Posted on 03/11/2023 7:17:43 AM PST by bitt
There is a moral problem with the bailout and we learned NOTHING from the 2008 housing crisis. Our kids should NEVER have to pay for something like this and if they did they should strip every single penny to the point of bankruptcy for every bank executive because they made bad decisions chasing their “bonuses”. The American banksters have privatized bonuses and stock options and they have shifted all risks to the taxpayer. Neat trick.
Bailing this out is BS. I am even hearing that we will lose our “tech startups” as an excuse? Seriously? If this were the case we should just put every kid in tech at MIT on government scholarship......
However, here is the biggest problem that few are talking about.... IF we bail this bank out (16th largest in country with enormous cash flow) be prepared to bail out dozens of other banks across the country who don’t have nearly the cash flow that SVB did. The truth is that SVB is not the only bank that made poor decisions and got caught short by the Bidenflation.... many of them did.
We never learn and we will never learn until people are forced to live with the consequences of poor decisions.
I agree with you 100%
I forgot to add, think about the contrast SVB and Silicon Valley gets bailed out but the citizens of East Palestine get nothing, one of the wealthiest areas gets made whole and one of the poorest gets nothing
Don’t jump to conclusions too fast.
A corporate Senior VP, who I did bargaining battles with in the past, had a simple plan. He sold every piece of stock granted to him the day it was vested. Always has, always will.
It didn’t make much sense at first. He merely said “The biggest percentage gain you will ever see is the first day it is granted (100%)”.
Also, he never had to worry about insider trading accusations since this was how he always did it.
I never liked the guy, but I admire his technique.
EC
Because if there had been no collapse there would be no story. Insiders sell stock all the time. I’m sure investors are scanning sites like FINVIZ looking for the next possible one. A $4000 investment in the correct option (ie a $250 MAR10 put) would turn into over a million bucks. A word to the wise. Lots of cats out there. Always looking to skin one. (Just make sure you are not a cat.)
FDIC will claw those funds back.
Not so stable
There are a few problems with your scenario—where to start.
I guess the first place is that most of the “in crowd” venture capital folks bailed before the bank was closed.
It was only the “stupid money” that got caught holding the bag.
Jack Posobiec 🇺🇸
@JackPosobiec
1500 climate change tech companies were banking with SVB
11:53 AM · Mar 11, 2023
Is SVB a bank, or a money launderer...?
There is a network of contacts, relationships, handshakes, deals done, etc that resides in the personnel at SVB.
Some of them obviously will bolt, and may have already left the building.
THAT, including the residual on-B/S assets and deposits, is the value.
I'm not saying that ALL of SVB's stakeholders will be made whole. Obviously the stockholders get wiped out, subordinated debt holders will likely take losses and/or swap debt for new equity and warrants, depositors likely are made whole, and remaining creditors will see puts and takes.
But the Chapter 7-like doom-porn that excites many people is as likely as me meeting the Easter Bunny.
They could just claim that they heard Jim Cramer say it was a buy (with some mooing sound effects) so they sold it immediately.
That was the argument folks made about Lehman—too many contacts within the industry—too many negative consequences—a much stronger version of the case you are making.
Looking back it is still hard to believe they let it fail.
But—imho this is just the beginning of many banks failing due to the very rapid increases in the fed rate—totally predictable and totally unavoidable.
They will be just another casualty.
“Something bad, this way, comes...”
In 2018, congress loosened the regulations on banking. of course trump signed. And here we are.
Don’t forget their families and all of them since 08.. the last bank run.
All fair points, yours and mine.
We can agree to disagree, and observe for the sidelines.
Re: 30 - I think your take is reasonable.
this one was a scheduled sale, but all insiders transactions are posed on multiple public websites. like this: https://finviz.com/insidertrading.ashx?or=10&tv=1000000&tc=7&o=-transactionValue
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