SVB is not bailout, Credit Suisse is a BAILOUT! - Politics Forum.org | PoFo

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#15268498
The Silicon Valley Bank bailout that 'isn't a bailout' IS A BAILOUT.

The short version is that the bad lending policies that led to the bank failing still made the people running it rich(er), and because of their mishandling, now we have to cover their losses to save the jobs of the employees of the depositors. The claim that covering these losses out of the FDIC will not result in additional taxpayer money being used is not only immaterial (because its already taxpayer money, its just taxpayer money we already set aside for this purpose), its also unlikely to remain true as more banks domino eachother and eventually the losses we have to cover exceed what's available in the FDIC (and now, the BTFP- see below) funds.

FTR- The FDIC already covers all depositors up to $250,000. Any business that lost more than that did so because it was TOO LAZY to just put anything over that into a different account at a different bank so it too would be covered. Also deposits can be privately insured against precisely this happening, clearly these folks didn't.

What's more, the 'not a bailout' claim is based on the notion that the new BTFP program will be "offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities [MBS], and other qualifying assets as collateral. These assets will be valued at par. The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress."

The bank failed (and others are failing) because these assets that we're going to 'value at par' lost most of their value. The assets are still of low value, we're just going to loan based on the original (and now inflated) value. Its like if you bought an $80,000 car, wrecked it and totaled it, and then I give you a loan for $80,000 with your totaled car as collateral. That's stupid. This is just kicking the can down the road. Its not going to work. The govt and the Fed are just hoping you won't notice that their 'not a bailout' scheme will inevitably result in bailouts.

Yes, the Latest Bank Bailout Is Really a Bailout, and You Are Paying for It
https://www.infowars.com/posts/yes-the- ... ng-for-it/

Once again, word games and lies.
There are too many important progressives and Democrats who had ties to that bank. They couldn't let the chips just fall where they may.
(The bank is in the San Francisco Bay Area and focused on the tech industry, so really not surprising)

But meanwhile they have to make it LOOK like there was no bailout, because they know all those Democrat voters would be very unhappy if they knew what was happening.
Government money for the rich.
Last edited by noemon on 21 Mar 2023 04:44, edited 1 time in total. Reason: Title amended
#15268499
Puffer Fish wrote:The Silicon Valley Bank bailout that 'isn't a bailout' IS A BAILOUT.

The short version is that the bad lending policies that led to the bank failing still made the people running it rich(er), and because of their mishandling, now we have to cover their losses to save the jobs of the employees of the depositors. The claim that covering these losses out of the FDIC will not result in additional taxpayer money being used is not only immaterial (because its already taxpayer money, its just taxpayer money we already set aside for this purpose), its also unlikely to remain true as more banks domino eachother and eventually the losses we have to cover exceed what's available in the FDIC (and now, the BTFP- see below) funds.

FTR- The FDIC already covers all depositors up to $250,000. Any business that lost more than that did so because it was TOO LAZY to just put anything over that into a different account at a different bank so it too would be covered. Also deposits can be privately insured against precisely this happening, clearly these folks didn't.

What's more, the 'not a bailout' claim is based on the notion that the new BTFP program will be "offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities [MBS], and other qualifying assets as collateral. These assets will be valued at par. The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress."

The bank failed (and others are failing) because these assets that we're going to 'value at par' lost most of their value. The assets are still of low value, we're just going to loan based on the original (and now inflated) value. Its like if you bought an $80,000 car, wrecked it and totaled it, and then I give you a loan for $80,000 with your totaled car as collateral. That's stupid. This is just kicking the can down the road. Its not going to work. The govt and the Fed are just hoping you won't notice that their 'not a bailout' scheme will inevitably result in bailouts.

Yes, the Latest Bank Bailout Is Really a Bailout, and You Are Paying for It
https://www.infowars.com/posts/yes-the- ... ng-for-it/

Once again, word games and lies.
There are too many important progressives and Democrats who had ties to that bank. They couldn't let the chips just fall where they may.
(The bank is in the San Francisco Bay Area and focused on the tech industry, so really not surprising)

But meanwhile they have to make it LOOK like there was no bailout, because they know all those Democrat voters would be very unhappy if they knew what was happening.
Government money for the rich.


There is a thread about this crap already.
#15268501
I heard @XogGyux that JP Morgan Chase was going under....the rumours. They said they are targeting all the deposits from thrifty doctors who work at clinics and hospitals who own Honda Accords. Is it Green? They got your number. Quick withdraw your bucks before the CEO gets a golden parachute severance package and keeps your hard earned money.

You should have gone shopping and spent your money like a drunken sailor....instead of keeping that money in the bank.

;)
#15268503
Tainari88 wrote:I heard @XogGyux that JP Morgan Chase was going under....the rumours. They said they are targeting all the deposits from thrifty doctors who work at clinics and hospitals who own Honda Accords. Is it Green? They got your number. Quick withdraw your bucks before the CEO gets a golden parachute severance package and keeps your hard earned money.

You should have gone shopping and spent your money like a drunken sailor....instead of keeping that money in the bank.

;)


LOL If JPMC fails, we will all have much bigger problems than losing some money.
#15268504
Puffer Fish wrote:The Silicon Valley Bank bailout that 'isn't a bailout' IS A BAILOUT.

The short version is that the bad lending policies that led to the bank failing still made the people running it rich(er), and because of their mishandling, now we have to cover their losses to save the jobs of the employees of the depositors. The claim that covering these losses out of the FDIC will not result in additional taxpayer money being used is not only immaterial (because its already taxpayer money, its just taxpayer money we already set aside for this purpose), its also unlikely to remain true as more banks domino eachother and eventually the losses we have to cover exceed what's available in the FDIC (and now, the BTFP- see below) funds.

FTR- The FDIC already covers all depositors up to $250,000. Any business that lost more than that did so because it was TOO LAZY to just put anything over that into a different account at a different bank so it too would be covered. Also deposits can be privately insured against precisely this happening, clearly these folks didn't.

What's more, the 'not a bailout' claim is based on the notion that the new BTFP program will be "offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities [MBS], and other qualifying assets as collateral. These assets will be valued at par. The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress."

The bank failed (and others are failing) because these assets that we're going to 'value at par' lost most of their value. The assets are still of low value, we're just going to loan based on the original (and now inflated) value. Its like if you bought an $80,000 car, wrecked it and totaled it, and then I give you a loan for $80,000 with your totaled car as collateral. That's stupid. This is just kicking the can down the road. Its not going to work. The govt and the Fed are just hoping you won't notice that their 'not a bailout' scheme will inevitably result in bailouts.

Yes, the Latest Bank Bailout Is Really a Bailout, and You Are Paying for It
https://www.infowars.com/posts/yes-the- ... ng-for-it/

Once again, word games and lies.
There are too many important progressives and Democrats who had ties to that bank. They couldn't let the chips just fall where they may.
(The bank is in the San Francisco Bay Area and focused on the tech industry, so really not surprising)

But meanwhile they have to make it LOOK like there was no bailout, because they know all those Democrat voters would be very unhappy if they knew what was happening.
Government money for the rich.



So Infowars is your source of information.

I suggest you reevaluate you life and how you got here.

Infowars couldn't get the day of week right even by accident.

WHote noise has more information content,.
#15268536
@Puffer Fish,
IMHO, the bailout of SVB is just half a bailout. That is the execs and investors will not be bailedout, but the depositors are being bailedout. We will see how much of the very recent bonuses are clawed back as they should be, also sales of shares of the bank's stock that were sold using inside info should be nulified.

Also IMHO, this situation wass caused by 3 things, 1st, Trump and the Repuds with corp Dem support rolled back regulations on mid-sized banks. 2nd, the Fed raised interest rates when the inflation was being cased almost totally by corp price gouging and supply chain issues from covid (and neo-liberalisms's just in time system), which will not be curbed by interest rate increases until there is a recession. And 3rd, by SVB investing in too many long term US bonds instead of enough short term bonds.
.
#15268545
Steve_American wrote:Also IMHO, this situation wass caused by 3 things, 1st, Trump and the Repuds with corp Dem support rolled back regulations on mid-sized banks.

You're welcome to try to explain why you think a roll back of regulations caused this bank to fail.

Steve_American wrote:2nd, the Fed raised interest rates when the inflation was being cased almost totally by corp price gouging and supply chain issues from covid (and neo-liberalisms's just in time system), which will not be curbed by interest rate increases until there is a recession. And 3rd, by SVB investing in too many long term US bonds instead of enough short term bonds.

You are correct that rising interest rates were probably a factor. That still does not mean the Fed letting rates rise was a bad idea. It could be said that maybe keeping interest down for so long was the bad idea.

You may be correct that holding long-term bonds rather than short term bonds may have contributed to liquidity issues.
But there is a reason that long term bonds pay higher rates of return. The one who makes a commitment gets compensated for the additional risk they take and get paid higher returns. This bank offered depositors higher interest rates than other banks. Higher interest rates mean more risk. It's sort of just an inherent trade-off.
#15268546
XogGyux wrote:LOL If JPMC fails, we will all have much bigger problems than losing some money.

That's always used as an excuse. What it means is government is subsidizing the risk-taking of wealthy investors.
If an investor wants to get higher returns by subjecting their money to more risk, then they should have to suffer the consequences if things fall through. This is common sense, in my opinion.

Same thing with people who build their home in high risk areas subject to frequent natural disasters.
#15268566
ness31 wrote:Maybe we can agree that they were very special depositors?

I’m not attacking how it was handled , I just don’t think it’s a straightforward case of bank mismanagement.


You are attacking how it was handled and not for the first time either.

This was not a bailout and nor is this yet another reason for you to engage in outrage. Make your peace and move on.
#15268572
This is the problem of our society. Too many people that don't know shit about how things works, so they just sort of choose to believe what they want.

This bank collapse and the really really really stupid belief that this is like 2008 is evidence of that.

Then we have a lot of asshats on social media and the like, spreading bullshit because it makes them money (see info wars, see fox news). Then we have ignorance and naive people (see some of the people in this thread) that are eating it up, and believe they know better.
#15268573
Puffer Fish wrote:You're welcome to try to explain why you think a roll back of regulations caused this bank to fail.


You are correct that rising interest rates were probably a factor. That still does not mean the Fed letting rates rise was a bad idea. It could be said that maybe keeping interest down for so long was the bad idea.

You may be correct that holding long-term bonds rather than short term bonds may have contributed to liquidity issues.
But there is a reason that long term bonds pay higher rates of return. The one who makes a commitment gets compensated for the additional risk they take and get paid higher returns. This bank offered depositors higher interest rates than other banks. Higher interest rates mean more risk. It's sort of just an inherent trade-off.

If your YouTube feed has not shown you why the roll back of regs contributed, then you are in an info silo. Mine showed me at least 3 sources. Maybe you need to find some more sources of info.
.
#15268575
I’m really sorry for the faux outrage and the dumbness and the ass hattery embedded in my posts. I hope my fellow PoFoers will find it in their hearts to forgive me.

But it’s a fucking bailout and that’s that.
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