State of single engine prices - Thoughts?

[Echo]

Not fearful at all.  Buffet?  That guy that has hundreds of billions out of the market in cash waiting, and waiting, and waiting for an opportunity?  That Buffet?  Jump in!  The waters warm.  Nothing to see here but business as usual.  Little guy (me) in it for the long haul just says thank you sir may I have another.  Cue Kevin Bacon in ROTC greens...Remain calm!  As a cucumber say I.

[Echo]

Meanwhile multiple banks had their trading halted due to volitility this morning.

[Echo]

Contagion?  Ya think.

[Ragsf15e]

The term “bail out” is pretty well defined for an airplane or maybe even a boat.  But in the context of a bank?  No.  To me, a bailout is making the banks bond holders and equity ownership whole.  The government is not doing that.  If you own part of the bank or hold its debt, you’re out of luck.

Allowing people to withdraw money they deposited for the bank to hold is not a bailout imo.  Now, is it in line with fdic insurance > $250k?  No, of course not.  That’s the point that we might discuss and disagree on.  That is different than the connotation of a “bailout” of the bank which people assume means the govt supports the bank ownership - ala 2008…

[Echo]

If depoitors had greater than $250k they were uninsured and should of made contingencies to protect their and their companies assets.  FDIC is making s$#* up if they are providing protection >$250k.  THAT is a bailout.  Glad to be wrong if that does/is not happening.

[Ragsf15e]

2 minutes ago, Echo said:

If depoitors had greater than $250k they were uninsured and should of made contingencies to protect their and their companies assets.  FDIC is making s$#* up if they are providing protection >$250k.  THAT is a bailout.  Glad to be wrong if that does/is not happening.

No, I agree if you define “bailout” that way, and we can debate the good/bad of that decision.  I just wanted to separate insuring deposits above the normal limit from making bank ownership, equity holders, debt holders, etc whole.  They are two (mostly) separate groups.  Just saying “bailout” can leave many misconceptions.

[N201MKTurbo]

The CEO said he was getting calls from all over yesterday morning wanting to buy our receivership vouchers at a discount. So he wasn’t worried. But it is all moot now. 
 

I wish we would let this thing run its course.

[WilliamR]

2 hours ago, 1980Mooney said:

Yes they were.  They were trying to manage through it.   And it was Peter Thiel's Tweet that caused the bank run.  It was the electronic version of yelling "Fire" at busy leaky gas station - and then tossing a lit cigarette as he drives off with a few of his "buddies" ....

Or it could have been caused by SVB announcing they have no more available for sales securities along with the CEO cashing out $3+MM in stock. SVB was a long time coming with poor liquidity management and lack of understanding their assets and liabilities. SVB did this to themselves just like Signature. Oh and Silvergate that was also crypto heavy.

A couple facts worth noting:

• Banks with assets <$250 Bn are no longer required to be stress tested (Large banks are still stress tested and are passing albeit with more put to reserves for some banks. Ask JPM, Wells, and BofA)
• Bank stock trading was halted only for an hour or two (I get its fun to note if you're a "doomsdayer") save maybe First Repub.
• Inflation has been coming down for some months and QT has been in effect since July '22

William

 

 

[T. Peterson]

4 hours ago, 1980Mooney said:

Signiture Bank, the other bank taken over and bailed out this weekend, was brought down by their more recent decision and push to attract Crypto currency deposits.  Crypto is the biggest black box in the world.  It needs more regulation not less - yet you have people like Ted Cruz arguing that crupto should be less regulated.  Thankfully Cruz is not on the Senate banking committee.

……or maybe some are attracted to Crypto because of the lack of regulation? Probably not the investment tool for the risk averse, but there may be a few individuals who don’t think regulation is the solution to investment risk?

As our forefathers noted, liberty is messy, but I much prefer it to several governments I could mention that love regulation. 

[1980Mooney]

1 hour ago, WilliamR said:

Or it could have been caused by SVB announcing they have no more available for sales securities along with the CEO cashing out $3+MM in stock. SVB was a long time coming with poor liquidity management and lack of understanding their assets and liabilities. SVB did this to themselves just like Signature. Oh and Silvergate that was also crypto heavy.

A couple facts worth noting:

• Banks with assets <$250 Bn are no longer required to be stress tested (Large banks are still stress tested and are passing albeit with more put to reserves for some banks. Ask JPM, Wells, and BofA)
• Bank stock trading was halted only for an hour or two (I get its fun to note if you're a "doomsdayer") save maybe First Repub.
• Inflation has been coming down for some months and QT has been in effect since July '22

William

 

 

Here’s another fact.  The sale of shares by CEO, Greg Becker, was part of a preplanned (10B5-1 Plan) sale. It was executed on January 26, 2023.  On that date, it set the number of shares, the price and the date of sale in the future. The sale was on “auto pilot“ at that point and out of his hands. 

10B5–1 plans are like Executive belly buttons – every Executive has one.  They are supposed to enable the executive to sell stock (or flip options) on an equal/fair  basis with other shareholders. However every executive in any company (large/small, healthy/distressed, good/bad) possesses some degree of “inside information” which  the public does not have. 
 

If you were to bail out of every company in which the CEO sold stock in a 10B5-1 transaction, you would not own any stock at all. The CEO can always make a superior return. It is not always triggered by bad news – sometimes it’s triggered by good news. Sometimes the CEO will set the sale date right after the announcement of earnings that exceed analysts expectations (which the CEO had an indication was coming)  Is it unfair?…a sham?  Yes. 

[WilliamR]

Fair enough and agree. I see my writing made it look like the stock sale was something that was a last minute sale which it was not. However, optically, still not great. Of course, the selling parties have to rep as to not having any MNPI back in Jan. SVB stock trades are the least of that former bank's problems, however. 

Tough to be a regional lender right now. 

Btw, look at the bank bond market...not as disrupted as the equity market. Fed funds futures don't seem bad either. Those are the markets that signaled the last recession (not that any one economic slowdown is like the other). 

Soft landing here we come. 

William

[Echo]

Liabilities are $680b on this within banks.  Fed has $640B in their quiver.  Not enough.  Reset coming.  Here comes digital currency and all the loss of freedom that entails.  All part of the grand plan or are the fed and treasury that inept?  Shoulder shrug.

[LANCECASPER]

9 hours ago, Echo said:

If depoitors had greater than $250k they were uninsured and should of made contingencies to protect their and their companies assets.  FDIC is making s$#* up if they are providing protection >$250k.  THAT is a bailout.  Glad to be wrong if that does/is not happening.

If the confidence in the banking system is gone, the whole thing collapses with a run on the banks.

If the government  wouldn't have publicized that all deposits, including above $250,000, were protected that would have sent the message to all depositors with >$250,000 to pull their money from currently solvent banks in anticipation of a collapse and that would have caused a collapse. There was no choice to make, they had to do it.

[Kmac]

11 hours ago, LANCECASPER said:

If the confidence in the banking system is gone, the whole thing collapses with a run on the banks.

If the government  wouldn't have publicized that all deposits, including above $250,000, were protected that would have sent the message to all depositors with >$250,000 to pull their money from currently solvent banks in anticipation of a collapse and that would have caused a collapse. There was no choice to make, they had to do it.

By insuring all accounts at these two failed banks and setting a precedent isn't the government potentially making the FDIC  potentially insolvent to fulfill all $250k accounts?  What happens if a few more banks fail?  Are they going to be fully covered as well?  At what point do they stop covering all accounts and just attempt to fulfill the original $250k?  Shouldn't everyone with any amount of money be worried now?

Edited March 14, 2023 by Kmac
addition

[LANCECASPER]

57 minutes ago, Kmac said:

By insuring all accounts at these two failed banks and setting a precedent isn't the government potentially making the FDIC  potentially insolvent to fulfill all $250k accounts?  What happens if a few more banks fail?  Are they going to be fully covered as well?  At what point do they stop covering all accounts and just attempt to fulfill the original $250k?  Shouldn't everyone with any amount of money be worried now?

The point is they did this so that there is not a run on other banks causing them to fail and creating a collapse. This action helps keep the FDIC solvent, not the other way around.

The whole world watches the U. S. economy and has confidence in the financial system if no one here loses any money in a bank failure. It is much less expensive to cover however many accounts there were at two banks over the weekend that exceeded $250,000 than to wake up Monday morning and see multiple banks fail and then have to cover all accounts below $250,000 at those banks. How quickly they stepped in Friday and the announcement over the weekend that all deposits would be covered, made yesterday a non-event, kept banks from toppling and stabilized the financial markets. Had that not happened over the weekend, yesterday easily could have turned into a new Black Monday. I am reasonably sure that there were a lot of executives at small to medium banks that breathed a huge sigh of relief over the weekend when that announcement was made.

So yes, they have probably set a precedent, but after the botched handling of the mid-1980's S&L crisis and the lessons learned from the 2008 crisis*, an unspoken understanding was already there anyway, that no one would lose money if their bank failed. It was just reinforced over the weekend, which turned out to be a good thing yesterday or we would be having a completely different conversation today.

(*The amount was of FDIC coverage raised from $100,000 to $250,000 on October 3, 2008. One dollar in 2008 is worth $1.39 today, so that alone would make $250,000 in 2008 worth $347,500 today. The amount of FDIC coverage was raised to $100,000 in 1980. One dollar in 1980 is worth $3.63 today, so that would make $100,000 in 1980 worth $363,000 today. So whether they make exceptions or not, the FDIC insured amount should be raised to $350,000, just due to inflation.)

[1980Mooney]

1 hour ago, Kmac said:

By insuring all accounts at these two failed banks and setting a precedent isn't the government potentially making the FDIC  potentially insolvent to fulfill all $250k accounts?  What happens if a few more banks fail?  Are they going to be fully covered as well?  At what point do they stop covering all accounts and just attempt to fulfill the original $250k?  Shouldn't everyone with any amount of money be worried now?

Excellent point.  At some point the amount of "uninsured" claims that are being honored as if they were "insured" could overwhelm the FDIC.  At that point, the Federal Government (the Treasury) will have to take over all the losses.  And then it will directly become a burden which taxpayers must bear.  Either taxes will need to be raised (direct burden paid by everyone) or money will just printed (created) leading to inflation and devaluation of the US dollar (indirect burden paid by everyone due to loss of value in everything).

Yes there should be worry by those that concentrate funds beyond $250K into one account.  Even though less efficient they should spread their funds to more accounts in more institutions.

[Steve0715]

Essentially what has happened is the fed just nationalized the banking industry. 
 

you could eliminate much of the banking problem if the management and directors were held liable for malfeasance.  
 

long term we should be terrified because the fed and beyond the fed, the world bank, is leading us to digital currency.  Digital currencies will give “them” ultimate control over how we spend our money.

All about control.  

[Echo]

Are you tired of being a patsy yet?  I am.  Must be nice to have only upside and NO downside as a business, because taxpayers will come in and make you whole.  Enough of this b.s.  Capitalism is about managing risk, having a better idea and or product.  No guarantees.  Big G (and taxpayers) are not your b&$#@es.  Enough!  Let 'em lose.

[Echo]

United States is moving toward Japan.  We need to balance a budget.  Address the debt.  Understand that globalism is over.  The financial system was made unstable by The Fed and treasury.  Find a local bank that invests locally and grows with its customers.  Not ALL banks are the same.  The days of free money are OVER!

[1980Mooney]

3 hours ago, Kmac said:

By insuring all accounts at these two failed banks and setting a precedent isn't the government potentially making the FDIC  potentially insolvent to fulfill all $250k accounts?  What happens if a few more banks fail?  Are they going to be fully covered as well?  At what point do they stop covering all accounts and just attempt to fulfill the original $250k?  Shouldn't everyone with any amount of money be worried now?

Another reason to be worried:

Look at the graph. Look at the magnitude of this is a single failure vs the 25 in 2008.  And this graph doesn't even include the Signiture Bank failure. (which, with $118 billion, is the 3rd largest bank failure in history - SV Bank was the 2nd largest bank failure in history).  SV and Signiture combined is $327 billion - that is already 88% of the total of 2008 - and only 2 banks involved.

[1980Mooney]

2 hours ago, LANCECASPER said:

The point is they did this so that there is not a run on other banks causing them to fail and creating a collapse. This action helps keep the FDIC solvent, not the other way around.

The whole world watches the U. S. economy and has confidence in the financial system if no one here loses any money in a bank failure. It is much less expensive to cover however many accounts there were at two banks over the weekend that exceeded $250,000 than to wake up Monday morning and see multiple banks fail and then have to cover all accounts below $250,000 at those banks. How quickly they stepped in Friday and the announcement over the weekend that all deposits would be covered, made yesterday a non-event, kept banks from toppling and stabilized the financial markets. Had that not happened over the weekend, yesterday easily could have turned into a new Black Monday.

So yes, they have probably set a precedent, but after the botched handling of the mid-1980's S&L crisis and the lessons learned from the 2008 crisis*, an unspoken understanding was already there anyway, that no one would lose money if their bank failed. It was just reinforced over the weekend, which turned out to be a good thing yesterday or we would be having a completely different conversation today.

(*The amount was of FDIC coverage raised from $100,000 to $250,000 on October 3, 2008. One dollar in 2008 is worth $1.39 today, so that alone would make $250,000 in 2008 worth $347,500 today. The amount of FDIC coverage was raised to $100,000 in 1980. One dollar in 1980 is worth $3.63 today, so that would make $100,000 in 1980 worth $363,000 today. So whether they make exceptions or not, the FDIC insured amount should be raised to $350,000, just due to inflation.)

Isn't this analogous to you insuring your Acclaim for $70K? (about 15% of market value - reports say only 15% of deposits at SV Bank were insured).  And then, in the event that a tornado hits Gillespie County Airport, destroying all the planes including yours, the insurance companies say "Out of the goodness of our hearts we will pay the market replacement value for every plane destroyed even if it is above the insured value. -  even though you knew that we said that we would only cover insured value, even though you were too lazy or cheap to have it fully insured".

How does this change anyone's behavior if they know the government is going to bail them out and make them whole every time?  I suppose the message has to be "OK we will bail you out this time but this is the last time we are going to ever do it again"....

Yeah - right.  This is like all those aging rock band "Farewell Tours" - "absolutely the last time...".....UNTIL THE NEXT TIME

‘Farewell’ Tours That Didn’t Stick — From Cream to Motley Crue – Rolling Stone

I am not sure what we learned from the S&L '80's or 2008.

Edited March 14, 2023 by 1980Mooney

[jetdriven]

22 minutes ago, 1980Mooney said:

Another reason to be worried:

Look at the graph. Look at the magnitude of this is a single failure vs the 25 in 2008.  And this graph doesn't even include the Signiture Bank failure. (which, with $118 billion, is the 3rd largest bank failure in history - SV Bank was the 2nd largest bank failure in history).  SV and Signiture combined is $327 billion - that is already 88% of the total of 2008 - and only 2 banks involved.

That's what we get when we roll back some key parts of the Dodd-Frank law. 

[glbtrottr]

United States is moving toward Japan.  We need to balance a budget.  Address the debt.  Understand that globalism is over.  The financial system was made unstable by The Fed and treasury.  Find a local bank that invests locally and grows with its customers.  Not ALL banks are the same.  The days of free money are OVER!

You’re kidding, right?

I worked for a multibillion dollar company for nearly 2 decades as employee # under 1000 to 70,000 upon acquisition- that did gobs of business with SVB, appreciated 90,000 percent, and then I went on to work at several startups propped up by SVB. Have a couple of IPO’s, a much larger number of acquisitions and failures under my belt.

One particular group has been programmed to measure one a other by the virtue they show. Save the puppies, save the children, cure world hunger, let transgender people have special privileges in religious schools, save the homeless, criminal reform, give everyone “free healthcare, education and basic income”, basically right every wrong in the world by forcibly taking taxpayer money - and charging a handling fee as a politician overtly or covertly for making people feel good about being virtuous. Bankruptcy trustees have nothing on some local city councilmen.

The big scam which was limited to a few geographies went national and global in the last dozen or so years. It’s always been there but it is now institutionalized and protected by courts.

Dodd / frank created the big collapse but now people are saying it didn’t- if only we kept worshipping those two, all would be rosy. The gall…

Japan? Try more like China. There is a difference between where we should go and where we are headed …Kids are being wholesale indoctrinated on the benefits of socialism, Marxism and communism. Plenty of social media pride by “educators” who’ve never set foot in Soviet Russia, haven’t lived in North Korea, who allege criticizing the CCP is racist, and dismiss Venezuela as a tiny country they can’t find on a map. But don’t get their pronouns wrong…. Priorities. Can you explain to them what a bank is? Short of how it works with Venmo to spend the money their parents give them, or how they got financial aid on time, they don’t care.

A balanced budget? Great thinking, but California realized that providing free healthcare was even too big a scam to not be noticed since it was estimated at $400bn to give free healthcare to undocumented people, knowing full well the real cost would be in the trillions. And even in light of a budget shortfall, Gavin is considering reparations in a state that never supported slavery. Over $100bn will have been spent on the “bullet train” and California won’t own a train station, track or train…but progress is good and fast trains are sexy.

People don’t want to accept that government money comes from the people…and every corrupt construction project that kicks back money to the approving politician benefits only the lawmakers and hurts the public.

SVB has for a long time been a ponzi scheme along with Vc and PE pump and dump raiders who make money in creative ways all while raising the cost of all.

We saw $7 and $8 dollar gas in California and things will never normalize now that the cat is out of the bag or the camels nose is in the tent. You like paying $8 due q carton of eggs at the store?

But some people say we are living under the greatest administration in history.

As others have said, it’s just the start.

Makes me feel good to see more multi trillion dollar bills pass while China demands their balloon back that our government says isn’t theirs


Sent from my iPhone using Tapatalk

[LANCECASPER]

On 3/14/2023 at 1:38 PM, 1980Mooney said:

Isn't this analogous to you insuring your Acclaim for $70K? (about 15% of market value - reports say only 15% of deposits at SV Bank were insured).  And then, in the event that a tornado hits Gillespie County Airport, destroying all the planes including yours, the insurance companies say "Out of the goodness of our hearts we will pay the market replacement value for every plane destroyed even if it is above the insured value. -  even though you knew that we said that we would only cover insured value, even though you were too lazy or cheap to have it fully insured".

How does this change anyone's behavior if they know the government is going to bail them out and make them whole every time?  I suppose the message has to be "OK we will bail you out this time but this is the last time we are going to ever do it again"....

Yeah - right.  This is like all those aging rock band "Farewell Tours" - "absolutely the last time...".....UNTIL THE NEXT TIME

‘Farewell’ Tours That Didn’t Stick — From Cream to Motley Crue – Rolling Stone

I am not sure what we learned from the S&L '80's or 2008.

I don’t keep an airplane at Gillespie County airport but I see the point you are trying to make.

The point I am trying to make is that what happened over the weekend had nothing to do specifically with any of the account holders at either of the two banks that failed, even though some of them benefited beyond what their accounts were insured for.

Had the Fed not done what they did over the weekend the risk was very real that come Monday morning the stock market would have opened much, much lower. “Small” and “medium” bank stocks would have plunged and there could have been a run on them as well. Thankfully all we have today is a gripe session today about covering accounts larger than $250,000. I don’t like that aspect any better than anyone else. But had they not done that, the conversation we may be having today would be about how 1/3 of the stock market value was just wiped out and that the Fed has closed the market today and there would be people lined up all over the country trying to get some of their money out of their failed banks. Instead today regional bank stocks have rebounded and the stock market had a rally.

The FDIC insures each account up to $250,000. Maybe an individual or corporation* stupid enough to not open more accounts to spread their money around should be limited to that much per account. But either way, based on what happened yesterday and today, the announcement they made over the weekend proved to be the right choice.

*not that $250,000 would even be practical for most companies. One payroll could be many times that amount. It's ironic that in practice they advertise $250,000 per account. But to really prevent a run on the bank and keep the whole system from collapsing in reality they have to insure all deposits. If the whole thing went down then I guess they could cap it at $250,000 per account but at that point the dollar wouldn't be worth anything anyway so it's a moot point (think Venezuela).

[Echo]

1 hour ago, glbtrottr said:

You’re kidding, right?

I worked for a multibillion dollar company for nearly 2 decades as employee # under 1000 to 70,000 upon acquisition- that did gobs of business with SVB, appreciated 90,000 percent, and then I went on to work at several startups propped up by SVB. Have a couple of IPO’s, a much larger number of acquisitions and failures under my belt.

One particular group has been programmed to measure one a other by the virtue they show. Save the puppies, save the children, cure world hunger, let transgender people have special privileges in religious schools, save the homeless, criminal reform, give everyone “free healthcare, education and basic income”, basically right every wrong in the world by forcibly taking taxpayer money - and charging a handling fee as a politician overtly or covertly for making people feel good about being virtuous. Bankruptcy trustees have nothing on some local city councilmen.

The big scam which was limited to a few geographies went national and global in the last dozen or so years. It’s always been there but it is now institutionalized and protected by courts.

Dodd / frank created the big collapse but now people are saying it didn’t- if only we kept worshipping those two, all would be rosy. The gall…

Japan? Try more like China. There is a difference between where we should go and where we are headed …Kids are being wholesale indoctrinated on the benefits of socialism, Marxism and communism. Plenty of social media pride by “educators” who’ve never set foot in Soviet Russia, haven’t lived in North Korea, who allege criticizing the CCP is racist, and dismiss Venezuela as a tiny country they can’t find on a map. But don’t get their pronouns wrong…. Priorities. Can you explain to them what a bank is? Short of how it works with Venmo to spend the money their parents give them, or how they got financial aid on time, they don’t care.

A balanced budget? Great thinking, but California realized that providing free healthcare was even too big a scam to not be noticed since it was estimated at $400bn to give free healthcare to undocumented people, knowing full well the real cost would be in the trillions. And even in light of a budget shortfall, Gavin is considering reparations in a state that never supported slavery. Over $100bn will have been spent on the “bullet train” and California won’t own a train station, track or train…but progress is good and fast trains are sexy.

People don’t want to accept that government money comes from the people…and every corrupt construction project that kicks back money to the approving politician benefits only the lawmakers and hurts the public.

SVB has for a long time been a ponzi scheme along with Vc and PE pump and dump raiders who make money in creative ways all while raising the cost of all.

We saw $7 and $8 dollar gas in California and things will never normalize now that the cat is out of the bag or the camels nose is in the tent. You like paying $8 due q carton of eggs at the store?

But some people say we are living under the greatest administration in history.

As others have said, it’s just the start.

Makes me feel good to see more multi trillion dollar bills pass while China demands their balloon back that our government says isn’t theirs


Sent from my iPhone using Tapatalk

As a heart attack am I serious.