BREAKING NEWS – The U.S. Treasury, Federal Reserve Board, FDIC and Joe Biden collectively announce that *all* depositors with Silicon Valley Bank (SVB) will have access to their funds – regardless of amount deposited. Also, all senior bank management has been terminated.
This announced action appears to cover those under FDIC protection ($250k or less) and those above FDIC protection (deposits greater than $250k). The only vulnerability is that SVB “shareholders and certain unsecured debtholders will not be protected.”
WASHINGTON DC – The following statement was released by Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and FDIC Chairman Martin J. Gruenberg:
Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.
After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.
We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.
Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.
Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.
The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe. (LINK)
Will this action help stop any contagion related to California’s largest bank?
…The odds are, yes.
Despite Friday’s action to stop trading of FRB, with this action, I doubt First Republic Bank (FRB) is now at risk.
So we the taxpayers get to pay for the elites taking bad risks? I see.
All the new owners or the Fed has to do is have enough cash to satisfy those that want their money out. Holding the bonds or MBS to maturity will make those holders whole. It is not pretty but it is not 2008 either.
Still, it’s protecting elite leftists (for the most part), at our expense, who took risks that most of us wouldn’t take. Consider the fact that the bank’s top risk management position was open from April 22 to January 23. Consider the fact that other top risk management officials at the bank spent most of their time worrying about LBTQ (or whatever the alphabet soup is) issues. Rescuing people from bad decisions shouldn’t be the business of government in a free market capitalist system. Bush and Obama did the same thing in 2008 rather than let the system work to clear out the dead wood and bad risks. And look where that got us? Double the national debt.
What free market capitalist system? That gave me a good laugh.
Well, we are all idealists around here, aren’t we? 🙂
Anything stopping all banks from doing exactly what these idiots did at SVB? If the government will insure all bank accounts no matter what the amount, then banks are free to go big and risk it all.
The FDIC is the insurance fund of all the banks contributions.
Capped at $250,000 PER CLIENT – not per account
All deposits are being covered not just the insured amount of $250,000.
Yes. I was just clarifying her statement. People mistakenly think FDIC insures $250/acct. Not true.
In this case, all deposited will be covered; not shareholders. First ever bail-in. Good news for us the taxpaper.
Exactly!
The FDIC does not have enough money to cover all these losses. Are they just assuming that everybody will just play nice and not withdraw their deposits?
Yes!
Printer go brr. And just like that another $150B magically appears out of thin air. Just like the $31T before it.
Where do the banks get the money for their ‘contributions?’ From the depositors and loaners. So, the depositors and loaners are paying for it. It is just another fee added on.
Corporations do not pay taxes no matter what the rate. All corporations pass along every tax to the consumer.
The tax-papers are not bailing out SVB. The Banking system – is handling it internally.
The tax-papers are not directly bailing out SVB. The Banking system – is pretending that it is handling it internally.
Sorry, but you’re being taken in by lies.
First, they are saying that the money to repay the uninsured SVB depositors will come from the Depositiors Insurance Fund (DIF). But the DIF website clearly states (https://www.difxs.com/DIF/Home.aspx) that only DIF members are protected by the fund. They’re the ones who’ve paid into it. It’s a private insurance fund.
Second, the DIF fund currently stands at about $100 billion. That’s far less than the amount that reportedly was not insured at the SVB. So there’s not enough money in the DIF to refund all the uninsured deposits at the SVB.
Third, the Silicon Vally Bank is NOT a member of DIF. Here, see for yourself (https://www.difxs.com/DIF/DIFMemberBanks.aspx#S). Not listed. So the depositors at SVB bank have NO RIGHT to the money in the DIF.
So, if they are saying the DIF is going to be the source of the uninsured SVB deposit bailout, then it looks to me like the US Treasury and the Federal Reserve have made a deal with the DIF to replace those funds, plus make up any difference between those funds and the actual payouts. And they get their money from your’s truly, the taxpayer.
So I stand by what I said.
You’re getting “Gruber’d.” You’re going to get stealth taxed to cover this fiasco. It’s a big sh*t sandwich and we all get to take a bite.
Well, kinda. Ya see, this had quite a few Israeli tech startups in peril. But now they aren’t. So all good.
Chinese ones too. To be so lucky to have your back covered!
Not only taking risks, but making hiring and investment decisions based on wokeness. The people who run the place have no idea what they are doing. They spend more time on leftist causes than on doing their jobs. incompetent. The bank’s execs are all bid Democrat donors, too. I’m surprised they are being fired.
Excellent point PAt.
Too many of the higher level employees in this place were complete whackjobs.
They need to go to jail.
And that should have some bearing on a lending institutions ability to qualify for FDIC protection in the future.
The good news is, all that the US has provided the Ukraine in the past year was ultimately a loaf of bread.
Because that’s what $150 Billion will buy once this finally flies over the cliff.
A loaf of bread.
Tapping the ESF (Exchange Stabilization Fund) for 25 billion to fund the lending facility. But many think the liquidity needs are north of 2. TRILLION!
The ESF is a type of slush fund created in the Depression Era that many think has been used to manipulate the precious metals pricing.
I don’t know but I don’t recall whether it was tapped during the GFC.
I don’t think it was so this is very noteworthy
May indicate the extreme seriousness of the situation.
It was tapped during GFC. It is the fund that makes money in the markets for the central bank.
I would like to personally thank Janet Yellen for reaching into my wallet and bailing out a host of leftard Tech Moguls…
The bank IS NOT being bailed out. The bank has the money to pay all depositors. Read the post.
Where does it say that? The release says the govt will step in.
Right….U.S. Treasury means you and me.
Treasury has become a payday loans operation
What the holy hell? You cannot be that stupid. You are a troll Sparky.
Lol…lol…lol…turn off cnn
We have all watched the Government lie to us on a COLOSSAL scale for many years. And you ask someone to “read the post”?
Dont you see a pattern here?
BrewingFrog: Don’t forget Ukraine, where she recently presented Zelensky with his Publisher Clearing House Sweepstakes check, backed by the full faith and credit of the US taxpayer.
Yes, but it is still ‘moral hazard!’
Biden: You’re doing a heck of a job, Powell…ie!
He is doing exactly what he was supposed to do.
Joe and his handlers must be proud of him.
Dont understand why people think this is good news.
Just one note the government has NO money of its own.
A government can just tax or print currency (which is a tax through inflation)
It’s all taxpayer money. If the government spends it, YOU the taxpayer are always on the hook
Either through bail-ins, bail-outs, treasury support or unicorns (whatever they call the bailout flavor of the day)
Further we are just waiting for the next shoe to drop in the financial system.
I have some derivates on mortgage backed securities I want to sell you. Call me.
The next shoe to drop may have just happened. It is being reported that Signature Bank in NY, NY has just been shuttered today by the Feds.
Yes, and Barney Frank went there after he retired from Congress.
the US corporate govt has operated via fiat currency since 1913 and likely b4…no gold standard backing
Some background fact, up until 1971 or so you could exchange a US dollar for gold.
It was backed by gold and as good as gold.
Nixon “suspended” the gold exchange, thus decoupling the currency making it’s value purely based on trust and faith.
It is YOUR SIGNATURE that is “good as gold.”
Remember William Jennings Bryant’s “you shall not crucify mankind upon a cross of gold”? Now they’re about to crucify us upon a cross of carbon.
If the top execs don’t pay a punitive price, this BS will continue. The biggest problem in 2008-9 was nobody paid a price to prevent execs from gambling with high risk investments. Plus, ESG must be eliminated from the banking system.
THIS! ESG, Adios.
There should be claw backs for them, but no word of that. However, they were fired and their remaining investments in the company were zeroed.
Back down the memory hole of past financial corruption:
They ‘served’ up a few with the Enron debacle. One went to federal prison and the issue quietly died.
“The Enron scandal drew attention to accounting and corporate fraud as its shareholders lost $74 billion in the four years leading up to its bankruptcy, and its employees lost billions in pension benefits.(google).” Skilling, the CEO, did not serve the full 25. Another auditor died.
And more history one from March 17, 2011 the other from August 8, 2011:
https://www.reuters.com/article/us-washingtonmutual-fdic/fdic-sues-ex-wamu-execs-wives-over-banks-failure-idUSTRE72G6N420110317
https://www.latimes.com/archives/blogs/nation-now/story/2011-08-08/no-criminal-charges-against-wamu-revolution-anyone
Top execs have in the past paid a price…all that did was foster creativity in mismanagement and greed.
Soon after the Council On Foreign Relations NAFTA treason with a Goldman Sachs Secretary of the (cough) Treasury
Good primer on what to expect during phases of hyperinflation
They explosive phase can last 2 years !
https://www.zerohedge.com/personal-finance/four-phases-hyperinflation-according-imf
Although, it looks like any cryptocurrency backed by SVB deposits is not covered.
Is this considered a taxpayer funded bailout, in not so many words?
Not according to Yellen’s statement.
I hope so. This cryptocurrency BS needs to end. If cryptocurrency has any footing, we will all be reduced to serfs at best.
Why is Crypto going up? Why is the stock market futures through the roof?
Because this could cause interest rates to go down in the near future to cover the Federal Reserve’s ass. Just another ramification of bad fiscal policy by the Biden administration and his inept cronies at the Fed. These banks weren’t holding risky investments, they were government bonds and mortgage backed securities the banks were investing in a year or more ago, at anywhere from 1 to 3 percent. As bonds are now worth double that, the bonds and bank notes the banks purchased can’t be sold for what new bonds are selling for. So although no one has defaulted as in 2008, no one wants to purchase them either. When depositors wanted their money, in order to give it to them, they needed to sell these bonds at an even greater loss to generate enough cash to pay them. That’s why they collapsed. The FED didn’t calculate this aspect of their rate increases at breakneck speed. Not only are we dealing a with a corrupt and evil government in the Biden administration, we are dealing with complete morons too!
Per Armstrong Silvergate Bank is going into voluntary liquidation. Leader in cryptocurrency backing.
https://www.axios.com/2023/02/06/crypto-washington-federal-reserve
One of the Democrat’s targeted by the criminal illegal surveillance by the Obama/Intell totalitarians, the same criminals who illegally surveilled and couped our President Donald J Trump. By today’s standards he would be a full fledged “rebel” Democrat, the only one.
Kucinich: Bailout ‘Driven by Fear Not Fact’
I remember when Kucinich was one of the last hold-outs on Obama “Care” (maybe the last hold out) and then he went on the plane with Obama and changed his mind. I always believed they threatened to throw him off the plane unless he changed his vote.
He was one of the more tolerable Democrats (I remember there were times when he and Dr. Ron Paul were on the same page).
James Trafficant was another good one—lots of good speeches calling out his own party (you don’t see that anymore!!) I remember there was one where he called out the Democrats for empowering the IRS, maybe the FBI and DOJ.
I remember Bart Stupak being the holdout on Obamacare over abortion funding. Kucinich voted with his party close to 90% of the time.
Just keep printing funny money. s/
It has just been reported that today the feds have closed Signature Bank in NY, NY.
buckeye: It was NY State that shut down Signature Bank NY (not to be confused with other Signature Banks).
I didn’t know that, thanks billrla. I know very little about monetary issues.
Rumors of a 2nd bank failure in New York State
Signiture Bank
Sbark: See above. Not a rumor.
Debtholders – would that be like California farms and ranches on which mortgages are being paid but now those properties wll be subject to foreclosures/auctions?
Yet another bailout for Democrat donors. So how much of the bailout monies work back into the DNC? Got elections to rig and people to pay off.
I dont believe ANYTHING these corrupt evil demons say.
“As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer”
So exactly where does this money come from??
Xi
https://twitter.com/ubipages/status/1635081582322257921/photo/1
All the other banks are to pay an assessment to the insurance fund. Most likely they will pass along to us in New fees.
Read what I noted about the Depositors Insurance Fund in my post to Marcia above. Only DIF member banks are protected by the DIF and SVB is not a member. So this money has to be coming from the taxpayer.
It has reported that the senior management at SVG withdrew their holding a week ago. Maybe they ought to go to prison
Did the piglosi’s trade any of their stock?
I wouldn’t doubt it.
Upper management not only dumped millions in stock, they paid company-wide annual bonuses on Friday.
Technically those bonus’ can be clawed back.
Not at all sure this is a good solution other than to prevent a serious run on all banks. More than likely this is kicking the can down the road to prevent an immediate run on more or all banks. Prepare accordingly. One thing is for certain, the Government, slush fund or not, cannot cover the money in multple banks, period. Gold and silver maybe the only way to store value. Crypto is all BS.
Correct. Making SVB depositors whole is NOTHING. The government cannot make ALL depositors in ALL banks whole.
What is going to be very clear in the next couple of days is a complete loss of trust in the monetary system while an incompetent and thoroughly corrupt government desperately tries to save it.
These morons are trying to put a Band-Aid on a ruptured aortic artery.
This is what happens when a country descends into relentless lying and widespread corruption.
I just heard that some banks over in the UK may be involved and are working to prevent a bank run (WBBM). Too early to tell.
I am wondering how “Safe Harbor” laws apply?
I see where this is going…’backed by the fulll faith and credit of….’ the American taxpayer…bailing out everyone else at our own expense.
digital currency and no cash…
And government contracts for the software or managing it, AKA Dominion in elections? Please let me be wrong.
Now, lets look at the “past performance is not an indication of future results”?
What is Sec Rule 156 past performance?
SEC Rule 156 requires mutual funds to tell investors not to base their expectations of future results on past performance before they invest.(google).
Short sell whatever Cramer says to buy Long. After reading his book “Confessions of a Street Addict” I concluded he should be in prison.
Why the hell is all of this money
Going to the Banks??
It should be going to Ukraine!
Lol
Seriously-Zelensky will be on the horn to Susan Rice.
And there it is.
A bank built on the model of capital investor hedges in the Tech sector.
Even Atkins says it is as much, “SVB deposits have dried up.”
Me thinks he means, “Capital wealth has stuck its finger to the wind and finally come to the conclusion underwriting the operations of the magic jack coffee shops that produce nothing but red balance sheets and demand ever more infusions of cheap capital liquidity into this black hole.”
So what was once the flowing of quasi dark money from the so called deep state into the tech sector. Is now being groomed to be overtly funded by the federal government.
As, if this rescue package will stem the bleeding of the tech business model.
Which are after all just nothing more than variations of Jack’s Magic Coffee Shop.
Yellen….”There will be no bailout” ROFLMAO (yeah right). They will have no choice. Keep your eye on the contagion spread. We have now reached Critical Mass Catch 22 Phase.
FYI those risky investments the SVB was involved with were called US Treasuries. The interest rate hikes made their balance sheet go to hell. Guess who else is heavily invested in Treasuries…..every other bank should be the answer.
SVB was a niche bank (tech sector) which has been in a rut as of late. This is probably why they fell first. Last week The FED/CTL Banks mentioned that aggressive rate hikes were still to come. After this weekend NOT so much I declare.
The rates are going to have to come down or this will continue to happen. It might anyway just from the contagion spread alone. If rates come down aggressively inflation will go bonkers. It might not be straight to Weimar immediately but it will be very rough.
Best comment I’ve read here so far. There’s a whole lot of ignorance being displayed in these comments on this issue. This is just a canary in the coal mine. And they just stepped in with a shot of adrenaline and the paddles to jolt that poor little bird back to life.
I read earlier today that Oprah is estimated to have $691 million deposited at SVB. Harry and Meghan bank there as well. Of course we’re shoring this up.
EO 13848?
Biden had to bail them out…. Harry is one of Obama’s connections to his real bosses EU royalty.
So Modern Monetary Theory wins out here? No taxpayer funds? Yellen, honey, gov $$ are taxpayer $$ strictly and only. I thought SVB had 178b in unsecured deposits so how is 25b going to do anything? Stock market will be giddy and Powell is now hamstrung. Billionairs will continue to billion and new ones will be minted. I’ll get up (after losing an hour of my weekend) work my ass off for paycheck, carefully parse that paycheck to meet my obligations and continue to watch my 401k value eaten by inflation. I’ll be told that warm yellow pouring on my head is rain and that because the government had to swoop in to save the day, I need to pay my fair share. I. Am. A. Fool.
So the Federal Deposit Insurance Corporation or FDIC has announced that depositors at the failed Silicon Valley Bank will get ALL of their deposits back…even the uninsured amount.
Accounts are only insured up to $250,000 per account and, apparently, possibly something like $150 BILLION on deposit at SVB wasn’t insured.
How can this work?
From the FDIC website:
Q: What happens when a bank fails?
A: In the unlikely event of a bank failure, the FDIC responds in two capacities.
First, as the insurer of the bank’s deposits, the FDIC pays insurance to depositors up to the insurance limit. Historically, the FDIC pays insurance within a few days after a bank closing, usually the next business day, by either 1) providing each depositor with a new account at another insured bank in an amount equal to the insured balance of their account at the failed bank, or 2) issuing a check to each depositor for the insured balance of their account at the failed bank.
In some cases—for example, deposits that exceed $250,000 and are linked to trust documents or deposits established by a third-party broker—the FDIC may need additional time to determine the amount of deposit insurance coverage and may request supplemental information from the depositor in order to complete the insurance determination.
Second, as the receiver of the failed bank, the FDIC assumes the task of selling/collecting the assets of the failed bank and settling its debts, including claims for deposits in excess of the insured limit. If a depositor has uninsured funds (i.e., funds above the insured limit), they may recover some portion of their uninsured funds from the proceeds from the sale of failed bank assets. However, it can take several years to sell off the assets of a failed bank. As assets are sold, depositors who had uninsured funds usually receive periodic payments (on a pro-rata “cents on the dollar” basis) on their remaining claim.
So, by law, the FDIC pays up to $250,000 out of the FDIC insurance fund that is funded by insurance premiums that the federal government forces member banks to pay.
If a depositor has uninsured deposits (anything above $250,000) the FDIC takes the money they get from selling off the bank assets and rations it out to all the uninsured depositors. Unfortunately these type of liquidations rarely generate enough cash to make everyone whole and, as the FDIC itself states above, this can take years.
But the FDIC has already told the world that every SVB depositor WILL be made whole and they haven’t even begun selling off bank assets.
The FDIC did that in an attempt to prevent a systemwide bank run that might begin tomorrow. We’ll see…https://s.w.org/images/core/emoji/14.0.0/svg/1f914.svg
It could work because the FDIC accounts apparently have enough to cover the losses that can’t be made up from liquidated bank assets.
But if more bank runs occur followed by more bank failures followed by more FDIC bailouts the FDIC accounts will run out of money and then everyone will look to the federal taxpayer to bail the failing banks out.
This is the “Don’t worry, everything’s fine, we’ve got this under control” phase where the FDIC, the federal government and their media partners are actively managing our perceptions and expectations.
They know that everything is not fine with our banking and investment sectors but they have no choice but to lie. They’re trapped into lying by the reality that if they’re honest about the reality of the situation people will panic and bring on the collapse.
In others words…they’re lying to us for our own good…https://s.w.org/images/core/emoji/14.0.0/svg/1f633.svg
Kind of a “manage the herd so they don’t stampede as we lead them to the slaughterhouse” situation.
The FDIC by law cannot pay out more than the $250,000 from FDIC accounts. Anything else has to come from liquidating the assets of the failed bank so you’ve got to ask yourself how, just two days later and over a weekend, the FDIC can assure everyone that they’ll get 100% of their deposits back?
That’s NOT how this works.
According to CNBC, it’s not the FDIC that will be giving the money back. It’s the DIF. Here …
https://www.cnbc.com/2023/03/13/wall-street-not-taxpayers-will-pay-for-the-svb-and-signature-deposit-relief-plans-.html
“For the banks that were put into receivership, the FDIC will use funds from the Deposit[ors] Insurance Fund to ensure that all of its depositors are made whole,” said a senior Treasury Department official, who spoke to reporters Sunday about the plan on the condition of anonymity.
“The Deposit[ors] Insurance Fund is bearing the risk,” the official emphasized. “This is not funds from the taxpayer.”
But that’s a lie.
Read what I noted about the DIF in my post to Marcia above.
“That’s not how this works.” Haven’t you heard of the Intl Rules Based Order led by the US? The “Rules” part means whatever the hell they want it to mean.
Don’t get too down. The day soon approaches when buying themselves time is no longer an option. I would be surprised if we even make it to next election. Too many things of note carrying forward including a giant swath of the population moving away from this Rules Based Order at quickening pace.
If I were a resident of East Palestine, I would be saying WTF about now.
Yep. For just $1 billion, they could have evacuated the entire town for a full year.
I opened an account at First Republic two years ago for a organization I am an officer of, Sons of the American Legion. We are pretty wealthy with just over $200,000 in deposits and certificate of deposits at FRB. I looked recently looked over their financials and they are in pretty good shape. So I don’t understand them (FRB) being on the rumor mill for having financial issues. Below is a email I received from FRB.
>>>>>
To Our Valued Clients,
In light of recent industry events, the last few days have caused uncertainty in the financial markets. We want to take a moment to reinforce the safety and stability of First Republic, reflected in the continued strength of our capital, liquidity and operations.
Our capital remains strong. Our capital levels are significantly higher than the regulatory requirements for being considered well capitalized.Our liquidity remains strong. In addition to our well-diversified deposit base, we continue to have access to over $60 billion of available, unused borrowing capacity at the Federal Home Loan Bank and the Federal Reserve Bank.We are here to fully serve you. We stand ready to process transactions and wires, fund loans, answer questions and serve your overall financial needs — as we do every day.For almost 40 years, we have operated a simple, straightforward business model centered on taking extraordinary care of our clients. We have successfully navigated various macroeconomic and interest rate environments, and today we have among the industry’s highest rates of client satisfaction and retention.
We are here to help you accomplish your financial objectives and provide you with extraordinary service at all times. Please feel free to reach out to your First Republic banker or wealth manager if we may be of service.
It’s a privilege to serve you,
Jim HerbertFounder and Executive Chairman
Mike RofflerCEO and President
>>>>>>>>>>>>>>>>>
I see a lot of wealthy Newport Beachers banking there and I am sure they have considerable uninsured deposits (above $250,000) I hope I am correct….
This second email just came out:
To Our Valued Clients,
Today, First Republic announced a further strengthening and diversification of our liquidity position. This increase in available liquidity further reinforces the safety and stability of First Republic. You can read more by viewing our press release available on our website.
As always, we stand ready to provide exceptional service to meet your banking and wealth management needs. We are grateful to have you as a client and for your continued support.
It’s a privilege to serve you,
Jim HerbertFounder and Executive Chairman
Mike RofflerCEO and President
You may want to check the Drudge Report. I have no respect for Drudge anymore these days but saw some headlines about FRB of CA.
J Gottfred: Pacific Western Bank sent out very similar open letter to clients today.
HA! Billrla,
I closed the Sons account at PWB and moved it to FRB when FRB pissed me off by closing down EVERYTHING during Covid. I walked down the street and moved it. I think it was one of the best decisions I have made!
So, if amounts above FDIC protection are going to be covered but, as the articles say, “not a dime of taxpayer money will be used,” then where is the money coming from? Are the printing it as we speak?
US Treasury = taxpayer moneys…. fiat currency all
This, on a Sunday, is equivalent to a midnight heist. From the taxpayers.
Private profits, public risk.
Now the taxpayers, and their great grandchildren, are fully subsidizing runaway woke and bank risk.
Martin Armstrong has been posting on his private blog endlessly on this. This was on his public blog last hour. He is very limited as to what he can say on the public blog.
https://www.armstrongeconomics.com/world-news/banking-crisis/the-unfolding-bank-crisis/
SVB is the nations 16th largest bank and the 2nd biggest bank failure in US history following the collapse of Washington Mutual in 2008 which was the catalyst for the economic turndown.
This is the first bail-in. Shareholders take the hit not the depositors. Hence, ‘elite’ bankers head got chopped. It’s a start.
FTA: As for the Biden Administration, if they DO NOT heed my warning, our forecast will be devastating. The Biden Administration MUST stand behind ALL deposits – not the $250,000 FDIC limit. If they do not, small businesses will pul; excess cash from banks, switch to 30-day T-Bills at a brokerage house, and say screw the FDIC and the Biden Administration’s anti-rich (small business which employs 70% of the workforce).
all this talk of monetary policy is good, but what about fiscal policy, ie, Xiden’s requested $6.8 trillion budget and its tax increases? That can’t help but slow or contract economic output so there will be less goose to be de feathered.
The payroll deposits dominoes were an enormous gamble without this. A part of me would have liked the stress test.
Yep, I predicted this: They would bail them out just like Long Term Capital Mgt, and the country of Mexico during the Clinton Administration.
Communists doing communist things.. Here’s looking at you Bush.
“No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”
“Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.”
Special assessment on banks which will be passed on to people with bank accounts by increased fees or lower interest rates on deposits. What a bunch of bullcrap. So, the $250K limit for FDIC insurance no longer exists. If they did it this time, they would have to do it every time going forward.
As I noted above …
The DIF website clearly states (https://www.difxs.com/DIF/Home.aspx) that only DIF members are protected by the fund.
Second, the DIF fund currently stands at about $100 billion. Far less than the amount not insured.
Third, the Silicon Vally Bank is NOT a member of DIF. Here, see for yourself (https://www.difxs.com/DIF/DIFMemberBanks.aspx#S).
The depositors at SVB bank have NO RIGHT to the money in the DIF. If they are saying the DIF is going to be the source of the uninsured SVB deposit bailout, then it looks to me like the US Treasury and the Federal Reserve made a deal with the DIF to replace those DIF funds, plus make up any difference between those funds and the actual payouts.
Thus, it’s the taxpayer bearing the cost of this. Like I said at the beginning of the thread.
This makes the most sense to me. We know that our government and big businesses lie to us. The Big Guys are too big to fail. The risks are always passed onto the little people EVEN IF, on paper, that is not supposed to happen.
So, if SVB gets money from “somewhere” (whoever is forced to provide it) then taxpayer money will be funneled back into that source to replenish it.
What I have learned is that most of our societal institutions are phony and that all of our “checks and balances” and rules to regulate BIG ________ are BS.
All of these regulatory and safe-guard institutions are just another way for insiders to have a job and be part of the power structure. Eventually, no one is guarding the hen house because they are all out having martini lunches with each other.
Perhaps the feds are playing whack-a-mole?
https://www.cnbc.com/2023/03/12/regulators-close-new-yorks-signature-bank-citing-systemic-risk.html
Drat, Elon was thinking about buying it, and perhaps he would bring sunlight to the shenanigans leading up to it, as he did with Twitter.
Shouldn’t that be our money.
Depositors Will Have Access to Their Money on Monday
Likely caused by Yellen pushing rates higher. Banks sitting on bonds at 1%….bond value decline as rates rise….lessened capital position triggers this event.
TGP just posted that Signature Bank NY has now been taken over, they hold 94% of deposits greater than FDIC’s $250K insurance cap. Is this to convince peeps that a central bank digital control grid is necessary? Or yet another massive xfer of wealth like 2008? Just like J6 and wuhuflu hoax, a crisis serves the purpose… evil all
Bank of New York 98%
Northern Trust 96%
Citigroup 85%
JP Mprgan 68%
PNC 56%
source: liz hoffman / semafor.com
Yellen says earlier, no bailout. Next comes an announcement most depositors will have deposits access, due to an FDIC, Federal Reserve and Presidential ‘actions’. What are these actions specifically is my question. Based on the Modus Operandi of the Democrats, ‘we will not bailout’ is spoken, and then creates a process that bails out this careless bank and it’s practices. And what about the report Barrons put out on 3/10, the CEO Becker, weeks ago, sold 3.6m in stock. Something smells.
Yellen is a deceitful crook. That’s how she got the job. Believe whatever the opposite is of what she says. Imho.
I’m watching for a run from the regional bank stocks. The deposits are secure. But the equity and bond holders will be dumping Monday.
As far as contagion is concerned, a firewall has been built that might prevent a run. But the HTM investments are still a problem and that could still require capital infusions
What, are they just going to print more money?! If not from the taxpayers, where else do they get their money from?!
Not ideal, but a better resolution than 2008.
Sure, they can keep the printing presses going.. So long as they have enough electricity to keep them running.
So customers of the woke bank in Left-wing Silicon Valley, with Left-wing California depositors, will get every penny back, even though the “insurance policy” covers only $250K. You can bet that if this was a farm bank in rural Texas or Idaho that wen bust, depositors would be met with, “Sorry, chumps, your losses are not our problem.”
From the “for what it’s worth” society…
[FinanceYahoo] Silicon Valley Bank exec was Lehman Brothers CFO prior to 2008 collapse
https://finance.yahoo.com/news/silicon-valley-bank-exec-lehman-000556735.html
FROM MARTIN ARMSTRONG OF ARMSTRONG ECONOMICS (this caused me to rethink my “feelings” on this matter):
I will offer this recommendation to the Biden Administration for if they DO NOT heed my warning, our forecast will be devastating. The Biden Administration MUST stand behind ALL deposits – not the $250,000 FDIC limit. If they do not, small businesses will pull excess cash from banks, switch to 30-day T-Bills at a brokerage house, and say screw the FDIC and the Biden Administration’s anti-rich (small business which employs 70% of the workforce).
The compromise here is that we need a shotgun wedding where a larger bank takes over SVB at the raw price of the deposits. The shareholder loses, but ALL depositors are covered. Any value of the shares should be attributed to tangible assets only, not goodwill. You will penalize your “hated rich” and even the small businesses will be saved. If not, you will wipe out numerous businesses that cannot even pay employees. That will set off a contagion while you try to uphold your hatred of the “rich” while you pour money into the most corrupt government in the world.
Of course, SVB can simply declare they “identify” as a Ukrainian Bank and then everything would be covered right down to the pensions of the CEO.
https://www.armstrongeconomics.com/world-news/banking-crisis/the-unfolding-bank-crisis/
and if half of the small businesses closed up…what would that do the states in terms of ‘unemployment’ payments? Who really pays for that? The states? Where do they get the money? Oh silly me…/s
I think that last domino will be at someone’s kitchen table.
Another memory hole moment:
https://www.latimes.com/archives/la-xpm-1993-11-07-mn-54337-story.html
A hilarious* comment to this general story on a Forex site:
“Money printer go brrr again…! Print Papa Jerome, print to infinity…!!”
(* Hilarious in a dark-comedy way to be precise.)