Name:   MartiniMan - Subject:   i'm waiting Date:   3/13/2023 3:06:25 PM (updated 3/13/2023 3:07:50 PM)

As I understand it FDIC is actual insurance that is paid for by financial institutions in the form of policy premiums.  But I can assure you the FDIC fund doesn't have enough to cover SVB losses let alone a slew of other banks that will likely fail in the coming months.  It used to only cover $100,000 in deposits but that was increased to $250K during the 2008 banking crisis. So it will likely be a combination of FDIC insurance and low-cost loans from the Fed (the bailout part).

What happened here is a direct result of inflation and the Fed's rate hikes to combat it.  SVB, along with probably pretty much every bank, based its investment strategy on cheap money.  As that money has gotten more expensive it has cratered their investments.  So even if the Feds bail out SVB the investors in the bank will still get screwed.  And rightly so.  If you are crazy enough to invest in a woke bank that ignores sound business practices in favor of DEI and ESG you will go down the drain with them.  SVB ran into a problem with Moody's who threatened to downgrade them.  In response they sold $20B in bonds at a loss of $1.8B to bloster liquidity which is what triggered the massive outflows of cash that cratered the bank.  Smart people recognized a sinking ship and acted quickly.....the rest will be bailed out by the Fed, you can be sure of that.

It's time to dust off the impending doom graph and update the x-axis to current years.