ML

My personal opinions, not legal advice.

[Joe Consorti @JoeConsorti]

In total, $432 billion CRE debt is maturing now through 2025.

Assuming an outsized portion of these loans default, lender's debt assets will be worthless.

And WHO are the most prominent lenders?

Regional banks — the ones that are already experiencing bank runs and failing 🫡

[exlawyer @exlawyernft]

1. The lawyers from prestigious firm Cooper & Kirk, which has argued numerous cases before multiple Circuit Courts and the United States Supreme Court have issued a white paper describing how federal banking regulators including the @FDICgov have illegally...

[Brian Armstrong @brian_armstrong]

1/ Today Coinbase received a Wells notice from the SEC focused on staking and asset listings. A Wells notice typically precedes an enforcement action.

[ML @mayliao_]

“Signet and SEN were essential,” said Nic Carter, a general partner at crypto-focused Castle Island Ventures. “Now we can expect more stablecoin depegs [and] more choppiness and volatility on exchanges on the weekends.” https://t.co/A8dK6W2yTD

[ML @mayliao_]

The Fed is considering easing the terms of banks’ access to its discount window, giving firms a way to turn assets that have lost value into cash without the kind of losses that toppled SVB Financial https://t.co/joHaX9zmlG via @markets

[ML @mayliao_]

Where Were the Regulators as SVB Crashed? - WSJ https://t.co/czQ3kqpeMY

[Jake Chervinsky @jchervinsky]

The closures of Silvergate, SVB, and Signature create a huge gap in the market for crypto-friendly banking.

There are many banks that can seize this opportunity without taking on the same risks as these three.

The question is if banking regulators will try to stand in the way.

[Jeremy Allaire - jerallaire.arc @jerallaire]

Update thread on USDC

We were heartened to see the US government and financial regulators take crucial steps to mitigate risks extending from the fractional banking system.

100% of deposits from SVB are secure and will be available at banking open tomorrow.

[ML @mayliao_]

Federal Reserve Board - Joint Statement by Treasury, Federal Reserve, and FDIC https://t.co/fDVzYnCzgL

[6529 @punk6529]

In one week, Silvergate, Signature and Silicon Valley Bank closed.

These were the 3 most plausible banks from which crypto businesses could get fiat banking in the USA.

Will be interesting to see what happens next.

[Steven Ehrlich @Steven_Ehrlich]

$USDC back to $1 peg

[ML @mayliao_]

Prisoner’s dilemma

[Tyler Stambaugh @ProfessorStam]

I worked in bank liquidity and treasury for the better part of the last decade, and there is one very interesting risk factor from the SVB collapse that I do not think we have ever witnessed before in modern finance, a 🧵:

[Bob Elliott @BobEUnlimited]

The US banking system is built on the expectation that equity and bond holders accept the bank economic risk and depositors, particularly the small folks, do not.

While that is not legally the structure, its important to keep in mind that's functionally how it works. Thread.

[wishful_cynic @EvgenyGaevoy]

Great update from Jeremy. Some tldr (as I see it) and some thoughts (as I think them)

all opinions are mine, Wintermute has exposure to USDC and this is ongoing volatile situation that will continue until banks are open on Monday (and potentially beyond)

[Brett Adcock @adcock_brett]

SVB Founders

Today is what will differentiate a good entrepreneur from a bad one:

1/ Get to the office. You are in the war room this weekend.

2/ Build an internal 3-person Tiger Team. Team goal is to extend cash & survive until April.

[Balaji @balajis]

Many people seem to (implicitly) think SVB must have been doing some kind of atypical tech gambling.

But most other banks *also* have unrealized losses. Because, like SVB, they trusted the Fed’s guidance and bought what is marketed as the safest thing you can buy: US Treasurys. And then the Fed devalued those assets with ultrafast rate hikes.

Moreover, this isn’t a small issue — as of Dec 2022 it’s $620B in Fed-caused unrealized losses across multiple banks. The accounting isn’t mark-to-market…but a bank run forces realization of the losses and determines if each bank is actually solvent.

Needless to say, if the take home lesson is don’t trust the Fed, don’t buy Treasuries if you can avoid it, and don’t trust US regulators to protect consumers or stress test banks…well, then, I’d unfortunately have to agree.

But I don’t think that was the intended lesson.

[Bill Ackman @BillAckman]

From a source I trust: @SVB_Financial depositors will get ~50% on Mon/Tues and the balance based on realized value over the next 3-6 months. If this proves true, I expect there will be bank runs beginning Monday am at a large number of non-SIB banks. No company will take even a tiny chance of losing a dollar of deposits as there is no reward for this risk. Absent a systemwide @FDICgov deposit guarantee, more bank runs begin Monday am.

[David Marcus @davidmarcus]

Hearing rumors that the FDIC is blocking GSIBs from buying SVB on the grounds that it would create too much concentration with our largest banks. If true, they really need to understand that not finding a suitable buyer over the weekend will result in much greater concentration in GSIBs than letting one buy it, and this will happen across industries as businesses and people move balances out of smaller banks in fear the same thing will happen to them. Do the right thing. Protect deposit holders while you still can!

[Tascha @TaschaLabs]

When you read doom & gloom news, take note of who's talking & their incentive.

If you're a VC w/ money stuck at SVB along w/ your portfolio companies, you have everything to gain and nothing to lose by making loud apocalyptic claims, and leveraging public fear to pressure government into giving bailout.

Reality is SVB is a mid-size bank w/ a $200 bn balance sheet which is just 0.8% of US banking sector.

Irony is by claiming SVB a bigger problem than it actually is, some people are drumming up public panic which will make the issue worse than what it could have been.