Explanations of how the Silicon Valley Bank (SVB) collapse was triggered are starting to come out. I picked this one up from a link I found at MoA: Chartbook #200 Something Broke! The Silicon Valley Bank Failure - How tech hubris and low interest rates combined to produce a big mess.
It will be interesting to see what happens next. Will the US Taxpayer pay for a bailout or will the bank be bought by one of the big Wal Street orgs like JP Morgan?
Either way, I don't see how its its allowed to fail..at least to the extent it causes runs on scads of smaller, regional banks (like a contagion).
My very first uneducated thought if they were to get bailed out, knowing a very small number of funds were insured, was if the insurance covers more than just the insured funds, that this is the newest iteration of money laundering. Cash from who knows where gets deposited, bank goes under, sympathetic government officials make sure everyone is made whole. And all that cash came from the government.
Actually I agree with both Moon of Alabama and Jim Bianco Research. It was the result of investing fort term money in long term assets (Moon of Alabama) and essentially a liquidity crisis rather than insolvency. So uninsured depositors would have gotten most of their money back.
Looks like the FDIC/FRB have decided to backstop all uninsured depositors, using a fund backed by bank assessments as a payment source. I think this was to forestall a run on bank uninsured deposits when the banks open tomorrow. Probably a good move.
Mark says the NY guys are gangsters, but they’re our gangsters. That’s a wonderful way to put it. Since there are no good guys in charge anymore, our best hope is that evil will dispatch worse evil.
Tom is absolutely spot on about crypto making strait the way for CBDCs. If Bletchley Park could crack a code as sophisticated as Enigma, then Big Gov is going to be able to get inside any crypto scheme. Here in Switzerland, we're soon going to vote on whether to keep cash or not. I hope a lot of other nations follow suit.
Been trying to understand all of this, at least enuff to have some idea how it might effect deplorables like me. Thanks Mark, this last roundup leaves me feeling more hopeful! Luongo's supposal wrt to the Wall St guys especially. I will be glad to see our oil resources in play again!
No dog in the Ukraine fight - wd like to see a solid move or two to disengage yesterday. Can I assume the threatened China/Thailand fight is Davos bluster too? Seems like McCarty backed off on a visit to Thailand last wk.
Question: Is this a credit to hardworking Congressmen digging deep in the interests of good government, or do powerful people want this guy gone? And then there's the Kama Sutra problem--somebody else's problem.
Republicans on the House Oversight Committee have been working with four witnesses with close ties to the Bidens, who have provided documents and other evidence tying the Bidens to the Chinese Communist Party.
"It’s as bad as we thought… Since we’ve last spoken we have bank records in hand. We have individuals who are working with our committee," Committee chair James Comer (R-KY) told Fox News' Maria Bartiromo on "Sunday Morning Futures."
"In the last two weeks we’ve met with either these individuals personally or with their attorneys. And that would be four individuals who had ties in with the Biden family in their various schemes around the world. So now we have in hand documents We have in hand documents in hand that show just how the Biden family was getting money from the Chinese Communist Party."
The hedges won't matter if things break en masse- this was the lesson of AIG in 2008. If deposits are secured by bonds of any kind that were purchased prior to the rate hiking period, then the banks involved are underwater if depositors start to withdraw en masse. If lots of banks start to rely on the hedges to cover the shortfalls, the people selling the hedges to the banks will be underwater and won't be able to pay off on the hedges. Someone is always left holding the bag at the end.
Some very interesting points made by the bad cat - including about SVB, mainly towards the end (but worth reading all of it):
https://boriquagato.substack.com/p/the-glorification-of-sub-mediocrity
It will be interesting to see what happens next. Will the US Taxpayer pay for a bailout or will the bank be bought by one of the big Wal Street orgs like JP Morgan?
Either way, I don't see how its its allowed to fail..at least to the extent it causes runs on scads of smaller, regional banks (like a contagion).
My very first uneducated thought if they were to get bailed out, knowing a very small number of funds were insured, was if the insurance covers more than just the insured funds, that this is the newest iteration of money laundering. Cash from who knows where gets deposited, bank goes under, sympathetic government officials make sure everyone is made whole. And all that cash came from the government.
Actually I agree with both Moon of Alabama and Jim Bianco Research. It was the result of investing fort term money in long term assets (Moon of Alabama) and essentially a liquidity crisis rather than insolvency. So uninsured depositors would have gotten most of their money back.
Looks like the FDIC/FRB have decided to backstop all uninsured depositors, using a fund backed by bank assessments as a payment source. I think this was to forestall a run on bank uninsured deposits when the banks open tomorrow. Probably a good move.
Mark says the NY guys are gangsters, but they’re our gangsters. That’s a wonderful way to put it. Since there are no good guys in charge anymore, our best hope is that evil will dispatch worse evil.
One of these days all big finance big wigs are going to have to realize that bits and bytes, like ink on paper are NOT REAL MONEY!
Tom is absolutely spot on about crypto making strait the way for CBDCs. If Bletchley Park could crack a code as sophisticated as Enigma, then Big Gov is going to be able to get inside any crypto scheme. Here in Switzerland, we're soon going to vote on whether to keep cash or not. I hope a lot of other nations follow suit.
Been trying to understand all of this, at least enuff to have some idea how it might effect deplorables like me. Thanks Mark, this last roundup leaves me feeling more hopeful! Luongo's supposal wrt to the Wall St guys especially. I will be glad to see our oil resources in play again!
No dog in the Ukraine fight - wd like to see a solid move or two to disengage yesterday. Can I assume the threatened China/Thailand fight is Davos bluster too? Seems like McCarty backed off on a visit to Thailand last wk.
https://youtu.be/jKr0YEhIItA
Macgregor totally on fire.
Question: Is this a credit to hardworking Congressmen digging deep in the interests of good government, or do powerful people want this guy gone? And then there's the Kama Sutra problem--somebody else's problem.
https://www.zerohedge.com/political/its-bad-we-thought-ccp-money-flowed-biden-family-according-bank-records-documents
Republicans on the House Oversight Committee have been working with four witnesses with close ties to the Bidens, who have provided documents and other evidence tying the Bidens to the Chinese Communist Party.
"It’s as bad as we thought… Since we’ve last spoken we have bank records in hand. We have individuals who are working with our committee," Committee chair James Comer (R-KY) told Fox News' Maria Bartiromo on "Sunday Morning Futures."
"In the last two weeks we’ve met with either these individuals personally or with their attorneys. And that would be four individuals who had ties in with the Biden family in their various schemes around the world. So now we have in hand documents We have in hand documents in hand that show just how the Biden family was getting money from the Chinese Communist Party."
The hedges won't matter if things break en masse- this was the lesson of AIG in 2008. If deposits are secured by bonds of any kind that were purchased prior to the rate hiking period, then the banks involved are underwater if depositors start to withdraw en masse. If lots of banks start to rely on the hedges to cover the shortfalls, the people selling the hedges to the banks will be underwater and won't be able to pay off on the hedges. Someone is always left holding the bag at the end.