* SVB shut down its banking business officially yesterday. ( Not equivalent to yes bank's moratorium ) ( In yes bank also all forced investors except kotak bank want to exit after 3 years lock-in period ending this March 2023 )
* Only 10% depositors of SVB will get insured deposits of 2,50,000 U.S $. Out of these amount bank's current capacity is only 1,88,000 U.S $. The rest of the amount will come from U.S Federal Deposit Insurance Corporation.
* Rest 90% depositors will get refund in the form of dividend after assets get sold & monetised for the deposits in excess of 2,50,000 U.S $.
* Banking/NBFC/Finance , real estate , infra & I.T sector ( SaaS Co. ) can be affected most in U.S Market.
* SVB exited completely from paytm after making huge loss - says VSS with smile. SVB also made loss in Cartrade's Carwale , Naaptol and other Indian Start-up.
* Elon Musk is ready to takeover SVB if his conditions are fulfilled.
* Biden proposes to increase capital gain tax from 20% to 40%. ( Very bad news for all listed U.S companies & MNCs. from investor angle )
* The one of the reason behind collapse is the Fed's decision of increasing interest rates beyond certain limit. Investors book profit from market and park their money in bank deposits for higher interest rate. Now investors will have to suffer from higher capital gain tax and loss of principal amount too. On the other side bank is not able to sell more credit from the increased deposits at higher rate. This may end up into recession like layman bros in 2008. This phenomenon can affect Ukraine also in Russia-Ukraine war.
* The return of Covid with new variant can add more fuel to this fire.
What is the remedy ?
# Fed may pause on increasing interest rate this time in March 2023 meeting.
# Evaluate all the Elon Musk's conditions for the interest of the stakeholders.
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