Our Gold Guy
No Result
View All Result
Tuesday, March 28, 2023
  • Home
  • Finance
  • Business
  • Economy
  • Politics
  • Contact Us
Our Gold Guy
  • Home
  • Finance
  • Business
  • Economy
  • Politics
  • Contact Us
No Result
View All Result
Our Gold Guy
No Result
View All Result
Home Finance

Silicon Valley Bank’s Shares Tank, Triggering Financial Sector Panic

by Bryan Jung
March 10, 2023
in Finance
Silicon Valley Bank

Silicon Valley Bank’s shares have tanked, causing panic in the financial sector to spread from Wall Street to Europe and Asia. This comes after the lender announced it would sell shares at a loss in order to cover rapidly declining customer deposits.

Silicon Valley Bank (SVB) Financial Group, a bank which lends primarily to tech companies, told investors on Mar. 9 that it was forced to sell almost $2 billions in shares to raise additional capital to help offset bond sale losses.

The news quickly triggered massive losses across the banking sector and raised concerns that the Federal Reserve’s interest-rate hikes were preventing banks from raising capital.

Before last year, when interest rates were near zero, large banks were buying up U.S. Treasurys and bonds, but the rise in the federal fund rate has since weakened their value, while banks sit on increasing losses.

Since banks tend to hold large portfolios of bonds, their decline is normally not a problem unless they are forced to sell them.

IRA BERSHATSKY LOVES AMERICA – Most precious metals companies are run by wokesters. Ira’s is not. He is unabashedly AMERICA FIRST and can help you move wealth or retirement to physical precious metals with a gold or silver IRA, or just get metals discreetly shipped to your door. Contact him now.

U.S. government bonds surged after the California lender sold off shares to cover bond losses, leading to more worries over the banking sector’s debt holdings.

Bank Stock Values Plunge Across the Board

The news from the tech industry lender quickly caused a knock-on effect on Thursday, as banking stocks fell at their fastest pace since the first months of the pandemic, taking Wall Street’s major indexes down with them.

SVB shares tumbled more than 60 percent and lost another 20 percent in after-hours trading, in the worst decline in the sector, after CEO Greg Becker admitted the bank could be dealing with problems for the foreseeable future.

Meanwhile, America’s four largest banks lost more than $50 billion in market value at the end of trading on Mar. 9.

Shares of JPMorgan Chase fell 5.4 percent, while Bank of America took a 6.2 percent hit, Wells Fargo was down 6.2 percent, and Citigroup tumbled 4.1 percent.

Bank stocks in Europe and Asia sold off sharply the following day, as news surrounding SVB Financial spread to markets across the world.

The Euro Stoxx Banks Index witnessed its worst day since June 2022, led by Deutsche Bank, which saw an 8 percent loss, followed by Société Générale, HSBC, ING Groep, and Commerzbank, which all fell more than 5 percent.

“Lots of chatter today about the possibility of generalized U.S. banking system stress due to SVB troubles. Three summary things on this: While the U.S. banking system as a whole is solid, and it is, that does not mean that every bank is,” stated economist Mohamed A. El-Erian in a tweet.

“Due to the volatility in yields after the prior protracted period of leverage-enabling policy, the most vulnerable currently are those vulnerable to both interest rate and credit risk. Contagion risk and the systemic threat can be easily contained by careful balance sheet management and avoiding more policy mistakes,” he continued.

Meanwhile, U.S. and European bond yields fell to their lowest level in weeks, after investors bet that turmoil in the bank sector could reduce the ability of the Fed to keep hiking interest rates.

Our Gold Guy America First

Silicon Valley Lender’s Bonds Lose Value to Rising Interest Rates

The interest-rate hikes over the past year have also caused value of its bonds to fall, particularly those that took many years to mature, forcing the bank to reinvest the proceeds from its sales into shorter-term assets.

SVB has suffered significant losses on its portfolio, which was heavily invested in U.S. Treasurys and mortgage-backed securities, which have all taken a beating.

The 40-year-old bank was forced into a fire sale of its securities on Thursday, dumping $21 billion worth of holdings at a $1.75 billion loss while raising $500 million from venture firm General Atlantic, according to a financial mid-quarter report on Mar. 8.

SVB additionally reported more than $90 billion in held-to-maturity securities.

Its recent losses have caused American startup firms, particularly venture-backed tech and life sciences companies, to feel the pinch, as the bank caters heavily to these new firms.

Higher interest rates, fears of a recession, and a tepid market for initial public offerings have made it harder for new startups to raise additional capital in the past year.

The lender’s 2022 third quarter report stated it was partnered with nearly half of all venture-backed tech and health care companies based in the United States.

“The failure of @SVB_Financial could destroy an important long-term driver of the economy as VC-backed companies rely on SVB for loans and holding their operating cash. If private capital can’t provide a solution, a highly dilutive gov’t preferred bailout should be considered,” warned Pershing Square CEO Bill Ackman in a tweet.

“After what the Feds did to @jpmorgan after it bailed out Bear Stearns, I don’t see another bank stepping in to help @SVB_Financial,” he added.

Investors were worried ahead of today’s employment report from the Department of Labor, which they hope will provide some hint on the Fed’s next policy moves.

SVB Reassures Investors That Things Are Fine

The collapse of SVB’s stock value comes shortly after a key lender for the cryptocurrency industry, Silvergate Capital, announced liquidation plans on Mar. 8, following the implosion of FTX, which used the bank to transfer customer funds.

However, the bank said in its letter to investors that it had minimal exposure to crypto, but analysts are still concerned that not all is well at SVB.

Becker reassured investors that their assets were safe and that the stock sale was only an attempt to increase financial flexibility, strength, and profitability at the bank, but the current market situation has caused pressure to its “balance of fund flows.”

The bank cited higher interest rates and “elevated cash burn from our clients” at a historically elevated level and less investments from venture capital, are the primary reasons for raising new capital.

Becker said the bank has “ample liquidity” to support its clients “with one exception: If everybody is telling each other that SVB is in trouble, that will be a challenge.”


Precious metals prices are low, making it the perfect time to transfer wealth or retirement into them. Gold in particular is at the best buying price in a very long time. Contact Ira and he’ll show you how easy it is move money or retirement into precious metals quickly.


He asked clients to “stay calm. That’s my ask. We’ve been there for 40 years, supporting you, supporting the portfolio companies, supporting venture capitalists.”

SVB’s mid-quarter update reported a low ratio of loans to deposits, at 43 percent, which leaves little protection in the wake of a share-price selloff over the coming days.

If startups panic and begin pulling funds from SVB due to concern about its financial health, this could exacerbate the mismatch in deposits and withdrawals, increasing pressure on the bank.

Still, one expert believes the problem goes deeper than just investors getting spooked by SVB and that it is more systemic.

“Why this sudden meltdown in bank stocks? Small banks face a double whammy: Less ”financial liquidity” (reserves) in the system, disproportionately affecting them, a tougher funding landscape, with plenty of safer and higher-yielding alternatives for depositors. This is the real issue, [in my honest opinion],” said Alfonso Peccatiello, founder and CEO of TheMacroCompass, in a tweet.

Article cross-posted from our premium news partners at The Epoch Times.

The Biden Regime and Globalists Don’t Want You Owning Precious Metals

Look around. Things aren’t the way they should be. Between Pandemic Panic Theater, Ukraine, food shortages, and a push for Central Bank Digital Currencies, everything you’ve spent your life building and protecting is in jeopardy.

Precious metals are historically the most reliable and safest hedge against economic turmoil. With the Biden regime and globalists enhancing the chaos, it’s important for patriotic Americans to take control of their financial future.

Ira Bershatsky offers consultations to those who want to invest in precious metals. During these consultations, he will match your current financial situation with the best physical precious metal purchases whether you want to rollover your IRA or have coins discreetly shipped to your home. You will not talk to a telemarketer or sales rep. You will talk to a true expert in precious metals with decades of experience helping people protect and advance their wealth.

Fill out the form here and we will schedule a precious metals consultation with Our Gold Guy, Ira.

Schedule a Precious Metals Consultation Today:

Tags: EconomyFedLedeSilicon Valley BankThe Epoch TimesTop Story


Learn more about RevenueStripe...

Bypass Big Tech Censors



Our Gold Guy



MyPatriotSupply


Data of 14 Million Customers Stolen in Cyber Attack

Data of 14 Million Customers Stolen in Cyber Attack

March 28, 2023
Apple

Check Out This BIG List of “Woke” Companies to Boycott

March 27, 2023
Silicon-Valley-Bank-Collapse-01

FDIC Disguises Bailout as “Purchase” as First Citizens Bank “Buys” Silicon Valley Bank

March 27, 2023

Recent News

Data of 14 Million Customers Stolen in Cyber Attack

Data of 14 Million Customers Stolen in Cyber Attack

March 28, 2023

Search

No Result
View All Result

Site Navigation

  • Home
  • Contact Us
  • Finance
  • Business
  • Economy
  • Politics

About Our Gold Guy

This site is dedicated to helping Americans learn more about the economy, business, and politics. Our nation is in turmoil on all three fronts. We want to make a difference.

© 2021 NOQ Report

No Result
View All Result
  • Contact Us
  • Finance
  • Business
  • Economy
  • Politics
  • Contact Us

© 2021 NOQ Report

Session expired

Please log in again. The login page will open in a new tab. After logging in you can close it and return to this page.

>