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.
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.
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.
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.
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.
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.
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.
Removed by mod
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.