Economy

[Guy Chamberlin]

Turns out the CEO of SVB lobbied hard to reduce government regulations of banks with less than $250 billion in assets, testifying before Congress that they shouldn't have to submit to stress testing by the Federal Reserve, nor have to keep certain levels of cash reserves. Trump approved the looser bank regulations in 2018. 

 

And it was libertarian poster boy and Trump cheerleader Peter Thiel who was among the first to pull massive amounts from SVB while encouraging other clients to do the same.  Had a few -- or any -- of the VCs publicly calmed the water rather than running to their own lifeboat, the crisis could have been averted. No sector has benefitted more and suffered less from the government than Tech, which turned from Libertarian to Socialist overnight, but will never, ever acknowledge this hypocrisy when the money faucet turns back on.

 

Did I hear someone invoke Dodd/Frank?

 

I mean.....yeah. But, no.  

[Archy1221]

Worth a listen to.   This has always been my problem with “too big to fail”   Too big to fail just creates an incentive to be “Too big to fail” which then allows companies to increase their risk profile, knowing there really isn’t much of a risk.   
I do wonder what what the outcome will be for these smaller banks and their largest depositors.  

 

[BigRedBuster]

3 hours ago, Archy1221 said:

Worth a listen to.   This has always been my problem with “too big to fail”   Too big to fail just creates an incentive to be “Too big to fail” which then allows companies to increase their risk profile, knowing there really isn’t much of a risk.   
I do wonder what what the outcome will be for these smaller banks and their largest depositors.  

Agree.  It's going to be interesting.

 

The problem with some of these huge banks, like what we saw in 2007/2008 is that the people running them don't really have any risk.  The bank fails, they still are extremely wealthy people and they move on with their lives.  Sure, I'm sure that life sucks for them for a little while while the bank is actually failing.  But, in the long run, there really isn't any risk.  I've read some things that makes it sound like the head of SVB is going to be just fine financially after all of this because he made certain financial transactions right before it failed.  That's why there needs to be outside regulations forcing these financial institutions to mitigate their risks.

[ZRod]

25 minutes ago, BigRedBuster said:

Agree.  It's going to be interesting.

 

The problem with some of these huge banks, like what we saw in 2007/2008 is that the people running them don't really have any risk.  The bank fails, they still are extremely wealthy people and they move on with their lives.  Sure, I'm sure that life sucks for them for a little while while the bank is actually failing.  But, in the long run, there really isn't any risk.  I've read some things that makes it sound like the head of SVB is going to be just fine financially after all of this because he made certain financial transactions right before it failed.  That's why there needs to be outside regulations forcing these financial institutions to mitigate their risks.

Or criminal/civil prosections

[Archy1221]

1 hour ago, BigRedBuster said:

Agree.  It's going to be interesting.

 

The problem with some of these huge banks, like what we saw in 2007/2008 is that the people running them don't really have any risk.  The bank fails, they still are extremely wealthy people and they move on with their lives.  Sure, I'm sure that life sucks for them for a little while while the bank is actually failing.  But, in the long run, there really isn't any risk.  I've read some things that makes it sound like the head of SVB is going to be just fine financially after all of this because he made certain financial transactions right before it failed.  That's why there needs to be outside regulations forcing these financial institutions to mitigate their risks.

In my humble view, if a company is too big to fail, it’s too big to exist.  We need to stop the constant bailouts because the Gov is afraid of what might happen.  If your so afraid, then quit allowing these companies to get so big and create this “fear”.  
 

In the meantime, I’m to the point of if your company gets bailout money because your company had a s#!tty “C suite”, then you are forbidden from running another company and the Boards of those companies can no longer be on a board again. 

[BigRedBuster]

1 hour ago, Archy1221 said:

In my humble view, if a company is too big to fail, it’s too big to exist.  We need to stop the constant bailouts because the Gov is afraid of what might happen.  If your so afraid, then quit allowing these companies to get so big and create this “fear”.  
 

In the meantime, I’m to the point of if your company gets bailout money because your company had a s#!tty “C suite”, then you are forbidden from running another company and the Boards of those companies can no longer be on a board again. 

To be clear, the feds aren’t bailing out SVB. 

[Archy1221]

1 minute ago, BigRedBuster said:

To be clear, the feds aren’t bailing out SVB. 

They are bailing out the depositors of SVB but won’t commit to bailing out depositors of small regional banks though.  
 

If feds need to bail out any portion of the banking business with taxpayer funds, sorry but your out and so is the board for being incompetent or possibly extremely unlucky.  In SVB’s case it’s more the first and a little bit of the second.  

[Scarlet]

We've privatized the profits but socialized the losses.  If a company goes belly up and we bail them out the government should own it.  

[BigRedBuster]

3 hours ago, Archy1221 said:

They are bailing out the depositors of SVB but won’t commit to bailing out depositors of small regional banks though.  
 

If feds need to bail out any portion of the banking business with taxpayer funds, sorry but your out and so is the board for being incompetent or possibly extremely unlucky.  In SVB’s case it’s more the first and a little bit of the second.  

It’s not tax payer funds. 

[Archy1221]

3 hours ago, BigRedBuster said:

It’s not tax payer funds. 

What?

[Moiraine]

5 hours ago, Archy1221 said:

What?

 

 

It’s not directly paid for from taxpayer funds. Most of it will be funded by FDIC insurance paid for by banks. Some will be from loans bank can take out from the Fed. If any of those loans aren’t paid back, those will be paid for by the taxpayer. 

 

It may also happen that if banks have their insurance rates increase, they’ll pass the cost onto the customers.

[Archy1221]

8 minutes ago, Moiraine said:

 

 

It’s not directly paid for from taxpayer funds. Most of it will be funded by FDIC insurance paid for by banks. Some will be from loans bank can take out from the Fed. If any of those loans aren’t paid back, those will be paid for by the taxpayer. 

 

It may also happen that if banks have their insurance rates increase, they’ll pass the cost onto the customers.

That’s what I was thinking, so wasn’t sure what he meant by not taxpayer money.   It’s my understanding FDIC will cover up to $250,000 per individual and the rest, which will be the majority of SVB depositor monies, will be taxpayer funded money.  

[Moiraine]

25 minutes ago, Archy1221 said:

That’s what I was thinking, so wasn’t sure what he meant by not taxpayer money.   It’s my understanding FDIC will cover up to $250,000 per individual and the rest, which will be the majority of SVB depositor monies, will be taxpayer funded money.  

 

 

No, that's not the case. I misspoke on the name, but the Deposit Insurance Fund will pay for the majority of the deposits. This is including deposits > $250,000.

[Archy1221]

16 minutes ago, Moiraine said:

 

 

No, that's not the case. I misspoke on the name, but the Deposit Insurance Fund will pay for the majority of the deposits. This is including deposits > $250,000.

Ok thank you for the info.   

[Moiraine]

I wonder how long this country can continue to excel when we have leaders who are either utter morons or completely selfish. 

 

For example, blaming the collapse of SVB on “wokeness.” Most big companies have some type of diversity or inclusivity person or small team. It’s a tiny part of the budget. It can’t cause a bank to fail. This country’s problems can’t be solved when half of its leaders are either completely full of s#!t or have no interest in solving them.