OT- Did it just get serious that fast? FED, FDIC, Treasury, and all of Congress just met

[IBleedMaroonDawg]

The banking system is safe. We can print and spend more money, and the taxpayers won't have to pay for another 17up by bankers ignoring interest rates and this false inflation. Trust your government to fix this. What's wrong with more debt? We are so lucky to have these people in charge in Washington... all of them.

 

[IBleedMaroonDawg]

Biden just spoke. I feel better.*******

If I hear of the term previous administration again, my head is going to explode. Trump was idiot, but he wasn't the evil of all evils turning everything he touched into black mold.

 

[Boom Boom]

"... it's pre-existness."

Physician, heal thyself.

Lol, I knew that wasn't great English, but took poetic license, Grammer police. I was blanking on the right word, something that is happening more frequently in old age unfortunately, but did not feel that poster was worth the time to find the right word. But thanks for feeling that only that was worth replying to. Real helpful.**

 

[Boom Boom]

If I hear of the term previous administration again, my head is going to explode. Trump was idiot, but he wasn't the evil of all evils turning everything he touched into black mold.

Truth. The bank deregulation did not come from Trump, it came from the same old crony capitalists and Trump just signed what was put in front of him.

 

[Cantdoitsal]

If I hear of the term previous administration again, my head is going to explode. Trump was idiot, but he wasn't the evil of all evils turning everything he touched into black mold.

Trump's an A$$HOLE but he's no idiot.

 

[Shmuley]

Lol, I knew that wasn't great English, but took poetic license, Grammer police. I was blanking on the right word, something that is happening more frequently in old age unfortunately, but did not feel that poster was worth the time to find the right word. But thanks for feeling that only that was worth replying to. Real helpful.**

We can just chalk it up to your being stupid and/or exploited.

 

[Boom Boom]

We can just chalk it up to your being stupid and/or exploited.

Fair enough, it was a dumb mistake and I would have hit it too.

 

[SyonaraStanz]

Pretty ridiculous to defend relaxed scrutiny while simultaneously arguing for a bailout, and doing so by saying well you can't absolutely prove that more rigorous scrutiny would have absolutely prevented this.

If you think increased scrutiny isn't the answer, then provide what you think is (like painful bailout conditions that incentivize market actors to want to avoid bailouts). Because the fact is that a certain crowd clamored for THIS current approach over the objections of another crowd that predicted this result, and somehow you are twisting yourself into a pretzel to take the side of the first crowd.

I didn't argue for a bailout. I was simply saying I don't see how added scrutiny would have saved the day, considering the heavy scrutiny already in place.

 

[Boom Boom]

I didn't argue for a bailout. I was simply saying I don't see how added scrutiny would have saved the day, considering the heavy scrutiny already in place.

Well the current level of scrutiny didn't catch it. So are you arguing no level of scrutiny would, even though it has in the past?

 

[IBleedMaroonDawg]

Truth. The bank deregulation did not come from Trump, it came from the same old crony capitalists and Trump just signed what was put in front of him.

This style of finance business has been in power for some time.

 

[Nicephorus123]

If only they had simply rebranded as the “Farmers and Small Business Bank of Ohio and Pennsylvania”, they would have gotten bailed out Friday and this all would be over.

Don’t think I could come up with a worse name than Silicon Valley Bank if I was seeking a bail out.

 

[ronpolk]

Some people hate banks so much they forget the individual customers. Isn't this the stuff the FDIC is for?

Ha I work for a bank but I truly understand the hate for banks. I would imagine most of the hate stems from what banks did in the 2000’s and the perception that they didn’t really get punished for it, and honestly they probably didn’t. Millions of people lost their homes and jobs due to a housing bubble that was heavily influenced by banks padding their profits for years. So I get it.

What I’d say, even though SVB at nearly $250 billion in assets seems huge, there is an enormous difference in them and JP Morgan (and others that are similar). To the extent that SVB had bad loans, they are not significant enough to fuel a fire the way JP and others did that helped cause the recession. SVB appears to have been caught holding too much long term government securities. Ordinarily, this would not be seen as a bad thing.

 

[SyonaraStanz]

Well the current level of scrutiny didn't catch it. So are you arguing no level of scrutiny would, even though it has in the past?

Catch what? Their declining securities' values? My guess is the regulators knew about it, but at that point there's nothing to do about it but hope to weather the storm. It sounds like they probably could have navigated this, but VCs spurred a run on the bank, ending any hope.

There are other banks in this position, and if their customers freak out and withdraw large deposits, they'll be facing the same fate.

 

[mstateglfr]

A depositor is entitled to access their deposits. A debtor is not entitled to loan forgiveness. Your trying to make an analogy between the two is either warped or an attempt to provoke someone to respond to your post IE being a TROLL

A depositor is entitled to access their deposits up to a certain amount and they sign paperwork saying they understand and agree to this.
...at least that is what I have had to do at every bank Ive ever held accounts at.
FDIC or Credit Union backed...its backed up to a certain amount and then you are SOL.

So depositors agreed to this, yet the agreement is being waved by the government and individuals are benefitting from it.
How does that not directly apply to student loan debt forgiveness? People signed paperwork saying they understand and agree to the parameters of the loan, but the loans are being waved by the government and individuals are benefitting from it.


To be clear, I am not arguing for student debt reduction in this post. All I am doing is pointing out that both scenarios include someone agreeing to terms and then getting to ignore them later.

 

[Boom Boom]

Catch what? Their declining securities' values? My guess is the regulators knew about it, but at that point there's nothing to do about it but hope to weather the storm. It sounds like they probably could have navigated this, but VCs spurred a run on the bank, ending any hope.

There are other banks in this position, and if their customers freak out and withdraw large deposits, they'll be facing the same fate.

Catch that they were taking on excessive risk, and have them start winding down that risk. That's the whole point of scrutiny, right? Or is it like that commercial where the security is just a monitor, not a guard?

 

[Cantdoitsal]

I'm starting to see Wokeness, ESG and other far left agendas may be in play here. These new investment strategies are raging now on Wall Street.

"SVB was a go-to institution to get loans for tech start-ups, a sector that’s taken a beating on Wall Street. That doesn’t bode well since most of these ventures don’t profit from the outset, which means more cash injections and lines of credit."
"There was no risk assessment officer for eight months. It was no different at the bank’s United Kingdom branch, where its risk assessment executive spent more time worrying about creating safe spaces and pushing woke extracurricular activities. Might as well not have such a corporate officer at all if she’s not going to do her job (via NY Post):
A head of risk management at Silicon Valley Bank spent considerable time spearheading multiple “woke” LGBTQ+ programs, including a “safe space” for coming out stories, as the firm catapulted toward collapse.

Jay Ersapah, the boss of Financial Risk Management at SVB’s UK branch, launched initiatives such as the company’s first month-long Pride campaign and a new blog emphasizing mental health awareness for LGBTQ+ youth.
“As a QWEER (can't say it here with a U) person of color and a first-generation immigrant from a working-class background, there were not many role models for me to ‘see’ growing up.”

Her efforts as the company’s European LGBTQIA+ Employee Resource Group co-chair earned her a spot on SVB’s “outstanding LGBT+ Role Model Lists 2022,” a list shared in a company post just four months before the bank was shut down by federal authorities over liquidity fears.
Silicon Valley Bank went ‘woke’ and ended up broke. Is that the moral of the story? The bit about no risk assessment executive being appointed for the US for nearly a year does raise eyebrows; how can you not have this person on staff? There have been deafening calls for a bailout, which Treasury Secretary Janet Yellen has rejected. We’ll see how long that lasts, however.

ME: This ESG BS has to stop because those making these calls should be financially beholden to profits for stockholders. They should be by law obligated to operate in a totally fiduciary way protecting their customers not wokeism. Millions of Retirement Accounts are currently under attack from The Woke. This is why Desantis is creating laws that protect his citizens of FL from having their pensions and what not protected from Woke Companies that don't look out after their constituents best interests.

Oh, So That's How a Top Executive for Silicon Valley Bank's UK Branch Spent Most of Her Time

townhall.com

 

[mstateglfr]

Ha I work for a bank but I truly understand the hate for banks. I would imagine most of the hate stems from what banks did in the 2000’s and the perception that they didn’t really get punished for it, and honestly they probably didn’t. Millions of people lost their homes and jobs due to a housing bubble that was heavily influenced by banks padding their profits for years. So I get it.

What I’d say, even though SVB at nearly $250 billion in assets seems huge, there is an enormous difference in them and JP Morgan (and others that are similar). To the extent that SVB had bad loans, they are not significant enough to fuel a fire the way JP and others did that helped cause the recession. SVB appears to have been caught holding too much long term government securities. Ordinarily, this would not be seen as a bad thing.

Wells Fargo opened 3.5million deposit and credit card accounts without customer approval because corporate had created numerically impossible to meet sales quotas. These accounts generated fees for the bank, hurt customer credit scores, and the bank was also able to keep customers from pursuing legal action.
It then blamed rogue employees and fired 5000 of them, even thought employees were encouraged to do these things and many did so in order to just keep their jobs by meeting the impossible quotas.
That **** should be criminal and it is absolutely in every way evil. It is unconscionable that nobody went to jail for opening up checking and credit accounts in other people's names(insurance policies were also opened).

I post this because it isnt just the '00s and the predatory lending that is why people hate banks and crap is still going on. Even after that, a bank that was actually OK during that lean time decided to straight up 17 with its customers and hurt their credit all in the name of aggressive sales. Then they 17ed with their employees and fired a bunch even though they were in many instances told/taught to do what they were fired for doing.
WF's actions also impact the consumer finance industry due to its size.

And this doesnt even get into fines they have paid recently for unjustifiably charging people of color higher interest.



Not arguing with you, to be clear. There are obviously good people and good banks- this country has 330million people so its not like everything is bad.

 

[BoDawg.sixpack]

Bitcoiners got some new life, she's up damn near 20%, outperforming everything.

 

[johnson86-1]

A depositor is entitled to access their deposits up to a certain amount and they sign paperwork saying they understand and agree to this.
...at least that is what I have had to do at every bank Ive ever held accounts at.
FDIC or Credit Union backed...its backed up to a certain amount and then you are SOL.

So depositors agreed to this, yet the agreement is being waved by the government and individuals are benefitting from it.
How does that not directly apply to student loan debt forgiveness? People signed paperwork saying they understand and agree to the parameters of the loan, but the loans are being waved by the government and individuals are benefitting from it.


To be clear, I am not arguing for student debt reduction in this post. All I am doing is pointing out that both scenarios include someone agreeing to terms and then getting to ignore them later.

Another word for depositor is creditor. The bank is bailing out creditors of the bank because it wants to encourage creditors to lend to banks without thinking too much about credit risk. Just like for a long time the government encouraged lending to students without thinking about credit risk by guaranteeing repayment of student loans.

Not really analogous on the debtor side.

 

[SyonaraStanz]

Catch that they were taking on excessive risk, and have them start winding down that risk. That's the whole point of scrutiny, right? Or is it like that commercial where the security is just a monitor, not a guard?

What were they doing to take on excessive risk? Seriously, I'm asking because I don't know. All I've heard/read about through my limited research is that the rising rates hit them hard, due to being heavily leveraged in these lower rate securities. No amount of monitoring is going to change that from the date of purchase. Maybe there's more to the story that I haven't heard, but it sounds like they have fallen victim to rising rates, an investment book with inadequate diversity and a customer base feeling the effects of the economic downturn.

 

[mstateglfr]

Another word for depositor is creditor. The bank is bailing out creditors of the bank because it wants to encourage creditors to lend to banks without thinking too much about credit risk. Just like for a long time the government encouraged lending to students without thinking about credit risk by guaranteeing repayment of student loans.

Not really analogous on the debtor side.

...but they are 'bailing out' beyond what the creditors agreed to. It is simply a comparison where in both instances an agreement was made, and the terms then get to change.
If the government wants to encourage lending to banks without thinking too much about credit risk, then they should increase the insured amount per account. Thats pretty simple.

I am not surprised this is being wiggled back and forth on SPS. Cant show weakness!

 

[Boom Boom]

What were they doing to take on excessive risk? Seriously, I'm asking because I don't know. All I've heard/read about through my limited research is that the rising rates hit them hard, due to being heavily leveraged in these lower rate securities. No amount of monitoring is going to change that from the date of purchase. Maybe there's more to the story that I haven't heard, but it sounds like they have fallen victim to rising rates, an investment book with inadequate diversity and a customer base feeling the effects of the economic downturn.

Borrowing short and lending long is my understanding. Taking on the risk that their short term lending costs (rates) will rise. Didn't hold enough cash reserves, had it in bond funds that decreased in value. Didn't backstop that risk. Sure was profitable at the time, I'm sure!

Isn't this what scrutiny is supposed to catch and mandate to be unwound? Maybe it's not. Maybe the whole system is pointless and if a bank wants to put all its deposits in Bitcoin then they get to and we the taxpayer backstop it and they get a bailout if needed. But that is not my understanding of how it works.

Who knows what they'll find now that they're looking deeper. Sure was a lot of cronyism around that bank. VCs that essentially mandated that the companies they funded use it as their bank. Was there kickbacks associated with that relationship?