The title is clickbaity. It's not like the banks are missing any of their depositors' money.
so what you’re saying is that there’s a major bank out there that could pay out all - or even half of - its deposits right now?
[dead]
America’s banks are missing hundreds of billions of dollars
321–330 of 450 posts
Re: America’s banks are missing hundreds of billions of dollars
#3221. The government requires banks buy their debt and hold it as reserves because it's considered the safest investment. 2. The government decides that, oops, it printed too much money in 2020/21 and is causing inflation, so it raises rates very quickly. 3. New treasuries yield 4 or 5 times as much in interest as the ones from 1-2 years ago. Why would anyone want to buy those old treasuries near face value now? 4. The…
I think SVB case was atypical in the sense that while being the 16th biggest bank in the country their largest accounts were owned by a few VCs that (figuratively) grew up on the same street. So it took just one guy to make a call for the panic to spread in town like a wildfire. It was only 36 hours from that first call to when SVB was gone.
Re: America’s banks are missing hundreds of billions of dollars
#323Can anyone recommend some good blog articles or books (aimed at lay people) on how the global economy works, bank interactions with other banks, and government management of inflation and interest rates? I'd like to understand a bit about both the previous crash and the current banking crisis, but feel I need to do some background reading first.
I like to watch Economics Explained https://youtube.com/@EconomicsExplained
A book I read and enjoyed is "Naked Economics: Undressing the Dismal Science". It helped me understand what economics even is.
Re: America’s banks are missing hundreds of billions of dollars
#324Earlier quoted context omitted.
A decade ago I had lunch with a friend through kindergarten (our daughters were friends) he was a financial advisor and things were going good for him. I complained, as people who 'make' stuff often do, that finance was unbalancing everything and taking too big a share of profits (not to be annoying to him, just sharing a viewpoint) and he replied that the reason why finance was getting more of the share was because…
He is probably right. So many businesses have become financialized now. In the UK, John Lewis, which is/was an upmarket department store (and also owns Waitrose, a grocery store), is a mutual , owned by it's employees, but is now in the built-to-rent property market. Its literally burning the reputation and diversifying in to all kinds of gimmicks as it dies. Sainsbury's, one of the biggest supermarket chains in the…
Not only that, it was in the paper the other day that the CEO of John Lewis wants to sell a chunk of the company to a private investor so it won't even be a full mutual any more.
Re: America’s banks are missing hundreds of billions of dollars
#325The title is clickbaity. It's not like the banks are missing any of their depositors' money.
It's not quite "yelling fire in a crowded theater" but it's pretty close. More like "you'll be dead soon" (for certain values of soon).
Re: America’s banks are missing hundreds of billions of dollars
#3261. The government requires banks buy their debt and hold it as reserves because it's considered the safest investment. 2. The government decides that, oops, it printed too much money in 2020/21 and is causing inflation, so it raises rates very quickly. 3. New treasuries yield 4 or 5 times as much in interest as the ones from 1-2 years ago. Why would anyone want to buy those old treasuries near face value now? 4. The…
The people in step 5 have a huge incentive to make it look like the fed is wrong to raise rate because their monopoly money fueled dumpster fire of an industry only "works" when rates are low.
I'm not alleging conspiracy, I don't think these people are competent enough to actually conspire. But the incentive to pull your money out knowing that it makes others more likely to follow and that if the bank keels over the failure mode makes policy you don't like look bad is definitely there.
Re: America’s banks are missing hundreds of billions of dollars
#327Earlier quoted context omitted.
Growing inequality without growing GDP means you became poorer. Even if we assuming they magically appeared and you did not become poorer: will never own an asset in your life, they can price you own of a house, land, shares, etc.
> Growing inequality without growing GDP means you became poorer. For example: Bill Gates comes along with Microsoft, and sells Windows to businesses worldwide, who all benefit. Why is GDP not growing? And even if it magically doesn't grow, how has that made me poorer?
Why are you conflating growth in inequality during the pandemic with entrepreneurship?
Did GDP grow during the pandemic? Did dozens of Bill Gates's spawn?
How did you even get the idea that Bill gates has increaeed inequality? Thousands of people were able to get a well paid job or start a business, inequality probably decreased on average.
Re: America’s banks are missing hundreds of billions of dollars
#328Earlier quoted context omitted.
Yes that’s the point. Treasuries are cash, they are not meant to make money for banks, they are meant to be a place for banks to put money when they don’t have anything else to do with it. Banks are supposed to make money from the premium between the base interest rate and the rate on the loans they make. The implied contract when you deposit money in a bank is that the bank has a dependable business model as a lende…
> Treasuries are cash, Obviously not. [edit to add: this seems a controversial comment, it’s being upvoted and downvoted wildly]
Some brokerages break down various types of position (equity, bond, etc). Mine in particular has a "Cash and equivalents" section. Money market accounts go there, but so do treasury funds and such.
I suspect the upvotes are because you're technically correct, treasuries are not literally cash. The downvotes are because grandparent obviously meant that treasuries are considered cash equivalents (whether or not they actually should be, given liquidity concerns).
Re: America’s banks are missing hundreds of billions of dollars
#3291. The government requires banks buy their debt and hold it as reserves because it's considered the safest investment. 2. The government decides that, oops, it printed too much money in 2020/21 and is causing inflation, so it raises rates very quickly. 3. New treasuries yield 4 or 5 times as much in interest as the ones from 1-2 years ago. Why would anyone want to buy those old treasuries near face value now? 4. The…
Let’s talk about the out of control military spending wayyy before the stimulus.
[dead]
Re: America’s banks are missing hundreds of billions of dollars
#330Earlier quoted context omitted.
Finally! People calling it what it is. Corruption. And the domestic angle isn’t even the worst. Breton-Woods put America in a sort of custodianship which they have betrayed. Raising and lowering rates to promote your domestic economy without even considering the global impact is fucked up if you promised the world that your currency can serve as a trusted foundation. World order is still fluctuating all as a result o…
> if you promised the world that your currency can serve as a trusted foundation. How do people get this backwards? The US didn't say, "use our currency as the global reserve currency!" Countries chose and continue to choose to use the USD for global commerce. No one is forcing them, the USD really is valuable. > World order is still fluctuating all as a result of these betrayals. So raising rates is a betrayal, but…
And all the 'democracy spreading' in countries that considered selling resources for something else than dollars is just encouragement for other countries to make the right decission?