[Nemo]

collapse may lead to interest rate reductions, to keep other banks from failing. Which will lead to higher inflation. You know how the circle joins up.

What bank has your money. Remember, FDIC only covers 250K. But careful account strategies can cover a fair bit more.

Nemo

https://finance.yahoo.com/news/silicon-valley-bank-crisis-force-161835121.html

As Banks Topple, Regulators Face Reckoning for Week of Mayhem

On Monday, the head of the Federal Deposit Insurance Corp. warned a gathering of bankers in Washington about a $620 billion risk lurking in the US financial system.

www.bloomberg.com

Silicon Valley Bank failed. FDIC covers some of the money, but only up to $250,000.

Banks don't fail frequently. Silicon Valley Bank was the first since 2020. Since the bank is FDIC-insured many customers will gain access to deposits

www.usatoday.com

 

[Nemo]

Thoughts from another source. If I wern't some poor dude I would be concerned.

But don't worry, its just one small sector of the economy.

Nemo

Silicon Valley Bank failure raises fear of broader financial contagion

 

[gunsmoker]

As a fiscal conservative, I say "no" to a tacks payer bail-out that exceeds a quarter-million per account.

 

[NTA]

I thought after the mortgage / bank disaster 14 years ago they added stiff bank "health checks" that run every few months. Looks like they are not yet effective. Of course one of the requirements is to have lots of gov bonds, then they become less valuable as interest rates rise.

 

[Casual User]

Busy weekend for the Fed Signature Bank bit the dust. All depositors to be made whole. Stock holders, management SOL.

Joint Statement by Treasury, Federal Reserve, and FDIC

Washington, DC -- The following statement was released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Cha

www.federalreserve.gov

 

[NTA]

No worries, all banks safe now:

Fed Panics: Signature Bank Closed By Regulators; Fed, TSY, FDIC Announce Another Banking System Bailout | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero

www.zerohedge.com

 

[Craftsman]

Totally a coincidence that most of the depositors are donors to the Democrat party. Totally.

 

[Schweisshund]

I am hearing all about a "bank run" on social media. What is that? What is a bank run?

 

[Casual User]

from Josh Brown:

By the way, SVB’s failure is not a regulation story – they blew up with 10-year Treasurys on their books. It’s a story of what happens when the central bank blows a decade-long bubble in venture-backed startups culminating in the crypto-SPAC free-for-all orgy of 2021 – and then you try to reverse it all within a single calendar year with five hundred basis points of consecutive rate hikes. The biggest beneficiaries of zero-percent interest rates were tech founders and the bankers who loved them – Silicon Valley Bank as the epicenter of the whole thing. When rates began to rise and the IPO spigot began to close, the failure got underway. It took two years for the lack of deposits and burgeoning bond losses to weaken the bank – and then a single 24 hours in which $42 billion was withdrawn in the first-ever Twitter-inspired, mobile-app enabled digital bank run. During the Savings & Loan Crisis of the 1980’s, people had to physically show up to a branch to pull their deposits. Now you can do it by phone, from your bed, your bath or your beyond. This is some new shit nobody was ready for.

Top. - The Reformed Broker

I don't make market calls very often like this, but I am pretty confident in this one.

thereformedbroker.com

 

[Nemo]

What is a bank run?

Short answer, everyone running to the bank and withdrawing all their money. That leaves the bank with no money to pay their loans and salaries and such.

The bank is basically broke using your money to pay their bills and make money with. Many think banks are the biggest rip off ever designed by man.

Other think it the second, behind paper money.

Nemo

 

[seajay]

If you think this was a total surprise and no one saw it coming...

Silicon Valley Bank collapse: CEO cashed out millions while employees got bonuses

Silicon Valley Bank collapse: CEO cashed out millions while employees got bonuses

 

[Craftsman]

The first domino, Signature Bank in New York, has Barney Frank - of Frank-Dodd infamy, on its board. No surprise that one gets bailed out.

 

[atlsrt44]

I am hearing all about a "bank run" on social media. What is that? What is a bank run?

Very simple

 

[Craftsman]

Banks operate by borrowing money short term from depositors and loaning it back out long term to borrowers. They also "invest" in stocks, bonds, etc. with those funds, which can sort of look like long term lending as well. If every depositor asked for their money back at the same time, or even a medium-sized percentage, the bank will run out of cash. Since everything in all investment categories is down due to rising interest rates, all their investments were down as well. The FDIC only insures the first $250K in deposits, which is enough for most individuals, but doesn't cover very many businesses. For example, a company that pays $10/hour for full-time employees every two weeks will exhaust $250K after a little over 300 employees. Roku had something north of $450 million in SVB for comparison. Companies got wind the bank had a liquidity issue when the bank sold equity (stocks) and moved their money out ASAP, making the problem worse. Since we have apps and 24 hour banking, the depositors didn't have to wait until the bank opened its doors, it happened overnight at Internet speed. The FDIC had to issue the "we will cover everything" statement or else every business would have moved out of community banks into the handful of banks designated as systematically essential (too big to fail) that the government DOES guarantee will stay afloat. That would have pretty much ended every small and medium-sized bank in the country.

 

[Nemo]

Don't worry about the banks. Inflation won't hurt them as much as interests rates increases by the Federal Reserve. Your bank won't collapse but you're screwed on inflation.

Either way, BOHICA!

Nemo

https://www.washingtonpost.com/business/2023/03/13/federal-reserve-interest-bank/

 

[phantoms]

Bernie already on the record blaming Trump.

Bernie Sanders says Silicon Valley Bank's failure is the 'direct result' of a Trump-era bank regulation policy

Sanders said a Trump-era bill was to blame for the SVB bank run. The 2018 law rolled back bank regulations and eased rules on most mid-sized banks.

www.businessinsider.com

 

[Casual User]

Spokesmen for George Bailey have been unavailable for comment.

Here's a blast from the past 2007, Merle Hazard.

 

[cbrer]

All of this activity occurred under a blanket of decreased regulation. Brought about by our buddies in Congress, after careful lobbying by management of SVB. And codified by Trump's signature. Not that it is a red/blue issue. It is not.

Opinion | The GOP's latest 'woke' victim will have your head spinning

Blaming 'woke' ideas has become Republicans' go-to answer, no matter the question.

www.msnbc.com

 

[Nemo]

If you give MSNBC credibility. I do not.

Add the--

March 13, 2023, 7:24 PM EDT
By James Downie, MSNBC Opinion Editor

from cited link above and it get less credibility.

Nemo

 

[cbrer]

If you give MSNBC credibility. I do not.

Add the--



from cited link above and it get less credibility.

Nemo

Though opinion, the facts stated in the article stand on their own merits. And there are plenty of other cases of bank deregulation that have proven the main thrust. Politicians are in the pocket of industry.

Elimination of the Glass Steagall act comes to mind. https://www.investopedia.com/articles/03/071603.asp

As well as the S&L crisis in 1982 due to deregulation. https://www.investopedia.com/terms/g/garn-st-germain-depository-institutions-act.asp