Swalwell is saying to bail them out but with what?
If they do they have to create more money by printing more.
Inflation then explodes.
It REMINDS me of when hyperinfaltion killed Germany in 1922:
The Weimar government was still in a position to get a grip on the economy; instead, it chose to print yet more money in order to pay the reparation debt. By July 1922 prices had risen by some 700 percent, and hyperinflation had arrived. The government had to print million-mark notes, then billion-mark notes.
I havea question that maybe you can answer (I cannot find the answer anywhere): how were the million/billion mark notes put into circulation? There are iconic photos of people with wheelbarrows of cash... where did they get it?
What I am really wondering is if a loaf of bread suddenly costs $39, how do I pay for it? Obviously I only have the cash I started with before hyperinflation. Do I not buy bread, or do I go exchange my dollar at the bank and receive a $100 note, for example? Is there a constant swapping of notes due to revaluation by the central bank? Or does everyone suddenly become unable to buy anything?
Also very telling is two of the big four banks analysts(WF Jared Shaw, JPM Steven Alexopoulos) were recommendation of OVERWEIGHT, they thought it would have higher returns than even the OUTPERFORM recc. Ruh-roh!
Sounds like it is dependent on the software or device you are using. When you click on the OP's title/link, what do you use, and what does the link open in?
If yes, then it makes me wonder how many of these investments were actually a fake transactions to get shares in someone’s businesses. I know, it’s more of a stretch theory, but knowing the cabal - who knows.
‘Explain’ is easy when you realize the decision makers are irrational, delusional and brainwashed. They can’t explain the fact that God created only two genders. They can’t explain why ‘green’ energy is unsustainable. EVERYTHING they believe is a lie.
Can anyone explain why you would by long term bonds at 1.5%?
Irresponsible management.
SVB marketed itself as a specialist in lending to tech companies, and especially small, start-up companies with venture capitalist backing.
SVB made loans to these companies, and in turn the companies did their banking with SVB.
The funds SVB received were invested in (a) more loans to start-ups, and (b) other "safe" investments, such as US Treasuries. Because they could get more interest with long-term treasuries than short-term (1.5% is more than say 0.01%), they put their money there.
1.5% doesn't seem like much, but when they use leverage, it is more than you would otherwise think.
EXCEPT ...
(a) Small, start-up tech companies are VERY risky, and USUALLY fail, and
(b) Long-term bonds (even government) fluctuate both up AND down in price more than short-term bonds do.
So, as the Federal Reserve (a private business, not a government agency) started increasing interest rates, the value of long-term bonds decreased.
This made SVB's balance sheet look worse, as some of its assets went down, so they had to sell some assets (long-term bonds) at a loss to raise cash.
When they announced this, fear set in for the account holders, who started to withdraw their cash from the bank.
So, as SVB was selling assets to raise cash, the customers were withdrawing that cash, forcing SVB to sell yet more assets.
A friend years ago used to run one of the largest banks in the US. They are one of a few on the "too big to fail" list.
SVB was a competitor in some areas. He said his bank ceased dealing with SVB because they took INSANE risks as a matter of course.
So all of these people pondering how this could have happened given how conservative SVB's choices were? No.
Next Week is probably going to be a bloodbath in the tech sector probably with spillover into other sectors.
If thing’s go really badly. We’ll probably either have a widespread bank run and or see another bank or two go bust.
It's inevitable that more banks are going to die.
Swalwell is saying to bail them out but with what?
If they do they have to create more money by printing more.
Inflation then explodes.
It REMINDS me of when hyperinfaltion killed Germany in 1922:
https://www.britannica.com/event/hyperinflation-in-the-Weimar-Republic
Maybe it's deliberate to collapse everything.
Entering a very scary period.
Get your wheelbarrows out, 'cause you're gonna need something to haul your grocery money in.
Great insight.
I havea question that maybe you can answer (I cannot find the answer anywhere): how were the million/billion mark notes put into circulation? There are iconic photos of people with wheelbarrows of cash... where did they get it?
What I am really wondering is if a loaf of bread suddenly costs $39, how do I pay for it? Obviously I only have the cash I started with before hyperinflation. Do I not buy bread, or do I go exchange my dollar at the bank and receive a $100 note, for example? Is there a constant swapping of notes due to revaluation by the central bank? Or does everyone suddenly become unable to buy anything?
Very good thread. The part about their bond exposure is very ‘dasting.
Also very telling is two of the big four banks analysts(WF Jared Shaw, JPM Steven Alexopoulos) were recommendation of OVERWEIGHT, they thought it would have higher returns than even the OUTPERFORM recc. Ruh-roh!
OP - Can you remove the tracking please?
https://twitter.com/FluentInFinance/status/1634437894818480128?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1634437894818480128%7Ctwgr%5E59b8c058b2c1fe881b9ac3a19821555324c1082f%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fgreatawakening.win%2Fp%2F16aTVEKXP6%2Finsane-half-of-all-venture-capit%2Fc%2F
All the text following the "?" at the end of the first string is tracking content, and is unnecessary for the actual tweet.
https://twitter.com/fluentinfinance/status/1634437894818480128
Is all that is necessary
Yep, why I posted the full link as the op sort of hid it in the op.
Yah, just trying to add some context/info.
(Although did the op modify? When I got to it, the only text I found was "https://twitter.com/fluentinfinance/status/1634437894818480128?s=61&t=gPr92VFgJosqe4gHZJw7ww")
Either way, you provided important info, imo.
Thx. I‘m still getting the tracking info. Why would so many tweet posts be doing this? Is the OP same as Tweeter or connectd ?
Sounds like it is dependent on the software or device you are using. When you click on the OP's title/link, what do you use, and what does the link open in?
I'm on a desktop and I see the reference link even if I just hover above the Twitter pic, so it appears to be there.
Makes me wonder if you were forced to keep your money at SVB in order to take part in the Y Combinator glow op.
If yes, then it makes me wonder how many of these investments were actually a fake transactions to get shares in someone’s businesses. I know, it’s more of a stretch theory, but knowing the cabal - who knows.
Can anyone explain why you would by long term bonds at 1.5%? Everyone knew rates were going up...
I still dont get why this bank was used by so many tech corporations...
‘Explain’ is easy when you realize the decision makers are irrational, delusional and brainwashed. They can’t explain the fact that God created only two genders. They can’t explain why ‘green’ energy is unsustainable. EVERYTHING they believe is a lie.
I saw where other similar conservative investments at the time (10-year U.S. Treasuries) were paying 0-0.25%. That was part of it.
SVB would work with companies other banks would not.
Irresponsible management.
SVB marketed itself as a specialist in lending to tech companies, and especially small, start-up companies with venture capitalist backing.
SVB made loans to these companies, and in turn the companies did their banking with SVB.
The funds SVB received were invested in (a) more loans to start-ups, and (b) other "safe" investments, such as US Treasuries. Because they could get more interest with long-term treasuries than short-term (1.5% is more than say 0.01%), they put their money there.
1.5% doesn't seem like much, but when they use leverage, it is more than you would otherwise think.
EXCEPT ...
(a) Small, start-up tech companies are VERY risky, and USUALLY fail, and
(b) Long-term bonds (even government) fluctuate both up AND down in price more than short-term bonds do.
So, as the Federal Reserve (a private business, not a government agency) started increasing interest rates, the value of long-term bonds decreased.
This made SVB's balance sheet look worse, as some of its assets went down, so they had to sell some assets (long-term bonds) at a loss to raise cash.
When they announced this, fear set in for the account holders, who started to withdraw their cash from the bank.
So, as SVB was selling assets to raise cash, the customers were withdrawing that cash, forcing SVB to sell yet more assets.
It turned into a downward spiral, and ...
poof
Yo' money is ... gone!
A friend years ago used to run one of the largest banks in the US. They are one of a few on the "too big to fail" list. SVB was a competitor in some areas. He said his bank ceased dealing with SVB because they took INSANE risks as a matter of course. So all of these people pondering how this could have happened given how conservative SVB's choices were? No.
That sounds like a Queen song we already know from years ago:
https://www.youtube.com/watch?v=-tJYN-eG1zk
Sweet. Should look at what opportunity this will create.