Axios: Midsize banks plead for unlimited FDIC backstop for two years
A coalition of midsize U.S. banks is calling on the government to insure all deposits for the next two years, in the wake of Silicon Valley Bank's emergency rescue that insured all of the firm's deposits regardless of size.
Driving the news: The Mid-Size Bank Coalition of America sent a letter to regulators arguing that a temporary suspension of the FDIC's deposit insurance limit is necessary to ensure that smaller banks can navigate the current banking crisis, Bloomberg reported.
* "Doing so will immediately halt the exodus of deposits from smaller banks, stabilize the banking sector and greatly reduce chances of more bank failures," the letter said, according to Bloomberg.
* Tesla CEO Elon Musk also endorsed the idea in a Twitter post early Saturday, saying the move was needed to "stop bank runs."
Read more ....
WNU Editor: According to some reports an incredible 200 banks are now at risk .... Nearly 200 banks at risk for same fate as SVB: study (NYPost).
As to what do I expect next. The Biden administration has no choice. They will do everything in their power to make sure the banking system does not collapse. That is why I expect massive bailouts, a return to quantitative easing, and money printing. And while the banking system will be saved, high inflation is going to be the result for years to come.
25 comments:
Notice that all the news stories saying 200 banks are "at risk" do not provide a list of the 200 banks! Journalists (except for Seymore Hersh perhaps) are COWARDS. May they all rot in Hell! :-(
Money has to be a function of useful work performed and stored. PERIOD.
Economists might want to look at the physics definition of work. You can expend measurable energy and produce zero work.
Charity is okay and it is necessary if you want to live as a Christian, but nowhere does it say to go so far as to let others eat you out of house and home.
Biden, Obama, and the rest of them are fools playing whack-a-mole.
The Fed should have known which banks would fail based on financial transactions. The Fed should have known a year ago.
IRS would track all bank transactions over $600 under Biden plan; Businesses revolt
When banks buy bonds, they are worth more than $600. they also buy treasuries from the US government. So the government has a record. From those and other records they could estimate the exposure of banks based on deposits, binds and other financial instruments that are repo6ted.
* The US government wants to track individuals transaction under 600 but can't track banks?
* The government wants to track you mileage. Will probably know the roads you drive too.
* The government does know the roads that truckers drive and their mileage. They have to keep logs.
The Fed chairmen should go to the Speaker of the house, the president, and the head of the senate and tell them with charts what printing money will do in terms of inflation, stagflation, bank failures etc. They should do this for each budget.
I blame COVID spending solely on Democrats and RINOs, but mostly on Democrats. They saw or saw or created a crisis and they did not let it go to waste.
When econometrics software gets down to the household level, people are going to beat the fuck out of their Democrats relatives and ex friends.
Gay man, 42, is branded an 'ungrateful brat' after forcing his dad, 80, to leave GOP by threatening to DISOWN him and entire family if they continued to vote Republican
Would it be fair to ice your Democrat relatives and friends?
Obama told people to buttonhole Republican relatives during Thanksgiving.
5 Things To Tell Your Republican Relatives At Thanksgiving Dinner
How to shut down your Trump-supporting family member at Thanksgiving dinner - The Hill
So Democrats have been doing this for over a decade. It is time to return the favor.
Since 2008/2009 we've been wondering when the other shoe would drop. Well it is dropping. the US is still the reserve currency and that is the only reason we do not look like a full blown banana republic with the attendant hyper inflation.
You can have bank failures or massive inflation. Democrats have forced into this situation.
“As people are sitting around the Thanksgiving table talking about these issues — as they should and I’m sure they all will across the country — I hope that is a question that will be raised and asked by members around the table.” - Obummer
TRUMP DUMPED BANK REGULATION OF DODD--FRANK THAT PROTECTED BANKS. PROVE OTHERWISE
5 Rules For Enduring Your Racist, Republican Relatives On Thanksgiving
thgat is very rich coming form the party of Slavery, the KKK, Jim Crow and Jim Eagle 2.0.
11:32 I will talk to your neighbors about you. Would they like to know about what you say online and otherwise.
The banks will be saved, and average people will suffer the most under the blanket inflation tax as they watch what little money they have continue to devalue them into poverty.
Republican Sen. Mike Crapo, the lead author of a 2018 bank deregulation law that weakened key guardrails designed to prevent another financial crisis, insisted this week that there is "no need" to impose more strict rules following two of the largest bank collapses in U.S. history.
"There is no need for regulatory reform," said Crapo, who chaired the Senate Banking Committee when Congress passed the 2018 law despite vocal warnings from experts that it would destabilize the banking sector. Dozens of Democrats supported the measure.
SOCIALISM for the wealthy
11:32 / 11:38 has never once said what banks should have done or how they would have remained solvent.
Suppose SVB conducted a stress test or had actually hired a risk officer. the stress test tells them when the Fed raises rates, the bank will fail. so what do they do. They have to sell assets or issue more stock. They sell their bonds and they lose money because they would have to sell them below par. They have more liquidity temporarily, but now profits are down or there are loses and there is a bank run anyway.
11:32 has never said what would happen if the banks had to sell a massive amount of bonds sub par
Those other 200 banks ... most of them are not meeting the 50 billion threshold. So no stress test.
That so many are failing and are under the 50 billion thrwshold tells me this is due to the business environment or better said the fiscal/regulatory envirnment set by governement spending and laws.
Biden’s Bailout of SVB Saved China, Gavin Newsome, Buzzfeed, VOX and BLM
The tactics of a Russian troll farm
Is there a difference between a Russian troll and the resident village idiot.
Dozens of Democrats supported the measure.
So Vox had money in SVB. Journalists are suppose to dig into things. SO Vox did not have one person to dig into the SVB annual reports?
Would not matter. They would not know what happens to bonds when interest rates go up until after it happens.
You can go to Morningstar and get a partial list. It does give you an idea what to look for in the bank.
Thx Copley
The other thing. Inoculate yourself. Go to bank. Take out as much cash as you can afford and put in an envelope in a secure location. Make sure you have enough food in the house for two weeks. Use a cc to do this purchase. Fill up your cars and have 1 or two 5 gal gas cans full.
These are all very short term things you can do if and when the finance system decided it wants to have a hissy fit.
This will do a couple of things for you.
A. It will save you from a "bank haircut" like Cyprus.
B. You will be in a place where you do not have an immediate panic, like most people are going to have.
C. It will give you space/time to plan.
As stated , these are very short term solutions you can put in place today by walking out your door and enjoy the "normalcy" we now have.
Next week? Who knows?
Mid to long term solutions?
Continue to increase the above and think about what else you need and buy it.
small banks too small to need regulations. when they fail, too big to fail let gov bail out
Before Collapse of Silicon Valley Bank, the Fed Spotted Big Problems
Cant help, but think this is all by design. The DOJ coupled with big tech continue to eliminate any opportunity to write a dissenting opinion. They portray the biggest buffoon, and first ever dictator to ever sit in the oval office as some sort of super leader. No I think the darkest of time are yet in front of us.
Illiterate proves my point. Via SEC filings and other data the FED can spot a bank in trouble without a stress test.
The Fed spotted this and did nothing.
Also there is banking or financial software. The Risk Officer (RO) overseas 1 to 10 people to input the data and run the software at least quarterly. It would include what if analysis that you have in Excel, the the stress test requires and that most financial software has. The 1 to 10 people or team brief the RO. the RO when they are finished with a month long promotion of LGBT present the findings to the CFO, COO and CEO. The CEO then takes action such as calling in loans perhaps, issuing stock or other things.
If a company is worth over 50 billion dollars and does not have financial software to conduct its own internal stress tests, then why are they there and why are they being paid?
If they were not conducting internal stress test with cheap software relative to a 50 billion plus dollar company, why d they pay their bonuses weeks before the failure?
.
Functional illiterate at 1:47 proved my point
Silicon Valley Bank Was on Federal Reserve’s Radar For More Than a Year – Fed Reserve of San Francisco Issued Six Citations and Flagged Bank as Ticking Time Bomb
So from SEC filings and other data the Fed can stress test a bank from afar. The more discrete the data the less the variance in the Fed's estimate of an institution's financial shape.
Looking up the resume of Fed Chairman Powell he seems to have a really good cv. He has a sufficiently long history of working in banking. He has a law degree. IMO a law degree by itself is worthless for most people working outside of the law. But a law degree coupled with another field is awesome and probably necessary. Everyone should have enough legal training to be a paralegal, when they graduate high school IMO.
I do not see an economics degree in his CV but he has 16 plus years of banking experience.
Trump nominated him and he got his second term under Biden. So that is "bipartisan"
My questiotn is this. If the bank had 6 citations, how come the fed did not intervene last fall or at the end of summer?
How many citations do bank get on average (by bank size)?
"By July of 2022, Silicon Valley Bank was under a “full supervisory review” and “placed under a set of restrictions that prevented it from growing through acquisitions,” according to the New York Times."
So the Fed knew 7 or 8 months ago
At a dinner hosted by Peter Orszag, Obama’s former budget director, Wally Adeyemo, Obama’s Nigerian assistant treasury secretary and Biden’s deputy treasury secretary, chatted with Blair Effron, an influential Biden donor, serving on Biden’s Intelligence Advisory Board, who had been hired as an advisor by SVB to deal with its financial crisis. The outcome was inevitable.
The fix is in to preferentially protect liberal money.
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