I can guarantee that the SVB collapse scared the hell out of the regulators. How do I know? Yellen based on just the rush over the weekend got spooked. Friday thru early Saturday the mantra coming out of the FDIC/Treas. had all the ear marks of going the Bail-in route. Mutterings of “dividends”, “losses for many”, “weeks to unwind” were in the air. Then by very late Saturday the tune changed. Blaring talk of “all depositors made whole”, “FDIC taps emergency fund”, “selling assets” were being issued. All the earmarks of going from Bail-in to Bail-out.
Nor is any of thie 'fixed'. Closing the doors for a bank holiday "don't wurk no mo". Not when CFOs can issue electronic funds transfers at the tap of a keyboard. SVB lost $42Bn in liquidity in ~48hrs. Expect to hear our favorite Indian, Warren, screaming about the govt needs more control of the banking sector.
On Thursday, rich, well connected SVB Bank Account Holders got the word to pull their money out of SVB. Those big account holders pulled $42 BILLION out of the bank in one single day. That was $42,000 Million.
The bank run was not Joe Lunchbucket closing his savings account, it was rich, well connected people emptying their multi-million and even multi-billion dollar accounts.
SVB was a COMPLETE Kabuki dance. the PTB KNEW (and anyone who started to do their own Due Diligence KNEW) that all of the remaining depositors were going to be made whole by the time the assets got unwound (or maybe even before). SVB wasn't gonna cost ANYONE ONE RED CENT.
Now some OTHER involved entities WERE going to get stung, and 2nd or 3rd order effects were likely to leave a mark.
Given the awkward issues with the WhiteList of banks that were OK'd to purchase SVB (WHO stands there and says, "HALP!!! [Errr, only YOU and YOU can help. Otherwise yer money ain't good enough]"
The only difference in last weekend's Kabuki Dance and one of Dita Von Teese's better Fan Dances is that Dita's dances are more honest.
Found your comment over at Cold Fury. I expect, fear, hope you're right. May the Lord and gods of war and peace be with us. Nobody else is coming to save us.
I'm so tired of bailing out the rich. Let Silicon valley take this one on the chin and maybe they'll be a little smarter next time.
ReplyDelete~Rhea
I may have become cynical in my old age, but I reckon the chances of that actually happening are very, very small.
DeleteSadly that is how a majority of Americans and almost ALL politicians think. They
ReplyDeletedon't have a meaningful grasp on numbers, finances or debt.
I can guarantee that the SVB collapse scared the hell out of the regulators. How do I know? Yellen based on just the rush over the weekend got spooked. Friday thru early Saturday the mantra coming out of the FDIC/Treas. had all the ear marks of going the Bail-in route. Mutterings of “dividends”, “losses for many”, “weeks to unwind” were in the air. Then by very late Saturday the tune changed. Blaring talk of “all depositors made whole”, “FDIC taps emergency fund”, “selling assets” were being issued. All the earmarks of going from Bail-in to Bail-out.
ReplyDeleteNor is any of thie 'fixed'. Closing the doors for a bank holiday "don't wurk no mo". Not when CFOs can issue electronic funds transfers at the tap of a keyboard. SVB lost $42Bn in liquidity in ~48hrs. Expect to hear our favorite Indian, Warren, screaming about the govt needs more control of the banking sector.
@Rhea,
ReplyDeleteSmarter, maybe. I would have preferred humbled myself.
On Thursday, rich, well connected SVB Bank Account Holders got the word to pull their money out of SVB. Those big account holders pulled $42 BILLION out of the bank in one single day. That was $42,000 Million.
ReplyDeleteThe bank run was not Joe Lunchbucket closing his savings account, it was rich, well connected people emptying their multi-million and even multi-billion dollar accounts.
They got caught with the cookie jar empty.Tough shit.Howzabout they take responsibility for their actions. No frigging bailouts.
ReplyDeleteBanking losses are now nationalized. Profits will go to the bankers.
ReplyDeleteNo change. More to come.
SVB was a COMPLETE Kabuki dance. the PTB KNEW (and anyone who started to do their own Due Diligence KNEW) that all of the remaining depositors were going to be made whole by the time the assets got unwound (or maybe even before). SVB wasn't gonna cost ANYONE ONE RED CENT.
ReplyDeleteNow some OTHER involved entities WERE going to get stung, and 2nd or 3rd order effects were likely to leave a mark.
Given the awkward issues with the WhiteList of banks that were OK'd to purchase SVB (WHO stands there and says, "HALP!!! [Errr, only YOU and YOU can help. Otherwise yer money ain't good enough]"
The only difference in last weekend's Kabuki Dance and one of Dita Von Teese's better Fan Dances is that Dita's dances are more honest.
Night Driver
Well. it's Friday, Mar 17, and you haven't posted anything lately.
ReplyDeleteI assume you are busy. So, here's an easy weekend song for you, that you can appreciate.
https://www.youtube.com/watch?v=Q7DniRWRA7s
Found your comment over at Cold Fury. I expect, fear, hope you're right. May the Lord and gods of war and peace be with us. Nobody else is coming to save us.
ReplyDelete@Termite,
ReplyDeleteOther than the incessant ongoing march of the destruction of all Western Civilization and everything we hold dear, it's been a slow year.
But I was actually lifting a comment I made at Wilder's, and turning it into a post (like I should have done when I wrote it).
But thanks for the musical interlude. It was the breast thing I saw all day.