21–30 of 52 posts
https://www.youtube.com/watch?v=jaGU0FrrXcQ https://www.cnbc.com/2020/03/25/bill-ackman-exits-market-hed...
Starting to think this was a manufactured bank run and whoever is manufacturing it wants it to spread. The first social media induced bank run. Kind of like what wallstbets did to pump worthless stocks like AMC and GME only in reverse.
Even though I dislike this guy, he is not wrong. First Republic is most certainly going into receivership tomorrow.
That's the rumor and I imagine they got to pull the same tricks as SVB as regards to buying risky MBS without alerting the FED. But is there any evidence to support this?
Starting to think this was a manufactured bank run and whoever is manufacturing it wants it to spread. The first social media induced bank run. Kind of like what wallstbets did to pump worthless stocks like AMC and GME only in reverse.
Every bank run leads to this exact conspiracy theory.
Let's say you're a company with well over the 250k limit on a bank account. How would you even withdraw that? Get it deposited on some other account (why trust the other bank more?), get the money in cash?
Earlier quoted context omitted.
That's the rumor and I imagine they got to pull the same tricks as SVB as regards to buying risky MBS without alerting the FED. But is there any evidence to support this?
MBS are much safer today than pre GSE (government sponsored entities). SVB failed to hedge their assets. The MBS will still be worth their face value at maturity.
Even though I dislike this guy, he is not wrong. First Republic is most certainly going into receivership tomorrow.
He's pretending something like this is true: SVB's failing will have a contagion effect on other banks (though some mechanism that he doesn't explain or have evidence for, although guys like him menacingly gesture towards MBS or something to remind us of 2008, even though it's completely different). By stopping the SVB run, we'll nip this contagion in the bud. There's some merit to this argument.
However, there's really no reason whatsoever to think that SVB's failing will have some causal impact on other banks' liquidity/solvency. To the extent that other banks are in trouble, it's because they have long duration assets that lost value when rates rose. Whether SVB survives or not has no impact on that. So the only mechanism through which an SVB bailout has any effect is through sending the implicit signal that the government will bail out all uninsured depositors.
Starting to think this was a manufactured bank run and whoever is manufacturing it wants it to spread. The first social media induced bank run. Kind of like what wallstbets did to pump worthless stocks like AMC and GME only in reverse.
Every bank run leads to this exact conspiracy theory.
Earlier quoted context omitted.
Every bank run leads to this exact conspiracy theory.
So why do there seem to be runs against other banks being encouraged now? It's the induced panic that can do damage... in stampedes or bank runs.
Kind of like how when you learn that one major application has vulnerabilities due to misuse of log4j, it suggests other major applications will have similar vulnerabilities, because programmers working with the same flawed tools are liable to make similar mistakes.
Not every Java application is vulnerable and not every bank is insolvent (presumably very few of them are) but a bad apple spoils the bunch.