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Another Bank failure


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https://www.cnbc.com/2023/03/12/regulators-close-new-yorks-signature-bank-citing-systemic-risk.html 

 

U.S. regulators on Sunday shut down New York-based Signature Bank, a big lender in the crypto industry, in a bid to prevent the spreading banking crisis.

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Good ...

In Uganda they say "you can't make more out of Nothing"

And "no matter how many times you divide a plie of Elephant Dung, you still have the same amount of Dung" ,,, "Better to spread on the crop where it can be of use"

 

Jabez Cowboy 

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Until I see banking executives, banking regulators and legislators going to jail for fiduciary malfeasance (after forfeiting their own last dime) I don't believe anyone (particularly in the crypto currency world) should be "made whole" beyond the limits of the FDIC insurance, currently 250,000 per account. If you have multiple millions in a single account you probably need a better financial advisor! In effect what is being said is "go to Vegas. bet $3 million on red at the roulette table and when it comes up black we will "make you whole" with other peoples money!"

Regards

:FlagAm:  :FlagAm:  :FlagAm:

Gateway Kid

 

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Quote

Any losses to the Deposit Insurance Fund will be covered by a special assessment levied on federally insured banks, not taxpayers.

 

Which the banks will pass on to their customers (Taxpayers) in higher fees that NEVER EVER go down.

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34 minutes ago, Cold Lake Kid, SASS # 51474 said:

What a surprise!

Whoda thunk it?

 

Management sure could use a good a$$ kicking for this.

 

 

Quote

Senior management of the banks will be fired following the FDIC takeover.

 

However they will be allowed to keep their golden parachutes. :angry: :angry: :angry:

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Bull shit statement of the day:

 

“As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer,” the regulators said.”

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2 hours ago, Gateway Kid SASS# 70038 Life said:

Until I see banking executives, banking regulators and legislators going to jail for fiduciary malfeasance (after forfeiting their own last dime) I don't believe anyone (particularly in the crypto currency world) should be "made whole" beyond the limits of the FDIC insurance, currently 250,000 per account. If you have multiple millions in a single account you probably need a better financial advisor! In effect what is being said is "go to Vegas. bet $3 million on red at the roulette table and when it comes up black we will "make you whole" with other peoples money!"

Regards

:FlagAm:  :FlagAm:  :FlagAm:

Gateway Kid

 

 

Fines of the executives involved are NOT the answer.

Fines are only the licensing fee for getting caught. Part of the cost of doing business.

Sadly, the payment of fines is likely to have from company off shore accounts.

If our respective governments really wanted to stop these kinds of shenanigans, they would need to use actual real time, behind bars, in a a normal prison., (As opposed to Club Fed)

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Until Banking Executives and those in charge of the regulations start forfeiting their Personally Ill-gotten Fortunes and going to Jail, it won't change...

 

Jabez Cowboy   

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This is what happens when the person in charge of risk management at the bank is out for a while to plan a lgbt event .  Seriously it was on the news .   
 

you can’t lend to green entities that can’t make money.  Everyone forgot all about salyndra during Obama.   Everyone forgot about GM had to stop making electric cars because no one bought them especially after the recession caused by the last banking crisis.   
 

 

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Just now, Red Gauntlet , SASS 60619 said:

As long as it's the shareholders who lose all their money and the depositors do not it won't cause a blip.

Heard on the radio and read elsewhere several companies are overseas companies like china and Israel.  There was concern those foreign companies will not be able to recover.  I say nothing should be covered over the legal $250,000 like it’s supposed to be not the millions in deposits held by large companies like roku or Roblox etc.  

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5 hours ago, Sedalia Dave said:

 

 

However they will be allowed to keep their golden parachutes. :angry: :angry: :angry:

 

I read that bonuses were given out just beforehand...what a convenient coincidence.:angry:

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21 minutes ago, Trigger Mike said:

 I say nothing should be covered over the legal $250,000 like it’s supposed to be not the millions in deposits held by large companies like roku or Roblox etc.  

 

Of course, companies with large accounts don't hold them to hold them, they hold them to make payroll to employees, and payments to suppliers, and so on.

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That’s right.  Also because svb requires that if they lend the company money you have to hold assets there.   Still it’s not the fdic job to cover above the set $250,000.   
 

the fact they couldn’t find a buyer even among their top investors like black rock and j p Morgan chase tells you a lot of what they have for assets and loans are junk.  

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Bonds have always scared me, they are a negative bet.

 

Consider a $1,000 bond paying 1% when interest rates are 1%. And interest rate goes to 2%... This bond is now only worth $500. Because it has to pay 2%.

 

At the other end of the market, consider a $1,000 bond paying 20%. And interest rates drop to 10%.  This bond is now worth $2,000. Because it pays 10%

 

With interest rates near zero, the Fed "encouraged" banks to buy bonds due to the fallout from CoViD, and banks did buy them. Banks are now sitting on about $1 trillion of unrealized losses. The losses are unrealized only because the banks have not sold those bonds.

 

As long as banks do not need the funds tied up in bonds, the banks can hold them until  some day when they will sell for face value or better. But if something happens and customers need funds which are tied up in those bonds, the bank needs to sell those bonds to provide the customer funds. This requires the bank to realize the loss.

 

This affects shareholders. But a shareholder can only lose a certain amount of money, the value of shares. If the loss from the bond sale exceeds the share value, the shareholder is not liable for the excess. A share can only drop to $0, it can not go negative.

 

SVB losses exceeded share value. That other bank suffered the FTX loss. Neither of these banks can make up the shortfall by selling bonds which have lost value..

 

These losses in are in two banks.. The problem is, for any bank, if they bought so many low-yield bonds that they will not be able to meet demand for cash during the monetary tightening (increasing interest rates by the Fed). Will they have to sell bonds at a loss to meet liquidity needs?

 

At the moment, this does not look like 2008, but this is in great part a problem today caused by bank regulation outside of the controls put in after 2008. So I am not surprised by the Fed saying all depositors will be made whole; I am also a bit skeptical of any claims taxpayers will not be on the hook for the costs of doing so.

 

 

 

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31 minutes ago, John Kloehr said:

 

 

With interest rates near zero, the Fed "encouraged" banks to buy bonds due to the fallout from CoViD, and banks did buy them. Banks are now sitting on about $1 trillion of unrealized losses. The losses are unrealized only because the banks have not sold those bonds.

 

 

 

It's a big accounting trick by the Fed. Inflation does not miraculously or arbitrarily appear due to wars and supply chain issues, etc...Its all done to more or less fool us on one level and increase the tax burden and create the illusion of a lessened government debt on another level. Then when banks and businesses too big to fail do fail, they are bailed out, at a cost to future taxpayers' wallets and at a cost to freedom through regulation. It is a big criminal enterprise.

Inflation and deficit spending are instruments of government imposed on the economy and tax payer but for no other reasons than mentioned: to feed a criminal political machine. If they sell bonds today, then devalue currency tomorrow through money printing, the value down the road decreases in real terms as the buying power of the dollar decreases and the cost of repaying bonds proportionally decreases gauged against revenue and GDP. The government can later claim to have cut the debt, cut the deficit etc so forth when spending and debt have actually increased. It is all based on artificially created proportions.  It is a bunch of currency manipulation and accounting tricks to fool the general public. They don't really care how many bonds they sell. They can leverage banks to buy them if necessary through cutting interest rates so low, they buy bonds for some form of meager profit, even if they know these bonds are garbage. This went on during Covid. OR they can sell to foreign investors, but I was always supsicious that the Chinese only bought so many hoping for a greater trade imbalance.

The FED is as guilty of currency manipulation as the Chinese. Then politicians toy with things, generally outside of their enumerated powers and leverage the FED come election time to lower interest rates. All the while bribing certain classes of citizens, while exploiting the hopes and hostilities of another.

 

At the end of the day, this has all happened because parents in mass forfeited the education and the rearing of their kids to government, and we are getting the government we deserve.

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Anybody pulling their money out of the banks? We got a letter from our bank today and it made my wife and I wonder if we should. It was meant as a confidence booster. Bank stocks across the board took some big hits, might be the perfect storm.

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11 hours ago, Dirty Dan Dawkins said:

 

 

At the end of the day, this has all happened because parents in mass forfeited the education and the rearing of their kids to government, and we are getting the government we deserve.

Sadly this seems to have contributed to more societal issues than just monetary policy 

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Just  Setting us up to go digital currency . Nothing to see here  It will be gold based crypto  

 

 

9 hours ago, Marshal Mo Hare, SASS #45984 said:

Any of them that invested in crypto deserved to fail.

  

Interesting you say that since your Much loved Ukraine is one of the biggest involved doing "aid" through Crypto 
Ukraine received $18.2 billion of security commitments from the U.S. and an unknown amount of donations through a Ukrainian government aid website launched with FTX in March. The Ukrainian government invested some of that money in FTX.  His deputy Nishad Singh allegedly funneled another $7.4 million..

Ukraine is ranked third on Chainalysis’s 2022 Global Crypto Index, climbing up a spot from the previous year. Plagued by Russia’s invasion of their territory earlier in 2022, the Ukranian government has grasped at any form of donations or help they could get. Amidst the chaos, cryptocurrency unveils itself as the unlikely hero for the Ukrainians war effort against Russia. As one of the first countries in the world to fully pass a legal framework for cryptocurrency, Ukraine’s digital transformation minister Mykhailo Fedorov and Deputy Minister of Digital Transformation on IT Industry Development, Alex Bornyakov was able to fast track the mobilization of digital currencies.  The Ukrainian government was quick to realize that crypto donation was the easiest and fastest way to handle the flood of international donations that were coming their way, with almost $55 million worth of donations in a week back in March.    As of August 2022, more than $100 million in crypto has been donated to help fund the war effort in Ukraine


All since late 2022 hmmm 

Moreover, Binance, the world largest cryptocurrency exchange, has started a “Ukraine Emergency Relief Fund”, a crypto-first crowdfunding site to support crypto donations readily. This is on top of the $10 million donation they contributed to the Ukrainian government. 


As always follow the money ever happen to wonder where the Gold bars we liberated in Iraq went ? 

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Barney Frank was a director at SVB. His director fee was $350,000. Remember he was from San Francisco and help pas the Dodd-Frank Act that was worthless! The government will bail out the mega banks and then pass the cost to the little community banks that run their banks correctly. Irish ☘️ Pat

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There were people being interviewed that wanted the board of directors jailed.

 

Jail is too good for them. Instead take ALL their assets including any their spouse has. Houses, cars, bank accounts including those over seas, jewelry, clothes and everything else. Leave them with nothing but the clothes on their backs.

Go back 5 years and any assets they gave to family members seize those too.  Then levy a judgment against them so that anytime they accumulate assets over a few thousand dollars it is seized and sold to repay those they swindled.

 

This is the ONLY wat to put a stop to this BS. Make them just as poor as the people whose money they stole.

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On 3/13/2023 at 10:42 PM, Marshal Mo Hare, SASS #45984 said:

Any of them that invested in crypto deserved to fail.

The banks maybe. Lots of little guys got burned too. One of my best friends lost tens of thousands on crypto, all he ever did was bust his @$$  working 70hrs a week or more at 2 different jobs. A friend of his (not me) got him into it, and there for a while it's like they were printing their own money (of course it was all rolling over into crypto, not going in the bank) until the bubble burst. Sad. Dumb, but still sad.

JHC :(

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16 hours ago, Cold Lake Kid, SASS # 51474 said:

Anybody know where SVBs Compliance Officer was and what she was doing before all this went down?

 

I looked it up.

Holy Cow! This was part of her job as Compliance Officer???

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