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.
Clarification: 1964, when I was but a toddler the U. S. minimum wage was $1.15 per hour, four silver quarters and two dimes melt value is about $22.00 now. Get it yet folks. My Father made $500.00 a month then, was enough to support a family of 4, a new home cost $14,000, 30 year mortgage payment was $110.00 a month.
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.
Would I be correct to assume that the powers-that-be (the big local money) in CH prefer keeping cash, given the niche position they’ve enjoyed as hard-asset managers under favorable Swiss banking laws? I’d think that digital/global standardization would erode that edge. While he seems to cast a large global net, how influential is Big Klaus in his home-country politics?
I'm not really qualified to answer that question, NFO. All I know about the Swiss bankers and pols is that they are as dirty as bankers and pols everywhere. In fact, Swiss bankers are probably the dirtiest of them all. The initiative comes from we little people who don't want to have our every financial transaction tracked by Big Brother. Having said all that, there IS still more of a respect for human freedom here than in most other European nations. I've got French friends who got money TAKEN directly out of their bank accounts by their government to pay their fines for not wearing masks. That doesn't happen here.
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.
After initial skepticism, I'm trending more towards Tom's views these days. The globalists and neocons are NOT winning every battle as they seemed to be back in 2020. As for globalism, it is already dead. The Russians and Chinese (with some help from KSA and Iran) have killed it. Sure, we might end up with two or three giant power blocs as in 1984 or the (First?) Cold War, but there is no chance now of one, single Davos/UN-run panopticon.
Although we better keep a wary eye on the WHO, in whose nefarious schemes to launch global vax passports Zhou is, but of course, complicit. I’ll get the links to Doc Malone’s draft letter to pull the US out.
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."
My question as well. Somewhere, someone has a plan for Crazy Joe and
Nitwit Kamala, but I can’t for the life of me come up with any hint of what shape it may ultimately take. I just don’t see how this dumpster fire of an administration can go on for two more years, seems like the downside is just too great.
A lifetime in a real jail will do. No country club, just real hard time. And all money, all homes, all assets returned to the U.S. tax payers they were stolen from.
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.
Those AIG credit default swaps were issued by its parent corporation and there was no reserve for them or collateral, unlike the state regulated insurance subsidiaries of AIG which were adequately reserved. Tim Geithner ordered those naked swaps to be paid 100 cents to the dollar to the loser panicking Wall Street Banks, and the taxpayer picked up the tab. Epic scam.
My point exactly. The opposite of insured deposits is uninsured deposits. Every banker knows this. Every single one.
If the government bails out uninsured depositors (aka general creditors), the result is something called 'moral hazard'. We are awash in moral hazard. The consequences are...not good.
"Leveraged credit (banks) will always have blow-ups."
This is a point that Luongo makes repeatedly re why the Fed is at war with Eurodollars and why most crypto is equivalent to Eurodollars. My understanding is that Luongo is talking about these leveraged dollars have been outside Fed control, and that's a situation that Powell is trying to end with SOFR and rate hikes.
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!
Clarification: 1964, when I was but a toddler the U. S. minimum wage was $1.15 per hour, four silver quarters and two dimes melt value is about $22.00 now. Get it yet folks. My Father made $500.00 a month then, was enough to support a family of 4, a new home cost $14,000, 30 year mortgage payment was $110.00 a month.
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.
Would I be correct to assume that the powers-that-be (the big local money) in CH prefer keeping cash, given the niche position they’ve enjoyed as hard-asset managers under favorable Swiss banking laws? I’d think that digital/global standardization would erode that edge. While he seems to cast a large global net, how influential is Big Klaus in his home-country politics?
I'm not really qualified to answer that question, NFO. All I know about the Swiss bankers and pols is that they are as dirty as bankers and pols everywhere. In fact, Swiss bankers are probably the dirtiest of them all. The initiative comes from we little people who don't want to have our every financial transaction tracked by Big Brother. Having said all that, there IS still more of a respect for human freedom here than in most other European nations. I've got French friends who got money TAKEN directly out of their bank accounts by their government to pay their fines for not wearing masks. That doesn't happen here.
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.
After initial skepticism, I'm trending more towards Tom's views these days. The globalists and neocons are NOT winning every battle as they seemed to be back in 2020. As for globalism, it is already dead. The Russians and Chinese (with some help from KSA and Iran) have killed it. Sure, we might end up with two or three giant power blocs as in 1984 or the (First?) Cold War, but there is no chance now of one, single Davos/UN-run panopticon.
Although we better keep a wary eye on the WHO, in whose nefarious schemes to launch global vax passports Zhou is, but of course, complicit. I’ll get the links to Doc Malone’s draft letter to pull the US out.
I'm wary of them too, WHO, but I have a feeling a lot of countries won't be complying. Let's hope so, anyway
This is the website:
https://stopvaxpassports.org/take-action-withdraw-us-from-the-w-h-o-now/?utm_source=substack&utm_medium=email
https://youtu.be/jKr0YEhIItA
Macgregor totally on fire.
Yep. He brings out the sheer enormity and scale of the conflict, and his judgments have been spot on so far.
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."
and meantime, Meritless and Co have found nothing on Trump. How ‘bout indicting Zhou, our Betrayor-in-Chief?
My question as well. Somewhere, someone has a plan for Crazy Joe and
Nitwit Kamala, but I can’t for the life of me come up with any hint of what shape it may ultimately take. I just don’t see how this dumpster fire of an administration can go on for two more years, seems like the downside is just too great.
Out with the trash.
And in with the new trash.
The trash is dead.
Long live the trash.
Ouch! I pray not, but I see why you would say so.
Good point. As the song goes - There are no heroes anymore...
The Stranglers? I think "Nice and sleazy does it" must be Biden's favourite.
at this point not even recyclable…
Need a BIG extra large dumpster
H-U-U-U-G-E !!!
To the gallows with them!
Off with their heads!
Ready! Aim! FIRE!!!
A lifetime in a real jail will do. No country club, just real hard time. And all money, all homes, all assets returned to the U.S. tax payers they were stolen from.
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.
Those AIG credit default swaps were issued by its parent corporation and there was no reserve for them or collateral, unlike the state regulated insurance subsidiaries of AIG which were adequately reserved. Tim Geithner ordered those naked swaps to be paid 100 cents to the dollar to the loser panicking Wall Street Banks, and the taxpayer picked up the tab. Epic scam.
Ah, yes, Tim Geithner...
Has he paid his social security taxes yet?
That little bewigged crook.
Banking 101. Can we still do it?
@Forbes
My point exactly. The opposite of insured deposits is uninsured deposits. Every banker knows this. Every single one.
If the government bails out uninsured depositors (aka general creditors), the result is something called 'moral hazard'. We are awash in moral hazard. The consequences are...not good.
Apologies. Larry Summers doesn't want to hear about moral hazard. If 'Larry' says so, I stand corrected...
https://www.forbes.com/sites/mattnovak/2023/03/12/larry-summers-says-now-is-not-the-time-for-moral-hazard-lectures-about-bailouts/?sh=65608b3d7f13
/sarc
Call it American Exceptionalism.
https://www.zerohedge.com/markets/citadels-griffin-slams-svb-bailout-american-capitalism-breaking-down-our-eyes
I'd like to watch the Ken Griffin v. Larry Summers Moral Hazard Smackdown.
FWIW, has Larry Summers ever truly earned a dime investing?
"Leveraged credit (banks) will always have blow-ups."
This is a point that Luongo makes repeatedly re why the Fed is at war with Eurodollars and why most crypto is equivalent to Eurodollars. My understanding is that Luongo is talking about these leveraged dollars have been outside Fed control, and that's a situation that Powell is trying to end with SOFR and rate hikes.
Agree about CBDC - and that's not even taking into consideration the freedom and human rights issues involved with it.