Silicon Valley Bank’s HQ in Santa Clara, California.
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We’re live-blogging the fallout from Silicon Valley Bank’s collapse last week.
US authorities have guaranteed the lender’s deposits and promised its customers will be made whole.
Bill Ackman, Michael Burry, and others have weighed in on the fiasco rocking financial markets.
Good morning from London. We’re live as Silicon Valley Bank’s collapse continues to rattle investors and stoke fears of further bank runs and financial catastrophe.
The US Treasury, Federal Reserve, and the Federal Deposit Insurance Corp. helped assuage those worries on Sunday by announcing deposits at the country’s 16th-largest bank would be guaranteed, and the bank’s customers would have access to all of their money on Monday. The FDIC took control of SVB on Friday, while the Fed plans to offer loans to banks and other deposit holders in case they face a wave of withdrawals.
Some experts have celebrated the intervention as necessary to prevent a crisis. Others have warned it could encourage banks to be more reckless, and SVB might be the first of several institutions to fail.
Follow along for the latest developments, analysis of what it all means, and what the likes of Bill Ackman, Michael Burry, Mark Cuban, Paul Krugman, and Elon Musk are saying.
Bill Ackman says he’s relieved
In a Monday tweet, billionaire investor Bill Ackman dismissed claims that authorities protecting SVB’s deposits constituted a bailout.
Ackman argued that if the Fed, FDIC, and Treasury hadn’t swooped in, the US would have faced a “1930s bank run continuing first thing Monday causing enormous economic damage and hardship to millions.”
The Pershing Square boss cautioned that more banks will probably collapse despite the intervention, but suggested it’s reassuring to know how the government might contain the fallout.
—Bill Ackman () March 13, 2023
Mohamed El-Erian flags “eye-popping” volatility
Mohamed El-Erian, Allianz’s chief economic adviser and a former Pimco CEO, flagged immense volatility in US bond yields in a Monday tweet.
Investors are reacting to SVB’s collapse and the risk that other banks could follow, and it could take a while for things to calm down, he said.
—Mohamed A. El-Erian () March 13, 2023
Jeffrey Gundlach rings the recession alarm
“Bond King” Jeffrey Gundlach, the head of DoubleLine Capital, warned in a Monday tweet that the sudden shift in bond yields on the back of the SVB fiasco indicates the US economy is barreling towards a downturn.
—Jeffrey Gundlach () March 13, 2023
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Source:: Business Insider