Silicon Valley Bank was closed by regulators on Friday after depositors rush to get their money.
The bank is a major leader of tech start ups and the spectacular collapse over two days is seen post the feds 4 triilion dollar injection into the market after the market freeze of March 2020 and now the interest rate hikes that has resulted in security bond yield increaing but their market value significantly decreasing.
He says banks generally are sitting on big losses from the interest rate hike effects on the value of their bond portfolios.
Bloomberg says this morning the situation will hit the SBV bank in England on Monday when it will be declared insolvent, and may hit other SBV banks in other countries such as India, China, Germany and Israel.
Leaders of roughly 180 tech companies today sent a letter calling on UK Chancellor Jeremy Hunt to intervene, claiming “The loss of deposits has the potential to cripple the sector and set the ecosystem back 20 years
Biden has come to the rescue of his wealthy donors with the announcement of a massive bailout. Yet he just cant seem to find the money to help the working class the poor thing
According to a post by economic historian Adam Tooze on his Chartbook site, “At a rough guess SVB suffered a loss of at least $1 billion every time interest rates went up by 25 basis points (a rise of 0.25 percentage points) and the Fed has hiked by 450. So if they had to sell their ‘safe’ portfolio of bonds they would actually suffer a huge loss.”
SVB are not Robinson Crusoe in the sea of banking malfeasance house of cards
Interesting comment by Bernie, supporting the people and correcting the definition of socialism
“Now is not the time for U.S. taxpayers to bail out Silicon Valley Bank. If there is a bailout of Silicon Valley Bank, it must be 100 percent financed by Wall Street and large financial institutions. We cannot continue down the road of more socialism for the rich and rugged individualism for everyone else,” said Sen. Bernie Sanders (I-Vt.) in a statement.
It was Trump who gave the rich a tax cut to the tune of 2 trillion dollars.
Trump Tax Cuts Helped Billionaires Pay Less Taxes Than The Working Class In 2018
According to a 2017 survey, many large corporations said that they didn’t need the money from the Trump administration’s tax cuts. They were sitting on a record $2.3 trillion in cash reserves, double the level in 2001.
Why do you keep lying?
Here is where your “observations” belong.
The dollar is a contract for a means of exchange of values. This contract is printed by the government and guaranteed to as to its exchange value.
OTOH, crypto money is not a means of exchange, it is merely an unsecured promise. If someone breaks the promise there is no way to recover the value.
Unfortunately a lot of people exchanged real money for crypto and someone broke a promise.
Yes, economics needs to be regulated. There are always greedy people who must be restrained from taking advantage of lax regulation.
Punishing them after the fact doesn’t change a thing. They must never be allowed to take advantage in the first place. It’s not complicated.
When Trump was president he did away with a lot of banking regulations so that he himself could take advantage. Remember, no bank would lend him money because he never did pay his debts, except to expensive porn stars.
This banking disaster is but one in Trump’s sorry legacy.
Some Re[ublicans are asking to deregulate banking even more, but some cooler heads are finally beginning to protest against the Republican onslaught.
Why Do Republicans Want To Gut Bank Regulations Even More?
Not satisfied with the regulatory relief that legislators bestowed upon banks under the Economic Growth, Regulatory Relief and Consumer Protection Act (S. 2155) signed earlier this year, seven Republican senators want to gut bank regulations even more. They [wrote] the Federal Reserve’s Vice Chairman for Supervision, Randall Quarles, last Friday requesting the relaxation of key capital and liquidity rules for numerous banks in the $100 -250 billion asset range, and in some case, even for those larger than that range. Senators Bill Cassidy,(LA) James M. Inhofe,(OK) James Lankford,(OK) David Perdue(GA), Thom Tillis(NC), Michael Rounds(SD), and Jerry Moran (KS) are all signatories to the letter. Only Senators Moran, Perdue, Rounds, and Tillis are members of the [Senate Banking Committee]
“This is just like before 2008 when political interference and ignorant ideology drove regulatory policy and resulted needlessly in the financial crisis” stated Dennis Kelleher, President and CEO of Better Markets, a civil society organization that promotes financial stability. “It is laughable that these senators are telling banking experts at the Federal Reserve with decades of individual experience and thousands of collective years, how to read data.” Kelleher emphasized that the “Fed exists to look at data in an unbiased manner and here you have a bunch of senators trying to bully the Fed to reading its own data in a particular way.”
With the exception of Senator Inhofe, senators Cassidy, Lankford, Moran, Perdue, Rounds, and Tillis all received campaign contributions from banks or securities firms. It is particularly incredible that senators who are in the Senate Banking Committee are allowed to receive monetary contributions from the very banks which the legislators are writing laws about. These senators’ voters should question whether they can be impartial when crafting laws intended to make the banking system safer in order not to have taxpayers continually bail banks out.
It was regulated until Trump removed most of the banking regulations during his presidency. This was just another disastrous decision by Trump to make some new rich friends in the banking industry so that he could borrow again.
Obviously that fact escaped your attention. So clearly it is you who has not given it any thought.
And one solution to lessen the risk to investors is to have insurances covering bank accounts dependent on size and risk . Borrowers would be responsible to pay part of the premiums. This would have several beneficial effects that are readily apparent.