Whatever, dude. Trump was an accomplished businessman before he decided to become president. He knows banking. He knows the system. He would never have let this happen. Biden just sold us out to the liberals and the Chinese. It's all about money, power and ego with Biden and the libs.
LOLOLOL keep it up. I’m upping the rating to 9/10.
SVB Financial Group Inc's shutdown and takeover by banking regulators on Friday can be traced to the U.S. Federal Reserve raising interest rates and souring the risk appetite of investors.
For everyone giving the Fed a hard time about the covering of the Deposit base for FDIC you are looking very simply at the equation.
They didn't do it per say to save the deposit base for SIVB (in reality they may have let that go), but the deposit rush thereafter which took out SBNY created a different story
No bank (no matter how regulated) can withstand a full on deposit run. It's chaos and the danger of hedge funds and social media can do a lot of damage
If the Fed didn't step in there was a proper risk that their could have been another 5-6 banks under by Monday afternoon as everyone smaller banks flees towards JPM. It's even happening WITH the protection they have announced in place
They could/should have handled it better and done a better job of trying to stop the panic, but to think the solution was tailor made for SIVB is very level 1 thinking.
Probably worth noting I think the Fed has been useless for a while and as mentioned didn't do a great job here but had very little other good choices.
Biden came out and said what he said to stem the contagion you mention. Still doesn't help a few root causes:
1. The worthless paper SVB had on their books were Federal Treasuries which are generally termed as "risk free". Spoiler: they aren't. Because...
2. Fed raised rates too quickly, causing the Bonds to become worthless. Because...
3. Fed/Biden had the blinders on regarding Covid inflation. They reacted too slowly and were in complete denial. Using words like "transitive" or "temporary"
So again, Fed has raised rates through open market operations, decreasing M1 supply. Now banks own the worthless paper and can't cover demand deposit accts due to high rates, decreased money supply and bonds they can't liquidate because they aren't worth anything.
Lot of this is the fault of the current administration.
The bonds aren’t worthless, moron. They are heavily discounted in the current interest rate environment but they will mature at par.
It doesn’t help that the vast majority of the depositors were over the $250,000 FDIC limit. They also all know each other. No wonder they ran for the hills.
This is the part I find most incredible. How lazy/dumb were these startup depositors who exceeded the FDIC limits. I've worked in the finance department of several organizations and being cognizant of FDIC limits is the most basic principle to adhere to.
250k is not even enough make payroll for a business. That is why.
Biden came out and said what he said to stem the contagion you mention. Still doesn't help a few root causes:
1. The worthless paper SVB had on their books were Federal Treasuries which are generally termed as "risk free". Spoiler: they aren't. Because...
2. Fed raised rates too quickly, causing the Bonds to become worthless. Because...
3. Fed/Biden had the blinders on regarding Covid inflation. They reacted too slowly and were in complete denial. Using words like "transitive" or "temporary"
So again, Fed has raised rates through open market operations, decreasing M1 supply. Now banks own the worthless paper and can't cover demand deposit accts due to high rates, decreased money supply and bonds they can't liquidate because they aren't worth anything.
Lot of this is the fault of the current administration.
The bonds aren’t worthless, moron. They are heavily discounted in the current interest rate environment but they will mature at par.
Worthless is relative. Worthless to the point where they were insufficiently hedged to provide depositors their demand acct balances. There are liquidity models to chase out these scenarios.
They didn't do that. They were to busy writing up DEI presentations.
SVB gave play money to idiotic startups that had no chance of success. I hope the failure of SVB puts the final nail in the coffin of the childish mentality most people attempting to build a new business have. 90% of them are doomed. That's 9 out of 10 who are wasting the money, resources and time of everyone involved. Where did the term "burn rate" originate ? That should tell you something.
Startup Failure Statistics 9 out of 10 startups fail (source: Startup Genome - the 2019 report claims 11 out of 12 fail). 7.5 out of 10 venture-backed startups fail (source: Shikhar Ghosh). 2 out of 10 new businesses fail in the first year of operations (source: Bureau of Labor). Only 1% of startups become unicorn firms like Uber, Airbnb, Slack, Stripe, and Docker (source: CB Insights). The success percentage for first-time founders is 18% (source: Exploding Topics).
I'm old enough to remember when for years anything that went wrong in Obama's administration was George Bush's fault too. Now in Obama's 3rd term, they've just switched it to blame Trump. Amazing how people like yourself seem to hold your programmed political beliefs as a religious experience, willing to say anything no matter how stupid to stand-up for your religion.
Former Rep. Barney Frank (D-MA), who famously co-authored the 2010 Dodd-Frank financial reform law in response to the 2008 financial crisis, served as a director of Signature Bank, which failed Sunday.
I'm old enough to remember when for years anything that went wrong in Obama's administration was George Bush's fault too. Now in Obama's 3rd term, they've just switched it to blame Trump. Amazing how people like yourself seem to hold your programmed political beliefs as a religious experience, willing to say anything no matter how stupid to stand-up for your religion.
FDIC covering any amount, not just up to $250,000 is a idiotic move by the incompetent Yellin and just sets the stage for all subsequent losses greater than the agreed upon limit.
Terrible precedent; terrible President.
They kind of had to.
What would you do if you ran a biz and were scared of your bank running into liquidity issues? Spread the money out over multiple banks, each balance not exceeding $250k. Just adds additional administrational work on your side, the result is the same.
I refer you to the Chappelle SNL monologue where he talks about how the system is rigged, Trump told people it was rigged.
It's all the same people, neither R nor D is more corrupt than the other.
Whether you think you're Robin Hood (Dems) or just a hood that's robbin (GOP unrestrained markets!), either way the regular people get taken and you walk away unscathed.
I refer you to the Chappelle SNL monologue where he talks about how the system is rigged, Trump told people it was rigged.
It's all the same people, neither R nor D is more corrupt than the other.
Whether you think you're Robin Hood (Dems) or just a hood that's robbin (GOP unrestrained markets!), either way the regular people get taken and you walk away unscathed.
Except you have no job and your shares went from worth millions to being worth absolutely zero. other than that, unscathed, yes. Korrekt.
All thanks to Biden and his woke banking policies, now even our banking system is failing just like our infrastructure is failing under Biden. Trains crash every day, but Dems don't care. All they care about is ruining more banks.
Weird how you guys don’t see the correlation between every company reporting “record profits” every quarter and rising inflation and bank failure.
All thanks to Biden and his woke banking policies, now even our banking system is failing just like our infrastructure is failing under Biden. Trains crash every day, but Dems don't care. All they care about is ruining more banks.
You do realize Trump lifted regulations on both those industries which is absolutely why these things are happening. did i miss the /s or are you just so far up you own ass youre too dumb to have actually paid any attention to Trumps actual policies and only listened when he said he was owning the libs
If only there was someway to go back to 2017 and read what was printed above that huge signature from the orangeman
I wonder how widespread the fallout will be. It’s likely high interest rates will “expose” more companies in the coming months.
How many more "Sh^t Shows" is the Biden administration going to create AND then blame it on "The previous administration"? Seriously!, where does it stop? It seems that everyday there's a new problem. There is absolutely NO leadership to speak of.
I wonder how widespread the fallout will be. It’s likely high interest rates will “expose” more companies in the coming months.
How many more "Sh^t Shows" is the Biden administration going to create AND then blame it on "The previous administration"? Seriously!, where does it stop? It seems that everyday there's a new problem. There is absolutely NO leadership to speak of.
In addition to deregulation of the banking industry, it's weird how you guys don’t see the correlation between every company reporting “record profits” every quarter and rising inflation and bank failure.
If your sh!tty bank cant function in a market where interest rates are historically average because you backed a bunch of sh!tty startups - then you get what you deserve.
Shows the daily level of the federal funds rate back to 1954. The fed funds rate is the interest rate at which depository institutions (banks and credit unions) lend reserve balances to other depository institutions overnight...
Are there legal ramifications to this FDIC all deposits stance? If I was a bank forced to pay insurance to cover up to a certain amount for both me and my competitors and then my competitor failed but got more than the coverage I would be livid. I pay for a certain level of protection but this specific guy gets more? That's BS. Can a bank sue the FDIC?
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