I'm very much no expert but from what I have read I think that both of DDB's scenarios will play out. The regional banks are basically solvent and sound in the absence of extraordinary runs on their deposits. At the same time I would expect them to be more stringent in their loans. It IS very interesting about FRC vs. SIVB.
Because Powell is in this for the long term and knows he can't do everything today. This is politics, not just finance. He probably can't count on the Senate GOP. He has to do what's possible and be ready to parry the next attack and move forward.
More below on the fact that the Fed/Treasury actions actually undermine small community banks and credit unions — exposing them to bank runs and probably contributing to banking consolidation, which is definitely NOT in the interest of ordinary Americans. Sure, Powell and Co may be fighting Davos on behalf of American big banking interests (according to Tom Luongo), but it appears they are also fighting Main Street.
As I've *attempted* to make clear, there's a lot more at stake here than "American big banking interests". There's the entire US economy and our foreign policy at stake, as well. This is about Davos with all its woke connections to the Open Society trying to take over the world. 1984 writ very large.
Yes, it was an exaggeration to simply say “big banking interests.” They have incentive to protect the u.s. economy from the Davos dystopians. I get that. However, Yellen’s comments the other day also make clear that HOW the big banking interests will “save” the U.S. economy will not necessarily be good for us bottom feeders. The extermination of community banking in this country (if that is where this is heading) will leave us as much at the whim of centralized / centralizing powers as would be the case under the Davos crowd (think CBDCs).
I’m a newb when it comes to this macro-economic stuff. Don’t claim to have it all figured out. I just wanted to alert folks to some rather strange happenings that at least may complicate the picture that Tom Luongo and DDB are painting.
I don't think that anything that has happened will come anywhere close to exterminating community banking. To be honest, community bankers (both the scale of which and the services they provide) are of no benefit or interest to the large diversified banks. The regional banks (such as Truist, PNC, Huntingdon Bancshares) are much more at risk for losing depositors to the big banks but even they should be fine with time (after the threat of bank runs is over) as they are quite solvent under normal conditions.
Yellen is a political animal--totally. Her background was labor economics, not banking and money. Her warning against big banks--who want her gone yesterday--is very much on a par with typical Dem "tax the rich" rhetoric or "us against the big corps" rhetoric. The notion that the Dems will protect the little guy against the big corporations is belied by the facts of our economic life. It's simply political rhetoric--the ALWAYS say stuff like that. I'm frankly baffled that you would place credence in Yellen's talking points, especially if you take a look at the operation that the Dems were running out of FTX and SVB and Signature. Those were not operations to protect the little guy.
Luongo today, to show he understands all this and admits there is uncertainty. After speculating on what will be happening going forward:
"Whether that's good or bad for anyone outside of the Marriner-Eccles building or Wall St. is anyone's guess. But that's the lay of the land."
His point is that, whatever it is, it will surely be better than eating bugs and owning nothing. Trust me on this: You won't be happy with that.
“I'm frankly baffled that you would place credence in Yellen's talking points, especially if you take a look at the operation that the Dems were running out of FTX and SVB and Signature. Those were not operations to protect the little guy.”
I am confused here. The comments I am referring to were not talking points. The Senator from Oklahoma had to press her into admitting something she did not want to admit to: precisely that the latest Fed backstop would NOT apply to the little guys. I don’t trust Yellen any further than I can throw her. But when she owns up to something embarrassing under direct questioning by a clearly hostile Senator, I pay attention.
And, I agree the operations run out of SVB, et al indeed not were not for the benefit of the little guy. But for what its worth, those big money depositors who just had their financial asses covered by the Fed are big time donors to the Dem Party and Leftist causes. It’s still business as usual for them. If those depositors had been run-of-mill apolitical to conservative interests in middle america, the powers that be would not have swooped in so quickly to save them. This is what Yellen admitted to.
Not trying to be obtuse or pick a fight with you. Just want to be clear about what I am talking about. I refer again to the video commentary below on the exchange between Senator Lankford and Yellen:
I know, I watched that segment. But please note, Yellen appeared to me in her responses to have a poor grasp of her facts--you'll see what Jim Rickards has to say about her in the next post. She doesn't know banking, and probably doesn't have a really good grasp of banking law and regs. Further, she has her own axe to grind. She was also accused of lying in other parts of her testimony.
It's a political war being waged with economic means. Powell was put in charge of a Fed that had been run by the enemy for a good two decades--and the same at Treasury. Whether GOP or Dem admins. In such a war there will be casualties. They're not fighting Main St. Do you seriously think JPMorgan is interested in doing rinky dink local banking? But these are the people Powell wants out, as DDB wrote in her book, and it's why Zhou was desperate to keep Powell out of the Fed:
"Federal Reserve Bank of San Francisco was lead regulator of Silicon Vally Bank. Fed Chief is Mary Daly. She's a woke activist focusing on George Floyd, Climate Change, and BLM. The CEO of SVB was on the Fed board of directors. The blind leading the blind."
Powell is in the same position as Trump, but he's much better at dealing with personnel issues than Trump will ever be.
I've usually found Luongo's comments persuasive, but he often gets very little pushback on his podcasts or interviews. Probably because others on the podcast don't have a good grasp of the Fed or other banking issues. When he interviewed DDB several weeks ago, it appeared to me she took the lead and he was more deferential. Probably because she understood the Fed better than him.
I'm not an economics or banking person, but have been trying to understand the issues as they are currently being presented. This notion from Luongo that the Fed doesn't want to eliminate regional and local banks because big banks like JPMorgan/Chase aren't interested in "rinky dink local banking" (i.e., they're not interested in making individual car or small business loans because they're only interested in big projects, like oil pipelines, etc.) doesn't appear to jive. How many of the big banks (JPMorgan/Chase, Wells Fargo, etc.) have local branches in your area? There are many of these in my area, and I'm sure local branches of Morgan/Chase and Wells Fargo make many small loans all the time.
Many fear that these 1-yr Fed loans - which are only going to "Fed-selected" banks - will protect the "Fed-selected" banks at the expense of small, "non-selected" banks and may lead to large transfers of capital from "non-selected" to "Fed-selected" banks. Thus, squeezing out the smaller banks and credit unions. These fears do not appear to be unwarranted and I can't recall if I've heard Luongo or DDB comment why this shouldn't be a worry.
Also, several people I've listened to have indicated that these loans could easily turn into QE if the Fed decides down the road to "forgive" these loans to select banks. I suppose this may undercut any interest rate hikes that Powell has instituted.
Re Luongo's podcast with DDB. As I said at the time ...
TL is ALWAYS deferential toward DDB--and he's not alone. She's a star in the conservative financial commentariat, and rightly so. It was a major coup for TL to get her to appear on his podcast. However, he was constantly trying to lead her to talk about the big picture--and he said *before* the podcast that that's what he wanted to do. He said *repeatedly*, beforehand, that she seemed to be holding back from commenting on the bigger picture (Davos v. Fed) and he wanted to draw her out if he could. To do that he had to let her talk freely, but she was not comfortable or prepared at that time to go where TL was trying to lead her--that was very clear and she didn't hide it. That said, TL wanted to draw her out because he respects her knowledge and was hoping she'd have a major contribution to make. She has opened up a bit since then, which shows that she's been thinking about some of these things since the podcast.
DDB undoubtedly understands the inner workings of the Fed better than TL, because she worked there and had her eyes open. OTOH, her understanding of the Fed doesn't include geopolitics, and TL has spent a lot of time, years, on that. Listen to her. She has domestic stats totally at her finger tips, but when TL tried to draw her into more geopolitical oriented concerns she freely admitted she hadn't given those considerations much, if any, thought.
MY impression was that TL was respectfully seeking a degree of validation for the "Theory of Everything" from her. You could read some of that validation between the lines of what she said. But at the same time she stated quite strongly that she felt that Powell was not under any obligation to anyone in his actions and certainly was not bound to anyone because of monetary needs. At least that was my impression.
Although, in fairness to Trump, the two institutions he was able to transform were the Fed and the SCOTUS. Not all the regional Feds, but the board of governors and the NYFed. Trump's Fed choices obviously got huge support from the NY Guys. I'm gonna guess that that kind of support (the biggest and richest lobby in the world) also got Trump's SCOTUS choices through. Not that the NY Guys are movement conservatives or culture warriors, but that they needed legal protection against the woke globalist crowd, and only conservatives could offer that. SCOTUS nominations that are hotly contested are hugely expensive and there had to be deep pockets to back Trump's picks. There were also deep pockets to try to pick off one or two GOP senators. This is all part of the big picture.
G'evening and thanks again Mark for your researching and sharing. This is very significant and important, if flying at quite an altitude for we mere grounded mortals.
I wonder if the apparent empowerment of the Fed, whether intentional or by virtue of circumstance, may be a danger once we're beyond today's crisis'. Big fat elephant is our Debt-based economy arriving at the huge debt with deficits deemed 'wonderfully reduced as declared by the Chief Executive/President' to what could be 2 trillion a year for the next decade. I tend to go along with the need to return banking to a regional program. However, the Military Industrial Complex uses Dollar Hegemony as a huge weapon in it's ongoing war against humanity, oops... anyways Powell's reclaiming control of the dollar from Europe, as such, is in major conflict to that whole CMI/Davos cabal.
I vote for fighting inflation: it's a permanent 'tax' on all and hits particularly hardest those least able to deal with it. Investors, generally having fared quite well this past decade of Fed QEs and loose political monetary policies are likely to lose big. There will be bad for us all in any recession/depression that may result: but that will be far more Capitalist and healing of our economy than more Can-Kicking. FWIW.
I am grateful to be allowed to express my thoughts; this stuff seems beyond the citizenry's control, no one's asking what we want so a Jay Powell rises and fills a heroic role. Necessarily, I guess. My best to all, (WrH)
Agreed, Sir Wayne. People have short memories and have already forgotten what a curse inflation is for the ordinary budget. However, my concern is that, although Powell is choosing the right path, and that there is no choice, the US economy won't survive the medicine. Like with many places in Western Europe, there's no longer any "there" there. Stay sane, my friend!
In light of Mark's posting today [Global War: Multi-Front Roundup] some of my opinions expressed here in this thread need my reconsideration. I do believe we, who actually pay the bills, have no say-so and worse, our best interests are not being pursued. While I am struggling with Luongo's/Mark's conclusion the likely 'hard landing' from Powell's actions (which may be depression-level) will result in my Soy-Sauce/Rice Vinegar Bug recipe becoming popular (humor for sanity excuse applies here), I'm far more a fan of capitalism than socialism's remedies we seem to be driven towards.
I'll add S'21, I appreciate your encouragement and response of my thoughts; (and, of course, Mark's articles providing for my often goofy and too-wordy thought to be shared). Blessings my Texas Friend! (WrH)
I still can't tell whether Luongo is right or whether he's just trying to fit the facts to his pet theory. Could be either or neither. Let's see what the Fed does with rates later in the month.
i think he is just making up an interesting narrative subtext for a usually boring subject. SOFR is not a weapon against LIBOR it is just that banks haven't lent to other banks unsecured for years so they had alot of room to say whatever number they needed to make their coworkers money. So they needed a rate that was actually set by the market but no one lends unsecured so they used the Secured Overnight Funding Rate(SOFR).
I think Powell knew he shouldn't have let Trump shame him into lowering rates (ironic that those low rates allowed them to fund all the shenanigans against him). So now he is just shamelessly fixing his mistake. SVB was the VCs trying to set off banks runs to release the pressure but Powell deftly made sure depositors wouldn't be screwed.
Luongo's narrative is much more interesting to read though.
Weak, blame it on President Trump. Wow, some of you posting here "Just want to be right and don't really follow the facts." It funny reading some of these posts. It's like you are living in a fantasy land...
“Powell deftly made sure [SVB] depositors wouldn't be screwed.”
This is correct. The Fed/Treasury didn’t bail out the bank. They bailed out the depositors. But why? Why THESE depositors? Ordinary people are already covered for up to $250k. SVB depositors were overwhelmingly 1%-ers with millions each on account with the bank. It will eventually come out that these bailed out depositors were all major donors to the Democratic Party and Leftist causes more generally.
Because Powell is in this for the long term and knows he can't do everything today. This is politics, not just finance. He probably can't count on the Senate GOP to support him. He has to do what's possible and be ready to parry the next attack and move forward.
Just listening to Jim Rickards--again. Yellen was talking about climate change the day before SVB blew up. She doesn't have a clue about banking and money. She's a labor activist, meaning, a Dem party activist. She thinks women should kill their babies and get out into the labor force.
When all options are bad, sometimes the 'less-bad' choice isn't the right one, RNo. I'd suggest a mild adjustment: Deflationary Depression is preferable? I'm inclined that way, just in it's far more 'capitalist' than the ongoing socialist/tyrannically managed system being perpetrated on us all. My best at you! (WrH)
"TL was respectfully seeking a degree of validation for the "Theory of Everything" from her."
Exactly.
I'm very much no expert but from what I have read I think that both of DDB's scenarios will play out. The regional banks are basically solvent and sound in the absence of extraordinary runs on their deposits. At the same time I would expect them to be more stringent in their loans. It IS very interesting about FRC vs. SIVB.
"But why?"
Because Powell is in this for the long term and knows he can't do everything today. This is politics, not just finance. He probably can't count on the Senate GOP. He has to do what's possible and be ready to parry the next attack and move forward.
More below on the fact that the Fed/Treasury actions actually undermine small community banks and credit unions — exposing them to bank runs and probably contributing to banking consolidation, which is definitely NOT in the interest of ordinary Americans. Sure, Powell and Co may be fighting Davos on behalf of American big banking interests (according to Tom Luongo), but it appears they are also fighting Main Street.
Skip into to 3:20:
https://youtu.be/wYIfap3CMMM
As I've *attempted* to make clear, there's a lot more at stake here than "American big banking interests". There's the entire US economy and our foreign policy at stake, as well. This is about Davos with all its woke connections to the Open Society trying to take over the world. 1984 writ very large.
Yes, it was an exaggeration to simply say “big banking interests.” They have incentive to protect the u.s. economy from the Davos dystopians. I get that. However, Yellen’s comments the other day also make clear that HOW the big banking interests will “save” the U.S. economy will not necessarily be good for us bottom feeders. The extermination of community banking in this country (if that is where this is heading) will leave us as much at the whim of centralized / centralizing powers as would be the case under the Davos crowd (think CBDCs).
I’m a newb when it comes to this macro-economic stuff. Don’t claim to have it all figured out. I just wanted to alert folks to some rather strange happenings that at least may complicate the picture that Tom Luongo and DDB are painting.
I don't think that anything that has happened will come anywhere close to exterminating community banking. To be honest, community bankers (both the scale of which and the services they provide) are of no benefit or interest to the large diversified banks. The regional banks (such as Truist, PNC, Huntingdon Bancshares) are much more at risk for losing depositors to the big banks but even they should be fine with time (after the threat of bank runs is over) as they are quite solvent under normal conditions.
"Yellen’s comments the other day"
Yellen is a political animal--totally. Her background was labor economics, not banking and money. Her warning against big banks--who want her gone yesterday--is very much on a par with typical Dem "tax the rich" rhetoric or "us against the big corps" rhetoric. The notion that the Dems will protect the little guy against the big corporations is belied by the facts of our economic life. It's simply political rhetoric--the ALWAYS say stuff like that. I'm frankly baffled that you would place credence in Yellen's talking points, especially if you take a look at the operation that the Dems were running out of FTX and SVB and Signature. Those were not operations to protect the little guy.
Luongo today, to show he understands all this and admits there is uncertainty. After speculating on what will be happening going forward:
"Whether that's good or bad for anyone outside of the Marriner-Eccles building or Wall St. is anyone's guess. But that's the lay of the land."
His point is that, whatever it is, it will surely be better than eating bugs and owning nothing. Trust me on this: You won't be happy with that.
“I'm frankly baffled that you would place credence in Yellen's talking points, especially if you take a look at the operation that the Dems were running out of FTX and SVB and Signature. Those were not operations to protect the little guy.”
I am confused here. The comments I am referring to were not talking points. The Senator from Oklahoma had to press her into admitting something she did not want to admit to: precisely that the latest Fed backstop would NOT apply to the little guys. I don’t trust Yellen any further than I can throw her. But when she owns up to something embarrassing under direct questioning by a clearly hostile Senator, I pay attention.
And, I agree the operations run out of SVB, et al indeed not were not for the benefit of the little guy. But for what its worth, those big money depositors who just had their financial asses covered by the Fed are big time donors to the Dem Party and Leftist causes. It’s still business as usual for them. If those depositors had been run-of-mill apolitical to conservative interests in middle america, the powers that be would not have swooped in so quickly to save them. This is what Yellen admitted to.
Not trying to be obtuse or pick a fight with you. Just want to be clear about what I am talking about. I refer again to the video commentary below on the exchange between Senator Lankford and Yellen:
https://youtu.be/Raavjoo-eao
I know, I watched that segment. But please note, Yellen appeared to me in her responses to have a poor grasp of her facts--you'll see what Jim Rickards has to say about her in the next post. She doesn't know banking, and probably doesn't have a really good grasp of banking law and regs. Further, she has her own axe to grind. She was also accused of lying in other parts of her testimony.
“better than eating bugs and owning nothing. Trust me on this: You won't be happy with that.”
Touché.
It's a political war being waged with economic means. Powell was put in charge of a Fed that had been run by the enemy for a good two decades--and the same at Treasury. Whether GOP or Dem admins. In such a war there will be casualties. They're not fighting Main St. Do you seriously think JPMorgan is interested in doing rinky dink local banking? But these are the people Powell wants out, as DDB wrote in her book, and it's why Zhou was desperate to keep Powell out of the Fed:
"Federal Reserve Bank of San Francisco was lead regulator of Silicon Vally Bank. Fed Chief is Mary Daly. She's a woke activist focusing on George Floyd, Climate Change, and BLM. The CEO of SVB was on the Fed board of directors. The blind leading the blind."
Powell is in the same position as Trump, but he's much better at dealing with personnel issues than Trump will ever be.
Yeah, what I just said but there is a penalty to be paid for not reading ahead :)
I've usually found Luongo's comments persuasive, but he often gets very little pushback on his podcasts or interviews. Probably because others on the podcast don't have a good grasp of the Fed or other banking issues. When he interviewed DDB several weeks ago, it appeared to me she took the lead and he was more deferential. Probably because she understood the Fed better than him.
I'm not an economics or banking person, but have been trying to understand the issues as they are currently being presented. This notion from Luongo that the Fed doesn't want to eliminate regional and local banks because big banks like JPMorgan/Chase aren't interested in "rinky dink local banking" (i.e., they're not interested in making individual car or small business loans because they're only interested in big projects, like oil pipelines, etc.) doesn't appear to jive. How many of the big banks (JPMorgan/Chase, Wells Fargo, etc.) have local branches in your area? There are many of these in my area, and I'm sure local branches of Morgan/Chase and Wells Fargo make many small loans all the time.
Many fear that these 1-yr Fed loans - which are only going to "Fed-selected" banks - will protect the "Fed-selected" banks at the expense of small, "non-selected" banks and may lead to large transfers of capital from "non-selected" to "Fed-selected" banks. Thus, squeezing out the smaller banks and credit unions. These fears do not appear to be unwarranted and I can't recall if I've heard Luongo or DDB comment why this shouldn't be a worry.
Also, several people I've listened to have indicated that these loans could easily turn into QE if the Fed decides down the road to "forgive" these loans to select banks. I suppose this may undercut any interest rate hikes that Powell has instituted.
Re Luongo's podcast with DDB. As I said at the time ...
TL is ALWAYS deferential toward DDB--and he's not alone. She's a star in the conservative financial commentariat, and rightly so. It was a major coup for TL to get her to appear on his podcast. However, he was constantly trying to lead her to talk about the big picture--and he said *before* the podcast that that's what he wanted to do. He said *repeatedly*, beforehand, that she seemed to be holding back from commenting on the bigger picture (Davos v. Fed) and he wanted to draw her out if he could. To do that he had to let her talk freely, but she was not comfortable or prepared at that time to go where TL was trying to lead her--that was very clear and she didn't hide it. That said, TL wanted to draw her out because he respects her knowledge and was hoping she'd have a major contribution to make. She has opened up a bit since then, which shows that she's been thinking about some of these things since the podcast.
DDB undoubtedly understands the inner workings of the Fed better than TL, because she worked there and had her eyes open. OTOH, her understanding of the Fed doesn't include geopolitics, and TL has spent a lot of time, years, on that. Listen to her. She has domestic stats totally at her finger tips, but when TL tried to draw her into more geopolitical oriented concerns she freely admitted she hadn't given those considerations much, if any, thought.
MY impression was that TL was respectfully seeking a degree of validation for the "Theory of Everything" from her. You could read some of that validation between the lines of what she said. But at the same time she stated quite strongly that she felt that Powell was not under any obligation to anyone in his actions and certainly was not bound to anyone because of monetary needs. At least that was my impression.
Although, in fairness to Trump, the two institutions he was able to transform were the Fed and the SCOTUS. Not all the regional Feds, but the board of governors and the NYFed. Trump's Fed choices obviously got huge support from the NY Guys. I'm gonna guess that that kind of support (the biggest and richest lobby in the world) also got Trump's SCOTUS choices through. Not that the NY Guys are movement conservatives or culture warriors, but that they needed legal protection against the woke globalist crowd, and only conservatives could offer that. SCOTUS nominations that are hotly contested are hugely expensive and there had to be deep pockets to back Trump's picks. There were also deep pockets to try to pick off one or two GOP senators. This is all part of the big picture.
G'evening and thanks again Mark for your researching and sharing. This is very significant and important, if flying at quite an altitude for we mere grounded mortals.
I wonder if the apparent empowerment of the Fed, whether intentional or by virtue of circumstance, may be a danger once we're beyond today's crisis'. Big fat elephant is our Debt-based economy arriving at the huge debt with deficits deemed 'wonderfully reduced as declared by the Chief Executive/President' to what could be 2 trillion a year for the next decade. I tend to go along with the need to return banking to a regional program. However, the Military Industrial Complex uses Dollar Hegemony as a huge weapon in it's ongoing war against humanity, oops... anyways Powell's reclaiming control of the dollar from Europe, as such, is in major conflict to that whole CMI/Davos cabal.
I vote for fighting inflation: it's a permanent 'tax' on all and hits particularly hardest those least able to deal with it. Investors, generally having fared quite well this past decade of Fed QEs and loose political monetary policies are likely to lose big. There will be bad for us all in any recession/depression that may result: but that will be far more Capitalist and healing of our economy than more Can-Kicking. FWIW.
I am grateful to be allowed to express my thoughts; this stuff seems beyond the citizenry's control, no one's asking what we want so a Jay Powell rises and fills a heroic role. Necessarily, I guess. My best to all, (WrH)
Agreed, Sir Wayne. People have short memories and have already forgotten what a curse inflation is for the ordinary budget. However, my concern is that, although Powell is choosing the right path, and that there is no choice, the US economy won't survive the medicine. Like with many places in Western Europe, there's no longer any "there" there. Stay sane, my friend!
In light of Mark's posting today [Global War: Multi-Front Roundup] some of my opinions expressed here in this thread need my reconsideration. I do believe we, who actually pay the bills, have no say-so and worse, our best interests are not being pursued. While I am struggling with Luongo's/Mark's conclusion the likely 'hard landing' from Powell's actions (which may be depression-level) will result in my Soy-Sauce/Rice Vinegar Bug recipe becoming popular (humor for sanity excuse applies here), I'm far more a fan of capitalism than socialism's remedies we seem to be driven towards.
I'll add S'21, I appreciate your encouragement and response of my thoughts; (and, of course, Mark's articles providing for my often goofy and too-wordy thought to be shared). Blessings my Texas Friend! (WrH)
https://www.thegatewaypundit.com/2023/03/exclusive-sam-bankman-fried-paid-himself-over-2-billion-and-his-team-another-1-billion-before-filing-for-bankruptcy/
I still can't tell whether Luongo is right or whether he's just trying to fit the facts to his pet theory. Could be either or neither. Let's see what the Fed does with rates later in the month.
i think he is just making up an interesting narrative subtext for a usually boring subject. SOFR is not a weapon against LIBOR it is just that banks haven't lent to other banks unsecured for years so they had alot of room to say whatever number they needed to make their coworkers money. So they needed a rate that was actually set by the market but no one lends unsecured so they used the Secured Overnight Funding Rate(SOFR).
I think Powell knew he shouldn't have let Trump shame him into lowering rates (ironic that those low rates allowed them to fund all the shenanigans against him). So now he is just shamelessly fixing his mistake. SVB was the VCs trying to set off banks runs to release the pressure but Powell deftly made sure depositors wouldn't be screwed.
Luongo's narrative is much more interesting to read though.
Weak, blame it on President Trump. Wow, some of you posting here "Just want to be right and don't really follow the facts." It funny reading some of these posts. It's like you are living in a fantasy land...
I told you! TL was correct.
We shall see.
“Powell deftly made sure [SVB] depositors wouldn't be screwed.”
This is correct. The Fed/Treasury didn’t bail out the bank. They bailed out the depositors. But why? Why THESE depositors? Ordinary people are already covered for up to $250k. SVB depositors were overwhelmingly 1%-ers with millions each on account with the bank. It will eventually come out that these bailed out depositors were all major donors to the Democratic Party and Leftist causes more generally.
"But why?"
Because Powell is in this for the long term and knows he can't do everything today. This is politics, not just finance. He probably can't count on the Senate GOP to support him. He has to do what's possible and be ready to parry the next attack and move forward.
Just listening to Jim Rickards--again. Yellen was talking about climate change the day before SVB blew up. She doesn't have a clue about banking and money. She's a labor activist, meaning, a Dem party activist. She thinks women should kill their babies and get out into the labor force.
That's my take too.
From what I have researched, he is spot on.
Rates aren't the whole story.
No, but they are a signal of the Fed's intent.
When all options are bad, sometimes the 'less-bad' choice isn't the right one, RNo. I'd suggest a mild adjustment: Deflationary Depression is preferable? I'm inclined that way, just in it's far more 'capitalist' than the ongoing socialist/tyrannically managed system being perpetrated on us all. My best at you! (WrH)