US$200 billions+ Silicon Valley Bank vaporized in 18 hours

40 years old US$200 billions+ Silicon Valley Bank vaporized in 18 hours, too big to fail? It is sinking with Silicon Valley with 10s of thousands of layoffs to be replaced by China Greater Bay Area where Huawei is headquartered. 40年歷吏的矽谷銀行,2000+ 億資產,18小時內蒸發. 大到不能倒真是笑話! 它正在與硅谷一起下沉,成千上萬的矽谷高科技工程師被裁員, 將被華為總部所在的中國大灣區所取代.

Bankers have to put up a pretty face as if nothing bad will happen! Because the entire system is built on confidence. If you send a confidence-destroying message, you are damaging your own industry.

However, the signals point to a recession.

T-bills today:
1-month yield 4.737%
1-year yield 4.871%
2-year yield 4.593%
10-year yield 3.704%
30-year yield 3.712%

Notice that longer maturity bills pay less interest. This is anomalous, and is called yield curve inversion. You get lower rates for holding bonds longer. That signals the expectation that things will get worse in the future.

Every recession in US history has been prefigured by yield curve inversion. It’s an airtight correlation.
Currently, we are seeing the highest T bill inversion in 40 years.

SVB was not particularly badly invested. T-bills and mbs’s, fairly conservative positions. The hot QE–4T– followed abruptly by 7 successive rate hikes, along with the US’s foolish trade war on China, esp. in the tech industry is to blame. Also to blame is the fact that the CEO of SVB lobbied successfully to have stress tests and breakwaters removed from the banking industry–this is part of the systemic corruption of the US political system.


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