Increasing fallout after historic Silicon Valley Bank collapse

Earlier this week, the bank took a loss of $1.8 billion dollars on the sale of bonds fueled in part by the Federal Reserve’s rapid interest rate increases. Frightened customers rushed to withdraw $42 billion in deposits. NBC News’ George Solis has more on what will happen to companies who had money at the bank and the sellers using e-commerce site, Etsy that are now not getting paid. 

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[dembonesTV]

"i had no idea this was going to affect me" will be an increasingly frequent phrase in the coming years

[dn]

Also, don't forget that the CEO of SVB sold his shares of SVB stocks weeks before the collapse of the bank... Very fishy...

[MrDayna]

Amazing that the executives took their bonuses for the year as they were running out the door. They know how to take care of their personal " bizness ".

[JB_Hobbies]

I’m gonna laugh if the same people saying that people buried in student debt can’t get a measly $10/20k but then being totally fine with this bank getting billions to survive.

[yellowrice]

I might finally have a chance to afford buying a house if the market crashes.

[tribalypredisposed]

Wait...so they got bonuses for running the bank into bankruptcy?

[worldlife]

Corporate media is extremely soft on the banks and government.

[KarlDahlquist]

I just read the bank employees have been offered time and a half by the FDIC to work at the new bank while they wind everything down. Not bad after that bonus.

[terryleong]

Jim Cramer was recommending viewers to buy SVB shares a few days before it collapsed so we know how professional this channel is

[rampagephoenix]

This doesn't feel like an accident.

[slimpickins]

Of course they got their bonuses. The system always rewards failures. It's the working man who suffers

[andrewadami]

From my limited but fairly well informed understanding, it was largely an accident. In the sense that it wasn't malicious or fraudulent intent that caused this failure.

To explain in short, many banks are upside down on their loans (due to interest rates being significantly higher today than in the past few years). Which is fine, as long as they don't have to liquidate the bonds (usually to acquire cash). They can let them mature and nothing bad would happen, but if a large amount of capital would be needed quite suddenly, they would have to sell the bonds for less than they paid, due to low market demand (the low demand is because the yield on these older bonds aren't as lucrative as today's bonds with higher rates). If sold, these old bonds would force the bank to take a loss on billions of dollars of loans. And since banks are leveraged 10:1 or even more, that can quickly make them insolvent. Poof, bank is now worthless, in addition to not generating 100% of the capital necessary to recoup their depositors.

[Aging_Casually_Late_Gamer]

Hello 2008. We've been waiting for you.

[gpg]

The ‘interest’ earned on a savings account isn’t worth the risk or hassle anymore.

[pioneerprepper]

How to start preparing.

Take three days during the work week and turn off your electric and water. Make do with what you can and write down things you needed and didn't have or tasks that were difficult. After you have this list, research alternatives
Eat, wear and consume cheaper. Choose cheaper meals to create room in your grocery budget to put back food. Wear second hand clothes or put a spending freeze on clothes shopping in order to make room to buy what you'll need for the future (especially if you have small children who grow frequently). Consume less electricity, gas, propane by finding alternatives. This may mean using a crock pot, hang drying clothes, using candles at night and opening windows for sunshine during the day etc. With the wiggle room you've created in those bills you now have some money to buy more food storage, medical supplies or invest in a small solar unit.
Make an edc bag. This is something you will carry all the time (on your person or in your car) that could provide you with what you and your family need for 3 nights. Think about what you may put into an overnight bag if you were to stay at a hotel. This will ensure even if something happens and you're out you're able to shelter in place
Understand how to take care of medical emergencies at home. Remember that in a major event, ems could be down or unavailable for sometime. While this is never the first line of defense in an emergency, understanding how to manage medical emergencies (high infections, deep wounds, pneumonia, asthma attacks, shock, 2nd and 3rd degree burns, poisoning, radiation sickness, torn ligaments, allergic reactions, excessive bleeding) while you wait on help can be life and death.
Food, water, temperature control are your highest priorities. If faced with a major event where services are limited for more than 3 days, having stored food as well as a way to cook, a way to filter and store water, and a way to keep yourself cool or warm can be life altering.

Please remember as we are entering or for some of us are already in uncertain times, having this foundation gives security as well as lowers stress. It allows us to feel more in control and gain a more positive perspective on not only our lives but the world. I'm willing to answer any questions from my own experience in the comments if you feel overwhelmed!

[nomenclature]

Wonder how many of those bonuses were deposited in banks other than SVB.

[gatesbev]

I still blame the FEDs for this, because in the end they benefit by either buying off the failed banks cheaper or something. The fed can print credit as long as someone will borrow it into existence, but they cannot print product (or production). This isnt over

[chillmusic]

is funny how they blame the Fed raising interest rates, but they don't blame the bank itself for misusing / gambling the deposits.

[davidhornback]

I'd like to know if any state or federal politicians had stock in this bank and if they liquidated said stock just prior the announced failure.

[ScootinIsLife]

GET YOUR MONEY OUT OF BANKS NOW, NOW !