Re:Urgent: Sign the petition now
by rahimnathwani on Saturday March 11, 2023 @09:44PM
(#35115892)
You're right, the gap is likely much smaller.
I did a quick calculation based on:
- $200bn deposits (on which we agree)
- press reports that Jefferies and hedge funds are offering to buy claims at up to 70c on the dollar (suggesting 30% loss)
Apparently the offer from hedge funds gives them a substantial profit.
Re:Urgent: Sign the petition now
by nuclearnice3 on Sunday March 12, 2023 @09:42AM
(#35119933)
Does the FDIC work like that?
I imagined they would sell assets for the insured. And then sell more for the uninsured. If that process didn't cover the insured, they would bring money.
In this case, the insured are well covered by the assets, so the FDIC won't bring money.
We have a $12B difference of opinion here. Although, more generally, I agree from initial reports the assets - deposits gap does not seem to reach 30%. We should know more tonight and Monday morning.
I'm not sure where you got this number, but it's different than what I've seen. Yes, SVB had $200B in deposits, but it had $15B in unrealized losses. The FDIC is probably contributing $12B as roughly 6% of deposits were insured. That means the gap is probably $3B, which is very different than the $60B you're suggesting. A lot of the issue may end up being the timeframe in which depositors receive back their funds rather than the amount of the shortfall.