For me real problem is this being possible trigger for running down banks who have most of the assets in long term bonds.
This won't be simple as single bank getting run down.
Also, this is kind of bad news for startups/organizations who had large amounts parked with them, it will also drag many small business with it if they can't source other ways to source money.
I'm not entirely sure about last one but I've read that some crypto exchanges also had some dealings with SVB. Given how bad the last half an year has been for crypto, this could be another blow. But this is just speculation on my end, I lack full knowledge.
Just my 2c.
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I'm not surprised at all since FTX collapsed few months ago I was afraid if FTX Do not face serious and immediate consequences then the Domino effect will happen.
I even posted a thread on psychology and money management forum few months ago titled FTX collapsed who is next?! I mentioned my concern that the financial institutions are watching and observing.
bankruptcy is Carte Blanche to them very wild time its like license to steal
For further reading
What if a broker declare bankruptcy!!! Ftx first who's next? - futures io
Managing risk of losing money is part of the trading and investment business.
but managing the risk of getting robbed by your broker is a new level of risk management that requires different skills and mindset.
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!"
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