SVB's business was start ups and risky tech investments. These companies will not be able to meet payroll or pay bills without their lines of credit. That means multiple bankruptcies coming up. Some of these companies may have gone
public and are already trading on the NASDQ. If that's the case, there may be a negative impact on the futures. In any case, the bankruptcies will filter down through the economy as SVB had a huge portfolio of companies they
lent to. On top of that, they have a major portfolio in treasuries whose yield has steadily gone down due to interest rate increases. Why they didn't liquidate the treasuries is a mystery. Maybe they used them as collateral. Who knows.

The government is in charge now. And remember: "We're the government. We're here to help!"

Truly, I'm also little confused by it. Every person who has been following basic economic news probably knew fed rates were going to get hiked, this is not something happening overnight, so obviously if one had huge assets in treasuries, any sensible organization would start moving it to some place else.

SVB's business was start ups and risky tech investments. These companies will not be able to meet payroll or pay bills without their lines of credit. That means multiple bankruptcies coming up. Some of these companies may have gone
public and are already trading on the NASDQ. If that's the case, there may be a negative impact on the futures. In any case, the bankruptcies will filter down through the economy as SVB had a huge portfolio of companies they
lent to. On top of that, they have a major portfolio in treasuries whose yield has steadily gone down due to interest rate increases. Why they didn't liquidate the treasuries is a mystery. Maybe they used them as collateral. Who knows.

As I understand it, they did liquidate their treasuries heavily, once they got hit by depositor withdrawals -- and they took a serious loss on them because the fixed rates they had from earlier bonds were much lower than current rates, so their market value had tanked. A big part of their problem was the they needed to meet panicky depositor withdrawals, and then they tried to raise the cash, they couldn't. California (they were a state-chartered bank) declared them insolvent on Friday -- unable to meet their obligations to their depositors -- and named the Federal Deposit Insurance Corporation to manage their liquidation.

It was a classic bank run: assets mostly long-term and illiquid, and short-term depositors demanding their cash now. That's why it all went bad so fast, as depositors got nervous.

There probably will be serious consequences to the tech firms that not only were financed by loans from them, but had their money on deposit there, too. Deposit insurance only goes to $250k guaranteed, and the balance, which will be large for many companies, may or may not be recoverable. Often the feds can find another bank that is willing to take over the failed bank -- the loans to the tech companies they have outstanding are still assets and may be attractive to a buyer, but probably not at full face value.

It can get very messy for a while.

Bob.

Shows .... nothing but a blurred image for me.

As I understand it, they did liquidate their treasuries heavily, once they got hit by depositor withdrawals -- and they took a serious loss on them because the fixed rates they had from earlier bonds were much lower than current rates, so their market value had tanked. A big part of their problem was the they needed to meet panicky depositor withdrawals, and then they tried to raise the cash, they couldn't. California (they were a state-chartered bank) declared them insolvent on Friday -- unable to meet their obligations to their depositors -- and named the Federal Deposit Insurance Corporation to manage their liquidation.

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