I'm thankful for this. It keeps me as a parent from having to bother with my little shithead. I just give him the tablet and he plays Roblox while I post FBI crime stats and pictures of Rhodesia to facebook.
Reminder that roblox is built off the back of child labor (which the article calls "the work of some children"), paying them peanuts in company scrip and turning a blind eye towards the (economic, verbal, sexual) abuse which riddles their platform.
Will edit w/ links later
Gaze upon the Hell that is Roblox (vid from People Make Games, a labor focused channel on who makes/develops games. They also have a fantastic follow up video as well).
This money isn't coming out of the money printer, they're taking money from other FDIC insured banks to cover it.
The “schmoozing and vibes bank”
Why even bother having a credit rating system?
From the federal reserve statement linked in the article
The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. As the FDIC sells the assets of Silicon Valley Bank, future dividend payments may be made to uninsured depositors.
As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.
Besides the 250k that is FDIC insured, the money thats coming is from the sale of SVB assets and not the govt it seems
When Naked Capitalism says there's a back-door bailout going on, I'm inclined to believe it. I'm just not clear how they're being bailed out.
Are SVB's remaining assets getting sold to a public stakeholder at above asking price in order to kick back money to the depositors? Are there public liabilities that the US or California or some other public treasury is waving in order to afford depositors more liquidity to extract from the dying bank? Is there some FDIC shuffling, wherein we cover enough accounts with insurance money that the balance makes all the outstanding depositors whole? Did Biden mint a $200B platinum coin and deposit it at SVB?
Idk. None of that is being made clear, atm.
It's a fine being levied on all fdic banks to make up for the funds. From what others have said the fdic does not have enough money to cover all of the svb deposits.
There's no way this fine is not just passed on to consumers.
Also till Sunday they only insured 250k. So the fdic wasn't lacking funds. The government just decided that it now insures all deposits.
Ah. I mean, I'll spot you that the FDIC not keeping reserves is a shit way to run an insurance system in a market where chain-reaction failures have a storied history and Congress is notoriously slow to respond to shortfalls in cash.
That said, the only real way this is a "bailout" in the traditional sense is that (I presume) SVB isn't also eating the fines levied on the rest of the financial system (because they're bankrupt). This is effectively a debt SVB owes to the FDIC by way of deferred payments that other banks are picking up.
There’s no way this fine is not just passed on to consumers.
Meh. That's not a problem with FDIC premium collections. Its a problem with capitalism writ-large. Even then, it presumes other banks weren't extracting every possible penny from their client bases already. If you're hanging on the Efficient Market Hypothesis by claiming every expense is inherently a consumer expense, you're already conceding that the optimal price for all consumer goods has been reached. In that case, raising prices further can only negatively impact profits (which would functionally mean investors take a bigger lose than consumers pay in price increases).
If you're assuming optimal pricing hasn't been reached and banks only just now realized they need to better-optimizing their pricing because of a new wave of expenses, then... idk, man. What are you really claiming, here? The FDIC fines are making bankers less lazy and stupid? Seems like a stretch.
You're also kinda ignoring who has the preponderance of wealth tied up in the banking system. At the absolute worst, this is effectively just passing the cost of the bailout to Other People With Big Bank Balances (ie, rich people). I just can't lose sleep over that shit.
The cost of the new funds will not be paid out by other rich banks. It will be paid out by fines levied on it's customers.
The whole thing is a joke. Student loans you gotta pay those off guys you decided to take them out
Oh no my long term bonds are now underwater. Please mister government help me out.
Just the lack of out rage is pretty pathetic.
It will be paid out by fines levied on it’s customers.
If it was possible to extract more money from customers without impacting the bottom line, banks would have done it already.
Oh no my long term bonds are now underwater. Please mister government help me out.
The root of the problem was that SVB (and the hundreds of other FDIC insured banks) weren't paying large enough premiums to carry the load if any one of them failed. Not that they're currently forced to make catch-up payments. Individual clients aren't catching any specific fine or fee that I've seen. Or, if they are at risk of it, maybe they should pick up and move to a Credit Union instead, since they're more likely to be insured by the NCUA.
Just the lack of out rage is pretty pathetic.
There's no straight line from My Student Loans to Your SVB Deposits, sadly. You can't do the "Wonderful Life" bit where you point and say "Your debt's in Tim's House and Jerry's House!" in order to rally the community into collective action, because it isn't inherently clear who owns what. Rage is easily stoked but very ineffectively galvanized at any specific point.
If SVB hadn't failed, my debts wouldn't be any smaller. We all know it. If anything, debtors would be better off with more bank failures, as a systemic bank collapse would heavily disrupt the collections process.
The root of the problem was that SVB (and the hundreds of other FDIC insured banks) weren’t paying large enough premiums to carry the load if any one of them failed.
The value of the Deposit Insurance Fund, which will be used to cover the gap between SVBs assets and liabilities, is currently ~$100B according to the FDIC. The gap between SVB's assets and deposit liabilities is larger than the DIF is designed to cover, but there is enough to money in the fund to gover the gap.
the fdic does not have enough money to cover all of the svb deposits.
Is the FDIC not part of "stress testing"? If not, that's a might big oversight.
FDIC created what is called a bridge bank, which assumed all of SVB' assets and at least it's deposit liabilities (I'm not sure if it's credit liabilities were assumed, but I would think not). They have two years to wind down operations by either finding a buyer for selling off the business in pieces. If they cannot find a buyer, they will break the business into pieces and auction it off, either in terms of business units or it's underlying assets. All of those funds will go to depositors. Whatever liabilities remain will be covered by the Deposit Insurance Fund. That is an insurance fund run by the FDIC that all banks pay quarterly fees into to cover deposits in events like this. Interest of government bonds is also an additional source of funding. Coincidentally, the DIF is the same fund that SVB lobbied to not have to pay as much into.
Now, whether or not that means taxpayers are going to pay for it depends on your definition of a couple different things. First would be what you consider a bailout. Generally in the past, that term has mean that the government comes in to keep the company afloat, meaning the equity/shareholders retains value. That was not the case here. It also depends on if you want to say that customers are going to end up paying for the increased fees anyways because the banks will pass along those to customers. And, frankly, corporations pass along whatever expenses they think the market will bear, including taxes and fees. How much that's going to actually amount to on a per dollar basis for customers, I can't really say at the moment.
There could be more going on, but its not in the article and I doubt a games journalist has insight into this so to me the headline seems misleading
I want to think that articles like this are an example of a wider trend of anti-capitalist sentiment spreading even in "mainstream" culture. But hey, critique of capital can ultimately be co-opted bla bla bla
The Federal Reserve is actually a private sector company believe or not lmao
I wonder why so many real companies invested so much money in a bank that sounds like a scam just by name. did their checkings account have higher interest than Chase? smdh.
They were giving literal personal kickbacks to business owners in the form of hyper low interest personal mortgages in exchange for keeping uninsured business funds in their bank. Not even kidding
IIRC one of the big functions of these tech banks was letting cryptobros exchange their holdings outside of Blockchain records. Which defeats the purpose of the Blockchain altogether.
