Gee whiz, ya think?
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Why would one go back to a struggling bank that had temporarily been righted when they can just use any other bank?
In other words, why would people redeposit there?
For an individual, switching banks is a pain in the ass. Think of all the auto payments that would have to be changed. Or maybe the branch is close to your house or a friend works there.
For business accounts, maybe the commercial bankers are people you’ve been working with for years and really understand your business and credit worthiness and then there’s less hurdles to getting financing when you need it.
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How many cars do you own?
Cars? I have like 3 bank accounts I rarely use just because I don’t want to close them. Don’t even get me started on touching my direct deposit setups and risking incompetence from my employers HR team.
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If you didn’t have so many cars then you wouldn’t have so many auto payments.
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I’m a little annoyed because if you had asked me at any point in the last six years up until last month, the answer would have proudly been 1 or 0 for three drivers in my family and now it’s 2
It’s a rough time to buy a car.
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What happens to these loans? Hard to believe they just disappear. (paywalled)
Same thing that happens to any other asset SVB owns.
lol GameStop up a cool 48% after hours.
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Q4 earnings came in, they managed to have a profitable quarter. Still lost >300M for the year, but netted 50M in Q4 from >2B of revenue. (I’m not saying this warrants a 50% jump, but to apes it does.)
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Two more banks are at risk of getting got according to the Big Shorter
https://www.thestreet.com/banking/big-short-michael-burry-sounds-the-alarm-on-two-us-banks
I did think of that, maybe they’re learning from my mistakes of buying a first house in early 2008, or buying a second house 16 months before needing to move for work. If they’re buying now I think they didn’t. Although I’m also buying again now so I can’t judge.
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December 2007 here. Sold 7 years later still underwater. Now worth about 2x.
Fun times
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Yeah, I have been thinking that the artificially low interest rates and bubbles it has caused over and over again seems unethical. Less overall growth is better if it means less bubbles/volatility for regular people.
Not owning a home right now would totally suck.
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I think you’re overstating the causality here. The changing rates are actually to smooth out the cycle. We had way worse bubbles and boom bust cycles in the pre central banking days.
It’s hard to know what is meant by “artificially” in your statement. Like, do you think it would be more natural to have something like a gold standard and free floating market rates? This has been tried and is pretty much worse in every way.
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I have often found that when people say things like this, they have a belief that the annual time value of money has some kind of natural level of around 5%, so when it’s near zero then it is manipulation on its face.
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