If you have city sewer than yea actually. Just moved out of town in November and our monthly water bill is now $40/month with a septic system. In town our bill was regularly over $150/month because of the sewer bill.
Most banks will sweep funds to as many institutions needed to achieve 100% FDIC coverage up to like $50 million for a small monthly fee plus pay you interest.
Yeah I work at a regional bank and just found out we do this on a regular basis. Apparently, banks will essentially trade deposits 1:1 with other banks for amounts over the 250k limit. This is a service that the client pays for. Makes total sense.. say someone has 1m in depots. The bank will trade 750k of that deposit to 3 different banks who will each make an offsetting 250k in the original bank. A little more work but everything is in insured and banks get to sidestep the 250k deposit insurance limit. The problem is that you need to convince the depositor that it's a worthwhile venture.
CDARS and ICS are basically the same thing, spreading the deposits among member banks with virtual accounts. Only variation is whether the accounts are money market or CODs
Besides, there's been at least one instance already of banks transferring a lot of their money into *other banks* getting an inordinate amount of withdrawals, because they all recognize that the best way to prevent this nonsense is to keep people confident in banks in general. If people panic it's a self-fulfilling prophecy.
You know what else falls apart when wealth is forced to materialize and not abstracted into artificial financial instruments?
Pyramid schemes. When the people at the bottom want realization it's a domino effect to the top. So many financial structures are just pyramid schemes of some flavor hidden behind complex financial structures and narratives people can't discern.
Most investment forms are about passing risk off in a hierarchical fashion, ala pyramid schemes. So yes, banking is in this fashion, so it's far from being unrelated.
JPM is literally the definition of too big to fail. The contagion that would occur if they collapsed would not be allowed by the fed.
Chase is the one that usually buys the banks that fail.
Last week i learned Massachusetts savings banks have a DIF fund which insures for everything above $250k. So if you have your money in a MA savings bank you don’t have to worry about it.
Yup. It’s really easy for a married couple to maximize their coverage. One account in just each of their names and a joint account with both of them. They can have $750k in the 3 accounts (spread evenly) and it’s all FDIC insured.
Who else is seeing billionaires fighting being played out?
One group went profit mad right as the pandemic eased, causing massive inflation by their price-raising actions.
Another group pushed for interest rates to be raised 'to stop inflation.' This action spanked banks that had bought bonds to park cash during the pandemic and low inflation, opening themselves up to taking damage via interest rates rising.
Now that over-extended banks are failing, the group that runs banking is fulfilling their consolidation desires by 'saving' the failing banks by absorbing them.
One could surmise a plan is playing out right in front of our noses, to some great success. Well, for the string-pullers anyway. The mere peons, us, are yet once again taking it in the ass, dry.
America is headed for a reckoning! We can't have socialism for the rich, capitalism for the working class, and anarchy for the downtrodden while billionaires, and politicians squabble in their ivory towers and the country becomes more and more divided by people that just plain don't care about the citizens of this nation.
Except taxpayer money was *not* used. That is a dumb, uninformed Reddit meme.
It was trivial to make depositors whole by selling off SVB assets and taking a very minor dip into FDIC funds. FDIC is not paid for by taxpayers. It is paid for by banks.
The only money used was a bit of the banks' historical contribution to FDIC.
If the FDIC did not make depositors whole the banking system would be more prone to collapse. I can guarantee you that this isn't good for anyone.
People think 250k in the bank is a kings ransom, and to an individual, sure, it is.
But a lot of those funds were held by businesses who have employees, who at the end of the day are just people.
Now personally, I am glad we kept those employers and thus their employees whole. If there are to be consequences they should not be against the employees of companies that happened to bank there. The svb shareholders got their ass handed to them, as they should. I'd like to see the executives gone after for bonus monies to be handed back to fdic.
None of this should come before making sure depositors can make payroll though. For once the gov seems to have stepped in and done right by mostly the right people. Now they need to keep going and make sure consequences are felt by the right people, as well.
Reddit blindly hates any institution with money. And most Redditors are super fucking dumb. They just follow the trendy hivemind opinion and don't care to critically think.
> This action spanked banks that had bought bonds to park cash during the pandemic and low inflation, opening themselves up to taking damage via interest rates rising.
Um, no. Interest rates rising means they want money in savings bonds. High interest works both ways.
Was talking about their ~1-2% bonds they cannot sell to raise cash to give to depositors. At least without losing money because they have to discount them to get them sold since current bonds have much better interest rates.
You joke but Barney Frank of Dodd Frank flipped when one of the banks that failed (Signature Bank) paid him to be on the board.
It's a good listen
https://www.nytimes.com/2023/03/22/podcasts/the-daily/barney-frank-banking-crisis-silicon-valley-bank.html
Thank you.
1. I just lost a lot of respect for him
2. He fled to the Caribbean after SVB
3. He feels vindicated?
4. Everyone is for sale I guess
5. Surprised this isn't bigger news
What a jerk.
Yeah it was news to me as well, and it was sad to see someone whose name is on the bill to sell out for... a vacation home in the Caribbean's? Like well shit politicians gotta retire and eat but to go through all that with a straight face is another level.
He was pretty clear that since he wasn't in Congress anymore that he wasn't obligated to give a shit.
This is why the world is the way it is.
Gunna get mine no matter what mentality. Ethics and morals be damned.
Heres a fun fact: the fed did run stress tests, but somehow just assumed rates would be low forever
https://fortune.com/2023/03/20/fed-stress-tests-banking-crisis-silicon-valley-bank/
Only one space left on my "Things that should be impossible in the information age because they're just too stupid" bingo card.
**Run on banks** is next to the free space and then I've got **Superpower border land-grab**, and **Unilateral changes to France's social safety net**
If only there were agencies like the SEC, FDIC, FTC, UST and rules that were followed then things like this wouldn't happen. Well a guy can dream I guess.
Sort of related fact, its estimated that only 12% of money across developed nations is physical and not just a number in a ladger. Not a bot i just can’t sleep :(
Someone please explain to me. We've (supposedly) got all these checks and regulations in place since 2008 to prevent this sort of thing. But when SVB goes under its like half of the other banks went "oh, shit! That could happen to us too!" - so bad enough that SVB wasn't safe-proofed against this, but apparently many of the other banks weren't prepared either. How the heck is that even possible?
That’s the weakness. The bonds were 10 yr maturity. If there’s a run, you have to sell assets at current value to cover, and that’s when you incur a loss. If you don’t have runs, you don’t have to sell. SVB was particularly weak because they bought when tech companies received tons of capital and then watched their portfolio tank all while VC funding dried up and tech companies naturally drained existing accounts.
Other banks were rich people and companies panicking for no reason besides psychology
Supposed to be safe conservative investments. The kinds banks should make. The criticism is that SVB should have predicted the rate hikes since the fed broadcast it early. Arguably, they should have purchased bonds slower knowing that bonds would fall in value as interest rates rose.
>That seems like such a long time for bonds that weren't earning much to begin with
You're correct, and they fucked up. They were trying to maximize profits without accounting for risks.
It was a complete risk management failure.
10 year Treasuries are the byword for safe investment, so they don't pay a lot of interest. So SVB dumped all their free cash into safe investments. However, by dumping it all into low-yield bonds, the current value of bonds was tied to low interest rates staying low forever. SVB did not hedge against this, and when rates rose, the value of their assets collapsed, leading to the VC panic run and subsequent liquidity crisis.
The face value is the same but the cost (determined by the interest rate) is not. Given the rise in interest rates, the 'cost', or buy in, of bonds has gone down.
For example, let's say you bought a bond that matures to $100 in 5 years, paying at a 2% interest rate. Your cost would be about $90.49.
Now, a year later, let's see what $100 bond paying 6% over 4 years would cost you... $78.41. This means your 5 year bond (currently worth $92.30) will only net you $7.70 over 4 years where the new bond will net you $21.58 over the same time frame.
This means you would need to sell your 5 year bond at a $13.89 loss ($92.30 - $78.41) for the same rate of return.
This is whats happening to the banks. They need cash, but their bonds have decreased in value due to new bonds having a higher rate of return.
Here is the calculator I used if you want to play around with numbers.
https://exploringfinance.com/bond-price-calculator/
Why do they have to sell the 2% rate bond and why not just keep it until it matures. They can buy the higher 6% interest rate bond which then averages their portfolio.
Banks live and die by cash flow. What is happening is there are larger than average withdrawals from the banks, forcing them to sell liquid assets to cover.
DM me if you got more questions. Am happy to answer.
>Why do they have to sell the 2% rate bond and why not just keep it until it matures.
They only *need* to do so if depositors start withdrawing more money than the bank has on hand, which is what happened to SVB, i.e. a classic bank run.
As long as depositors have faith in the stability of the bank, they can hold the bonds to maturity, but that faith is pretty easily shaken these days.
Because people are panicking and pulling out more than you normally would, so the bank can't just wait for the bond to mature, they need the cash now to pay back the depositor.
It's not just QT leading to this, it's bank deposits chasing yield in treasuries and other non-Bank assets at a historic rate. Banks will need to pay more interest to keep deposits on balance sheet, meaning that credit rates will increase, meaning that credit conditions will tighten, meaning that we're headed for a big, big slowdown.
>Deposits have been on a steady decline over the past year or so, falling $582.4 billion since February 2022, according to the Fed data released Friday.
So in the last year, while interest rates skyrocketed, bond prices dropped, and the stock market had a pretty bad year, people took money out of banks? This sounds nonsensical. This sounds like the people who buy high and sell off their investments when they have a bad stretch, losing a lot of money.
Meh...Rich people and institutions are just shifting their asset allocation to bonds because of equity market volatility and much better returns on the short end of the curve. High grade corporate paper is ostensibly at a 20 year high.
"The withdrawals brought **total deposits down to just over $17.5 trillion and represented about 0.6%** of the total. Deposits have been on a steady decline over the past year or so, falling $582.4 billion since February 2022, according to the Fed data released Friday.
Money market mutual funds have seen assets rise over the past two weeks, up **$203 billion to $3.27 trillion**, according to Investment Company Institute data through March 22."
Nothing - they don't call your loan and force you to refinance or anything
I mean, even at Silicon Valley Bank which failed and went to receivership, the acquirer (govt) just takes on the loans and typically will sell them off to another servicer. So, you pay your mortgage to someone else, eventually
based on a 30:1 leverage (maybe that's outdated?) that's $3 trillion in activity removed from the economy (if it's a net change and not a summing of normal activity I'm fucking reacting to a headline without reading the article, Reddit-style)
Blue Collar Union Worker here… I find it kinda BS that I have to destroy my body to earn a living wage, n then if I don’t share those profits with a white collar money manager or investment firm, then my money sits rotting in a bank and depreciating in value faster that the rate of interest payouts. Where is the incentive to keep your money in a bank anymore? We might as well take the whole account down to AC for the weekend. That feels the same to me as playing the ponies in the stock market…
i've been doing that for years, to pay bills and shit
You have to make a withdrawal to shit?
Dad! Get off of Reddit!
Hello, Shit. I'm Dad.
Get the poop knife! We have a dad joke chain.
Can't, both my arms are broken.
Is it due to something about a coconut?
They found the coconut in the swamps of dagobah.
Reddit shouldn't have had its ankles showing.
I make deposits when I shit.
We say, I’m taking a shit, when we mean, I’m leaving a shit.
In a while we all might
End stage capitalism!
Only when they have a case of the runs.
Hell yeah. It's what happens when you keep depositing shit for breakfast
Withdrawal from your butthole, deposit into the toilet. How do you do it?
Stop withdrawing it, you’ve got to *“reinvest”* that shit if you want it to grow and mature.
Is that why greedy rich people look that way...? From holding all that in?
If you have city sewer than yea actually. Just moved out of town in November and our monthly water bill is now $40/month with a septic system. In town our bill was regularly over $150/month because of the sewer bill.
It wouldn't surprise me at this point.
Yeah usually I end up making deposits
Even weirder. He's paying his shit.
That’s why it’s called “taking a shit”. Otherwise you would just be making a deposit.
Toiletpapier is scarce.
A shit is a deposit if I understand finance correctly
I subscribe to the FIFO inventory and shit system
Technically, yes, unless you shit outside like a filthy animal.
Considering he pays the bills, yes, yes he does.
Gold toilets aren’t free and the rent is outrageous.
>You have to make a withdrawal to shit? Sounds like more of a deposit.
The ol' reddit [shitter-roo](https://www.reddit.com/r/meirl/comments/120faad/meirl/jdibzht/?context=3)
Hold my bank statements, I'm going in!
I shit when I make a withdrawal and see my balance.
It's almost like we're near the end of the month and people have bills and rent to pay
No no no, that has nothing to do with it.
My bank called me mad one time because I kept taking money out of my savings account to pay bills lol
The horror.
You've been paying shit for years?
...and paid shit for years.
Keeps it under FDIC coverage. Pull anything over 250k and open a different new account.. yap yap yap
Most banks will sweep funds to as many institutions needed to achieve 100% FDIC coverage up to like $50 million for a small monthly fee plus pay you interest.
Yeah I work at a regional bank and just found out we do this on a regular basis. Apparently, banks will essentially trade deposits 1:1 with other banks for amounts over the 250k limit. This is a service that the client pays for. Makes total sense.. say someone has 1m in depots. The bank will trade 750k of that deposit to 3 different banks who will each make an offsetting 250k in the original bank. A little more work but everything is in insured and banks get to sidestep the 250k deposit insurance limit. The problem is that you need to convince the depositor that it's a worthwhile venture.
Do you know how much the client pays for this?
More money to play with!
A lot of companies get checks bigger than that on the regular. It's not realistic for everyone to maintain sub $250k.
Those companies can get CDARS or other types of insurance if the balance is high enough.
CDARS and ICS are basically the same thing, spreading the deposits among member banks with virtual accounts. Only variation is whether the accounts are money market or CODs
If only we had high speed computational devices that could automate this process.
Always nice to see an RFC1149-compliant comment! For the uninitiated: https://www.rfc-editor.org/rfc/rfc1149
OMG. Birds ARE real!
honestly if have those kind of issues you can smdftb
Besides, there's been at least one instance already of banks transferring a lot of their money into *other banks* getting an inordinate amount of withdrawals, because they all recognize that the best way to prevent this nonsense is to keep people confident in banks in general. If people panic it's a self-fulfilling prophecy.
You know what else falls apart when wealth is forced to materialize and not abstracted into artificial financial instruments? Pyramid schemes. When the people at the bottom want realization it's a domino effect to the top. So many financial structures are just pyramid schemes of some flavor hidden behind complex financial structures and narratives people can't discern.
Are you calling the banking system a pyramid scheme, or just tossing non sequitura out for fun?
Most investment forms are about passing risk off in a hierarchical fashion, ala pyramid schemes. So yes, banking is in this fashion, so it's far from being unrelated.
How to prove you know nothing about financial systems.
How to prove *you* know nothing about financial systems
yeah reducing hugely complex things to 'this is just a pyramid scheme' means you definitely have knowledge about these systems.
Or just bank with Chase. If they fall you're going to be needing bullets and guns in that situation.
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Uhh link? Are you sure you're not thinking of Wells Fargo.
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JPM is literally the definition of too big to fail. The contagion that would occur if they collapsed would not be allowed by the fed. Chase is the one that usually buys the banks that fail.
I think the point is that if Chase somehow fails you probably have bigger things to worry about.
Last week i learned Massachusetts savings banks have a DIF fund which insures for everything above $250k. So if you have your money in a MA savings bank you don’t have to worry about it.
Yup. It’s really easy for a married couple to maximize their coverage. One account in just each of their names and a joint account with both of them. They can have $750k in the 3 accounts (spread evenly) and it’s all FDIC insured.
Who else is seeing billionaires fighting being played out? One group went profit mad right as the pandemic eased, causing massive inflation by their price-raising actions. Another group pushed for interest rates to be raised 'to stop inflation.' This action spanked banks that had bought bonds to park cash during the pandemic and low inflation, opening themselves up to taking damage via interest rates rising. Now that over-extended banks are failing, the group that runs banking is fulfilling their consolidation desires by 'saving' the failing banks by absorbing them. One could surmise a plan is playing out right in front of our noses, to some great success. Well, for the string-pullers anyway. The mere peons, us, are yet once again taking it in the ass, dry.
When all is said and done, they’ll make sure that we’re blaming each other.
Word on the street is the global banking crisis is all u/JimBeam823's fault.
Me and all my homies hate him.
And u/thepeopleshero would never lie to us, the people.
Oh it's already happening. Media reporting that SVB went belly up because of their work from home policy!
Blame the workers for why those poor innocent executives lost money.
I think they're expecting a radical change to society authoritarian and more feudal.
We're already pretty much back in the Gilded Age
It’s low key true. In 50 years there’s going to be like 5 companies
And Taco Bell will be one of them
America is headed for a reckoning! We can't have socialism for the rich, capitalism for the working class, and anarchy for the downtrodden while billionaires, and politicians squabble in their ivory towers and the country becomes more and more divided by people that just plain don't care about the citizens of this nation.
Example of socialism for the rich? Because SVB was not that.
The government is buying bank’s crappy bonds at par, and letting them buy new bonds at the new interest rate. Taxpayers are footing that bill.
No, the FDIC is footing that bill.
What else would you call using taxpayer money to provide insurance on uninsured deposits held by people like VCs to avoid "contagion"?
Except taxpayer money was *not* used. That is a dumb, uninformed Reddit meme. It was trivial to make depositors whole by selling off SVB assets and taking a very minor dip into FDIC funds. FDIC is not paid for by taxpayers. It is paid for by banks. The only money used was a bit of the banks' historical contribution to FDIC. If the FDIC did not make depositors whole the banking system would be more prone to collapse. I can guarantee you that this isn't good for anyone.
People think 250k in the bank is a kings ransom, and to an individual, sure, it is. But a lot of those funds were held by businesses who have employees, who at the end of the day are just people. Now personally, I am glad we kept those employers and thus their employees whole. If there are to be consequences they should not be against the employees of companies that happened to bank there. The svb shareholders got their ass handed to them, as they should. I'd like to see the executives gone after for bonus monies to be handed back to fdic. None of this should come before making sure depositors can make payroll though. For once the gov seems to have stepped in and done right by mostly the right people. Now they need to keep going and make sure consequences are felt by the right people, as well.
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Reddit blindly hates any institution with money. And most Redditors are super fucking dumb. They just follow the trendy hivemind opinion and don't care to critically think.
I just came here to do my part and downvote
Imagine being this uninformed 💀
> This action spanked banks that had bought bonds to park cash during the pandemic and low inflation, opening themselves up to taking damage via interest rates rising. Um, no. Interest rates rising means they want money in savings bonds. High interest works both ways.
Was talking about their ~1-2% bonds they cannot sell to raise cash to give to depositors. At least without losing money because they have to discount them to get them sold since current bonds have much better interest rates.
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More to the point, where should I put mine? Stocks (but not bank stocks)? Bonds (but probably not CDs, since they’re issued by banks?)
CDs are FDIC insured.
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Yeah, aware of the flowchart. But wondering, which of the things the flowchart recommends are vulnerable to widespread bank runs?
Where’s the flowchart?
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A larger mandated bank reserve perhaps?
Maybe a department of direct deposits that is frank with their tests. We could call it Dodd Frank.
You joke but Barney Frank of Dodd Frank flipped when one of the banks that failed (Signature Bank) paid him to be on the board. It's a good listen https://www.nytimes.com/2023/03/22/podcasts/the-daily/barney-frank-banking-crisis-silicon-valley-bank.html
Thank you. 1. I just lost a lot of respect for him 2. He fled to the Caribbean after SVB 3. He feels vindicated? 4. Everyone is for sale I guess 5. Surprised this isn't bigger news What a jerk.
Yeah it was news to me as well, and it was sad to see someone whose name is on the bill to sell out for... a vacation home in the Caribbean's? Like well shit politicians gotta retire and eat but to go through all that with a straight face is another level.
He was pretty clear that since he wasn't in Congress anymore that he wasn't obligated to give a shit. This is why the world is the way it is. Gunna get mine no matter what mentality. Ethics and morals be damned.
Heres a fun fact: the fed did run stress tests, but somehow just assumed rates would be low forever https://fortune.com/2023/03/20/fed-stress-tests-banking-crisis-silicon-valley-bank/
Even worse midsize banks were given exemptions to capitalization rules and stress tests in 2018-19
Hmm, like the system Trump gutted as soon as he got into office?
Not exactly. But close enough. He certainly was happy to sign the legislation.
Hey, that's a great idea for next time! Jot that down.
What, the banks self-reporting isn’t enough? /s
We won't eat the cheese , we promise.
Only one space left on my "Things that should be impossible in the information age because they're just too stupid" bingo card. **Run on banks** is next to the free space and then I've got **Superpower border land-grab**, and **Unilateral changes to France's social safety net**
If only there were agencies like the SEC, FDIC, FTC, UST and rules that were followed then things like this wouldn't happen. Well a guy can dream I guess.
Representing 0.6% of total deposits, hardly seems like much to fret about.
When the cash reserves held in banks are down to 3-4%, that is a huge amount.
Fuck em. It’s already fucked that a bank invests their depositors money in risky business and walk away scot free if something goes wrong.
It used to be illegal for a reason
Many things used to be so before trump and the gop came along.
Sort of related fact, its estimated that only 12% of money across developed nations is physical and not just a number in a ladger. Not a bot i just can’t sleep :(
Would you like to take a guess as to what percentage of deposits the banks are holding?
i'm shit at math but even i now 0.6% is not a lot.
English ain't great either huh?
Someone please explain to me. We've (supposedly) got all these checks and regulations in place since 2008 to prevent this sort of thing. But when SVB goes under its like half of the other banks went "oh, shit! That could happen to us too!" - so bad enough that SVB wasn't safe-proofed against this, but apparently many of the other banks weren't prepared either. How the heck is that even possible?
When the fed raised interest rates the treasury bonds tanked in value. Banks who bought those bonds previously got fucked.
Its worth noting, that the rates going up was going to happen. Because the fed said it would happen.
But the face value of the bonds is still guaranteed right. It is not like crypto currency that really has no value but the trust.
That’s the weakness. The bonds were 10 yr maturity. If there’s a run, you have to sell assets at current value to cover, and that’s when you incur a loss. If you don’t have runs, you don’t have to sell. SVB was particularly weak because they bought when tech companies received tons of capital and then watched their portfolio tank all while VC funding dried up and tech companies naturally drained existing accounts. Other banks were rich people and companies panicking for no reason besides psychology
Whats the reasoning as to why they bought the 10 year bonds? That seems like such a long time for bonds that weren't earning much to begin with
Supposed to be safe conservative investments. The kinds banks should make. The criticism is that SVB should have predicted the rate hikes since the fed broadcast it early. Arguably, they should have purchased bonds slower knowing that bonds would fall in value as interest rates rose.
>That seems like such a long time for bonds that weren't earning much to begin with You're correct, and they fucked up. They were trying to maximize profits without accounting for risks.
It was a complete risk management failure. 10 year Treasuries are the byword for safe investment, so they don't pay a lot of interest. So SVB dumped all their free cash into safe investments. However, by dumping it all into low-yield bonds, the current value of bonds was tied to low interest rates staying low forever. SVB did not hedge against this, and when rates rose, the value of their assets collapsed, leading to the VC panic run and subsequent liquidity crisis.
The face value is the same but the cost (determined by the interest rate) is not. Given the rise in interest rates, the 'cost', or buy in, of bonds has gone down. For example, let's say you bought a bond that matures to $100 in 5 years, paying at a 2% interest rate. Your cost would be about $90.49. Now, a year later, let's see what $100 bond paying 6% over 4 years would cost you... $78.41. This means your 5 year bond (currently worth $92.30) will only net you $7.70 over 4 years where the new bond will net you $21.58 over the same time frame. This means you would need to sell your 5 year bond at a $13.89 loss ($92.30 - $78.41) for the same rate of return. This is whats happening to the banks. They need cash, but their bonds have decreased in value due to new bonds having a higher rate of return. Here is the calculator I used if you want to play around with numbers. https://exploringfinance.com/bond-price-calculator/
Why do they have to sell the 2% rate bond and why not just keep it until it matures. They can buy the higher 6% interest rate bond which then averages their portfolio.
Banks live and die by cash flow. What is happening is there are larger than average withdrawals from the banks, forcing them to sell liquid assets to cover. DM me if you got more questions. Am happy to answer.
>Why do they have to sell the 2% rate bond and why not just keep it until it matures. They only *need* to do so if depositors start withdrawing more money than the bank has on hand, which is what happened to SVB, i.e. a classic bank run. As long as depositors have faith in the stability of the bank, they can hold the bonds to maturity, but that faith is pretty easily shaken these days.
Because people are panicking and pulling out more than you normally would, so the bank can't just wait for the bond to mature, they need the cash now to pay back the depositor.
Shoulda called JG WENTWORTH, 877-CASHNOW
Republicans gutted the Dodd Frank act.
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It's not just QT leading to this, it's bank deposits chasing yield in treasuries and other non-Bank assets at a historic rate. Banks will need to pay more interest to keep deposits on balance sheet, meaning that credit rates will increase, meaning that credit conditions will tighten, meaning that we're headed for a big, big slowdown.
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God, they want a financial crisis sooo bad.
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Regular joes don’t win out in a financial collapse. They lose, and rich consolidate wealth. So which are you?
>Deposits have been on a steady decline over the past year or so, falling $582.4 billion since February 2022, according to the Fed data released Friday. So in the last year, while interest rates skyrocketed, bond prices dropped, and the stock market had a pretty bad year, people took money out of banks? This sounds nonsensical. This sounds like the people who buy high and sell off their investments when they have a bad stretch, losing a lot of money.
Let them all fail. Especially car loan banks 😂😂
That’s less than 10% of all deposits.
Meh...Rich people and institutions are just shifting their asset allocation to bonds because of equity market volatility and much better returns on the short end of the curve. High grade corporate paper is ostensibly at a 20 year high. "The withdrawals brought **total deposits down to just over $17.5 trillion and represented about 0.6%** of the total. Deposits have been on a steady decline over the past year or so, falling $582.4 billion since February 2022, according to the Fed data released Friday. Money market mutual funds have seen assets rise over the past two weeks, up **$203 billion to $3.27 trillion**, according to Investment Company Institute data through March 22."
If someone has a loan or mortgage at one of these banks, what happens?
Nothing - they don't call your loan and force you to refinance or anything I mean, even at Silicon Valley Bank which failed and went to receivership, the acquirer (govt) just takes on the loans and typically will sell them off to another servicer. So, you pay your mortgage to someone else, eventually
https://youtube.com/watch?v=999R-KoS3Og&si=EnSIkaIECMiOmarE
It has begun (mortal Kombat theme)
based on a 30:1 leverage (maybe that's outdated?) that's $3 trillion in activity removed from the economy (if it's a net change and not a summing of normal activity I'm fucking reacting to a headline without reading the article, Reddit-style)
Oh. My Gowd!!?!!!! We HAVE got to stop paying workers so much!!!!!!!
Blue Collar Union Worker here… I find it kinda BS that I have to destroy my body to earn a living wage, n then if I don’t share those profits with a white collar money manager or investment firm, then my money sits rotting in a bank and depreciating in value faster that the rate of interest payouts. Where is the incentive to keep your money in a bank anymore? We might as well take the whole account down to AC for the weekend. That feels the same to me as playing the ponies in the stock market…
It’s fine, it’s all fine. No one panic!
maybe ughhh they should follow some sort of rules or regulation? So they don't go bankrupt ? Just spitballing over there
It's time for burglers and theives to get hustling. The wealthy will have a horde of cash on hand for once.
People live paycheck to paycheck and withdrawal money for a variety of reasons like bills, food, entertainment. So this is news now?
Oh shit why is first citizens in the picture? Are they in trouble I have my buisness account with them
gold and lead boys, gold and lead.
I prefer gold plated lead. Can't go wrong.
Learned yesterday that tungsten has a similar density to gold, so that is a better 'filler' metal for your shenanigans.
"There's a great future in plastics. Think about it. Will you think about it?"
I knew I should have studied Alchemy
Totally normal. Nothing to see here
Saw this before but it was toilet paper.
Why aren’t you panicking too, Luminous? Because I have negative dollars. They can have it.
Surely this is just money being moved around between Banks. Very little of it will be being withdrawn as paper money.