Post ATYTTOI4JbkcWx6T6O by MidwitNavigator@poa.st
(DIR) More posts by MidwitNavigator@poa.st
(DIR) Post #ATYQ5XDFBvz1ODmOhc by alex@gleasonator.com
2023-03-12T23:06:06.640832Z
1 likes, 1 repeats
I don’t understand the Silicon Valley Bank situation. So, the government shut them down? Why? Then the government issued a press release about “increasing our trust in banking”? Also, did all those companies lose their money for good? Help me understand.
(DIR) Post #ATYQG56640rTNRSvMO by HSTG@freeatlantis.com
2023-03-12T23:08:06Z
1 likes, 0 repeats
@alex Inflation is going to go to points unknown. They are just going to keep giving money to these assholes.
(DIR) Post #ATYQJsK3VCeyumntFA by radix023@noagendasocial.com
2023-03-12T23:08:46Z
3 likes, 0 repeats
@alex Jim Bianco's narrative is lots of retail/deposit customers pulled money out of 0.5% rates to put into money markets at 3.4% or more and this led to liquidity problem. Bank assets were in Fannie/Freddie mortgage backed securities that were yielding avg 1.5% and so lost tons of face value due to Powell raising rates. Regulators don't "mark to market" but let banks "hold until maturity" and ignore the notional loss. SVB had to auction security available for sale. *crash*
(DIR) Post #ATYQOS8sGeSpALkyFE by professionalbigot69@poa.st
2023-03-12T23:09:38.096516Z
2 likes, 0 repeats
@alex SVB mismanaged money, lost, depositors want it back, only a small fraction of the bank's assets is actually in cash, certified financial bruh moment
(DIR) Post #ATYQRtAKFfBZqX4dZw by alex@gleasonator.com
2023-03-12T23:10:10.066140Z
0 likes, 0 repeats
@professionalbigot69 Thanks, that makes sense
(DIR) Post #ATYQVv4H7WtKuAAKrA by alex@gleasonator.com
2023-03-12T23:10:53.852278Z
2 likes, 0 repeats
@professionalbigot69 So basically it’s better to store your money as Bitcoin than in Silicon Valley Bank.
(DIR) Post #ATYQXeeT7uQ8ZOvFcu by nolasco@iddqd.social
2023-03-12T23:11:17.919213Z
0 likes, 0 repeats
buttcoin would've prevented this
(DIR) Post #ATYQgSYJTrv7eQF2ps by djsumdog@djsumdog.com
2023-03-12T23:12:50.934291Z
2 likes, 1 repeats
I haven't been following it recently. FDIC insures all accounts (personal and corporate) for $250k ... so if a company had 30M in a bank that collapses .. they could stand to lose 29M+.Typically the federal government steps in, stops transactions, and finds a way for the bank to get bought out by another bank to accept its liabilities and keep a cash flow. In 2008, this allowed major banks to buy smaller ones. PNC bought National City in Ohio for $5 billion .. and then got a $5 billion tax credit (they got to buy National City for free on the tax payers dollar).There was an old video called Bank Eat Bank: Bailout Encourages Mergers. (Ivory. American News Project. November 21, 2008) and it use to be here: https://www.youtube.com/watch?v=_06mSZLhEhY but ANP deleted their account and it's gone now.I have no idea what the fuck they're going to try to pull this time. My personal theory: FDIC insurance won't pay people back in USD but in some new digital currency and this will be what's used to move America off the green back.
(DIR) Post #ATYQoXbqYxQreSkROq by monsterislandcolonizer@poa.st
2023-03-12T23:14:21.352593Z
2 likes, 1 repeats
@alex @professionalbigot69 Bitcoin is too volatileXMR is much more stable
(DIR) Post #ATYQtmuX6GUMYWzS9A by ghostly@pleroma.8777.ch
2023-03-12T23:15:13.523029Z
0 likes, 0 repeats
@alex I doubt the companies lost all their money for good, the FDIC moved all ensured funds into a new bank they created called "the Deposit Insurance National Bank of Santa Clara" which is operating from SVB's old offices.
(DIR) Post #ATYQvxjtoLCIie3Moa by pasture@pl.gamers.exposed
2023-03-12T23:15:36.398238Z
3 likes, 0 repeats
banks don't just hold on to your money, they invest it so they can make themselves and you more money. From my understanding one of the reasons has to do with bonds. SVB (and many other banks I might add) park their money into instruments like bonds. when you purchase a bond it matures at a particular interest rate. when the government increased interest rates, the interest rates of bonds went up, and the bonds that were bought before are worth much less because why would you buy a bond with a lower interest rate at full price. so when companies needed to pull a bunch of money out of SVB to pay for stuff due to other macroeconomic factors, SVB had to also sell a bunch of their bonds for lower prices. they tried to raise funding to cover the rest of their deposits but they couldn't get it and the FDIC stepped in
(DIR) Post #ATYRTBN69CyUYTEFH6 by mittimithai@neenster.org
2023-03-12T23:21:40.713601Z
0 likes, 0 repeats
Us govt saying everybody getting all their money on Monday
(DIR) Post #ATYRXa0sTMPc8bvr2e by raintrees@noagendasocial.com
2023-03-12T23:22:29Z
0 likes, 0 repeats
@alex Didn't it start with a bank run on them? Too many demanding funds? Hence all the "It's a Wonderful Life" movie references...Given that being the case, regulators step in, close it, put it into receivership, then attempt to start making people whole, starting with the accounts that are less speculative (grossly simplifying).
(DIR) Post #ATYSRh5RMODsIDp7ey by meowski@fluf.club
2023-03-12T23:32:25.676893Z
1 likes, 0 repeats
@alex they invested depositor funds in bonds and junk. (as all banks do under """fractional""" reserve, which is now zero reserve)the fed raised interest rates, and the bank's bonds started losing money. they didn't have the funds to cover withdrawals, causing a bank run- but apparently they did have the funds to pay out some big executive bonuses before imploding.also some insider trading was going on. they knew they were insolvent earlier this year and execs sold their own shares
(DIR) Post #ATYTTOI4JbkcWx6T6O by MidwitNavigator@poa.st
2023-03-12T23:44:08.886222Z
1 likes, 0 repeats
@alex Conventional banking for many decades has been problematic due to fractional reserve rules. Fractional reserve means a bank only needs to have a fraction of a sum of money on hand in order to lend it to another party. If this sound ridiculous, congratulations for being sane. During the pandemic, the Federal Reserve removed fractional reserve rules, which now means banks can loan money they doesn't even exist. As long as everything stays in the system as a digital dollar, this can be maintained for some time. But any liquidity crisis (inflation spikes are an example) can send it all flying apart.FDIC insures deposits for up to $250K, but some entitites had tens of millions of dollars tied up in SVB, and approx 95% of it was in asset classes that are not insurable under FDIC, so it is not at all clear what is going to happen. It also is left as an excerise to determine how FDIC is funded and how many dead banks they can eat before becoming insolvent themselves.
(DIR) Post #ATYVfJnf2JCJzFhBo0 by D00B@seal.cafe
2023-03-13T00:08:42.627181Z
0 likes, 0 repeats
@alex IT'S GONE
(DIR) Post #ATYiKWMIRmtaGAJFY0 by not_br549@jollyville.net
2023-03-13T02:30:36.669938Z
0 likes, 0 repeats
but it's a delicate balance -- it works as long as the whole economy is expanding, and most of the parties who take out loans can make payments. it's all positive-feedback -- more business, more credit, more happy customers paying their loans. the reverse trend is also positive-feedback: bad debt leads to more bad debt, eventually bankruptcies and defaults, which lead to more bad debts. the trend stops when asset prices come down enough for people to open businesses with cash on hand. and of course, the central banks will monkey around with these trends and complicate them. mostly by printing money, which naturally dilutes the value of the money.
(DIR) Post #ATZheu1IHNQodhbHpw by PhenomX6@fedi.pawlicker.com
2023-03-13T13:57:45.616108Z
0 likes, 0 repeats
@djsumdog @alex millions of boomers believe if it's not that much it's not their issueDaddy government will step in