Aussie markets have opened lower this morning, just like we all knew they would, because Wall Street was in “foot to the floor, chin on the horn, 120 miles an hour with your eyes squeezed tight’ panic mode on Friday.

And that’s because the US is about to have Yet Another Banking Crisis, and that, dear Readers, is because – as my dear friend and colleague Christian “Chedward” Edwards so succinctly put it, “they’re idiots”.

Hop over there and have a read, because it’s a good explainer that will help you to understand that while the collapse of Silicon Valley Bank was because there was a run on the bank, there’s an element to this that needs digging into.

The whole thing started to unravel in the middle of last week, when Silicon Valley Bank (SVB) sent out a Red Alert Emergency Call for capital, after finding itself a teensy bit short of funds, and was poking around underneath investors’  couch cushions to see if anyone had a lazy $2.25 billion kicking around to shore up its balance sheets.

This, obviously, is not the kind of thing you like to hear your bank saying. Especially when that bank specialises in one very narrow area of the banking market, and especially when that area is the terrifyingly ephemeral part of the Business World known as start-ups.

Start-ups, from a banking perspective, are essentially tiny little non-profit organisations that are designed to blow through ridiculous quantities of cash in the hope that whatever hair-brained idea the coked up CEO had while on a mushroom-fuelled bender spiritual retreat in the Arizona desert actually works, and might make some money in the end.

They are hugely expensive for what they produce (often a dry, dusty hole in the ground which employees have lined with useless stock certificates so they have somewhere warm to sleep) – just keeping the lights on is hard work for most of them.

So when the Fed hawks started really cranking the handle on the relentless round of interest rate hikes, the little start-ups were getting battered harder than slabs of unidentifiable firm-fleshed fish on a Friday down the chippy.

(It’s probably shark, probably illegally caught, probably full of mercury… but you’re gonna eat it anyway, aren’t you?)

So the start-ups started to pull their cash out of SVB for incidentals – a new tin of coffee here, and month’s worth of payroll there, and before you know it, WHAMMO!

SVB’s staring into what it thought was a wooden barrel of money, but instead turned out to be a long-drop dunny with nothing but a bad smell coming from a deep, dark hole.

Hence, the call for $2.25 billion in capital – and this is the first point in the story when it’s okay to start asking questions like this one: “At some point, well before they were $2.25 billion in the hole, SVB would have noticed that there was a smaller hole starting to form, right?”

Apparently not.

Where this gets more even dumberer is that when things started going south at SVB, prominent funds including Union Square Ventures and Coatue Management started emailing their start-up clients, urging them to get their money out.

“We’re concerned there’s going to be a bank run, so you should all get all of your money out right now” is – quite literally – how bank runs get started.

So I would like to amend Christian’s claims that these people are idiots, because they’re not.

They’re worse than that, occupying a space on the intelligence spectrum somewhere between “ambulatory fungus” and “sentient meat pie”.

They did this to themselves, in an orgy of panicky self-indulgent stupidity.

SVB customers pulled a staggering $42 billion of deposits by the end of Thursday, even as SVB CEO Greg Becker was literally pleading with his customers to stop sh-tting themselves and calm the f-ck down.

Incredibly, even as the whole thing was coming down around their ears, SVB handed out bonus cheques to its employees on Friday. The day after the bank had shuddered like a sh-tting dog and died.

The fallout tonight is 100% going to be Train Wreck TV at its finest – stomach-churning to watch, but so terribly hard to turn away from.

Either way, the writing looks like it’s on the wall for SVB. CBS news has already had US Treasury Secretary Janet Yellen on to say the US federal government “will not provide a bailout for Silicon Valley Bank’s investors after the bank was abruptly shuttered”.

Thoughts and Prayers will be offered instead, while the Fed says the best it can do is “make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors”.

Now let’s take a look at how that small group of people in the US has made our Monday completely horrible.

 

TO MARKETS

The ASX opened lower this morning, racing down the rabbit hole because of everything I was just talking about, and it would really be lovely if you went back and read it if you didn’t already, because I don’t feel like rehashing it here.

But there’s “Great News” from our own federal government, as Treasurer Jim “SuperNintendo” Chalmers said that “Any fallout for Australia’s broader financial system is unlikely to be significant”.

I feel safe, and loved. Thanks Jim… you’re awesome.

The ASX 200 benchmark fell as low as -0.9% before bouncing – remarkably well – shortly before lunch to leave the index at -0.6% at lunchtime.

Sector-wise, the whole lot’s in the toilet except for – absurdly – last week’s perennial laggards, Materials and Energy… two sectors that are so out of step with the rest of the market I’m quietly surprised they’re still allowed to hang around.

Materials is up 0.38% and Energy’s up 0.33%. Wonders will never cease.

Hardest hit have been Real Estate (-1.89%), InfoTech (-1.49%) and Consumer Discretionary (-1.39%), with the heavyweight Financials also down by 1.26%.

Up in the Corporate Boxes this morning, there are 14 (count ‘em… 14!) billion-dollar-plus companies in the top 50 gainers today – which is ludicrously high. Normally there’s like 1 or maybe 3 on a big day.

BHP (ASX:BHP) has blurted out a 1.6% gain – which is quite a lot, given that it’s now just over $230 billion in market cap.

The big mover in the Large Caps, though, is Capricorn Metals (ASX:CMM), which is surging hard this morning, and is up nearly 13% after releasing a really, really positive set of results on Friday morning.

Investors are likely lining up behind Capricorn as something of a gold-coated safe haven – gold prices shot up 2% in the wake of the SVB debacle in the US – while the rest of the market quietly sobs in the shower, trying to wash the stink of Wall Street off and wondering why it’s so mean to us all the time.

 

NOT THE ASX

Obviously, the collapse of Silicon Valley Bank is going to be the dominant news driving Wall Street when it opens tonight, and at this point I’d like to encourage you all to assume the brace position because however this thing lands, it’s almost guaranteed that it’s going to be pretty bloody bumpy when it does.

Wall Street closed lower by a considerable margin on Friday, with the S&P 500 and Dow Jones tumbling 1.5% each, while Nasdaq finished 1.76% lower.

Earlybird Eddy reports that the US is also dealing with a February non-farm jobs print that blew past expectations once again. The US economy added 311,000 jobs in February vs forecasts of 225,000.

The US unemployment rate however edged up to 3.6%, and wage growth rose 4.6%, slower than expected.

In Japan, the Nikkei is down 1.75% this morning, despite news of a brand new fad sweeping the nation, thanks to a machining and engineering company in the town of Moka, Tochigi.

The company, Sano Kiko, is widely known for its precision-machined sink strainers (no, really…) – but has decided for some unfathomable reason to branch out into rapid restraint devices, design to instantly subdue someone and hold them on the ground, on the end of a long pole.

Precisely why you’d need to do that – if you weren’t either a cop, or a sex offender – is unclear, but what is certain is that these things are frighteningly effective, as this poor schmuck demonstrates.

 

 

For what it’s worth, that’s apparently the CEO of the company, proving the effectiveness of his new product while brandishing what looks like a black pudding in entirely the wrong direction. Genius.

On the plus side, he’s now got video evidence that he has suffered a gruesome whiplash injury at work, and will now be out on Compo for a month. Maybe two. We’ll see what his doctor says after some more scans.

Meanwhile, in Hong Kong, the Hang Seng has edged higher (I know, right?) – up 0.48% in early trade, while in Shangai things are flat, because everyone is all partied out following the joyous celebration of Xi Jinping becoming Emperor for Life again.

In Crypto, the SVB collapse is dominating the news there, overshadowing the collapse of crypto-friendly bank Silvergate (which itself is a whole other story) – but, crypto being crypto, the market has responded by rocking gently back and forth, counting all the things it the room it can see that are red.

Rob “I Collapsed Weeks Ago” Badman has all the details over at Mooners and Shakers, because he’s awesome and because that’s his job.

 

ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks for March 13 [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

Code Company Price % Volume Market Cap
EAX Energy Action Ltd 0.155 41% 16,717 $2,968,746
ADR Adherium Ltd 0.004 33% 120,000 $14,989,315
MGG Mogul Games Grp Ltd 0.002 33% 1,400,000 $4,895,162
MRD Mount Ridley Mines 0.004 33% 1,060,917 $23,354,649
VPR Volt Power Group 0.002 33% 655,333 $16,074,312
MOH Moho Resources 0.019 27% 648,163 $3,114,933
MHC Manhattan Corp Ltd 0.006 20% 159,800 $8,773,307
NEU Neuren Pharmaceuticals 9.04 18% 1,866,051 $968,457,735
CR9 Corellares 0.04 18% 848,273 $10,747,090
GFN Gefen Int 0.049 17% 88,000 $2,860,205
GTG Genetic Technologies 0.0035 17% 250,000 $34,624,974
AUT Auteco Minerals 0.046 15% 2,034,840 $92,513,452
HNR Hannans Ltd 0.0115 15% 604,268 $27,246,048
CMM Capricorn Metals 4.335 14% 1,581,637 $1,424,123,483
RLC Reedy Lagoon Corp. 0.008 14% 20,000 $3,967,037
TAS Tasman Resources Ltd 0.008 14% 987,091 $4,698,361
AKM Aspire Mining Ltd 0.059 13% 153,762 $26,397,123
AL3 Aml3D 0.079 13% 28,023 $16,081,106
FRX Flexiroam Limited 0.045 13% 354,307 $25,676,531
BUY Bounty Oil & Gas NL 0.009 13% 411,110 $10,964,008
LSR Lodestar Minerals 0.0045 13% 1,251,057 $6,953,749
XRG Xreality Group Ltd 0.046 12% 2,173 $17,382,693
GWR GWR Group Ltd 0.085 12% 294,810 $24,412,466
ORR Orecorp Ltd 0.38 12% 312,717 $135,659,170
SIO Simonds Grp Ltd 0.1 11% 25,368 $32,391,581
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Nominally topping the charts this morning is Energy Action (ASX:EAX), which has somehow climbed 41% on $2,300 worth of turnover and no news – but the volume is more than 4x the four-week average, so… Tadaaaa!, I guess.

Moho Resources (ASX:MOH) is up nearly 27% on news that it’s completed a drill program at its Burracoppin Project in WA, on the hunt for both REEs and gold.

Moho says that its found a soil gold anomalism coincident with elevated arsenic values and proximal to shearing and folding, which it believes could be related to sulphide mineralisation in the underlying bedrock.

And another Aussie pharma company is celebrating a huge win with the US FDA this morning, after Neuren Pharmaceuticals (ASX:NEU) received FDA approval of DAYBUE (trofinetide) for the treatment of Rett syndrome in adult and paediatric patients two years of age and older.

It’s big news, NEU’s price is up 17.6% as a result, and there’s a lot to this story that will take far, far too long to explain.

Luckily, Stockhead’s very own star reporter Nadine McGrath got the scoop on this story, so you can read all about it right here.

 

ASX SMALL CAP LOSERS

Here are the most-worst performing ASX small cap stocks for March 13 [intraday]:

Swipe or scroll to reveal full table. Click headings to sort:

Code Company Price % Volume Market Cap
AVW Avira Resources Ltd 0.002 -33% 747 $6,401,370
CCE Carnegie Cln Energy 0.001 -33% 6,634 $23,463,861
PRM Prominence Energy 0.001 -33% 400,000 $3,636,913
WOO Wooboard Tech Ltd 0.009 -25% 55,664 $2,759,458
FODDB The Food Revolution 0.085 -23% 43,747 $26,035,946
OSX Osteopore Limited 0.091 -21% 355,860 $14,252,514
WEC White Energy Company 0.12 -20% 23,875 $6,085,394
EMU EMU NL 0.002 -20% 747,250 $3,089,761
MTL Mantle Minerals Ltd 0.002 -20% 47,883 $13,364,013
VAL Valor Resources Ltd 0.004 -20% 616,323 $18,865,174
PYR Payright Limited 0.023 -18% 1,999 $5,865,402
AOA Ausmon Resorces 0.005 -17% 71,714 $5,815,736
CT1 Constellation Tech 0.005 -17% 68,448 $8,827,202
NAE New Age Exploration 0.005 -17% 1,099,619 $8,615,393
OAU Ora Gold Limited 0.0025 -17% 2,533 $11,810,775
PKO Peako Limited 0.01 -17% 3,731,329 $4,550,583
W2V Way2Vatltd 0.011 -15% 425,000 $2,861,975
BUR Burley Minerals 0.23 -15% 72,902 $16,581,876
BLG Bluglass Limited 0.064 -15% 9,857,675 $101,216,377
MM1 Midas Minerals 0.15 -14% 89,650 $9,998,059
ADV Ardiden Ltd 0.006 -14% 2,270,271 $18,818,347
AUH Austchina Holdings 0.006 -14% 3,234,142 $14,545,185
CAV Carnavale Resources 0.003 -14% 1,290,000 $9,567,431
CPT Cipherpoint Limited 0.006 -14% 1,128,164 $8,005,717
EFE Eastern Resources 0.012 -14% 16,496,842 $17,387,250
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