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Bank Failures Visualized

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Re: Bank Failures Visualized

#301

Post by yieldcrv »

RC_ITR wrote: post #296
yieldcrv wrote: post #176

Earlier quoted context omitted.

it doesn’t and that wasn't the premise of why we can acknowledge that using that payment network saved everyone time in the clawbacks, despite the shaken confidence that the exact same event caused into that payment network the main distinction involved here is that not knowing who to subpeona for records slows down everything, whereas with the blockchains used most of the participants consolidate funds into KYC’d ex…

Wait, we recovered almost all of Madoff's money too? Traditional finance has plenty of clawback mechanisms. You're completely straw-manning a world in which traditional finance isn't also mostly done on KYC'ed exchanges.

I actually think Madoff is a great example of comparison, and didn't mention that because I felt someone else would call that a strawman, ironically, or at least choose to say something about the difference in the size of those frauds.

The main difference is the time, you're choosing to ignore that. 8 months versus .... how many years for Madoff? A decade?

Re: Bank Failures Visualized

#302

Post by mywittyname »

sam_goody wrote: post #214

And now that the fed said they will only "fully" back depositors in large banks that go under, there will be even more consolidation, so the next crash can consist of just one huge circle that acted gregariously and irresponsibly before its collapse, but no one could do anything because of its size. What makes this even worse, is that Yellen would have lost nothing had she said they would back every bank and not just…

> What makes this even worse, is that Yellen would have lost nothing had she said they would back every bank and not just large banks - small bank failures are just not that common, and the risk is low, (and can be walked back in two years when the tension lowers).

FDIC is supposed to protect smaller individual depositors, not gigantic companies with hundreds of millions of dollars in deposits. Gigantic companies have financial teams that should be tasked with protecting their operating capital.

FDIC is also a last-resort. The idea is that bank assets are sold off and all depositors are made whole. It's very difficult and time-consuming to do this with a mega bank though.

Maybe FDIC limits should be raised, but the problem with that is someone needs to pay for it. Perhaps companies with $100MM deposits should be paying for private insurance.

Re: Bank Failures Visualized

#303

Post by lazide »

zamnos wrote: post #278
noduerme wrote: post #215

Earlier quoted context omitted.

oh, I don't know. Lots of people walk up and down main street. No one I know keeps more than $250k in any given bank under the same name. Obviously having LLCs, wives and children etc let you spread things out in the same bank. I had to wait 10 months in 2008 for FDIC to make me whole when a local bank I had most of my savings in at the time went under. Most people have a living memory of that. Also, I have 8 account…

Figure what out? I'm saying people with that kind of money have private bankers*, and don't need to spend the time making 40 different accounts and managing that because their money is already protected through a sleight of financial trickery called cash sweeping. If you like seeing the inside of bank branches, and having unnecessary zoom meetings where the background is a picture of the inside of a bank branch, that…

Well, there are private banks/banks that specialize in private banking (like First Republic), and private bankers, which specialize in navigating the Byzantine bullshit endemic at a normal bank. I believe you pointed to the private banker division at Chase, and most large banks have them somewhere, for large net worth individuals like you’re saying.

It is definitely an entirely different experience (either way), no doubt.

Re: Bank Failures Visualized

#304

Post by mywittyname »

momofuku wrote: post #50

For the life of me, I'm not able to understand why none of these lists include Lehman Brothers? A commenter below posted: >Lehman Brothers is also not included because, even though it was a US bank, it was an investment bank with no FDIC insured deposits. It was around the size of all of this year's failures, combined. So does this mean, that since Lehman had no customer deposits, it doesn't count?

Lehman had no FDIC-insured accounts. So it shouldn't be included in a list of failures managed by the FDIC, because it wasn't.

The liquidation of Lehman was handled by the Treasury department (and a bankruptcy court), not the FDIC, and Congressional involvement was necessary to pass a bill to finance the resulting "bailout". The FDIC maintains its own fund to pay back depositors.

It might sound like a pointless technicality, but it's really not. It would be like asking why an NHSTA report doesn't include plane crashes.

Re: Bank Failures Visualized

#305

Post by SamReidHughes »

coliveira wrote: post #274
SamReidHughes wrote: post #181

Earlier quoted context omitted.

Keep in mind that car loans get paid down pretty fast. For example, Capital One's <620 FICO customer segment has already paid off about half the auto loan principal from 2021. Their delinquency rate has flattened, quarter over quarter, as well.

New car loans are not only longer (> 6 years) and also more expensive than previous loans. Also, people stop paying when they lose their job, so the trigger may be the start of a recession.

Some of them. A bit less than half of loans at Capital One are more than 5 years, for instance. (I'm just overly familiar with that company.) But a 6 year loan from June 2021 is still almost 1/3 paid off.

The other question is if there's a recession, how much will used car prices, for cars that were new in 2021, drop.

Re: Bank Failures Visualized

#306

Post by apaprocki »

noduerme wrote: post #88
apaprocki wrote: post #83

Earlier quoted context omitted.

If you’ve ever tried to practically use multiple banking institutions in the US, especially through the 80s-90s, you’d immediately relate to only using a single account regardless of what the statistical hazards are. It’s 2023 and my institution limits Zelle transfers to $2,500/mo. Want more, just as fast? Back to human wires and fax machines…

Really? You could always just go get a cashiers check and walk it over to another bank. Now I've got accounts at several banks with free online transfers between them (2-3 business days)... it was more of a process in the 90s, sure, but now you can open a checking account at any major bank, link it to another bank and fuel it in 5-10 minutes. Not with Zelle, just a normal domestic wire which is usually paid for by th…

My credit union (it’s actually very worth it, so I’m not switching) has no branch within multiple states from me. A domestic wire requires phone calls and fax, can’t be done entirely online. It’s certainly more doable with a behemoth like Chase, but then you’re dealing with all the negatives of using Chase and employees that have no leeway to use common sense when solving problems.

Re: Bank Failures Visualized

#307

Post by igravious »

andy_ppp wrote: post #261
igravious wrote: post #239

Earlier quoted context omitted.

Circles don't have volumes?

The volume of a circle would presumably be zero, but yes I've used the wrong word. I'll change it above. I sometimes wish there was a forum that allowed editing of spelling in other peoples posts and they could just accept the changes (same with Twitter). You could spend all your days correcting obvious mistakes...

> The volume of a circle would presumably be zero, but yes I've used the wrong word.

i guess?

> I sometimes wish there was a forum that allowed editing of spelling in other peoples posts and they could just accept the changes (same with Twitter). You could spend all your days correcting obvious mistakes...

nice and interesting idea except some people are awful and would abuse that feature :(

maybe you should make a forum with that feature!

Re: Bank Failures Visualized

#308

Post by lesuorac »

lottin wrote: post #286
yieldcrv wrote: post #159

Earlier quoted context omitted.

because the clawbacks are easier to track through multiple hops, even when the initial recipient had already done other things with the funds

What do you mean clawbacks? Blockchain transactions are irreversible, right?

Sure but a court can order you to do a future transaction that effectively reverses the original. (Akin to how almost every single reversed transaction _actually_ works).

And if you refuse, they can order your local (or not so local) PD to jail you until you comply.

Blockchain still exists in the real world with its very real rules.

Re: Bank Failures Visualized

#309

Post by RC_ITR »

yieldcrv wrote: post #301
RC_ITR wrote: post #296

Earlier quoted context omitted.

Wait, we recovered almost all of Madoff's money too? Traditional finance has plenty of clawback mechanisms. You're completely straw-manning a world in which traditional finance isn't also mostly done on KYC'ed exchanges.

I actually think Madoff is a great example of comparison, and didn't mention that because I felt someone else would call that a strawman, ironically, or at least choose to say something about the difference in the size of those frauds. The main difference is the time, you're choosing to ignore that. 8 months versus .... how many years for Madoff? A decade?

>But the biggest sum has been in “category A crypto” tokens with large and liquid markets. FTX now has more than $4bn of crypto assets under its control, a total that has been bolstered by a sharp recovery in cryptocurrency prices.

>Bitcoin, which had dropped below $20,000 after FTX’s collapse, this week broke $30,000 for the first time since June 2022 , with other cryptocurrencies including ethereum charting a similar course.

This seems to go against your claims. - the existing assets just became more valuable in USD terms. Actual recoveries:

>Recovery efforts have more than doubled that figure so far, court filings show, including $800m in recovered cash and a further $600m in “settlements and investments receivable”.

Re: Bank Failures Visualized

#310

Post by roflyear »

sam_goody wrote: post #214

And now that the fed said they will only "fully" back depositors in large banks that go under, there will be even more consolidation, so the next crash can consist of just one huge circle that acted gregariously and irresponsibly before its collapse, but no one could do anything because of its size. What makes this even worse, is that Yellen would have lost nothing had she said they would back every bank and not just…

I'm not sure I understand your argument, because it is ONLY larger banks that are failing! Not the uber-big but larger.
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