Global Financial Crisis (23 Viewers)

[GordoDeCentral]

Credit union works too. By big banks I meant those that are too big to fail i.e will always get a bailout.

On the 250k insured deposits, that’s peanuts for a business account. Any business worth anything would have bigger deposits and are not in a place to evaluate the credit worthiness of the bank they’re depositing into. SVB had a good reputation until it crashed and I think Moodys had them rated highly too. I can’t fault a business for depositing money there.

if all businesses start seeing simple deposits as a risky endeavour then all smaller banks will crash. That’s the consequence they want to mitigate by the fed action.

I just read a piece by Ben Thompson about what happened and it looks like Peter Thiel might be the biggest instigator of the panic/bank rush. Another friend of Musk and David Sacks

You mean like bart simpson back in the day

 

Buy on AliExpress.com

[Hist]

You mean like bart simpson back in the day

Same same but different

 

[Bjerknes]

Credit union works too. By big banks I meant those that are too big to fail i.e will always get a bailout.

On the 250k insured deposits, that’s peanuts for a business account. Any business worth anything would have bigger deposits and are not in a place to evaluate the credit worthiness of the bank they’re depositing into. SVB had a good reputation until it crashed and I think Moodys had them rated highly too. I can’t fault a business for depositing money there.

if all businesses start seeing simple deposits as a risky endeavour then all smaller banks will crash. That’s the consequence they want to mitigate by the fed action.

I just read a piece by Ben Thompson about what happened and it looks like Peter Thiel might be the biggest instigator of the panic/bank rush. Another friend of Musk and David Sacks

Not sure if it's true or not, but I heard that the bond raters were the ones who uncovered this mess, not the regulators. So the Fed is going to conduct a "thorough review" according to J Pow. Again, what is the point of oversight if the regulators aren't doing their job?

The regulators will just step in and pick their winners and losers. Just let them all fail. There are plenty of startups and tech firms across the country to pick up the slack if silicon valley firms have no money left.

 

[Bjerknes]

Don’t be silly guys. Trust everything. Buy everything. Enjoy the ride.

 

[Bjerknes]

 

[Bjerknes]

So the Fed saved the day. For now.

 

[Bjerknes]

BLM = rent seeking scam
SIVB = money launderer
Fed = enabler

So much shit in this country just needs to fail. @GordoDeCentral

 

[Lion]

did we all not watch the big short? credit rating means fuck all since it's basically bought by the businesses.

 

[swag]

BLM = rent seeking scam
SIVB = money launderer
Fed = enabler

So much shit in this country just needs to fail. @GordoDeCentral

I'm not sure I'm properly connecting the donations a bank makes to what it invests its customer holdings in.

Chase probably donates to the Westboro Baptist Church in some direct or indirect way. But how does that have any bearing on customer accounts? I don't see the connection.

That's like blaming Bear Stearns' donations to Meals-on-Wheels for the 2008 collapse.

 

[Raphaël]

European banks falter today in the wake of Credit Suisse( -22%), BNP lost 12%, Societe Generale lost 13%, ING lost 8%, BBVA lost 9%...

 

[Strickland]

Havent had time to focus on this, but if SIVB has money to pay out all the deposits why is it failing? You usually see this with banks closed for AML breaches..

 

[GordoDeCentral]

Havent had time to focus on this, but if SIVB has money to pay out all the deposits why is it failing?

It had assets(bonds) not cash, it was a liquidity issue mostly.

 

[Strickland]

It had assets(bonds) not cash, it was a liquidity issue mostly.

So it is the state pouring in money after all thats disguised as "purchasing bonds"?

 

[Bjerknes]

 

[GordoDeCentral]

So it is the state pouring in money after all thats disguised as "purchasing bonds"?

From what i understand, yes.

 

[Bjerknes]

I'm not sure I'm properly connecting the donations a bank makes to what it invests its customer holdings in.

Chase probably donates to the Westboro Baptist Church in some direct or indirect way. But how does that have any bearing on customer accounts? I don't see the connection.

That's like blaming Bear Stearns' donations to Meals-on-Wheels for the 2008 collapse.

Well, maybe if they had that cash they wouldn’t have such a liquidity issue? Who knows. Either way, it’s just stupid.

 

[swag]

Well, maybe if they had that cash they wouldn’t have such a liquidity issue? Who knows. Either way, it’s just stupid.

But using operating capital to cover for customer accounts sounds highly illegal.

 

[Seven]

That goes without saying, i think these assholes gonna refund all deposits but not salvage the bank and politically claim it as not a bailout.

I understand no one in the US likes the word bailout, but it's not as bad as it sounds.

If the government guarantees people getting their bank deposits, that will build a lot of trust into the financial system. And trust is crucial to prevent economic collapse. In Belgium, and I think in quite a few European countries, it's actually solidified in law that the state has to guarantee (part of) your deposit. A supposed bailout would have to be limited to deposits though, it's not the government's job to lessen your risk if you're investing. And it shouldn't be used to save the bank as an institution either. The bank itself can go bankrupt, as long as clients have access to their savings.

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But using operating capital to cover for customer accounts sounds highly illegal.

I don't think it's realistic to assume those are in fact completely separated.

 

[GordoDeCentral]

I understand no one in the US likes the word bailout, but it's not as bad as it sounds.

If the government guarantees people getting their bank deposits, that will build a lot of trust into the financial system. And trust is crucial to prevent economic collapse. In Belgium, and I think in quite a few European countries, it's actually solidified in law that the state has to guarantee (part of) your deposit. A supposed bailout would have to be limited to deposits though, it's not the government's job to lessen your risk if you're investing. And it shouldn't be used to save the bank as an institution either. The bank itself can go bankrupt, as long as clients have access to their savings.

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I don't think it's realistic to assume those are in fact completely separated.

It's moreso the concept of moral hazard, i feel like we are just encouraging more and more risky and destructive behavior. In America too, deposits up to 250k are insured. So you do know that anything above is at risk.

 

[Seven]

It's moreso the concept of moral hazard, i feel like we are just encouraging more and more risky and destructive behavior. In America too, deposits up to 250k are insured. So you do know that anything above is at risk.

I think that's probably a good bar to set.

As for the risky and destructive behavior, part of that might also be the very low or even negative interest rates.