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 was one of the ones saying this wasn't a bailout. I still kinda think it's not a bailout, at least the first part, the FDIC stuff. Maybe it's just semantics, maybe I'm not clear on the definition of a bailout, but my understanding is that a bailout is when you help out the bank owners, and this was helping out the people with money in the bank (who are likely a bunch of bourg scum who don't deserve "their" money back but that's an entirely different matter). Is that whack?
This is of course all within the capitalist framework, but is putting money in a bank account really ever considered a risk or an investment? That makes sense for investment accounts and stuff but as far as I'm aware these were just normal bank accounts
The people using SVB were often people who could not get loans from bigger, more mature banks. Think of all the completely useless apps and projects venture capital likes to fund. SVB also required loans to be deposited into SVB accounts. I'm no business or finance knower but there is no way I would go through with getting a shady loan that I have to keep at the shady bank so they can puff up their numbers.
I was one of the ones saying this wasn't a bailout. I still kinda think it's not a bailout, at least the first part, the FDIC stuff. Maybe it's just semantics, maybe I'm not clear on the definition of a bailout, but my understanding is that a bailout is when you help out the bank owners, and this was helping out the people with money in the bank (who are likely a bunch of bourg scum who don't deserve "their" money back but that's an entirely different matter). Is that whack?
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This is of course all within the capitalist framework, but is putting money in a bank account really ever considered a risk or an investment? That makes sense for investment accounts and stuff but as far as I'm aware these were just normal bank accounts
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I guess that tracks, but it feels weird to call something a "risk" when there is no upside (0% interest) and only a downside
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I follow. Thanks for walking me through it.
As a wise man once said, "The kind Vladimir Ilyich would have shot everybody here".
The people using SVB were often people who could not get loans from bigger, more mature banks. Think of all the completely useless apps and projects venture capital likes to fund. SVB also required loans to be deposited into SVB accounts. I'm no business or finance knower but there is no way I would go through with getting a shady loan that I have to keep at the shady bank so they can puff up their numbers.
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My impression is they were likely keeping two books and counting those loans as new deposits, but maybe I'm giving their grift too much credit
Isn't that part of what happened with FTX or am I getting my financial entities in crisis mixed up?
I think it is, there's only so many tricks to be played
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