Although the libertarian view (depending on your flavor of libertarian) might not be so sympathetic to the depositors. Those entrepreneurs and customers chose to do business with a private bank that chose to mismanage its risk. Personally I think the government stepping in was the right thing other...

"why should there be a risk-free return?" Because the banks make money on that deposit by loaning it out. If there was no return, why would you let them hold it vs "putting it under your mattress"? Not to mention that banks "create" money when they write loans backed by the deposits. The vast major...

"why should there be a risk-free return?" Because the banks make money on that deposit by loaning it out. If there was no return, why would you let them hold it vs "putting it under your mattress"? Not to mention that banks "create" money when they write loans backed by the deposits. The vast major...

My favorite thing that happened this week - High net worth depositors pulled money out of First Republic Bank and moved it to the big banks for safety.
The big banks then got together and sent $30B of excess deposits to First Republic to shore it up.

You should get 0 or negative rate on instantly available cash. If you want a return you should have to tie up your money for a few months, that would mitigate bank runs. Most of the time, doing things in a panic is not normally advantageous to the investor. So the idea that money would be tied up f...

Where are reserves going, are banks not parking them at the Fed for risk free 4.65%? https://old.reddit.com/r/finance/comments/11snp0z/jpmorgan_says_feds_loans_will_provide_2_trillion/ It's 4.65 today. A year ago it was .15. Presumably some of these banks thought they could do better by going into ...

Some analyst commentary on the potential scale of the Fed's new Bank Term Funding Program New Fed Bank Backstop Has Scope to Inject as Much as $2 Trillion Facility unlikely to be used by largest banks: JPM strategists Wrightson ICAP sees window, new facility use rising by $100b ByMasaki Kondo and Al...

jalanlong wrote: ↑

Thu Mar 16, 2023 9:00 am

It's like trying to box someone who never really moves or throws a punch but just keeps tying you up until you get frustrated and throw in the towel.

Duran-Leonard II No Mas?
Classic

So if I'm a bank I can now make terrible investments at no risk? Maybe we should all open banks? This is a key question. It would be very interesting to know how many banks take advantage of this lending in the coming days/weeks. Will that be reported? Shouldn't it be a red flag in itself if a bank...

I’ve been meaning to catch dalio on an AMA for yeaaarrss now. I’ve wanted to ask him point blank to what degree he attributes his thinking to Harry Browne. I’ll get ‘em one of these days. He's commented in the past 24 hours on the SVB situation, calling it the canary in the coal mine. He points to ...

So... Is it stupid to have money in any bank that isn't one of these? "Systemically important": Meaning what? That the reach of their malfeasance has become so extensive that the federal government has no realistic choice but to continue propping them up? There are a number of commentators, one of ...

... It's interesting, and other than the interest expense to the borrowing bank, I'm not seeing a negative effect on anyone, even though something about it feels like sleight of hand to the layperson. ... The negative aspect is that the loans are secured with crap collateral. 30 year treasuries and...

Where will these funds come from? The Fed will create them obviously. So basically, it was a lie that taxpayers would fund the bailout. That dang inflation.... I think you mean "wouldn't". But, strictly, taxpayers and people who use the dollar are not exactly the same set of people. So I suppose it...

While the FDIC was stepping in to make all depositors whole at SVB, the Fed was setting up the lifeline for all depository institutions called the Bank Term Funding Program. Pretty cool, they will make term loans to institutions on assets AT PAR. So if a bank holds a bond or MBS portfolio that has ...

While the FDIC was stepping in to make all depositors whole at SVB, the Fed was setting up the lifeline for all depository institutions called the Bank Term Funding Program. Pretty cool, they will make term loans to institutions on assets AT PAR. So if a bank holds a bond or MBS portfolio that has b...

I wasn't asked for an opinion but I'll volunteer one. I was predisposed to thinking of Naomi Wolf as a conspiracy theorist and rabid feminist. Setting aside those biases, what she's written here is well done, well researched and her points are valid. The released footage deserves an explanation. She...

Vinny, good for you on listening to our presidents. I know unsolicited advice is rarely appreciated, but I would suggest turning up your bullshit detector to 11 when listening to Biden. He has an absolutely abysmal record of truth telling in the First State going back to the 1970s. Don’t get sucker...

Feds announce that all SVB depositors will be made whole. Even those above $250K. It seems like someone explained the situation to them. Still, just a stop gap. This solution is a bit capricious and not a good foundation for future planning. Best to assume that any future failures won't be covered ...

Feds announce that all SVB depositors will be made whole. Even those above $250K. It seems like someone explained the situation to them. Still, just a stop gap. This solution is a bit capricious and not a good foundation for future planning. Best to assume that any future failures won't be covered ...

Some interesting observations from Bill Ackman: *** https://twitter.com/BillAckman/status/1634564398919368704 In 1991 when Bank of New England failed, the FDIC stepped in and insured all depositors including those over the (then) $100,000 limit. They did so for the exact reasons your quote describe...

And then the unimaginable happened. Rising interest rates. Kaboom. A lot of regional banks are in the same position. If the Feds raise rates, more banks go under. If they don't raise rates, inflation stays high. Jerome Powell not feeling irie this weekend I imagine Bernanke sipping margaritas knee ...

In the short term, I would expect another (possibly large) run on the banks come Monday as every CFO in the country moves cash above $250K into 3 month treasury bills. That's a massive amount of money. I wonder what effect it might have on the treasury and short term debt markets to experience a su...

Would you rather the poor be poorer, so long as the rich are worse off? https://www.youtube.com/watch?v=pdR7WW3XR9c This was actually pretty thought provoking. I watched the video twice and then thought about it more during an evening walk (I know, get a life). If I am understanding what Maggie sai...

Would you rather the poor be poorer, so long as the rich are worse off? https://www.youtube.com/watch?v=pdR7WW3XR9c This was actually pretty thought provoking. I watched the video twice and then thought about it more during an evening walk (I know, get a life). If I am understanding what Maggie sai...

I scored 32.
I'm seriously contemplating taking a run over to Las Vegas and trying my hand at counting cards. After People's Court is finished.