SVB - 2023 Too Big to Fail

theiioftx

theiioftx

Sponsor Deputy
With the collapse of woke SVB, the Biden administration was quick to start the lie to the American public. "They will not bail out SVB, but they will guarantee all deposits beyond FDIC limits." So in fact, they are bailing out the bank.

I expect many more failures coming in the next 12 months if not sooner. Get ready for the fall.
 
guy4321 said:
2) Barney Frank?!? Good grief
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At this point, I would have been more surprised if he wasn't on the Board. You have an ultra-woke bank failing and now ready to ask the taxpayers for a handout. Of course, you're going to find some slimy, liberal politician in the mix. He's about to earn his money. It's like when we found out that Bill Clinton's OMB Director was running Fannie Mae.
 
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This morning, Biden says taxpayers will not be paying for the bailout. Last time I checked, all funds the government uses are taxpayer dollars. Maybe Biden can tap the cash strategic reserves like he did with oil reserves to stem inflation?
 
theiioftx said:
This morning, Biden says taxpayers will not be paying for the bailout. Last time I checked, all funds the government uses are taxpayer dollars. Maybe Biden can tap the cash strategic reserves like he did with oil reserves to stem inflation?
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Biden will personally pay for it?
 
I'm surprised this guy isn't on the board.

Joe-Biden-Hunter-Biden-Feening-for-Burisma-Jobs.png
 
guy4321 said:
Whats the point of FDIC limits then
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It gives those people who hate the FDIC (if there are any) something else to make fun of them about. I dare you to find an FDIC employee (on either the audit or the liquidation side) who can explain the FDIC coverage to you. THEY DON"T KNOW IT!

SVB is just another major loss for taxpayers when the FDIC sells off loans at two/three cents on the dollar. Deposits will all be transferred to another bank just like they have done with ever other bank of any size in the last 60 years.

Major and only question is what or whom at SVB did what to piss off the feds?
 
If the rogue banks depend on the gubmint to cover their ***, why even have banks to begin with? If you're not going to let them fail, you're running a socialist game

Biden wants more legislation but we already have that in place. What's missing is regulators doing their job. 2008, madoff, SBF, now this. All preventable
 
Run,

You should have to work/deal with some of those regulators. How about the guy in charge being an English major from a school in the Midwest. No accounting, no finance classes at all, but he was in charge of a huge region.
 
Horn2RunAgain said:
If the rogue banks depend on the gubmint to cover their ***, why even have banks to begin with? If you're not going to let them fail, you're running a socialist game

Biden wants more legislation but we already have that in place. What's missing is regulators doing their job. 2008, madoff, SBF, now this. All preventable
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As a state-chartered bank, SVB was regulated by the California Department of Financial Protection and Innovation (DFPI). I guess the first question is where were the State regulators (hopefully not moved to Texas)? The second question is at what point does the US step in and mandates Federal Banking Charters in California because the State is incapable? (This would derail Newsome's bid to be President so not a bad option.) The third question is what type of guarantee did the Feds give to HSBC for them to take over SVB's UK operations. (Yes, in theory, HSBC picked up all liabilities, but from dealing with HSBC for 15 years they are no dummies. I am sure at some point they will hand a bill to the US for some of those liabilities.)
 
The fundamental problem with banking regulation is that it's damn near impossible not to create terrible incentives. If you regulate too tightly, it's too hard for worthy debtors to get credit, which hurts the economy. If you protect the seemingly innocent (depositors and small investors), you incentivize bad decisions by the banks because somebody will bail them out.

As usual, the government is a huge part of this problem. Not only do they protect depositors and incentivize bad decisions, they actively encourage banks to make bad decisions. This kind of crap is entirely foreseeable.
 
Viper,

As a state chartered institution with federal insurance, SVB was subject to annual examinations by the California banking department, as well as a joint or separate examination by the FDIC. Then, of course, they would have an annual audit by some accounting firm like Arthur Young, aka, King of the Goodwill Markups. Brings to mind the story of a major Texas bank that did not want to renew their participation in the Lee Iaococa (sp)/Chrysler credit facilities. A special board meeting was called for early one morning. When the chairman told the guy in DC that the bank was not going to renew the facility, the voice from DC replied, "Are you sure? Last time I checked you were a federally insured bank but that can change before dark.

The FDIC has NO authority to close, but can remove their insurance, which is the same thing.
 
Sabre,

Did Uncle Joe just neuter the FDIC with the "all deposits will be covered" statement? Why pay insurance to the FDIC if the Feds are going to pay everyone in full?
 
I doubt seriously that Joe knows how the system works. I have been a proponent of doing away with the FDIC ever since I was in undergrad. What he might understand is that the FDIC has been *****-slapped in court every time this crap comes up.

Who do you trust more - Wells Fargo or HSBC? BofA or the Swiss?
 
Looking at the SVB situation they collapsed because they followed government regulation to a tee. There weren't buying up risky assets. They were the most buy the book, low risk bank out there according to the mainstream economic viewpoint. What killed them was US monetary policy, the expectation of low interest rates, and the expectation of transitory inflation that was produced by monetary policy.

The only thing that would save a bank like this is stable currency and market fluctuating interest rates.

How Easy Money Killed Silicon Valley Bank | Daniel Lacalle
 
Feds could not find anyone who wanted to take over SVB over the weekend. They claim they are going to try again. Eventually, they will find a sucker, but the longer this goes on the higher the tab to taxpayers.

Also, it appears that KPMG gave the bank an unqualified audit 14 days before it failed.
 
The British PM is being hailed as a hero for allowing HBSC buy the British arm of SVB for one pound. It’s a ponzi miracle.
 
The SVB bank bail out is also a return to a loose monetary policy and will support more price inflation, for anyone who thought inflation was going away.

Also this represents a distribution of money from low and middle class people to the extremely wealthy. I look at the French Revolution with disdain, but situations like this make me little sympathetic, honestly.

Rich people are now incentivized to do whatever they want and face no consequences financially. They simply will take whatever they need from the working class. This isn't capitalism. It is cronyism or mercantilism which are flavors of fascism.

Yes, the Latest Bank Bailout Is Really a Bailout, and You Are Paying for It. | Ryan McMaken
 
ViperHorn said:
Feds could not find anyone who wanted to take over SVB over the weekend. They claim they are going to try again. Eventually, they will find a sucker, but the longer this goes on the higher the tab to taxpayers.

Also, it appears that KPMG gave the bank an unqualified audit 14 days before it failed.
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Apparently their loan book is very attractive:

Venture Capitalists Circle SVB's Carcass | ZeroHedge
 
Monahorns said:
The SVB bank bail out is also a return to a loose monetary policy and will support more price inflation, for anyone who thought inflation was going away.

Also this represents a distribution of money from low and middle class people to the extremely wealthy. I look at the French Revolution with disdain, but situations like this make me little sympathetic, honestly.

Rich people are now incentivized to do whatever they want and face no consequences financially. They simply will take whatever they need from the working class. This isn't capitalism. It is cronyism or mercantilism which are flavors of fascism.

Yes, the Latest Bank Bailout Is Really a Bailout, and You Are Paying for It. | Ryan McMaken
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This guy is dishonest and didn’t need to be. There is no bank bailout because the government isn’t buying special shares of the bank like in 2008. The bank has been taken over - the opposite of a bailout. I guess he thought he was clever but he is clearly just an ***. By the way, the taxpayer is always on the hook for stupid actions by our government (BAILOUT!!!!). See? I can play this stupid game too.
 
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Monahorns said:
The SVB bank bail out is also a return to a loose monetary policy and will support more price inflation, for anyone who thought inflation was going away.

Also this represents a distribution of money from low and middle class people to the extremely wealthy. I look at the French Revolution with disdain, but situations like this make me little sympathetic, honestly.

Rich people are now incentivized to do whatever they want and face no consequences financially. They simply will take whatever they need from the working class. This isn't capitalism. It is cronyism or mercantilism which are flavors of fascism.

Yes, the Latest Bank Bailout Is Really a Bailout, and You Are Paying for It. | Ryan McMaken
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Another lie. The loss is only realized if the bank is forced to sell them. Otherwise there is no loss if the treasury bill are held to maturity:

Part of the reason these banks are in trouble is because their assets are no longer worth anywhere near par value in the marketplace
 
mchammer said:
This guy is dishonest and didn’t need to be. There is no bank bailout because the government isn’t buying special shares of the bank like in 2008. The bank has been taken over - the opposite of a bailout. I guess he thought he was clever but he is clearly just an ***. By the way, the taxpayer is always on the hook for stupid actions by our government (BAILOUT!!!!). See? I can play this stupid game too.
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The point is that the Fed and the Treasury steal from worker's wealth in order to support bank accounts in excess of $250,000. It is a bail out in that it keeps the bank solvent even though it is a different mechanism than you describe.

The term "bail out" isn't the technical term you make it out to be.
 
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