CAI - General Chat, page-759

Lots of articles related to SVB collapse in media. One in AFR particularly caught my attention with key points:

- markets are expected to plunge this week
- further runs on regional US banks are likely - queue of people outside SVB and regional banks trying to withdraw money - experts saying companies and individuals will start transferring their deposits from other regional banks on Monday leading to fresh run on other banks - it’s not just SVB that had exposure to the tech sector and crypto ( its seems crypto firms have lots of money with SVB - eg one has $5b) - it is possible depositors at SVB will only get 50% back on Monday/Tuesday this week and the rest in 3-6 months - no one will take a chance of that happening to their deposits in other regional banks and will want to get their money out
- while SVB had a dangerous exposure to VC and crypto space it’s failure was largely a guide to the health of other bank deposit levels - ie lots of banks have very underwater bond portfolios
- markets are now betting the probability of a 0.5% Fed increase is 40% down from 80% - IMO there is a chance of a 0% increase if there is significant contagion.

All sounds like it’s a very uncertain and volatile chaotic situation that may become significantly worse.

Its going to be a very interesting week.

Guess what this is good for?