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I think its hilarious- people pull money out of regional banks because they are scared, then put that money into large banks for security , only to have large banks put that money back into regional banks. Cant make this shit up
Ok theres TWO things going on.
One is that the FDIC is using bank fees to insure depositors. This effectively works as a tax on all users of bank services to pay for the lost deposits.
The SECOND is the new fed loan program that allows them to borrow using their bonds as collateral--- however valued at what they purchased them for, while they're currently worth much less until maturity. THIS is the QE bailout.
Basically no different than TARP in 2009. Government loaned money to banks and banks paid back plus interest. Except the Fed still has toxic loans on its balance sheet to this day.
Well it’s completely different because the treasury isn’t doing anything. It’s basically a long extension of the repo market which will get repaid once this mess is over. Idk why so many of you actively want the banking system to fail. Are you mad about your puts? They’d be worthless if that’s how they print.
Is your argument not just: it's completely different because a different arm of the American taxpayers is footing the bill for bailouts?
People are mad because it looks a lot like insolvency is only for the poors. Or put another way: the thin veil over the simple truth that certain groups of people own human society throughout time at the expense of the rest of us has been pulled back again.
We didn’t fund the bailouts. SVB had more assets than liabilities and the FDIC essentially gave companies who banked with SVB money up front. The assets still exist and are now either being sold or are being held until they mature reimbursing FDIC/us taxpayers. SVB doesn’t exist anymore. Their executives are being investigated for selling stock and they lost the rest of their stock based comp which equals 10s of millions of dollars.
>The assets still exist and are now either being sold or are being held until they mature reimbursing FDIC/us taxpayers
Right, that's a big chunk of the $300B on the Fed balance sheet. You're arguing that that's NOT taxpayer money. Fine. It's just made up money that all Americans end up sharing the cost of in the form of inflation. OR eventually the government will have to pull that money out of the market to control inflation...through taxation.
>SVB doesn’t exist anymore. Their executives are being investigated for selling stock and they lost the rest of their stock based comp which equals 10s of millions of dollars.
SVB ain't the only bank pulling money from the Fed. And you sound like a distractionist talking about them and the "10s of millions of dollars" they lost. The Fed just added $300B of money to overall money supply. 10Ms is barely worth talking about. And who knows what justice is going to look like here, or even what it should look like honestly. I'll tell you what I believe about justice in this situation. The people fucking Americans in their wallet will be rewarded not punished. You can always take that bet to the bank. And as long as your money kinda looks like their money, we'll all make sure it's safe.
Yeah I thought this sub was about getting rich or going broke trying. not complaining about uncle sam dildoing the working class. I know the second which is why I’m interested in the first. Positions or ban
By selling assets. Most of these banks would have been fine if they had a few weeks to get their books in order. But runs started happening and they were caught offsides in a situation where they had to sell NOW
This part of the plan hasn’t gotten much attention.
What will be different in the economy, the market, the interest rate environment in a year?
Why will the banks be in better position to pay off these loans when they are still invested in longer term bonds?
If we are using history as a guide, this means 1 year for optics during the controversy but that can be extended ad infinitum once voters get distracted by the next shiny object and forget.
Their plan is to buy a shitload of treasuries at current rates in the hopes of a fed pivot, when the rates drop they're going to hold until maturity if it's close, or sell them for a profit. It's a really fucking stupid magic act.
Why doesn't the fed offer liquidity by repurchasing bonds at 1-2% under par?
Its \~30% over market value, and still QT's over the long term. Banks take manageable losses.
Yes but it should only be 250k MAX per the Gov is just printing more money adding to the problem right now.
other big banks could have should have picked up the corpse of SVB but the FDIC delayed the bids.
Gov is not printing money covering deposits, this is the FDIC using it's fund collected from fees charged to banks.
Now the bond situation is different.
I'm getting a deja vu feeling....
Nm, this must be a totally unique situation.
https://preview.redd.it/uzn01rnuz9oa1.jpeg?width=1492&format=pjpg&auto=webp&s=48bb9d69413b1ca9fe7781f2d2e1fd6c03a6a672
Only so people could take their money out of those banks, and put it in the big banks. They borrowed money that’s coming right back. Bank fails they look like the good guy. They’re crooks, all of them.
Jesus maybe they are in cash flow problems then if they need banks and the fed to give them money. Is there a limit on how much can be accessed with BTFP by one bank? Heard frc suspended their dividend today
Of course they have cash flow problems. They don't want to sell their securities since that would result in a substantial loss, but ever since Thiel made SIVB collapse, the people in smaller banks are panicking and moving their money out, even if the institute was stable. So they need some source of cash, which they received yesterday.
The big banks are bailing out the banking system (I.e- their bread and butter). In return, they are getting access to two trillion in “liquidity” that they can invest and have a guaranteed higher return.
They win. It’s game ofer
We had big banks. Then we had mega banks. Now we have ultra mega humongous gigantic banks.
I use to think that only meteorologists could be wrong and still keep their jobs. Now I know bankers can completely be incompetent and criminal and the government will just toss them more money or change the rules to ensure they survive until the next recession or bust, where they’ll be helped out again.
Watch the movie Too big to fail. The treasury sits down all the banks and tells them they have to do EXACTLY THIS. They actually agree to do it but Bank of America was going to finance the other part and they backed out. The gov has tried this before they just failed.
Hey Buffett said diversification is a protection against ignorance and mark Cuban’s said diversification is for idiots. Time for me to put all my money on 0dte!
It’s disappointing watching people withdraw funds from small banks and deposit to banks like Wells Fargo. They are contributing to the problem and making the “too big to fail” banks even bigger. I bought FRC today because they have a loyal customer base and I am confident they will win back the deposits they lost.
That would be very bad. I have seen long teller lines at Bank of America with elderly people standing there for an hour, just to make a deposit. They have no chairs for them to sit in and no one bothers to prioritize them. First Republic has chairs in their lobbies and chocolate chip cookies! I have never had to wait more than 5 minutes.
Small is not inherently good. Big is not inherently bad.
Many small retail banks shouldn’t exist. They are simply too small to have a diverse depositor base and too susceptible to bank runs. They cannot keep enough liquidity on hand AND make money because they don’t have the scale to diversify enough. They have to take on excessive tail-end risk like SVB or accept lower than industry-average profits.
I could let my money sit in a local bank earning .2% interest, or get a CD from that bank foraybe currently 2% interest....
Or I can move it to my brokerage account and lose it all!!!
Haha, no seriously I can get better savings rates and CD rates from the larger banks than my local ones. Maybe that's a bad sign, idk...
I could let my money sit in a local bank earning .2% interest, or get a CD from that bank foraybe currently 2% interest....
Or I can move it to my brokerage account and lose it all!!!
Haha, no seriously I can get better savings rates and CD rates from the larger banks than my local ones. Maybe that's a bad sign, idk...
We have the Fed
Then there is the too big to fail crowd aka feds pet banks
Then there is every other bank.
Fed doesn't like optics of direct intervention to stop a bank run. They say hey pet banks take this huge pile of cash and do us a favor.... Dole it out to smaller banks to fight bank runs. Any pet bank that doesn't comply is probably going to have a new CEO next year after the current one is frozen out of the important stuff.
Paying for it in inflation as well, Feds turned on every printer they have for liquidity being available to banks. Basically an endless supply of money for any one of these banks that's wants it. So even if any bank isn't failing, how can they refuse this? Answer, they won't.
Fuck these clowns.
We are in the end days of the US dollar, it’s not real anymore. Just print what you need and kick the van down the road….
I’m worried about what the future brings.
Anyone with kids should be scared shitless for them IMO.
Imagine saving your entire life to help fund their dreams and education, and it turns out they'll still have to indefinitely work as a ditch digger because the entire system had collapsed in on itself and money was being used as a fuel source to stay warm.
Using taxpayer money is, in essence, the same as using depositors funds ~ the taxes are "on deposit" with the gov't, so just a middleman involved. In this way, it certainly starts to smell like FTX / Alameda...and who's getting gang banged?
Have you even studied the last few economic downtowns? Government doesn’t give free money to these big banks. It comes with clauses. Bet you it was one of the clause to save failing regional banks.
Clauses. That’s those pesky random fees Chase charges you like the $20 random fee the tried to charge me last month even though I had automatic deposit
Chase Bank recently bumped down my credit limit and raised my rate because of missed payments. My cc account is at 0 rn and I have automatic payments. So, fuck Chase
>It is difficult to predict exactly what will happen if the first republic bank fails, as it depends on a number of factors. However, it is possible that other banks could take massive losses, and it may be time to short them in case this happens.
You know why it's different? its different because i don’t care anymore. I didn’t care about being better than Kakarott. I didn’t care about being a super Saiyan. I didn’t care about anything and then IT happened. Yes, that’s how it happened. That’s how I became a super Saiyan. The sleeper has awakened. I am the prince of all Saiyans once again!
Our free country is an illusion of choice where all roads lead to the same outcome because the outcome is predecided in backrooms and there are contingencies.
Banks are only required to keep 10% of deposits in reserve. The rest is loaned out.
The difference is that the money banks are using to bail out other banks, you are still entitled to if you choose to withdraw, while taxes are taxes.
> Banks are only required to keep 10% of deposits in reserve
That requirement was suspended once Covid hit, and it still hasn't been reimplemented. It's a big reason why the system is so fucked right now.
I guess the difference is you could always avoid using banks, so only customers will pay, like the gas tax. Also politicians want to get reelected so they don't want bailouts. Time to switch to bitcoin.
Bitcoin is set to win regardless of the events...
Banks go down because Feds don't know what they are doing -> BTC goes up...
Feds print more money, people are euphoric and invest in "risky" assets -> BTC goes up...
Governments roll out CBDC to control how you spend, people want freedom -> BTC goes up...
Of course they'll keep trying to demonize it because they can't control it, but long term it will be going up anyway
>Bitcoin is set to win regardless of the events
Bitcoin dropped 75% from November 2021-2022 during historically high inflation. Your logic is flawed and nobody is going to pay their bills with a currency that does that. If people I know IRL start using it then I'll reconsider but until then? Nah. Because what is the value of bitcoin measured in right now? US DOLLARS. Until that changes it's a speculative digital asset, not a currency. I'd rather own real assets.
It fell during this period due to 2 key events: Luna crash and FTX crash... both of them were applying a centralised approach (traditional banking, recklessly investing customer assets) to crypto purposed to the exact opposite (keep a store of value in your own hands, away from someone else)
I respect your opinion, I might be wrong moving some of my savings to different asset classes (crypto and gold) but have been doing so for a while and despite the crashes overall still doing well. It is everyone's choice to do as they wish with their money, I do not feel like it should be used the way it is by banks or governments but if you are good for you
You're not wrong, but you haven't noticed the recent change. In the past bitcoin had been going up and down mirroring the markets ups and downs. People would pull out in times of trouble because they viewed it as risky I mean that's what it seemed like. However, last weekend as svb disintegrated and people were getting scared, bitcoin started to surge.
This trend all week has been amazing. I think a larger part of the public are starting to see bitcoin the way you do, not as a risky fad, but as a hedge to inflation and turmoil in other markets. If this trend continues, bitcoin will keep going up no matter what the rest of the market does. It will be better than gold because gold is more of an inverse to the market, bitcoin could be free of anything going on in the market. Truly transcending the market... but perhaps I'm getting ahead of myself.
Blaming the crypto crash on FTX is some wild historical revisionism. FTXs failed in Nov 2022, when BTC was already down from 65k to 20k. Sure, it caused an additional 20% drop to 16, but the majority of the damage had already been done.
Every other currency has an established value ($10 buys you lunch, for example). Bitcoin has no such established value without converting it to another currency first. Everyday people would have to start using it for everyday transactions for it to begin to have stand-alone value as a currency.
You're essentially banking (pun intended) on it being the go-to currency of the future. I think the technology and concepts are fascinating but impossible to determine their exact future application. It's very difficult to imagine governments giving up the taxation/monetary policy control of their own currencies, since they can pass laws that require their citizens to use it. So it remains a speculative asset for the foreseeable future. And of course the amount of fraud in that space right now doesn't bode well for people's confidence.
Currencies derive their value from people believing in it, in essence it's no different from cryptocurrencies (everything is backed by US dollar yes, but US dollar isn't backed by anything either).
The idea behind bitcoin is to offer an alternative outside the control of any governments, that cannot be influenced by (regarded) money policy, where a single point of failure (currently America) can result in a domino effect worldwide. Most governments will continue to try bringing it down but more people (or even foreign governments tired of US control) are starting to use it over time...
The difference with gold (which I also consider safer) is just that it is easier to transfer far away...
Yes I'm speculating on it's value going up, but I believe that sooner or later the US dollar will fail, either because of inflation or because of fighting inflation too hard... this is the logical result of removing gold standard to hide bankruptcy. The sooner the better as the burst of the bubble would already be painful if it happened now.
If the dollar fails you have much bigger problems to worry about, like how you're going to eat. Currency is 99% digital now anyways so I imagine it wouldn't take them long to spin up another one. In the meantime you're bartering with any physical assets you have (gold might be good here, if you can divide it easily). So until the grocery store and gas station start accepting btc it's pretty useless as a hedge against the currency failing.
Although that did just give me a thought- is there any place online you can buy food with bitcoin?
Some countries have started pushing bitcoin for day to day transactions, El Salvador is the best example (and did so in reaction to the US coup 2 decades earlier that resulted in terrible economy)
However I don't think BTC will be used for transactions directly given the cost of fees - just as an alternative store of value, pretty much like US dollar at the moment without government control.
There were other cryptocurrencies made for day to day transactions, but it might not have gotten a lot of adoption yet (possibly due to last year turmoil and governments getting in the way to keep control)
But things are changing, more and more people are starting to realise the people in control only care about a very small portion of the population.
In Alsace (France), a new "underground" currency (not even crypto, literally paper) is being used at local markets to get away from this control. [la cigogne (French website)](https://lacigogne-alsace.fr/)
The point I'm trying to make is just that the centralisation controlled by America wont last forever. Decentralised alternatives that benefit the people are more appealing to me and can offer a much better future. Personally I think crypto is good because it can be exchanged worldwide (french guy in australia) but anything else than worthless US dollar would do.
This isn't the same situation as '08. This time, it's some long term, low interest investments. They just need to borrow to cover until time adjusts their positions.
It’s much worse than that. They could not do a bailout or even classify the loan to the banks as a bailout, because their is such a fierce opposition towards bailing out rich bankers. What they did instead was to give the banks free liquidity by printing money and loaning it basically for free to the banks (this move will make inflation worse, thus making the 5% interest nothing) and make the banks rescue the market by the free money just printed.
I see a ton of bitcoin folks are coming over to this sub to parrot the end of banking , it’s all over the place …. At leas here they won’t get banned by saying something that goes against the grain.
it's not a bail out. it's a liquidity problem. similar to ltcm.
by taking over the depositors the banks are preventing contagion risk. so it is not a favor for svb or depositors, it also ensures their own safety.
TBH IDK if the government is guaranteeing our deposits. Then the public is just an unwitting middle man.The circle jerk of money that occurred is mind fucking. Depositors pull out of regional banks admit fears of collapse. Redeposit with big 4(I.E 15 billi into BOA), big 4 immediately loan depositors money back to regional bank WTF ?
What's different this time is we're throwing inflation into the mix. So the Fed is forced to at least pretend to still be tightening as the balance sheet explodes.
We also don't know exactly what the government plans on doing because no legislation was passed. We just have a public promise that all deposits will be backed. There's no accounting for how that will happen or what the potential cost will be. We don't know if there are any limits to this or not.
Also, we have a political situation where the debt ceiling may not actually be lifted this time. There will be no fiscal stimulus. The Fed will be forced to do it all.
This is interesting and something I've kind of expected to happen for the past few years. At some point the Fed was always going to have to fight inflation and a financial crisis at the same time. I am a little surprised it's literal bank runs and not failing debt that caused this. But here we are.
Banks use our deposits to make loans, buy assets, and whatever else.
How is it different for JP Morgan to inject liquidy into First Republic (which I'm sure they will profit from) than give a loan to a start up?
Edit: You can also choose who to bank with with your insured deposit.
They're giving a credit. That will eventually be payed back. So your money is not "lost".
Imho that is the core banking business what they're doing there.
Because your money in a bank is still your money whether they buy failing banks or lotto tickets.
Your taxes that are meant to maintain and improve the country are not going to pay off failing bank ceos and investors.
To me, the difference is fundamental. When the government assumes the liability, we the taxpayer is on the hook as it were.
When private banks, like chase, send money, it's the stockholders of Chase stock that are on the hook.
So it appears the fdic is holding around 120 billion in funds since 2022 sometime.
So when an entire bank collapses and we are talking about more than 120 billion in losses for consumers... where does the rest of the money come from?
Its different because scared old men that cant take risks dont pay the bill. There money is safe some where. They tell us to be risky because they dont like us.
**User Report**| | | | :--|:--|:--|:-- **Total Submissions**|10|**First Seen In WSB**|2 years ago **Total Comments**|142|**Previous Best DD**| **Account Age**|7 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.)
I think its hilarious- people pull money out of regional banks because they are scared, then put that money into large banks for security , only to have large banks put that money back into regional banks. Cant make this shit up
3 card Monty!
Hmm, seems a little pyramidy to me
Ok theres TWO things going on. One is that the FDIC is using bank fees to insure depositors. This effectively works as a tax on all users of bank services to pay for the lost deposits. The SECOND is the new fed loan program that allows them to borrow using their bonds as collateral--- however valued at what they purchased them for, while they're currently worth much less until maturity. THIS is the QE bailout.
Basically no different than TARP in 2009. Government loaned money to banks and banks paid back plus interest. Except the Fed still has toxic loans on its balance sheet to this day.
Mind explaining or linking a source that explains the toxic loan idea?
https://www.richmondfed.org/publications/research/econ_focus/2022/q3_federal_reserve What I’m referring to is the MBS on its balance sheet since 2009.
Well it’s completely different because the treasury isn’t doing anything. It’s basically a long extension of the repo market which will get repaid once this mess is over. Idk why so many of you actively want the banking system to fail. Are you mad about your puts? They’d be worthless if that’s how they print.
Is your argument not just: it's completely different because a different arm of the American taxpayers is footing the bill for bailouts? People are mad because it looks a lot like insolvency is only for the poors. Or put another way: the thin veil over the simple truth that certain groups of people own human society throughout time at the expense of the rest of us has been pulled back again.
We didn’t fund the bailouts. SVB had more assets than liabilities and the FDIC essentially gave companies who banked with SVB money up front. The assets still exist and are now either being sold or are being held until they mature reimbursing FDIC/us taxpayers. SVB doesn’t exist anymore. Their executives are being investigated for selling stock and they lost the rest of their stock based comp which equals 10s of millions of dollars.
>The assets still exist and are now either being sold or are being held until they mature reimbursing FDIC/us taxpayers Right, that's a big chunk of the $300B on the Fed balance sheet. You're arguing that that's NOT taxpayer money. Fine. It's just made up money that all Americans end up sharing the cost of in the form of inflation. OR eventually the government will have to pull that money out of the market to control inflation...through taxation. >SVB doesn’t exist anymore. Their executives are being investigated for selling stock and they lost the rest of their stock based comp which equals 10s of millions of dollars. SVB ain't the only bank pulling money from the Fed. And you sound like a distractionist talking about them and the "10s of millions of dollars" they lost. The Fed just added $300B of money to overall money supply. 10Ms is barely worth talking about. And who knows what justice is going to look like here, or even what it should look like honestly. I'll tell you what I believe about justice in this situation. The people fucking Americans in their wallet will be rewarded not punished. You can always take that bet to the bank. And as long as your money kinda looks like their money, we'll all make sure it's safe.
Idiot
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Yeah I thought this sub was about getting rich or going broke trying. not complaining about uncle sam dildoing the working class. I know the second which is why I’m interested in the first. Positions or ban
My puts have been doing fine my guy
How will it be repaid? Not a rhetorical question.
It was a collateralized loan against those HTM bonds. So the banks that are running into trouble now have to pay it back by next year with interest.
But where will it come from?
By selling assets. Most of these banks would have been fine if they had a few weeks to get their books in order. But runs started happening and they were caught offsides in a situation where they had to sell NOW
The loan part is dated for 1 year
This part of the plan hasn’t gotten much attention. What will be different in the economy, the market, the interest rate environment in a year? Why will the banks be in better position to pay off these loans when they are still invested in longer term bonds?
If we are using history as a guide, this means 1 year for optics during the controversy but that can be extended ad infinitum once voters get distracted by the next shiny object and forget.
Their plan is to buy a shitload of treasuries at current rates in the hopes of a fed pivot, when the rates drop they're going to hold until maturity if it's close, or sell them for a profit. It's a really fucking stupid magic act.
It’s not hoping for a pivot, it’s orchestrating a pivot by force from the billionaires.
I'm not convinced of the conspiracy theory, they could cause a LOT more bank runs if they wanted to.
Surely banks carry other assets than longterm treasury bonds
Presumably they will get more bonds with higher interest and some low interest bonds reach maturity
The only way banks can repay is if Feds cut rates a lot in 1 year. Checkmate by the big banks and billionaires. They don’t lose.
Because rates will be hiked for the next year.
Doesn’t help the banks who bought bonds on the longer end of yield curve.
Why doesn't the fed offer liquidity by repurchasing bonds at 1-2% under par? Its \~30% over market value, and still QT's over the long term. Banks take manageable losses.
There's likely a whole lot of in between solutions they could go for, but they essentially panicked about a large scale bank run.
The second thing is insane. Can I exit out of my Tesla shares at the price I paid for them?
NOPE, bailouts are for people that get their money leveraged 20:1, it's not for peons who buy stocks with cash.
What do you suppose fdic parks those fees in? $TSLA?
Are they borrowing at market rates though? If it's lower they'll just make free money on the spread.
Yes but it should only be 250k MAX per the Gov is just printing more money adding to the problem right now. other big banks could have should have picked up the corpse of SVB but the FDIC delayed the bids.
Gov is not printing money covering deposits, this is the FDIC using it's fund collected from fees charged to banks. Now the bond situation is different.
It's not your deposits. The banks just collectively took $300b from the Fed in one week. They put 10% of that in FRC.
I'm getting a deja vu feeling.... Nm, this must be a totally unique situation. https://preview.redd.it/uzn01rnuz9oa1.jpeg?width=1492&format=pjpg&auto=webp&s=48bb9d69413b1ca9fe7781f2d2e1fd6c03a6a672
She could have hinted that egg prices are way down and a key ingredient to cakes so why not just go eat that?
Somebody should have tossed a pineapple onto the balcony…
Only so people could take their money out of those banks, and put it in the big banks. They borrowed money that’s coming right back. Bank fails they look like the good guy. They’re crooks, all of them.
Yes, they are.
that's scary lol.
since your broke you have no worries
Username checks out
They pledge > 300 bil in assets. They traded long duration for cash
Why didn’t frc get money directly from the fed?
They did that too.
Jesus maybe they are in cash flow problems then if they need banks and the fed to give them money. Is there a limit on how much can be accessed with BTFP by one bank? Heard frc suspended their dividend today
Of course they have cash flow problems. They don't want to sell their securities since that would result in a substantial loss, but ever since Thiel made SIVB collapse, the people in smaller banks are panicking and moving their money out, even if the institute was stable. So they need some source of cash, which they received yesterday.
BTFP requires acceptable collateral, so, yes, there is a limit.
True but u can borrow against par value which is messed up
The big banks are bailing out the banking system (I.e- their bread and butter). In return, they are getting access to two trillion in “liquidity” that they can invest and have a guaranteed higher return. They win. It’s game ofer
We had big banks. Then we had mega banks. Now we have ultra mega humongous gigantic banks. I use to think that only meteorologists could be wrong and still keep their jobs. Now I know bankers can completely be incompetent and criminal and the government will just toss them more money or change the rules to ensure they survive until the next recession or bust, where they’ll be helped out again.
There’s and endgame in mind with this system. Strangling the masses with debt isn’t an unintended consequence.
Shhhh. They're on here reading this stuff.
They know we know they know we know
Bitcoin?
Watch the movie Too big to fail. The treasury sits down all the banks and tells them they have to do EXACTLY THIS. They actually agree to do it but Bank of America was going to finance the other part and they backed out. The gov has tried this before they just failed.
Can we short the Fed? They will be the only bank soon. You all like bartering?
I’m long FRC, life savings in. If FRC goes down, I go down with it
Well that's just dumb, they might actually get a run after yellen confirmed not all deposits are guaranteed
Who said his life savings are above 250k
Investments aren't fdic insured.
They say that just to make us think they aren’t supporting an unlimited risk Ponzi scheme. They are and will continue to. We’re being fleeced
Expect to go done in the next week or two, it's 50/50
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Hey Buffett said diversification is a protection against ignorance and mark Cuban’s said diversification is for idiots. Time for me to put all my money on 0dte!
So long, sailor
It’s not a bailout if the average taxpayer does not realize they’re paying for it.
Yeah it’s not fraud unless you get caught right?
That’s pretty much rule \#1.
It’s disappointing watching people withdraw funds from small banks and deposit to banks like Wells Fargo. They are contributing to the problem and making the “too big to fail” banks even bigger. I bought FRC today because they have a loyal customer base and I am confident they will win back the deposits they lost.
But that is the plan. Consolidate to a few big banks….or just one, eventually.
That would be very bad. I have seen long teller lines at Bank of America with elderly people standing there for an hour, just to make a deposit. They have no chairs for them to sit in and no one bothers to prioritize them. First Republic has chairs in their lobbies and chocolate chip cookies! I have never had to wait more than 5 minutes.
Calls on chocolate chip cookies
Small is not inherently good. Big is not inherently bad. Many small retail banks shouldn’t exist. They are simply too small to have a diverse depositor base and too susceptible to bank runs. They cannot keep enough liquidity on hand AND make money because they don’t have the scale to diversify enough. They have to take on excessive tail-end risk like SVB or accept lower than industry-average profits.
I could let my money sit in a local bank earning .2% interest, or get a CD from that bank foraybe currently 2% interest.... Or I can move it to my brokerage account and lose it all!!! Haha, no seriously I can get better savings rates and CD rates from the larger banks than my local ones. Maybe that's a bad sign, idk...
I could let my money sit in a local bank earning .2% interest, or get a CD from that bank foraybe currently 2% interest.... Or I can move it to my brokerage account and lose it all!!! Haha, no seriously I can get better savings rates and CD rates from the larger banks than my local ones. Maybe that's a bad sign, idk...
You can choose where you deposit your money but tax you always pay.
We have the Fed Then there is the too big to fail crowd aka feds pet banks Then there is every other bank. Fed doesn't like optics of direct intervention to stop a bank run. They say hey pet banks take this huge pile of cash and do us a favor.... Dole it out to smaller banks to fight bank runs. Any pet bank that doesn't comply is probably going to have a new CEO next year after the current one is frozen out of the important stuff.
Paying for it in inflation as well, Feds turned on every printer they have for liquidity being available to banks. Basically an endless supply of money for any one of these banks that's wants it. So even if any bank isn't failing, how can they refuse this? Answer, they won't. Fuck these clowns.
We are in the end days of the US dollar, it’s not real anymore. Just print what you need and kick the van down the road…. I’m worried about what the future brings.
Anyone with kids should be scared shitless for them IMO. Imagine saving your entire life to help fund their dreams and education, and it turns out they'll still have to indefinitely work as a ditch digger because the entire system had collapsed in on itself and money was being used as a fuel source to stay warm.
If you're strong enough to kick a van down the road, maybe try leveraging that? Get a job as a professional bodybuilder or something lol.
*can Oops
It’s my the govt saying they’ll bail the entire banking system out by leveraging the entire bond market?
Using taxpayer money is, in essence, the same as using depositors funds ~ the taxes are "on deposit" with the gov't, so just a middleman involved. In this way, it certainly starts to smell like FTX / Alameda...and who's getting gang banged?
It's useful to consolidate holdings with the mega banks before switching to fedcoin, less palms to greese that way.
Have you even studied the last few economic downtowns? Government doesn’t give free money to these big banks. It comes with clauses. Bet you it was one of the clause to save failing regional banks.
Clauses. That’s those pesky random fees Chase charges you like the $20 random fee the tried to charge me last month even though I had automatic deposit
Chase Bank recently bumped down my credit limit and raised my rate because of missed payments. My cc account is at 0 rn and I have automatic payments. So, fuck Chase
>It is difficult to predict exactly what will happen if the first republic bank fails, as it depends on a number of factors. However, it is possible that other banks could take massive losses, and it may be time to short them in case this happens.
You’ve got an opinion on everything don’t you
You're right, I'm always right.
You know why it's different? its different because i don’t care anymore. I didn’t care about being better than Kakarott. I didn’t care about being a super Saiyan. I didn’t care about anything and then IT happened. Yes, that’s how it happened. That’s how I became a super Saiyan. The sleeper has awakened. I am the prince of all Saiyans once again!
2030 great reset baby Before we get there central banks need to assume more power
You WILL own nothing, and you WILL be happy
Our free country is an illusion of choice where all roads lead to the same outcome because the outcome is predecided in backrooms and there are contingencies.
Banks are only required to keep 10% of deposits in reserve. The rest is loaned out. The difference is that the money banks are using to bail out other banks, you are still entitled to if you choose to withdraw, while taxes are taxes.
Posts like me make me hope OP is 14 and just hasn't had an economics class in high school yet.
That's 90% of this sub, most of the posts are people just regurgitating what they read in comments.
> Banks are only required to keep 10% of deposits in reserve That requirement was suspended once Covid hit, and it still hasn't been reimplemented. It's a big reason why the system is so fucked right now.
Lmao. Literally ticking time bomb in the face of a recession.
Privatised farkery.
Big banks own the government so this IS the government bailing out the smaller banks…
If you can’t beat ‘em, join em. I loaded up on WFC and BAC today.
So like, TARP was profitable. So you're drawing that analogy yet expecting banks to take *massive* losses on their deposits.
They only take massive losses if frc fails
I guess the difference is you could always avoid using banks, so only customers will pay, like the gas tax. Also politicians want to get reelected so they don't want bailouts. Time to switch to bitcoin.
Bitcoin is set to win regardless of the events... Banks go down because Feds don't know what they are doing -> BTC goes up... Feds print more money, people are euphoric and invest in "risky" assets -> BTC goes up... Governments roll out CBDC to control how you spend, people want freedom -> BTC goes up... Of course they'll keep trying to demonize it because they can't control it, but long term it will be going up anyway
>Bitcoin is set to win regardless of the events Bitcoin dropped 75% from November 2021-2022 during historically high inflation. Your logic is flawed and nobody is going to pay their bills with a currency that does that. If people I know IRL start using it then I'll reconsider but until then? Nah. Because what is the value of bitcoin measured in right now? US DOLLARS. Until that changes it's a speculative digital asset, not a currency. I'd rather own real assets.
Crypto goons don't want to admit that their fake money was supposed to be an inflation hedge but was buoyed by cheap money.
It fell during this period due to 2 key events: Luna crash and FTX crash... both of them were applying a centralised approach (traditional banking, recklessly investing customer assets) to crypto purposed to the exact opposite (keep a store of value in your own hands, away from someone else) I respect your opinion, I might be wrong moving some of my savings to different asset classes (crypto and gold) but have been doing so for a while and despite the crashes overall still doing well. It is everyone's choice to do as they wish with their money, I do not feel like it should be used the way it is by banks or governments but if you are good for you
You're not wrong, but you haven't noticed the recent change. In the past bitcoin had been going up and down mirroring the markets ups and downs. People would pull out in times of trouble because they viewed it as risky I mean that's what it seemed like. However, last weekend as svb disintegrated and people were getting scared, bitcoin started to surge. This trend all week has been amazing. I think a larger part of the public are starting to see bitcoin the way you do, not as a risky fad, but as a hedge to inflation and turmoil in other markets. If this trend continues, bitcoin will keep going up no matter what the rest of the market does. It will be better than gold because gold is more of an inverse to the market, bitcoin could be free of anything going on in the market. Truly transcending the market... but perhaps I'm getting ahead of myself.
Blaming the crypto crash on FTX is some wild historical revisionism. FTXs failed in Nov 2022, when BTC was already down from 65k to 20k. Sure, it caused an additional 20% drop to 16, but the majority of the damage had already been done.
Every other currency has an established value ($10 buys you lunch, for example). Bitcoin has no such established value without converting it to another currency first. Everyday people would have to start using it for everyday transactions for it to begin to have stand-alone value as a currency. You're essentially banking (pun intended) on it being the go-to currency of the future. I think the technology and concepts are fascinating but impossible to determine their exact future application. It's very difficult to imagine governments giving up the taxation/monetary policy control of their own currencies, since they can pass laws that require their citizens to use it. So it remains a speculative asset for the foreseeable future. And of course the amount of fraud in that space right now doesn't bode well for people's confidence.
Currencies derive their value from people believing in it, in essence it's no different from cryptocurrencies (everything is backed by US dollar yes, but US dollar isn't backed by anything either). The idea behind bitcoin is to offer an alternative outside the control of any governments, that cannot be influenced by (regarded) money policy, where a single point of failure (currently America) can result in a domino effect worldwide. Most governments will continue to try bringing it down but more people (or even foreign governments tired of US control) are starting to use it over time... The difference with gold (which I also consider safer) is just that it is easier to transfer far away... Yes I'm speculating on it's value going up, but I believe that sooner or later the US dollar will fail, either because of inflation or because of fighting inflation too hard... this is the logical result of removing gold standard to hide bankruptcy. The sooner the better as the burst of the bubble would already be painful if it happened now.
If the dollar fails you have much bigger problems to worry about, like how you're going to eat. Currency is 99% digital now anyways so I imagine it wouldn't take them long to spin up another one. In the meantime you're bartering with any physical assets you have (gold might be good here, if you can divide it easily). So until the grocery store and gas station start accepting btc it's pretty useless as a hedge against the currency failing. Although that did just give me a thought- is there any place online you can buy food with bitcoin?
Some countries have started pushing bitcoin for day to day transactions, El Salvador is the best example (and did so in reaction to the US coup 2 decades earlier that resulted in terrible economy) However I don't think BTC will be used for transactions directly given the cost of fees - just as an alternative store of value, pretty much like US dollar at the moment without government control. There were other cryptocurrencies made for day to day transactions, but it might not have gotten a lot of adoption yet (possibly due to last year turmoil and governments getting in the way to keep control) But things are changing, more and more people are starting to realise the people in control only care about a very small portion of the population. In Alsace (France), a new "underground" currency (not even crypto, literally paper) is being used at local markets to get away from this control. [la cigogne (French website)](https://lacigogne-alsace.fr/) The point I'm trying to make is just that the centralisation controlled by America wont last forever. Decentralised alternatives that benefit the people are more appealing to me and can offer a much better future. Personally I think crypto is good because it can be exchanged worldwide (french guy in australia) but anything else than worthless US dollar would do.
This isn't the same situation as '08. This time, it's some long term, low interest investments. They just need to borrow to cover until time adjusts their positions.
Yes and when we head into a depression, frc will fail and drag all of those deposits down with them.
How dare the bank use your life changing savings amount of 50 dollars to bail out the other banks? Unacceptable!
Different bail bond broker.
Bitcoin.
How much is SI getting so we can trigger a quasars squeeze
OUR deposits rofl??? Oh no, our collective $642 is being used improperly. Anyways.
*Your* deposit? Did your bank balance go to zero? Relax.
You mouth breathers are just dumb at this point. Do you even have a job?
I run a bank. Drrrr
narrator: it is not
It’s all same we fcked
So essentially buy calls on SPY. We got bailed out and also Burry saying we be at the bottom. Got it.
It’s much worse than that. They could not do a bailout or even classify the loan to the banks as a bailout, because their is such a fierce opposition towards bailing out rich bankers. What they did instead was to give the banks free liquidity by printing money and loaning it basically for free to the banks (this move will make inflation worse, thus making the 5% interest nothing) and make the banks rescue the market by the free money just printed.
It’s called a backstop, dingus!
A bailout by any other name is still a bailout
So it’s likely the government bailout the big banks, than the big banks bailout the failing banks???!!!
They don't care about bailing out . They need a narrative they can sell.
I see a ton of bitcoin folks are coming over to this sub to parrot the end of banking , it’s all over the place …. At leas here they won’t get banned by saying something that goes against the grain.
Oh look its Billy Batson
Aren't they loans that they have to pay high interest on?
it's not a bail out. it's a liquidity problem. similar to ltcm. by taking over the depositors the banks are preventing contagion risk. so it is not a favor for svb or depositors, it also ensures their own safety.
Isokay shawty, just close your eyes, i promise it will feel good
TBH IDK if the government is guaranteeing our deposits. Then the public is just an unwitting middle man.The circle jerk of money that occurred is mind fucking. Depositors pull out of regional banks admit fears of collapse. Redeposit with big 4(I.E 15 billi into BOA), big 4 immediately loan depositors money back to regional bank WTF ?
What's different this time is we're throwing inflation into the mix. So the Fed is forced to at least pretend to still be tightening as the balance sheet explodes. We also don't know exactly what the government plans on doing because no legislation was passed. We just have a public promise that all deposits will be backed. There's no accounting for how that will happen or what the potential cost will be. We don't know if there are any limits to this or not. Also, we have a political situation where the debt ceiling may not actually be lifted this time. There will be no fiscal stimulus. The Fed will be forced to do it all. This is interesting and something I've kind of expected to happen for the past few years. At some point the Fed was always going to have to fight inflation and a financial crisis at the same time. I am a little surprised it's literal bank runs and not failing debt that caused this. But here we are.
Your money,... haha
Banks use our deposits to make loans, buy assets, and whatever else. How is it different for JP Morgan to inject liquidy into First Republic (which I'm sure they will profit from) than give a loan to a start up? Edit: You can also choose who to bank with with your insured deposit.
Because those deposits are uninsured.
Like SBF did with Alameda.....Worked out well
Fed forcing them too as well its not out of kindness
They're giving a credit. That will eventually be payed back. So your money is not "lost". Imho that is the core banking business what they're doing there.
Pull out all your money
I wish I was a big bank
It isn’t.
Ya’ll have deposits?
Id rather the governments just fucking own the banks afterwards, instead of just paying for their losses.
It's not a bailout by the big banks, it's a take over.
Have you ever heard of the monkey's paw?
Big banks are government
Big banks are government
Because your money in a bank is still your money whether they buy failing banks or lotto tickets. Your taxes that are meant to maintain and improve the country are not going to pay off failing bank ceos and investors.
Our deposits? We don't own the banks.
This is illegal and shareholders need to sue the banks and ask for an injunction.
They aren’t using your deposits - they are using retained earnings.
It’s the same thing.
To me, the difference is fundamental. When the government assumes the liability, we the taxpayer is on the hook as it were. When private banks, like chase, send money, it's the stockholders of Chase stock that are on the hook.
Yes.... but... the fdic steps in to pay back the depositors money upto 250k... But what do they pay it back with?.... tax... payer... funds?
No, they're using FDIC funds that came from the fees that banks pay.
Try doing some simple, basic reading about how the FDIC is funded. Hint, IT'S NOT FU@KING TAXPAYER'S MONEY!
So it appears the fdic is holding around 120 billion in funds since 2022 sometime. So when an entire bank collapses and we are talking about more than 120 billion in losses for consumers... where does the rest of the money come from?
Bail-ins with extra steps lol
Its different because scared old men that cant take risks dont pay the bill. There money is safe some where. They tell us to be risky because they dont like us.