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2023 bank failures

Parliament

By Parliament
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SL Xpress

SL Xpress 7518

Posted
Posted
18 minutes ago, Chopper said:

FDIC coverage is $250,000 per depositor, per insured bank, for each account ownership category. In theory much more than $250k per depositor is eligible to be insured. That's because the different types of accounts that can be FDIC-insured for every depositor are: Checking accounts, Negotiable Order of Withdrawal (NOW) accounts, Savings accounts, Money Market Deposit Accounts, and Time deposits such as certificates of deposit, Cashier's checks, money orders, and other official items issued by a bank.

I am open to correction but I don't believe there's even a limit on the number of insurable CDs that one individual or bank can have.

edit - Also don't fall for the scare tactics that this is definitely going to have some huge ripple effect across the banking system. Some of the same people who've argued here that the government needs to step in have also expressed their full confidence that every depositor will be made whole when the bank's assets are sold. SVB is a regional bank and even their client industry base is very narrow. If the Fed goes through their books and comes to the determination that SVB's failure poses system risk, then they'll backstop it.

My sense is that the people screaming for federal intervention at this point, with zero proof that SVB's failure poses any risk whatsoever to the banking system, have motivations that they haven't thus far disclosed.

 

 

 

 

I don't understand this post. The federal government already intervened when they shut the bank down to stop the run on deposits and preserve its asset base as much as possible. 

It's going to have a ripple effect across the banking system. How big of one is unknown. Huge is a pretty subjective term.

They're going to backstop it to whatever degree is necessary to get the remaining assets of the bank sold. That's how this is going to work. There's not a need to make any other choice. 

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Nivek
Nivek

So we should bail out a bank and financial/business leaders of companies who stupidly put too much money in a single account because they were too lazy or too cheap to get a DIF insurance, open a CDAR

pantone159
pantone159

It is like nobody in the industry is over 40 and so has no memory of interest rates being other than zero. Interest rates now are not 'high'. They are about 'normal' now. The past 15 years have been t

washparkhorn
washparkhorn

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GringoSalado

GringoSalado 1652

Posted
Posted

Man on the street - "TARP?"
Banker - "Govt. had to give the banks money to save their asses."
MoS - "Sounds like a bailout."
B - "The banks paid the govt. back, with interest."
MoS - "Oh, that sounds more like a loan."
B - "A loan nobody else would offer, and the banker knew he was protected by the regulator. He was in his wedding, so that enabled his excessive risk taking..."
MoS - "Yeah, I'm never getting that kind of treatment. Who are you?"
B - "I'm that banker. I was fired and am unemployed now."
MoS - "Well I guess that is appropriate, but still. I hope you can find another career and be useful."
B - "Nah, I sold all my stock before anybody else knew things were pear shaped. I'm worth $20M"
MoS - 

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Chopper

Chopper 17245

Posted
Posted
8 minutes ago, SL Xpress said:

I don't understand this post. The federal government already intervened when they shut the bank down to stop the run on deposits and preserve its asset base as much as possible. 

It's going to have a ripple effect across the banking system. How big of one is unknown. Huge is a pretty subjective term.

They're going to backstop it to whatever degree is necessary to get the remaining assets of the bank sold. That's how this is going to work. There's not a need to make any other choice. 

image.thumb.png.2846eb11de32cb4cdee9d21b25cf2a42.png

My comment was directed at hysteria such as that copypasted above. I hope that helps you understand.

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52-80

52-80 19241

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56 minutes ago, bernorange said:

 

Crypto took a hit with Sivergate, but it looks like the crypto market isn't panicking on SVB/Circle/USDC news. 

It was one nonsequitur after another trying to bunt for a free base.

Circle is a fraction of crypto.

Keeping their peg in dollars is exactly what they're supposed to do.

The "pitch" for crypto is against easing of financial conditions i.e. reducing rates (*causing* inflation), so the exact opposite of what he claimed.

What quality of comments do you expect from the cheap seats tho....

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52-80

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Posted (edited)
1 hour ago, Nicole44 said:

I’ve not really made up my mind re:bailing people out (it’s not going to happen and I understand why) but the posters who feel that it shouldn’t happen at all it’s because the people who lost money beyond $250k were too stupid to diversify so oh well?

Hey, I feel that way about handouts and taxing the crap out of the middle class to pour all our money that we’ve worked out asses off for into a bottomless pit of the poor and special interest groups and continue to take more and more resources away from those who’ve earned it.

 It’s like jumping into the water to save a drowning person (who should be wearing a life jacket or shouldn’t be in the goddamn water anyway if they can’t swim) and because they are flailing about so much you drown along with them. The vast majority of us are existing paycheck to paycheck and busting our asses…many people are living in multigenerational homes just to pay the bills. We are barely treading water and they want us to try and save the drowning guy who is always drowning no matter how much help you give him.

You've accidentally read into garbage peddled by the misinformation merchants.

The bank has the money it owes people. In an orderly liquidation they can give most of it back. (In a firesale they can give less of it back).

A cross section of the people who have financial interest in that money is 1 venture capitalist partner, invested in 5 companies, which employees 100 people.

We know the money will ultimately be returned.  The only question is, right now while the funds are frozen, who is going to suffer the 1st and 2nd order impact of the failure -- the rich VC guy, or the 100 employees?  (Easy answer, except some still get it completely wrong).

And no - nothing is being taken from you and me. The fed (FDIC) stepping in is resourced by insurance contribution from the banks. Had the depositors been money been spread around different banks, they would have been fully covered by the insurance, so the insurance pool itself should already be sufficient.

 

Nana is not being asked for money to "bail out the banks".  And as this connotates the bankers fat cats and speculators who drove its stock price to $700/sh... no, they're not being bailed out, they've already been rightfully wiped out.

Edited by 52-80
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52-80

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Posted
Posted (edited)
32 minutes ago, Chopper said:

image.thumb.png.2846eb11de32cb4cdee9d21b25cf2a42.png

My comment was directed at hysteria such as that copypasted above. I hope that helps you understand.

You peabrained nimwit. Hysteria is exactly the *cause* for the initial bankrun, and which ripples into further bankruns.  See:

That's the thing that's literally, actually happening.  It's not happening because of my saying it. It's happening because that's how it is.

Check out this mail First Republic sent out because they saw my post on surlyhorns.

 

FrCpV93XoAEDd5h.jpg

Edited by 52-80
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Trey3216

Trey3216 15355

Posted
Posted
2 hours ago, TonyTexas said:

What do you think happened in the stonk market during the pandemic with the likes of GameStop and Bed Bath and Beyond? Or was that ok because it was the common man sticking it to the evil short sellers? 

Dude, the “common man” had some, but very little to do with the GameStop ordeal.   That was a Wall St vs Wall St battle that a few astute folks got to play along with.   

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Chopper

Chopper 17245

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Posted

Seems weird to see a crypto fan also supporting crony capitalism, and adding more banks to the Too Big To Fail list. But there he is.

 

6 minutes ago, 52-80 said:

And no - nothing is being taken from you and me. The fed (FDIC) stepping in is resourced by insurance contribution from the banks. Had the depositors been money been spread around different banks, they would have been fully covered by the insurance, so the insurance pool itself should already be sufficient.

2becw0.jpg

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52-80

52-80 19241

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Sorry angry marxists, you lose this one. 

 

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm

After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

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Sawbonz

Sawbonz 27587

Posted
Posted
1 hour ago, Farmerted said:

Statement and question re individual vs a small business

For an individual  with 251k to say a few million who wants to keep their money in the bank it’s not really that hard to have several different accounts to keep it all FDIC insured. Maybe inconvenient but doable. But for a small town business with say 50 employees that has bills, rent, salary, and retirement plan to fund its a bit more difficult to spread that 250-1 million around to 5 accounts and use that rolling capital every week. So what are the options can a company purchase insurance for their working capital that’s in the bank and valued at over 250k - 

I don’t know the answer to that. We never need more than 200K at any given time in the account we make payroll and pay overhead our monthly overhead out of but I believe there are banks that carry insurance on top of FDIC and if our company ever gets to that point we will definitely look at that. 
 

 

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52-80

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Posted
Posted
3 minutes ago, Chopper said:

Seems weird to see a crypto fan also supporting crony capitalism, and adding more banks to the Too Big To Fail list. But there he is.

 

2becw0.jpg

I'm deeply sorry you didn't get to see employers lose hundreds of billions of dollars.

Better send a scathing letter to the government about your disappointment at Secretary Yellen's nomination.

See you at the next crisis.

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Sawbonz

Sawbonz 27587

Posted
Posted
1 hour ago, Porterhouse said:

For many borrowers, it is a REQUIREMENT to hold all deposits with a bank with the loan

I’ve been involved in loans up to 25M and even those with rates as favorable as @LIBOR we have never had to hold ALL deposits at the lending institution. Are they paying you to take these loans?

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Nicole44

Nicole44 22077

Posted
Posted
1 minute ago, Chopper said:

Seems weird to see a crypto fan also supporting crony capitalism, and adding more banks to the Too Big To Fail list. But there he is.

 

2becw0.jpg

Hey I’ve got this shit all worked out. Now that I have access to TCH Delta 9 gummies I’ve been pondering this dilemma and my thoughts about it are Crystal fucking clear. So all of these people the government is supporting with my paycheck…I have a solution and an ROI for the government. Give all the able bodied people a government 9-5 job. Pay them just enough so that they too can be taxed at a middle class level and also be able to squirrel away some money. Put them up in government owned housing so a third of their paycheck goes to that. They will have a safe place to stay and work and electricity and running water in a nice working community. Give them vouchers to coupons to use at a government owned grocery store that only those in that community can shop at. Lease them government owned hybrids. So at least they have a car and like I said pay them just enough that they can save up some money if they choose each month. Then if they want to leave their utopia and venture out into the private sector they can and someone else can take their place. That’s my fucking idea. That way you aren’t breaking the middle class. You can even earmark their taxes for special community and government projects. That way we can stop breaking the backs of the middle class and for all those part time or whatever jobs give them to highschool kids and give them extra credit for working and other incentives. Pot is great shit’ Off my totally awesome tangent. 
 

I wonder what the scene will look like at the banks tomorrow.

I can’t imagine…

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Chopper

Chopper 17245

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Posted
Just now, 52-80 said:

I'm deeply sorry you didn't get to see employers lose hundreds of billions of dollars.

Better send a scathing letter to the government about your disappointment at Secretary Yellen's nomination.

See you at the next crisis.

Your reading comprehension sucks as does the consistency with which you adhere to your ideology.

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Bevo

Bevo 13600

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Posted
7 minutes ago, 52-80 said:

Sorry angry marxists, you lose this one. 

 

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm

After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

I guess Chopper was wrong. It didn't take a bill being passed by congress and signed into law by the president.

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Parliament

Parliament 14292

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48 minutes ago, GringoSalado said:

Man on the street - "TARP?"
Banker - "Govt. had to give the banks money to save their asses."
MoS - "Sounds like a bailout."
B - "The banks paid the govt. back, with interest."
MoS - "Oh, that sounds more like a loan."
B - "A loan nobody else would offer, and the banker knew he was protected by the regulator. He was in his wedding, so that enabled his excessive risk taking..."
MoS - "Yeah, I'm never getting that kind of treatment. Who are you?"
B - "I'm that banker. I was fired and am unemployed now."
MoS - "Well I guess that is appropriate, but still. I hope you can find another career and be useful."
B - "Nah, I sold all my stock before anybody else knew things were pear shaped. I'm worth $20M"
MoS - 

God I love America.

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52-80

52-80 19241

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Posted
3 minutes ago, Bevo said:

I guess Chopper was wrong. It didn't take a bill being passed by congress and signed into law by the president.

FDIC has autonomy for this action.  There might be some congressional act going forward to prevent this happening again. History of banking regulations is they evolve with each crisis - so it obviously operates on a lag and cant forward-predict everything

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52-80

52-80 19241

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Posted
12 minutes ago, Chopper said:

Your reading comprehension sucks as does the consistency with which you adhere to your ideology.

Depositors losing money is bad and erosion of trust in US banking is even worse. 

Oh no! You've exposed my shameful ideology!

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Chopper

Chopper 17245

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Posted
1 minute ago, 52-80 said:

Depositors losing money is bad and erosion of trust in US banking is even worse.

I'll be looking for details on what made SVB worthy of creating a special fund, apparently out of payments to banks by depositor's with accounts under 250k in order to guarantee accounts with a much higher dollar amount (who could have and should have mitigated their own risk).

SVB was itself a strong cause for any erosion of trust in the US banking system. There's more than sufficient evidence that had their political cronies not rigged the game in their favor they would have already been out of business.

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52-80

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Posted
3 minutes ago, Sawbonz said:

Maybe banks shouldn’t do stupid shit that makes them untrustworthy? Nah better for the govt to continue to clean up their messes

The bank is gone. Everyone dollar invested in the bank is gone. You folks a bit slow, or just overly retributive?

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TonyTexas

TonyTexas 10525

Posted
Posted
39 minutes ago, Trey3216 said:

Dude, the “common man” had some, but very little to do with the GameStop ordeal.   That was a Wall St vs Wall St battle that a few astute folks got to play along with.   

Lots of Wall Street types hanging out at wallstreetbets on Reddit huh?

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Brew

Brew 3049

Posted
Posted
1 hour ago, Chopper said:

FDIC coverage is $250,000 per depositor, per insured bank, for each account ownership category. In theory much more than $250k per depositor is eligible to be insured. That's because the different types of accounts that can be FDIC-insured for every depositor are: Checking accounts, Negotiable Order of Withdrawal (NOW) accounts, Savings accounts, Money Market Deposit Accounts, and Time deposits such as certificates of deposit, Cashier's checks, money orders, and other official items issued by a bank.

I am open to correction but I don't believe there's even a limit on the number of insurable CDs that one individual or bank can have.

 

This is not how FDIC insurance works. Maybe you should read up on FDIC insurance.

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Sawbonz

Sawbonz 27587

Posted
Posted
Just now, 52-80 said:

"How terribly disappointing it is that the US financial system isn't crashing and burning!"

Lol. Wanting these assholes to be required to take reasonable precautions to prevent catastrophic failure = wanting the US financial system to crash and burn

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52-80

52-80 19241

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Posted
1 minute ago, Sawbonz said:

Lol. Wanting these assholes to be required to take reasonable precautions to prevent catastrophic failure = wanting the US financial system to crash and burn

These assholes who didn't take the necessary precautions are now rightfully out of business.

You're still unsatisfied because..?

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Brew

Brew 3049

Posted
Posted
1 minute ago, Sawbonz said:

Lol. Wanting these assholes to be required to take reasonable precautions to prevent catastrophic failure = wanting the US financial system to crash and burn

In your example who is the asshole, the bank or the depositors or are they all assholes?

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Hefeweizen

Hefeweizen 5332

Posted
Posted
9 hours ago, wackawacka said:

- FT

Not sure why people are advocating for bail out unless they were caught on the wrong side the trade.

Truth was best stated earlier, and I’m paraphrasing:

 

SVB was great at raising capital.  They were terrible at allocating their assets.  I don’t think their lending to VCs is really even an issue. 
 

Terrible risk management that is going to cause another round of reassessment and then further deregulation.  Because nothing solves risk management issues better than letting the banks decide how to allocate their assets.

This is how you build moral hazard.  No lesson at all except maybe for Greg Becker.  He’s toast.

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Bevo

Bevo 13600

Posted
Posted
23 minutes ago, Chopper said:

I'm never afraid to admit if I've made a mistake but don't be this guy.

maxresdefault.jpg

I don't have a strong view on the subject which is probably why I didn't comment until many pages into this thread. But I do know that when AIG was saved that it was done through the Federal Reserve and US Treasury Department. So when you negged me for pointing that out, I found it important for you to know the truth.

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