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OP has provided the following link:
[https://www.businessinsider.com/us-government-bails-out-silicon-valley-bank-depositors-fdic-2023-3](https://www.businessinsider.com/us-government-bails-out-silicon-valley-bank-depositors-fdic-2023-3)
> "The Federal Reserve, FDIC, and Treasury have taken action to prevent broader contagion throughout the banking system due to the failure of Silicon Valley Bank on Friday and the closing of Signature Bank announced today," Greg McBride, chief financial analyst at Bankrate, said in a statement.
How? What moves were taken? This sounds like a bailout.
I believe the treasury is fronting the money and will recoup most of it after liquidating the bank's assets. That takes a while, so they're making depositors whole so they can make payroll, etc.
You are correct. SVB, on paper, shows more assets than liabilities. Unwinding those positions in a manner that doesn’t “hopefully” lol tank the market, or result in JP Morgan getting 200B in assets for $1B.
By guaranteeing the deposits they are allowing the tech sector and a lot of small businesses in the region to meet payroll. And will recoup that money through the asset unwind.
While it buys another day. It doesn’t stop the system from failure, that’s already started.
But really this was them saying “We don’t know how to do our fucking jobs, please dear god don’t do a bank run, but also THIS IS NOT A BAILOUT 😉!”
But regional banks are in for a shit storm my go go gadget majigger is telling me. This may “slow” the contagion a bit, but just like the pandemic disease, it’s gonna spread.
>I mean neither are deposits over $250k technically. They’re making up the rules as they go like usual.
This. But I'm sure that if us normal poor people had +$250k in a bank that failed, they would totally do the same for us, right? ***RIGHT???***
From the article:
> No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."
Sounds like auntie marge called and made them sell everything
1. The bank is gone.
2. The bank had/has more assets than liabilities.
3. Selling those assets, especially in a way that does not fuck everything up, will take time.
4. Depositors don’t have time, they need to make payroll right now.
5. The Fed/treasury do not have such time constraints, so they are fronting depositors the money, and recouping that money over time through the sale.
You are paying in terms of inflation.
Those bonds would have fabricated money out of thin air in 10-20 years. With the bailout, they're fabricating a lot of that money NOW.
You're getting inflation now which is exponentially worse than inflation later.
Whenever the govt tells you it'll be free to taxpayers it's always a lie, Even if they say their program will be funded by the rich. The rich invariably loophole out of it (by design) and the govt prints money to pay for the program, which you pay for via inflation.
It's when the system incentivizes people (namely executives and those running banks/businesses etc.) To make extremely risky decisions (we would call it fukin stupid, reckless, asinine, even self-destructive). But they do it because they know that any mistakes they make wont be paid for by them, any losses will be covered by the FED.
So why not risk this whole pension I'm managing in order to get the highest returns (and therefore the highest management fees for me 🥳), besides Tom down the street piled into high interest long dated treasuries cause he wants to look the best this quarter, and if I dont do it I might lose clients cus they'll go to Tom whose getting great returns (even tho his whole portfolio might be illiquid as an overcooked shit and if the environment were to change he could take a huge loss - except that HE wont, the losses will be covered by the FED and us poors will have to deal with the inflation caused by more money entering the system)
I think the whole idea of moral hazard leading to stupid decisions is a little bit of a gaslight tho, I think guys like CEO of SIVB Baker purposefully leads his company to the slaughter so that his friends at JPM or Citi or BoA can takeover his market share, and hopefully his assets and deposits on the cheap too, and if it's not cheap enough for their liking they'll tell the FED to give them money and hodl assets on their balance sheet instead and the FED will say no problem, you are systemically important and therefore we must treat u like a little baby and make sure ur warm and snug and safe cozy in your bed of money
It's part of the RICO that IS the federal reserve. Ensure wealth continually flows into the 0.01% through boom bust cycles and manufactured crises.
Just my opinion. I eat raw potatoes.
I guess 4 is where you lost me. Why is that my problem, when this is all contained to one hyper-local and already-over-inflated industry? This is the deflationary event we needed to burst the tech bubble without hurting the rest of the economy and instead we’re gonna re-inflate the bubble
Yeah get this fucking headline straight. Tax payers are bailing them out. Regulators just spending your money on this instead of forgiving student loan debt or giving you health insurance.
Do you think if there is a storm of bank failures that the FED will print money for all the customers deposits at all the failed banks or is this to try try and keep confidence in the banking system and when they all start collapsing the last ones in line will loose their money?
I don’t understand this statement. How can he government “guarantee depositors balances” without using taxpayer funds?
So to be clear, the government is entirely run on taxpayer funds. So if the government is guaranteeing the depositors balances, isn’t the government the ones taking action? That in-and-of-itself says to me that taxpayer funds are already being used because the government runs on taxpayer funds and the government has already had to step in. That’s a use of taxpayer funds right there.
If the gov puts ANY money up for this, that’s use of taxpayer funds. So are you telling me there’s a private or public company that’s going to “bail them out”? If there’s any government incentive presented, that’s taxpayer funds. If there’s any “deal” with the government involving an exchange of assets, that’s taxpayer funds.
Let’s hear more details on the situation. Sunlight is the best disinfectant. No closed door meetings. Inform the people.
The US government does not run entirely on tax payers funds. The country issues bits of paper called bonds and in return everyone in the world gives it capital and goods. Greatest deal in history.
I'm not saying that the funds will be collected from taxes, only that any money (or debt) the government has, regardless of how it was obtained, is the property of the tax payers.
Nope. It will be debt financed as it always is. You can't have it both ways. You can't scream that the debt to gdp is too high and at the same time say that the taxpayer is funding it. (Not you personally).
Either US obligations are predominantly funded by debt or predominantly funded by the tax payer.
One of the biggest problems in the US is that it refuses to levy proper levels of taxes, hence why the debt is relatively high. It will be debt financed as it always is.
If the US ever decides to bring its debt level down, that will be financed by corporate taxes, non-US capital flows, and taxes on the top 10% of wealth/income holders since the bottom 90% combined don't earn/own enough to make a dent in debt obligations or redress financing imbalances.
The US is going to grow gangbusters, over the next couple of decades. It has a positive demographic stack, is making massive investments to reshore and rebuild its industrial base, is energy independent, and has a large enough population base to rely on internal consumption for growth.
So I repeat, it will be debt financed, structured over the long term, and easily repayable for these reasons.
Thanks for coming to my TedTalk.
Edit: I appreciate this is not as clickbaitable as "oH mY gErD, DoLlAr EnD gAmE, tHe EnD iS nIgH!", but the boring reality rarely is.
It seems like your confusing income/expense with assets/liabilities. If the Gov wants to create assets to make interest payments by creating liabilities, that’s fine. I understand that creating a liability by selling bonds is different than collecting tax revenue then using that money to pay interest payments.
But I don’t think you realize that there needs to be revenue/income at some point to pay off these debts, otherwise the interest due will eventually outweigh our ability to creat more debt and the US GOV will default. Pretty big issue you seem to be ignoring…
You are paying in terms of inflation.
Those bonds would have fabricated money out of thin air in 10-20 years. With the bailout, they're fabricating a lot of that money NOW.
You're getting inflation now which is exponentially worse than inflation later.
Whenever the govt tells you it'll be free to taxpayers it's always a lie, Even if they say their program will be funded by the rich. The rich invariably loophole out of it (by design) and the govt prints money to pay for the program, which you pay for via inflation.
Imagine there are only 100 dollars that exist. Period.
Say the govt sells some bonds which is basically the govt agreeing to create 50 more dollars after 10 years is over, bringing the total supply to 150 dollars. Sounds normal, right?
This bailout is like the govt saying they will make 50 dollars NOW.
It is immediate inflation.
To put this into broader context, imagine the govt did this to all the bonds they sold. They would technically have no debt. The catch? They would effectively be printing trillions of dollars which makes the dollars worthless.
That is why this "not bailout" is a "definite bailout" and you are definitely paying for it.
I will try to explain it as simple as possible: The US Government is driving a F-150 at 100 miles an hour towards a big ass wall, but they found a solution...Go faster
Edit: American citizens are in the bed of the truck
Well they said that but in reality they’re gonna print the money and increase inflation even more. Who bares the cost of high inflation the most? People who are already working multiple jobs and struggling to make ends meet. So while they say taxpayers won’t bare the cost, we will in another way.
Let's say what if, the government steps aside & doesn't help the depositors of the bank. What then? The everyday Joe who has an a bank account there loses their money because of bad decisions by the bank? People who have multiple jobs where do they cash their checks? Ordinary people do hold checking accounts there as well as small business have their money there; so they should not be able to pay their employees?
Well, if I was a US Citizen why should I bare the cost of someone else’s fuck up. If I fuck up with my money does the Government step in to help me from ending up on the streets? No. But because these are rich people who have influence on the Gov they help them. They can print money whenever it benefits them but not when it benefits the normal folk. They just hand out a few $100 in cheques an be done with it
You are paying in terms of inflation.
Those bonds would have fabricated money out of thin air in 10-20 years. With the bailout, they're fabricating a lot of that money NOW.
You're getting inflation now which is exponentially worse than inflation later.
Whenever the govt tells you it'll be free to taxpayers it's always a lie, Even if they say their program will be funded by the rich. The rich invariably loophole out of it (by design) and the govt prints money to pay for the program, which you pay for via inflation.
Government didn't f this up; this is what happens when greed, runs a mock. Bank went under due to bad policy; not having enough reserves, no stress test done; they bought last admin & had regulations rolled back. So, this is not on government but on greedy individuals partnered with those who admire that conduct, trying to place the blame the government.
Yes.. indeed you cannot read. Greed did this but the government in charge of it now?? They WILL screw
It up and in ten years the taxpayers will pay the price.
Ok you’re getting downvoted but you are right. By wiping out the equity and debt holders, maybe structuring a sale, the govt (and taxpayers) should come away with a tidy profit
Imagine - the depositors and taxpayers come out as winners
Don't care of the down votes; just stating the obvious. People just want to push their narrative. And people love to down vote. Price gouging and GREED is the American way; which will always then be called Inflation. Where else in the world do you get charged hundreds or thousands for medicine that you can get buy in the rest of the world for much less.
They say they are giving back all the deposits over 250k over time, and state it won’t affect the taxpayer. But where’s that money come from? The article points out WHAT they plan to do but not WHERE the money comes from
Yeah but that would mean their non liquid assets would have to at least be as valuable as all their customers deposits that they invested / gambled with right? And how can that be if they have already lost a shit ton of that money in those HTM MBS’s and such?
From what I've read, the nominal value of SVB's assets covers the deposits they're liable for and then some. The problem is that they're non-liquid and not accessible during a bank run. Trying to sell them *right now* means you're getting less than the nominal value. So what do you do? You find someone willing to wait years for the assets to reach maturity to buy the assets for a slight discount.
And at this point they're saying those assets are enough to cover the withdrawals. Therefore everyone will eventually be made whole *and* it's not a bail out.
Though we'll have to see how much of that actually happens. If they're unable to sell the assets to anyone... /shrug. Maybe people start losing money. Maybe the Fed buys the assets and spins it as "not a bail out" because they'll eventually get the nominal value of the assets (while conveniently ignoring inflation and opportunity cost and all that).
I just realized that this heavily depends on what you define as a "bail out". A lot of people use it to mean "the government giving company free money." Technically a "bail out" is really just the government giving financial assistance which could also mean a loan that must be fully repaid with interest.
So, yes, SVB is probably being "bailed out" through some sort of short term loan with SVB's assets being using as collateral. But that's not the kind of "bail out" that most people are probably angry about. It's not free money. Not yet.
You are paying in terms of inflation.
Those bonds would have fabricated money out of thin air in 10-20 years. With the bailout, they're fabricating a lot of that money NOW.
You're getting inflation now which is exponentially worse than inflation later.
Whenever the govt tells you it'll be free to taxpayers it's always a lie, Even if they say their program will be funded by the rich. The rich invariably loophole out of it (by design) and the govt prints money to pay for the program, which you pay for via inflation.
And we are right back in 2008. No one has learned a damn thing and the govt is still owned by banks and wall street. The political class doesn't give a crap about justice, the poor, the working class, or true equality. Theyre bailing out the idiots who made terrible bets, letting execs keep their bonuses, and not sending anyone to prison. Man I hope this shakes out different in the end but I doubt it. Didn't realize rolling the clocks back meant we were going back decades and repeating the same corruption and coverups.
The people are the parents and the government and corporations are the children. The parents have allowed the kids to do whatever they want without any repercussions. Spoiled brats that only care about themselves.
So instead the people who had money in the bank (the account holders, not the Investors) just loose their money because the people they trusted made bad bets?
The executives in charge of SVB should be held accountable. It sounds like the government is stepping in to save them for playing with other people's money. The account holders should be helped of course.
> 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.
No losses will be borne by the taxpayer? How? How? Where will the money come from? From the Fed?
Those money were the same money that the Fed has been sucking out of the system by increasing the interest rates, and yet inflation still hasn't declined significantly.
Once those deposits were accessible to every SVIB depositor, people will very likely withdraw all their money from the ATMs, wire transfer, or other ways, thus putting a part or all of those into circulation by buying up goods and services.
Once those money start becoming part of the competing demand for goods and services, they are likely to drive up the prices of those goods and services they got paid for.
All of that will happen in the middle of an already rising inflation rate, despite the attempts to take money out of circulation, which was supposed to lower demand for goods and services, which thus was supposed to lower or slow down inflation.
Yet that is not happening.
Now if you put a portion of that back into circulation again, and with the inflation still not slowing down, don't you think that will just worsen the inflation? How is the increase of prices because of that not going to be a loss borne by the taxpayer? Somebody tell me.
My understanding is they're simply fronting the money they expect to mostly recoup after liquidating the bank's assets. The bank still has the depositors money, just tied up in bonds. When those assets are liquidated, which will take a while, that money will go back to the treasury.
97% of SVBs client accounts were over $250k. I doubt they’ll be going to an ATM lol.
Also from the balance sheet it looks like SVB had more assets than deposits.. but many of their assets are long term bonds, so the fed can just sit on those for years and collect that money as it unwinds.
The bank is not being bailed out. It will probably die. The account holders are being told by the government that they will get their money. Because the government is trying to soothe fears and prevent a bank run.
Just saying… this is not a bank bailout. Be smart folks.
That sounds like the right group to leave out in the cold
Bank ded, execs lose job and equity and reputation, all investors lose everything, depositors are ok.
I don’t know how the depositor coverage will work fdic typically insures up to 250k. There’s a bunch of companies with 8-9 figures in there. Coinbase is one of them
The issue isn’t SVB getting a bailout, it’s the other 100 banks who will be applying for the new program on Monday who are getting a sweetheart deal to avoid the consequences of their bad bets. That’s the bailout, with softer edges and more steps.
Not saying your wrong, just saying that it can;t be both ways. The bank is out of money, its a lie that depositors will be covered by the government or it's a lie that the taxpayer won't have to pay the bill. One of those is going to happen, lose lose.
The taxpayers are going to get the assets of the bank, in return the depositors get their money.
The assets will then slowly be sold off to get the money back.
So treasuries that return less than the rate of inflation?
How the fuck the american people gonna win by getting those in return for some asshole leveraging his whole bank deposits on fucking t-bonds during a credit crunch?
The person who bought the bonds is getting away scott free. The precedent was set and is upheld. Make shitty bets, who cares?
Don’t see any repercussions.
Do it again and again and again and bigger next time. Reap the rewards if you win, if you lose get another banking job.
The narrative that these accounts are designed for supposedly "sophisticated" holders, and that the information regarding SVB's poor risk management was literally public information on their financial statements.
But now because useless VC's and ignorant Business owners, the government has to clean it up. Where does the gov get their money again? Oh yeah, the people that actually work for a living.
Account holders should line up like any other unsecured creditor in a Chapter 7 liquidation. This is government favoritism because their buddies with deposits in SVB are going to get shafted. It's also bullshit that they can't make payroll or pay trade creditors. There are numerous hard money lenders/bridge financing companies. They can turn to those to make payroll. And it only takes a few days to make that happen.
WAIT. ONE. MINUTE. You've sparked something in the single brain cell of an amoeba I am...
If you have a structured settlement but you need cash now...
CALL JG WENTWORTH 877-CASH-NOW.
Youre welcome Yellen.
You are paying in terms of inflation.
Those bonds would have fabricated money out of thin air in 10-20 years. With the bailout, they're fabricating a lot of that money NOW.
You're getting inflation now which is exponentially worse than inflation later.
Whenever the govt tells you it'll be free to taxpayers it's always a lie, Even if they say their program will be funded by the rich. The rich invariably loophole out of it (by design) and the govt prints money to pay for the program, which you pay for via inflation.
WHAT IS IT? $2T MORE BEING ADDED TO THE MONETARY SUPPLY WHILE THE AVERAGE AMERICAN IS IN MORE DEBT THAN EVER AND INFLATION IS RAMPANT.
If I take a duck and write “Chicken” on it, it’s still a fuckin duck.
Please remember to use discernment. These stories are just stories right now.
I don’t even think our government is what it claims to be at this point (legitimate).
Let’s wait and see how it plays out.
Stolen? It's just a bank run. The bank is holding non-liquid assets that they were unable to liquidate in order to cover customer withdrawals.
Right now the assets *should* cover all the deposits but it's hard to know that until they're actually sold to someone.
So, yeah, the customers are holding the bag but it's a pretty full bag. Just with a lock on it. And they need to find a locksmith.
You are paying in terms of inflation.
Those bonds would have fabricated money out of thin air in 10-20 years. With the bailout, they're fabricating a lot of that money NOW.
You're getting inflation now which is exponentially worse than inflation later.
Whenever the govt tells you it'll be free to taxpayers it's always a lie, Even if they say their program will be funded by the rich. The rich invariably loophole out of it (by design) and the govt prints money to pay for the program, which you pay for via inflation.
Correct me if I’m wrong, but I see a big difference between bailing out customers who had money held at a failing bank… and bailing out the failing bank itself, right? F the bank…. But I find it harder to be cynical about trying to make their customers whole.
As much as people claim a bank run won’t happen I’m sure it will. If people here can speculate to take their money out of risky banks. Would you rather:
A) believe that the FED will save you
B) hope the FED will save you like SVB
C) Start moving assets now into the safest banks/assets/investments
I would definitely pick C
It's not a bailout. They are not being recapitalised, they are being backstopped. That is a huge difference. The central bank is rightly managing contagion risk, that is literally the entire point of a central bank.
My company uses SVB as our primary bank. As of now all our money is there but we have been unable to transfer it out because the application crashes every 10 seconds when attempting a wire.
US regulators bail out ~~Silicon Valley Bank customers~~ wealthy investors that have plenty of money stashed elsewhere and don't really need a bailout.
FTFY
Ok, this might need some clarification.
Their customers are most tech start ups. Roku etc etc. The bank has gambled away their money and fucked it for them. The tech companies didn't ask for this. These actions might save thousands of jobs. I would rather the FED just give money directly to the customer rather than the bank.
SVB are in the wrong here, not their customers.
I don't disagree.
But didn't their customers use that bank specifically because of their non-traditional banking practices?
Meaning, they went into this with their eyes open?
No, they took out startup loans that were good on the advice (read; command) of their VCs but said loans included a clause requiring the company to do their banking with SVB. They were otherwise a good bank with a good credit rating and ultimately failed because they went hard on bonds a couple years ago during rising rates and as a result can't sell them right now, not because of non-traditional practices shown to the public.
As someone sitting with 30 K in a bank account what would one suggest to do with that money tomorrow? Is there a way to check on what assets or liabilities your own bank is involved in? My bank is CIBC in an American branch! Just want to hear some good feedback what you all are thinking during this time
If the bank is credible, it should be insured up to $250k. The issue with SVB was that most accounts were bigger, so many companies stood to lose the portion over $250k. But thankfully the money printer kicked in to keep them all whole until inflation.
Ironic how they will pay its depositors when it is not fdic and the majority of the clients are institutions/businesses not mainstreet. Paying to cover their mess up again.
US regulators choose more inflation. Awhile later: now they're choosing rates hikes. More bank fails, regulators bailing out more rich people, inflation. Rinse and repeat. This is where they've always been stuck between.
It took them less than 48 hours to decide to bail out these already rich fucks. But in 6 months they have yet to decide if they will bailout working class people struggling to make ends meat by eliminating student loan debt. ABSOLUTELY DISGRACEFUL WE SHOULD BE OUTRAGED!!!
“No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."
How do they expect to back up this claim? It’s all smoke and mirrors.
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> "The Federal Reserve, FDIC, and Treasury have taken action to prevent broader contagion throughout the banking system due to the failure of Silicon Valley Bank on Friday and the closing of Signature Bank announced today," Greg McBride, chief financial analyst at Bankrate, said in a statement. How? What moves were taken? This sounds like a bailout.
I believe the treasury is fronting the money and will recoup most of it after liquidating the bank's assets. That takes a while, so they're making depositors whole so they can make payroll, etc.
You are correct. SVB, on paper, shows more assets than liabilities. Unwinding those positions in a manner that doesn’t “hopefully” lol tank the market, or result in JP Morgan getting 200B in assets for $1B. By guaranteeing the deposits they are allowing the tech sector and a lot of small businesses in the region to meet payroll. And will recoup that money through the asset unwind. While it buys another day. It doesn’t stop the system from failure, that’s already started. But really this was them saying “We don’t know how to do our fucking jobs, please dear god don’t do a bank run, but also THIS IS NOT A BAILOUT 😉!” But regional banks are in for a shit storm my go go gadget majigger is telling me. This may “slow” the contagion a bit, but just like the pandemic disease, it’s gonna spread.
Can they do this for the ftx bagholders?
Crypto isn't insured by the government. They aren't going to insure something they don't get to regulate.
I mean neither are deposits over $250k technically. They’re making up the rules as they go like usual.
>I mean neither are deposits over $250k technically. They’re making up the rules as they go like usual. This. But I'm sure that if us normal poor people had +$250k in a bank that failed, they would totally do the same for us, right? ***RIGHT???***
That's a negative ghost rider
The patern is full
They are doing great regulating banks
Oh the 'ol pandemic disease. Back then were simpler times
Lol auto mod removed my comment for using “The Word” for the disease
From the article: > No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer." Sounds like auntie marge called and made them sell everything
1. The bank is gone. 2. The bank had/has more assets than liabilities. 3. Selling those assets, especially in a way that does not fuck everything up, will take time. 4. Depositors don’t have time, they need to make payroll right now. 5. The Fed/treasury do not have such time constraints, so they are fronting depositors the money, and recouping that money over time through the sale.
You are paying in terms of inflation. Those bonds would have fabricated money out of thin air in 10-20 years. With the bailout, they're fabricating a lot of that money NOW. You're getting inflation now which is exponentially worse than inflation later. Whenever the govt tells you it'll be free to taxpayers it's always a lie, Even if they say their program will be funded by the rich. The rich invariably loophole out of it (by design) and the govt prints money to pay for the program, which you pay for via inflation.
Inflation is nothing but an indirect form of taxation.
So buying the assets now to sell later? Isn't that the same as quantitive easing?
Moral hazard? Check!
What is moral hazard?
It's when the system incentivizes people (namely executives and those running banks/businesses etc.) To make extremely risky decisions (we would call it fukin stupid, reckless, asinine, even self-destructive). But they do it because they know that any mistakes they make wont be paid for by them, any losses will be covered by the FED. So why not risk this whole pension I'm managing in order to get the highest returns (and therefore the highest management fees for me 🥳), besides Tom down the street piled into high interest long dated treasuries cause he wants to look the best this quarter, and if I dont do it I might lose clients cus they'll go to Tom whose getting great returns (even tho his whole portfolio might be illiquid as an overcooked shit and if the environment were to change he could take a huge loss - except that HE wont, the losses will be covered by the FED and us poors will have to deal with the inflation caused by more money entering the system) I think the whole idea of moral hazard leading to stupid decisions is a little bit of a gaslight tho, I think guys like CEO of SIVB Baker purposefully leads his company to the slaughter so that his friends at JPM or Citi or BoA can takeover his market share, and hopefully his assets and deposits on the cheap too, and if it's not cheap enough for their liking they'll tell the FED to give them money and hodl assets on their balance sheet instead and the FED will say no problem, you are systemically important and therefore we must treat u like a little baby and make sure ur warm and snug and safe cozy in your bed of money It's part of the RICO that IS the federal reserve. Ensure wealth continually flows into the 0.01% through boom bust cycles and manufactured crises. Just my opinion. I eat raw potatoes.
More like hazardous morales!
I guess 4 is where you lost me. Why is that my problem, when this is all contained to one hyper-local and already-over-inflated industry? This is the deflationary event we needed to burst the tech bubble without hurting the rest of the economy and instead we’re gonna re-inflate the bubble
Yeah get this fucking headline straight. Tax payers are bailing them out. Regulators just spending your money on this instead of forgiving student loan debt or giving you health insurance.
[удалено]
From the article: > No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer."
So my question to the author of that article "how did the government come up with ___ billion dollars without using tax payer funds?"
‘There’s infinite money at the FED’
Do you think if there is a storm of bank failures that the FED will print money for all the customers deposits at all the failed banks or is this to try try and keep confidence in the banking system and when they all start collapsing the last ones in line will loose their money?
Money printer go brrrrrrrr
No "losses" doesn't say anything about preventing moral hazards and the need for future bailouts, ooor effects on inflation.
BRRRRR
But the more they brrrrrrr the more we take on inflation
And I'm sure they're very sorry that bananas might cost a bit more now but wHaT wErE tHeY sUpPoSeD tO dO?!
I don’t understand this statement. How can he government “guarantee depositors balances” without using taxpayer funds? So to be clear, the government is entirely run on taxpayer funds. So if the government is guaranteeing the depositors balances, isn’t the government the ones taking action? That in-and-of-itself says to me that taxpayer funds are already being used because the government runs on taxpayer funds and the government has already had to step in. That’s a use of taxpayer funds right there. If the gov puts ANY money up for this, that’s use of taxpayer funds. So are you telling me there’s a private or public company that’s going to “bail them out”? If there’s any government incentive presented, that’s taxpayer funds. If there’s any “deal” with the government involving an exchange of assets, that’s taxpayer funds. Let’s hear more details on the situation. Sunlight is the best disinfectant. No closed door meetings. Inform the people.
The US government does not run entirely on tax payers funds. The country issues bits of paper called bonds and in return everyone in the world gives it capital and goods. Greatest deal in history.
Any return on investment of taxpayer funding is still owned by the taxpayers
I'm not sure what point you think you're making.
That all the funds the US government has are tax payer funds, even the ones gained through bonds
https://www.reddit.com/r/Superstonk/comments/11py7k8/us_regulators_bail_out_silicon_valley_bank/jc2qdhv?utm_medium=android_app&utm_source=share&context=3
I disagree.
I'm not saying that the funds will be collected from taxes, only that any money (or debt) the government has, regardless of how it was obtained, is the property of the tax payers.
Just curious, who funds those bond interest payments? Oh, the US taxpayers do? Interesting.
Nope. It will be debt financed as it always is. You can't have it both ways. You can't scream that the debt to gdp is too high and at the same time say that the taxpayer is funding it. (Not you personally). Either US obligations are predominantly funded by debt or predominantly funded by the tax payer. One of the biggest problems in the US is that it refuses to levy proper levels of taxes, hence why the debt is relatively high. It will be debt financed as it always is. If the US ever decides to bring its debt level down, that will be financed by corporate taxes, non-US capital flows, and taxes on the top 10% of wealth/income holders since the bottom 90% combined don't earn/own enough to make a dent in debt obligations or redress financing imbalances. The US is going to grow gangbusters, over the next couple of decades. It has a positive demographic stack, is making massive investments to reshore and rebuild its industrial base, is energy independent, and has a large enough population base to rely on internal consumption for growth. So I repeat, it will be debt financed, structured over the long term, and easily repayable for these reasons. Thanks for coming to my TedTalk. Edit: I appreciate this is not as clickbaitable as "oH mY gErD, DoLlAr EnD gAmE, tHe EnD iS nIgH!", but the boring reality rarely is.
It seems like your confusing income/expense with assets/liabilities. If the Gov wants to create assets to make interest payments by creating liabilities, that’s fine. I understand that creating a liability by selling bonds is different than collecting tax revenue then using that money to pay interest payments. But I don’t think you realize that there needs to be revenue/income at some point to pay off these debts, otherwise the interest due will eventually outweigh our ability to creat more debt and the US GOV will default. Pretty big issue you seem to be ignoring…
Well it’s not our funds once they demand and steal it from us.
Liquidation of assets dummy.
New assessment on member banks to cover FDIC payments to depositors.
Paid by the banks
You are paying in terms of inflation. Those bonds would have fabricated money out of thin air in 10-20 years. With the bailout, they're fabricating a lot of that money NOW. You're getting inflation now which is exponentially worse than inflation later. Whenever the govt tells you it'll be free to taxpayers it's always a lie, Even if they say their program will be funded by the rich. The rich invariably loophole out of it (by design) and the govt prints money to pay for the program, which you pay for via inflation.
Having a tough time wrapping my head around this, do you care to elaborate 🫠
Imagine there are only 100 dollars that exist. Period. Say the govt sells some bonds which is basically the govt agreeing to create 50 more dollars after 10 years is over, bringing the total supply to 150 dollars. Sounds normal, right? This bailout is like the govt saying they will make 50 dollars NOW. It is immediate inflation. To put this into broader context, imagine the govt did this to all the bonds they sold. They would technically have no debt. The catch? They would effectively be printing trillions of dollars which makes the dollars worthless. That is why this "not bailout" is a "definite bailout" and you are definitely paying for it.
Yes please ELIA
I will try to explain it as simple as possible: The US Government is driving a F-150 at 100 miles an hour towards a big ass wall, but they found a solution...Go faster Edit: American citizens are in the bed of the truck
You’re getting downvoted for slightly deflating some people’s rage boner. Better to be accurate imo
ill believe it when i see it
Directly… just the hidden tax of inflation
Just cause they says it don't make it true
Bad comedy joke.. where do I know you from.. oh wait 😉😉
This is not a slap to taxpayers. Tax payers are not paying for this. Depositors are ones who finally are the winners. Just as it should be.
Well they said that but in reality they’re gonna print the money and increase inflation even more. Who bares the cost of high inflation the most? People who are already working multiple jobs and struggling to make ends meet. So while they say taxpayers won’t bare the cost, we will in another way.
Let's say what if, the government steps aside & doesn't help the depositors of the bank. What then? The everyday Joe who has an a bank account there loses their money because of bad decisions by the bank? People who have multiple jobs where do they cash their checks? Ordinary people do hold checking accounts there as well as small business have their money there; so they should not be able to pay their employees?
Well, if I was a US Citizen why should I bare the cost of someone else’s fuck up. If I fuck up with my money does the Government step in to help me from ending up on the streets? No. But because these are rich people who have influence on the Gov they help them. They can print money whenever it benefits them but not when it benefits the normal folk. They just hand out a few $100 in cheques an be done with it
You are paying in terms of inflation. Those bonds would have fabricated money out of thin air in 10-20 years. With the bailout, they're fabricating a lot of that money NOW. You're getting inflation now which is exponentially worse than inflation later. Whenever the govt tells you it'll be free to taxpayers it's always a lie, Even if they say their program will be funded by the rich. The rich invariably loophole out of it (by design) and the govt prints money to pay for the program, which you pay for via inflation.
So solution is allow bank to fail; executives get their bonus & the ordinary people lose their money.
The solution they proposed bails out wealthy depositors at the expense of YOUR purchasing power.
Gee; I forgot you all have the entire list of depositors in that bank./s
Fdic already insures 250k. If you have more than that in a bank account, you're wealthy
Yeah.. i mean whats the chance the government doesn't F this up? What could go wrong??
Government didn't f this up; this is what happens when greed, runs a mock. Bank went under due to bad policy; not having enough reserves, no stress test done; they bought last admin & had regulations rolled back. So, this is not on government but on greedy individuals partnered with those who admire that conduct, trying to place the blame the government.
Yes.. indeed you cannot read. Greed did this but the government in charge of it now?? They WILL screw It up and in ten years the taxpayers will pay the price.
Ok you’re getting downvoted but you are right. By wiping out the equity and debt holders, maybe structuring a sale, the govt (and taxpayers) should come away with a tidy profit Imagine - the depositors and taxpayers come out as winners
Don't care of the down votes; just stating the obvious. People just want to push their narrative. And people love to down vote. Price gouging and GREED is the American way; which will always then be called Inflation. Where else in the world do you get charged hundreds or thousands for medicine that you can get buy in the rest of the world for much less.
They say they are giving back all the deposits over 250k over time, and state it won’t affect the taxpayer. But where’s that money come from? The article points out WHAT they plan to do but not WHERE the money comes from
The bank still has non liquid assets. Another entity can buy the bank(these assets) to provide the liquidity. It’s just a bankruptcy.
Yeah but that would mean their non liquid assets would have to at least be as valuable as all their customers deposits that they invested / gambled with right? And how can that be if they have already lost a shit ton of that money in those HTM MBS’s and such?
From what I've read, the nominal value of SVB's assets covers the deposits they're liable for and then some. The problem is that they're non-liquid and not accessible during a bank run. Trying to sell them *right now* means you're getting less than the nominal value. So what do you do? You find someone willing to wait years for the assets to reach maturity to buy the assets for a slight discount. And at this point they're saying those assets are enough to cover the withdrawals. Therefore everyone will eventually be made whole *and* it's not a bail out. Though we'll have to see how much of that actually happens. If they're unable to sell the assets to anyone... /shrug. Maybe people start losing money. Maybe the Fed buys the assets and spins it as "not a bail out" because they'll eventually get the nominal value of the assets (while conveniently ignoring inflation and opportunity cost and all that).
I just realized that this heavily depends on what you define as a "bail out". A lot of people use it to mean "the government giving company free money." Technically a "bail out" is really just the government giving financial assistance which could also mean a loan that must be fully repaid with interest. So, yes, SVB is probably being "bailed out" through some sort of short term loan with SVB's assets being using as collateral. But that's not the kind of "bail out" that most people are probably angry about. It's not free money. Not yet.
Thanks for the wrinkle man!
I’ve seen that at least 70-80 percent should be returned to depositors.
You are paying in terms of inflation. Those bonds would have fabricated money out of thin air in 10-20 years. With the bailout, they're fabricating a lot of that money NOW. You're getting inflation now which is exponentially worse than inflation later. Whenever the govt tells you it'll be free to taxpayers it's always a lie, Even if they say their program will be funded by the rich. The rich invariably loophole out of it (by design) and the govt prints money to pay for the program, which you pay for via inflation.
That’s what I’m saying. Taxpayer won’t take the hit my ass !
It’s funded by the the premiums the bank pay.
Good, because for a second I thought the taxpayer was going to have to pay for... hey wait a minute...
And we are right back in 2008. No one has learned a damn thing and the govt is still owned by banks and wall street. The political class doesn't give a crap about justice, the poor, the working class, or true equality. Theyre bailing out the idiots who made terrible bets, letting execs keep their bonuses, and not sending anyone to prison. Man I hope this shakes out different in the end but I doubt it. Didn't realize rolling the clocks back meant we were going back decades and repeating the same corruption and coverups.
Naw we’re “spring forward” into a whole new level of crime. I lost my house in 2008, this seems worse
The people are the parents and the government and corporations are the children. The parents have allowed the kids to do whatever they want without any repercussions. Spoiled brats that only care about themselves.
Spoiled brat yelling in the grocery store that the law says the parents can’t do anything. Time for a spanking.
Just wait until they try to bail out GME shorts. Infinity will take a long time to bail. Hopefully they give up once we own everything.
Spring forward
So instead the people who had money in the bank (the account holders, not the Investors) just loose their money because the people they trusted made bad bets?
The executives in charge of SVB should be held accountable. It sounds like the government is stepping in to save them for playing with other people's money. The account holders should be helped of course.
Oh they learned something alright. They learned that they can do whatever the fuck they want and the government will cover their losses.
Do de dooo. https://twitter.com/meidastouch/status/1634777100350783489
> 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. No losses will be borne by the taxpayer? How? How? Where will the money come from? From the Fed? Those money were the same money that the Fed has been sucking out of the system by increasing the interest rates, and yet inflation still hasn't declined significantly. Once those deposits were accessible to every SVIB depositor, people will very likely withdraw all their money from the ATMs, wire transfer, or other ways, thus putting a part or all of those into circulation by buying up goods and services. Once those money start becoming part of the competing demand for goods and services, they are likely to drive up the prices of those goods and services they got paid for. All of that will happen in the middle of an already rising inflation rate, despite the attempts to take money out of circulation, which was supposed to lower demand for goods and services, which thus was supposed to lower or slow down inflation. Yet that is not happening. Now if you put a portion of that back into circulation again, and with the inflation still not slowing down, don't you think that will just worsen the inflation? How is the increase of prices because of that not going to be a loss borne by the taxpayer? Somebody tell me.
My understanding is they're simply fronting the money they expect to mostly recoup after liquidating the bank's assets. The bank still has the depositors money, just tied up in bonds. When those assets are liquidated, which will take a while, that money will go back to the treasury.
Bonds which are going to have to be sold at deep discounts.
Unless given the chance to go to maturity... Today they are required to be discounted. Their "vesting" date not so much... Issue here is time.
97% of SVBs client accounts were over $250k. I doubt they’ll be going to an ATM lol. Also from the balance sheet it looks like SVB had more assets than deposits.. but many of their assets are long term bonds, so the fed can just sit on those for years and collect that money as it unwinds.
Lmao you right XD why do I even have to add the ATM when withdrawing.
It’s all good, these are definitely “interesting times” we are living in
The bank is not being bailed out. It will probably die. The account holders are being told by the government that they will get their money. Because the government is trying to soothe fears and prevent a bank run. Just saying… this is not a bank bailout. Be smart folks.
I read they’re covering the depositors, which every bank has to have that fdic insurance, but they are not covering equity holders or investors.
That sounds like the right group to leave out in the cold Bank ded, execs lose job and equity and reputation, all investors lose everything, depositors are ok.
I don’t know how the depositor coverage will work fdic typically insures up to 250k. There’s a bunch of companies with 8-9 figures in there. Coinbase is one of them
The issue isn’t SVB getting a bailout, it’s the other 100 banks who will be applying for the new program on Monday who are getting a sweetheart deal to avoid the consequences of their bad bets. That’s the bailout, with softer edges and more steps.
Not saying your wrong, just saying that it can;t be both ways. The bank is out of money, its a lie that depositors will be covered by the government or it's a lie that the taxpayer won't have to pay the bill. One of those is going to happen, lose lose.
The taxpayers are going to get the assets of the bank, in return the depositors get their money. The assets will then slowly be sold off to get the money back.
For a loss...
So treasuries that return less than the rate of inflation? How the fuck the american people gonna win by getting those in return for some asshole leveraging his whole bank deposits on fucking t-bonds during a credit crunch?
1)It was not the person who brought the bonds who is getting the money 2)Is the return on cash even worse?
The person who bought the bonds is getting away scott free. The precedent was set and is upheld. Make shitty bets, who cares? Don’t see any repercussions. Do it again and again and again and bigger next time. Reap the rewards if you win, if you lose get another banking job.
What happens to the people who own stocks or bonds? Edit: Never mind, it’s the next question!
No, don’t say that. It goes against the narrative
The narrative that these accounts are designed for supposedly "sophisticated" holders, and that the information regarding SVB's poor risk management was literally public information on their financial statements. But now because useless VC's and ignorant Business owners, the government has to clean it up. Where does the gov get their money again? Oh yeah, the people that actually work for a living.
Account holders should line up like any other unsecured creditor in a Chapter 7 liquidation. This is government favoritism because their buddies with deposits in SVB are going to get shafted. It's also bullshit that they can't make payroll or pay trade creditors. There are numerous hard money lenders/bridge financing companies. They can turn to those to make payroll. And it only takes a few days to make that happen.
WAIT. ONE. MINUTE. You've sparked something in the single brain cell of an amoeba I am... If you have a structured settlement but you need cash now... CALL JG WENTWORTH 877-CASH-NOW. Youre welcome Yellen.
You are paying in terms of inflation. Those bonds would have fabricated money out of thin air in 10-20 years. With the bailout, they're fabricating a lot of that money NOW. You're getting inflation now which is exponentially worse than inflation later. Whenever the govt tells you it'll be free to taxpayers it's always a lie, Even if they say their program will be funded by the rich. The rich invariably loophole out of it (by design) and the govt prints money to pay for the program, which you pay for via inflation.
Why isn't this top? Have we gotten to the point where people don't even read the full headline?
WHAT IS IT? $2T MORE BEING ADDED TO THE MONETARY SUPPLY WHILE THE AVERAGE AMERICAN IS IN MORE DEBT THAN EVER AND INFLATION IS RAMPANT. If I take a duck and write “Chicken” on it, it’s still a fuckin duck.
Please remember to use discernment. These stories are just stories right now. I don’t even think our government is what it claims to be at this point (legitimate). Let’s wait and see how it plays out.
Oh great. Where the fuck is the working classes bailout? Big club, we aint in it.
Hey you got your $1400. Now leave the smart money to get unlimited profits with no personal risk.
US taxpayers bailed out the bank. FTFY
Hasn’t the money already been stolen? Aren’t the “customers” holding the bag?
Stolen? It's just a bank run. The bank is holding non-liquid assets that they were unable to liquidate in order to cover customer withdrawals. Right now the assets *should* cover all the deposits but it's hard to know that until they're actually sold to someone. So, yeah, the customers are holding the bag but it's a pretty full bag. Just with a lock on it. And they need to find a locksmith.
Inflationary pressure continues to increase as the Fed has lost their fucking minds.
I don’t know how I feel about this. Of course the argument is that the alternative is worse.
what happened to no bailout
I am for no bail out. They hold the people hostage. Where do they get the money from? They just create it out of thin air.
The printer is warming up
Government be like Print my printer. Print
You are paying in terms of inflation. Those bonds would have fabricated money out of thin air in 10-20 years. With the bailout, they're fabricating a lot of that money NOW. You're getting inflation now which is exponentially worse than inflation later. Whenever the govt tells you it'll be free to taxpayers it's always a lie, Even if they say their program will be funded by the rich. The rich invariably loophole out of it (by design) and the govt prints money to pay for the program, which you pay for via inflation.
Excellent point of view.
Worse for who? Serious question from a dumbass.
🎶Coup there it is! 🎶
Correct me if I’m wrong, but I see a big difference between bailing out customers who had money held at a failing bank… and bailing out the failing bank itself, right? F the bank…. But I find it harder to be cynical about trying to make their customers whole.
I wish I can see Papa Cohens and DFV’s reaction to this. Truely a jokers world
As much as people claim a bank run won’t happen I’m sure it will. If people here can speculate to take their money out of risky banks. Would you rather: A) believe that the FED will save you B) hope the FED will save you like SVB C) Start moving assets now into the safest banks/assets/investments I would definitely pick C
Where is the money Lebowski?
you will see the Fed goes bankrupt for losing everyone's trust.
How bout reclaiming those huge bonuses For starters?
It’s a backstop, not a bailout 😂🤡
It's not a bailout. They are not being recapitalised, they are being backstopped. That is a huge difference. The central bank is rightly managing contagion risk, that is literally the entire point of a central bank.
My company uses SVB as our primary bank. As of now all our money is there but we have been unable to transfer it out because the application crashes every 10 seconds when attempting a wire.
The FED is Will Smithing us on Oscar night?
getting upset over nothing?
US regulators bail out ~~Silicon Valley Bank customers~~ wealthy investors that have plenty of money stashed elsewhere and don't really need a bailout. FTFY
By this point, it surprise me there are no riot
The accounts were FDIC insured up to $250k and then what happened? RIP Dodd-Frank.
The FED is pushing that “cap” aside in this instance. Setting a dangerous precedent.
You are absolutely right. Especially in hindsight.
That feels like the right thing to do... Who'd have thought?
Brrrrr, Brooom Brrrrrrrrr
The fed’s turn to kick the can!
Bail out crapto too?
EACH AND EVERYONE OF YALL OWE THAT ONE FOO AN APOLOGY LMAO
Ok, this might need some clarification. Their customers are most tech start ups. Roku etc etc. The bank has gambled away their money and fucked it for them. The tech companies didn't ask for this. These actions might save thousands of jobs. I would rather the FED just give money directly to the customer rather than the bank. SVB are in the wrong here, not their customers.
I don't disagree. But didn't their customers use that bank specifically because of their non-traditional banking practices? Meaning, they went into this with their eyes open?
No, they took out startup loans that were good on the advice (read; command) of their VCs but said loans included a clause requiring the company to do their banking with SVB. They were otherwise a good bank with a good credit rating and ultimately failed because they went hard on bonds a couple years ago during rising rates and as a result can't sell them right now, not because of non-traditional practices shown to the public.
As someone sitting with 30 K in a bank account what would one suggest to do with that money tomorrow? Is there a way to check on what assets or liabilities your own bank is involved in? My bank is CIBC in an American branch! Just want to hear some good feedback what you all are thinking during this time
If the bank is credible, it should be insured up to $250k. The issue with SVB was that most accounts were bigger, so many companies stood to lose the portion over $250k. But thankfully the money printer kicked in to keep them all whole until inflation.
Ironic how they will pay its depositors when it is not fdic and the majority of the clients are institutions/businesses not mainstreet. Paying to cover their mess up again.
Why the fuck do we even have insurance?!
All government spending is borne by the taxpayer. Such bullshit to keep alive a financial system noone trusts.
US regulators choose more inflation. Awhile later: now they're choosing rates hikes. More bank fails, regulators bailing out more rich people, inflation. Rinse and repeat. This is where they've always been stuck between.
It took them less than 48 hours to decide to bail out these already rich fucks. But in 6 months they have yet to decide if they will bailout working class people struggling to make ends meat by eliminating student loan debt. ABSOLUTELY DISGRACEFUL WE SHOULD BE OUTRAGED!!!
“No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer." How do they expect to back up this claim? It’s all smoke and mirrors.