Moderators: richierich, ua900, PanAm_DC10, hOMSaR
Bricktop wrote:The mess at SVB has been well expanded on above. But where was the Federal Reserve in watching this, especially San Francisco? The typical pathetic partisan sniping on this only obscures the fact that once again, the Man is sticking it to the taxpayers. Again. Anything over the $250K FDIC amount is a bailout.
DIRECTFLT wrote:Bricktop wrote:The mess at SVB has been well expanded on above. But where was the Federal Reserve in watching this, especially San Francisco? The typical pathetic partisan sniping on this only obscures the fact that once again, the Man is sticking it to the taxpayers. Again. Anything over the $250K FDIC amount is a bailout.
I believe that a senior officer of SVB was on the San Francisco Fed Board. So you could say a fox was guarding the hen house...
Aaron747 wrote:DIRECTFLT wrote:Bricktop wrote:The mess at SVB has been well expanded on above. But where was the Federal Reserve in watching this, especially San Francisco? The typical pathetic partisan sniping on this only obscures the fact that once again, the Man is sticking it to the taxpayers. Again. Anything over the $250K FDIC amount is a bailout.
I believe that a senior officer of SVB was on the San Francisco Fed Board. So you could say a fox was guarding the hen house...
All of finance is fox and hen house. SEC officials in NYC routinely lunch with folks at GS - these people all went to school/previously worked together.
davidjohnson6 wrote:I think SVB is going to be a sideshow.... I'm getting distinctly concerned about the health of Credit Suisse who are very much in the too-big-to-fail category. Think Bear Stearns compared to Lehman Brothers in 2008
GalaxyFlyer wrote:Aesma wrote:GalaxyFlyer wrote:“Sketchy assets” are now US Treasuries and backed MBS bonds.
Doesn't your Republican party argue right now that the US should stop paying, including US debt holders ? You know, default on these Treasuries ?
That’s not exactly true. They, as has the Democrats, holding the debt ceiling hostage. The USG can, and will, make their debt payments. Without borrowing capacity, that could force the Treasury to prioritize other obligations for payment. The Treasury has plenty of cash flow to make monthly debt service. Default is not making contractual debt payments, not paying salary or SS or an invoice isn’t a debt.
MaverickM11 wrote:GalaxyFlyer wrote:Aesma wrote:
Doesn't your Republican party argue right now that the US should stop paying, including US debt holders ? You know, default on these Treasuries ?
That’s not exactly true. They, as has the Democrats, holding the debt ceiling hostage. The USG can, and will, make their debt payments. Without borrowing capacity, that could force the Treasury to prioritize other obligations for payment. The Treasury has plenty of cash flow to make monthly debt service. Default is not making contractual debt payments, not paying salary or SS or an invoice isn’t a debt.
When have the Democrats held the debt ceiling hostage?
GalaxyFlyer wrote:MaverickM11 wrote:GalaxyFlyer wrote:
That’s not exactly true. They, as has the Democrats, holding the debt ceiling hostage. The USG can, and will, make their debt payments. Without borrowing capacity, that could force the Treasury to prioritize other obligations for payment. The Treasury has plenty of cash flow to make monthly debt service. Default is not making contractual debt payments, not paying salary or SS or an invoice isn’t a debt.
When have the Democrats held the debt ceiling hostage?
They haven’t held it hostage, but if they followed the process they’d pass the appropriations bills, stop the spending and not have exceed the debt limits. It takes two to tango unless, of course, you’d rather have a single party ruling the Federal government.
bennett123 wrote:So if the Democrats accept the priorities of the Republicans everything will be OK.
Aesma wrote:Yeah about Credit Suisse that's not great and at least in France authorities are appearing a bit pissed that the Swiss Central Bank is doing nothing.
Bitcoin is liking this development, though.
edit : I see in the last 2 hours the Swiss Central Bank has pledged support to CS.
GalaxyFlyer wrote:MaverickM11 wrote:GalaxyFlyer wrote:
That’s not exactly true. They, as has the Democrats, holding the debt ceiling hostage. The USG can, and will, make their debt payments. Without borrowing capacity, that could force the Treasury to prioritize other obligations for payment. The Treasury has plenty of cash flow to make monthly debt service. Default is not making contractual debt payments, not paying salary or SS or an invoice isn’t a debt.
When have the Democrats held the debt ceiling hostage?
They haven’t held it hostage, but if they followed the process they’d pass the appropriations bills, stop the spending and not have exceed the debt limits. It takes two to tango unless, of course, you’d rather have a single party ruling the Federal government.
DIRECTFLT wrote:The "Inflation is Transitory" Secretary (and former Fed Chair) will be testifying at a Senate Hearing today.... (Popcorn smiley)
https://www.youtube.com/watch?v=CX6O--sk48A
DIRECTFLT wrote:The "Inflation is Transitory" Secretary (and former Fed Chair) will be testifying at a Senate Hearing today.... (Popcorn smiley)
https://www.youtube.com/watch?v=CX6O--sk48A
bluecrew wrote:Okay, well that's good, because she did a fine job as Fed Chair, and no notable collapses happened on her watch. Also, inflation didn't kill this bank, poor risk management did.
It could have happened at any time, anywhere. Seems like a shocker, but when the economy takes a hit, financial institutions tend to be stress-tested, because they live in the arbitrary nature of the economy. Interest rates rise and fall - being hock to so many treasury bonds that a shift in the treasury rate causes a bank run is profoundly abnormal.
So, leave her alone, unless your idea of regulation is that the Fed Chair or Treasury Secretary is supposed to have access to all of the books for all of the banks and audit them. In which case, you can just be honest, you want to nationalize sectors of the economy. I can't fathom how she was supposed to see this coming.
DIRECTFLT wrote:bluecrew wrote:Okay, well that's good, because she did a fine job as Fed Chair, and no notable collapses happened on her watch. Also, inflation didn't kill this bank, poor risk management did.
It could have happened at any time, anywhere. Seems like a shocker, but when the economy takes a hit, financial institutions tend to be stress-tested, because they live in the arbitrary nature of the economy. Interest rates rise and fall - being hock to so many treasury bonds that a shift in the treasury rate causes a bank run is profoundly abnormal.
So, leave her alone, unless your idea of regulation is that the Fed Chair or Treasury Secretary is supposed to have access to all of the books for all of the banks and audit them. In which case, you can just be honest, you want to nationalize sectors of the economy. I can't fathom how she was supposed to see this coming.
It was the Fed's raising interest rates, in response to the "transitory inflation" that led to the SVB troubles.
MaverickM11 wrote:DIRECTFLT wrote:bluecrew wrote:Okay, well that's good, because she did a fine job as Fed Chair, and no notable collapses happened on her watch. Also, inflation didn't kill this bank, poor risk management did.
It could have happened at any time, anywhere. Seems like a shocker, but when the economy takes a hit, financial institutions tend to be stress-tested, because they live in the arbitrary nature of the economy. Interest rates rise and fall - being hock to so many treasury bonds that a shift in the treasury rate causes a bank run is profoundly abnormal.
So, leave her alone, unless your idea of regulation is that the Fed Chair or Treasury Secretary is supposed to have access to all of the books for all of the banks and audit them. In which case, you can just be honest, you want to nationalize sectors of the economy. I can't fathom how she was supposed to see this coming.
It was the Fed's raising interest rates, in response to the "transitory inflation" that led to the SVB troubles.
How did 99.999% of the other banks avoid SVB's troubles?
GDB wrote:An article that lays down how this was allowed to happen, less the usual stale, reheated arguments that fly in the face of 2008, even 1929, it seems the gap between learning lessons is shorter and the malign influence of these chancers on Capitol Hill too great due to their paid poodles.
https://www.theguardian.com/commentisfr ... on-opinion
DIRECTFLT wrote:Can that then be viewed as insider trading and prosecuted?https://abcnews.go.com/Business/svb-execs-sold-millions-company-stock-lead-collapse/story?id=97937058
In the days following SVB CEO Becker's sale of millions of dollars in his SVB shares and before the bank's collapse, the then-CEO appeared confident during remarks to an audience of investors, Wall Street analysts and technology executives attending a technology conference in San Francisco's Palace Hotel, according to a copy of his remarks obtained by ABC News.
One day after Becker's reported remarks, SVB announced a $1.8 billion loss on the sale of securities, including Treasury and mortgage bonds which had lost significant value over the previous year due to an aggressive series of interest rate hikes at the Federal Reserve. The bank laid out plans to raise more than $2 billion in an effort to shore up its balance sheet.
According to the New York Times, the week before Becker's confident projection at the tech conference – and then the bank's ultimate collapse – the rating agency Moody's had called to tell Becker "the banks bonds were in danger of being downgraded to junk." That would mean the call came around the same time Becker sold the over $3.5 million of his SVB common stock on Feb 27.
Aesma wrote:Yes probably. But insider trading gets you nothing in the US, even when politicians do it.
GalaxyFlyer wrote:davidjohnson6 wrote:I think SVB is going to be a sideshow.... I'm getting distinctly concerned about the health of Credit Suisse who are very much in the too-big-to-fail category. Think Bear Stearns compared to Lehman Brothers in 2008
Yup, the markets are not happy this morning. CS is in deep trouble.
DIRECTFLT wrote:Thanks...that article was well written.
wingman wrote:DIRECTFLT wrote:Thanks...that article was well written.
It's well written and completely contradicts your earlier comments/insinuations that "Yellen" or "The Fed" caused this to happen to SVB. You should acknowledge that because otherwise the stance is a very real part of the problem and the reason why the most basic of banking history lessons is never quite learned. Inflation and interest rates are most definitely "transitory", meaning they go up and down over time as proveable as gravity itself. When banks claim they know perfectly well how to self-regulate and no longer need the government to watch over them to ensure it is so, that's when they inevitably stick their heads up their asses and voila, the next banking crisis unfolds. Let's repeat the lesson here in full caps..BANKS DO NOT KNOW HOW TO SELF-REGULATE. THEY NEED GOVERNMENT REGULATION IN ORDER TO PREVENT CRANIAL EXPLORATION OF THE COLON.
wingman wrote:DIRECTFLT wrote:Thanks...that article was well written.
It's well written and completely contradicts your earlier comments/insinuations that "Yellen" or "The Fed" caused this to happen to SVB. You should acknowledge that because otherwise the stance is a very real part of the problem and the reason why the most basic of banking history lessons is never quite learned. Inflation and interest rates are most definitely "transitory", meaning they go up and down over time as proveable as gravity itself. When banks claim they know perfectly well how to self-regulate and no longer need the government to watch over them to ensure it is so, that's when they inevitably stick their heads up their asses and voila, the next banking crisis unfolds. Let's repeat the lesson here in full caps..BANKS DO NOT KNOW HOW TO SELF-REGULATE. THEY NEED GOVERNMENT REGULATION IN ORDER TO PREVENT CRANIAL EXPLORATION OF THE COLON.
TangoandCash wrote:GalaxyFlyer wrote:
And, they’re heavily regulated, so how’s that working out. It’d be better to let a few fail, the remains bought up to serve as a warning to all. Like many financial businesses, bring back partnerships where the principals with unlimited personal liability and will be well and truly wiped out, on the street. They’d exercise a lot more caution, if it was literally their money on the line.
One of SVB’s officers came from Lehman who thought that was a good idea.[/quote
"Heavily regulated" by our own MBA school classmates, golfing buddies, fellow country club members, and former/future work colleagues. The phrase "fox guarding the henhouse" comes distinctly to mind.
I'm with GalaxyFlyer, let a few banks fail, put some partner money on the line, and quit bailing them out!
TangoandCash wrote:GalaxyFlyer wrote:
And, they’re heavily regulated, so how’s that working out. It’d be better to let a few fail, the remains bought up to serve as a warning to all. Like many financial businesses, bring back partnerships where the principals with unlimited personal liability and will be well and truly wiped out, on the street. They’d exercise a lot more caution, if it was literally their money on the line.
One of SVB’s officers came from Lehman who thought that was a good idea.[/quote
"Heavily regulated" by our own MBA school classmates, golfing buddies, fellow country club members, and former/future work colleagues. The phrase "fox guarding the henhouse" comes distinctly to mind.
I'm with GalaxyFlyer, let a few banks fail, put some partner money on the line, and quit bailing them out!
GalaxyFlyer wrote:wingman wrote:DIRECTFLT wrote:Thanks...that article was well written.
It's well written and completely contradicts your earlier comments/insinuations that "Yellen" or "The Fed" caused this to happen to SVB. You should acknowledge that because otherwise the stance is a very real part of the problem and the reason why the most basic of banking history lessons is never quite learned. Inflation and interest rates are most definitely "transitory", meaning they go up and down over time as proveable as gravity itself. When banks claim they know perfectly well how to self-regulate and no longer need the government to watch over them to ensure it is so, that's when they inevitably stick their heads up their asses and voila, the next banking crisis unfolds. Let's repeat the lesson here in full caps..BANKS DO NOT KNOW HOW TO SELF-REGULATE. THEY NEED GOVERNMENT REGULATION IN ORDER TO PREVENT CRANIAL EXPLORATION OF THE COLON.
And, they’re heavily regulated, so how’s that working out. It’d be better to let a few fail, the remains bought up to serve as a warning to all. Like many financial businesses, bring back partnerships where the principals with unlimited personal liability and will be well and truly wiped out, on the street. They’d exercise a lot more caution, if it was literally their money on the line.
One of SVB’s officers came from Lehman who thought that was a good idea.
GalaxyFlyer wrote:There’s a lot of benefits for limited liability, but like all th8ngs there’s trade-offs. Much of a Wall Street was, for most of its history- partnerships, not limited liability corporations. It makes sense in some areas—law and finance with many moral hazards, it might be an idea in some new fashion,
bennett123 wrote:TangoandCash wrote:GalaxyFlyer wrote:
And, they’re heavily regulated, so how’s that working out. It’d be better to let a few fail, the remains bought up to serve as a warning to all. Like many financial businesses, bring back partnerships where the principals with unlimited personal liability and will be well and truly wiped out, on the street. They’d exercise a lot more caution, if it was literally their money on the line.
One of SVB’s officers came from Lehman who thought that was a good idea.[/quote
"Heavily regulated" by our own MBA school classmates, golfing buddies, fellow country club members, and former/future work colleagues. The phrase "fox guarding the henhouse" comes distinctly to mind.
I'm with GalaxyFlyer, let a few banks fail, put some partner money on the line, and quit bailing them out!
Do you propose scrapping Limited liability for all companies or just banks?.