The bank index of US markets fell north of 6.5% yesterday.
The reason for this?
Silicon valley bank which banks nearly half of the US tech industry was down 60% yesterday and is further down 20% from yesterday’s close after the bank raised nearly 2 billion dollars in equity and debt and also sold their 21 billion dollars mortgage backed securities (nearly 25% of their portfolio at a 1.8 billion loss)
Nearly 80 billion dollars wiped out from the bank’s market capitalisation in a day. (80 billion dollars = SBI)
This tweet thread explains nicely about what has happened in the bank
https://twitter.com/jamiequint/status/1633956163565002752?t=aJuFxr8vM2TGm3sjoFcVgw&s=19
Day before yesterday, one of the biggest crypto dedicated bank decided to shut down as FTX saga still continues to haunt the crypto space.
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https://twitter.com/deepakshenoy/status/1634023539631087616?t=0qWqlX75N589IHpXEvGghw&s=19
Deepak shenoy’s tweet also covers the crux of the story nicely.
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Repercussions of high interest rates in US now starting to kick in.
Most of the VC backed startups are at risk.
Yesterday 60% crash
Total 60% down open in pre market.
Exchange halted trading in the stock.
Incredible. It’s like 1.5 * SBI/ 1 hdfc bank got halted in a day
Bank closed! FDIC: PR-16-2023 3/10/2023
Depositors will get $250k by monday and rest as bankrupcy procedure.
Another fire started to fight by Central bankers