noemon wrote:It's not a bailout and you should not be using this term because it justifies infowars type of ignorance.
Oh, so if infowars says the sky is blue we should not be using the term blue because it justifies ignorance?
For the record, I did not even read what the OP said and certainly I did not click on a link to infowars website. The former because the OP constantly makes nonsensical threads and the latter because... well it is infowars and out of principle I do not wish to generate any sort of traffic or revenue for them. My assessment is independent and contains information that I have obtained from more reputable sources, sources that typically are accused of being biased to the left i might add.
On a side note, I resent your veiled attempt at either attempting to manipulate me (reverse psychology) or trying to shame me for supposedly spreading infowars nonsense. As I have said before, I have no fucking clue what infowars is saying because I can promise you, that website has not made it to my internet browser history. If the only way you can consider another point of view is to have that point of view be told to you by a source that you trust, perhaps Mr William Isaac, a former chair of the FDIC opinion might sway you.
He thinks this is "clearly" a bailout of the depositors. I said just as much and to my credit I only searched for this clip after making my other post. As I said, I came up with my own independent analysis.
Here is an ABC article that also hints at it:
https://abcnews.go.com/Business/bailout ... d=97846142Deposits must always be guaranteed, not vilify the action of guaranteeing them as a "bailout".
Well, that is certainly your opinion and perhaps there is a good argument to be made and it is prudent to have that debate. But, there have been 500+ banks that have failed since 2000. Washington Mutual does not exist anymore, failed in 2008 and FDIC seized the bank and sold it off to JPMC... whats so different about this situation that something similar could not be arranged? Why this case needs special accommodation?
You say deposits must always be guaranteed... well they arent and have never been. There is a reason there is a nice logo and plaque "FDIC insured" in most banks and they clearly say deposits insured up to 250k. The implication being, that unless you take any additional steps (and there are means by which companies can mitigate risk) the guarantee is up to 250k and that is it. If I insure my apartment for 500k and tomorrow it catches on fire, I might be able to get from my insurance company up to 500k for my claim... however, I cannot ask them to also cover 20million for my jackson pollock that burned with my apartment... for that I would have to acquire additional insurance that might come with additional hurdles and fees. For the federal government to create a post-hoc solution for this, is in essence a bailout.
Companies and people should not have the insecurity that if their bank fails, they lose their money.
Sure, and when you find utopia give me the coordinates so that I can move in with you.
If you are asking the government to assume the risk then they should also run the business (aka. nationalization -> socialism). I don't like the mixture of allowing them to function as private enterprise/business and then have the government on the hook for when shit hits the fan. I think that makes for a slopy banking system and for a sloppy regulatory system. Besides, there have been hundreds of bank failures in the US in the last 2 decades alone yet the people are not living in constant fear that their bank will fuck them up, so I am not certain that we need some extra insurance.
By definition this is not a bailout, no matter how many opt to play petty politicking against their own interests.
Read above. It is
merriam-webster:
: a rescue from financial distress
Aren't the depositors being rescued from financial distress?
cambridge dictionary:
the act of helping a person or organization that is in difficulty, usually by giving or giving or lending money:
Again, isn't the government intervening and facilitating payments to the depositors that are having difficulty?
The FED or the Central Bank of a country regulates the banks, is the ultimate guarantor of financial stability, is the lender of last resort and is the controller of inflation.
Yes. Up to 250k if the bank is insured. It says it on the tiny little metal plaque underneath the bullet proof window of any bank teller that is insured. The implication (rather obvious really) being, that if you place 250,001$, you got 250k insured and $1 uninsured. If the bank goes bust, the insurance is only required to give you 250k and you lost $1 for not doing your due diligence and putting that extra little dollar on a separate bank or getting any other sort of insurance scheme for your money.
Central banks can print these money and inject them in without affecting inflation and as such there is no excuse for people not demanding this to be law. It is in fact stupendously idiotic that some people are using words to vilify the rescue of depositors such as "bailout" because the brainwashing is deep and powerful.
You are the one vilifying here. I am using a term that carries no intrinsic negative connotation. You are the one that is choosing to see it through a prism of (presumably) deleterious assumptions.
Instead of demanding that all deposits are guaranteed, you lot are implicitly justifying the Central Banks for choosing which depositor to rescue.
Why all depositors must be guaranteed? That is like saying all houses must have insurance. Why? What happens if I don't want to pay for insurance for mine? If I am willing to take the risk and then if I lose it I either rebuild it with my own money, go buy another one (either cash or through mortgage)? There is a cost to that, and someone will be footing the bill. I am going to go on a limp here and take a guess that Jamie Dimon, Charles Scharf, Brian Moynihan, Jane Fraser and Andrew Cecere are not going to be taking paycuts to pay for additional insurance premiums. There are methods by which individuals and/or companies can insure above and beyond FDIC, they just need to account for this and likely pay the premium themselves.
When I mail a package, it is insured for up to $100. If I want or need more, I can always go above and beyond. Schemes exist to arrange for this. If nothing else, you can buy shorts on the bank and if they fail and you lose a portion of your uninsured deposits, you'll make it up by your short positions. It will cost you money, but that is insurance for you, if you are so afraid of losing your money, there are strategies to minimize the impact.
There is not a single group, that has an interest to not increase the deposit guarantee to infinity.
That is fine with me, i have no objection on doing so but I am not going to pretend that what just happened here was not a bailout. Granted, for companies that perhaps did not have a major culprit on their financial hardship (although this is also debatable, you should always do due diligence). The government bailed out businesses during covid pandemic... does that mean they did something wrong? is this vilifying the businesses that were having financial trouble? No it is not. If you perceive the term as a vilification, that is a you problem, not a me problem. For the record, there are many schemes that can insure your money beyond 250k FDIC insurance.
https://www.moneycrashers.com/dif-insur ... ance-fund/And listen, businesses fail all the time, and sometimes not due to reasons that are foreseen or their fault. It is just the way it is. I am sure some horse hardness builders went out of business when cars came to market. I am a fountain pen user, I know this, many brands went extinct with the invention of ballpoint pens!
ow. I have no intrinsic issue with changing the rules for the future events but you must at least admit there is an unsavory ordeal with changing the rules after-the-fact even if you perceive this to be the best case.
Who is bearing the cost of the added FDIC premium to cover deposits over 250k? It is going to be the depositors. Now... how many Americans have over 250k in a single account? I promise you, not many. So they are likely going to be paying increased interests, fees, etc for insuring above and beyond a quantity of money that they will never have.
Otherwise, the role should be taken by the State and be done with it.
Massachusets have DIF
Your argument that depositors "will not learn a lesson from this" is frankly ridiculous. What lesson is that? Companies can do business without a bank account? They can't.
It is called risk management and it is a whole field of its own. For starters, Why Roku needed to have 400million in a single bank? Whats wrong with having 100M across 4 banks... you might say well, you are still over 250k and that is true, however now they only have 25% exposure as not all 4 banks would go under. But it is far less than that, SVB reportedly have assets that covers 70%+ of the deposits, so if roku had 100m instead of 400m they might have stood to lose only ~30% of the 100M that they had in SVB... Individuals can spread their $$ across different accounts, there are also credit unions, there are banks that in addition to FDIC they also have DIF which insures above 250k. And this is just a few things that a dude on his underwear in bed can find out, imagine the schemes a company with 400million in the bank can pay lawyers and accountants to figure out. There are ways.
That they should choose their bank more carefully?
No? What else do you want to get rid of? I could lose my life's saving with a crash of the stock market in my 401k without a fault of my own.... or even if I keep it in cash under my mattress, I could lose the value of it all due to inflation or due to a fire, and even if I put it in gold, somebody could come and steal it from me. I am just saying, for the individual person, the 250k limit is barely an inconvenience. I am in the 5% of earners for the US and I am not personally worried about having my "fortune" wiped out in this fashion and businesses have additional risk management strategies. Do you really need to bring the risk to 0%? No, that is absurd, everything in life has a certain risk attached to it.
That the local plumber and hairdresser must study finance and check their banks quarterly statements before opening an account?
You must know some wealthy hairdressers or plumbers
.
Your analogy of fire-fighters and scammed students makes no sense either. You will have to actually expand & compare them qualitatively for it to make sense.
I am sorry you cannot understand it.