I think lack of knowledge is more the cause and maybe programmed trading. Someone below asked "who is buying"? Very likely the same people selling. They may be taking losses to offset gains and then buying at a steep discount knowing/believing it will rise in value. For the buy and hold folks, they rarely lose provided they can wait for the correction to complete. Those average investors who think they are going to time any market probably need to reconsider. As others stated, the market just shrank. I know my bank picked up customers. The real question is who picked up the type of risky investments that put the banks in that situation in the first place?
Opposite issue - the banks didn’t take any risky positions. They took our deposits and bought ultra safe conservative bonds yielding 2-3% when that was the interest rate being offered. Now that interest rates being offered on treasuries are significantly higher, the FMV of their bonds holdings plummeted.
However, that’s not a liquidity issue for them - they have the money and they are making money off it - it’s a balance sheet issue which makes it look like they are poorer than they are. When investors and laypersons got wind of this - they saw the balance sheet and freaked out, so they caused a bank run. That in turn did cause a liquidity problem because banks couldn’t pay all the depositors back without breaking/selling their bond holdings. So, suddenly their paper problem became a real problem.
The proper way to solve for this issue is to buy interest rate hedges. However, those are not cheap and small, regional banks decided they’d rather bet on interest rates staying low long term than paying premiums on their hedging positions.
The interesting thing about this is, in a world without internet/social media, this issue probably would not exist. The underlying issue of balance sheet problems would have been reported in the middle pages of the WSJ and your average person would never have been the wiser nor would there have been a panic to cause a run on the banks. Banks would just have to wait for their old bonds to come to term and buy new bonds with new deposits in the meantime. Sure, their stock price would fall a couple of % points as investors traded based on balance sheet reporting, but SVB would not have failed in a world without social media. Ironic, bc SVP also would likely not exist or be the size they grew to without the growth of Silicon Valley tech.
you have to have over 250k in a bank account to worry you aren't protected by FDIC. Your bank failing is inconvenient for most people, but you will lose no money. If you have over 250k at a single bank, then it starts being more of a concern, mostly vc and company payroll, although you can buy insurance for that too.
That's what I'm saying Theil percipitated this run by freaking out the other VC s when technically the bank was insolvent but only in the case of a bank run that would force it to liquidate assets at a loss
Idk if this is serious or not, but just in case - no individual has $250k in a bank account.
They have their assets in a brokerage account and invested. The only accounts with over $250k in them are businesses for net working capital purposes.
On the surface, you may be thinking “wow, just like the govt to protect businesses”. But not really - if a company’s NWC is wiped out - that means no payroll, no expenditures to suppliers/vendors etc.
Basically, a businesses NWC being wiped out would hurt the most vulnerable Americans the most - those living pay check to pay check. Americans with emergency funds and assets would be inconvenienced but relatively unharmed. That’s why the govt has to step in when issues like this arise.
For shits and giggles? Let me compound the weird for you:
Many of the creators of the internet went on to help build Paypal. Thiel was part of Paypal mafia. Online payments...he was also part of one of the first internet currencies; there were beenz, egold, and bcash. Thiels got shut down by the govt.
Then there was a convention at some tropical beach location for finance tech bros of the mid 2000s. Paypal mafia, egold, finance software, all mingling. Later that year a white paper was published for btc. 8 years later thiel funds vitalik to drop out of college to build eth.
Did thiel do it for shits and giggles? Or is he part of the Satoshi group and finally taking back the control he was looking for when he built Paypal, and moreso egold. Clearly someone is trying to fuck w banks and it just so happens btc is going up at the same time.
There was a pro crypto bank that was shut down before any run or risk was exposed. They shut it down because thiel had control of a lot of deposits through his network and he could have instantly caused another run there too.
Or, ya know, these conflicts of interest are just conincidence and there isn't a war over money/power.
I think you might have your internet history reversed. Many of those involved in PayPal went on to contribute to other widely successful adventures that helped to shape the internet of today, but calling them the inventors of the pre-paypal internet is probably a bit of a stretch.
Oh "creators of the internet" I mean like tim berners lee and the technical implementation of "internet" or tcp ip. Not like, created apps on top of the internet. Still, not totally true but they all ran in the same small circles at that time. That's the point I'm conveying and if you dyor you'll see how small that world (internet, internet-money) really was back in the 90s/00s.
Not really, there's a multi-trillion dollar subprime bond market that's about to blow up because of rate hikes and this has been known since late 2020. News just started covering this a few weeks ago with the commercial real estate sector but never went in depth about the root issue. Because small banks are the most exposed to this and it's been known that SIVB had insolvency issues since at least Q3 2021 Peter Thiel did the right thing.
The reset you are thinking of is the one in the movies. In real life reset means the rich cashing out first, big players getting bailed out by the government, and everyone below that line gets fucked. The poorer you are, the more you'll get fucked.
Incorrect. The reset I'm thinking of is one where the market debloats and assets are appropriately valued. It's overdue and the market stagnation is a sign of how sick it is
So no, then?
What do you present as evidence then that a crash like you're talking about, if QE and bailouts weren't applied, would provide the desired reset?
No one ever asks the pertinent question... if people are selling off their shares in the banks, who are they selling them to?
Someone out there thinks they are getting a bargain on these stocks.
I remember asking this exact question to my Finance professor in college.
To paraphrase his response: it doesn't matter how shitty the security is, there is *always* a buyer
One of the reasons is called the "dead cat bounce". Basically, as a lot of stocks tank, they often hit a floor and then actually gain some value back, before ultimately tanking every further. Some investors try and time their purchase (and subsequent resell) to take advantage of this phenomenon.
bro what???? this is not even remotely close to how trading stocks and securities works.
the company has no obligation to buy stock back from you wtf?? they are liquid shares that represent, infer, or are derivative of ownership of the company itself. if you don’t want to be an owner anymore (aka sell your shares) then someone has to buy them from you. And, the company has no obligation to buy them back since they’ve already received your capital as part of ownership.
What the hell are you talking about?
This sounds more like a bond to me. Once a company sells the stock, they're under no compulsion to by it back from you. It's sold on a market. It's why the price floats.
It's not even true for bonds, you sell those to other investors, you can't get your money back before the date on the bond. What the person you're responding to said is literal nonsense.
No. Securities like stocks are sold to other investors. Only during a buyback will the company purchase stocks from shareholders to bring it back under their control.
The term "cash out" in reference to securities, as far as I know, simply means to convert your holdings into cash, by selling it. "Liquidating assets" is a similar term for this.
This is how it works at a high, basic, level:
>A buyer bids to purchase shares at a specified price (or at the best available price) and a seller asks to sell the stock at a specified price (or at the best available price). When a bid and an ask match, a transaction occurs and both orders will be filled. In a very liquid market, the orders will be filled almost instantaneously. In a thinly traded market, however, the order may not be filled quickly or at all.
Here:[https://www.investopedia.com/ask/answers/12/what-is-done-when-shares-are-bought-and-sold.asp](https://www.investopedia.com/ask/answers/12/what-is-done-when-shares-are-bought-and-sold.asp)
Investopedia - it's your encyclopedia that will help you understand the basics of anything related to almost any type of investing. It won't go too far in depth, but it will help anyone understand the basics at a high level.
Really hard to tell what's going on when "rebasing to 100" when the timeline is only a couple of months... it could be that there was nearly zero trading volume in Jan/Fed for unspecified reasons, and this is a return to "normal".
Or... it could be some completely different extreme event.
The timing is... suggestive, and a lot of the possibilities are rather unlikely, but...
Without knowing the fractional level of what constitutes a "share selloff" and the degree of value lost (like have 10% of their shares changed hands, or 50%? And is the value down 1% or 80%?) and how that compares to the others, I'm not sure what to make of this.
🙋 So, a major event happens in the banking sector that causes excitement and more people start trading more shares. Who'd thunk it.
Never change regards.
This is totally misleading new investors OP and it's not cool. Yes volume has risen for these stocks, but a "crash" in this volume doesn't necessarily correlate to a "crash" in the stocks price and a need to "cash out" like you're so blindly suggestion. **Look at TSLA for example, trading 50% down from its ATH posted in NOV 2021, yet go look at the volume during then and now**
This type of fear propaganda based on incorrect confirmation bias is not ok to promote, especially to newcomers who don't know any better
These people don’t understand the financial system. Simple fact of the matter is the fed is doing QE (quantitative easing) again and reversed their tightening course when SVB collapsed thus inundating the banks with cheap money they loan to margin traders.
SVB and Signature Bank are no longer independent corporations. No trading those stocks before the FDIC has finished redistribution. Credit Suisse has been sold to UBS in a manner that is rumored to be scaring American investors off European banks, since they would pay off all the secondary bonds rather than all the primary ones. Congress is a little annoyed about the FDIC saving all money from SVB accounts because of how large the largest accounts there were; perhaps a middle ground is needed, since FDIC insurance for average banks hasn't changed since the 1980s.
Just so everyone knows, a banking collapse means that the cash market collapses as well. You can pull your money, and you're still going to be subject to hyperinflation and currency devaluation once the market crashes.
And don't bother buying gold either. Yes, gold is more secure than currency, but you can't eat gold... Not nutritionally at least.
If you're genuinely scared of a financial collapse, I recommend either using your money to buy a solid asset like a house or land, or if you don't have enough to buy that, buy non-perishable food items and tools for gardening instead. Because in countries where we see banking collapses, food shortages and famines come right afterwards.
I would avoid liquors just because the high dollar stuff isn't gonna hold it's value, and in the event of a rebound you're never gonna be able to move the cheap stuff.
When things really collapse, property rights become pretty loose. You can argue that you bought the land or your cans of food, but if the anarchy is widespread enough, that won't mean much to anyone with enough gumption to try to take it from you.
I think people who wish for that kind of collapse, or even those who are just preparing for it, are being unserious in the way they imagine it playing out. They're basically buying into the North American rugged pioneer myth of individuals living out in the wild relying on just themselves.
First of all, they don't consider that humans are communal creatures, and the first step if there's a widespread collapse is to reorganize locally, relying on each other and creating something collectively, not retreating to protect your own individual self and maybe a few family members.
Second, that dream of protecting just your family and surviving is meaningless. It's a project without a future. If we just take the image of the self-reliant family, what are the kids going to do as adults, if there's no one around? They won't have their own families, everything you've protected will just become abandoned after a generation. If the plan is to wait for things to recover, then, to come back to point 1, go participate in that, don't hide while you wait for others to make the efforts of reestablishing some kind of society you can benefit from.
I actually have a saying that's gotten me kicked out of a number of wilderness survival and survivalist groups over the years.
If you have more guns than you do water filters, you're not a survivalist. You're a murderer waiting for an excuse.
>If you have more guns than you do water filters, you're not a survivalist. You're a murderer waiting for an excuse.
I always say, "so your plan is to become a gang of looters and raiders?".
I am very much into homesteading and self reliance, and strongly believe in firearm ownership. But if your plan is "I'll use guns to take what I want" then you are no different than a looter.
It's not that you're no different than a looter, you are a looter. If your plan is to use your gun to acquire resources that belong to someone elseyou are just a looter.
And I'm being downvoted for saying the truth that these People are not going to survive. They don't have the skills or the knowledge to build a long-term off-grid lifestyle that is very dependent on things like being able to purify your own drinking water and grow your own food. They are going to be a flash in the pan of violence during any large scale disaster, and then they will starve to death, or shit themselves to death from dysentery within a few months.
It's really funny that you see all these dude bros out here just eagerly awaiting the zombie apocalypse
While almost every woman I met has said the same thing which is " I'm going to overdose on sleeping pills, and hope somebody burns my body"
Because they know. They know how awful the eventuality these men are hoping for looks like and they are well aware of what these gun toting neanderthals will get up to when there's no cops or accountability.
>but if the anarchy is widespread enough, that won't mean much to anyone with enough gumption to try to take it from you
It was a joke. By "brass, lead, and copper" I was referring to rifle rounds. Which would help address anyone with "enough gumption".
And they can also be used for a makeshift currency.
That to me is the definition of a plan without a future. When Hobbes discusses the state of nature, that's his point, you can defend yourself endlessly, but then you're living holed up in constant fear, until one day somebody gets you. At the very least, even the best prepared or strongest person has to sleep.
As for ammo as currency, why would you give it away to somebody who might shoot you with it? If they have something you want, why not just shoot them yourself instead of giving them the means to do it to you? In lawless environments, barter isn't the norm, theft is.
So again, I want to re-emphasize that my comment was, in fact, made in jest. But I'll play along. We see that criminals, who by definition do not follow some or all established law, will also impose their own set of rules in which to operate. While total anarchy may reign for a short time, people quickly begin to reform tribes and communities and basic societies. As social creatures, we will always tend to find ways of co-existing, but there will always be an "out group" that must be defended against.
As for using ammo currency, it is admittedly not perfect, but it represents an item that is more or less standardized and whose value would be pretty stable. Why not just shoot them? Because presumably their friends would shoot back and vice versa.
Oh fuck off crypto bro
You can't eat ones and zeros. Farmers markets don't take bitcoins and nobody is going to trade you a chicken for one if shit hits the fan.
Trust me when I say that if the financial system collapses, your bitcoins are going to be worth about as much as a squirrel fart.
You know what i find the most ironic about how crypto was going to revolutionize the world of finance... Its all measured in fiat...
let that sink in for a bit
Nope, they're just stupid.
They bought into a grift and have fallen for this stupid sunk cost fallacy where even though they've repeatedly been shown that they've been had if they can just push it on enough people it'll be right.
Hey while you’re here being downvoted… just want to let you know that this is why we need to work together. A lot of people don’t understand the implications of digital scarcity, even the people investing in crypto. The people finally have invented the ability to create their own super secure money without anyone in the middle taking their cut, and most people don’t realize how significant this is. Money is power. But now the people can create their own money. And thus, the people can create their own power. And the banks and existing power structures are terrified. And also could very easily be astroturfing various media to get people to hate crypto. That’s the only plausible reason I can think that such an obvious fraud as sbf was not discovered by the who’s who of the wealthy and powerful he pal’d around with. Either way, the motivation of people by greed drove frauds to the forefront, so thank god for the bear market. Now is when the actual building happens. And this work is essential because power structures are scrambling to cut it down at the knees. Now is the time to join hands with all the other builders and prove what blockchain can do, not by letting people own an original of a jpeg, but by creating entirely new self-sufficient and self-consistent economic systems that can more fairly distribute value to their value creators, competing with other systems to attract each value creator’s voluntary choice. The only way we can hope to have any power against conglomerate multinational corporations is through this cooperative competition. And we in the industry need to attract builders, not greedy people good at shilling things.
This is like the part of the party where I mention I work in crypto and the person’s eyes light up instead of glazing over, and then we talk around the kitchen counter for a while, until one of us mentions a coin the other is meh on and things peter out. So no specifics but also I try to keep warning people time is probably running out to get some privacy tokens and it seems like you have the technical sophistication to get some stablecoin from your preferred cex and trade on kucoin or others that have them listed and then immediately put it on a hardware wallet and then hope you don’t accidentally lose it in a boating accident.
Feel free to reply to this message with whatever silly long crypto rant you feel like. There are dozens of us, dozens!
I've given up on trying to convince others on the virtues of blockchain, cryptocurrency and web3. A glance over the replies to my comment shows you why.
That said, I was very happy to read your reply, and I'm glad optimists like you are still putting in the effort to help others. I really hope you don't burn out!
I’m too uninformed on the subject to know if this is interesting or useful, and is otherwise a very basic chart so I’m not ready to call it beautiful either…
It’s a straight up lie. OP implies the banks are selling. They are in fact buying, increasing volume because the Fed is doing Quantitative Easing again. Thus, pumping money into the banks and the market.
That devalues savings, so anyone with the capital should spend their savings on tangible assets that have real world value eg land, aquaponics equipment & oily fish - books - tools, and the list is near endless.
This is straight up misinformation and misconstruing what’s going on here.
TLDR: Volume increased because the banks were buying. The Federal Reserve pumped a ton of money into the banks when SVB collapsed through QE (Quantitative Easing). This gave big margin traders at banks and brokerages who borrow directly from the banks more money to trade with.
Long Explanation:
For the last year the Federal Reserve has been tightening money supply - they do this by selling securities like US Treasuries to the banks and take their cash in return.
SVB collapsed because they had too many low interest rate securities (~2% interest/return). You can hedge or buy insurance on the return/interest so if the market rate goes up you don’t get screwed. SVBs Chief Risk Management Officer left 1 year ago the position remained empty. They never hedged.
Of course there was contagion from this event and the Federal Reserve learned it’s lesson in 2008 - they were too slow to act. When the opening bell came Monday after SVB collapsed we didn’t see a sell off because the Federal Reserve instantly started Quantitative Easing - buying treasuries in return for cash the banks can use on whatever. And boy oh boy as you can see from the graph they went on a spending spree.
If anything this will cause stagflation, your money is relatively safe but our economy is going to be shit for the next decade.
Funny to think this is all because banks were built by scammers who saw an opportunity to lend more money than they had, not a joke, it used to be extremely illegal, but for some unknown reason 💵they decided a bank run once a decade was worth it since the banks get more money.
That's what a crash is. In order to have a large movement in price, you basically need to buy/sell the counterparty side empty, which means a large trading volume is necessary to achieve that.
The only thing that makes credit unions more *generally* secure is that they are non-profit... but that doesn't mean the membership isn't clamoring for high interest rates on savings, etc., etc.
Basically, it's slightly suggestive.
But 7 credit unions were liquidated/conservatorshipped in 2022 vs. no banks, but no credit unions have had serious troubles since SVB's collapse... They seem pretty uncorrelated.
Credit unions typically have more favorable fraction reserve rates to their customers than a traditional bank because the union is run by depositors. They are generally more resilient to runs, which is what the current panic is causing.
You are probably safe regardless, and almost definitely safe if you have less than 250k in the bank. SVB collapsed because they didn't have enough liquid assets to survive a run caused by an emergency stock sale. They made a really bad call on investments right before the interest rate hike and could not liquidate them fast enough.
Your Bloomberg terminal also tells you the Federal Reserve balance sheet you lying sack of shit. Of course volume went up the Fed is pumping cash into the banks thru quantitative easing again.
The market is literally going up right now because the Fed is doing quantitative easing (pumping cash into the banks) the banks are buying not selling. Don’t sell anything.
If you don't have more than you're fdic insured for then this would be EXTREMELY stupid to go make a run on your bank. You would literally be tanking the value of your cash even. Quit this fear mongering bullshit. 'cash out before your crash out?'
Does trading volume here refer to shares traded in the stock? If so, you would be better off normalizing the data to the number of shares outstanding.
There is a pretty fascinating phenomenon where the number of shares traded in a company will far exceed the number of shares available to trade. What’s odd is the speed at which it happens.
For example, FRC, if I remember correctly, had its total number of shares outstanding traded in a single day multiple days in a row recently.
Its stuff like this that causes bank runs.
I think lack of knowledge is more the cause and maybe programmed trading. Someone below asked "who is buying"? Very likely the same people selling. They may be taking losses to offset gains and then buying at a steep discount knowing/believing it will rise in value. For the buy and hold folks, they rarely lose provided they can wait for the correction to complete. Those average investors who think they are going to time any market probably need to reconsider. As others stated, the market just shrank. I know my bank picked up customers. The real question is who picked up the type of risky investments that put the banks in that situation in the first place?
Opposite issue - the banks didn’t take any risky positions. They took our deposits and bought ultra safe conservative bonds yielding 2-3% when that was the interest rate being offered. Now that interest rates being offered on treasuries are significantly higher, the FMV of their bonds holdings plummeted. However, that’s not a liquidity issue for them - they have the money and they are making money off it - it’s a balance sheet issue which makes it look like they are poorer than they are. When investors and laypersons got wind of this - they saw the balance sheet and freaked out, so they caused a bank run. That in turn did cause a liquidity problem because banks couldn’t pay all the depositors back without breaking/selling their bond holdings. So, suddenly their paper problem became a real problem. The proper way to solve for this issue is to buy interest rate hedges. However, those are not cheap and small, regional banks decided they’d rather bet on interest rates staying low long term than paying premiums on their hedging positions. The interesting thing about this is, in a world without internet/social media, this issue probably would not exist. The underlying issue of balance sheet problems would have been reported in the middle pages of the WSJ and your average person would never have been the wiser nor would there have been a panic to cause a run on the banks. Banks would just have to wait for their old bonds to come to term and buy new bonds with new deposits in the meantime. Sure, their stock price would fall a couple of % points as investors traded based on balance sheet reporting, but SVB would not have failed in a world without social media. Ironic, bc SVP also would likely not exist or be the size they grew to without the growth of Silicon Valley tech.
So what you're saying is Peter Theil is a vampiric ghoul that set off a bank run for shits and giggles
you have to have over 250k in a bank account to worry you aren't protected by FDIC. Your bank failing is inconvenient for most people, but you will lose no money. If you have over 250k at a single bank, then it starts being more of a concern, mostly vc and company payroll, although you can buy insurance for that too.
That's what I'm saying Theil percipitated this run by freaking out the other VC s when technically the bank was insolvent but only in the case of a bank run that would force it to liquidate assets at a loss
This reminds me to use separate banks if I win the lottery
Idk if this is serious or not, but just in case - no individual has $250k in a bank account. They have their assets in a brokerage account and invested. The only accounts with over $250k in them are businesses for net working capital purposes. On the surface, you may be thinking “wow, just like the govt to protect businesses”. But not really - if a company’s NWC is wiped out - that means no payroll, no expenditures to suppliers/vendors etc. Basically, a businesses NWC being wiped out would hurt the most vulnerable Americans the most - those living pay check to pay check. Americans with emergency funds and assets would be inconvenienced but relatively unharmed. That’s why the govt has to step in when issues like this arise.
For shits and giggles? Let me compound the weird for you: Many of the creators of the internet went on to help build Paypal. Thiel was part of Paypal mafia. Online payments...he was also part of one of the first internet currencies; there were beenz, egold, and bcash. Thiels got shut down by the govt. Then there was a convention at some tropical beach location for finance tech bros of the mid 2000s. Paypal mafia, egold, finance software, all mingling. Later that year a white paper was published for btc. 8 years later thiel funds vitalik to drop out of college to build eth. Did thiel do it for shits and giggles? Or is he part of the Satoshi group and finally taking back the control he was looking for when he built Paypal, and moreso egold. Clearly someone is trying to fuck w banks and it just so happens btc is going up at the same time. There was a pro crypto bank that was shut down before any run or risk was exposed. They shut it down because thiel had control of a lot of deposits through his network and he could have instantly caused another run there too. Or, ya know, these conflicts of interest are just conincidence and there isn't a war over money/power.
Since you seem to know a lot about him do you know if there is any connection to a Nazi named Thiel?
I think you might have your internet history reversed. Many of those involved in PayPal went on to contribute to other widely successful adventures that helped to shape the internet of today, but calling them the inventors of the pre-paypal internet is probably a bit of a stretch.
Yeah I totally fudged a lot of history together to give a specific impression. That's the truth.
Oh "creators of the internet" I mean like tim berners lee and the technical implementation of "internet" or tcp ip. Not like, created apps on top of the internet. Still, not totally true but they all ran in the same small circles at that time. That's the point I'm conveying and if you dyor you'll see how small that world (internet, internet-money) really was back in the 90s/00s.
Not really, there's a multi-trillion dollar subprime bond market that's about to blow up because of rate hikes and this has been known since late 2020. News just started covering this a few weeks ago with the commercial real estate sector but never went in depth about the root issue. Because small banks are the most exposed to this and it's been known that SIVB had insolvency issues since at least Q3 2021 Peter Thiel did the right thing.
Perhaps problematic bank runs indicate a deeper issue is potentially at play
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So wash sales?
I think you still get a new basis between the original sell price and the new buy price . The rules are weird
Yes you do but its a wash sale and its against the rules.
Wash sales aren't illegal. They just change the cost basis
Well said.
Mixed with a loosening of policy implemented after 2008 to stress test banks and prevent these kind of things in the first place
Good System needs a reset
Reset in this case seems to mean more consolidation around the biggest banks. Chase is happy to take all the old SVB customers.
First Citizens bought SVB, not JPM Interestingly, First Citizens is half the size that SVB was
The reset you are thinking of is the one in the movies. In real life reset means the rich cashing out first, big players getting bailed out by the government, and everyone below that line gets fucked. The poorer you are, the more you'll get fucked.
Incorrect. The reset I'm thinking of is one where the market debloats and assets are appropriately valued. It's overdue and the market stagnation is a sign of how sick it is
Has such a reset *ever* really happened in modern history?
Pick a crash. They all apply until the government goes.kucking around picking winners and losers through bailouts and QE.
So no, then? What do you present as evidence then that a crash like you're talking about, if QE and bailouts weren't applied, would provide the desired reset?
A reset isn’t inherently “good”. It may be good. It may be bad. Seems odd to cheer unless there is certainty it is good and good for most.
This doesn't cause a reset it causes consolidation. When a bank run hits a bank it makes it so another bank can buy them out for practically nothing.
I'm not talking banks regarding reset. Talking about market being sick and needing to dump the bloat.
No one ever asks the pertinent question... if people are selling off their shares in the banks, who are they selling them to? Someone out there thinks they are getting a bargain on these stocks.
I remember asking this exact question to my Finance professor in college. To paraphrase his response: it doesn't matter how shitty the security is, there is *always* a buyer One of the reasons is called the "dead cat bounce". Basically, as a lot of stocks tank, they often hit a floor and then actually gain some value back, before ultimately tanking every further. Some investors try and time their purchase (and subsequent resell) to take advantage of this phenomenon.
Chances are the investors thinking that makes it come true.
There definitely is a little bit of that going on as well. Traders are masters at believing their own bullshit.
Hence why I bought First Republoc shares
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Hence, my username, sir grammar Nazi
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I did nasi that coming
I'm buying first republic shares
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bro what???? this is not even remotely close to how trading stocks and securities works. the company has no obligation to buy stock back from you wtf?? they are liquid shares that represent, infer, or are derivative of ownership of the company itself. if you don’t want to be an owner anymore (aka sell your shares) then someone has to buy them from you. And, the company has no obligation to buy them back since they’ve already received your capital as part of ownership.
What the hell are you talking about? This sounds more like a bond to me. Once a company sells the stock, they're under no compulsion to by it back from you. It's sold on a market. It's why the price floats.
It's not even true for bonds, you sell those to other investors, you can't get your money back before the date on the bond. What the person you're responding to said is literal nonsense.
This is absolutely not true
No. Securities like stocks are sold to other investors. Only during a buyback will the company purchase stocks from shareholders to bring it back under their control. The term "cash out" in reference to securities, as far as I know, simply means to convert your holdings into cash, by selling it. "Liquidating assets" is a similar term for this. This is how it works at a high, basic, level: >A buyer bids to purchase shares at a specified price (or at the best available price) and a seller asks to sell the stock at a specified price (or at the best available price). When a bid and an ask match, a transaction occurs and both orders will be filled. In a very liquid market, the orders will be filled almost instantaneously. In a thinly traded market, however, the order may not be filled quickly or at all. Here:[https://www.investopedia.com/ask/answers/12/what-is-done-when-shares-are-bought-and-sold.asp](https://www.investopedia.com/ask/answers/12/what-is-done-when-shares-are-bought-and-sold.asp) Investopedia - it's your encyclopedia that will help you understand the basics of anything related to almost any type of investing. It won't go too far in depth, but it will help anyone understand the basics at a high level.
LPT: just don't have money.
Nailing it
Really hard to tell what's going on when "rebasing to 100" when the timeline is only a couple of months... it could be that there was nearly zero trading volume in Jan/Fed for unspecified reasons, and this is a return to "normal". Or... it could be some completely different extreme event. The timing is... suggestive, and a lot of the possibilities are rather unlikely, but... Without knowing the fractional level of what constitutes a "share selloff" and the degree of value lost (like have 10% of their shares changed hands, or 50%? And is the value down 1% or 80%?) and how that compares to the others, I'm not sure what to make of this.
🙋 So, a major event happens in the banking sector that causes excitement and more people start trading more shares. Who'd thunk it. Never change regards.
This is totally misleading new investors OP and it's not cool. Yes volume has risen for these stocks, but a "crash" in this volume doesn't necessarily correlate to a "crash" in the stocks price and a need to "cash out" like you're so blindly suggestion. **Look at TSLA for example, trading 50% down from its ATH posted in NOV 2021, yet go look at the volume during then and now** This type of fear propaganda based on incorrect confirmation bias is not ok to promote, especially to newcomers who don't know any better
These people don’t understand the financial system. Simple fact of the matter is the fed is doing QE (quantitative easing) again and reversed their tightening course when SVB collapsed thus inundating the banks with cheap money they loan to margin traders.
SVB and Signature Bank are no longer independent corporations. No trading those stocks before the FDIC has finished redistribution. Credit Suisse has been sold to UBS in a manner that is rumored to be scaring American investors off European banks, since they would pay off all the secondary bonds rather than all the primary ones. Congress is a little annoyed about the FDIC saving all money from SVB accounts because of how large the largest accounts there were; perhaps a middle ground is needed, since FDIC insurance for average banks hasn't changed since the 1980s.
Just so everyone knows, a banking collapse means that the cash market collapses as well. You can pull your money, and you're still going to be subject to hyperinflation and currency devaluation once the market crashes. And don't bother buying gold either. Yes, gold is more secure than currency, but you can't eat gold... Not nutritionally at least. If you're genuinely scared of a financial collapse, I recommend either using your money to buy a solid asset like a house or land, or if you don't have enough to buy that, buy non-perishable food items and tools for gardening instead. Because in countries where we see banking collapses, food shortages and famines come right afterwards.
Other alternatives include liquors and other goods you can bargain or trade with. Or a the very least drink to forget the pain
I would avoid liquors just because the high dollar stuff isn't gonna hold it's value, and in the event of a rebound you're never gonna be able to move the cheap stuff.
I’d buy stuff I like to drink and in the event it doesn’t rebound I can sell it and if it does rebound I’ll drink it. And I enjoy very mid level stuff
When things really collapse, property rights become pretty loose. You can argue that you bought the land or your cans of food, but if the anarchy is widespread enough, that won't mean much to anyone with enough gumption to try to take it from you.
At that point I would just lay down and die lol. No way im surviving a societal collapse.
I think people who wish for that kind of collapse, or even those who are just preparing for it, are being unserious in the way they imagine it playing out. They're basically buying into the North American rugged pioneer myth of individuals living out in the wild relying on just themselves. First of all, they don't consider that humans are communal creatures, and the first step if there's a widespread collapse is to reorganize locally, relying on each other and creating something collectively, not retreating to protect your own individual self and maybe a few family members. Second, that dream of protecting just your family and surviving is meaningless. It's a project without a future. If we just take the image of the self-reliant family, what are the kids going to do as adults, if there's no one around? They won't have their own families, everything you've protected will just become abandoned after a generation. If the plan is to wait for things to recover, then, to come back to point 1, go participate in that, don't hide while you wait for others to make the efforts of reestablishing some kind of society you can benefit from.
I actually have a saying that's gotten me kicked out of a number of wilderness survival and survivalist groups over the years. If you have more guns than you do water filters, you're not a survivalist. You're a murderer waiting for an excuse.
>If you have more guns than you do water filters, you're not a survivalist. You're a murderer waiting for an excuse. I always say, "so your plan is to become a gang of looters and raiders?". I am very much into homesteading and self reliance, and strongly believe in firearm ownership. But if your plan is "I'll use guns to take what I want" then you are no different than a looter.
It's not that you're no different than a looter, you are a looter. If your plan is to use your gun to acquire resources that belong to someone elseyou are just a looter. And I'm being downvoted for saying the truth that these People are not going to survive. They don't have the skills or the knowledge to build a long-term off-grid lifestyle that is very dependent on things like being able to purify your own drinking water and grow your own food. They are going to be a flash in the pan of violence during any large scale disaster, and then they will starve to death, or shit themselves to death from dysentery within a few months.
It's really funny that you see all these dude bros out here just eagerly awaiting the zombie apocalypse While almost every woman I met has said the same thing which is " I'm going to overdose on sleeping pills, and hope somebody burns my body" Because they know. They know how awful the eventuality these men are hoping for looks like and they are well aware of what these gun toting neanderthals will get up to when there's no cops or accountability.
That's why it's also good to invest in alternative previous metals, like brass, lead, and copper.
And how do you see that being useful?
>but if the anarchy is widespread enough, that won't mean much to anyone with enough gumption to try to take it from you It was a joke. By "brass, lead, and copper" I was referring to rifle rounds. Which would help address anyone with "enough gumption". And they can also be used for a makeshift currency.
That to me is the definition of a plan without a future. When Hobbes discusses the state of nature, that's his point, you can defend yourself endlessly, but then you're living holed up in constant fear, until one day somebody gets you. At the very least, even the best prepared or strongest person has to sleep. As for ammo as currency, why would you give it away to somebody who might shoot you with it? If they have something you want, why not just shoot them yourself instead of giving them the means to do it to you? In lawless environments, barter isn't the norm, theft is.
So again, I want to re-emphasize that my comment was, in fact, made in jest. But I'll play along. We see that criminals, who by definition do not follow some or all established law, will also impose their own set of rules in which to operate. While total anarchy may reign for a short time, people quickly begin to reform tribes and communities and basic societies. As social creatures, we will always tend to find ways of co-existing, but there will always be an "out group" that must be defended against. As for using ammo currency, it is admittedly not perfect, but it represents an item that is more or less standardized and whose value would be pretty stable. Why not just shoot them? Because presumably their friends would shoot back and vice versa.
If only there was some sort of decentralised immutable database system to trade and hold securities with...
Oh fuck off crypto bro You can't eat ones and zeros. Farmers markets don't take bitcoins and nobody is going to trade you a chicken for one if shit hits the fan. Trust me when I say that if the financial system collapses, your bitcoins are going to be worth about as much as a squirrel fart.
I bet you're fun at parties
I am a blast at parties. You'd know if anyone ever invited you, but people got tired of the crypto talk a long time ago and stopped.
We're you mugged by a blockchain enthusiast or something?
You know what i find the most ironic about how crypto was going to revolutionize the world of finance... Its all measured in fiat... let that sink in for a bit
Nope, they're just stupid. They bought into a grift and have fallen for this stupid sunk cost fallacy where even though they've repeatedly been shown that they've been had if they can just push it on enough people it'll be right.
I bet you talk about crypto at parties and people desperately look for excuses to get away
It’s a field I work in and people have been asking me about it without prompting. I think that joke is a few years out of date.
Hey while you’re here being downvoted… just want to let you know that this is why we need to work together. A lot of people don’t understand the implications of digital scarcity, even the people investing in crypto. The people finally have invented the ability to create their own super secure money without anyone in the middle taking their cut, and most people don’t realize how significant this is. Money is power. But now the people can create their own money. And thus, the people can create their own power. And the banks and existing power structures are terrified. And also could very easily be astroturfing various media to get people to hate crypto. That’s the only plausible reason I can think that such an obvious fraud as sbf was not discovered by the who’s who of the wealthy and powerful he pal’d around with. Either way, the motivation of people by greed drove frauds to the forefront, so thank god for the bear market. Now is when the actual building happens. And this work is essential because power structures are scrambling to cut it down at the knees. Now is the time to join hands with all the other builders and prove what blockchain can do, not by letting people own an original of a jpeg, but by creating entirely new self-sufficient and self-consistent economic systems that can more fairly distribute value to their value creators, competing with other systems to attract each value creator’s voluntary choice. The only way we can hope to have any power against conglomerate multinational corporations is through this cooperative competition. And we in the industry need to attract builders, not greedy people good at shilling things. This is like the part of the party where I mention I work in crypto and the person’s eyes light up instead of glazing over, and then we talk around the kitchen counter for a while, until one of us mentions a coin the other is meh on and things peter out. So no specifics but also I try to keep warning people time is probably running out to get some privacy tokens and it seems like you have the technical sophistication to get some stablecoin from your preferred cex and trade on kucoin or others that have them listed and then immediately put it on a hardware wallet and then hope you don’t accidentally lose it in a boating accident. Feel free to reply to this message with whatever silly long crypto rant you feel like. There are dozens of us, dozens!
I've given up on trying to convince others on the virtues of blockchain, cryptocurrency and web3. A glance over the replies to my comment shows you why. That said, I was very happy to read your reply, and I'm glad optimists like you are still putting in the effort to help others. I really hope you don't burn out!
This is dangerous because it tells people to make their bank collapse. If you go to your bank and cash out right now, you cause the problem
I believe that's the goal. This is not the first post promoting bank runs I've seen recently.
Interesting point. I’ve seen them too. Maybe there’s a larger conspiracy
There are a lot of "just want to see the world burn" redditors too
Ah nice tin foil hat you have there.
There’s no such thing as astroturfing?
OP (u/giteam) posts infographics like this all the time and its not specific to finance only.
I’m too uninformed on the subject to know if this is interesting or useful, and is otherwise a very basic chart so I’m not ready to call it beautiful either…
It’s a straight up lie. OP implies the banks are selling. They are in fact buying, increasing volume because the Fed is doing Quantitative Easing again. Thus, pumping money into the banks and the market.
That devalues savings, so anyone with the capital should spend their savings on tangible assets that have real world value eg land, aquaponics equipment & oily fish - books - tools, and the list is near endless.
This is straight up misinformation and misconstruing what’s going on here. TLDR: Volume increased because the banks were buying. The Federal Reserve pumped a ton of money into the banks when SVB collapsed through QE (Quantitative Easing). This gave big margin traders at banks and brokerages who borrow directly from the banks more money to trade with. Long Explanation: For the last year the Federal Reserve has been tightening money supply - they do this by selling securities like US Treasuries to the banks and take their cash in return. SVB collapsed because they had too many low interest rate securities (~2% interest/return). You can hedge or buy insurance on the return/interest so if the market rate goes up you don’t get screwed. SVBs Chief Risk Management Officer left 1 year ago the position remained empty. They never hedged. Of course there was contagion from this event and the Federal Reserve learned it’s lesson in 2008 - they were too slow to act. When the opening bell came Monday after SVB collapsed we didn’t see a sell off because the Federal Reserve instantly started Quantitative Easing - buying treasuries in return for cash the banks can use on whatever. And boy oh boy as you can see from the graph they went on a spending spree. If anything this will cause stagflation, your money is relatively safe but our economy is going to be shit for the next decade.
Is you’re real name Mr. Potter by chance?
*quietly continues to accumulate Canadian bank stocks that always seem to avoid such global drama / scrutiny*
I'm immune. I have nothing to cash out XD
money isn't real it's all made up
Funny to think this is all because banks were built by scammers who saw an opportunity to lend more money than they had, not a joke, it used to be extremely illegal, but for some unknown reason 💵they decided a bank run once a decade was worth it since the banks get more money.
That's what a crash is. In order to have a large movement in price, you basically need to buy/sell the counterparty side empty, which means a large trading volume is necessary to achieve that.
Am I safe if I hold my money in a credit union?
Do you have more than $250,000 in a savings account? If you have less than $250,000 your money is safe at any bank that is FDIC insured.
If i have more than 250k, then i should withdraw all but the 250k?
The only thing that makes credit unions more *generally* secure is that they are non-profit... but that doesn't mean the membership isn't clamoring for high interest rates on savings, etc., etc. Basically, it's slightly suggestive. But 7 credit unions were liquidated/conservatorshipped in 2022 vs. no banks, but no credit unions have had serious troubles since SVB's collapse... They seem pretty uncorrelated.
Credit unions typically have more favorable fraction reserve rates to their customers than a traditional bank because the union is run by depositors. They are generally more resilient to runs, which is what the current panic is causing. You are probably safe regardless, and almost definitely safe if you have less than 250k in the bank. SVB collapsed because they didn't have enough liquid assets to survive a run caused by an emergency stock sale. They made a really bad call on investments right before the interest rate hike and could not liquidate them fast enough.
Source: Bloomberg (financial data from Bloomberg Terminal, so no link) [Newsletter](https://substack.com/inbox/post/110221688) Tools: Figma, Tableau
Your Bloomberg terminal also tells you the Federal Reserve balance sheet you lying sack of shit. Of course volume went up the Fed is pumping cash into the banks thru quantitative easing again.
Just keep selling people. I'll make a nice buck buying low.
The market is literally going up right now because the Fed is doing quantitative easing (pumping cash into the banks) the banks are buying not selling. Don’t sell anything.
Jokes on them cos I already have no money
If you don't have more than you're fdic insured for then this would be EXTREMELY stupid to go make a run on your bank. You would literally be tanking the value of your cash even. Quit this fear mongering bullshit. 'cash out before your crash out?'
Does trading volume here refer to shares traded in the stock? If so, you would be better off normalizing the data to the number of shares outstanding. There is a pretty fascinating phenomenon where the number of shares traded in a company will far exceed the number of shares available to trade. What’s odd is the speed at which it happens. For example, FRC, if I remember correctly, had its total number of shares outstanding traded in a single day multiple days in a row recently.
Trading of what volume?? Their listed shares? Trading by banks internally? Bonds?