• We’re currently investigating an issue related to the forum theme and styling that is impacting page layout and visual formatting. The problem has been identified, and we are actively working on a resolution. There is no impact to user data or functionality, this is strictly a front-end display issue. We’ll post an update once the fix has been deployed. Thanks for your patience while we get this sorted.

Discussion ***Official*** 2023 Stock Market Thread 💰

Page 13 - Seeking answers? Join the AnandTech community: where nearly half-a-million members share solutions and discuss the latest tech.
Ok yes normal people don't have to fret much about the $250K guarantee limit. But there may be a few people here who have say 10%-20% or whatever over that amount in just a few banks? First of all we (or they) don't really want to admit that we (they) have that much money even in one bank due to security reasons. Like the whole forum and the net could read it and know what you have.

And second of all I (or they) can just open up a few more accounts at a few more different banks to lower the total cash in each bank to the $250K.

And for the record I don't have enough cash to make the CDARS method or similar methods practical. That's for several multi Smillions or at least a few multi Smillions. They spread out the cash into dozens or hundreds of different banks so you get the $250K FDIC guarantee for all of them. And they can shift the cash from one bank to another on a daily or whenever basis if there's any doubt about the stability of any of the banks. For movie star and CEO types.
 
dullard said:
What kind of idiot would buy bank stocks when interest rates are rising? This happens over and over again throughout history. Banks fail during rising interest rates. Not only do they have fewer customers for their products, but their assets decline in value since investors would rather buy the new higher yielding bonds and mortgages than the low yield ones that the banks still have on their books. You want to buy bank stocks during the times of falling interest rates. In times of falling rates, banks have a boom of customers with refinances and new mortgages. Think of all the bank fees which are pure profit on each refinance. Plus, all the high interest rate loans they still have skyrocket in value as investors want them over new low interest rate loans.

I know KB was trying to argue here that banks would do well, with the assumption that they will give banking customers low interest rates on savings and then lend out at high interest rates. But that just isn't how most banks work. Most banks can't keep on to the higher interest rate loans. They sell them off to Freddy Mac and Fanny Mae. That is even if they do have any loans to sell as there are so few customers wanting the higher rate loans.
Click to expand...

Yeah many of the banks have poorly managed their money. SVB got into so much trouble because they bought lots of long-term low-yielding t-bills which got pummeled when rates rose. Bad on them. I think other banks like JPM will do better and may gain from SVBs demise.

One thing I didn't expect was the big drop in the savings rate, down to a all-time low of 2%. This meant that banks had to increase the rates they paid out to attract money and the net interest margin wasn't as high as I had expected.
 
Last edited:
PlanetJosh said:
Ok yes normal people don't have to fret much about the $250K guarantee limit. But there may be a few people here who have say 10%-20% or whatever over that amount in just a few banks? First of all we (or they) don't really want to admit that we (they) have that much money even in one bank due to security reasons. Like the whole forum and the net could read it and know what you have.

And second of all I (or they) can just open up a few more accounts at a few more different banks to lower the total cash in each bank to the $250K.

And for the record I don't have enough cash to make the CDARS method or similar methods practical. That's for several multi Smillions or at least a few multi Smillions. They spread out the cash into dozens or hundreds of different banks so you get the $250K FDIC guarantee for all of them. And they can shift the cash from one bank to another on a daily or whenever basis if there's any doubt about the stability of any of the banks.
Click to expand...
Usually you would store large amounts of money in bonds or stocks.
 
^ They probably have enough cash for a third or even half in cash and half in bonds and stocks. The cash being for I guess two main reasons, fear of a bond and stock collapse in a stock and economic 1929 style crash. And to have ready cash for expensive houses, gifts, to own a business, give to charity, etc.

I realize a crash that big could endanger bank CDs and savings accounts. So it's possible we could all be in some sort of bread line. But that's just theory, we don't know yet if cash will or won't survive a crash of that magnitude.
 
Last edited:
biostud said:
Usually you would store large amounts of money in bonds or stocks.
Click to expand...
That would be the norm. Except SVB had low liquidity and was forced to sell bonds at a loss to cover it. Word got out, chaos ensued, and a bank run was a result.

All banks should have enough to cover deposits without having to sell assets at a loss. That's how SVB failed.
 
AdamK47 said:
That would be the norm. Except SVB had low liquidity and was forced to sell bonds at a loss to cover it. Word got out, chaos ensued, and a bank run was a result.

All banks should have enough to cover deposits without having to sell assets at a loss. That's how SVB failed.
Click to expand...
I meant as a private person with more than $250k in cash
 
Apparently the FDIC did try to seriously sell SVB's corpse... but only got one offer and they rejected it.

Also the rate odds have gone back to favoring a Single Hike. Guess there's expectation that the CPI numbers will continue to be very high.
 
CPI numbers were in line I think with the estimate (0.4 and 0.5 for Core CPI)... which is still a pretty big month on month increase. But Wall Street doesn't seem to mind.
 
FelixDeCat said:
Bought 35 FRC @ 30
Click to expand...

Sold too soon yesterday at $38 😶

Edit..but it was too risky to wake up to zero dollars. Not to say it will happen given the JPM and Fed bailout of FRC, but seriously the regulators can shut down any bank at any time.
 
Last edited:
Speaking of rate increases I just realized my mortgage renewal is in September. That's probably going to hurt. On the flip side, my TFSA is yielding me $2/mo in interest now! 😛 Probably going to use that money on a new water heater though, I really need to bite the bullet and replace my old gas one that's costing me a lot to run and is on it's last legs. Will probably get a heat pump one so they are going for like 3 grand. I see that as an investment as it will save me a lot in utility bills.
 
Red Squirrel said:
Speaking of rate increases I just realized my mortgage renewal is in September. That's probably going to hurt. On the flip side, my TFSA is yielding me $2/mo in interest now! 😛 Probably going to use that money on a new water heater though, I really need to bite the bullet and replace my old gas one that's costing me a lot to run and is on it's last legs. Will probably get a heat pump one so they are going for like 3 grand. I see that as an investment as it will save me a lot in utility bills.
Click to expand...

My parents had a gas water heater (American Standard) installed in 1994 for $400. It failed in 2022. They had to go electric because of changing regulations, which meant the installation of a dedicated appliance wire in the basement for $1000 and the install of the water heater itself by the same company. Total cost was $3000.
 
FelixDeCat said:
FRC continues to crash and burn.
Click to expand...

Bailout/buyout in the works? Crazy volatility. Bought 1 share at 32 yesterday and sold this morning at 21 at a loss. Then I noticed it was running monstrously back up, bought some here and there, 53 shares average price $25.82.
 
Last edited:
You must log in or register to reply here.

TRENDING THREADS

Back
Top