Silicon Valley Bank Collapses

[vad]

Imagine you're rich oligarch say like rich Arabs or Asians that put your money in Swiss, looking what they did to rich Russian oligarch (even they're Putin's haters  ) and just seize and steal your wealth, ever thinking to pull your money out ?

If you are referring to oil-rich Arab monarchies, I have bad news for you.
You cannot have oligarchs under monarchy, despite what they tell you on TV in Russia.

Any bank that wants to operate in the West will comply with sanction regime imposed against Putin’s wallets and Putin’s cronies, or face secondary sanctions.

No reputable bank would support regime, whose leader is accused of war crimes and has international arrest warrant issued for him.

[jonpaul]

Bonjour à tous

After the SVB, and silverGate Today's failure and takeover of hugeCredit Suisse, a 150 year old highly regarded Swiss Bank, is now the third bank failure in just 10 days.  Even the FED, US treasury, ECB, and Swiss government cannot stem the rising tide of bank runs and  metatastizing  loss of bank confidence

A natural.and long predicted result of

a, Fiat currencies with zero metallic backing
b, Fractional réserve banking
c. sovereign debt explosion due to socialiste control of USA and EU budgets
d, impacted of rapidly rising énergie costs, inflation
e "Black Swan" of Covid-19 and then Putin's Ukraine war.

The extreme volatility in all markets,and régions and widespread market impact may Signal the start of a major turndown.

your thoughts?

Jon

[BravoV]

No reputable bank would support regime, whose leader is accused of war crimes and has international arrest warrant issued for him.

Like those claiming there was a WMD in Iraq and bombed the hell out of them ? Wait ... nah, you will never be smart enough to get this. 

[coppice]

No reputable bank would support regime, whose leader is accused of war crimes and has international arrest warrant issued for him.

Reputable next to bank? That's a strange sentence. Real banks usually love war criminals. They tend to be loaded.

[tom66]

No reputable bank would support regime, whose leader is accused of war crimes and has international arrest warrant issued for him.

Like those claiming there was a WMD in Iraq and bombed the hell out of them ? Wait ... nah, you will never be smart enough to get this. 

It's possible to think Putin is a war criminal and W. Bush is one too, but also accept the likelihood of Bush being prosecuted in our lifetimes as practically nil given the US does not accept any higher authority above itself.  They have a law which would legalise their invasion of the Hague if one of their soldiers were to be put on trial.

In fact, I once heard it quipped that if the US government had evidence God was real they'd go to war with the almighty to avoid accepting a higher power. 

[coppice]

After the SVB, and silverGate Today's failure and takeover of hugeCredit Suisse, a 150 year old highly regarded Swiss Bank, is now the third bank failure in just 10 days.

Credit Suisse is only 2 or 3 times the size of SVB. Its not that huge in global terms. Did you mean "highly reported"? I haven't seen anyone hold them in high regard for a very long term. The have given reporter lots to talk about, though.They've been a basket case just waiting for the final nudge over the edge.

[BravoV]

No reputable bank would support regime, whose leader is accused of war crimes and has international arrest warrant issued for him.

Like those claiming there was a WMD in Iraq and bombed the hell out of them ? Wait ... nah, you will never be smart enough to get this. 

It's possible to think Putin is a war criminal and W. Bush is one too, but also accept the likelihood of Bush being prosecuted in our lifetimes as practically nil given the US does not accept any higher authority above itself.  They have a law which would legalise their invasion of the Hague if one of their soldiers were to be put on trial.

In fact, I once heard it quipped that if the US government had evidence God was real they'd go to war with the almighty to avoid accepting a higher power.

Thats what US and NATO called "rule of law", which means, do what I say, but NOT what I do.   

[vad]

No reputable bank would support regime, whose leader is accused of war crimes and has international arrest warrant issued for him.

Like those claiming there was a WMD in Iraq and bombed the hell out of them ? Wait ... nah, you will never be smart enough to get this. 

Was there a bank that claimed Saddam’s WMD possession and had few bombers in possession of their Security department? 

You need to get your facts straight.

[vad]

No reputable bank would support regime, whose leader is accused of war crimes and has international arrest warrant issued for him.

Reputable next to bank? That's a strange sentence. Real banks usually love war criminals. They tend to be loaded.

If you feel your bank is not reputable, you probably need to find a new one.

Real banks also have compliance departments. And executives of real banks prefer to stay out of jail. For that reason they have the compliance departments.

[bdunham7]

After the SVB, and silverGate Today's failure and takeover of hugeCredit Suisse, a 150 year old highly regarded Swiss Bank, is now the third bank failure in just 10 days.  Even the FED, US treasury, ECB, and Swiss government cannot stem the rising tide of bank runs and  metatastizing  loss of bank confidence

A natural.and long predicted result of

a, Fiat currencies with zero metallic backing
b, Fractional réserve banking
c. sovereign debt explosion due to socialiste control of USA and EU budgets
d, impacted of rapidly rising énergie costs, inflation
e "Black Swan" of Covid-19 and then Putin's Ukraine war.

The extreme volatility in all markets,and régions and widespread market impact may Signal the start of a major turndown.

your thoughts?

My thoughts are that most of those factors should not cause bank failures.  My opinion is that the primary and possibly sole cause is the previous ZIRP (and in the EU, NIRP) policies.  Credit Suisse, along with many other banks, was forced to buy negative-yield bonds.  In addition, those policies caused banks to issue loans at very low and occasionally below zero interest rates to avoid having to deposit their reserves at even more negative rates.  Now that interest rates are popping back up, the banks are stuck with those loans as most borrowers are not likely to pay off a negative interest rate loan early.

The decision by the US government and the Federal Reserve to keep pumping money into the economy and maintaining near-ZIRP conditions all throughout 2021 instead of gradually ramping up rates a bit was one of the stupidest blunders in history, IMO.  And that isn't just hindsight, I and many other people were observing and discussing the obvious market distortions that were developing--stock market grossly overvalued, bids for TIPS bonds going way above the zero real yield price, home values rising on almost a daily basis (at one point our home was appreciating at a rate greater than our income), rents rising so fast that some fully-employed people were becoming homeless and lots more.

Also, as of right now (7:44AM PDT, 2:44 GMT 19MAR2023) I haven't seen that Credit Suisse has actually either failed or agreed to be purchased by UBS.  Has that happened?

Edit:  as of now (11:28AM PDT 19MAR2023) it is reported that UBS will be acquiring CS for the token sum of SFR 2 billion.  Technically not a 'bank failure', but if it was I believe it would be the largest ever.

[BravoV]

Also, as of right now (7:44AM PDT, 2:44 GMT 19MAR2023) I haven't seen that Credit Suisse has actually either failed or agreed to be purchased by UBS.  Has that happened?

No one want to buy a sinking ship, infact all potential buyers demand Swiss gov. for a "guarantee" if they save CS.

Latest progress ...

Switzerland Considers Nationalization Of Credit Suisse As Proposed UBS Takeunder Falters

-> https://www.zerohedge.com/markets/ubs-offers-buy-credit-suisse-1bn-025-share-takeunder-cs-balks-offer

Nationalize = print more money to solve problems, that what US and EU are good at for at least the last few years. 

Interesting time we live in.

[coppice]

Real banks also have compliance departments. And executives of real banks prefer to stay out of jail. For that reason they have the compliance departments.

You need to move on from the 80s. We aren't in the era of S&L management suffering, often for things beyond their control. We are in the post 2008 era, where the people who were in full control of crashing things roam free. At least one of them moved on from Lehman Bros, and was just a part of crashing SVB.
 

[BravoV]

Real banks also have compliance departments. And executives of real banks prefer to stay out of jail. For that reason they have the compliance departments.

You need to move on from the 80s. We aren't in the era of S&L management suffering, often for things beyond their control. We are in the post 2008 era, where the people who were in full control of crashing things roam free. At least one of them moved on from Lehman Bros, and was just a part of crashing SVB.

Some people or even certain demographics that so brainwashed, that are never have the word "accountability" in their brain, as the brain just can not cope with that understanding.

Let alone words like "reputation" , "responsibility" ,"guilty" and etc. 

[vad]

Real banks also have compliance departments. And executives of real banks prefer to stay out of jail. For that reason they have the compliance departments.

You need to move on from the 80s. We aren't in the era of S&L management suffering, often for things beyond their control. We are in the post 2008 era, where the people who were in full control of crashing things roam free. At least one of them moved on from Lehman Bros, and was just a part of crashing SVB.

Not being able to find a bank you can trust must be really hard on you.

What alternative do you have? Buying physical gold and a reliable shotgun?

[coppice]

Real banks also have compliance departments. And executives of real banks prefer to stay out of jail. For that reason they have the compliance departments.

You need to move on from the 80s. We aren't in the era of S&L management suffering, often for things beyond their control. We are in the post 2008 era, where the people who were in full control of crashing things roam free. At least one of them moved on from Lehman Bros, and was just a part of crashing SVB.

Not being able to find a bank you can trust must be really hard on you.

What alternative do you have? Buying physical gold and a reliable shotgun?

Being able to rely on a bank depends on a lot more than their honesty. Its honesty which has triggered the downfall of many of them. When the biggest players tilt the table, the smaller guys get screwed, and the unscrupulous gather up the pieces and move on. Many people say the S&L problem was due to lax regulation. Look more closely and you'll see it was due to unbalanced regulation. They used to have tight regulation of what they could lend to, and strong customer compensation regulation. They loosened up only one side (allowed to lend to pretty much anyone for anything), leaving the managers in S&Ls between a rock and a hard place. Customers simply went for the highest interest, with no regard for safety, and the S&Ls were forced into more and more risky loans to be able to offer those interest rates. I feel sorry for any bankers who disagreed with those wacky changes, and who suffered legal consequences.

Regulation becomes very polarised, with one side calling for more, and one calling for less. When you look at most regulation related messes, its not usually the amount of regulation that mattered. Its whether the various relevant regulations were well balanced. That's very hard to achieve when each side will grasp at any opportunity to change a single regulatory issue in isolation.

[Marco]

Fractional reserve banking and contagion is the natural state of the market, only government intervention can prevent it. In extreme cases even government needs to devalue relative to gold in a gold standard.

[Marco]

Its honesty which has triggered the downfall of many of them.

With accounting regulations for publicly owned company any analyst can mark to market bank assets with reasonable accuracy, it's pretty hard for them to not be honest without outright fraud. Mark to market in a downturn is a recipe for contagion though.

[tom66]

Reports now that Credit Suisse has been bought out by UBS for ~1.3 billion EUR, which essentially leaves the average CS shareholder about 80% out of pocket.  But it looks like they will live another day.

[jonpaul]

Swiss news..as of 19:40 CUT/GMT/Zulu

UBS has bought out Credit Suisse for 3B  CHFR and assumed 5B CHFR losses.

Jon

[m k]

How was it, the blood and buying.

[SiliconWizard]

Real banks also have compliance departments. And executives of real banks prefer to stay out of jail. For that reason they have the compliance departments.

You need to move on from the 80s. We aren't in the era of S&L management suffering, often for things beyond their control. We are in the post 2008 era, where the people who were in full control of crashing things roam free. At least one of them moved on from Lehman Bros, and was just a part of crashing SVB.

Not being able to find a bank you can trust must be really hard on you.

Do you think you can trust yours?

[tooki]

Reports now that Credit Suisse has been bought out by UBS for ~1.3 billion EUR, which essentially leaves the average CS shareholder about 80% out of pocket.  But it looks like they will live another day.

The deal went down while I was at a pub quiz with friends. My route home has me change trams at Paradeplatz. That’s me just now, with the Credit Suisse headquarters behind my left shoulder and UBS headquarters over my right.

[SiliconWizard]

Crédit Suisse has been in trouble for at least 3 years, with a couple shaky affairs, so what's happening is very little surprise.

[james_s]

It's possible to think Putin is a war criminal and W. Bush is one too, but also accept the likelihood of Bush being prosecuted in our lifetimes as practically nil given the US does not accept any higher authority above itself.  They have a law which would legalise their invasion of the Hague if one of their soldiers were to be put on trial.

In fact, I once heard it quipped that if the US government had evidence God was real they'd go to war with the almighty to avoid accepting a higher power.

Any country can invade or go to war with any other country for any reason really, making war illegal doesn't change that. The various alliances make that complicated and risky but don't really prevent it, as evidence by the fact that we have had two major world wars and countless smaller ones.

[TimFox]

Fractional reserve banking and contagion is the natural state of the market, only government intervention can prevent it. In extreme cases even government needs to devalue relative to gold in a gold standard.

The alternative to fractional reserve banking is keeping ones money under a mattress.
The required fraction to hold as reserves is a matter of regulation.