Share this page!

Will DeCotiis Profile picture
Twitter logo
Mar 11 • 4 tweets • 1 min read
This is a very good take (assuming FDIC does what the FDIC is tasked to do as a regulator…protecting depositors)…the real risk to the system is deleveraging…SVB was in the business of giving out loans on excessively favorable terms…credit extension likely just got tighter…
& leverage will be washing out of the VC ecosystem…which is actually healthy for the ecosystem
If you actually believe in the start-up ecosystem long-term…you should welcome it…it’s a healthy growing pain for the industry, it will come back stronger and more fortified #antifragile
Also a good take

• • •

Missing some Tweet in this thread? You can try to force a refresh
　

Keep Current with Will DeCotiis

Will DeCotiis Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @Will_DeCotiis

Will DeCotiis Profile picture
Mar 12
Impromptu thread:

There’s a saying in fight sports: positioning > speed > power

What it means practically is:

Positioning: if you’re fighting another person and you’re standing or otherwise positioned in an advantageous way (perhaps on top of them), you have the upper hand
Speed: If neither of you are in an advantageous spot, you need to be fast, to get to the advantageous spot first before your opponent to gain the upper hand
Power: If you’re slower than you’re opponent or they’re positioned more advantageously than you, you have to rely on power or force to move them off the spot to regain the advantageous positioning and upper hand
Read 14 tweets
Will DeCotiis Profile picture
Mar 11
Important to remember that it was planned to look sympathetic (pensions, foundations, etc.) so you’d bail out the bad actors ImageImageImage
In case it wasn’t clear the folks who caused the crisis dgaf about your pension or university endowment…they were happy to lever the 💩 out of it when it was profitable to them to do so…now that it’s a crisis you have to save them “for your own sake”
Not a reflection on Megan who seems perfectly genuine (perhaps just slight misinformed as to how it all went down)
Read 4 tweets
Will DeCotiis Profile picture
Mar 11
While the media is flooded with whiny bailout calls…saw a company today having a “bank run sale” (a discount on sales of current inventory in an effort to convert to cash shoring up B/S liquidity)…creative proactive solution to adapt to an environment that they didn’t cause
…admirable (saw a few others asking for advances from clients for future services to insure continuity of ops…also a creative effort)
For the VCs in the back of the classroom those are the founders you want to fund…the ones that refuse to die when the situation looks bleak
Read 5 tweets
Will DeCotiis Profile picture
Dec 5, 2022
Bc all debt is denominated in USD and then hedged via swap…when it comes time to unwind there should be a mad rush for USD (a proverbial “run” on USD)…that’s why BIS would care it’s a settlement/liquidity problem…Fed knows this and has already front run the issue by setting up
swap lines so that in a “run” USD should be readily available. Similarly bc a lot of leverage is generated via a carry trade by swapping USTs in repo and then buying higher yielding assets…a so called “collateral transformation” trade… we could also see a run on USTs as folks
try to unwind their positions … Fed has front run this too via FIMA repo (foreign) and SRF (domestic) so if you need USTs you should be able to get them … so in short the Fed has endeavored to remove systemic risk via runs on both USD and USTs (the global financial systems
Read 10 tweets
Will DeCotiis Profile picture
Nov 4, 2022
Hey Steve, happy to…I think A’s CEO is being surprisingly honest and candid…taking it in parts: 1) all assets are correlated w/the Fed…Fed pushed so much liquidity into the mkt that it raised all boats, that works the same in reverse & is going to be painful
b/c it destroys diversification you might otherwise expect (if everything is correlated nowhere is safe)…that creates a risk of “fire sales” like we already saw in England…if everyone has been corralled into the same trades it creates a risk of forced selling into a mkt
of insufficient buyers…add some margin calls or fund redemptions into that situation and it gets ugly quickly … it’s a big risk for passive strats and funds …Mr Rowan is eluding to that by tossing the LDI issue together with mutual funds and ETFs…
Read 16 tweets
Will DeCotiis Profile picture
Sep 26, 2022
Hey folks quick 🧵revisting the various facilities the Fed has to deal w/ dollar funding issues since they may become relevant. I’ve endeavored to speak plainly for ease of comprehension so if you are a funding mkt guru please forgive the lack of precision in some concepts.
Foreign Liquidity Facilities:
1) FX Swap Lines: Currency exchange between central banks (e.g. Yen for USD). Nothing special here it’s just a currency swap between central banks.
2) FIMA Repo: US treasuries (from foreign Central Bank Reserves) pledged to Fed in exchange for USD
federalreserve.gov/monetarypolicy…. Prevents foreign central banks from having to sell their UST holdings (they can just pledge them in repo and receive USD).
Read 17 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!

Send Email!

:(