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Reasons the banking crisis isn’t a repeat of 2008

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Re: Reasons the banking crisis isn’t a repeat of 2008

#81

Post by arcticbull »

bogomipz wrote: post #79
Avshalom wrote: post #70

It aint fucking lost on me that financial papers spent the better part of 2022 arguing that we were headed for a recession. The q4 numbers came in showing the US economy was still expanding and now those same papers are telling me we're in a banking crisis on the basis of like two and a half banks, with SVB and CS both being fully rescued. The fucking owners of capital seem bound and determined to destroy their own s…

>"The q4 numbers came in showing the US economy was still expanding and now those same papers are telling me we're in a banking crisis on the basis of like two and a half banks, with SVB and CS both being fully rescued." Why would GDP(a lagging indicator) and a current event(a wave of banks over the last two week) be mutually exclusive? You also seem to have overlooked some significant details and context. To date th…

> SVB’s uninsured deposits(anything over 250k) accounted for 94% of its total deposits and the FDIC took the extraordinary step of insuring those deposit after the fact.

Did they need to? It's not clear anyone would have lost anything at all because depositors are senior to equity and bond holders. All the bank's equity would have been wiped out sure (and it was anyways) but losses to depositors would likely be slim to none. If folks lost anything it would worst case have been like a 5-10% haircut, not 100% of un-insured deposits.

The FDIC was using this as an opportunity to say "we've got your back no matter what" to reassure the public.

It's extremely unlikely anyone, anywhere, would be at risk of losing any deposits - insured or uninsured - in this day and age in the US regardless of the FDIC's 'new' position.

> The first republic rescue saw three of the largest US banks depositing 30 billion dollars to prop it up.

The only real issue at banks right now is that they're in long-term government debt which has significant mark to market losses - which are an issue if folks are trying to withdraw since they can't be liquidated for face value. However if they're held to maturity there's no loss. So the Fed provided a facility where banks can borrow against the maturity value of long-term debt instead of market value.

That makes the problem basically solved.

Re: Reasons the banking crisis isn’t a repeat of 2008

#82

Post by Avshalom »

oblio wrote: post #74
chiefalchemist wrote: post #71

Earlier quoted context omitted.

> The fucking owners of capital seem bound and determined to destroy their own system. Nah. These disruptions are a means to an ends. That is, shifting still more wealth to the top. Follow that graph. Everything else is a means to that ends or a distraction.

I hate all these conspiracy theories. And you know why? It's because they imply hubris, arrogance, control. Let's just realize that we all have a lot less control over our environment than we think we do, and some things are just forces beyond anyone's control.

I mean hubris and arrogance are in full and open display pretty constantly. The inability to actually control shit is why its always a moving target.

but the idea that rich people are acting in a manner to maintain/increase their wealth aint exactly a conspiracy theory.

Re: Reasons the banking crisis isn’t a repeat of 2008

#83

Post by JediLuke »

arcticbull wrote: post #81
bogomipz wrote: post #79

Earlier quoted context omitted.

>"The q4 numbers came in showing the US economy was still expanding and now those same papers are telling me we're in a banking crisis on the basis of like two and a half banks, with SVB and CS both being fully rescued." Why would GDP(a lagging indicator) and a current event(a wave of banks over the last two week) be mutually exclusive? You also seem to have overlooked some significant details and context. To date th…

> SVB’s uninsured deposits(anything over 250k) accounted for 94% of its total deposits and the FDIC took the extraordinary step of insuring those deposit after the fact. Did they need to? It's not clear anyone would have lost anything at all because depositors are senior to equity and bond holders. All the bank's equity would have been wiped out sure (and it was anyways) but losses to depositors would likely be slim…

[dead]

Re: Reasons the banking crisis isn’t a repeat of 2008

#84

Post by contravariant »

sph wrote: post #69
zoltar wrote: post #63

Earlier quoted context omitted.

Is that the same Peter Schiff that said gold was going to $5,000/oz in 2012?

Person that made a bad prediction in their life should never be listened to ever again, for everything they say is wrong. Show me anyone that predicted two consecutive macroeconomic trends, ever.

If, as you your second sentence seems to suggest, nobody ever managed to get it right twice then we shouldn't listen to people how made a good prediction either.

Re: Reasons the banking crisis isn’t a repeat of 2008

#85

Post by Avshalom »

bogomipz wrote: post #79
Avshalom wrote: post #70

It aint fucking lost on me that financial papers spent the better part of 2022 arguing that we were headed for a recession. The q4 numbers came in showing the US economy was still expanding and now those same papers are telling me we're in a banking crisis on the basis of like two and a half banks, with SVB and CS both being fully rescued. The fucking owners of capital seem bound and determined to destroy their own s…

>"The q4 numbers came in showing the US economy was still expanding and now those same papers are telling me we're in a banking crisis on the basis of like two and a half banks, with SVB and CS both being fully rescued." Why would GDP(a lagging indicator) and a current event(a wave of banks over the last two week) be mutually exclusive? You also seem to have overlooked some significant details and context. To date th…

>>four bank rescues not two - Signature Bank, First Republic, SVB and Credit Suisse.

so when I said two and a half banks with two rescued it was actually two and a half banks with two and a half rescued.

feels to me like even less of a banking crisis.

Re: Reasons the banking crisis isn’t a repeat of 2008

#86

Post by arcticbull »

Avshalom wrote: post #85
bogomipz wrote: post #79

Earlier quoted context omitted.

>"The q4 numbers came in showing the US economy was still expanding and now those same papers are telling me we're in a banking crisis on the basis of like two and a half banks, with SVB and CS both being fully rescued." Why would GDP(a lagging indicator) and a current event(a wave of banks over the last two week) be mutually exclusive? You also seem to have overlooked some significant details and context. To date th…

>>four bank rescues not two - Signature Bank, First Republic, SVB and Credit Suisse. so when I said two and a half banks with two rescued it was actually two and a half banks with two and a half rescued. feels to me like even less of a banking crisis.

Indeed - Credit Suisse isn't a retail bank (outside Switzerland), they're an investment bank so they're completely different and shouldn't be lumped in with the other 3. Two small crypto institutions and SVB. [edit] Not to mention Credit Suisse was holding $5B dollars of losses from Bill Hwang's Archegos shenanigans.

Re: Reasons the banking crisis isn’t a repeat of 2008

#87

Post by alxmng »

Who cares about keeping deposits safe when money isn’t worth anything?

Americans don’t even have money in the bank. Median savings is $4500.

Many people who perform socially useful jobs can barely afford the basic basket of goods like rent, food, and transportation.

Re: Reasons the banking crisis isn’t a repeat of 2008

#88

Post by rqtwteye »

oblio wrote: post #74
chiefalchemist wrote: post #71

Earlier quoted context omitted.

> The fucking owners of capital seem bound and determined to destroy their own system. Nah. These disruptions are a means to an ends. That is, shifting still more wealth to the top. Follow that graph. Everything else is a means to that ends or a distraction.

I hate all these conspiracy theories. And you know why? It's because they imply hubris, arrogance, control. Let's just realize that we all have a lot less control over our environment than we think we do, and some things are just forces beyond anyone's control.

Since 2008 I believe there are participants in the economy that are more equal than others. Namely Wall Street players.

Re: Reasons the banking crisis isn’t a repeat of 2008

#89

Post by LoganDark »

alxmng wrote: post #87

Who cares about keeping deposits safe when money isn’t worth anything? Americans don’t even have money in the bank. Median savings is $4500. Many people who perform socially useful jobs can barely afford the basic basket of goods like rent, food, and transportation.

> Americans don’t even have money in the bank. Median savings is $4500.

> Many people who materially contribute by doing socially useful jobs can barely afford the basic basket of goods like rent, food, and transportation.

I... hate that this is so accurate...

Re: Reasons the banking crisis isn’t a repeat of 2008

#90

Post by slj »

oblio wrote: post #74
chiefalchemist wrote: post #71

Earlier quoted context omitted.

> The fucking owners of capital seem bound and determined to destroy their own system. Nah. These disruptions are a means to an ends. That is, shifting still more wealth to the top. Follow that graph. Everything else is a means to that ends or a distraction.

I hate all these conspiracy theories. And you know why? It's because they imply hubris, arrogance, control. Let's just realize that we all have a lot less control over our environment than we think we do, and some things are just forces beyond anyone's control.

What is a conspiracy here: The idea of an invisible hand which is beyond anyone’s control, or the analysis of historical information which shows a pattern? I choose to believe the data, not the fairytale you are proposing.
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