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.
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.
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.