SVB collapse

Sea_Shell

dunstonh said:

The US futures markets have just opened and the S&P, Dow and Nasdaq are all up between 1% and 1.4%

UK/Euro markets looking a bit twitchy still so far this morning.

Something else?    Or not convinced of the HSBC solution?

Sea_Shell

Just watching a bit of Bloomberg.

Pre market US banking stocks looking under pressure.

GeoffTF

The market has just been continuing its recent down move:

https://markets.ft.com/data/etfs/tearsheet/summary?s=VWRL:LSE:GBP

Nobody knows where it is going from here.

diystarter7

GeoffTF said:

The market is just continuing its recent down move:

https://markets.ft.com/data/etfs/tearsheet/summary?s=VWRL:LSE:GBP

Nobody knows where it is going from here.

A couple of years ago the Dow jones was moving up and down by over 500 points daily and then it settled.

stocks and shares are long term but many small investors will paly the markets

The speed this has been sorted tells me there are many banks with healthy outlokk but as always, things can change within the second,

Drama over

Thnaks

dunstonh

Sea_Shell said:

dunstonh said:

The US futures markets have just opened and the S&P, Dow and Nasdaq are all up between 1% and 1.4%

UK/Euro markets looking a bit twitchy still so far this morning.

Something else?    Or not convinced of the HSBC solution?

European markets closed before the US markets completed their drop.  So, they are playing catch up.    Plus, the US futures markets have dropped in the last few minutes.  No longer 1-1.5% up but now -0.08 to +0.59% 

Tucosalamanca

Some interesting threads over on Twitter in the last few days.

It has been suggested that stress testing introduced after GFC is no longer fit-for-purpose, as communication (social media) and the ability to access the banking system is now instantaneous. This was not the case in 2008/09 where smart phones and social media barely existed.

This appears to have happened with SVB, where a run on the bank has happened in hours rather than days/weeks. 

Folk are talking about 'social media risk', I think we're going to hear more about this going forward.
With the move towards online/digital banking and social media being so prevalent, more runs on banks seems inevitable.

aaj123

Another US bank stock is down nearly 60% in pre-market https://finance.yahoo.com/quote/FRC/

quirkydeptless

Well another opportunity to stress test my portfolio, now in decumulation

Malthusian

It has been suggested that stress testing introduced after GFC is no longer fit-for-purpose, as communication (social media) and the ability to access the banking system is now instantaneous. This was not the case in 2008/09 where smart phones and social media barely existed.

Everyone and his nan was already on Facebook in 2007, and smartphones were increasingly popular.
The run on Northern Rock started before opening hours as customers tried to get their money out online, and then moved into the traditional "queues round the block" phase.

Early in the morning of Friday, 14 September, Graham Hallworth, a businessman from Macclesfield, was trying to make a routine online money transfer.
He hadn't heard Robert Peston's report, and found Northern Rock's website didn't appear to be working properly. After a few goes he gave up thinking there was a temporary technical hitch.
In fact Northern Rock's website was seizing up, unable to cope with the volume of savers trying to get their money out.
When the morning papers arrived, Graham saw the headlines and put two and two together. "I made a concerted effort to get onto the website and transfer the money. I tried that for an hour or so without any success at all."
Graham Hallworth decided to go straight to his nearest Northern Rock branch, in Stockport. When he arrived he found he was not alone. Other savers were already there, anxiously trying to withdraw their deposits. (BBC report November 2007)

but this time it's different!

There isn't a material difference between customers causing a bank run at 7pm on Sunday by hammering their online banking apps and queuing round the block at 8am Monday morning.

If things got really bad in the pre-social-media world outside banking hours, the customers would form a mob outside the bank, then go to the branch manager's house and drag him out of bed. 
SVB went bust because it tied up too much of its customers' money in long-dated bonds, not because of social media.

aaj123

Malthusian said:

It has been suggested that stress testing introduced after GFC is no longer fit-for-purpose, as communication (social media) and the ability to access the banking system is now instantaneous. This was not the case in 2008/09 where smart phones and social media barely existed.

Everyone and his nan was already on Facebook in 2007, and smartphones were increasingly popular.
The run on Northern Rock started before opening hours as customers tried to get their money out online, and then moved into the traditional "queues round the block" phase.

Early in the morning of Friday, 14 September, Graham Hallworth, a businessman from Macclesfield, was trying to make a routine online money transfer.
He hadn't heard Robert Peston's report, and found Northern Rock's website didn't appear to be working properly. After a few goes he gave up thinking there was a temporary technical hitch.
In fact Northern Rock's website was seizing up, unable to cope with the volume of savers trying to get their money out.
When the morning papers arrived, Graham saw the headlines and put two and two together. "I made a concerted effort to get onto the website and transfer the money. I tried that for an hour or so without any success at all."
Graham Hallworth decided to go straight to his nearest Northern Rock branch, in Stockport. When he arrived he found he was not alone. Other savers were already there, anxiously trying to withdraw their deposits. (BBC report November 2007)

but this time it's different!

There isn't a material difference between customers causing a bank run at 7pm on Sunday by hammering their online banking apps and queuing round the block at 8am Monday morning.

If things got really bad in the pre-social-media world outside banking hours, the customers would form a mob outside the bank, then go to the branch manager's house and drag him out of bed. 
SVB went bust because it tied up too much of its customers' money in long-dated bonds, not because of social media.

Fscs protection in 2007 only covered first 2K and then 90% of your deposit until 33k. Big difference from the current blanket protection for 85k.