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Posted (edited)

So here’s how SVB was explained to me by my financial adviser this morning: The bank experienced a significant and sudden request for withdrawals; but because they’d invested a large percentage of the banks assets in long term bonds, they were forced to cash out those bonds ahead of their maturity term, at a significant loss. The bank was way too heavily invested in this single asset type and regulators failed to either caution or actually stop them from investing with such limited diversity. 

Edited by SoCal Deek
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Posted (edited)
1 hour ago, Buffarukus said:

 

dont tell me what im playing! maybe im playing texas holdem!!! 4d holdem!! 

 

bam boom royal flush on the reply! 😅

Yeah, I actually don't play chess or at best I suck.  Know where the pieces can go.  Canasta and scrabble I'm pretty good.

Edited by redtail hawk
Posted (edited)
On 3/16/2023 at 10:37 PM, Buffarukus said:

 

i was unaware i was playing chess. so just the fdic people are paying the price like me? good to know. eventually usually means immediate hikes....see inflation of entire country

 

boom rook takes queen check in 3 replys. your up

 

🤷‍♂️

Actually rates dove in response to this so you saved money in response to this. 

 

It appears you have no understanding of the FDIC, which i don't fault you for but the way you reject information on it is weird. 

 

The FDIC receives no tax dollars. They receive no appropriations from government. They are funded by assessments to member institutions.

 

If you hold an account at a Member FDIC bank, you will receive the benefit of an insurance policy for your funds in the amount of $250k per depositor, per bank, per ownership category. With proper structure you can insure well over a million dollars. 

 

Additionally, the FDIC will regulate your bank and also enforce consumer protections, if they are the prudentialregulator depending on charter. If your have a complaint about your bank you can file that with the FDIC and they will investigate in your behalf if it is a regulatory issue. 

 

This is entirely funded as a non- interest expense to the bank. 

 

Now, as a customer of a bank yes the bank makes money, but the vast majority of this profit is through net interest margin, lending your deposits and making money off loans. 

 

It is very easy to maintain a banking relationship for a deposit account with no fees, in fact it's really the industry standard, as long as you don't do things like overdraft your account. The bank wants your deposits, they pay you interest then lend it out for more and the spread is profit. 

 

So when you say you are paying the FDIC i have no idea what you are referring to. What fees are you paying? Are you spending money you don't have and over drafting all the time? 

Edited by ArtVandalay
Posted (edited)
4 hours ago, ArtVandalay said:

Actually rates dove in response to this so you saved money in reasons to this. 

 

It appears you have no understanding of the FDIC, which i don't fault you for but the way you reject information on it is weird. 

 

The FDIC receives no tax dollars. They receive no appropriations from government. They are funded by assessments to member institutions.

 

If you hold an account at a Member FDIC bank, you will receive the benefit of an insurance policy for your funds in the amount of $250k per depositor, per bank, per ownership category. With proper structure you can insure well over a million dollars. 

 

Additionally, the FDIC will regulate your bank and also enforce consumer protections, if they are the prudentialregulator depending on charter. If your have a complaint about your bank you can file that with the FDIC and they will investigate in your behalf if it is a regulatory issue. 

 

This is entirely funded as a non- interest expense to the bank. 

 

Now, as a customer of a bank yes the bank makes money, but the vast majority of this profit is through net interest margin, lending your deposits and making money off loans. 

 

It is very easy to maintain a banking relationship for a deposit account with no fees, in fact it's really the industry standard, as long as you don't do things like overdraft your account. The bank wants your deposits, they pay you interest then lend it out for more and the spread is your profit. 

 

So when you say you are paying the FDIC i have no idea what you are referring to. What fees are you paying? Are you spending money you don't have and over drafting all the time? 

 

while i appreciate you going into depth about the subject i was simply stating that saying "no cost to tax payer" "pay their fair share" ect ect. its all just a backdoor way of burdening regular folks. thats all. i may not overdraft all the time. it may just raise loans and mortgages .1%. it may get so spread out you dont even realize it. but it does come out of OUR pockets collectively. when you talk about possible billions/trillions banks will get creative as most companies for profit will.

 

if you look at this the way you are then who cares about any gov or corporate greed if it doesnt dramatically cost you personally. i dont overdraft but the person on a fixed income that repeatedly does may care that fee has gone up ect ect ect. it adds up in the end.

 

so i was basically pointing out verbage and joking with the boom pow bang checkmate comment. 😁

 

you seem knowledgeable and want to reasonably debate on topics so hopefully we can get into other topics we truly disagree on so we can test those chess skills. 👍🏻

Edited by Buffarukus
Posted

Why woke ‘Frisco Fed chief missed Silicon Valley Bank’s warning signs

 

 

Wokeness has replaced competence and merit across the banking sector, and San Francisco Fed Chief Mary Daly is the poster child of this pernicious trend

 

A protege of Treasury Secretary Janet Yellen and short-list candidate for Federal Reserve vice chair, Daly was supposed to be supervising Silicon Valley Bank but apparently was too busy playing politics and pushing woke agendas to regulate rogue banks like SVB, the second-biggest bank failure on record.

 

Daly had other priorities, including climate change, George Floyd and Black Lives Matter, inequities between blacks and whites, LGBTQ+ rights and a host of other woke social-justice issues that had nothing to do with banking and finance.

 

Daly’s Fed bio gushes she’s committed to “understanding the economic and financial risks of climate change and inequities.” Never mind the more existential threat of banks in her jurisdiction amassing mortgage bonds with longer maturities that exposed investors to greater interest-rate risk.

 

In 2021, she said, “I am not thinking that we have unwanted inflation around the corner. I don’t think that’s a risk.”

 

https://nypost.com/2023/03/17/why-woke-frisco-fed-chief-missed-silicon-valley-banks-warning-signs/?utm_campaign=iphone_nyp&utm_source=pasteboard_app
 

 

 

The best and brightest. 
 

This country is done.  

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Posted (edited)
On 3/17/2023 at 5:34 PM, SoCal Deek said:

So here’s how SVB was explained to me by my financial adviser this morning: The bank experienced a significant and sudden request for withdrawals; but because they’d invested a large percentage of the banks assets in long term bonds, they were forced to cash out those bonds ahead of their maturity term, at a significant loss. The bank was way too heavily invested in this single asset type and regulators failed to either caution or actually stop them from investing with such limited diversity. 


and that asset happened to be us treasuries. 

But now the plot thickens…

 

apparently the acting CRO was an ‘equity hire’ and incompetent or at the very least distracted celebrating “authenticity”..

 

and a bunch of AGs sent letter to Powell suggesting the local regulators were focusing on DEI and ESG over balance sheets, risk management and fiscal responsibility. 
 

Oh God Omg GIF by HULU

Edited by Over 29 years of fanhood
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Posted (edited)
On 3/17/2023 at 5:34 PM, SoCal Deek said:

So here’s how SVB was explained to me by my financial adviser this morning: The bank experienced a significant and sudden request for withdrawals; but because they’d invested a large percentage of the banks assets in long term bonds, they were forced to cash out those bonds ahead of their maturity term, at a significant loss. The bank was way too heavily invested in this single asset type and regulators failed to either caution or actually stop them from investing with such limited diversity. 

I heard Treasury Secretary Yellen speak during some Congressional testimony on backstopping banks depending on whether or not they posed any systemic risk.  The long and short of it all was that if in the opinion of Treasury that risk existed they'd move to support the bank, depositors, creditors in some way in order to contain any fallout.  What no representative asked was a question of mine that if in the opinion of Treasury any bank posed systemic risk then why are they allowed to exist in any form that posed such risks?  Along with what is wrong with the "system" where these events keep happening?     

Edited by All_Pro_Bills
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Posted
1 minute ago, All_Pro_Bills said:

I heard Treasury Secretary Yellen speak during some Congressional testimony on backstopping banks depending on whether or not they posed any systemic risk.  The long and short of it all was that if in the opinion of Treasury that risk existed they'd move to support the bank, depositors, creditors in some way in order to contain any fallout.  What no representative asked was a question of mine that if in the opinion of Treasury any bank posed systemic risk then why are they allowed to exist in any form that posed such risks?  Along with what is wrong with the "system" where these events keep happening?     

I think those are very good questions and you could probably find agreement across many Dems and Reps on it. 
 

Unfortunately, the solutions would likely require an act of Congress. So until that happens, Treasury and the Fed will have to keep putting out fires. 

Posted
19 minutes ago, Over 29 years of fanhood said:

and a bunch of AGs sent letter to Powell suggesting the local regulators were focusing on DEI and ESG over balance sheets, risk management and fiscal responsibility.

from banks to fortune 500 companies. 

 

How does one tell investors that the numbers are down and dividends are going down, while cutting expenses and labor.. All the while just spending bank on DEI, ESG and expensive energy cause its "green"

 

IE, focusing on the DEI, ESG social spending (PR) vs balance sheets, risk management and fiscal responsibility. 

 

 

 

9 minutes ago, ChiGoose said:

I think those are very good questions and you could probably find agreement across many Dems and Reps on it. 
 

Unfortunately, the solutions would likely require an act of Congress. So until that happens, Treasury and the Fed will have to keep putting out fires. 

And congress is never going to actually fix the problem by instituting some Glass Steagall type separation of investment from traditional banking.

 

If they did anything, it would be like the last few fixes that made the problem worse.  creating more bubbles

 

 

 

 

 

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Posted
23 minutes ago, All_Pro_Bills said:

I heard Treasury Secretary Yellen speak during some Congressional testimony on backstopping banks depending on whether or not they posed any systemic risk.  The long and short of it all was that if in the opinion of Treasury that risk existed they'd move to support the bank, depositors, creditors in some way in order to contain any fallout.  What no representative asked was a question of mine that if in the opinion of Treasury any bank posed systemic risk then why are they allowed to exist in any form that posed such risks?  Along with what is wrong with the "system" where these events keep happening?     


the cynical version is they pick the winners and losers. It’s the too big to fail argument but with subjectivity. 
 

 it’s still really hard to understand why they let Lehman Bros die while bailing out the others. 

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Posted
5 hours ago, All_Pro_Bills said:

I heard Treasury Secretary Yellen speak during some Congressional testimony on backstopping banks depending on whether or not they posed any systemic risk.  The long and short of it all was that if in the opinion of Treasury that risk existed they'd move to support the bank, depositors, creditors in some way in order to contain any fallout.  What no representative asked was a question of mine that if in the opinion of Treasury any bank posed systemic risk then why are they allowed to exist in any form that posed such risks?  Along with what is wrong with the "system" where these events keep happening?     

This is a good point. Perhaps we shouldn't allow banks to get so large as to pose a systemic risk to our economy?

This discussion should be happening. It isn't. Instead we're talking about the government intervening to protect depositors (and, in turn, the banks themselves) that weren't previously considered large enough to pose a systemic risk. 

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Posted

What stopped inflation in the 80s?
In order to combat rising inflation, recently appointed chairman of the Federal Reserve, Paul Volcker, elected to increase the federal funds rate. Following the October 6, 1979 meeting of the Federal Open Market Committee, the federal funds rate increased gradually from 11.5% to an eventual peak of 17.6% in April 1980.

 

By the summer of 1980, inflation was near 14.5 percent, and unemployment was over 7.5 percent

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Posted
7 minutes ago, ALF said:

What stopped inflation in the 80s?
In order to combat rising inflation, recently appointed chairman of the Federal Reserve, Paul Volcker, elected to increase the federal funds rate. Following the October 6, 1979 meeting of the Federal Open Market Committee, the federal funds rate increased gradually from 11.5% to an eventual peak of 17.6% in April 1980.

 

By the summer of 1980, inflation was near 14.5 percent, and unemployment was over 7.5 percent

So you’re saying THESE days are actually the good old days! Sweet.

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Posted
3 hours ago, redtail hawk said:

Feds like eff the fixed income, poor and working class. Inflation be damned. we have the investor class to worry about. 

 

 

2 hours ago, ALF said:

What stopped inflation in the 80s?
In order to combat rising inflation, recently appointed chairman of the Federal Reserve, Paul Volcker, elected to increase the federal funds rate. Following the October 6, 1979 meeting of the Federal Open Market Committee, the federal funds rate increased gradually from 11.5% to an eventual peak of 17.6% in April 1980.

 

By the summer of 1980, inflation was near 14.5 percent, and unemployment was over 7.5 percent

Fixing the Carter Economic disaster.

 

 

 

 

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