DL Open Thread Monday March 13 2023
I just knew SVB gamblers were going to made whole. (Heck of a job, Coonsie.)
Privatized Gains & Socialized Losses
Washington, DC — The following statement was released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg:
Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.
After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.
We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.
Counterpoint:
Matthew C. Klein
@M_C_Klein
“We aren’t using taxpayer money to do a bailout, we are just using the ESF and also having the Fed pretend that banks haven’t lost money on their bond portfolios and we are going to charge depositors at banks that didn’t fail to make depositors whole at banks that did”
One More:
I didn’t see any of these movies
Everything Everywhere All at Once’ wins seven Oscars, including best picture and acting nods for Michelle Yeoh, Ke Huy Quan and Jamie Lee Curtis. Brendan Fraser was named best actor for ‘The Whale’ plus ‘’Naatu, Naatu’ RRR’ wins best original song plus host Jimmy Kimmel’s best jokes – here’s the biggest moments at the 2022 Emmy Awards!
Deregulation had zip to do with this failure. You commies ever hear of liquidity…
Deep thoughts. I wonder why liquidity ratios are something that regulators pay attention to?
Thanks.
Atrios points out that the Fed has been using “Oh no people will lose their jobs if we don’t do this” as an excuse for the bailout and yet, the fed has been operating with an explicit “throw people out of their jobs to save the economy” agenda since Biden took office.
Don’t fool yourself, by hook or by crook we will all pay for yet another failed bank as the perpetrators walk away fat and happy. I expect more banks to fail, even as political memory of 2008 conveniently fade away.
Did you say ‘yet another failed bank’?:
https://www.reuters.com/business/finance/new-york-state-regulators-close-signature-bank-2023-03-12/
Lent to the Trumps all the time until Jan. 6. Big crypto lenders.
Another bank in trouble:
https://www.cnn.com/2023/03/13/investing/first-republic-bank/index.html
While Rethugs try to tie this to ‘wokeness’ (no, really), Elizabeth Warren states the obvious:
“No one should be mistaken about what unfolded over the past few days in the U.S. banking system: These recent bank failures are the direct result of leaders in Washington weakening the financial rules.
In the aftermath of the 2008 financial crisis, Congress passed the Dodd-Frank Act to protect consumers and ensure that big banks could never again take down the economy and destroy millions of lives. Wall Street chief executives and their armies of lawyers and lobbyists hated this law. They spent millions trying to defeat it, and, when they lost, spent millions more trying to weaken it.”
FWIW ($1,172,066, to be precise) Carper received by far his most campaign $$’s from the Finance, Insurance, & Real Estate Sector:
https://www.opensecrets.org/members-of-congress/tom-carper/industries?cid=N00012508&cycle=2022
By my count, the amount of that which was spent on behalf of the public is roughly:
$0.00.
Chris Coons has similarly pocketed lucre from the banking and securities sector. Between 2015 and 2020, he received $706,038 from that sector, plus another $313,140 from the real estate sector:
https://www.opensecrets.org/members-of-congress/chris-coons/summary?cid=N00031820&cycle=2020
That’s almost exactly the same amount that Carper received, and Coons did it in only five years as opposed to Carper’s seven.
Both Carper and Coons voted to significantly weaken Dodd/Frank.
Cause, meet effect.
Adding some context here.
Unlike what the fed did back in 2008, thankfully bank shareholders will NOT be made whole (let them sue the owners who paid out employee bonuses mere hours before the bank was shut down.)
Also read an article pointing out that deposits haven’t necessarily completely vanished; most are tied up in assets that can’t be instantly liquidated to generate the needed cash and will be recovered over time.
I think the Fed knows this and thus the bailout of depositors becomes more of a temporary measure so that these startup companies will have the needed cash to support their day-to-day operations (payroll, etc.)
Same article pointed out that private equity firms were reaching out to large depositors offering to buy their accounts for 60-80 cents on the dollar, so you know these greedy vultures wouldn’t make offers like this unless they felt the money was recoverable as well – they just have the luxury of time the startups don’t.
Giant blob of woke seaweed headed for Florida
On top of red tide, rising seas, and general fascism, now this:
I don’t think Coons and Carper voted to help Trump vandalize Dodd-Frank for the Money. I’m sure they voted that way because they consider banks to be their constituents, and CEOs to be their peers.
You and me… were just ants that scurry around the feet of giants.
Elizabeth Warren on SVB: I told you so.
I watched every Oscar nominee this year and lots of them were great! The Best Picture winner is sensational. It somehow mixes family drama, romantic sentimentality, kung fu, and multi-universal existentialism seamlessly.
It occurs to me that if the Fed is successful in their hell-bent scheme to throw people out of work to save the economy, the rest of the banks may follow SVB as newly unemployed people default on their mortgages and car loans.
For the record…. “I just knew SVB gamblers were going to made whole” is factually wrong. SVB depositors will be made whole. There is difference….
Regarding comments about Coons…they are factually correct.
The depositors are gamblers too, whatever you think. Any tech startup is a gamble.
If an affluent, financially sophisticated depositor exceeds FDIC limits (a quarter million!) they are taking a risk (gambling). These are high income folks making deposits as collateral for start-up and tech venture loans.
The wealthy actually have a safety net. The poor are denied medical insurance and/or killed by police.
Stop gaslighting in the comments! Lol.
The venture capitalists are the gamblers, and many of them made depositing their ventures’ capital in this particular bank a condition of the loans. So gambling all around.
I love the pedantic definitional arg the most! It’s not “factually correct”. Lol. Zero context, literally zero understanding of how anything works. Just centrist dipshit vibes. All to suck off Chrissy Coons anonymously on here. That’s awesome dude.
BTW… where all my LIBERTARIANS at? Haha
I have no problem depositors getting relief up to $250,000.