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6 minutes ago, BigRedBuster said:

Not sure what the outrage is about.  3.6% is still a freakishly low unemployment rate.  The tech sector has been laying off people.  The majority of other industries are still having problems finding workers.  The unemployment rate has been so low that really, the only way it was going to move was up...and this is just a small movement.  

Purely based on news reports and anecdotal evidence on my part, I get the impression that traditional “white collar” jobs are being impacted by job cuts and have an excess of people.  The service sectors and “blue collar industries do not have enough workers at this point.  Kinda an interesting dynamic.   
 

The companies my friends and family are associated with are all going through jobs cuts or getting ready to go through them.  Yet 90% of the clinics and ASC’s I work with are looking for people to hire and can’t keep a full staff.  

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39 minutes ago, BigRedBuster said:

Not sure what the outrage is about.  3.6% is still a freakishly low unemployment rate.  The tech sector has been laying off people.  The majority of other industries are still having problems finding workers.  The unemployment rate has been so low that really, the only way it was going to move was up...and this is just a small movement.  

No outrage at the numbers, just at the stupidity of layoffs. Most of these companies are going to rehire people again in 2 to 3 years.

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Yikes. 

 

Quote

New York(CNN)Roku held approximately $487 million of its $1.9 billion in cash at Silicon Valley Bank, which collapsed Friday and was taken over by the Federal Deposit Insurance Corporation, the streaming technology company disclosed in an SEC filing. 

 

That's approximately 26% of the company's cash and cash equivalents, Roku (ROKU) said, adding that most of its deposits with the bank are uninsured.

 

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I am more than open to any information as to what allowed this. 

 

I have friends that are bankers who have constantly complained about Dodd Frank. I’m not in their shoes. But, I’ve alway told them, if the banking industry hadn’t screwed up so much, we wouldn’t have the regulations. 
 

So, what’s the other side to this story?
 

 

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1 hour ago, BigRedBuster said:

I am more than open to any information as to what allowed this. 

 

I have friends that are bankers who have constantly complained about Dodd Frank. I’m not in their shoes. But, I’ve alway told them, if the banking industry hadn’t screwed up so much, we wouldn’t have the regulations. 
 

So, what’s the other side to this story?
 

 

 

 

 

SVB CEO lobbied for relaxation of Dodd-Frank rules | Fortune

 

 

 



Trump eased oversight of small and regional lenders when he signed a far-reaching measure designed to lower their costs of complying with regulations. A measure in May 2018 lifted the threshold for being considered systemically important — a label imposing requirements including annual stress testing — to $250 billion in assets, up from $50 billion.

 

SVB had just crested $50 billion at the time. By early 2022, it swelled to $220 billion, ultimately ranking as the 16th-largest US bank.

 

I don't know a whole lot about it but I do know complying with the regulations is more difficult for smaller banks because it takes additional people, some of which have that as their only role. I think a $250 billion threshold is ridiculously f#&%ing stupid. There are only 10 banks in the country above that #. You can't tell me a $50b company can't afford to do this work.

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This probably has the best explanation for what happened that I've seen.

 

Opinion | Silicon Valley Bank Feels the Toll of the Fed’s Inflation Fight - The New York Times (nytimes.com)

 

 

And I can summarize it a little further (at least, I think I can). Actually, I'm probably doing it way worse. But I've already written this crap.

 

Banks have low interest or no interest deposit accounts, and when interest rates rise very slowly, normal customers don't really think about putting their money into something with a higher interest rate, because it just doesn't cross their mind. On top of that, Silicon Valley Bank had a higher than normal # of "not normal" customers, i.e. big companies, investment fund runners, and others who are always paying attention and trying to get the best interest rate they can. With faster interest rate increases, not only are those people who are paying attention going to move their $ into things with higher interest rates, so are more of the normal customers. As this started to happen SVB had to make that $ available by selling and taking a loss on treasury bonds, which they should not have invested so much of their $ in. But the reason they had to put so much $ into these is their customers were doing too well and not taking out loans.

Their loss they released to the public (I assume because they were required to) was not actually that bad ($2b on $200b) but then you add in the fact a lot of these customers are people who look at the internet all the time, and news spread like wild fire, and too many of them went into panic mode and decided they needed their money right away. But even without that, if they were losing the $2b Thursday, it likely would not have stopped there even without the panic. The $2b loss happened before any panic, just from regular withdrawals and people wanting higher returns. What happened Thursday was probably just a fast version of what would have happened anyway.


My guess on the biggest factors are:

Inflation and the reaction to it - increasing interest rates quickly
Changes to Dodd-Frank, making it so banks like SVB did not have to go through as much stress testing, which they may have failed with the type of investments they were making
Tech companies doing great, then immediately not doing well
The internet existing

The changes to Dodd-Frank were voted on by Democrats and Republicans, and I don't think they should have been made except potentially for small banks. But things could have been a lot worse.

In a rare demonstration of bipartisanship, the House voted 258-159 to approve a regulatory rollback that passed the Senate this year, handing a significant victory to President Trump, who has promised to “do a big number on Dodd-Frank.”
 

Later this month, five regulators are expected to release a plan to water-down the Volcker Rule, which bans banks from making risky bets with depositors’ money. Regulators have already proposed easing limits on how much the largest banks can borrow, a change that was opposed by Obama administration appointees at the Fed and the Federal Deposit Insurance Corporation, who argued it was too soon to reduce capital requirements for the biggest banks. And the Consumer Financial Protection Bureau, which is run by Mr. Trump’s budget director, has halted the agency’s continuing investigations into finance companies.

 

Republicans saw Tuesday’s vote as merely the beginning, not the end, of the Dodd-Frank legislative rollback.

 

For years, House Republicans have been pushing for a more significant overhaul of Dodd-Frank and last year passed the Financial Choice Act, which would have crippled the consumer bureau and revoked the Volcker Rule. However, that bill stood no chance of gaining Democratic support in the Senate and Republicans, looking to score a victory before the midterm elections, ultimately chose the pragmatic path of approving the bipartisan Senate legislation.

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