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Fed and FDIC discussing backstop to make SVB depositors whole, stem contagion

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Re: Fed and FDIC discussing backstop to make SVB depositors whole, stem contagion

#61

Post by machina_ex_deus »

grogers wrote: post #56
machina_ex_deus wrote: post #38

If this happens, banks have officially lost all their legitimacy and all banks should have their priviledges revoked. There is absolutely no reason banks should be given the priviledge of being the only way to deposit money, while playing with those customers money and simultaneously having zero risk on that money. These banks are getting 10 to 1 leverage, from me, captive customer. Break their monopoly. I want an ac…

You want a quasi-government agency to have unlimited tracking and control over your transactions? Banks may suck but a CBDC is straight up scary. It's bad enough we have to put up with the capriciousness of the Fed's monetary policy, the less power they have the better.

I want an equal seat at the table so that the other players will stop exploiting me. Until and unless you get an equal seat at the table, you can't hope to get the banks to behave. I might actually still put my money in a bank after they are forced to be aligned with my incentives. You might not be aware, but anti-money-laundering means that whatever it is that's scaring you about CBDC has already been going on for years at the banks. They also get to sell your data because all of them do it.

With CBDC I get to put in my bank what I don't want with the government and vice versa.

They are using you as leverage because you have zero leverage on them. There are bank runs and the JP morgan stock is going up, because people have literally nowhere to flee to.

Re: Fed and FDIC discussing backstop to make SVB depositors whole, stem contagion

#62

Post by goldforever »

machina_ex_deus wrote: post #38

If this happens, banks have officially lost all their legitimacy and all banks should have their priviledges revoked. There is absolutely no reason banks should be given the priviledge of being the only way to deposit money, while playing with those customers money and simultaneously having zero risk on that money. These banks are getting 10 to 1 leverage, from me, captive customer. Break their monopoly. I want an ac…

[dead]

Re: Fed and FDIC discussing backstop to make SVB depositors whole, stem contagion

#63

Post by pseudo0 »

Vecr wrote: post #40
labrador wrote: post #26

As a Independent non-aligned American voter, I have to ask myself did Peter Thiel deliberately cause a run on SVB? Did Elon Musk buy Twitter to destroy it as an effective platform for Democratic organizing? Is Musk coordinating with Tucker Carlson to push propaganda that Jan 6 was merely constitutionally protected protest? And are House Republicans coordinating with Thiel, Musk and Tucker Carlson over the debt ceilin…

Only the Jan 6 protest outside the in-use government buildings was constitutionally protected. As far as I know the congress does not have to allow random people to disturb them while in session and can enforce that. In general, it's safe for the police to do so, I think they should arrest all rioters on basic misdemeanor charges, do a bit of investigation, and then let those go who did not do anything. Obviously in…

That video of the Capitol Police escorting the QAnon shaman through the building and opening doors for him is pretty damning. If he was not authorized to be there, the police should have thrown him out, not given him a guided tour. Charging him after the fact seems highly suspect. If he had a good faith belief that he was authorized to be there, because of the actions and statements made by police officers, then he should not have been convicted. But he is currently serving a 41 month sentence after pleading guilty.

Anyone fighting with cops or otherwise rioting deserves whatever charges are appropriate for those actions though.

Re: Fed and FDIC discussing backstop to make SVB depositors whole, stem contagion

#64

Post by grogers »

grogenaut wrote: post #24
tome wrote: post #9

Earlier quoted context omitted.

The problem is that continuing to bail out depositors means that they'll never do due diligence on their banks and therefore bank executives will keep trying risky strategies that increase their bonuses.

what kind of due diligence are you imagining that I, a depositor with under 250k should / am doing on a bank? What do you believe, I, as a single depositor of 250k CAN DO to audit a bank or otherwise make sure it's safe for my deposit?

The only DD you as a depositor with less than 250k USD in deposits needs to do is check that it is FDIC insured. When you sign up for the account it will be prominent and I doubt there are many accounts that aren't. So, basically you don't need to do anything special.

Re: Fed and FDIC discussing backstop to make SVB depositors whole, stem contagion

#65

Post by lordnacho »

andygcook wrote: post #37
noelsusman wrote: post #25

Has there been any good reporting on why so many tech startups had large amounts of uninsured cash deposits? This has been a solved problem for a long time. https://www.intrafi.com/solutions/depositors/ https://americandeposits.com/how-it-works/ There's no reason for a small business to have any uninsured cash deposits. Is this a corruption story? Are they all just that incompetent?

Anecdotally, most founders are extremely busy and much of their financial success is in finding product/market-fit to maximize equity value. Therefore, learning about maximizing interest and managing dozens of bank accounts to minimize insolvency risk didn’t seem like a good use of time. Parking cash in SVB, which had been around for 40 years (with some investors even requiring startups to bank with them), seemed lik…

Sure but don't they hire a CFO who knows what to do with financial instruments?

Re: Fed and FDIC discussing backstop to make SVB depositors whole, stem contagion

#66

Post by machina_ex_deus »

fach wrote: post #59
machina_ex_deus wrote: post #50

Earlier quoted context omitted.

They are officially announcing to all listening banks that customers deposits are theirs to gamble with as they please. Why do banks get to play with those deposits, as if they were just free leverage from unwilling captive participants? How can small banks compete against big banks that can allow themselves to act this way? They can't. If you're big you get to risk it all. If you're small nobody will come to you as…

> If I gambled away all your money you'd never give me more again Apart from the arguing about the definition of gambling here applied to the SVB situation, no one is going to be able to give SVB another dime after this. They no longer exist. This is the exact opposite of risk free.

Really? https://www.svbsecurities.com/team/joseph-gentile/ Joseph Gentile would like a word with you. I'm sure this guy had absolutely no experience with having MBS blow up in his face as interest rates rise.

It's sad you're actually satisfied with a fictitious corporate entity "dying" when these people have perfected the art of making hostage situations with other people's money. It's all continuing because they get to successfully trade the hostages for a bailout each time. This guy is a professional Madoff, the only difference between them is that this guy is abusing bank's priviledge to get the government to backstop his ponzies.

Re: Fed and FDIC discussing backstop to make SVB depositors whole, stem contagion

#67

Post by jacooper »

paxys wrote: post #20
the-grump wrote: post #5

Earlier quoted context omitted.

You took the risk buying those bonds. Depositing cash at a bank is a different matter. No bailout for SVB; no bailout for you.

Depositing >250K cash in a bank carries similar risk, so not a different matter at all.

If depositing money in a bank is risk, where should I put my money then?

Re: Fed and FDIC discussing backstop to make SVB depositors whole, stem contagion

#68

Post by Overtonwindow »

Those lobbyist are hard at work. Treasury Secretary, Janet Yellen may have said that there will be no bail out, but mark my words: The vultures will get their money back.

I have worked in government, both policy, and political, for 22 years. The only thing that makes the government actually move is money. The majority of the powers that be cannot afford to alienate Silicon Valley campaign cash.

Be thankful for your government, it's the best that money can buy.

Re: Fed and FDIC discussing backstop to make SVB depositors whole, stem contagion

#69

Post by fach »

machina_ex_deus wrote: post #66
fach wrote: post #59

Earlier quoted context omitted.

> If I gambled away all your money you'd never give me more again Apart from the arguing about the definition of gambling here applied to the SVB situation, no one is going to be able to give SVB another dime after this. They no longer exist. This is the exact opposite of risk free.

Really? https://www.svbsecurities.com/team/joseph-gentile/ Joseph Gentile would like a word with you. I'm sure this guy had absolutely no experience with having MBS blow up in his face as interest rates rise. It's sad you're actually satisfied with a fictitious corporate entity "dying" when these people have perfected the art of making hostage situations with other people's money. It's all continuing because they get…

Again, what bailout? It seems like unless people are brought up on federal charges, you would be unsatisfied with the result.

Re: Fed and FDIC discussing backstop to make SVB depositors whole, stem contagion

#70

Post by labrador »

christophilus wrote: post #55
labrador wrote: post #43

Earlier quoted context omitted.

There's a big effort on the right, including by Musk, to rewrite history and portray them as political prisoners ahead of the 2024 election.

There’s been a big effort on both sides to rewrite history. A bunch of dumb, rowdy protestors made some dumb moves. One side heralds them as patriotic heroes. The other as dangerous, violent insurrectionists the like of which we’ve never seen. Nah. They were just a big, dumb crowd doing big dumb things.

I agree with you. There were small groups like the Oath Keepers and the Proud Boys who invaded the capitol in "stack" formations following premeditated plans. Nobody talks about them much. Instead the media wants to talk about the hapless enthusiasts who LARPed their way into committing minor crimes following the breaches created by these more committed groups.
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