Financial markets

[Tron]

[Tron]

How a country goes bankrupt in 10 steps.
 

https://rubino.substack.com/p/how-a-country-goes-bankrupt-in-10

[Tron]

[GhostfaceJim]

[GhostfaceJim]

[Tron]

Run on one bank → credit event → contagion → imminent financial system collapse → QE infinity
 

 

[YACCster]

23 hours ago, Tron said:

Run on one bank → credit event → contagion → imminent financial system collapse → QE infinity
 

 

Lender is SEIZED by regulators in largest US bank failure since Great Recession:

https://www.dailymail.co.uk/news/article-11845495/Silicon-Valley-Bank-branch-calls-NYPD-tech-investors-tried-pull-cash.html

 

New Info added!:

Treasury Secretary Yellen says she has 'full confidence' in US banking, at talks with regulators over SVB failure

https://www.dailymail.co.uk/news/article-11845969/Janet-Yellen-insists-banking-resilient-biggest-bank-failure-2008.html

 

WOW, whew, that was a close one, everything must be ok then!

Edited March 10, 2023 by YACCster
additional info

[GhostfaceJim]

[GhostfaceJim]

[Tron]

17 hours ago, YACCster said:

Lender is SEIZED by regulators in largest US bank failure since Great Recession:

https://www.dailymail.co.uk/news/article-11845495/Silicon-Valley-Bank-branch-calls-NYPD-tech-investors-tried-pull-cash.html

 

New Info added!:

Treasury Secretary Yellen says she has 'full confidence' in US banking, at talks with regulators over SVB failure

https://www.dailymail.co.uk/news/article-11845969/Janet-Yellen-insists-banking-resilient-biggest-bank-failure-2008.html

 

WOW, whew, that was a close one, everything must be ok then!

This weekend, the Feds will make JP Morgan or some other large bank buy them ....with an implicit guarantee they won't lose any money backstopped by you and I the taxpayer. 
 

This isn't the big one...but every bank in America is likely to be "technically insolvent" right now, because they all hold large amounts of US Treasuries and Mortgage Backed Securities that have tumbled in mark to market value due to the insane pace of rate hikes. The people managing risk at SVB bet their bank on rates staying low forever without hedging at all. Given the nature of our fractional reserve banking system, if enough people decide to pull out their cash, this would even happen at Wells Fargo or JP Morgan....and eventually it will happen at a large bank. Buckle up. High net worth individuals will begin to move all cash balances above $250k into short term Treasury Bills. Good idea for everyone to keep at least a month's worth of expenses in cash at home in the event we have a systemic banking crisis...the chances of which are definitely not zero. 
 

 

Edited March 11, 2023 by Tron

[Majbasil]

so........... have we learned anything yet?  https://www.forbes.com/sites/mayrarodriguezvalladares/2018/08/22/why-do-republicans-want-to-gut-bank-regulations-even-more/?sh=1bb3bec14279   sigh... history repeats itself...  some ideologies are really bad for the world, some aren't.  VOTE WISELY  (our future depends on it.) 

[Tron]

24 minutes ago, Majbasil said:

so........... have we learned anything yet?  https://www.forbes.com/sites/mayrarodriguezvalladares/2018/08/22/why-do-republicans-want-to-gut-bank-regulations-even-more/?sh=1bb3bec14279   sigh... history repeats itself...  some ideologies are really bad for the world, some aren't.  VOTE WISELY  (our future depends on it.) 

We don't need more regulations, we need regulators to do their fucking jobs. This one was preventable and some may argue the run on SVB was started by Senator Warren, and partially caused by regulatory rule making requiring too much capital allocated to US debt. All this is going to do is ensure every high net worth individual moves their cash from small banks to one of the big 4 banks. This will make our "too big to fail" problem even worse and concentrate power. It will also severely imperil liquidity at smaller community banks. 

[YACCster]

In case you think the SVB collapse affects only the Silicon Valley elites:

Mompreneurs on Etsy say they can't 'pay the mortgage or feed their kids' after their payments failed to arrive because firm used shuttered Silicon Valley Bank to process sales - as fallout from collapse hits ordinary families

https://www.dailymail.co.uk/news/article-11848079/Mompreneurs-Etsy-hit-SVB-collapse-pay-bills.html

 

[Tron]

31 minutes ago, YACCster said:

In case you think the SVB collapse affects only the Silicon Valley elites:

Mompreneurs on Etsy say they can't 'pay the mortgage or feed their kids' after their payments failed to arrive because firm used shuttered Silicon Valley Bank to process sales - as fallout from collapse hits ordinary families

https://www.dailymail.co.uk/news/article-11848079/Mompreneurs-Etsy-hit-SVB-collapse-pay-bills.html

 

Not only that…there are thousands of people who won’t get paid next week because the startup or small business they work for can’t make payroll. Lots of layoffs coming from this unless someone steps in and picks up the pieces. If it happens, my money is on Goldman Sachs being the acquirer. If they et liquidated…customers probably looking at a 20% haircut. 
 

Here is good summary of why this bank run will have so many ripple effects.

 

 

Edited March 11, 2023 by Tron

[Tron]

On 3/9/2023 at 6:25 PM, Tron said:

Run on one bank → credit event → contagion → imminent financial system collapse → QE infinity
 

 

 

[Tron]

SVB's Chief Administrative Officer was the CFO of Lehman Brothers' Investment Bank when it collapsed. 

SVB's Chief Risk Officer was the Managing Director at Deutsche Bank during 2008 AND led credit ratings in 2007. 

The CEO was a director at the San Francisco Fed from 2019 to the present.

You can't even make this shit up ....

[YACCster]

At least they had their priorities in the right place:

 

Silicon Valley Bank had NO head of 'risk assessment' for nine months before it collapsed... as woke boss for Europe, Middle East and Africa was busy organizing a month-long Pride campaign

https://www.dailymail.co.uk/news/article-11848705/Woke-head-risk-assessment-Silicon-Valley-Bank-accused-prioritizing-diversity-issues.html

 

 

[Majbasil]

Hang on there, are you trying to blame Elizabeth Warren for this mess? W T actual F!  Shesh that is like saying WW2 is Churchill's fault imho.  https://www.politico.com/news/2023/03/12/silicon-valley-bank-fallout-washington-00086662

 

Nope, this is by Republicans ideology and efforts, as per usual working oh so hard to f^ck things up and deregulate (gotta make white collar crime easier so a few can profit) banks and frankly everything.  Now, the S&it is hitting the proverbial fan once again and more banks to crash as well apparently.  What did we learn from this, or did we not learn anything and history once again repeats itself and craps all over everyone.  PARDON MY dag gone FRENCH.   

Quote

Sen. Elizabeth Warren (D-Mass.) is renewing calls for strengthening oversight and bolstering measures that reduce bank reliance on debt — something that Fed officials have identified as a top priority. Banks have launched a lobbying onslaught to resist those efforts.

“Silicon Valley Bank’s collapse underscores the need for strong rules to protect the financial system,” Warren tweeted. “Regulators must not buckle to pressure.”

 

[Tron]

9 minutes ago, Majbasil said:

Hang on there, are you trying to blame Elizabeth Warren for this mess? W T actual F!  Shesh that is like saying WW2 is Churchill's fault imho.  https://www.politico.com/news/2023/03/12/silicon-valley-bank-fallout-washington-00086662

 

Nope, this is by Republicans ideology and efforts, as per usual working oh so hard to f^ck things up and deregulate (gotta make white collar crime easier so a few can profit) banks and frankly everything.  Now, the S&it is hitting the proverbial fan once again and more banks to crash as well apparently.  What did we learn from this, or did we not learn anything and history once again repeats itself and craps all over everyone.  PARDON MY dag gone FRENCH.   

 

Yes, this SVB failure is partially her fault. You obviously haven't been paying attention to this particular situation closely, and the things she said publicly last week regarding this bank. I'm not really political...consider myself to be a Libertarian..but your simplistic view on blaming only R's for this is very naive.

[YACCster]

Next one happening soon maybe FNB?:

Bank shares plummet up to 74% in pre-market trading despite Biden's guarantee scheme for SVB and Signature Bank - amid fears of a banking rout mount when stock market opens at 9.30am

https://www.dailymail.co.uk/news/article-11853651/Bank-shares-plummet-71-pre-market-trading-despite-Bidens-backing.html

 

Edited March 13, 2023 by YACCster

[Tron]

If this banking collapse doesn’t show you the use case for Bitcoin, you’re NGMI.

Edited March 13, 2023 by Tron

[Tron]

Next up…they will ban the short selling of bank stocks…mark my words it’s coming. 

[Tron]

Someday, bond traders will be telling their grandchildren about this price action. 10 yr Treasury yield is down over 100bps in last 3 trading days. Last time this happened was Oct 1987 crash.
 

[Majbasil]

Tron wrote "Good idea for everyone to keep at least a month's worth of expenses in cash at home in the event we have a systemic banking crisis...the chances of which are definitely not zero. "  and to that I can say YES.  Having cash in a fire safe at home, and at your bank safe deposit box, etc. is wise always.  THIS is something that Tron and I can agree with.  Think of it as insurance against SHTF, never ever to be used, just there like an insurance policy.  Folks tend to over spend, buy stuff they cannot afford, etc.  Pay yourself first, protect yourself and your family.  Keeping a healthy emergency fund to be never ever used is a wise investment, you'll be able to sleep better at night just in case the S H T F.  

As for this banking crisis, I am pleased so far at the govt. responses this Monday, and thank goodness we have an actual grownup as President, whew.  Now if we will just prosecute those "evil doers" who run amok breaking laws and ripping off everyone for their own profits.  That would make things much more safe and healthier and environment to live in.  https://www3.d125.org/aconneen/citizenu/TEXT4.9.pdf

 

Quote

4.9 Ideology and Economic Policy Describe different political ideologies on the role of government in regulating the marketplace. The range of political ideologies held by citizens frames and constrains public policy debates. No policy receives greater attention than when governments get involved in making economic decisions. The business of America is, after all, business. Liberals, represented by Democrats, actively support government regulation of the market. Big government policies ultimately grew out of economic crises. Economic depressions demanded bold answers. The single greatest example of a time when bold answers were given was during the Great Depression of the 1930s. Democratic president Franklin Roosevelt promised the nation a New Deal. With it came an unprecedented economic policy agenda. Fiscal policy turned to higher taxes and significant higher spending. Balanced budgets were replaced by Keynesian theories that advocated for government debt. The Federal Reserve centralized monetary policy during this time of crisis. Money supply was tightened and interest rates increased. Liberals favor economic experimentation. Typically, liberals look to government to help the under-dog. Whereas they favor increasing the inheritance tax they actively pursue an increase in the minimum wage. Liberals favor an active government in the economy. Conservatives, represented by Republicans, advocate for less government regulation of the market. Traditionally Americans preferred a government with a laissez faire economic policy. Selfreliance, rugged individualism and entrepreneurship have been the backbone of American prosperity according to conservatives. Government should stay out of business affairs if at all possible. Of course, at times even conservatives see the need for some government regulation. At times a referee is needed to keep private enterprise fair. Safety nets for the disadvantaged are to be expected. Nevertheless, Republicans prefer supply side policies. This typically calls for lowering marginal tax rates. Therefore, conservatives favor fiscal policies that reduce both taxes and government spending. Monetary policy, as well, should keep interest rates lower. Conservative economic policy supports lowering inheritance taxes. It is also argued that raising the minimum wage hurts economic growth. Conservatives favor less government regulation of the marketplace. Libertarian voices are characterized by a desire for little or no government regulation of the market. Whereas conservatives talk of laissez faire ideals, libertarians demand such policies. Libertarians see no need for government intervention in the economy. They oppose most regulations. Market forces are to be trusted. Governments, they argue, are to be held at an arms distance. Though libertarians can be found across the political spectrum most would agree that government solutions to economic problems should be met with skepticism. Libertarian policies would result in a smaller government with fewer taxes. Government bailouts would end. The government should balance its budget. Libertarians favor little or no regulation of the marketplace. Despite our political culture’s shared commitment to fair and honest trade and equal opportunity, the role of government in the economy is one of our most contested debates. The marketplace of ideas is often mired in economic policy disputes. Advocacy groups can be found across the political spectrum. Markets look to government for stability and certainty. Public policy ideas have economic consequences. American political beliefs not only affect who governs us but what we have in our pocketbooks as well. 2 Pocket-book issues move and mobilize voters perhaps greater than any other issue. The marketplace of ideas is often stuck on marketplace agendas. We follow stock markets, home prices and grocery bills with much more zeal than many social issues. Some say it is because we are governed by the “golden rule,” he with the gold rules. Ideological differences on marketplace regulation are based on different theoretical support, including Keynesian and supply-side perspectives on monetary and fiscal policies. Liberals and conservatives, Democrats and Republicans, differ greatly when it comes to economic policy. Liberals, represented by Democrats, actively support government regulation of the market. Big government policies ultimately grew out of economic crises. Economic depressions demanded bold answers. The single greatest example of a time when bold answers were given was during the Great Depression of the 1930s. Democratic president Franklin Roosevelt promised the nation a New Deal. With it came an unprecedented economic policy agenda. Fiscal policy turned to higher taxes and significant higher spending. Balanced budgets were replaced by Keynesian theories that advocated for government debt. The Federal Reserve centralized monetary policy during this time of crisis. Money supply was tightened and interest rates increased. Liberals favor economic experimentation. Typically, liberals look to government to help the under-dog. Whereas they favor increasing the inheritance tax they actively pursue an increase in the minimum wage. Liberals favor an active government in the economy. Attempts to raise the minimum wage are an example of a marketplace issue that has mobilized liberals. Higher wages, setting minimum standards-of-living and providing for the less privileged has often characterized the economic policy goals of the Democratic Party. To varying degrees they have been successful, but it is never easy. Conservatives, represented by Republicans, advocate for less government regulation of the market. Traditionally Americans preferred a government with a laissez faire economic policy. Selfreliance, rugged individualism and entrepreneurship have been the backbone of American prosperity according to conservatives. Government should stay out of business affairs if at all possible. Of course, at times even conservatives see the need for some government regulation. At times a referee is needed to keep private enterprise fair. Safety nets for the disadvantaged are to be expected. Nevertheless, Republicans prefer supply side policies. This typically calls for lowering marginal tax rates. Therefore, conservatives favor fiscal policies that reduce both taxes and government spending. Monetary policy, as well, should keep interest rates lower. Conservative economic policy supports lowering inheritance taxes. It is also argued that raising the minimum wage hurts economic growth. Conservatives favor less government regulation of the marketplace. Attempts to reform the inheritance tax are an example of a marketplace issue that has mobilized conservatives. Lowering taxes, protecting small businesses from excessive regulation and protecting estates from abusive death taxes has often characterized the economic policy goals of the Republican Party. To varying degrees they have been successful, but it is never easy. Despite our political culture’s shared commitment to fair and honest trade and equal opportunity, the role of government in the economy is one of our most contested debates. The marketplace of ideas is often mired in economic policy disputes. Advocacy groups can be found across the political spectrum. Markets look to government for stability and certainty. Public policy ideas have economic consequences. American political beliefs not only affect who governs us but what we have in our pocketbooks as well

 

[Tron]

I guarantee you the current POTUS has no fucking clue what is happening. He doesn’t even know which way to walk off stage after he finishes reading what the underlings wrote for his teleprompter appearances. The writers for South Park know more about how shit operates in our economy than Biden does. Can’t take you seriously anymore Basil. You clearly prioritize politics over facts.