Cruising stocks getting hammered today. (March 2023)

[rmalbers]

12 hours ago, SusieAV8R said:

And older ships will be sold.  I have been in the stock market for nearly 50 years now and a lot of shedding will be done.  Printing money is coming back to roost. 

I'm sure they may try that but finding a buyer for those old ships is going to be a real problem.  China is their only hope.  That's why X/RCG had to put up their E class ships as collateral to get the loans. 

Edited March 12, 2023 by rmalbers

[rmalbers]

8 hours ago, NMTraveller said:

The government will not let Silicon Valley Bank fail.  I am not kidding.

 

I would expect the depositors to be made whole.

 

As a taxpayer I am frustrated at the competence of ...

 

The gov't has already let it fail, it's in receivership.  The gov't will have to find a buyer or liquidate it's assets. 

[grandgeezer]

9 hours ago, NMTraveller said:

The comment was in regards to Silicon Valley Bank...

Where does it say that? It wasn’t mentioned in your post. The original topic was about cruise ship stock being hammered, not banks.

[NMTraveller]

30 minutes ago, rmalbers said:

The gov't has already let it fail, it's in receivership.  The gov't will have to find a buyer or liquidate it's assets. 

And the depositors will likely get their money back.

 

And whom do you suppose pays for this mess.

Edited March 12, 2023 by NMTraveller

[Lastdance]

27 minutes ago, NMTraveller said:

And the depositors will likely get their money back.

 

And whom do you suppose pays for this mess.

We all have such deep pockets.

[mnocket]

1 hour ago, NMTraveller said:

And the depositors will likely get their money back.

This certainly flies in the face of Yellen saying that the government will not bail out SVB.  It seems 90+% of deposits are not covered by FDIC.  Why do you feel it's likely the depositors will get their money back?  

[NMTraveller]

1 hour ago, mnocket said:

This certainly flies in the face of Yellen saying that the government will not bail out SVB.  It seems 90+% of deposits are not covered by FDIC.  Why do you feel it's likely the depositors will get their money back?  

Yes.

 

"But we are concerned about depositors and are focused on trying to meet their needs.”  Yellen quote.

 

SVB is gone.  It is not an SVB bailout.  I would be surprised if there was not a depositor bailout.

Edited March 12, 2023 by NMTraveller

[mnocket]

5 minutes ago, NMTraveller said:

Yes.

 

"But we are concerned about depositors and are focused on trying to meet their needs.”  Yellen quote.

 

SVB is gone.  It is not an SVB bailout.  I would be surprised if there was not a depositor bailout.

You may be right.  I do hope they act, but I'm concerned that by not making a definitive statement about protecting all deposits before the market & banks open tomorrow they are inviting a larger meltdown.  Acting after a meltdown is not nearly as effective as acting before.  Unfortunately, instead of acting to prevent the consequences, government all to often fails to act until the consequences force their hand.  I appreciate Yellen's concern, but what we need is action - today! 

[NMTraveller]

4 hours ago, mnocket said:

You may be right.  I do hope they act, but I'm concerned that by not making a definitive statement about protecting all deposits before the market & banks open tomorrow they are inviting a larger meltdown.  Acting after a meltdown is not nearly as effective as acting before.  Unfortunately, instead of acting to prevent the consequences, government all to often fails to act until the consequences force their hand.  I appreciate Yellen's concern, but what we need is action - today! 

You cannot expect a definitive statement from politicians.  Especially when the message is that they are going to bail out billion dollar corporations.  I agree mostly with your assessment.  I would have been more impressed if Treasury had noticed the problem before and acted accordingly vs dealing with the bad aftermath.

 

I am just sitting back with popcorn in hand watching the 3 ring circus.

 

I am not sure why Yellen is still in charge of Treasury?  When you are wrong you are wrong.

 

History is full of too little too late in regards to economics.

Edited March 13, 2023 by NMTraveller

[Jim_Iain]

5 hours ago, mnocket said:

You may be right.  I do hope they act, but I'm concerned that by not making a definitive statement about protecting all deposits before the market & banks open tomorrow they are inviting a larger meltdown.  Acting after a meltdown is not nearly as effective as acting before.  Unfortunately, instead of acting to prevent the consequences, government all to often fails to act until the consequences force their hand.  I appreciate Yellen's concern, but what we need is action - today! 

 

I guess you saw the reports that all deposit will be covered.

 

Financial regulators said Sunday night depositors of the failed Silicon Valley Bank will have access to all of their money starting Monday, March 13, while announcing new facilities to backstop deposit withdrawals across the banking system amid fears of contagion following SVB's shock failure last week.

 

In a joint statement, the heads of the Federal Reserve, Treasury Department, and FDIC said: "After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors."

 

"Depositors will have access to all of their money starting Monday, March 13," the statement added. "No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."

Edited March 13, 2023 by Jim_Iain

[mnocket]

1 hour ago, Jim_Iain said:

 

I guess you saw the reports that all deposit will be covered.

 

Financial regulators said Sunday night depositors of the failed Silicon Valley Bank will have access to all of their money starting Monday, March 13, while announcing new facilities to backstop deposit withdrawals across the banking system amid fears of contagion following SVB's shock failure last week.

 

In a joint statement, the heads of the Federal Reserve, Treasury Department, and FDIC said: "After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors."

 

"Depositors will have access to all of their money starting Monday, March 13," the statement added. "No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."

Yep I saw the announcement.  I'm glad to be wrong about this.  I think a market disaster tomorrow has been averted.  It will be interesting to see what, if any, follow-on impacts there are to banks. If banks don't raise the pitiful interest rates they are currently paying depositors I think we may well see a continued acceleration of people moving money from banks to Treasuries. This still has the potential to become a big problem. Interesting times.

[BermudaBound2014]

12 hours ago, rmalbers said:

  China is their only hope.  

Not just China. Keep your eye on the Saudi Sovereign. They are buying cruise ships and they are also heavily invested in CCL. If I’m not mistaken, I believe the own over 5% of the company. Couple that with all the money being poured into Port of Dubai….. they are a player. 

[NMTraveller]

3 hours ago, Jim_Iain said:

"Depositors will have access to all of their money starting Monday, March 13," the statement added. "No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."

I am not sure how they can make this claim.  The taxpayer will pay one way or another....  Such a nonsensical claim reminds me of transitory inflation.  Nonsense...  We have been paying a very heavy price for the last two years.  The money has to come from someplace to cover the deposits.  Where do you think it comes from?

 

Whether it is in the form of a weaker dollar,  printing money, inflation, or otherwise.  All of these effect the taxpayer.

 

Perhaps the right move,  but one that really does effect the average American.  IMHO moves that they are making now are due to the goof ups they made in 2021.

 

Did we not learn our inflation lessons from the 1980s when we lost the Saving and Loan banks due to high inflation?

 

One would think that the Fed and Treasury would have been more pro active and took care of this before it was an issue.

 

Edited March 13, 2023 by NMTraveller

[Bill Miller]

Well dang, guess this is the end of free SVB calendars and ball point pens.

[grandgeezer]

11 hours ago, NMTraveller said:

I am not sure how they can make this claim.  The taxpayer will pay one way or another....  Such a nonsensical claim reminds me of transitory inflation.  Nonsense...  We have been paying a very heavy price for the last two years.  The money has to come from someplace to cover the deposits.  Where do you think it comes from?

 

Whether it is in the form of a weaker dollar,  printing money, inflation, or otherwise.  All of these effect the taxpayer.

 

Perhaps the right move,  but one that really does effect the average American.  IMHO moves that they are making now are due to the goof ups they made in 2021.

 

Did we not learn our inflation lessons from the 1980s when we lost the Saving and Loan banks due to high inflation?

 

One would think that the Fed and Treasury would have been more pro active and took care of this before it was an issue.

 

Unless I’m mistaken, a good share of the banks have FDIC insurance which cover cash deposits up to $250,000 per account, I know both of mine do. 

[JeanieC,Aston]

HSBC has bought the SVB subsidiary in the UK.

[Jim_Iain]

1 hour ago, grandgeezer said:

Unless I’m mistaken, a good share of the banks have FDIC insurance which cover cash deposits up to $250,000 per account, I know both of mine do. 

They do have FDIC Coverage as it is required by law of all banking institutions.   SVB is (was) a mostly a commercial bank.   They do have FDIC coverage but most of the Companies that banked there have 100's of Millions on deposit.

 

The "Non-Bailout" will mostly be covered by FDIC and will be covered by raising the premiums of all banks.    Kinda like after a major earthquake insurance policies raise premiums to offset their loss.

 

 

[mnocket]

1 hour ago, grandgeezer said:

Unless I’m mistaken, a good share of the banks have FDIC insurance which cover cash deposits up to $250,000 per account, I know both of mine do. 

The problem is that over 90% of the deposits exceed the $250K threshold.  What's happening is that the FDIC is waiving that limit and will cover all deposits regardless of amount.  It seems that the FDIC has amassed about  $100B in FDIC insurance fees from the banks and will use this to pay depositors. 

[Baron Barracuda]

12 hours ago, NMTraveller said:

I am not sure how they can make this claim.  The taxpayer will pay one way or another....  Such a nonsensical claim reminds me of transitory inflation.  Nonsense...  We have been paying a very heavy price for the last two years.  The money has to come from someplace to cover the deposits.  Where do you think it comes from?

 

Whether it is in the form of a weaker dollar,  printing money, inflation, or otherwise.  All of these effect the taxpayer.

 

Perhaps the right move,  but one that really does effect the average American.  IMHO moves that they are making now are due to the goof ups they made in 2021.

 

Did we not learn our inflation lessons from the 1980s when we lost the Saving and Loan banks due to high inflation?

 

One would think that the Fed and Treasury would have been more pro active and took care of this before it was an issue.

 

As of 12/22 SVB had $16B in equity plus $18B in unsecured debt vs $212B in assets.  Since asset quality does not appear to be a major issue that $34B cushion should provide more than enough cushion to pay off depositors.  Therefore no need for bailout.

[rmalbers]

20 minutes ago, Baron Barracuda said:

As of 12/22 SVB had $16B in equity plus $18B in unsecured debt vs $212B in assets.  Since asset quality does not appear to be a major issue that $34B cushion should provide more than enough cushion to pay off depositors.  Therefore no need for bailout.

I haven't been following to close but I think the whole 'problem' was created by 'asset quality'.  They needed money and had to do a 'fire sale' on their bond holdings, which, these days with the interest rates climbing, well, no one wanted them and they lost billions. 

Edited March 13, 2023 by rmalbers

[SusieAV8R]

19 hours ago, NMTraveller said:

I am not sure how they can make this claim.  The taxpayer will pay one way or another....  Such a nonsensical claim reminds me of transitory inflation.  Nonsense...  We have been paying a very heavy price for the last two years.  The money has to come from someplace to cover the deposits.  Where do you think it comes from?

 

Whether it is in the form of a weaker dollar,  printing money, inflation, or otherwise.  All of these effect the taxpayer.

 

Perhaps the right move,  but one that really does effect the average American.  IMHO moves that they are making now are due to the goof ups they made in 2021.

 

Did we not learn our inflation lessons from the 1980s when we lost the Saving and Loan banks due to high inflation?

 

One would think that the Fed and Treasury would have been more pro active and took care of this before it was an issue.

 

Yes indeed.  Our taxpayer dollars at work.

[kguerriero]

4 hours ago, SusieAV8R said:

Yes indeed.  Our taxpayer dollars at work.

Money is coming from the FDIC insurance fund, which is generated by quarterly regulatory fees paid in by financial institutions who want to be insured. No tax dollars are used in the program.

 

It's actually a pretty solid good government policy that curtails economic harm to normal people, which would then require a lot of tax dollars.

[BigAl94]

Could Credit Suisse be next? 

[SusieAV8R]

19 hours ago, kguerriero said:

Money is coming from the FDIC insurance fund, which is generated by quarterly regulatory fees paid in by financial institutions who want to be insured. No tax dollars are used in the program.

 

It's actually a pretty solid good government policy that curtails economic harm to normal people, which would then require a lot of tax dollars.

That is correct for deposits of less than $250,000, but most of the money being bailed out by the government exceed that amount.  I've heard 2 different stories:  (1) that deposits above $250,000 will also be bailed out by the FDIC which will necessitate increased FDIC fees, increasing bank costs for all us.  The 2nd story is that the FED is lending money to the bank at the face value of the treasuries they hold which are actually worth much less. Ultimately FED losses or gains become part of the national budget.  It really doesn't matter which one is true.  Whenever the Government bails out anything, someone has to pay and the only someone who can pay is the someone whom lives here in the USA. 

[kguerriero]

3 hours ago, SusieAV8R said:

That is correct for deposits of less than $250,000, but most of the money being bailed out by the government exceed that amount.  I've heard 2 different stories:  (1) that deposits above $250,000 will also be bailed out by the FDIC which will necessitate increased FDIC fees, increasing bank costs for all us.  The 2nd story is that the FED is lending money to the bank at the face value of the treasuries they hold which are actually worth much less. Ultimately FED losses or gains become part of the national budget.  It really doesn't matter which one is true.  Whenever the Government bails out anything, someone has to pay and the only someone who can pay is the someone whom lives here in the USA. 

 

As someone with an inside/outside perspective at the moment, the communication is definitely not clear, and it seems like it takes several different news sources to get the full picture. There's a few programs running concurrently here, leading to confusion, as the FDIC steps in to wind down SVB/Sig, and the Fed handles the turbulence in the rest of the market:

-For the SVB/Sig holders, all deposits are being insured through the FDIC fund, including balances above $250k. The Fed is fronting this money to the FDIC, who is then in charge of selling off the banks' remaining assets to recoup as much as possible, and pay back the Fed. Any outstanding balance will coming from the insurance pool, which will then be restored by the other banks. Until the assets are sold, there's no clear number of how much or even if the FDIC will need to dip into the insurance fund. Bonds are actually ticking up since the event, so losses, if any may be lower than estimated.

-To prevent the chance of another similar bank run on any other existing financial institution, the Fed has also created a program allowing banks to offer up collateral in exchange for capital on an if-needed basis, at a .1% interest rate, to avoid selling bond portfolios at a loss and stay liquid. This was a smart move IMO, to keep consumer confidence up and money in the banking system.

It's true the money has to come from -somewhere- if there is an impact to the insurance fund, but it's also true banking margins in both retail and commercial institutions are so remarkably padded at this point, that nearly any decent bank is forecasted to absorb the cost than pass it on in the existing environment. If anyone tries to tell you that you're paying a fee on your checking account or debit card because of SVB, you should probably switch banks. 

I strongly believe in the Dunning-Kruger effect, but from my POV it seems the path taken makes the most sense in terms of keeping employment numbers in check, shoring up banking confidence, and minimizing gov/taxpayer expenses. The FDIC is doing its job and using the allotted resources to stabilize the situation.