# Have you checked your bank account today? You better, Silicon Valley Bank is crashing **URL:** \ **Category:** Miscellaneous and Personal Stuff I Must Share\ **Created:** [March 10, 2023, 10:58pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997 "2023-03-10T22:58:31Z")\ **Posts on this page:** 20\ **Page:** 9
**Author:** ![SmartAleq](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smartaleq/32/163_2.png) [@SmartAleq](https://boards.straightdope.com/u/SmartAleq)\ **Post date:** [March 14, 2023, 6:30pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/161 "2023-03-14T18:30:01Z")
Oh dear–Moody’s just downgraded their outlook on the entire US banking system from “stable” to “negative.” Money quote: > The firm, part of the big three rating services, said Monday it was making the move in light of key bank failures that prompted regulators to step in Sunday with a dramatic rescue plan for depositors and other institutions impacted by the crisis. > “We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY,” Moody’s said in a report. > The move followed action late Monday, when Moody’s warned it either was downgrading or placing on review for downgrade seven individual institutions. > The moves are important because they could impact credit ratings and thus borrowing costs for the sector. > In its downgrade of the entire sector, the rating agency noted the extraordinary actions taken to shore up impacted banks. But it said other institutions with unrealized losses or uninsured depositors still could be at risk. > **[Moody's cuts outlook on U.S. banking system to negative, citing 'rapidly...](https://www.cnbc.com/2023/03/14/moodys-cuts-outlook-on-us-banking-system-to-negative-citing-rapidly-deteriorating-operating-environment.html?__source=sharebar%7Ctwitter&par=sharebar)** > > The firm, part of the big three rating services, said it was making the move in light of key bank failures. Well, THAT’S gonna leave a mark. ETA: Oh, and just for shits and giggles for the people who believe THEIR bank is Just Fine, a primer on Fractional Reserve Banking, which has to be one of the dumber ideas ever floated in the financial world. [![](https://img.youtube.com/vi/6nc2HoQmf84/hqdefault.jpg ""All the Banks are Broke......it's called Fractional Reserve Banking"") ](https://www.youtube.com/watch?v=6nc2HoQmf84) ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [March 14, 2023, 6:38pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/162 "2023-03-14T18:38:37Z")
Fractional reserve banking is how all banks work all the time. Without it, there wouldn’t be mortgages, credit card and auto loans would be much, much harder to get. Heck, there wouldn’t be banks, because running a bank cost money and many banks only make money because they can issue mortgages financed by deposits, the very essence of fractional reserve banking. ---
**Author:** ![hajario](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/hajario/32/171_2.png) [@hajario](https://boards.straightdope.com/u/hajario)\ **Post date:** [March 14, 2023, 6:45pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/163 "2023-03-14T18:45:01Z")
I got an email from my Credit Union yesterday assuring me that they are rock solid and exceed the “well-capitalized” threshold. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [March 14, 2023, 6:52pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/164 "2023-03-14T18:52:18Z")
> [@SmartAleq](#): > > Moody’s just downgraded their outlook on the entire US banking system from “stable” to “negative.” This would be the same Moody’s that didn’t notice any problem at all until after SVB had been taken over by the Feds on Friday? Their opinion is worth about as much as the journalists on the financial news who always constructive a rational narrative _after_ the market has moved. Moody’s ratings do matter to the extent that some investment funds are constrained to invest only in bonds with a certain minimum credit quality, but I don’t see how that makes much difference here. > [@SmartAleq](#): > > ETA: Oh, and just for shits and giggles for the people who believe THEIR bank is Just Fine, a primer on Fractional Reserve Banking, which has to be one of the dumber ideas ever floated in the financial world. This is about as ignorant as saying that money isn’t _really_ worth anything and we should go back to the barter system. The video you linked to (which I’m not going to watch) appears to be associated with UKIP, so I assume it is right wing populist fearmongering nonsense. > **[UK Independence Party](https://en.wikipedia.org/wiki/UK_Independence_Party)** > > The UK Independence Party (UKIP; /ˈjuːkɪp/ YOO-kip) is a Eurosceptic, right-wing populist political party in the United Kingdom. The party reached its greatest level of success in the mid-2010s, when it gained two members of parliament (both through defections) and was the largest party representing the UK in the European Parliament. The party is currently led by Neil Hamilton. > UKIP originated as the Anti-Federalist League, a single-issue Eurosceptic party established in London by Alan Sked ... ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [March 14, 2023, 7:00pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/165 "2023-03-14T19:00:15Z")
> [@Riemann](#): > > appears to be associated with UKIP I had assumed either libertarian loonies or Freemen of the Land loonies, but I guess right-wing loonies makes sense, too. ---
**Author:** ![SmartAleq](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smartaleq/32/163_2.png) [@SmartAleq](https://boards.straightdope.com/u/SmartAleq)\ **Post date:** [March 14, 2023, 7:01pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/166 "2023-03-14T19:01:49Z")
> [@Riemann](#): > > This would be the same Moody’s that didn’t notice any problem at all until after SVB had been taken over by the Feds on Friday? Their opinion is worth about as much as the journalists on the financial news who always constructive a rational narrative _after_ the market has moved. Well no shit there, Sherlock, I’m just finding it mordantly funny that even Moody’s is having to admit the Emperor’s willie is hanging out for all to see. And don’t watch the video, no skin off my ass, but it’s pretty amusing to see an MP in '13 taking people to task. Even broken clocks are right twice a day, or only once if they’re digital. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [March 14, 2023, 7:07pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/167 "2023-03-14T19:07:02Z")
> [@SmartAleq](#): > > Even broken clocks are right twice a day Your ignorant claim that Fractional Reserve Banking is “one of the dumber ideas ever floated in the financial world” is not right at any time of day, even by chance. It’s like saying that trains are one of the dumber ideas ever invented in the history of civiliztion just because incompetent safety protocols led to a major train accident. ---
**Author:** ![SmartAleq](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smartaleq/32/163_2.png) [@SmartAleq](https://boards.straightdope.com/u/SmartAleq)\ **Post date:** [March 14, 2023, 7:08pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/168 "2023-03-14T19:08:55Z")
You think that banks being allowed to lend out money they don’t have and don’t intend to secure is a Good Idea? Okay then, but hey–look around you. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [March 14, 2023, 7:12pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/169 "2023-03-14T19:12:35Z")
OK. I’m seeing a globally dominant hyperpower with a extremely strong economic system which, even at its worst during the Great Depression, was still the most dominant in the world. You? ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [March 14, 2023, 7:12pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/170 "2023-03-14T19:12:48Z")
> [@SmartAleq](#): > > money they don’t have and don’t intend to secure To save you from further embarrassment, I suggest that you don’t double down on trying to explain the details of something that you don’t understand. > [@SmartAleq](#): > > hey–look around you Why don’t you try doing the same. The remarkable quality of life that we enjoy is the result of the greatest economic success story in the history of civilization, facilitated by fractional reserve banking. ---
**Author:** ![SmartAleq](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smartaleq/32/163_2.png) [@SmartAleq](https://boards.straightdope.com/u/SmartAleq)\ **Post date:** [March 14, 2023, 7:15pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/171 "2023-03-14T19:15:46Z")
Hey, all Ponzi schemes are great and everyone loves them and cashes in…right up until the moment when they…don’t. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [March 14, 2023, 7:22pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/172 "2023-03-14T19:22:10Z")
Feel free to stop using the banking system. That usually goes along with putting all your money into physical gold, digging a bunker, stockpiling weapons and freeze dried dinners. I can recommend Peak Refuel Sweet Pork & Rice. The two main markets for freeze dried dinners are backpackers and preppers, but we actually eat them. > **[PEAK REFUEL Sweet Pork and Rice - 2 Servings | REI Co-op](https://www.rei.com/product/182730/peak-refuel-sweet-pork-and-rice-2-servings?sku=1827300001&CAWELAID=120217890010431448&CAGPSPN=pla&CAAGID=102333396473&CATCI=pla-428758891126&cm_mmc=PLA_Google%7C21700000001700551_1827300001%7C92700053582135720%7CTOF%7C71700000066695699&gclid=Cj0KCQjwtsCgBhDEARIsAE7RYh16K3vkxSGzgItnxvIBgtMxJJmKty4EwE3hxKPa_BfjPGPbwNM7NCQaAnUeEALw_wcB&gclsrc=aw.ds)** > > Settle down after a grueling hike to restore your energy with PEAK REFUEL Sweet Pork and Rice, a sweet yet savory source of protein- and iron-rich pulled pork, white beans, veggies and spices. ---
**Author:** ![RitterSport](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/rittersport/32/6326_2.png) [@RitterSport](https://boards.straightdope.com/u/RitterSport)\ **Post date:** [March 14, 2023, 7:23pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/173 "2023-03-14T19:23:28Z")
> [@Riemann](#): > > That usually goes along with putting all your money into physical gold Don’t forget crypto!! ---
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [March 14, 2023, 7:34pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/174 "2023-03-14T19:34:55Z")
My company just sent out a message to our customers letting us know that we have no funds in SVB. I guess it comes to that eventually. ---
**Author:** ![TroutMan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/troutman/32/6721_2.png) [@TroutMan](https://boards.straightdope.com/u/TroutMan)\ **Post date:** [March 14, 2023, 7:38pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/175 "2023-03-14T19:38:16Z")
Well yeah, no one has funds in SVB anymore. The question is, did you _use to_ have funds in SVB? ---
**Author:** ![SmartAleq](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smartaleq/32/163_2.png) [@SmartAleq](https://boards.straightdope.com/u/SmartAleq)\ **Post date:** [March 14, 2023, 7:40pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/176 "2023-03-14T19:40:15Z")
That’s one helluvan excluded middle y’all are flailing around in there. Yes, there is NO place in between huge overleveraged banks up to their pupiks in toxic “assets” and the lumpy mattress method. None at all. Especially not credit unions, not keeping balances over the FDIC/NCUA limits in one bank and keeping a goodly liquid cash reserve handy in case of weekend bank difficulties. Nope, it’s one or the other, good going there! ---
**Author:** ![Cheesesteak](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/cheesesteak/32/3694_2.png) [@Cheesesteak](https://boards.straightdope.com/u/Cheesesteak)\ **Post date:** [March 14, 2023, 7:44pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/177 "2023-03-14T19:44:55Z")
I’m not entirely sure you appreciate that the vast majority of posters in this thread would welcome that excluded middle with huge overleveraged banks reined in by government regulations. What they don’t agree with is your assessment that fractional reserve banking is a dumb idea. It isn’t a dumb idea, but it is an idea that requires sensible management that is often voted down by those looking for higher profits. ---
**Author:** ![SmartAleq](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/smartaleq/32/163_2.png) [@SmartAleq](https://boards.straightdope.com/u/SmartAleq)\ **Post date:** [March 14, 2023, 7:49pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/178 "2023-03-14T19:49:43Z")
Well, it’s an idea that, as currently practiced, is shit. How’s that? Yes, if things were managed properly and banks were required to keep a pretty sizable percentage of solid liquid assets on hand (that they don’t get to borrow every night from the Fed to meet the current requirements, which are ludicrously low) then sure, fractional reserve banking would be okay. Which is like saying that, if every time two people had sex one of them choked the other to death, that “sex is GREAT, it’s NATURAL, everyone NEEDS SEX.” Well, except for the ones who die of strangulation, they might have a different view of the matter–if they weren’t, y’know, dead and all. ---
**Author:** ![Riemann](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/riemann/32/3133_2.png) [@Riemann](https://boards.straightdope.com/u/Riemann)\ **Post date:** [March 14, 2023, 7:53pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/179 "2023-03-14T19:53:59Z")
> [@SmartAleq](#): > > That’s one helluvan excluded middle y’all are flailing around in there. Yes, there is NO place in between huge overleveraged banks up to their pupiks in toxic “assets” and the lumpy mattress method. Do you not see the irony in you claiming _others_ are guilty of fallacy of the excluded middle, when the problem here was that you equated the fundamental concept of fractional reserve banking with ‘overleveraged banks up to their pupiks in toxic “assets” .’ > [@SmartAleq](#): > > None at all. Especially not credit unions, not keeping balances over the FDIC/NCUA limits in one bank and keeping a goodly liquid cash reserve handy in case of weekend bank difficulties. Nope, it’s one or the other, good going there! Are you under the impression that credit unions do not use fractional reserve banking? > [@SmartAleq](#): > > if things were managed properly and banks were required to keep a pretty sizable percentage of solid liquid assets on hand You realize that you are simply discussing the appropriate “fraction” in the concept of fractional reserve banking, right? > [@SmartAleq](#): > > if every time two people had sex one of them choked the other to death, that “sex is GREAT, it’s NATURAL, everyone NEEDS SEX.” Um… so your “analogy” with sex requires that sex be 100% fatal? I’m not really sure what to do with that. Again, the more apt analogy is that there has just been a major train accident, and rather than discussing the failures in safety protocols, you are condemning trains as a terrible idea. ---
**Author:** ![JohnT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/johnt/32/15048_2.png) [@JohnT](https://boards.straightdope.com/u/JohnT)\ **Post date:** [March 14, 2023, 7:54pm UTC](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997/180 "2023-03-14T19:54:42Z")
> [@SmartAleq](#): > > Which is like saying that, if every time two people had sex one of them choked the other to death, that “sex is GREAT, it’s NATURAL, everyone NEEDS SEX.” Well, except for the ones who die of strangulation, they might have a different view of the matter–if they weren’t, y’know, dead and all. Uh… are you OK? [Previous page](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997.md?page=8) [Next page](https://boards.straightdope.com/t/have-you-checked-your-bank-account-today-you-better-silicon-valley-bank-is-crashing/980997.md?page=10)