749 replies to this topic

[Victoria Watcher]

Since Friday I’ve converted most of my cash over $100,000 into gold wafers. Then I’ve stored/hidden them in my torchiere lamp shaft.

Edited by Victoria Watcher, 13 March 2023 - 07:22 AM.

[Mike K.]

You laugh, but the economy is far more fragile than we give it credit for. Look at inflation. It has eroded 20% of wealth in the span of 36 months, and arguably far more. At this rate, a pensioner earning $3,500/month is going to be living in poverty by the time the decade is up.

Riddle me this. How could a bank, with $200 billion in assets, located in the crown jewel of modern innovation in the wealthiest country on earth, just “fail.”

[Victoria Watcher]

They made bad decisions..

[Mike K.]

Sounds like they made excellent decisions ($200 billion in assets).

[dasmo]

Money laundering

[dasmo]

See FTX
Just classier and based on traditional fake money manipulation.

[Mike K.]

Another US bank has collapsed.

Signature Bank, a New York state-chartered commercial bank that’s FDIC-insured, had total assets of about $110.36 billion and total deposits of roughly $88.59 billion as of Dec. 31, the New York Department of Financial Services said in a separate statement.

- https://nationalpost...6f-7a0ac8576380

[spanky123]

Riddle me this. How could a bank, with $200 billion in assets, located in the crown jewel of modern innovation in the wealthiest country on earth, just “fail.”

 

They failed because tech bros on Twitter told their minions to pull all of their money from SVB. The subsequent run forced a redemption of SVB assets which then had to be sold below cost. As SVB started to run out of liquidity the Feds stepped in.

[Mike K.]

And shorted the stock?

[Stephen James]

It is a good thing. Why would it be a bad thing?

I’ve done a lot of business in the US and they take their jobs, and your time/my time, seriously. I value and respect Americans greatly because of their work ethic and dedication to their jobs.

But even they fall far short of Japanese workers. They are in a different league entirely.

These comments are interesting to me.

 

I worked for 25 years for an American multi-national, retiring from a position 3rd from the Canadian leader. My P&L was approx $300mm (for my area of responsibility), 8 direct, just over 1,000 indirect reports. I had some strategic responsibility globally, and risk management, and led several large changes.

 

Do you think Americans work harder than Canadians from Ontario? Manitoba? New Brunswick?

 

And on the topic of culture, I had to work on a very particular issue for several years, affecting attrition in western Canada. The root cause turned out to be the perception that people from Alberta or BC had that they were somehow "different" than those people from other parts of Canada. 

[Stephen James]

 failed after stating that its tech clients were still burning through cash and they were unable to find any buyers for a share sale.

 

https://financialpos...pooks-investors

 

... and there's also the little reported fact that these financial geniuses loaded up on bonds just before the first, biggest, interest rate hike run in 40 years? 

no bailout ffs

[Stephen James]

Does nobody monitor banks like this? Was there warnings? Maybe there were, but nobody listened? It seems fairly straightforward why it failed, its bonds holdings.

nah nah, can't have it both ways lol

 

these same banks, with their libertarian roots, treat government like the anti-christ until, just like any foxhole convert, they're about to expire. how do you think they would react to the regulator telling them loading up on bonds was offside...? (you have all said "can't regulate stoopid" and that's right.)

 

no bailout, ffs

 

also, the tech industry is the most highly leveraged. I've managed a lot of lending and this group is the most problematic. (example: pledging the same assets for collateral seems to be a cultural imperative, rather than fraud, lol.) they live hand to mouth and are always to the first to fail.

 

the question on the table is whether the leverage in the system today is enough, and weak enough, that the failures will spread. it's simple: debt servicing is 3x more expensive than 3 years ago and some businesses are also seeing lower sales. very hard to tell what the next 12-18 months will look like, but reasonable to expect some shocking failures, 30-50% broad market drop... we have not yet seen the earnings reports that accurately describe the problem, because they're a lagging indicator. What are the leading indicators?

[Stephen James]

The bank was solid. The reason that the Feds stepped in was that there was a run on the bank and the bank couldn't mange redemptions requests without time to sell assets and restructure.

 

The was yet another good example of twitter and social media power. VCs were telling their companies to cash out of SVB which then spread like wildfire. 

 

Oh and if you believe the twittersphere, the same VCs that were telling people to cash out of SVB were also shorting the stock to profit from the bank's collapse!

the bank "busted" on a bet on mt and lt bonds...

to meet redemptions they had to lose a fortune in bad investments

[Stephen James]

If you own stocks the bank going under doesn’t dissolve that ownership though. I guess it’s worth looking into some sort of backup of ownership if the brokerage disappears somehow?

If the brokerage disappears, nothing happened to the stocks. They are held for you in segregated accounts, by law. Bank/brokerage can't touch them.

[Mike K.]

These comments are interesting to me.

I worked for 25 years for an American multi-national, retiring from a position 3rd from the Canadian leader. My P&L was approx $300mm (for my area of responsibility), 8 direct, just over 1,000 indirect reports. I had some strategic responsibility globally, and risk management, and led several large changes.

Do you think Americans work harder than Canadians from Ontario? Manitoba? New Brunswick?

And on the topic of culture, I had to work on a very particular issue for several years, affecting attrition in western Canada. The root cause turned out to be the perception that people from Alberta or BC had that they were somehow "different" than those people from other parts of Canada.

I would say, based in my own experiences, that Toronto and Calgary are very American cities, in terms of work ethic. I don’t have any reference points for Manitoba or New Brunswick.

[Stephen James]

You laugh, but the economy is far more fragile than we give it credit for. Look at inflation. It has eroded 20% of wealth in the span of 36 months, and arguably far more. At this rate, a pensioner earning $3,500/month is going to be living in poverty by the time the decade is up.

Riddle me this. How could a bank, with $200 billion in assets, located in the crown jewel of modern innovation in the wealthiest country on earth, just “fail.”

There are such fundamental differences between the two banking regimes, it's hard to extrapolate conclusions.

 

2008-9 highlighted one of those differences:

leverage, unrestricted and when you make the right choices/guesses about the future, produces higher profits, sometimes by an order of magnitude. When you make the wrong choices/guesses, same results in the opposite.

Banks are leverage, pure and simple.

The problem, from a Canadian pov, is that leverage is made with your deposits so, whether you agreed with the strategy or not, your deposits could be wiped out by someone's stupid or very risky bet (a bet they might have made because they could earn a colossal bonus). So the Can gov keeps a tight lid on leverage.

In 2008-9 US banks had used insurance policies to get around the leverage rules, creating massive leverage by insuring garbage mortgages/other debt, and sourcing as many of these debt contracts as they could. Every financial professional who DIDNT work for one of these banks that I knew just laughed at them and went elsewhere - it was obviously leverage and by 2006-7 we were hearing the famous lines "this time it's different." It wasn't, lol.

The Canadian government said no, "this is also leverage" and prohibited it. Things went well for us (in this case.)

[Stephen James]

I would say, based in my own experiences, that Toronto and Calgary are very American cities, in terms of work ethic. I don’t have any reference points for Manitoba or New Brunswick.

I can share that I, coming from Toronto, was given coaching to be more "circumspect."

Midwestern, and southern, Americans were offended by direct communication... too shocking.

New Yorkers, Bostonians, Philly... no problem, lol.

 

American's like money more than Canadians, maybe that's related to your experiences/observations. It may be marketing that gets them there. Canadians are more critical and have higher performance standards, interestingly.

Edited by Stephen James, 13 March 2023 - 12:39 PM.

[Stephen James]

I would say, based in my own experiences, that Toronto and Calgary are very American cities, in terms of work ethic. I don’t have any reference points for Manitoba or New Brunswick.

 

I brought up the prairies because, at one firm, it was a common assumption that the "prairie work ethic" produced the hardest workers and the Americans I worked with assumed it was the same in all of N America.

[Mike K.]

There are such fundamental differences between the two banking regimes, it's hard to extrapolate conclusions.

2008-9 highlighted one of those differences:
leverage, unrestricted and when you make the right choices/guesses about the future, produces higher profits, sometimes by an order of magnitude. When you make the wrong choices/guesses, same results in the opposite.
Banks are leverage, pure and simple.
The problem, from a Canadian pov, is that leverage is made with your deposits so, whether you agreed with the strategy or not, your deposits could be wiped out by someone's stupid or very risky bet (a bet they might have made because they could earn a colossal bonus). So the Can gov keeps a tight lid on leverage.
In 2008-9 US banks had used insurance policies to get around the leverage rules, creating massive leverage by insuring garbage mortgages/other debt, and sourcing as many of these debt contracts as they could. Every financial professional who DIDNT work for one of these banks that I knew just laughed at them and went elsewhere - it was obviously leverage and by 2006-7 we were hearing the famous lines "this time it's different." It wasn't, lol.
The Canadian government said no, "this is also leverage" and prohibited it. Things went well for us (in this case.)

The Paul Martin government also did some work on the banking sector in the early 2000s, that shielded us from what happened in the US in 2008-2010, I think?

[lanforod]

I wonder how well this post will age: https://vibrantvicto...e-3#entry676129