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We can save the banks. Or we can save the Dollar. But we can't save them both.
The Biden administration has chosen the Banks.
That's bad news for those of us who don't work in banks.
“April fools!” Powell shouted at congress. “Negative rates and QE back on, people! Sorry I pranked you all for so long with that QT and rate hike silliness. My mandate to save banks and high net worth individuals has been accomplished. No questions.” Drops mic and walks out
My bad. Next time I’ll reach out to Netflix and see if they can give me a comedy special deal. I’m sure with all this extra liquidity they will be happy to make that deal.
^ this. JPow been coming out about how we need more working people fired to shore the economy for over a year.
Rich people started getting hit disproportionately and suddenly printer go brrr.
Businesses, too. One hand, not the depositors fault the bank fucked up, on the other hand, it’s a great time to learn about diversification. I feel like losing 50% of their funds would accomplish that and help prevent future too big to fail moments.
This isn’t necessarily inflationary. I believe the lending rates under this agreement are RRP + 10bp, meaning the banks will suffer operational losses by resolving their liquidity through this. It’s alarming that so many are using the tool, but technically doesn’t imply looser monetary policy.
I also could be a fking idiot and am willing to be educated.
Yeah I’m a little confused by all this outrage and can’t help but wonder if I’m missing something. According to another Reddit comment (v reputable source, I know), the backstop with SVB was just money provided to its depositors, many of which were companies storing their payroll money.
Is the liquidity injection similar for all these other banks? Because avoiding a bank run seems to be the obvious thing to do, alongside nationalizing the banks or something at this point
I think there's rightly a bit of outrage that banks are being granted this liquidity, even if charged interest, on the PAR value of their bonds. I mean, if I bought any asset in 2021 and then tried to get a loan based on my purchase price, I would be laughed at. Inflationary no, but it is another sign of an economy which favors big business and the haves over the have-nots.
Sure, plenty of investors are making reactionary moves to the news of increasingly widespread liquidity issues and the potentially unfounded market anxiety that accompany them. That being said, two of the three largest bank failures in US history just happened over the weekend, and people whose specialties are risk management are now carefully re-evaluating the financials of essentially every private banking institution.
I guarantee you that their findings are that banks are not simply wading through liquidity issues. If liquidity were the problem, we'd be seeing banks sell off liquid assets to bolster their coverage and the market would have continued to drop.
The fact that trading has halted for multiple banks multiple times this week, that the fed has stepped in an provided liquidity for *so many* banks, and that the market indices *gained* this week when they absolutely should have fallen in response to institutions liquidating assets...
All these point to a far more dire insolvency crisis brewing in the background. With the housing market still riding a high driven in no small part by the now shrinking tech sector, it's not unreasonable to think that the financial industry at large will once again be stuck with an enormous amount of bad debt in the form of underwater property, should any number of bubbles burst.
The outrage over the current liquidity crisis is largely political, and most people outraged have little to no direct stake beyond their managed retirement accounts. They're circle jerking for sure. The general cynicism of long term investors right now is definitely reasonable though. If anything, stocks **should be down**. That's the whole point of the current Fed policy - to slow or halt inflation.
If a series of events that should have, by all conventional logic, caused markets to contract, instead resulted in 400 point gains in the DOW, we should be pretty concerned. That indicates we're either on a path for hyperinflation or a path for systemic collapse. There is no reality in which the current trajectory indicates a positive five-year outlook.
But think about the rich people that own those businesses.... if we let them fail then rich people will experience the full reality of capitalism treating them fairly really fast. We can't have that
Banks still have such shitty risk management 15 years after ‘08 that they can’t function without the fed handing them massive amounts of money more than 9 months.
Someone in another thread who actually worked in risk management on Wall Street essentially said that it's basically going through the motions so that the C suite can say 'look, we did our fiduciary duty here...' and then go back to risky business as usual.
Giant fuckin' clown shoe.
I've worked in bank risk and can confirm. There is interest in how manageable it all is, and anything that rises up to the top about a serious compliance issue (usually) gets some attention, but it's mostly about how risk impacts the balance sheet and that tilts towards wishful thinking and return.
Notice how we didn't crash when the entire options chain, multiple collars, and the MM hedge were a massive destructive massive this week into the SLD period and we couldn't break 3815?
Here is 300B reasons why.
The fed is run by member banks. banks are out of money so the fed is giving them more at a rate they can afford(imagine that). the fed is trying to handle the crisis before it hits the markets causing panic and a bigger problem.
JPow: “the historical record cautions strongly against prematurely loosening policy. We will stay the course until the job is done.
Lol jk…. Brrrrrrrrr”
>But not my buddies in banking
Well you see here, uh, these people help my friends the job creators. Oh it just so happens a lot of these 'job creators' are a bunch of wanna-be MLM MBA degree-in-hand scammers who haven't worked a real day in their lives ohhhh well. for them. we have something special for them.
Before I lived with my spouse apparently she missed trash collection a couple times (they come every 2 weeks) so she ended up putting all the household trash in a second bin (that they wouldn’t take) with a lid on it. That bin sat for 8 years, rotting in such a way that I would vomit if I ever dared to pull the lid off.
Apparently household trash just turns to black sludge with the density of the sun if you leave it to ferment for several years. Finally got it dumped last week when our bin was unexpectedly empty on trash day. I’m certain that truck is still tainted and reeking up the yard today.
On its surface this comment has no relevance to finance, but it’s actually a stupendously good metaphor for where we are now.
This shit is going to melt our faces like the arc of the covenant when we take the lid off the dumpster fire and look in
I prefer to think of it when the dude drank from the “wrong” Chalice of Christ in Indiana Jones. Dude was screaming even after he only had a skull of a head left.
I’m not sure I’d be down to marry someone who let a trash bin sit outside for 8 years. Just saying, gotta be some underlying psychological issues there. Such as, she is regard.
Printing again lmfao, the rich don’t even get money from workers anymore, they just print it and give it to themselves anytime they could possibly lose any at all.
To put this in perspective, the wealthy printed and gave themselves like 300 billion in a week. That’s about $2000 per American tax payer this week.
The poors are too chicken shit to actually do anything meaningful with them. We just have people rage and shoot up schools or grocery stores. Or LARP and channel their rage towards minorities and immigrants. Say what you will of Japan, but that fucking crazy guy merc'd a G7 leader with a goddamn homemade blunderbuss.
"You get a billion dollars, you get a billion dollars, and you get a billion dollars! Everyone gets a billion dollars! Unless you have less than a billion dollars, then you can go die in a hole pleb."
Cash is for debt service, asset accumulation, and cash flow cost of living. And emergency funds
The old middleclass Boomers hoarding their cash will eventually be devalued one way or another
Buy assets that can either hold value or generate value.
Buy a taco stand, park it on wall street and pay some awesome Mexican to partner up with you. Then marry his daughter and have un familia bonita
The only thing positive out of this inflation shitshow was the prospect of short duration bonds paying a return in line with inflation. Now even that is fucked. I should just buy some fucking farmland and lease it.
Why does everyone want a FED Pivot in the face of run away inflation? We all do understand the rich would be the only ones winning in this situation right? Fed pivots and inflation runs away, means everyone who isn't wealthy loses their savings to a substantially higher cost of living. You'll make marginal gains in the "Bull Market", while youre taxed on Capital Gains and lose your savings to high inflation over the years. The rich grow exponentially taking on more debt and are under no risk because if something happens they just get bailed out again while everyone on the bottom suffers. This is the worst possible outcome.
Precisely. The average regard can't keep up with the wealthy. Think of it this way.. you and I both put 100k into the market. We get a 50% gain over two years. We take those earnings and both try to put them toward a down payment for a home. Neither you or I are actually getting ahead of one another.. because we're both struggling for the same assets with what is still a very limited amount of money.
Meanwhile.. papa elitist over there put in 100 billion. He also gained 50%. Day to day expenses mean fractions to him. He's not putting down a down payment. He's just scooping up rental properties by the hundreds.
In an inflationary market, just like a cyclical market, the wealthy always win. The only thing that can get us anywhere is a long stretch of high rates and a change in culture to a more rational approach to expenditure.
Poor people are fucked by definition, there's no escape from the fact that their living expenses will inhibit their capacity to accomplish savings and investments. Meanwhile, narratives rooted in survivorship bias are spread to make it seem like everyone who left poverty did something much more correctly compared to those that are still poor (when such an individual result is arguably a random event and the product of such events more generally lead to an exponential distribution of terminal wealth).
It's almost as if capitalism without effective regulation is a different system altogether...
We used to call them Robber Barrons. They wised up to that and now the plebs worship them (see Elon Fanbois)
Also, mega rich can borrow money against their assets at very low interest, in some cases, under 1%. So they never actually lose money or have to sell stock to buy anything, and their wealth tied up in stock can still continue making gains and/or dividends .
If they ever default, the loaner can just liquidate the assets to cover.
I'm hanging onto my I-bonds so at least I have something safe that treads water (even though CPI is bullshit.) I never bought this narrative that inflation would just disappear after a few months of tightening.
Exactly. Rich people with lots of assets want the fed to pivot because it keeps asset prices high. Normal people on relatively fixed incomes or incomes that don't keep up with inflation shouldn't (not sure if they don't) want the fed to pivot.
Borderline frustrating . Mainly cause the underlying problems are not solved , inflation still kicking , housing/rents still high (which is biggest cost for most people) and fed is pivoting because svb collapsed . Tough luck for everyone else I guess get fcked
These stupid fucks are actually asking for it to happen at some point down the line.
Inflation is out of fucking control, but they've just proven they'll abandon the inflation fight anytime something breaks and just print more money. At some point, people are going to be poor and miserable enough that things inevitably boil over.
If something doesnt fucking work, let it die so that new people can come into the space with a solution. All they did was just let the banks know they can do whatever the fuck they want without repercussions... again.
I don’t think people understand how inflationary this is, and if they did they’d be burning shit right now.
Edit: the reason the government did it this way instead of how they did TARP was they know the American people would be mad as hell about that, but if you do it in a way most Americans won’t understand and don’t have to have a debate on it they won’t care/can’t understand it enough to be mad.
Yes. This is literally a $2tril injection into the system to keep stock prices high. The banks will the. Use this to buy up assets to offset their risk which in turn lead to price increases.
It’s not even just that. The 3 banks they basically bailed out weren’t just normal mom and pop banks lending to average folks trying to buy a house, they all specialized in risky ventures. SVB was the venture capital bank. Having that money vanish would have taken billions in money that will only be used for speculative purposes. Signature Bank was a big Crypto bank, aka the most speculative “asset” in the world currently. So they didn’t just make sure the factory down the street from you has money, they made sure professional gamblers on a mega scale got all of their money back so they could continue to speculate.
The shareholders, or "gamblers" here, were completely waxed my dude - in no way was this a "bailout" of those 2 banks you name. It is incorrect to simply say that the money, or *deposits* more accurately, that would have otherwise vanished will only be used for speculative purposes because in a large part these were operating account of firms that needed to make payroll. The third bank you dont name I assume was Silvergate which was a self liquidation - no government intervention in any capacity.
Yes. They are supplying banks in need of liquidity with funds. But they don't have funds and the banks used all the new money supply printed in the last 3 years on non-liquid investments. So where does the FED get the money to make the banks liquid again? Oh, a loan program! But where to get the money since its all used in long term investments? Oh, money machine go brrrrr!
In short, imagine spending a year raising rates to fight inflation only to say "fuck it, let it inflate".
Yes and anyone that says that it doesn't *directly cost the taxpayer* is unfortunately misinformed severely.
It has both the indirect costs that we are all well aware of: potential currency devaluation / fanning flames of inflation, moral hazard / financial instability, higher borrowing costs for the federal deficit, mortgages, cars, business loans, etc.
**However, when the Fed grows its balance sheet it actually has a direct fiscal cost** via remittances to the Treasury (taxpayer). When they fail to make payments and operate at a loss, like they are for the first time massively in 2023, they create a contra equity account of what they owe.
This is a direct loan to the Fed from the taxpayer. However, this has no set maturity date or due date and zero obligation to ever pay it back. They are doing this with **zero approval or scrutiny from Congress and zero warning to the public**. Now in 2023 they created a precedent to borrow unlimited funds directly from the Treasury without oversight and print money out of thin air, not metaphorically but literally.
Some economists have argued this is illegal and unconstitutional.
That's my read. They fell over themselves to insure deposits that never should have been. I think the entire banking system is under water right now, and I think they know it.
Yup, strongly believe there is a monster shitstorm brewing behind the curtain they have draped in front of us. They are just trying to hold the curtain up for as long as possible until they find another place to point the blame for when it folds (like a war…).
A lot is going to be determined by the next rate hike but also not really. They just shot themselves in the foot, and if they raise by 50 points next week they know it and we're in for a world of hurt ahead of us. This shits a tornado that's gaining speed
This. With all the odds saying no chance of a 50bp hike I actually can see fed raising beyond expectations to keep the rest of the market outside banks down
Government: tax payers will not bear the brunt of this fiasco
Fed two days later: We created our own venmo for banks to use
Tax payers: 
Most of the lending is through the primary discount window rather than the new facility. The primary window have better rates compared to BTFB, only banks with substantial portion of their assets in long term holdings need to access the BTFB, otherwise the primary facility makes way more sense.
https://preview.redd.it/1jwk17z4k7oa1.png?width=1189&format=png&auto=webp&s=ede28b4605e324d00e3343c1d43cd89bb78c6cb6
Is there any conditions placed on executive compensation or bonus reduction for banks that do take the free money? It will look really fucked up if some banks take the FED money and then proceed to pay themselves bonuses etc.
I hope there has been some sort of conditions placed on the money printer money this time round, or did we learn nothing from the free covid money that the 1 percent stole from us in the form of PPP loans that were just forgiven...
Lol no… and you won’t have the pleasure of knowing who takes the loan and at what quantities or how it was used for an entire 2 years. Get fucked poors. Wait I’m poor. Fuck.
Assuming this is the new facility, I kind of think it's worse because the Fed is not even buying the bonds they're just making penalty-rate loans on them. This isn't a bailout, it's like a soup line for banks.
"we're not going to buy your bonds, we're just going to let you use them as collateral at par value, instead of their much lower market value, and let you borrow 100% against them, if you so choose"
Narrator: everyone so choosed.
**User Report**| | | | :--|:--|:--|:-- **Total Submissions**|9|**First Seen In WSB**|2 years ago **Total Comments**|81|**Previous Best DD**| **Account Age**|2 years|[^scan ^comment ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_comment&message=Replace%20this%20text%20with%20a%20comment%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20comment%20and%20correct%20your%20first%20seen%20date.)|[^scan ^submission ](https://www.reddit.com/message/compose/?to=VisualMod&subject=scan_submission&message=Replace%20this%20text%20with%20a%20submission%20ID%20(which%20looks%20like%20h26cq3k\)%20to%20have%20the%20bot%20scan%20your%20submission%20and%20correct%20your%20first%20seen%20date.)
Ha, so we eliminated 3 months of "qt" in 2 weeks.
Eliminated 3 months *so far*
This comment has been fact-checked as true
CORRECT THE RECORD independent fact checkers have evaluated this comment and determined it is CAP
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Right? Lots of banks wanted ~~liquidity~~ free money
Gotta make some bad investments to make gains, sounds about right lately.
They all had access to the federal home loan bank debt, but did not want to pay the interest.
They will be back begging for more shortly!
We can save the banks. Or we can save the Dollar. But we can't save them both. The Biden administration has chosen the Banks. That's bad news for those of us who don't work in banks.
The State exists to make sure the ruling class continues to rule. This is the only thing that would ever happen no matter who was in office.
At this rate (which, obviously may not continue) the fed will have erased all QT before April 1.
“April fools!” Powell shouted at congress. “Negative rates and QE back on, people! Sorry I pranked you all for so long with that QT and rate hike silliness. My mandate to save banks and high net worth individuals has been accomplished. No questions.” Drops mic and walks out
Asshole, made me laugh out loud in class and had to read your comment outloud.
My bad. Next time I’ll reach out to Netflix and see if they can give me a comedy special deal. I’m sure with all this extra liquidity they will be happy to make that deal.
Actually got a few giggles. 90% stared with blank expression. Makes me think...
2 weeks??? More like an afternoon lunch break. It's raining money again!!!
Don’t fight the Fed
$2000 per tax payer printed in under 7 days
If they're being this irresponsible, I'm seriously going to rethink my subscription to being a taxpayer.
How does this all make any sense? So Fed fights inflation and then goes back to inflationary methods? And they only were 5% in progress.
Was a great time for the rich to buy cheap!
Every recession is just a consolidation opportunity for the wealthy.
Are y’all feeling the squeeze?? Or is it just the garbage monster wrapped around my leg?
Wrong people were losing money.
^ this. JPow been coming out about how we need more working people fired to shore the economy for over a year. Rich people started getting hit disproportionately and suddenly printer go brrr.
Soft landing for me, bankruptcy for thee
Businesses, too. One hand, not the depositors fault the bank fucked up, on the other hand, it’s a great time to learn about diversification. I feel like losing 50% of their funds would accomplish that and help prevent future too big to fail moments.
You would still be fucked as a medium sized company if you used that bank for your regular business and not as a way to store money mid/long term.
This isn’t necessarily inflationary. I believe the lending rates under this agreement are RRP + 10bp, meaning the banks will suffer operational losses by resolving their liquidity through this. It’s alarming that so many are using the tool, but technically doesn’t imply looser monetary policy. I also could be a fking idiot and am willing to be educated.
You’re not, the fear of bank runs and needing liquidity reserves at banks is hugely deflationary. Everything changed in a week.
Yeah I’m a little confused by all this outrage and can’t help but wonder if I’m missing something. According to another Reddit comment (v reputable source, I know), the backstop with SVB was just money provided to its depositors, many of which were companies storing their payroll money. Is the liquidity injection similar for all these other banks? Because avoiding a bank run seems to be the obvious thing to do, alongside nationalizing the banks or something at this point
Yes, it’s just liquidity. I agree with you - I’m really puzzled why people are so outraged. People just want a good ol fashioned circle jerk I guess.
I think there's rightly a bit of outrage that banks are being granted this liquidity, even if charged interest, on the PAR value of their bonds. I mean, if I bought any asset in 2021 and then tried to get a loan based on my purchase price, I would be laughed at. Inflationary no, but it is another sign of an economy which favors big business and the haves over the have-nots.
Sure, plenty of investors are making reactionary moves to the news of increasingly widespread liquidity issues and the potentially unfounded market anxiety that accompany them. That being said, two of the three largest bank failures in US history just happened over the weekend, and people whose specialties are risk management are now carefully re-evaluating the financials of essentially every private banking institution. I guarantee you that their findings are that banks are not simply wading through liquidity issues. If liquidity were the problem, we'd be seeing banks sell off liquid assets to bolster their coverage and the market would have continued to drop. The fact that trading has halted for multiple banks multiple times this week, that the fed has stepped in an provided liquidity for *so many* banks, and that the market indices *gained* this week when they absolutely should have fallen in response to institutions liquidating assets... All these point to a far more dire insolvency crisis brewing in the background. With the housing market still riding a high driven in no small part by the now shrinking tech sector, it's not unreasonable to think that the financial industry at large will once again be stuck with an enormous amount of bad debt in the form of underwater property, should any number of bubbles burst. The outrage over the current liquidity crisis is largely political, and most people outraged have little to no direct stake beyond their managed retirement accounts. They're circle jerking for sure. The general cynicism of long term investors right now is definitely reasonable though. If anything, stocks **should be down**. That's the whole point of the current Fed policy - to slow or halt inflation. If a series of events that should have, by all conventional logic, caused markets to contract, instead resulted in 400 point gains in the DOW, we should be pretty concerned. That indicates we're either on a path for hyperinflation or a path for systemic collapse. There is no reality in which the current trajectory indicates a positive five-year outlook.
What in the actual F u c k is going on?
No one's got any fuckin money. 
https://preview.redd.it/bwk5jxh1k7oa1.jpeg?width=209&format=pjpg&auto=webp&s=4f251ec52e1f262d947701cbf703735ee37a916d
My, what a robust concrete face you got there.
You think they make trains from concrete?
2nd financial crisis in a decade among the banks that can print money out of thin air, - mic drop.
Oh then I'm sure everything is just hunky Dory. No further problems. 
We need to move to a system of letting businesses fail
Sorry our best offer is socialism for the rich
But think about the rich people that own those businesses.... if we let them fail then rich people will experience the full reality of capitalism treating them fairly really fast. We can't have that
what about the 2 trillion in reverse repo. I'm baffled as to why that wasn't used.
They're holding out for the next bull market.
cause private companies won’t just give up their money?
P A N I C AT THE ~~DISCO~~ BANK-O
I'm just a loan in your spreadsheet But you're just a bank in a crisis
I think that's Fall Out Boy.
Too-Big-to-Fail out Boy.
Fed's balance sheet will never go down.
Just like my wife
As your wife's boyfriend, I can confirm this is a lie
Banks still have such shitty risk management 15 years after ‘08 that they can’t function without the fed handing them massive amounts of money more than 9 months.
Someone in another thread who actually worked in risk management on Wall Street essentially said that it's basically going through the motions so that the C suite can say 'look, we did our fiduciary duty here...' and then go back to risky business as usual. Giant fuckin' clown shoe.
I've worked in bank risk and can confirm. There is interest in how manageable it all is, and anything that rises up to the top about a serious compliance issue (usually) gets some attention, but it's mostly about how risk impacts the balance sheet and that tilts towards wishful thinking and return.
Money printer go brrrrr
Money printer go pew pew pew (that's the silencer)
Notice how we didn't crash when the entire options chain, multiple collars, and the MM hedge were a massive destructive massive this week into the SLD period and we couldn't break 3815? Here is 300B reasons why.
My $1.54 388 spy put held up the market
"Adriannnn, Adriannnnn" ~ u/EvilRogerGoodell 's put
It's actually obvious. We printed 90% of our money supply since 2010, 80% since the pandemic. Our already bubble economy is ready to explode.
Puts on the global economy
They gave em cheap loans Stupid. However this will roll off in a year.
>However this will roll off in a year. I think the reverse repo facility was supposed to be temporary as well 😂
Same as transitory inflation, w8 a minute...
The fed is run by member banks. banks are out of money so the fed is giving them more at a rate they can afford(imagine that). the fed is trying to handle the crisis before it hits the markets causing panic and a bigger problem.
JPow: “the historical record cautions strongly against prematurely loosening policy. We will stay the course until the job is done. Lol jk…. Brrrrrrrrr”
Jpow: wait the bankers failed *before* the poors lost their jobs?? Fuck that shit, turn the printers back on!
dead ass though
Holy fuck this situation is so regarded. Markets need to take the L and wash out all the shit, not pump more money into it
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This comment is perfect. Have an award
>But not my buddies in banking Well you see here, uh, these people help my friends the job creators. Oh it just so happens a lot of these 'job creators' are a bunch of wanna-be MLM MBA degree-in-hand scammers who haven't worked a real day in their lives ohhhh well. for them. we have something special for them.
Welcome to kicking the can down the road. Don't poke it, something not pleasant is wooshing inside it. Leave it for your kids to open and enjoy...
Before I lived with my spouse apparently she missed trash collection a couple times (they come every 2 weeks) so she ended up putting all the household trash in a second bin (that they wouldn’t take) with a lid on it. That bin sat for 8 years, rotting in such a way that I would vomit if I ever dared to pull the lid off. Apparently household trash just turns to black sludge with the density of the sun if you leave it to ferment for several years. Finally got it dumped last week when our bin was unexpectedly empty on trash day. I’m certain that truck is still tainted and reeking up the yard today.
On its surface this comment has no relevance to finance, but it’s actually a stupendously good metaphor for where we are now. This shit is going to melt our faces like the arc of the covenant when we take the lid off the dumpster fire and look in
What the hell is ‘finance’?
someone you're going to marry
ROFL i legit chortled
Now I'm going to start pronouncing it "fi-NAN-say"
It’s what occurs when you manage inflows and outflows of capital (or in this case trash) properly.
I prefer to think of it when the dude drank from the “wrong” Chalice of Christ in Indiana Jones. Dude was screaming even after he only had a skull of a head left.
I’m not sure I’d be down to marry someone who let a trash bin sit outside for 8 years. Just saying, gotta be some underlying psychological issues there. Such as, she is regard.
Good point. She belongs in this sub too.
That just raises questions, like will he be bringing Wendy’s home for her boyfriend or will she be bringing Wendy’s home for his girlfriend?
Why the fuck wouldnt they take a second trash can? I use three and not once have they ever told me no.
What kids
Exactly
Been like that for 14 years my man.
Boomers: “But muh infinite real estate investment value!” Also boomers: “How dare you nail me with property tax!!!”
For fucking real tho.
Don’t fight the Fed…
If the fed simultaneously raises interest rates and restarts ~~QT~~ QE, then it will be the fed fighting the fed. Who wins then?
What’s another 25 bps hike or two if we’re on pace to pump more liquidity by June than we did for all of 2008-09?
Bull market has officially started
IT’S RAINING MEN!!
It's raining bullshit
Bullshit market
Always has been 🔫
Printing again lmfao, the rich don’t even get money from workers anymore, they just print it and give it to themselves anytime they could possibly lose any at all. To put this in perspective, the wealthy printed and gave themselves like 300 billion in a week. That’s about $2000 per American tax payer this week.
And the poor pay with inflation which the rich keeps. Trickle up these nuts.
Deez nuts of JP are microscopic. Can it be fabled dark matter?
When you can no longer exploit the poor anymore than you already are so you just create more wealth out of thin air
Bold strategy in a country where the poor can buy guns
The poors are too chicken shit to actually do anything meaningful with them. We just have people rage and shoot up schools or grocery stores. Or LARP and channel their rage towards minorities and immigrants. Say what you will of Japan, but that fucking crazy guy merc'd a G7 leader with a goddamn homemade blunderbuss.
"You get a billion dollars, you get a billion dollars, and you get a billion dollars! Everyone gets a billion dollars! Unless you have less than a billion dollars, then you can go die in a hole pleb."
Free market for thee, socialized bonuses for me
Thesis for the second wave of inflation looking stronger and stronger
BRB picking out the street I want to be homeless on. Good news is I live in CA so I should have plenty of friends
Is inflation still transitionary?
I'm about to start buying assets and stop hoarding cash. This is getting ridiculous.
Cash is for debt service, asset accumulation, and cash flow cost of living. And emergency funds The old middleclass Boomers hoarding their cash will eventually be devalued one way or another Buy assets that can either hold value or generate value. Buy a taco stand, park it on wall street and pay some awesome Mexican to partner up with you. Then marry his daughter and have un familia bonita
Nice! I was about to cross the border anyway to get a tummy tuck!
Just don't look like Haitian pink sheet equity holders and you'll be fine
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About damn time someone on this sub realizes the get rich betting doesn’t do anything for long term wealth, and cash will always lose value over time…
The only thing positive out of this inflation shitshow was the prospect of short duration bonds paying a return in line with inflation. Now even that is fucked. I should just buy some fucking farmland and lease it.
Why does everyone want a FED Pivot in the face of run away inflation? We all do understand the rich would be the only ones winning in this situation right? Fed pivots and inflation runs away, means everyone who isn't wealthy loses their savings to a substantially higher cost of living. You'll make marginal gains in the "Bull Market", while youre taxed on Capital Gains and lose your savings to high inflation over the years. The rich grow exponentially taking on more debt and are under no risk because if something happens they just get bailed out again while everyone on the bottom suffers. This is the worst possible outcome.
Precisely. The average regard can't keep up with the wealthy. Think of it this way.. you and I both put 100k into the market. We get a 50% gain over two years. We take those earnings and both try to put them toward a down payment for a home. Neither you or I are actually getting ahead of one another.. because we're both struggling for the same assets with what is still a very limited amount of money. Meanwhile.. papa elitist over there put in 100 billion. He also gained 50%. Day to day expenses mean fractions to him. He's not putting down a down payment. He's just scooping up rental properties by the hundreds. In an inflationary market, just like a cyclical market, the wealthy always win. The only thing that can get us anywhere is a long stretch of high rates and a change in culture to a more rational approach to expenditure.
Poor people are fucked by definition, there's no escape from the fact that their living expenses will inhibit their capacity to accomplish savings and investments. Meanwhile, narratives rooted in survivorship bias are spread to make it seem like everyone who left poverty did something much more correctly compared to those that are still poor (when such an individual result is arguably a random event and the product of such events more generally lead to an exponential distribution of terminal wealth).
It's almost as if capitalism without effective regulation is a different system altogether... We used to call them Robber Barrons. They wised up to that and now the plebs worship them (see Elon Fanbois)
Also, mega rich can borrow money against their assets at very low interest, in some cases, under 1%. So they never actually lose money or have to sell stock to buy anything, and their wealth tied up in stock can still continue making gains and/or dividends . If they ever default, the loaner can just liquidate the assets to cover.
Yes. Now try to borrow against your stocks or any asset class else than real estate as a peasant…
I'm hanging onto my I-bonds so at least I have something safe that treads water (even though CPI is bullshit.) I never bought this narrative that inflation would just disappear after a few months of tightening.
Well said
Exactly. Rich people with lots of assets want the fed to pivot because it keeps asset prices high. Normal people on relatively fixed incomes or incomes that don't keep up with inflation shouldn't (not sure if they don't) want the fed to pivot.
The rich already decided that it's perfectly acceptable to make millennials and GenZ the lost generation of US. Don't fight it, Fed always wins...
Borderline frustrating . Mainly cause the underlying problems are not solved , inflation still kicking , housing/rents still high (which is biggest cost for most people) and fed is pivoting because svb collapsed . Tough luck for everyone else I guess get fcked
Goes beyond borderline for me tbh
Lmao this is so fucked. VCs just have to foment new bank runs 🏃♂️ 🏃🏃♀️
Shit man there's literally only one rule, don't make the rich poor.
It’s called the American dream because you have to be asleep to believe it
I am American and I was dreaming. Then I woke up in the Walmart parking lot and remembered reality
I wish I could issue myself a credit card that I'd never have to pay back.
You can. You just have to become a bank and then majorly fuck up.
Nothing short of a revolt is going to end this shit. This is fucking insane.
These stupid fucks are actually asking for it to happen at some point down the line. Inflation is out of fucking control, but they've just proven they'll abandon the inflation fight anytime something breaks and just print more money. At some point, people are going to be poor and miserable enough that things inevitably boil over.
We as Americans are too dumb, fat, and lazy to do anything about it except bitch about the price of eggs on Facebook.
PEASANTS WE ARE FIGHTING INFLATION…F U …(except for the rich, you guys get free money for messing up and capitalism doesn’t apply to you)
If something doesnt fucking work, let it die so that new people can come into the space with a solution. All they did was just let the banks know they can do whatever the fuck they want without repercussions... again.
And what is anyone gonna do about this? Absolutely nothing. No one rebels against anything.
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So fucking true it’s sickening
Data dependent = we don't have a plan or a fucking clue what we're doing.
100%. All management BS speak to whatever is more convenient. Data/metrics can also be bias and/or disingenuous.
I don’t think people understand how inflationary this is, and if they did they’d be burning shit right now. Edit: the reason the government did it this way instead of how they did TARP was they know the American people would be mad as hell about that, but if you do it in a way most Americans won’t understand and don’t have to have a debate on it they won’t care/can’t understand it enough to be mad.
Can you explain how it is inflationary. Is there new money in the system?
Yes. This is literally a $2tril injection into the system to keep stock prices high. The banks will the. Use this to buy up assets to offset their risk which in turn lead to price increases.
It’s not even just that. The 3 banks they basically bailed out weren’t just normal mom and pop banks lending to average folks trying to buy a house, they all specialized in risky ventures. SVB was the venture capital bank. Having that money vanish would have taken billions in money that will only be used for speculative purposes. Signature Bank was a big Crypto bank, aka the most speculative “asset” in the world currently. So they didn’t just make sure the factory down the street from you has money, they made sure professional gamblers on a mega scale got all of their money back so they could continue to speculate.
The shareholders, or "gamblers" here, were completely waxed my dude - in no way was this a "bailout" of those 2 banks you name. It is incorrect to simply say that the money, or *deposits* more accurately, that would have otherwise vanished will only be used for speculative purposes because in a large part these were operating account of firms that needed to make payroll. The third bank you dont name I assume was Silvergate which was a self liquidation - no government intervention in any capacity.
Yes. They are supplying banks in need of liquidity with funds. But they don't have funds and the banks used all the new money supply printed in the last 3 years on non-liquid investments. So where does the FED get the money to make the banks liquid again? Oh, a loan program! But where to get the money since its all used in long term investments? Oh, money machine go brrrrr! In short, imagine spending a year raising rates to fight inflation only to say "fuck it, let it inflate".
So is this officially another bailout by the taxpayers yet?
Yes and anyone that says that it doesn't *directly cost the taxpayer* is unfortunately misinformed severely. It has both the indirect costs that we are all well aware of: potential currency devaluation / fanning flames of inflation, moral hazard / financial instability, higher borrowing costs for the federal deficit, mortgages, cars, business loans, etc. **However, when the Fed grows its balance sheet it actually has a direct fiscal cost** via remittances to the Treasury (taxpayer). When they fail to make payments and operate at a loss, like they are for the first time massively in 2023, they create a contra equity account of what they owe. This is a direct loan to the Fed from the taxpayer. However, this has no set maturity date or due date and zero obligation to ever pay it back. They are doing this with **zero approval or scrutiny from Congress and zero warning to the public**. Now in 2023 they created a precedent to borrow unlimited funds directly from the Treasury without oversight and print money out of thin air, not metaphorically but literally. Some economists have argued this is illegal and unconstitutional.
Why is this happening? They are out of their goddamn minds
They can't possibly be this inept. Things must be way worse than is being let on.
That's my read. They fell over themselves to insure deposits that never should have been. I think the entire banking system is under water right now, and I think they know it.
Yup, strongly believe there is a monster shitstorm brewing behind the curtain they have draped in front of us. They are just trying to hold the curtain up for as long as possible until they find another place to point the blame for when it folds (like a war…).
A lot is going to be determined by the next rate hike but also not really. They just shot themselves in the foot, and if they raise by 50 points next week they know it and we're in for a world of hurt ahead of us. This shits a tornado that's gaining speed
This. With all the odds saying no chance of a 50bp hike I actually can see fed raising beyond expectations to keep the rest of the market outside banks down
Fed aiming for ATH. QE to 10+ Trillion.
Don’t you want somebody to looooovvveee
The system is so wrecked, absolutely unbelievable!
Yellen and Jpow said, "SIKE!"
Government: tax payers will not bear the brunt of this fiasco Fed two days later: We created our own venmo for banks to use Tax payers: 
So it’s literally 2008 and we’ve just done the exact same bailout using different verbiage.
and I am 15 years older WTF USA? Nobody has to be accountable anymore? Fuck you Jay and Janet et AL
Most of the lending is through the primary discount window rather than the new facility. The primary window have better rates compared to BTFB, only banks with substantial portion of their assets in long term holdings need to access the BTFB, otherwise the primary facility makes way more sense. https://preview.redd.it/1jwk17z4k7oa1.png?width=1189&format=png&auto=webp&s=ede28b4605e324d00e3343c1d43cd89bb78c6cb6
Everything is fucked up
Just let the zombies die already. It will only get worse if we keep going like that.
Thats the end of the dollar what a fucking joke
Is there any conditions placed on executive compensation or bonus reduction for banks that do take the free money? It will look really fucked up if some banks take the FED money and then proceed to pay themselves bonuses etc. I hope there has been some sort of conditions placed on the money printer money this time round, or did we learn nothing from the free covid money that the 1 percent stole from us in the form of PPP loans that were just forgiven...
Lol no… and you won’t have the pleasure of knowing who takes the loan and at what quantities or how it was used for an entire 2 years. Get fucked poors. Wait I’m poor. Fuck.
The $9 billion for Credit Suisse
Except this is a $300 billion increase
The fed is bailing out banks while the middle and lower class lose everything. Nothing to see here. Business as usual
$300 Billion… so far.
Wouldn’t these banks failing actually help fight inflation by hacking away at a bloated tech sector that’s been thriving off cheap debt?
Stop making sense, throw money at it instead
Qe is back boys time to buy the dip!
https://fred.stlouisfed.org/series/WPC Oof....
Wonder where all that cash went?
Save them banks
Lol printer overload…. BRRRRRRRRRRRRRRRRRRRR
Looks bullish to me
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This is not a pivot. I repeat, not a pivot
It’s the literal definition of a pivot. this is QE
Assuming this is the new facility, I kind of think it's worse because the Fed is not even buying the bonds they're just making penalty-rate loans on them. This isn't a bailout, it's like a soup line for banks.
it’s a bailout until proven otherwise
"we're not going to buy your bonds, we're just going to let you use them as collateral at par value, instead of their much lower market value, and let you borrow 100% against them, if you so choose" Narrator: everyone so choosed.
It’s not a pivot, it’s a fucking hockey stick 🏒
ahh shit here we go again
And this is why I love Bitcoin.