SVB failing... Here's our chance

Discussion in 'BS Forum' started by Br4d, Mar 10, 2023.

  1. Jonathan_Vilma

    Jonathan_Vilma Well-Known Member

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    You can’t consistently blame bad business decisions on “deregulation”. It’s like blaming the fact that people get hooked on drugs on the law even though there’s are laws in place that makes drugs illegal.

    The reason these banks are failing is because they felt they had no risk at all since the US government saved two massive industries from 2008-pre pandemic and then during the pandemic they demonstrated they would print money with no end in site to save everything. Banks took dumbfuck risks with this in mind.

    The only way to right the path is to let them fail, casualties aside, and prove to industry that you need to be financially responsible.

    “Heroine’s illegal but it’s our fault you overdosed because we didn’t get the heroine you bought off the street before you could buy it.”
     
  2. Br4d

    Br4d 2018 Weeb Ewbank Award

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    Without the deregulation in 2018 the banks that just failed would have been stress tested on a regular basis. Instead they were left mostly on their own with just a local handler at the Fed. A guy who apparently had very close ties with them.

    That's called crony capitalism. Furthering the effect the head of SVB actually sat on the regional Fed board. Basically we let SVB regulate themselves when they were playing with massive sums of depositors money.
     
  3. HomeoftheJets

    HomeoftheJets Well-Known Member

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    I'm fine with either banning them from taking risks, not bailing them out if they fail, or punishing them if they require a bailout. But letting them take risks, bailing them out, and not punishing them is a great way to erode whatever social trust is left these days.
     
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  4. Acad23

    Acad23 Well-Known Member

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  5. Br4d

    Br4d 2018 Weeb Ewbank Award

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    They really should have a Captain goes down with their ship rule for publicly traded companies, clawing back all stock sales, bonuses and base pay above a specified minimum for a given statutory period when the company fails.
     
  6. Jonathan_Vilma

    Jonathan_Vilma Well-Known Member

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    How is crony capitalism not bailing out a bank that housed investments of nearly exclusively millionaire and billionaire venture capitalists from tech companies? The FDIC automatically insures you up to $250K and I believe the statistic was that 90% of depositors at this spot were over that.

    You just have to figure out a way to blame Trump as per usual especially when this was a bi-partisan bill that went through our government swiftly like shit through a goose.

    SVB didn’t have a risk manager for nearly all of 2022
     
  7. Ralebird

    Ralebird Well-Known Member

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    The much larger question: "Why was SVB permitted to operate without a risk manager?"
     
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  8. Acad23

    Acad23 Well-Known Member

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  9. Acad23

    Acad23 Well-Known Member

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  10. Br4d

    Br4d 2018 Weeb Ewbank Award

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    Not a bipartisan bill. Rammed through by GOP and Trump.

    This happened for the same reason all of these debacles have happened: Laissez-faire Capitalism is just fine until it run off the road into a ditch. Then it requires Big Gub'mint Capitalism to rescue it.

    Every time.
     
  11. Jonathan_Vilma

    Jonathan_Vilma Well-Known Member

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    It was as bipartisan as a bill gets these days. And you haven’t answered any of things I’ve brought up.

    You don’t think this is crony capitalism that Biden agreed to bail out a bank of primarily million and billionaires? There’s no way it doesn’t hit Main Street and you know it.
     
  12. HomeoftheJets

    HomeoftheJets Well-Known Member

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    You're both right.
     
  13. Br4d

    Br4d 2018 Weeb Ewbank Award

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    I didn't want any bailout at all beyond the $250k FDIC guarantee.

    The Fed lost a game of chicken with Peter Thiel and his crowd, who were betting they'd get bailed out again when they started the bank run on the Wednesday before SVB collapsed.

    The last simple solution left is for the FDIC to dramatically raise insurance rates for banks that have above a certain percentage of accounts that are above the $250k limit. This is probably the last chance to block off the consequences of this banking crisis from Main Street. I very much doubt that anybody in government has the balls to try to make it work.
     
  14. SOXXX2

    SOXXX2 Well-Known Member

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    The FDIC only has $121 Billion.

    The FED will have to print more and send it to the FDIC if they want to insure every bank.

    At the end of the day its all a confidence game. If confidence in the banking system is lost then their will be bank runs, the FED will print, and the US dollar will plunge while the cost of living will double.



     
  15. SOXXX2

    SOXXX2 Well-Known Member

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  16. Jonathan_Vilma

    Jonathan_Vilma Well-Known Member

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    The United States is on a quick trajectory to lose it’s place holding the worlds dominant currency. The new China/Russian collaboration is terrible for the dollar and China is out here brokering peace deals between decades old hateful rivals like the Saudi’s and Iran.

    Meanwhile the US is spending six figure salaries across major departments on diversity, equity and inclusion directors including in the US military branches.

    We’re really doomed from an economic standpoint if not social decay.
     
  17. Acad23

    Acad23 Well-Known Member

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    Let's not forget the promise of ESG!
     
  18. Br4d

    Br4d 2018 Weeb Ewbank Award

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    The FED only has to print more and give it to the FDIC if bank failures run above the FDIC balance. The answer if that happens will be the FDIC raising insurance rates for the banks that have more accounts above the $250K FDIC maximum - given that that is obviously no longer the maximum.

    This is a self-correcting problem at this point. It just requires adequate management.
     
  19. Br4d

    Br4d 2018 Weeb Ewbank Award

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    We have to stop cutting taxes (GOP priority) and raising spending (DEM priority).

    Our budgetary problems are mostly based on cut and spend. We need to reverse the flow so to speak and raise taxes while cutting spending.
     
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  20. Jonathan_Vilma

    Jonathan_Vilma Well-Known Member

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    That push and pull gets fixed without wasteful bullshit spending.
     

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