Silicon Valley Bank just crashed more than 70% in a day

The bank index of US markets fell north of 6.5% yesterday.

The reason for this?

Silicon valley bank which banks nearly half of the US tech industry was down 60% yesterday and is further down 20% from yesterday’s close after the bank raised nearly 2 billion dollars in equity and debt and also sold their 21 billion dollars mortgage backed securities (nearly 25% of their portfolio at a 1.8 billion loss)

Nearly 80 billion dollars wiped out from the bank’s market capitalisation in a day. (80 billion dollars = SBI)

This tweet thread explains nicely about what has happened in the bank

Day before yesterday, one of the biggest crypto dedicated bank decided to shut down as FTX saga still continues to haunt the crypto space.


Deepak shenoy’s tweet also covers the crux of the story nicely.

1 Like

Repercussions of high interest rates in US now starting to kick in.

Most of the VC backed startups are at risk.

Yesterday 60% crash

Total 60% down open in pre market.

Exchange halted trading in the stock.

Incredible. It’s like 1.5 * SBI/ 1 hdfc bank got halted in a day

Bank closed! FDIC: PR-16-2023 3/10/2023

Depositors will get $250k by monday and rest as bankrupcy procedure.

Another fire started to fight by Central bankers


Likes of Hindenburg were busy targetting Adani and Indian PSU banks and a bank failed in their own backyard. :grinning:

1 Like

Yeah, its really intriguing that banks failed just due to interest rate risk ( no scandal, no high bets on risky asset ,no NPAs etc).

I feel in todays world any thing can happen how fundamentally strong company may be. ZEEL with no debt of there own ( one small line in fine print don’t even know if that exist) leads to NCLT.

Equity is riskier than ever !! In two days bank is taken over by fdic, funds blocked.

1 Like

So, the Americans attacked themselves…

Unlike India where deposit amounts are usually below insured amt threshold period, the amount of uninsured amount is huge and govt of US says they will not bailout the bank.

New day and another bank gets closed. making it the third largest bank failure in US history.

But, markets are now recovering after US govt stepping up saying measures shall be taken soon.

1 Like

First republic Bank is now down 60% in pre market trading.

This fall comes even after the govt intervention and securing new facility from JP morgan

Well 3 banks in just a few days aouch

Different people different opinion

Where was Hindenburg when there own banks get defaulted?

Introspection is rare and difficult quality to have my friend.

SVB collapsed shortly after being featured in Forbes America magazine best banks list. What 2008 taught me that has again been affirmed is that the reality does loose touch with what we see and what we hear at alarming frequency and impact.

1 Like

I think people will move from banking and will starting placing in surplus cash in money market or GSeC funds.

I also feel with so much risk involved any bank can fail any time better divide money in multiple bank or keep it in overnight funds or medium duration funds.

This is first time banks are closed due to duration risk in Interest rates(never think of scenario )

I did that after PMC bank episode. Closed private bank account and put money in three different PSU banks.

Interesting thought @AlgoEye

Ease of accessing the money and doing transactions will be key for successful migration to money markets. We never know if government may incentivize investors to invest in them in future.

But, one more possibility is migration to PSUs from private banks in our country.

1 Like

Busy counting the money from shorting Adani, good for them.
Seriously, do you expect a company like them to research anything and everything ? What is ‘own’ here ? Do they own these banks ?
As traders you don’t try to trade every move. You trade where your edge is. Same applies to them.

Surprising in how quickly this happened. But this is also not a new problem. Mismatch of duration of deposits vs investments is a an old vice. People get greedy during good times and reaper comes calling during bad times.

1 Like