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Can you get anything right?
I was wrong. Typed out 54 million instead of 54 billion.
Your desperation for a gotcha reeks of insecurity but it's at least understandable considering how often your posts are ignored by everyone here.
Can you get anything right?
Desperation, sure, keep trying.
No one gave a about your million/billion typo.
So back to my question, what is your conspiracy theory this time?
Yes desperation. You hump my leg all the time begging for attention and for the most part it's ignored.Desperation, sure, keep trying.
No one gave a about your million/billion typo.
So back to my question, what is your conspiracy theory this time?
I don't have a conspiracy and nothing about what I quoted even sniffed at any conspiracy.
Like I said earlier, there is no gotcha here no matter how desperate you are for one.
Your copy/paste Credit Suisse tweets were wrong, not your fault but you are just lashing out in shame for posting something you hoped was true.
No gotcha, just pointing out your posting MO.
Hope you learn something from this but I doubt it.
This is exactly what I'm talking about when saying you are desperate for a gotcha. I didn't post that about Credit Suisse hoping it was true. I posted it to contribute to the thread and it ended up not happening because of a 54 billion dollar bailout.Your copy/paste Credit Suisse tweets were wrong, not your fault but you are just lashing out in shame for posting something you hoped was true.
No gotcha, just pointing out your posting MO.
Hope you learn something from this but I doubt it.
You are desperately trying to turn this into something it never was in hopes of a gotcha.
Hope you learn something from this but I doubt it
Peter Theil reported had $50 million of his own money in SVB when he (allegedly) started the bank run. No haircut, though.
https://www.businessinsider.com/pete...-report-2023-3
He was going to make a lot more from shorting the bank stock than any haircut might take.
Possible moral hazard with uncapped deposits: rich folks plowing their money into risky/badly run banks offering high interest rates.
It wasn't just you that was wrong, the thing you posted was wrong as well. Deposits in Switzerland are made in Swiss Francs, not US dollars. The Swiss Franc has roughly 1:1 exchange parity with the US dollar.
Because they are in Swiss Francs, there's no scenario where the SNB or Switzerland proper couldn't bail the bank out if they choose to do so.
Already said the guy I posted was wrong as well.
The relatively comic thing about this is that the SNB has seen a massive influx of deposits from people moving their money from Credit Suisse to SNB.
Credit Suisse has been mismanaged for over a year now, and whoever the regulators are there need to put the clamps on it.
thats where you need regulators to step in tbh. i dont think putting consumers in the position of being regulators is really a solution. and the capped deposit insurance is in large part what led to the run in the first place. 90+% of SVB's deposits werent insured, so everybody freaked out for that reason realizing how vulnerable they were, and the run was a self fulfilling prophecy. much like the covid toilet paper shortage
16 years
They've been reducing their net debt from $77b in 2019 to $20b at the end of 2021. By the end of 2022 that debt ballooned to $100b while their assets shrunk in value.
Bank Term Funding Program go brrr.
Fortunately for us all, there's zero moral hazard associated with propping up banks and the stock market.
Last edited by Winehole23; 03-17-2023 at 02:44 AM.
Huh, there was already a way for mega-depositors to protect up to $150M. Wonder why they didn't use it.
https://americandeposits.com/what-is...ed-cash-sweep/
Regional banks coddled by a complacent Fed
https://prospect.org/economy/2023-03...ailures-banks/According to three sources with knowledge of the situation, Federal Reserve chair Jerome Powell was reluctant to sign off on anything that weekend that included references to the Fed’s role in supervision, regulation, or accountability, and fought efforts to do so.
The debate held up the final announcement for an indeterminate period of time, according to the sources. While the Fed did not allow any reference to regulation or supervision in the joint statement, that the central bank also tried to influence the presidential statement is novel, considering that they were not party to it.
The New York Times earlier on Thursday reported about the joint statement but not the presidential statement.
A Federal Reserve spokesperson declined to comment.
Powell’s hesitancy suggests that he wanted to keep a lid on the central bank having to field questions about accountability. “It should have been the opposite,” said Sheila Bair, former FDIC chair, when informed of Powell’s reticence. “They should have been emphasizing that there were unusual gaps in oversight risk management.”
The Federal Reserve was the primary bank examiner for Silicon Valley Bank and Signature Bank, which also failed over the weekend. It did not raise flags regarding the shaky condition of either ins ution.
In addition, the Fed went above even the congressionally mandated deregulatory actions by establishing rules in 2019 that weakened oversight of large regional banks, like the two that failed. Former Fed attorney Jeremy Kress called the central bank’s actions “discretionary deregulation.” At the time, Fed governor Lael Brainard, now Biden’s National Economic Council director, warned that the changes would “increase risk to financial stability and the taxpayer.”
Consequences
the FDIC clearly thinks it's part of the solution; never mind that though, I'm sure you know better.
Pucker factor
The SVB failure and the FDIC decision to make uninsured mega-depositors whole may have downsides for international cooperation between central banks. Tearing up rules we forced on others isn't a good look.
https://www.nakedcapitalism.com/2023...entration.htmlBefore you say, “Well, even if there was time to figure out how to backstop payrolls, which there wasn’t, we had to go whole hag because contagion,” that is not a satisfactory answer. Because nearly all banks have sizable Treasury and/or agency holdings (First Republic was unusual), the new Fed interventions come very close to being a full backstop of uninsured deposits. That means vastly more subsidized gambling. There should be a great increase in supervision and regulation to try to prevent more sudden meltdowns, which one would expect to become more frequent otherwise due to even greater government backstopping:
As Georgetown law professor Adam Levitin put it:
….. the Bank Term Funding Program bears some consideration. No one in the private market would lend against securities at face, rather than at market. But that’s what the Fed’s doing in order to enable banks that have held-to-maturity securities avoid loss realization. The Bank Term Funding Program is a lifeline for banks that failed at banking 101—managing interest rate risk. The whole nature of banking is that it involves balancing long-term assets and short-term liabilities. Firms that can’t do that well probably shouldn’t be in the banking business.Moreover, European banking regulators, regularly been criticized for last minute, kick-the-can interventions, are finding out how the US rules-based order of “we get to rewrite the rules when we feel like it” works in their arena. From the Financial Times:
Europe’s financial regulators are furious at the handling of the Silicon Valley Bank collapse, privately accusing US authorities of tearing up a rule book for failed banks that they had helped to write.Mind you, the Europeans are not being hypocrites. They forced the unsecured depositors at Cyprus bank to take 47.5% haircuts in its banking crisis.
While the disapproval has yet to be conveyed in a formal setting, some of the region’s top policymakers are seething over the decision to cover all depositors at SVB, fearing it will undermine a globally agreed regime.
One senior eurozone official described their shock at the “total and utter incompetence” of US authorities, particularly after a decade and a half of “long and boring meetings” with Americans advocating an end to bailouts.
Europe’s supervisors are particularly irate at the US decision to break with its own standard of guaranteeing only the first $250,000 of deposits by invoking a “systemic risk exception” — despite claiming the California-based lender was too small to face rules aimed at preventing a rerun of the 2008 global financial crisis.
Admittedly those were banks in a country seen as a money laundering haven, but it had a lot of British retirees banking there too. The EU also tried to get banks to use bail-in structures like co/cos bonds. The US was skeptical of them and as we predicted, they had perverse effects. But the point is the EU has made a much more serious attempt at renouncing bailouts than we have, even if they have yet to find the secret sauce.
And they are not shy about calling out who bears the cost. Again from the Financial Times:
The US has claimed SVB’s failure will not hit taxpayers because other banks will cover the cost of bailing out uninsured depositors — over and above what can be recouped from the lender’s assets.
However, a European regulator said that claim was a “joke”, as US banks were likely to pass the cost on to their customers. “At the end of the day, this is a bailout paid for by the ordinary people and it’s a bailout of the rich venture capitalists which is really wrong,” he said.
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