rich people are going around scaring themselves like kittens in front of mirrors
i can't believe the fed is just backstopping uninsured deposits. they are trying so hard to dance around the word that explains exactly what's going on right now: BAILOUT
fuck these people, fuck joe biden, and death to amerikkka
It's not a bailout, the investors in this bank are getting fucked. What's happening is they're liquidating the bank and using all its assets to fully cover deposits, then returning the rest to investors. No money is being given by the government to anybody. Same deal as SVB.
No money is being given by the government to anybody.
please correct me if i'm wrong but that is exactly what is NOT happening. The shareholders aren't covered as you say, but there are no current buyers for these assets. Therefore, the fed announced the depositors will be receiving all their money from the deposit insurance fund i.e. the treasury, i.e. the taxpayer ultimately if the DIF dips to 0. And the Fed basically indicated in their statement that this applies to every bank, meaning every bank's FDIC insurance is now up from $250k to unlimited. But they don't pay for that insurance, meaning we are now creating a huge moral hazard situation where all these banks can just do anything they want, because even if they use their deposits to buy the riskiest securities ever, it doesn't matter! The depositors will not have to worry. The VC backed companies will never have to worry, they will never lose because they will always play with house money.
If I am understanding this correctly, this is just one degree of indirection from bailout.
Not everything is crypto assets, so as far as I can tell they're going to sell off the good assets, hold onto ones for which there is not currently a market (and sell when and as there is a market) and, yes, use the DIF to make whole the depositors.
What happens if there's not enough money to cover depositors? Or would that be illegal and therefore unlikely?
Because the FDIC has lifted the $250K ceiling, that means that Deposit Insurance Fund will be covering everything. It is an insurance fund that all FDIC member banks pay into to cover these situations. This means that all of the banking industry will pay for this failure, and that premiums will be going up. If there isn't enough in the DIF to cover the deposits, the FDIC has the ability to borrow directly from the Fed or to issue debt.
If you have to explain how this is not a bail out
You already lost
There's a paywall.
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archive.today • Regulators close New York's Signature Bank, citing systemic risk
Hmm...
Signature is one of the main banks to the cryptocurrency industry. As of Dec. 31, Signature had $110.4 billion in total assets and $88.6 billion in total deposits, according to a securities filing.
Lol 110 in assets. How much was real and how much was monkey pictures
My apologies, the paywall didn't show up on my side (which is odd since i've never subscribed or anything) so i assumed it was fine. I'll add the archive to the post if that's ok.
This is good for crypto. Both the American banks that were used by exchanges are now gone. One bankrupt and another forcefully shut down.
I think Coinbase is still weathering it because JPM hasn't dropped them. inshallah to Cramer's kiss of death
he tweeted that JPM was a fortress when the bank run stories first broke
LMAO. Jim Cramer called it :isaac-pog:
There is an even larger elephant in the room: derivatives. Volatility increased last Thursday and Friday. The turmoil has reached vast magnitudes beyond what characterized the 2008 crash of AIG and other speculators.
Today, JP Morgan Chase and other New York banks have tens of trillions of dollar valuations of derivatives– casino bets on which way interest rates, bond prices, stock prices and other measures will change.For every winning guess, there is a loser. When trillions of dollars are bet on, some bank trader is bound to wind up with a loss that can easily wipe out the bank’s entire net equity.
https://michael-hudson.com/2023/03/why-the-banking-system-is-breaking-up/
EDIT: the Cramer tweet in question: https://nitter.snopyta.org/jimcramer/status/1634222320398086145
do you know what reporting he's referencing here? I can't find much.
If you are asking about Hudson's reporting, I think he is referring to this:
https://wallstreetonparade.com/2022/06/jpmorgan-chases-derivatives-spike-by-14-trillion-in-first-quarter-to-six-year-high-of-60-trillion/
Lol usually they don't bother shuttering banks on a Sunday wonder what's gonna happen Monday exdee
We’re going down baby down down the roller coaster sweet sweet baby never gonna let you go :coaster:
So what's the narrative here? Banks that invested in crypto are now going under. But these banks aren't too big to fail so the feds are liquidating them. Is there a way this could spread to banks who did not invest in crypto?
I don't understand how the fed is going to seize the illiquid assets and sell them if any significant portion of it is crypto currency or holdings related to crypto currency. What are the chances the FDIC folks walk into 400gb of monkey pictures? How will they turn that into money?
Is there a precedent for the seizure of an asset crashing the market that that asset is traded within? I’d imagine there is.
So basically.
Money of completely fake made up along with our economy. Only if you are rich though
Always was after a certain point in a manufacturing economy. We are quite literally at a point of post-scarcity in the U.S., but profit has to be made.
