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SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

theintercept.com

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Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#121

Post by OrvalWintermute »

onos wrote: post #89
OrvalWintermute wrote: post #85

Earlier quoted context omitted.

The overinvestment into US debt put them at extreme risk for interest rate related devaluation, which is exactly what happened. Even if they were going to go heavy with US debt, investment professionals normally use bond laddering for with fixed income funds to reduce that interest rate risk to the portfolio. They did not even do basic laddering!

Can anyone provide a link that carefully outlines this? Eg did they just recently buy a ton of ten year bonds? That would sound nuts as everyone knows rates are rising right now. Would love to see details.

It wouldn't matter even if they weren't of the same maturities, since you'd have to buy bonds with better interest rates, and you'd want the capital outflow to be spaced out.

The mitigation to interest rate risk is by buying them spaced out so principal returns are being re-invested at changing rates, and you are never tied to a specific rate. https://www.investopedia.com/terms/b/bondladder.asp

Here you see https://www.cnn.com/2023/03/11/business/svb-bank-collapse-ex... their average yield at 1.79%

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#122

Post by caoilte »

themitigating wrote: post #106
aaomidi wrote: post #15

Earlier quoted context omitted.

And Biden killed the strikes. Both parties hate the non-rich. One just hates it more and is way more obvious about it.

Claiming politicans hate the vast majority of people is so insane I can't believe I'm seeing it here.

Political parties aren't people so assigning feelings to them is of questionable value, but no more so than calling someone insane for doing so.

The underlying fact is that the Republican and Democratic Party are both constituted to represent their donors and that certain parties (rich individuals being the largest such party) enjoy the benefit of giving bi-partisan patronage.

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#123

Post by zmgsabst »

themitigating wrote: post #106
aaomidi wrote: post #15

Earlier quoted context omitted.

And Biden killed the strikes. Both parties hate the non-rich. One just hates it more and is way more obvious about it.

Claiming politicans hate the vast majority of people is so insane I can't believe I'm seeing it here.

Calling an argument “insane” isn’t a constructive comment.

Perhaps you could explain why you don’t think that’s a reasonable interpretation..?

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#124

Post by jmyeet »

andrewstuart wrote: post #11
hedora wrote: post #8

Earlier quoted context omitted.

In fairness, the train crash had bipartisan support.

[flagged]

The history is more complicated than that.

Obama originally proposed rules for widening the definition of hazardous trains and requiring upgraded brakes. This version didn't get enacted. It was weakened after a lot of lobbying eg trains carrying oil and gas were no longer "hazardous".

Trump did remove this rule in 2018.

But we're in 2023 now when Biden was sworn in over 2 years ago. Did Biden or Buttigieg re-institute these rules? No.

This problem is beyond politics. Both parties serve corporate interests. Republicans just go a little further on the deregulation train (pun intended). Look at Biden and Congress united behind hobbling the rail workers strike. Those rail workers were wanting to strike in part due to safety issues.

Buttigieg is a McKinsey alum. He's part of the system that creates this problem. Don't think this is just a few bad apples. It isn't. It's a systemic problem.

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#125

Post by lettergram »

arrosenberg wrote: post #87
lettergram wrote: post #69

Lol somehow always blaming “deregulation” and politicians I’ll tell you what, it’s not regulators that caused this. IMO Banks need less regulation (and more smaller banks) and need to fail more (and have more jail time). It’s the banking executives and business analysis team at fault here. Just like it’s the startups error for failing to have multiple bank accounts. Some advice, be robust and self reliant. Assume eve…

> IMO Banks need less regulation > and have more jail time Regulations are how you get jail time.

No, laws (criminal codes) are how you get jail time.

Regulations are rules passed by administrative bodies, those rarely, if ever, result in jail time. There’s a lot of reason for that, but administrative agencies often don’t have the full authority to send people to prison (I personally don’t think they should). Instead injured parties should be able to bring a suit, and I’m sure they will here.

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#126

Post by fwungy »

andrewstuart wrote: post #3

Weaken regulations, trains and banks crash, but hey small government, slash the red tape.

The train workers were striking to protest safety conditions. Biden ordered them back to work.

Do you really think far away rich people are working to make things better for you?

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#127

Post by bobby_bbb »

mjhay wrote: post #33
andrewstuart wrote: post #11

Earlier quoted context omitted.

[flagged]

Biden could reinstate them by EO, just like how Trump cut them. He hasn't though. There is a bipartisan consensus that the safety of the rail system is less important than rail company profits.

" There is a bipartisan consensus that the safety of the rail system is less important than rail company profits."

Any of us can buy railroad stocks and become - in your mind - wealthy. Perhaps the more important value being protected was, if the railroads stop working, many of us stop eating. Same reason we subsidized food production, fuel, etc. Our societies have grown too much to be able to go back to life without them, without huge numbers of deaths as we adjust.

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#128

Post by Karunamon »

notch898a wrote: post #32
andrewstuart wrote: post #3

Weaken regulations, trains and banks crash, but hey small government, slash the red tape.

0) Make narrow banking illegal 1) Hold interest rates near zero, inflating the fuck out of the economy 2) Use government to destroy market value of distant maturing bonds by holding real interest rates deeply negative and then rapidly inverting it. Force people to seek ever more risky investments and long term low interest MBS securities just to barely not even break even. 3) Suck all the liquidity out of the market…

A bank failed, and then only because they were doing unwise things with their holdings. Where are all the other failed banks as a result of the long-standing fiscal policy?

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#129

Post by fwungy »

admax88qqq wrote: post #113
makestuff wrote: post #23

Earlier quoted context omitted.

I always see people say the national debt doesn’t matter because it isn’t like household debt. However, I just fail to see how that is true. At some point the can won’t be able to be kicked down the road anymore. I guess everyone is hoping that it won’t be during their lifetime.

Because fundamentally the US government can print money to pay US debt. You can't print money to pay off your household debt. It's a different beast altogether subject to entirely different rules and incentives than household debt.

Yes, and we the taxpayers get the privilege of paying interest on the money that is printed based on our nation's creditworthiness.

The debt can never be paid. It's by design.

Re: SVB Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

#130

Post by gnulinux »

themitigating wrote: post #106
aaomidi wrote: post #15

Earlier quoted context omitted.

And Biden killed the strikes. Both parties hate the non-rich. One just hates it more and is way more obvious about it.

Claiming politicans hate the vast majority of people is so insane I can't believe I'm seeing it here.

Claiming otherwise is being blindfolded. When I look at American politics, I can't see any justification other than the desire to help 1% and the apathy towards people who live paycheck-to-paycheck (or worse). We saw it in 70s, 2008, COVID, Student Loan Forgiveness cancellation, increasing rent/housing costs, and now seeing it, and will always see it. "Hate" is a strong word of course but the spirit is absolutely true.
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