03-06-2023, 12:32 PM | #7613 | |
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Short term Treasuries and some MM funds are paying 5% and I am using those vehicles. Some of my portfolio is at ATH and recent stock purchases I have made in the past three months are doing OK for now. |
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03-06-2023, 06:17 PM | #7614 |
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1 year gain my brokerage: -12.7%
1 year gain SP500: -9.2% 1 year gain SP500 (avg): 10% 1 year (Aug22) hedge fund (avg): 7.2% YTD gain my brokerage: 13.3% YTD gain SP500: 5.7% Verdict: you can make money if you have a good brain. Dont let them tell you otherwise. Come at me if you like Disclaimer: investing is risky, consult your best judgement, or a financial advisor if you’re into that |
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03-07-2023, 08:53 AM | #7615 | |
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03-07-2023, 08:55 AM | #7616 | |
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See you in 40 years. |
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03-07-2023, 10:05 AM | #7617 |
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03-08-2023, 07:10 AM | #7618 | |
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. See what I did there? The worst that could happen is that you lose all of your money invested in a small company with no earnings in a competitive market.
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03-08-2023, 12:40 PM | #7619 |
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Word of caution: be very skeptical and careful with robinhood or other tech company masquerading as a stock brokerage (or crypto bank) these companies play dirty, keep your holdings with them to low levels of your overall portfolio.
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03-08-2023, 04:57 PM | #7620 |
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Enough is enough, buy when there is blood in the water. Market sentiment is absolute trash. I bought a small amount of TQQQ, lets good
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03-08-2023, 06:04 PM | #7621 |
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I feel like market will go up tomorrow and then dip quite a bit Friday with labor numbers. Been up and down day to day but up over the last 6 months.
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03-10-2023, 06:37 AM | #7622 |
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Big market day today
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03-10-2023, 11:42 AM | #7623 |
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Shows how much I know. It happened the opposite as of about noon EST. Market is recovering from yesterday’s sell off.
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03-10-2023, 04:44 PM | #7625 | |
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03-10-2023, 04:46 PM | #7626 | |
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03-10-2023, 05:10 PM | #7627 |
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Good old run on the bank. Lots of large dollar accounts (above the $250,000 FDIC cover) and when they started withdrawing money the bank could not cover those withdrawals.
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03-10-2023, 05:20 PM | #7628 |
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The gist of it is that SVB suffered a bank run.
This was for two reasons: 1) it was paying too-low rates on deposits, having placed a substantial portion of those deposits in low-rate, long-dated US Treasuries and mortgage bonds BEFORE the Fed started inexorably raising rates; and, 2) the bank's depositors were heavily skewed towards Silicon Valley startup founders who wanted their deposits back, either to get higher returns elsewhere or to deal with business issues in an economy no longer as enamored of tech startups as it recently was (esp. from mid-2020 to early 2022). ----------------------------- "Silicon Valley Bank’s...troubles have been brewing for more than a year. Founded in 1983, the bank, based in Santa Clara, Calif., was a go-to lender for start-ups and their executives." "Though Silicon Valley Bank advertised itself as a 'partner for the innovation economy,' it was being shaken by decidedly old-fashioned decisions. To compete with bigger names, it had long boasted of looser lending standards for fledgling companies, and offered to pay higher interest rates on deposits than its larger rivals." "Flush with cash from high-flying start-ups, it bought huge amounts of bonds more than a year ago, just before the Federal Reserve began to raise interest rates. Like its peers, Silicon Valley Bank kept just a fraction of the deposits on hand and invested the rest with the hope of earning a return." "In particular, the bank put customer deposits into long-dated Treasury bonds and mortgage bonds which, while interest rates were low, promised modest, steady returns." "That had worked well for years." "When the Federal Reserve began raising rates last year, however, those holdings became less attractive because newer government bonds paid more in interest. That might not have mattered so long as the bank’s clients didn’t ask for their money back." "But at the same time as interest rates were rising, the environment for start-up funding dried up, putting pressure on the bank’s clients — who then began to withdraw their money. To pay those redemption requests, Silicon Valley Bank had to sell off some of its investments at exactly the wrong time. In its surprise disclosure on Wednesday, the bank admitted that it had lost nearly $2 billion when it was all but forced sell some of its holdings." “'It’s the classic Jimmy Stewart problem,' said Sheila Bair, former chair of the Federal Deposit Insurance Corporation, a primary bank regulator... 'If everybody starts withdrawing money all at once, the bank has to start selling some of its assets to give money back to depositors.'”
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03-10-2023, 05:52 PM | #7629 | |
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I really think this is the first shoe to drop...I wonder which bank is next? |
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03-10-2023, 05:53 PM | #7630 | |
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So who is going to prison? This is like FTXX? |
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03-10-2023, 05:55 PM | #7631 | |
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03-10-2023, 06:19 PM | #7632 |
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It’s not possible for a bank to cover all the money deposited at the same time. Those funds are part of what they use for lending and investing. They have minimum capital and liquidity requirements.
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03-10-2023, 06:21 PM | #7633 | |
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03-10-2023, 08:18 PM | #7634 | ||
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2) That's always possible in an environment of steadily increasing interest rates. However, SVB, and I don't know how many of them are out there (it can't be many), while a conventional bank in most respects, had a very distinct customer base and lending environment. This time around, the best argument against a wider banking crisis is that the employment market continues to be strong and Americans continue to have over $1 trillion in so-called excess savings left over from the pandemic years. Most Americans will continue making their loan payments on time and without undue difficulty. While that strength in the economy will lead the Fed to continue raising rates, I suspect the end is in sight on that front. Unemployment will have to rise, but it's so low now that even a modest but sustainable rise will lead the Fed to end raising its policy rate. ----------------------------- That's a lot of speculation and, as always, just my 2¢ on a very complicated matter. Quote:
What is the Fed's reserve requirement, you might ask. It's zero. Yes, the Fed has no reserve requirement at the present time. In order to deal with the extraordinary challenges presented by the pandemic, the Fed, in its wisdom, chose to permit banks, et al. to, at their discretion, lend and otherwise invest up to 100% of their deposits. Almost three years later now, the Fed has not changed its position. My expectation is that it will do so sometime after it's done raising interest rates. While it's unlikely any institution has left itself with no reserve with which to honor withdrawal requests from its depositors, it has given them a remarkable degree of freedom in how they manage the last 10% or so of their deposits (10% being the Fed reserve requirement in force until March 15, 2020). This page offers what I think is a useful explanation of the Fed's reserve requirement and its effects: https://www.thebalancemoney.com/rese...rement-3305883. I don't think so. Last I checked, the New York Times allows you 10 free articles before it cuts you off. Blow away cookies, and you've got 10 more free articles available to you. But maybe that's changed - I got tired of blowing away cookies and got a subscription for a small fraction of what my Wall Street Journal costs me. They do say you get what you pay for, though, don't they?
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TC Kline Coilovers; H&R Front Bar; Wavetrac; Al Subframe Bushings; 18X9/9½ ARC-8s; 255/35-18 PS4S (4); Dinan Elite V2 & CAI; MPerf Orange BBK; Schroth Quick Fit Pro; Full PPF |
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