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Are more Bank Failures on the horizon in the Biden Economy????
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(03-15-2023, 08:42 AM)Lucky2Last Wrote: Who cares if the bank itself exists, Marty? Is the CEO going to get away with selling his shares and making a ton of money? Are the investors, who are the elite among us going to recoup all of their money, even though they know the FDIC only insures 250k? When are you guys going to wake up and realize there are two different standards for the elite and the rest of us? You're confusing investors and depositors. Those are not the same thing. Investors are the owners (stockholders) of the bank. Depositors are the customers of the bank. Depositors are insured up to $250,000. Investors are not. Depositors are a wide variety of the public, including business owners who have cash in the bank in excess of the insurance limits. Small businesses often have to have cash beyond the insurance limits in order to meet payroll and pay their suppliers. Those people are innocent victims. The investors, on the other hand, will probably be wiped out. As for the CEO, I don't think he is going to get away with anything. We show less advertisements to registered users. Accounts are free; join today!
My very first banking account was with Barnett Bank, then First Union.. Then I got mad with them and switched to Sun Bank, then Bank of America.. Then years later, I found Vystar.. I'll never go to another bank again. Only Credit Unions from now on.
(03-15-2023, 09:26 AM)The Real Marty Wrote:(03-15-2023, 08:42 AM)Lucky2Last Wrote: Who cares if the bank itself exists, Marty? Is the CEO going to get away with selling his shares and making a ton of money? Are the investors, who are the elite among us going to recoup all of their money, even though they know the FDIC only insures 250k? When are you guys going to wake up and realize there are two different standards for the elite and the rest of us? I just misspoke, but thanks for the lesson, Marty. SVB is not a small bank. It was THE bank to go to for tech companies, which is why this is such a problem. The depositors of that bank are the elite among us. But keep telling yourself it's the little guys, just like us.
(03-15-2023, 11:07 AM)Lucky2Last Wrote:(03-15-2023, 09:26 AM)The Real Marty Wrote: You're confusing investors and depositors. Those are not the same thing. Investors are the owners (stockholders) of the bank. Depositors are the customers of the bank. Depositors are insured up to $250,000. Investors are not. Depositors are a wide variety of the public, including business owners who have cash in the bank in excess of the insurance limits. Small businesses often have to have cash beyond the insurance limits in order to meet payroll and pay their suppliers. Those people are innocent victims. The investors, on the other hand, will probably be wiped out. As for the CEO, I don't think he is going to get away with anything. How do you define "elite" in this instance?
(03-15-2023, 11:07 AM)Lucky2Last Wrote:(03-15-2023, 09:26 AM)The Real Marty Wrote: You're confusing investors and depositors. Those are not the same thing. Investors are the owners (stockholders) of the bank. Depositors are the customers of the bank. Depositors are insured up to $250,000. Investors are not. Depositors are a wide variety of the public, including business owners who have cash in the bank in excess of the insurance limits. Small businesses often have to have cash beyond the insurance limits in order to meet payroll and pay their suppliers. Those people are innocent victims. The investors, on the other hand, will probably be wiped out. As for the CEO, I don't think he is going to get away with anything. If it wasn't the tech sector at risk it's likely that they wouldn't be changing the rules. Gotta pay off your capos when the time comes. “An empty vessel makes the loudest sound, so they that have the least wit are the greatest babblers.”. - Plato
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(03-15-2023, 01:28 PM)homebiscuit Wrote: https://twitter.com/CollinRugg/status/16...20192?s=20 Prosecute to the fullest extent.. (03-15-2023, 01:28 PM)homebiscuit Wrote: https://twitter.com/CollinRugg/status/16...20192?s=20 "What do I know of cultured ways, the gilt, the craft and the lie? I, who was born in a naked land and bred in the open sky. The subtle tongue, the sophist guile, they fail when the broadswords sing; Rush in and die, dogs - I was a man before I was a king."
03-15-2023, 02:53 PM
(This post was last modified: 03-15-2023, 02:56 PM by mikesez. Edited 4 times in total.)
The FDIC and Treasury are saying this was an emergency and they had to fully back the deposits or else innocent businesses would fail to make payroll and insurance payments.
Obviously the FDIC process needs some tweaks. They should have been able to temporarily seize and freeze all the deposits, and release specific amounts of money to the depositors for their regular expenses. Then they could take a few weeks to figure out how to liquidate the bank's assets and cash out the deposits with whatever hair cut the depositors have to get. The banks should all have reliable information on what a given account's burn rate is. But just deciding on a Friday night to shift the FDIC's job from reducing depositor risk to eliminating it, that's really bad. That's not how big decisions should be made, and there will be consequences. Best case scenario is we have a bigger and more corruptable government than before. Worst case is other banks start catching on to the moral hazard of it all and screw up even more of the economy and money supply.
My fellow southpaw Mark Brunell will probably always be my favorite Jaguar.
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(03-15-2023, 02:53 PM)mikesez Wrote: The FDIC and Treasury are saying this was an emergency and they had to fully back the deposits or else innocent businesses would fail to make payroll and insurance payments. I don't understand the problem with bailing out depositors, who are not guilty of anything. Especially businesses who cannot stay below the $250,000 limit and continue to operate.
(03-15-2023, 03:15 PM)The Real Marty Wrote:(03-15-2023, 02:53 PM)mikesez Wrote: The FDIC and Treasury are saying this was an emergency and they had to fully back the deposits or else innocent businesses would fail to make payroll and insurance payments. I thought it was handled well. Management was sacked (and hopefully the CEO is prosecuted) and depositors with over $250K were made whole using fees paid into the FDIC by bankers instead of using taxpayer dollars. It remains to be seen if this sets a precedence for other badly managed banks but I don’t think so. If anything, it should create an improvement. After seeing how SVB investors lost their shirts in this deal, they’ll insist on more oversight to protect their interests.
(03-15-2023, 03:15 PM)The Real Marty Wrote:(03-15-2023, 02:53 PM)mikesez Wrote: The FDIC and Treasury are saying this was an emergency and they had to fully back the deposits or else innocent businesses would fail to make payroll and insurance payments. I agree to an extent, yet also disagree. Everyone knows the limit is $250,000 and they willingly assumed concentration risk. There are a multitude of businesses who have 10-20 bank accounts and spread their money around for this reason, and maybe only keep amounts above insurance limits for a short period of time, i.e. to make payroll, AP, etc. At the end of the day, I think the way it is currently being handled is probably a good thing to prevent a larger economic issue, but those businesses willingly concentrated their risk knowing what the limits technically are. They keep saying it will be no burden to the taxpayer, which is hogwash. Sure, it may not come directly from tax revenue but somehow, someway, costs always get passed onto the people. (03-15-2023, 03:15 PM)The Real Marty Wrote:(03-15-2023, 02:53 PM)mikesez Wrote: The FDIC and Treasury are saying this was an emergency and they had to fully back the deposits or else innocent businesses would fail to make payroll and insurance payments. The problem is the FDIC does not have enough money, on its own, to pay out more than $250k per account if any larger bank fails. The special treatment for this smaller bank is difficult to explain. And if this becomes the standard remedy, to fully reimburse every account, that changes the nature of banking in the US completely.
My fellow southpaw Mark Brunell will probably always be my favorite Jaguar.
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(03-15-2023, 08:42 AM)Lucky2Last Wrote: Who cares if the bank itself exists, Marty? Is the CEO going to get away with selling his shares and making a ton of money? Are the investors, who are the elite among us going to recoup all of their money, even though they know the FDIC only insures 250k? When are you guys going to wake up and realize there are two different standards for the elite and the rest of us?Legally I'm not sure you can prove anything illegal was done. The stock was sold far enough in advance and usually those require decisions to sell before the sell date. The financials were known and other than coming out an openly saying they needed to raise capital, there weren't any stupid moves to purposely crash the bank. Unless they have some fraud, they were just stupid in their decisions. Sent from my SM-T970 using Tapatalk
(03-15-2023, 11:03 PM)mikesez Wrote:(03-15-2023, 03:15 PM)The Real Marty Wrote: I don't understand the problem with bailing out depositors, who are not guilty of anything. Especially businesses who cannot stay below the $250,000 limit and continue to operate. I think it's perfectly explainable as a move to stop any potential panic about bank failures, and to save thousands of jobs in the businesses who stand to lose all of their operating cash. We show less advertisements to registered users. Accounts are free; join today! (03-16-2023, 10:52 AM)The Real Marty Wrote:(03-15-2023, 11:03 PM)mikesez Wrote: The problem is the FDIC does not have enough money, on its own, to pay out more than $250k per account if any larger bank fails. The special treatment for this smaller bank is difficult to explain. And if this becomes the standard remedy, to fully reimburse every account, that changes the nature of banking in the US completely. So why not do the same thing if a larger bank is teetering next week?
My fellow southpaw Mark Brunell will probably always be my favorite Jaguar.
(03-16-2023, 12:06 PM)mikesez Wrote:(03-16-2023, 10:52 AM)The Real Marty Wrote: I think it's perfectly explainable as a move to stop any potential panic about bank failures, and to save thousands of jobs in the businesses who stand to lose all of their operating cash. Great question. I don't know. Principles are a great thing ("We set the insurance limits, you knew what they were, and we're not going to bail you out") until standing on those principles causes a great deal of damage to completely innocent people. One would hope that every bank out there is doing risk analysis and taking steps to prevent what happened to SVB. (03-15-2023, 03:15 PM)The Real Marty Wrote:(03-15-2023, 02:53 PM)mikesez Wrote: The FDIC and Treasury are saying this was an emergency and they had to fully back the deposits or else innocent businesses would fail to make payroll and insurance payments. Because we have to keep up the illusion that the green pieces of paper in our pocket mean something. 250 k isn't just an arbitrary figure, it also represents the actuarial allotment fdic has for a given account. They can't just artificially raise that to infinity on a whim. (03-15-2023, 03:31 PM)homebiscuit Wrote:(03-15-2023, 03:15 PM)The Real Marty Wrote: I don't understand the problem with bailing out depositors, who are not guilty of anything. Especially businesses who cannot stay below the $250,000 limit and continue to operate. The banking industry is the most regulated industry in our economy. The fed and the fed government are pushing this esg stakeholder theory woke garbage. |
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