year, or the smallest expansions of margins. They include Customers Bancorp, First Republic Bank, Sandy Spring Bancorp, New York Community Bancorp, First Foundation, Ally Financial, Dime Community Bancshares, Pacific Premier Bancorp, Prosperity Bancshares, and Columbia Financial. The news of First Republic Bank’s collapse comes amid growing concerns about the stability of the US banking system.”

From NPR. “A senior Treasury official on Sunday stressed Silicon Valley Bank’s investors will not be provided with any relief by Sunday’s actions. ‘The bank’s equity and bondholders are being wiped out. They took a risk as owners of those securities. They will take the losses,’ the official said.”

From NBC News. “SVB’s historic meltdown last week was largely attributed to deteriorating business conditions in the firm’s concentrated customer base and an ill-timed decision to invest billions of dollars in mortgage-backed securities. But long-time clients and others with intimate knowledge of how SVB operated say the bank did itself no favors. Between the bank’s refusal to upgrade its technology to meet the demands of modern-day businesses and its treatment of many startup customers, SVB’s problems extended beyond its risk profile and a challenging economy.”

“An ex-SVB manager, who worked on risk initiatives and asked not to be identified, said the bank remained technologically stagnant even as it was a haven for startups that had an eye for cutting-edge software and products. As she described it, ‘the backend of the bank is all bubblegum and wires.'”

From First Post. “On 9 March, the bank’s shares plunged by 41 per cent, the biggest decline since 1998. The fall came after SVB sold all of the available-for-sale securities in its portfolio and updated its forecast for the year to include a sharper decline in net interest income, reports Hindustan Times. The regulatory filing at the end of the business day showed that SVB had a negative cash balance of $958 million.”

Fromm WYH Radio. “When looking at prices at the market level, the NAR found that 20 of the 186 cities monitored by the group saw prices drop in the fourth quarter of last year. Among the cities that saw prices drop included San Jose, California, decreasing 5.8% compared to a year ago; San Francisco, California, dropping 6.1%; Boise, Idaho, falling 3.4%; Anaheim, California, down 1.6%; Austin, Texas, down 1.3%; Los Angeles, California, falling 1.3%; and Boulder, Colorado, down 2.0%, the NAR reported.”

“In the fourth quarter, the NAR listed San Jose as the most expensive place to buy a home in the U.S., despite it seeing prices fall 17% from their peak when the median home price was $1.9 million in the second quarter last year. They now sit just below $1.6 million. Part of the reason prices are decreasing in these areas comes from what NAR’s chief economist Lawerence Yun calls ‘weaker employment and higher instances of residents moving to other areas.’ Yun noted that the relief is needed, as prices have far surpassed the wage increases and consumer price inflation throughout the last half-decade.  ‘A slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42% in the past three years,’ Yun shared.”

The Mountain Democrat in California. “A year ago the median selling price for a El Dorado County home was $740,000. The average time a home was listed before an offer was accepted was seven days and 80% of sales averaged 103% higher than the listing price. This year the housing market, like the weather, has been cold and wet. Since the first of this year the median price for a county home has been $560,000. Statistically, sellers have lost 24% of their home’s 2022 value in the last year, while mortgage rates for buyers have increased 89%. Sellers need to price their homes at where the market is today or will be tomorrow not where it has been.”

The Coeur d’Alene Press in Idaho. “The median price for single-family homes in Kootenai County fell slightly to $511,000 in February. It was $525,000 in January. The local housing market reached a median price of $559,000 in May, which was the highest of 2022.”

KING 5 in Washington. “Although interest rates are high, that’s not stopping homebuyers in Pierce County. Victor Bustos spent his Sunday looking for a potential new home with his daughters. Bustos said he’s seen seven homes so far. According to Regina Madira with RM Home Specialists, that isn’t surprising. ‘We just saw a surge of inventory, really starting since last August,’ Madira said. ‘Just so much inventory, and that’s when the interest rates started to go really high, and so the demand really fell off.'”

The Deseret News. “The average total building cost in Utah, including land and construction fees, is $538,000, the study shows. That is $97,000 less than the average single-family home listing price of $635,000. Quinn Crowton’s work as a realtor for Century 21 Everest takes him across Weber, Tooele, Salt Lake and Utah counties. He said homebuyers wanting to move to expanding areas like Herriman, Bluffdale and Riverton should definitely look at new builds, which are priced competitively with older homes.”

“The current housing market has made it much easier to get seller concessions, where the seller agrees to help pay part of the closing costs, Crowton said. Loans and discounts are also more prevalent, including the 2-1 buydown loan, a mortgage where the first two years of the loan are set at a reduced price. ‘Since (interest) rates hiked, lots of builders are wanting to get rid of their inventory, so they’re willing to take lower bids and willing to give those incentives back to the buyers to get rid of their inventory,’ he said.”

Blackburn News in Canada. “The real estate market in Chatham-Kent is seeing fewer buyers these days despite more homes available for sale, something that was not the case over the past few years. The average price of homes sold in February was $426,963, a decrease of 19.7 per cent from February 2022. Local realtors sold a total of $26 million in February, a sharp decrease of 60.5 per cent from the same month last year. If you’re a buyer there’s lots of inventory to choose from. The Chatham-Kent Association of Realtors also said there are a total of 294 homes for sale, a 320 per cent jump from a year ago. ‘Active listings haven’t been this high in the month of February in more than five years,’ CKAR said.”

The Sydney Morning Herald in Australia. “Red Maple Finance director and mortgage broker Nariman Amalsadiwala said his clients in Melbourne’s western suburbs were suffering as rate rises continued to bite. ‘If you’re an average household doing your budget how do you find that extra $1000 to $2000 per month?’ he said. ‘People will be eating up their savings. Some … are going to be in a bit of stress. We might even see some investors selling investment properties if they just can’t take it.'”

Related Posts

New Homes Are Taking A Hit!

https://www.youtube.com/watch?v=US1hhP88jP0 https://www.youtube.com/watch?v=uolRA-Avi2U https://www.youtube.com/watch?v=oPn78_LAHIw https://www.youtube.com/watch?v=Ya0ax7ldoSI

This Post Has 104 Comments

  1. ‘A year ago the median selling price for a El Dorado County home was $740,000…Since the first of this year the median price for a county home has been $560,000’

    Good thing everybody put 30% down.

  2. In its regulatory Consolidated Financial Statements for Holding Companies—FR Y-9C, filed with the Federal Reserve, SVB Financial, reported a negative $1.911 billion in accumulated other comprehensive income as of Dec. 31. That is line 26.b on Schedule HC of the report, for those keeping score at home. You can look up regulatory reports for any U.S. bank holding company, savings and loan holding company or subsidiary institution at the Federal Financial Institution Examination Council’s National Information Center. Be sure to get the name of the company or institution right — or you may be looking at the wrong entity.

    Here’s how accumulated other comprehensive income (AOCI) is defined in the report: “Includes, but is not limited to, net unrealized holding gains (losses) on available-for-sale securities, accumulated net gains (losses) on cash flow hedges, cumulative foreign currency translation adjustments, and accumulated defined benefit pension and other postretirement plan adjustments.”

    In other words, it was mostly unrealized losses on SVB’s available-for-sale securities. The bank booked an estimated $1.8 billion loss when selling “substantially all” of these securities on March 8.
    The list of 10 banks with unfavorable interest margin trends

    On the regulatory call reports, AOCI is added to regulatory capital. Since SVB’s AOCI was negative (because of its unrealized losses on AFS securities) as of Dec. 31, it lowered the company’s total equity capital. So a fair way to gauge the negative AOCI to the bank’s total equity capital would be to divide the negative AOCI by total equity capital less AOCI — effectively adding the unrealized losses back to total equity capital for the calculation.

    Getting back to our list of 10 banks that raised similar red margin flags to those of SVB, here’s the same group, in the same order, showing negative AOCI as a percentage of total equity capital as of Dec. 31. We have added SVB to the bottom of the list. The data was provided by FactSet:

    Customers Bancorp Inc. West Reading, Pa. -$163 $1,403 -10.4% $20,896
    First Republic Bank San Francisco -$331 $17,446 -1.9% $213,358
    Sandy Spring Bancorp Inc. Olney, Md. -$132 $1,484 -8.2% $13,833
    New York Community Bancorp Inc. Hicksville, N.Y. -$620 $8,824 -6.6% $90,616
    First Foundation Inc. Dallas -$12 $1,134 -1.0% $13,014
    Ally Financial Inc. Detroit -$4,059 $12,859 -24.0% $191,826
    Dime Community Bancshares Inc. Hauppauge, N.Y. -$94 $1,170 -7.5% $13,228
    Pacific Premier Bancorp Inc. Irvine, Calif. -$265 $2,798 -8.7% $21,729
    Prosperity Bancshare Inc. Houston -$3 $6,699 -0.1% $37,751
    Columbia Financial, Inc. Fair Lawn, N.J. -$179 $1,054 -14.5% $10,408
    SVB Financial Group Santa Clara, Calif. -$1,911 $16,295 -10.5% $211,793
    Source: FactSet

    Click on the tickers for more about each bank.

    Read Tomi Kilgore’s detailed guide to the wealth of information available for free on the MarketWatch quote page.

    Ally Financial Inc. — the third largest bank on the list by Dec. 31 total assets — stands out as having the largest percentage of negative accumulated comprehensive income relative to total equity capital as of Dec. 31.

    To be sure, these numbers don’t mean that a bank is in trouble, or that it will be forced to sell securities for big losses. But SVB had both a troubling pattern for its interest margins and what appeared to be a relatively high percentage of securities losses relative to capital as of Dec. 31.
    Banks with the highest percentage of negative AOCI to capital

    There are 108 banks in the Russell 3000 Index that had total assets of at least $10.0 billion as of Dec. 31. FactSet provided AOCI and total equity capital data for 105 of them. Here are the 20 which had the highest ratios of negative AOCI to total equity capital less AOCI (as explained above) as of Dec. 31:
    Bank Ticker City AOCI ($mil) Total equity capital ($mil) AOCI/ (TEC – AOCI) Total assets ($mil)
    Comerica Inc. Dallas -$3,742 $5,181 -41.9% $85,406
    Zions Bancorporation N.A. Salt Lake City -$3,112 $4,893 -38.9% $89,545
    Popular Inc. San Juan, Puerto Rico -$2,525 $4,093 -38.2% $67,638
    KeyCorp Cleveland -$6,295 $13,454 -31.9% $189,813
    Community Bank System Inc. DeWitt, N.Y. -$686 $1,555 -30.6% $15,911
    Commerce Bancshares Inc. Kansas City, Mo. -$1,087 $2,482 -30.5% $31,876
    Cullen/Frost Bankers Inc. San Antonio -$1,348 $3,137 -30.1% $52,892
    First Financial Bankshares Inc. Abilene, Texas -$535 $1,266 -29.7% $12,974
    Eastern Bankshares Inc. Boston -$923 $2,472 -27.2% $22,686
    Heartland Financial USA Inc. Denver -$620 $1,735 -26.3% $20,244
    First Bancorp Southern Pines, N.C. -$342 $1,032 -24.9% $10,644
    Silvergate Capital Corp. Class A La Jolla, Calif. -$199 $603 -24.8% $11,356
    Bank of Hawaii Corp Honolulu -$435 $1,317 -24.8% $23,607
    Synovus Financial Corp. Columbus, Ga. -$1,442 $4,476 -24.4% $59,911
    Ally Financial Inc Detroit -$4,059 $12,859 -24.0% $191,826
    WSFS Financial Corp. Wilmington, Del. -$676 $2,202 -23.5% $19,915
    Fifth Third Bancorp Cincinnati -$5,110 $17,327 -22.8% $207,452
    First Hawaiian Inc. Honolulu -$639 $2,269 -22.0% $24,666
    UMB Financial Corp. Kansas City, Mo. -$703 $2,667 -20.9% $38,854
    Signature Bank New York -$1,997 $8,013 -20.0% $110,635

    Again, this is not to suggest that any particular bank on this list based on Dec. 31 data is facing the type of perfect storm that has hurt SVB Financial. A bank sitting on large paper losses on its AFS securities may not need to sell them. In fact Comerica Inc. which tops the list, also improved its interest margin the most over the past four quarters, as shown here.

    But it is interesting to note that Silvergate Capital Corp. which focused on serving clients in the virtual currency industry, made the list. It is shuttering its bank subsidiary voluntarily.

    Another bank on the list facing concern among depositors is Signature Bank of New York, which has a diverse business model, but has also faced a backlash related to the services it provides to the virtual currency industry. The bank’s shares fell 12% on Thursday and were down another 24% in afternoon trading on Friday.

    Signature Bank said in a statement that it was in a “strong, well-diversified financial position.”

    https://www.msn.com/en-us/money/savingandinvesting/20-banks-that-are-sitting-on-huge-potential-securities-losses-as-was-svb/ar-AA18tAxj

    1. I can’t keep track of all this. It doesn’t help that Silvergate, Silicon Valley, and Signature Banks all have similar names.

      Gold’s a-poppin’ too.

      2. I was buying CDs in banks like these but switched to treasuries last year because they had the same yield and better state tax treatment.

        bankcorp , so many had bankcorp in the name and yes I looked them up at the time they were all in good standing 😧

      3. Gold’s a-poppin’ too.

        They printed too much money, and it’s sloshing around everywhere. Now, they’re desperately trying to still keep it sloshing. They could have allowed tens of billions of it to go to money heaven by not bailing rich depositors, but that ship sailed.

        1. Now, they’re desperately trying to still keep it sloshing.

          It seems that they are only serious about fighting inflation and CPI when it doesn’t hurt rich people.

    2. I have great news everybody! My VC firm, which invests in crypto payment processing for porn sites, cam girls, and medical marijuana dispensaries and had all its funds deposited in a bank run by woke micro-dosing idiots in Silicon Valley, got every penny of its deposits restored by Janet Yellen! The CCP-run VC firm in the office next to us at the Rainbow of Innovation Incubator that invests in AI for facial recognition security systems and monitoring speech on the internet site also got all their funds restored!! To celebrate all this awesomeness we are grilling Beyond Meat patties in the courtyard today. Swing by and celebrate with us!

    3. What happened to all that “stress testing” the Fed has been doing since the last banking puke fest to ensure we don’t have anymore major problems in the banking sector?

        1. It’s strange. All 3 were deep into imaginary coins. Could be some weakness there! The SV outfit was run like a lemonade stand, risk wise. Whatever happened to having yer assets marked at true value? I guess that’s too old school.

          1. What we have found is that the billionaire “elites” who are running things are neck deep in crypto. Musk, Cuban, etc.

        2. Another Narrative the left is trying to get rolling is that the border invasion is Republican’s fault, because they are the ones yelling that the border is open and not secured.

          A friend of mine thinks that Brandon, along with the rest of the Dems are going to pivot into a “law and order” stance as 2024 approaches. He also thinks that Brandon will be the candidate and will “win”.

          Me: I’m not even sure we’re going to make it to Nov 2024.

          1. If the Dems pivot to law and order, it will be just long enough to get elected. Then it will be right back to the Woke Olympics.

      3. What happened to all that “stress testing”
        My limited knowledge on the recent stress testing is that in the last 4-5 years all stress tests assumed rates tanked to zero when things were hitting the fan, not increasing. Heard 3rd party as I haven’t been involved in stress tests in 10 years.

    4. Something that I’ve noticed is conveniently missing from most discussions on the latest bailout is the fact that the ‘assets’ being listed is mostly their loan book and those loan books have barely begun to rack up the losses that they surely will be making over the next few years. This is why no one is bidding for them. Signature Bank is heavily into loans to crypto. I’m sure it will be fine. Not!

      Another observation is regarding Ally. One of the great predictors of financial mismanagement is the sponsorship of a NASCAR team. I keep a collection of bankrupt sponsor cars. Soon Ally will be one of them.

    5. https://www.frbsf.org/our-district/leadership/office-of-the-president/

      As President and CEO of the Federal Reserve Bank of San Francisco, Mary C. Daly leads an organization dedicated to building a healthy, inclusive, and sustainable economy in the Federal Reserve System’s Twelfth District, the largest and most diverse within the Federal Reserve System (FRS).… She actively supports the Bank’s commitment to understanding the economic and financial risks of climate change and inequities, issues that materially affect the Fed’s mandate… Mary’s leadership is underpinned by her belief in “3D public service,” the need for public servants to be fully human —vulnerable, compassionate, optimistic, and pragmatic—to help solve the most pressing issues of our time.…

    6. Looks like the crypto scam operation Circle was the largest depositor at SVB with 3 billion $.

      If this was a bank in Texas with large uninsured deposits of oil and gas exploration companies would the outcome have been the same?

  3. The sudden closure of New York’s Signature Bank by state regulators Sunday underscored the urgency of extraordinary US efforts to backstop the nation’s banking system and quell mounting concerns among customers about the safety of their deposits.

    The decision to close Signature came as a surprise to its managers, who found out shortly before the public announcement, according to a person familiar with the matter. The bank faced a torrent of deposit outflows on Friday, but the situation had stabilized by Sunday, the person said, asking not to be identified discussing a private matter.

    “I think that if we’d been allowed to open tomorrow, that we could’ve continued — we have a solid loan book, we’re the biggest lender in New York City under the low-income housing tax credit,” said former Congressman Barney Frank, a Signature Bank board member known for the Dodd-Frank Act, which overhauled US financial regulation in the wake of the global financial crisis. “I think the bank could’ve been a going concern.”

    “I understand the deposit outflow,” he said. “But I think it was a classic case of being illiquid but not insolvent, and being illiquid for exogenous reasons that would’ve been corrected.”

    Signature Bank’s collapse may cause serious problems for one corner of the tech industry: the crypto sector. Coinbase Global Inc., the US’s biggest crypto exchange, said that it had a $240 million balance at the bank as of Friday night. Paxos Global said it had $250 million there, and that it “holds private deposit insurance well in excess of our cash balance and FDIC per-account limits.”

    “Crypto is almost completely shut out of US banking now,” said Nisa Amoils, managing partner at A100x Ventures.

    Signature is the second crypto-friendly bank to fail in less than a week. On Wednesday, Silvergate announced plans to wind down operations and liquidate its bank amid scrutiny from regulators and a criminal investigation by the Justice Department’s fraud unit into dealings with Sam Bankman-Fried’s fallen crypto giants FTX and Alameda Research. The seizure of Silicon Valley Bank came less than two days later.

    https://uk.finance.yahoo.com/news/signature-bank-closed-york-regulators-231946962.html

    1. Oh gawd, Barney Frank is involved? How can anyone take that seriously? As the bust gains momentum these loan books are going to implode and currently the FDIC owns them. Who would bid anywhere near what they want for that garbage?

      Let’s do a fun thought experiment. Let’s visualize one of the character types that John so eloquently wrote about above and consider how they will likely react now that their deposits have been made whole. Do they really need to repay their loans with the funny money bank? Why not just take the money and run? It’s covered, right??

      This is the moral hazard we occasionally hear about. It appears that the loan losses alone from these three banks could easily wipe out the FDIC’s reserve and it is early, very early still. Many more banks are going to need ‘help’ before we are done with this bubble.

      1. easily wipe out the FDIC’s reserve and it is early, very early still.

        That’s what I was thinking.

  5. California lawmakers were told during a briefing call Sunday that the Treasury Department and Federal Deposit Insurance Corporation’s top priority is to engineer a sale following the collapse of Silicon Valley Bank, two people on the call told NBC News.

    Rep. Ro Khanna, D-Calif., said that acquisitions would be “the ideal situation” and that the California delegation made that clear when speaking to the FDIC on Saturday night.

    “That’s what we urged them to work on. They said they’re working on it. But to have that happen, you need FDIC and Treasury involved, because these assets are not liquid, and they may pay off 10 years from now,” Khanna said on CBS News’ “Face the Nation.” “I don’t think you’re gonna get a private seller without the Treasury Department and FDIC being actively engaged in helping liquidity with these treasury bonds.”

    https://www.msn.com/en-us/money/companies/treasury-fdics-top-priority-is-to-find-buyer-for-silicon-valley-bank-hours-before-asia-markets-open/ar-AA18wSq6

    ‘these assets are not liquid’

    Oh dear…

  6. 𝗪𝗵𝗲𝗮𝘁 𝗥𝗶𝗱𝗴𝗲, 𝗖𝗢 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗖𝗿𝗮𝘁𝗲𝗿 𝟭𝟴% 𝗬𝗢𝗬 𝗔𝘀 𝗬𝗲𝗮𝗿𝘀 𝗢𝗳 𝗦𝘂𝗯𝗽𝗿𝗶𝗺𝗲 𝗠𝗼𝗿𝘁𝗴𝗮𝗴𝗲 𝗟𝗲𝗻𝗱𝗶𝗻𝗴 𝗥𝗮𝘃𝗮𝗴𝗲 𝗗𝗲𝗻𝘃𝗲𝗿 𝗔𝗿𝗲𝗮

    https://www.movoto.com/wheat-ridge-co/market-trends/

    𝘈𝘴 𝘢 𝘳𝘦𝘯𝘰𝘸𝘯 𝘦𝘤𝘰𝘯𝘰𝘮𝘪𝘴𝘵 𝘴𝘵𝘢𝘵𝘦𝘥 𝘴𝘰 𝘦𝘭𝘰𝘲𝘶𝘦𝘯𝘵𝘭𝘺, “𝘐𝘧 𝘺𝘰𝘶 𝘩𝘢𝘷𝘦 𝘵𝘰 𝘣𝘰𝘳𝘳𝘰𝘸 𝘧𝘰𝘳 15 𝘰𝘳 30 𝘺𝘦𝘢𝘳𝘴, 𝘺𝘰𝘶 𝘤𝘢𝘯’𝘵 𝘢𝘧𝘧𝘰𝘳𝘥 𝘪𝘵 𝘯𝘰𝘳 𝘪𝘴 𝘪𝘵 𝘢𝘧𝘧𝘰𝘳𝘥𝘢𝘣𝘭𝘦.”

  8. Washington Post navel gazing on its own censorship and propaganda:

    “Who’s afraid of misinformation? That’s not a rhetorical question. The purported danger from misleading online news has been one of the biggest stories in the English-speaking world since 2016. A veritable industry of academic institutions and think-tank organs — with government encouragement — has sprung up in response.”

    A veritable industry?

    “Something else helps distinguish misinformation hawks from misinformation doves, according to a recent paper published in New Media & Society, a top communications journal. In short: The people who perceive the greatest social threat from misinformation tend to be those who have the gravest doubts about ordinary people’s common sense.

    But there’s a natural rejoinder from the misinformation hawks: That democracy can’t work properly if citizens are misinformed, and genuine public debate and reasoning are being drowned in a sea of falsehoods. In this view, crackdowns on misinformation don’t reflect a lack of faith in democracy, but a desire to perfect it — to ascertain the true public will, untainted by social media misdirection.

    The misinformation scare of the past seven years, then, is driven by a pessimistic view of ordinary people’s democratic faculties — and an optimistic view of how this might be transformed by elite intervention in public discourse.”

    https://archive.is/blWw4

    “A desire to perfect it”

    “Elite intervention”

    Translation: stop noticing. Only *we* are allowed to notice.

    1. “genuine public debate and reasoning are being drowned in a sea of falsehoods.”

      Free speech isn’t free. It costs $44 billion.

  11. A reader sent these in:

    How about we let capitalism happen? No one was having emergency meeting when home prices went up 40% in two years stealing the American dream from an entire generation

    https://twitter.com/GRomePow/status/1634958078637674497

    $SIVB …. Maybe a little less “ESG” and a little more “RM” (Risk Management) would have made the difference

    https://twitter.com/joceyreyes209/status/1634687699448922112

    The more @DavidSacks and these other dildos tweet about SVB, the more I say let it burn. Just ringfence the banks that aren’t insolvent on a mark to market basis. Bunch of insufferable tw*ts.

    https://twitter.com/Keubiko/status/1634920830407958534

    Well there goes SVBs hopes of Gov bailout. What happened to ‘SVB is a liberal haven of money which Biden and Yellen wants to protect some rich liberal donors money’ argument. Not that they aren’t but the argument is tougher now. 🙃

    https://twitter.com/SamanthaLaDuc/status/1634948814749712386

    Any competent corporate treasurer understands the 250k FDIC limit and manages cash with money market funds, sweep arrangements, repo, bills etc. Maybe the guys who were pouring money into FTX and monkey jpeg “startups” aren’t all that sophisticated?

    https://twitter.com/FedGuy12/status/1634949182791487489

    Hahaha. Now the truth comes out. What a giant phony. He can go pound sand. Scumbag.

    https://twitter.com/StealthQE4/status/1634926637421854722

    Lots of really bad takes about SVB. Let’s try and correct

    This is not a solvency crisis like 2008. Bad loans or poor investments were not made. Money was not lost. So, everyone is going to get their money back. (And please no takes about no interest rate hedging. Asset/liability mismatches are how banking works.)

    Instead this is an old fashion 1930s liquidity crisis. Too many depositors demanded cash at once (as in right now) and SVB (and SI) could not convert loans and securities (and crypto) to cash that quickly. So, everyone is getting their money back from SVB (and SI), just not at 8AM Monday. And, yes this is a big problem as this is working capital for a lot of companies. They have payrolls to meet and vendors to pay next week. And if they don’t pay bills and employees, they in turn don’t pay their bills and this can quickly cascade into a major economic problem.

    The important question is why so many demanded their money back at once. And I’m not referring to the last two days. I’m asking about the days/weeks leading up to this last two days forcing SVB to sell securities and realize a $1.8B loss, necessitating a capital raise. Why were depositors withdrawing in big enough amounts before Thursday/Friday?

    First, welcome to the world of mobile banking. Gone are the frictions of standing in line with tellers instructed to count money slowly. (Media images of lines Friday were largely gawkers)

    How did $42 billion get withdrawn Friday alone without thousands in line? Answer, your phone! This is not the Bailey Savings and Loan anymore.

    This should scare the hell of bankers and regulators worldwide. The entire $17 trillion deposit base is now on a hair trigger expecting instant liquidity.

    Add in social media and millions get a message, like Peter Thiel telling Founders companies to pull out, or Senator Warren gloating that SI went under, and pick up their phone open a Chase account and Venmo-ed their life savings into it in 10 minutes. Instant liquidity (not solvency) crisis with everyone still in bed.

    Banking will never be the same.

    The second, and I did a long thread on this on Friday … banks are over-reserved, after 14 years of QE, and are still paying 0.50% on accounts when T-bills are yielding 5.00%. They don’t need to compete for deposits.

    Initially as rates passed 2%, 3% and 4%, the public did not notice. So bankers thought deposits were well anchored at their bank and not moving regardless of the interest rate paid.

    But at 5% the public finally noticed, and millions reached for the phone at once and transferred to a money market account or Treasury direct to buy T-bills. Banks were squeezed to convert loans and securities to cash instantly so depositors could leave for better rates.

    Add in the bleed out from tech firms struggling, and Senator Warrens tweeting with glee about SI going out of business, and depositors at SVB got the message and picked up their phones and acted.

    This is why I have been tweeting that this has to stop now. The Fed is meeting Monday at 11:30. Too late! They need to meet today (Sunday) at 11:30.

    What needs to be done? Two things.

    The FDIC needs to raise the deposit insurance ceiling to unlimited as they did this in 2008. Besides $250k is a made up number anyway. So make up a bigger number.

    Banks need to get their deposit base to stop figuring out how to buy a 4.5% money market fund. They need to raise the interest rates they pay 3.00% – 3.50%, from 0.50%, immediately. Yes, this will kill bank profitability so expect Bank Execs to balk at doing this.

    This way the public gets the message that you money is safe, no matter the bank, or the amount, and the rate paid on your money is at least competitive with other alternatives. So, do nothing.

    Otherwise, if we are all waiting for the Fed to START a meeting at 11:30 Monday, hundreds of billions of deposits will have moved by phone and it will be far worse.

    https://twitter.com/biancoresearch/status/1634885127179325440

    Total bullocks. Supreme sh$t take. SVB had a IRR of over 35% of their Tier 1 for a 200 bp move. That is a total outlier in terms of IRR management. It not only shows bad risk management but also regulatory failure. Saying this is how banking works shows that you’re an absolute 🤡

    https://twitter.com/INArteCarloDoss/status/1634923017712312320

    You’ve all seen this low lifer chime in with his usual indecency begging for a handout. Am sure everyone is interested in understanding his lowly motives. Here they are. 1/4

    https://twitter.com/INArteCarloDoss/status/1634974692187725824

    Can’t believe this is getting any traction. This is essence of what’s wrong today. Sh$t analysis by sh$t thinkers who most likely have conflicts of interests. How is Fed to blame for horrendous interest rates risk management? There is no need for more to refute this sh$t.

    https://twitter.com/INArteCarloDoss/status/1634884438747394050

    Bill Ackman creating a wave of market hysteria and panic and threatening onset of totally unjustified bank runs fears while he tries to steer public opinion in favor of bailing-out a significant portion of his sh$t fund. How is that not market manipulation? @GaryGensler

    https://twitter.com/INArteCarloDoss/status/1634860871380877312

    Watching a group of dudes who normally preach from Ayn Rand’s book of philosophy suddenly demand Biden rescue $SVIB depositors while simultaneously doing everything possible to cause more panic in mkts and around regional banks…. it’s a #wholeotherlevel of hypocrisy

    https://twitter.com/SRuhle/status/1634703830032998400

    Let me tell you, if Fed pivots because the recipients of years of QE and ZiIRP are about to lose some of their monopoly money in perfect accordance with current regulatory framework and laws, then you are set on path of guaranteed super inflation. Beware what you wish for.

    https://twitter.com/INArteCarloDoss/status/1634848046721953793

    Millennials: *faces a student debt crisis*
    Gov: Sorry, nothing we can do.
    Millennials: *faces a housing crisis*
    Gov: Sorry, nothing we can do.
    Venture Capitalists: *faces a deposit crisis*
    Gov: On it. It’ll be fixed by Monday.

    https://twitter.com/StephenPunwasi/status/1635119475669479424

    Now we start to see who’s swimming naked in regards to SVB

    https://twitter.com/menlobear/status/1634641697740304386

    The Kobeissi Letter

    The question now becomes how the SVB collapse impacts interest rates. If this government backstop is the solution, it’s time to get back to fighting inflation. We are on our 21st consecutive month of 5%+ inflation.

    https://twitter.com/KobeissiLetter/status/1635076489468313600

    Wow … the Fed and the US Treasury just became the FDIC backing the entire banking system.

    https://twitter.com/WallStreetSilv/status/1635078781374439425

    If all bank deposits are now insured 100% by the US govt … what new moral hazards are we building into the system? If there is zero risk to bank risk managers making lousy decisions, they can “bet the bank” for their annual bonus, knowing the US govt will cover them if wrong.

    https://twitter.com/WallStreetSilv/status/1635052681025974272

    1. Millennials: *faces a student debt crisis*
      Gov: Sorry, nothing we can do.

      What’s this fookin’ clown talking about? They haven’t been paying their loans for 3 years now. Get a clue, aszhole.

    2. “Gone are the frictions of standing in line with tellers instructed to count money slowly. ”

      Ugh, how did I not know this? And here all this time I thought bank tellers were just dumb.

  13. Go back to sleep, sheeple. Watch the Oscars. Watch some sportsball.

    Washington Post — Science of forgetting: Why we’re already losing our pandemic memories (3/13/2023):

    “How much do you remember about the past three years of pandemic life? How much have you already forgotten?

    A lot has happened since the “Before Times.” Canceled proms, toilet paper shortages, nightly applause for health workers, new vaccines, waitlists for getting the first jab, and more.

    Covid disrupted everyone’s lives, but it was truly life-changing for only a sizable subset of people: those who lost someone to covid, health-care workers, the immunocompromised or those who developed long covid, among others.

    For the rest of us, over time, many details will probably fade because of the quirks and limitations of how much our brains can remember.”

    https://archive.ph/CaM2q

    Will probably fade?

    That’s what you think, globalist scum media. A few things your article failed to mention:

    Fentanyl Floyd overdose followed by riots in hundreds of cities resulting in dozens of deaths and over $2 billion of property damage, and what you globalist scum said was “racism is a greater threat to public health than covid.”

    November 2020 stolen election, January 6th Fedsurrection, and installation of unelected pedophile Joe Biden into the White House.

    Evolution of “100% safe and effective” to widespread public knowledge that the “vaccines” don’t work and are actually more likely to kill you.

    Threatening people to get them fired from their jobs for not getting injected with experimental mRNA poison. Globalist scum you think we’re going to forget that one?

    One of the greatest wealth transfers in history, from small business owners and the working class to the 0.001% globalist pigmen, that one is playing out now with all the bank collapses.

    The censorship. The propaganda. Snitch culture. Dehumanization of the purebloods. All components of the Mass Formation Psychosis, that shortly after Joe Rogan had Dr. Robert Malone on his podcast to discuss it, Google censored the search results for Mass Formation Psychosis. We didn’t forget that one, globalist scum.

    Covid is the greatest FRAUD of my lifetime.

    We’re not forgetting, certainly not forgiving, and the #Noticing is only going to increase.

    1. Don’t forget that the fake killer flu was primarily used as a smokescreen to hide the fundamentally broken financial system we have, so the fed could pump trillions into the fake economy.

      Remember the repo market failure in the fall of 2019? Don’t? Good….they want you to forget.

  14. Meanwhile on the southern border…

    New York Post — Video shows hundreds of migrants storm across US-Mexico border bridge (3/13/2023):

    “Chaotic video shows the moment hundreds of migrants stormed across a major bridge linking Mexico to the US.

    Footage first shared with Fox News shows the crowd screaming and even jumping for joy Sunday afternoon as they start streaming onto the Paso Del Norte bridge from Juárez under a sign saying “Feliz Viaje,” or “Happy travels.”

    The rush followed a rumor that the border was being opened to give them fast-tracked political asylum in the US, according to Mexican outlet Norte Digital.

    https://nypost.com/2023/03/13/video-shows-hundreds-of-migrants-rush-us-mexico-border-bridge/

    1. I wonder how many Venezuelans are in Juarez these days. It must be in the tens of thousands.

      Also, noticed in the videos that the “refugees” are 99% young males.

      1. Serious question — why is that? Is it because they’re young and strong and can work to send money home? Why not send more women to have babies and “colonize” the US?

          4. So, the women are being intercepted Panama and raped by drug gangs, while the men can kill the snakes and survive?

          5. IIRC, there’s a much longer account of these men’s escorted journey through the Darien Gap. It’s an arduous trek to begin with. For women and children, add in rape by their traffickers.

        2. I don’t think they are planning on sending any money home. More likely they will join gangs here.

  17. “‘We’re seeing a liquidity withdrawal, the classic thing that you’d expect following a credit event like what’s happening at SVB,’ said Haig Bathgate at Atomos Investments. ‘People get scared, reduce exposure to equities and move into government bonds. They’re wondering if anyone else will be in this position as these things don’t tend to happen in isolation.’”

    Maybe comtagion and the risk of bank runs are contained, but that won’t eliminate Cockroach Theory’s effect in the banking sector.

    1. The Financial Times
      US banks
      First Republic and other US regional banks tumble over fears of deposit flight
      Biden pledges to do ‘whatever is needed’ in effort to reassure Americans their money is safe
      A First Republic Bank logo outside a branch in Los Angeles
      Shares in First Republic plunged on Monday as investors dumped stocks following Silicon Valley Bank’s collapse
      Jennifer Hughes, James Fontanella-Khan, Ortenca Aliaj and Brooke Masters 24 minutes ago

      Shares in First Republic and several other US regional banks tumbled on Monday as investors worried that the weekend actions of the Federal Reserve and the Treasury were not sufficient to stem deposit outflows.

      First Republic’s stock fell 75 per cent, while Arizona-headquartered Western Alliance Bank was down 80 per cent. Trading in shares of both banks was halted because of volatility.

      PacWest shares halved and Zions dropped more than a quarter. Charles Schwab, the retail broker that also operates a bank subsidiary, fell 8.5 per cent.

      Investors dumped the stocks even after the Fed and Treasury boosted lenders’ access to quick cash following the government takeovers of Silicon Valley Bank and Signature Bank.

      The sell-off continued despite a pledge from US president Joe Biden to do “whatever is needed” to protect bank deposits as he sought to reassure Americans their money was safe.

      “We will not stop at this,” he added, referencing the US government’s actions at the weekend. “We’ll do whatever is needed on top of all [this].”

      SVB was taken over by the government on Friday following a run on its deposits and a collapse in its stock price amid fears it was struggling for capital. On Sunday, regulators took over Signature Bank, which had close ties to the crypto sector.
      …

      1. Humpty Dumpty sat on a wall.
        Humpty Dumpty had a great fall.
        All the king’s horses and all the king’s men
        couldn’t put Humpty together again.

    2. “don’t call them bailouts”

      Not it’s NOT a bailout. wink wink

      This is probably equivalent to 100BPS rate cut, but no, right?

      2. I don’t expect them to throw in the towel on the inflation fight just yet, given scant evidence that inflation is receding.

        But you can keep hoping!

        1. the inflation fight

          They have 10# of crap in a 5# sack. They don’t want to remove any of the crap, just keep more of it from oozing out. They can keep hoping too.

      3. This is probably equivalent to 100BPS rate cut, but no, right?

        Butters, you’re losing it. They bailed out depositors. This is cash in the bank that already existed. Equating this to a rate cut is ludicrous.

        1. Oh you are missing the point just like the fed.

          If the goal is to defeat inflation how are you going to do it by making every loss whole?

  20. With SVB out of the picture, where will VC firms find lenders willing to finance their harebrained schemes?

  21. Trading of more than 12 regional bank stocks halted amid Silicon Valley Bank collapse
    On the heels of the collapse of Silicon Valley Bank, trading of more than one dozen regional banks was halted. CBS News contributor and managing editor for business and markets with Axios, Javier David joined Anne-Marie Green and Nikki Battiste to discuss the latest fallout.34m ago

  22. Please remain calm and know your money is safe.

    After all, John Fetterman is on the Senate Banking Committee.

  24. ECONOMYLatest Bank To Collapse Is Same One That Closed Trump’s Accounts After Jan 6th

    Previously called for President’s resignation

    Steve Watson
    13 March, 2023

    A third U.S. bank has failed in the space of a week, and this time its the same one that closed President Trump’s accounts two years ago, reasoning that it would not do business with Trump after January 6th.

    Signature bank in New York was shut down by US regulators on Sunday, according to a joint statement from the Federal Reserve, US Treasury and the Federal Deposit Insurance Corporation (FDIC), noting that the lender “was closed by its state chartering authority.”

    It comes after SVB bank and California-based crypto-focused Silvergate also failed.

    https://summit.news/2023/03/13/latest-bank-to-collapse-is-same-one-that-closed-trumps-accounts-after-jan-6th/

  26. ‘The fall came after SVB sold all of the available-for-sale securities in its portfolio and updated its forecast for the year to include a sharper decline in net interest income, reports Hindustan Times. The regulatory filing at the end of the business day showed that SVB had a negative cash balance of $958 million’

    There are some things about this ‘official story’ that don’t make sense. Recap: sold 20B in MBS/bonds and lost 2B. Why did you need the 20B? Musk borrowed 44B to buy a puddle watching site for vanity that has lost money for well over a decade – not that long ago, and these guys couldn’t raise 2B? There’s something else going on.

    You just sold guberment paper for 20B, and yer in the hole for billion a few days later? Where did the money go girls?

    It’s suspicious to have 3 go down boom boom boom, just like that. What’s the official story on the other 2? Not a lot of details. One just said, we’re done.

    1. Where did the money go girls

      And they paid themselves bonuses right before being shut down. I don’t know how that gets a pass, but it smells like a well planned collapse.

    2. Why are all of them heavily tied to crypto, and why is crypto now going parabolic? We’re not getting the whole story.

      1. All this moral hazard is impacting my faith in them doing what is needed to stem the tide of inflation

  27. Today’s stock market rally ran out of gas and stalled during the last hour of trading. Tomorrow will tell just how worried Mr Market is about more bank dominoes toppling.

    1. While I find the removal of the FDIC limit and the bailout of the wealthy particularly disgusting – they knew the rules – there’s really no good news at all. The moonshot in crypto makes no sense, unless there’s something we’re not being told.

      1. The moonshot in crypto makes no sense

        Unless SVB and other banks are knee deep into crypto. This could explain why crypto did not sink to its true value this past year: banks are hodling it.

        1. “banks are hodling it.”

          Banks and rich people are hodling crypto. And yesterday’s decision bailed out bunch of them.

      2. There is renewed conjecture that the Fed may now scale back its rate hikes campaign to contain inflation, out of fear they may precipitate further bank failures if rates remain elevated.

        Anything that favors lower future interest rates and increased future inflation works to support high risk gambling activities, such as speculation in cryotocurrencies.

  31. Trump-appointed judge wants apology after ambush from Stanford dean

    By Jon Levine
    March 11, 2023

    A federal judge appointed by former President Trump was ambushed by about 100 student protesters and a woke diversity dean who derailed his talk at Stanford Law School and accused him of causing “harm” to students.

    Tirien Steinbach, the school’s associate dean for diversity, equity and inclusion, subjected U.S. Circuit Judge S. Kyle Duncan to a lengthy harangue and made it clear to him his presence on campus was unwelcome, video of the event shows.

    “It’s uncomfortable to say this to you as a person. It’s uncomfortable to say that for many people here, your work has caused harm,” Steinbach claimed during the judge’s attempt to speak to Stanford’s chapter of the conservative Federalist Society.

    https://nypost.com/2023/03/11/trump-appointed-judge-wants-apology-from-stanford-dean/

    at 7:37 – the spoiled white privleged Stanford students walk.

    4,355 views Mar 12, 2023

    Stanford Law students lose their minds when Fifth Circuit appellate judge Kyle Duncan tries to speak at an event he was INVITED to.

    The “associate dean of diversity, equity, and inclusion” then lectured him on all the ways he made her “uncomfortable.”

    https://youtu.be/szZaHUC5qnE

    2. made her “uncomfortable.”

      Someone that fat and stupid is always going to be uncomfortable.

  32. The Financial Times
    Opinion Instant Insight
    SVB shows the perils of regulators fighting the last war
    Worries have focused on credit and liquidity risks rather than interest rates
    Gillian Tett
    A Silicon Valley Bank sign. The SVB saga shows that investors and regulators urgently need to get a better sense of imagination — and history
    © Damian Dovarganes/AP
    Gillian Tett 2 hours ago

    How could regulators have missed the risks at Silicon Valley Bank? That is the question many shocked investors were asking on Monday.

    After all, the fact that SVB was sitting on a massive, unhedged portfolio of long-term Treasuries was no secret; last year, JPMorgan circulated shocking calculations to its clients (which were recirculated this week) that showed that these (then) unrealised losses could wipe out tier one capital.

    But while some former clients of SVB tell me that this prompted them to withdraw money back then, the bank’s regulators — namely the Federal Reserve and California regulators — seemingly did nothing.

    Worse still, SVB’s top managers were permitted to sell their shares two weeks ago, just before a bungled attempt at capital raising. This is shocking.

    So what made people so blind? One factor was America’s fragmented regulatory structure, which often causes problems to fall between the cracks.

    Another was politics. Republicans have pushed to loosen bank regulations in recent years and banks such as SVB have previously lobbied to be excluded from the category of “systemically important banks” — meaning they faced lower capital and liquidity standards. This is mad.

    But the other problem is that investors and regulators — like generals — are trained to fight the last war. Most notably, they spent the past decade worrying about credit and liquidity risks, since these respectively created the 2008 financial crisis and the market freeze in 2020.

    Interest rate risks, however, have grabbed less attention because they have not posed a significant threat in recent decades. Indeed, the last time they caused big losses (in derivatives markets) was in 1994, when entities such as Orange County were hit hard.

    However, nobody under the age of 50 would have seen this drama first hand; instead, they have built their careers in a world in which it seemed as if rates were destined to stay permanently low.
    …

    1. “SVB’s top managers were permitted to sell their shares two weeks ago, just before a bungled attempt at capital raising.”

      Just before shareholders got hammered by a new age bank run, executed on cell phones…

      Isn’t that special?

    2. unhedged portfolio of long-term Treasuries

      That phrase shows how clown world things are.

      No mention of any of these rainbow stardust depositors having taken out private deposit insurance on their accounts.

  35. Saw this on one of those Old Guys T-shirt advertisements and had to think for a minute how true it was.

    No, I can’t do Snapchat or Tik Tok

    But I can write in cursive, do math without a calculator and tell time on a clock with hands.

    +

    I don’t know how to act my age
    I’ve never been this old before

    Last one

    It’s Weird Being The Same Age As Old People

    OK one more

    Unvaccinated Conservative Meat Eating Gun Owner

    How Else Can I Offend You Today?

    🙂

    1. Unvaccinated Conservative Meat Eating Gun Owner

      How Else Can I Offend You Today?

      Tell them you’re a Christian.

  36. SVB’s ESG: Hiring and Supplier Quotas Based on Ethnicity, Race, Sex

    ROBERT KRAYCHIK
    13 Mar 2023

    Silicon Valley Bank’s (SVB) 2022 Environmental, Social, and Governance (ESG) report listed ethnic, racial, and sexual hiring quotas in pursuit of its own stated “diversity, equity and inclusion” goals.

    The report listed the following personnel targets:

    “Increase women in senior leadership roles globally” to 43 percent by 2025
    “Increase Black/African American representation in US senior leadership roles” to five percent by 2025
    “Increase Hispanic/Latinx representation in US senior leadership roles” to six percent by 2025
    SVB also stated its intention of determining its procurement on the ethnic, racial, and sexual characteristics of its suppliers’ owners and staffers. It declared its objective to “increase total cumulative spend with diverse suppliers” to eight percent of total purchasing by 2025.

    SVB’s report uses the term “underrepresented individuals” as a euphemism for those it defines as “women, Black and Latinx individuals.”

    https://www.breitbart.com/economy/2023/03/13/svbs-esg-hiring-supplier-quotas-based-ethnicity-race-sex/

    1. The Financial Times
      US politics & policy
      The weekend US officials hatched a plan to stave off a banking crisis
      Collapse of Silicon Valley Bank prompted regulators to announce package to restore public confidence
      Photo montage of Martin Gruenberg, Janet Yellen and Jay Powell
      Left to right: Martin Gruenberg, head of the Federal Deposit Insurance Corporation, Janet Yellen, Treasury secretary, and Jay Powell, chair of the Federal Reserve
      Colby Smith, James Politi, Ortenca Aliaj and James Fontanella-Khan yesterday

      Just hours after Wall Street opened for trading on Friday morning, US regulators had seized control of Silicon Valley Bank, which had imploded under the strain of depositors pulling out their money en masse.

      What at first seemed like the failure of a one-of-its-kind lender with deep ties to the technology industry quickly appeared as though it might spiral out of control.

      Within 48 hours, regulators were preparing a package of emergency measures to quell panic among depositors and prevent contagion in the rest of the banking system. For some working on the effort, it evoked memories of the response to the coronavirus pandemic in 2020 and the great financial crisis of 2008.

      By Sunday evening, the US government announced it would guarantee all deposits held at SVB and crypto-lender Signature bank, which was also shut down by regulators at the weekend. The Federal Reserve, meanwhile, launched a lending facility that would be available to lots of other banks in order to ensure depositors’ demands could be met.

      “The policy actions that were taken on Sunday were at the very aggressive end of the range of plausible options that the authorities had,” said Krishna Guha, a former New York Fed staffer who is now vice-chair of Evercore ISI.

      Initial relief at the US rescue plan soon gave way to fear that the government’s actions would be insufficient to prevent further fallout. On Monday, shares of First Republic and several other US regional banks were still under heavy selling pressure.

      Indeed, the measures announced on Sunday served as a stunning reminder of the fragility of pockets of the US financial system, even after regulators have spent 15 years implementing a vast new rule book in the wake of the 2008 crisis.

      The need for bolder government action following the collapse of SVB became apparent to US regulators and lawmakers just hours after the Federal Deposit Insurance Corporation seized control of the bank.

      “I understood that we had 72 hours to come up with a plan to address this catastrophe,” said Anna Eshoo, a Democratic congresswoman whose district covers much of Silicon Valley. She likened the collapse of SVB to a financial “earthquake” measuring 7.9 on the Richter scale.
      …

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