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Bank failures come in waves

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Re: Bank failures come in waves

#151

Post by bengale »

xioxox wrote: post #139
sgsag33 wrote: post #90

Why do we even need banks? If they make money by lending money that mostly belong the people (state/feds) anyways, I guess we all would be better if banking was just a state monopol. I guess I'm just missing some points here so maybe someone can help and explain me why this is a bad idea?!

There are things called Government Savings Banks. The UK has National Savings and Investments (NS&I [1]), which allows individuals to save money with unlimited protection (though I think their accounts typically allow maximum amounts of a few million pounds). The UK government uses this as a form of raising money. I believe other countries have similar schemes. [1] https://en.wikipedia.org/wiki/National_Savings_and_I…

Tops out at £2m or £4m for a couple.

Re: Bank failures come in waves

#152

Post by guepe »

rocqua wrote: post #80
fuoqi wrote: post #68

Earlier quoted context omitted.

You can be your own narrow bank by directly investing into short-term bonds or by buying a money market fund.

That has massive fee friction, does not eliminate counter party risk entirely, and earns different (lower?) rates than the Fed offers.

If you buy t-bills yourself fees are low, and brokers aren't banks - so risk of money being stuck there is low.

It's a bit of work but very manageable. 10/10 recommend, you earn more than a savings account.

Re: Bank failures come in waves

#153

Post by nonethewiser »

ktta wrote: post #89
bubbleRefuge wrote: post #25

Earlier quoted context omitted.

what ? explain.

FDIC - Federal Deposit Insurance Corporation It is not the Fed itself, but a separate entity that doesn't receive any federal funding. The $250k insurance you hear about is not free, it has a cost associated with it: https://www.fdic.gov/deposit/insurance/assessments/proposed.... Just like your $25k car has an insurance premium, these bank accounts are also insured because they pay a premium. Now if your car's value…

It comes from the idea that there are no real rules in economics and that we are oppressed by some malevolent force.

Re: Bank failures come in waves

#154

Post by mejutoco »

nkuttler wrote: post #121
vishnugupta wrote: post #95

Continuing the theme of the article the current banking crisis has exposed two conflicting functions of money i.e., store of value and a vehicle of investment both of which are facilitated by banks. Keeping money safe, whether physically or digitally, comes at a cost. Banks absorb this cost because they make money through credit creation, maturity transformation, and interchange fees. They even pass on some of that p…

> I think this crisis is the strongest yet reason to push for CBDCs as only a central bank can fully guarantee a deposit This makes zero sense. A CBDC doesn't have a stronger "guarantee" than normal central bank money, yet it has all kinds of negatives like total surveillance and control.

Exactly. And regarding

> only a central bank can fully guarantee a deposit

The buck stops at the government, as we are seeing with changing laws to allow Credit Suisse acquisition or by Biden and European representatives statements abou "doing whatever is needed" or similar.

Re: Bank failures come in waves

#155

Post by nonethewiser »

bubbleRefuge wrote: post #30
acjohnson55 wrote: post #17

Earlier quoted context omitted.

Your comment seems pretty unserious, but modern monetary theory ( https://en.wikipedia.org/wiki/Modern_Monetary_Theory ) adherents assert that the point of taxes is not to "fund" anything, but to engineer incentives, redistribute wealth, and remove excess money. And that, yes, we should simply print money, to the extent that we need to, subject to the constraint that excess money causes inflation in specific circumst…

upvote! MMT founders think we can eliminate income taxes and get by with state taxes. One has said a national real estate tax would be fair in leu of income taxes. But they all agree taxing is necessary to maitain demand/need for the currency and to slow down the economy if needed.

Many non MMTers think we can get rid of income tax too.

Re: Bank failures come in waves

#156

Post by zaxcellent »

spacebanana7 wrote: post #133
drexlspivey wrote: post #130

Earlier quoted context omitted.

You can already do that by buying a money market fund no?

To the best of my understanding you can’t initiate payments with a money market fund using, say direct debits or visa/Mastercard. So they can’t replace an ordinary bank account.

There are accounts out there which can function this way, often called Cash Management Accounts. Fidelity has one that works this way: https://accountopening.fidelity.com/ftgw/aong/aongapp/intere...

Re: Bank failures come in waves

#157

Post by ac29 »

guepe wrote: post #152
rocqua wrote: post #80

Earlier quoted context omitted.

That has massive fee friction, does not eliminate counter party risk entirely, and earns different (lower?) rates than the Fed offers.

If you buy t-bills yourself fees are low, and brokers aren't banks - so risk of money being stuck there is low. It's a bit of work but very manageable. 10/10 recommend, you earn more than a savings account.

Fees on buying treasuries are zero if you buy them directly from the treasury or any of the large brokers (Vanguard, Fidelity, etc).

Re: Bank failures come in waves

#158

Post by ricardobayes »

frozenwind wrote: post #117
vishnugupta wrote: post #95

Continuing the theme of the article the current banking crisis has exposed two conflicting functions of money i.e., store of value and a vehicle of investment both of which are facilitated by banks. Keeping money safe, whether physically or digitally, comes at a cost. Banks absorb this cost because they make money through credit creation, maturity transformation, and interchange fees. They even pass on some of that p…

CBDC is a another puzzle piece of a future dystopia. We're exchanging freedom for the sake of a security façade.

On the other hand, imagine what level of services we could have if it wasn't for the tax dodgers and cash in hand payments. I reckon we could fund universal basic income just from whitening the economy, in any given country.

Re: Bank failures come in waves

#159

Post by HWR_14 »

mejutoco wrote: post #154
nkuttler wrote: post #121

Earlier quoted context omitted.

> I think this crisis is the strongest yet reason to push for CBDCs as only a central bank can fully guarantee a deposit This makes zero sense. A CBDC doesn't have a stronger "guarantee" than normal central bank money, yet it has all kinds of negatives like total surveillance and control.

Exactly. And regarding > only a central bank can fully guarantee a deposit The buck stops at the government, as we are seeing with changing laws to allow Credit Suisse acquisition or by Biden and European representatives statements abou "doing whatever is needed" or similar.

Just to be clear, those are two different things. The Biden administration's response is using powers granted to the executive branch explicitly to save banks. The Swiss government seems to be modifying their laws to save CS (by getting it acquired).

Re: Bank failures come in waves

#160

Post by ifyoubuildit »

ricardobayes wrote: post #158
frozenwind wrote: post #117

Earlier quoted context omitted.

CBDC is a another puzzle piece of a future dystopia. We're exchanging freedom for the sake of a security façade.

On the other hand, imagine what level of services we could have if it wasn't for the tax dodgers and cash in hand payments. I reckon we could fund universal basic income just from whitening the economy, in any given country.

I imagine we'd have a similar level of services, and the same level of urgency to raise taxes.
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