Nearly half the money — $143 billion — went to holding companies for the two major banks that failed over the past week, Silicon Valley Bank and Signature Bank, triggering widespread alarm in financial markets.
@mkultrawide is correct though. The point they're trying to make is that the FDIC thing isn't a bailout, which is probably why they led with it so that people will jump the gun and call it a bailout when it isn't since billions in bank equity and debt are getting wiped out. The securities swap is a bailout however (its basically backdoor quantitative easing), which came later, and is more technical and less talked about. It undercuts your position to not understand these technical nuances because it makes you look misinformed when you make statements that are factually wrong, even if they might be sound rhetorically. This is how technocrats argue and you're falling into their trap by not understanding these specifics.
I'm not trying to shout at or own anyone here. I'm going to go back and amend some of my posts. I'm mad about all of this. I just want y'all to understand the nuances here because our finance system is complicated as fuck and it doesn't help us if we dont understand it and understand how to communicate what is going on effectively.
I mean I think it's fair to cover the nuances, but saying it's not a bailout when it effectively does the same thing and has the same effects on the rest of us just seems like a bit of pedantry.
So saying "it's not technically a bailout but here why that doesn't really matter" probably would've gotten a less harsh response than glibly posting the same shit that they were in neolib circles
It doesn't do the same thing. If it did the same thing as a bailout, you would be able to go out and buy SVB stock right now. You can't, because the bank is gone and the equity is worthless. SVB Bridge Bank, which published that fucking ridiculous "we are now the safest place to put your money" bullshit is not the same bank. It's an FDIC-adminstered bank that will operate until they can find a buyer or wind down operations.
Whether or not insuring the full value of deposits constitutes a bailout is a different question that I don't have a good answer for, but SVB's depositors are not the same thing as their shareholders, although I am sure there are more than a few idiots who were both.
Please explain how you believe that the effects on the economy of letting SVB fail and go inter receivership are the same as bailing it out and letting it continue as a going concern.
Silicon Valley Bank Bridge Bank is not Silicon Valley Bank. All of the executives were fired, the board was fired, and all of the shareholders (the owners) lost all of their money and don't get shares of the FDIC bridge bank in return. That is not a bailout. Doing the BTFP two weeks ago and letting them dump their shitty treasury portfolio on the Fed in return for liquity would have been a bailout.
Depositors are not shareholders. Unless you are banking with a credit union, you aren't a shareholder in whatever bank you keep your money in. If your bank fails and your money is all gone, does the FDIC kicking mean that you received a bailout?
I don't have an concrete answer as to what the lifting of the cap on deposit insurance should be called. I have already said that I lean towards thinking that the FDIC shouldn't have raised the cap and there should have been some level of payroll protection instead. But that's not SVB getting bailed out, that's SVB's depositors.
Yes, I have seen that, and I agree that it's bullshit. My kindest reading of that is that the message is geared towards existing SVB depositors to have them keep their money in the bank so that there aren't additional liquidity/solvency issues and so that it's more attractive to potential buyers, given that it starts out with "Dear Clients". However, the the FDIC is insuring apparently fully insuring new deposits according to the website, which absolutely fucking bullshit.
I don't think you're wrong or anything, my only real critique concerns the original post which promoted the downplaying of the situation the FDIC was putting out, and now we see just a few days later the corruption is still very much there.
Whether or not this was a bailout doesn't really matter to me. I don't really care who is in control of that bank or whether or not people can buy shares of it.
It continuing immediately with garbage like this means to me that the structure of the SVB has been kept alive and the cost of that life support is going to fall on the rest of us.
You gotta meet people where they're at and that requires understanding their definition and working around it to make your point clear, otherwise you're just talking past each other. I'm not saying you have to concede their definition explicitly, its probably best to ignore what doesn't make your point crystal clear, and by lumping the FDIC and securities swap together you're just making your whole argument easier to attack.
there's a meme about how liberals and fascists don't need to understand anything, they can just say "duh, the thing is bad/good because it's a bad/good thing" and communists have to be experts in history, philosophy, geopolitics, war, law, science and economics.
it sucks but its true.
if youre gonna be able to provide a counterpoint to "itll all be fine, we'll save the hardworking job creators at the wework but for funcopops factory by using the totally normal dif, backstopped by the fed with a little securities swap in the middle" you actually have to understand and engage with those ideas.
It’s literally turn on the news, see what they’re saying, read the faq about swaps on your banks website and say “this is a back end bailout”.
Which there is no response to because it’s 100% accurate.
When someone says “the nazis were socialist” you don’t have to throw up your hands and storm away, you can quote hitler in his own words and then cite the things that happened directly afterward (he said we’re not socialists, in fact we’re gonna kill them and then persecuted the socialists).
@mkultrawide is correct though. The point they're trying to make is that the FDIC thing isn't a bailout, which is probably why they led with it so that people will jump the gun and call it a bailout when it isn't since billions in bank equity and debt are getting wiped out. The securities swap is a bailout however (its basically backdoor quantitative easing), which came later, and is more technical and less talked about. It undercuts your position to not understand these technical nuances because it makes you look misinformed when you make statements that are factually wrong, even if they might be sound rhetorically. This is how technocrats argue and you're falling into their trap by not understanding these specifics.
I'm not trying to shout at or own anyone here. I'm going to go back and amend some of my posts. I'm mad about all of this. I just want y'all to understand the nuances here because our finance system is complicated as fuck and it doesn't help us if we dont understand it and understand how to communicate what is going on effectively.
I mean I think it's fair to cover the nuances, but saying it's not a bailout when it effectively does the same thing and has the same effects on the rest of us just seems like a bit of pedantry.
So saying "it's not technically a bailout but here why that doesn't really matter" probably would've gotten a less harsh response than glibly posting the same shit that they were in neolib circles
It doesn't do the same thing. If it did the same thing as a bailout, you would be able to go out and buy SVB stock right now. You can't, because the bank is gone and the equity is worthless. SVB Bridge Bank, which published that fucking ridiculous "we are now the safest place to put your money" bullshit is not the same bank. It's an FDIC-adminstered bank that will operate until they can find a buyer or wind down operations.
Whether or not insuring the full value of deposits constitutes a bailout is a different question that I don't have a good answer for, but SVB's depositors are not the same thing as their shareholders, although I am sure there are more than a few idiots who were both.
Effectively doing the same thing in the sense of its effects on the economy and the rest of us.
Whether or not I can buy stocks of SVB wasn't exactly the main concern being brought up
Please explain how you believe that the effects on the economy of letting SVB fail and go inter receivership are the same as bailing it out and letting it continue as a going concern.
The vast majority of everyone involved is getting bailed out and the bank continues to operate just under new management
Silicon Valley Bank Bridge Bank is not Silicon Valley Bank. All of the executives were fired, the board was fired, and all of the shareholders (the owners) lost all of their money and don't get shares of the FDIC bridge bank in return. That is not a bailout. Doing the BTFP two weeks ago and letting them dump their shitty treasury portfolio on the Fed in return for liquity would have been a bailout.
Depositors are not shareholders. Unless you are banking with a credit union, you aren't a shareholder in whatever bank you keep your money in. If your bank fails and your money is all gone, does the FDIC kicking mean that you received a bailout?
I don't have an concrete answer as to what the lifting of the cap on deposit insurance should be called. I have already said that I lean towards thinking that the FDIC shouldn't have raised the cap and there should have been some level of payroll protection instead. But that's not SVB getting bailed out, that's SVB's depositors.
Here's how the new team is advertising
https://twitter.com/charliebilello/status/1635982686111121408?s=20
Just fully taking advantage of the limitless insurance now.
Yes, I have seen that, and I agree that it's bullshit. My kindest reading of that is that the message is geared towards existing SVB depositors to have them keep their money in the bank so that there aren't additional liquidity/solvency issues and so that it's more attractive to potential buyers, given that it starts out with "Dear Clients". However, the the FDIC is insuring apparently fully insuring new deposits according to the website, which absolutely fucking bullshit.
I don't think you're wrong or anything, my only real critique concerns the original post which promoted the downplaying of the situation the FDIC was putting out, and now we see just a few days later the corruption is still very much there.
Whether or not this was a bailout doesn't really matter to me. I don't really care who is in control of that bank or whether or not people can buy shares of it.
It continuing immediately with garbage like this means to me that the structure of the SVB has been kept alive and the cost of that life support is going to fall on the rest of us.
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Norway is a socialist country because of social safety nets. Fuck the nuances.
Here's my "fed posting", since you are so interested.
Yes understanding and regurgitating fed double speak will for sure give us a upper hand in over throwing the system.
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You gotta meet people where they're at and that requires understanding their definition and working around it to make your point clear, otherwise you're just talking past each other. I'm not saying you have to concede their definition explicitly, its probably best to ignore what doesn't make your point crystal clear, and by lumping the FDIC and securities swap together you're just making your whole argument easier to attack.
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there's a meme about how liberals and fascists don't need to understand anything, they can just say "duh, the thing is bad/good because it's a bad/good thing" and communists have to be experts in history, philosophy, geopolitics, war, law, science and economics.
it sucks but its true.
if youre gonna be able to provide a counterpoint to "itll all be fine, we'll save the hardworking job creators at the wework but for funcopops factory by using the totally normal dif, backstopped by the fed with a little securities swap in the middle" you actually have to understand and engage with those ideas.
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It’s not a semantics or knowledge test though.
It’s literally turn on the news, see what they’re saying, read the faq about swaps on your banks website and say “this is a back end bailout”.
Which there is no response to because it’s 100% accurate.
When someone says “the nazis were socialist” you don’t have to throw up your hands and storm away, you can quote hitler in his own words and then cite the things that happened directly afterward (he said we’re not socialists, in fact we’re gonna kill them and then persecuted the socialists).
They seem very similar worldviews? Wouldn't the capitalist losses refer to shareholders?
Though the depositors are also capitalists, their risky behavior was keeping money in a bank
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the depositors in a commercial bank are capital-holders.