Silicon Valley Bank Collapse

[Elixir]

Just told Mrs Elixir if I wasn’t so lazy I would round up all our liquid assets, dump them into an index fund right now and pull them out this afternoon.

 

[Gospel]

I think that FDIC insurance should dramatically increased.

I don't think increasing it would improve things. What ought to be done is to restrict banks from investing what is not theirs to invest. They do that and FDIC would be pointless.

 

[Jimmy Higgins]

I think that FDIC insurance should dramatically increased.

I don't think increasing it would improve things. What ought to be done is to restrict banks from investing what is not theirs to invest. They do that and FDIC would be pointless.

That isn't how it works. FDIC fees going up with help manage banks that go out of business, because banks have always and will always go out of business. It's a thing. So pump more into FDIC to cover the inevitable failures, and then reassess the level of bank that doesn't get stress tested quite as much. And maybe try to streamline the ability to determine the status of a bank. I understand that finance is murky, but if we can approximate properties of soil just using moisture contents, I think we can do likewise with banks (small metrics providing larger understanding).

 

[Gospel]

I think that FDIC insurance should dramatically increased.

I don't think increasing it would improve things. What ought to be done is to restrict banks from investing what is not theirs to invest. They do that and FDIC would be pointless.

That isn't how it works. FDIC fees going up with help manage banks that go out of business, because banks have always and will always go out of business. It's a thing. So pump more into FDIC to cover the inevitable failures, and then reassess the level of bank that doesn't get stress tested quite as much. And maybe try to streamline the ability to determine the status of a bank. I understand that finance is murky, but if we can approximate properties of soil just using moisture contents, I think we can do likewise with banks (small metrics providing larger understanding).

Huh woah wait what now? I thought that when people deposit money in a bank account that money should be their when they come back. If the bank charges a fee to maintain the account and a part of that fee is spent on investments, I don't see how my deposit should be lost. If the bank screws up and can't pay it's operation costs from the fee's they charge, they fucking give me my deposit and close their doors.

What am I missing that's so complicated?

 

[Cheerful Charlie]

So deposits are being covered by FDIC and auctioning bank assets. Anything further will require a special assessment on all other FDIC insured banks to pay into the fund to make up the difference. And I would guess the banks would want to recoup this special assessment somehow.

Sincerely,
Mr. Somehow

I doubt that! All banks have customers who aren't 100% FDIC covered. They would all want their customers covered. They'll gladly agree to chip in more to the fund. I think that FDIC insurance should dramatically increased.

To do that would neccesitate heavy regulation. If everybody no matter what was insured, that might tempt some bank officials to run amuck. Cause if we fail, everybody is covered, so damn the torpedos. Perhaps what is needed is a sliding scale premium paid by the banks for insurance. The bigger the deposit, the more insurance costs. Depositors can choose banks that pay and cover them, or choose not to. If you have $100 million in a bank, what would you choose? But only banks run on sound principles can get optional insurance coverage.

 

[jonatha]

What am I missing that's so complicated?

Watch "It's a Wonderful Life".

Banks aren't armored mattresses in which to stuff your cash. (Those are called "safe deposit boxies"...) Banks take your deposit and lend it to your neighbor so he can buy his house. Banks make their money on interest income and suchlike, not on all those pesky nickel and dime fees they charge...

 

[Jimmy Higgins]

I think that FDIC insurance should dramatically increased.

I don't think increasing it would improve things. What ought to be done is to restrict banks from investing what is not theirs to invest. They do that and FDIC would be pointless.

That isn't how it works. FDIC fees going up with help manage banks that go out of business, because banks have always and will always go out of business. It's a thing. So pump more into FDIC to cover the inevitable failures, and then reassess the level of bank that doesn't get stress tested quite as much. And maybe try to streamline the ability to determine the status of a bank. I understand that finance is murky, but if we can approximate properties of soil just using moisture contents, I think we can do likewise with banks (small metrics providing larger understanding).

Huh woah wait what now? I thought that when people deposit money in a bank account that money should be their when they come back. If the bank charges a fee to maintain the account and a part of that fee is spent on investments, I don't see how my deposit should be lost. If the bank screws up and can't pay it's operation costs from the fee's they charge, they fucking give me my deposit and close their doors.

What am I missing that's so complicated?

The part about how the bank uses people's deposits. What you are asking for is called a safe, not a bank. Banks use your money. They used to pay you for that, but so much anymore. It is how our economy works. A bank needs likely some smaller percentage on hand to manage daily withdrawals, but overall, the money most people put in banks isn't be spent. It is on reserve.

 

[TV and credit cards]

So deposits are being covered by FDIC and auctioning bank assets. Anything further will require a special assessment on all other FDIC insured banks to pay into the fund to make up the difference. And I would guess the banks would want to recoup this special assessment somehow.

Sincerely,
Mr. Somehow

I doubt that! All banks have customers who aren't 100% FDIC covered. They would all want their customers covered. They'll gladly agree to chip in more to the fund. I think that FDIC insurance should dramatically increased.

Okay but if they are all chipping in more to the FDIC fund, which I believe did happen at the beginning of this year in order for the FDIC to meet its reserve ratio, that money has to come from somewhere. My assumption is it would come in the form of lower interest rates for deposits.

 

[Gospel]

I think that FDIC insurance should dramatically increased.

I don't think increasing it would improve things. What ought to be done is to restrict banks from investing what is not theirs to invest. They do that and FDIC would be pointless.

That isn't how it works. FDIC fees going up with help manage banks that go out of business, because banks have always and will always go out of business. It's a thing. So pump more into FDIC to cover the inevitable failures, and then reassess the level of bank that doesn't get stress tested quite as much. And maybe try to streamline the ability to determine the status of a bank. I understand that finance is murky, but if we can approximate properties of soil just using moisture contents, I think we can do likewise with banks (small metrics providing larger understanding).

Huh woah wait what now? I thought that when people deposit money in a bank account that money should be their when they come back. If the bank charges a fee to maintain the account and a part of that fee is spent on investments, I don't see how my deposit should be lost. If the bank screws up and can't pay it's operation costs from the fee's they charge, they fucking give me my deposit and close their doors.

What am I missing that's so complicated?

The part about how the bank uses people's deposits. What you are asking for is called a safe, not a bank. Banks use your money. They used to pay you for that, but so much anymore. It is how our economy works. A bank needs likely some smaller percentage on hand to manage daily withdrawals, but overall, the money most people put in banks isn't be spent. It is on reserve.

The saying goes when it's free, you're the product. Thus funds in "free checking accounts" are leveraged by the bank to earn money. If we stupid Americans would stop being products and instead pay for the services just maybe banks will be banks instead of the lucrative gambling houses they are today. I don't see why we can't change the banking system in a way that they invest their own money and leave ours alone. They have a service that modern civilization can't go without. How is it possible that they can't earn money managing our transactions & use the money they earn to invest without touching ours? It's insane to me. FDIC insurance is great and much needed in emergencies but the emergency it has been used for the most can be avoided.

They also earn money by giving out loans from loans they obtain themselves from the feds. They have money that materializes out of thin air at their disposal and they still can't earn enough to not fuck around with money that isn't theirs? The hell is going on round here?

 

[TSwizzle]

Woke Silicon Valley Bank donated over $73 million to Black Lives Matter-related social justice groups in the years before it collapsed, while failed Signature Bank donated $850,000, it has been revealed. A database by the conservative Claremont Institute shows that SVB donated around $73,450,000 to the movement and other social-justice related causes as it worked to increase its Environmental, Social and Governance rating.

Daily Mail

Go woke, go broke!

It deserves everything that is coming to it.

 

[bilby]

I think that FDIC insurance should dramatically increased.

I don't think increasing it would improve things. What ought to be done is to restrict banks from investing what is not theirs to invest. They do that and FDIC would be pointless.

That isn't how it works. FDIC fees going up with help manage banks that go out of business, because banks have always and will always go out of business. It's a thing. So pump more into FDIC to cover the inevitable failures, and then reassess the level of bank that doesn't get stress tested quite as much. And maybe try to streamline the ability to determine the status of a bank. I understand that finance is murky, but if we can approximate properties of soil just using moisture contents, I think we can do likewise with banks (small metrics providing larger understanding).

Huh woah wait what now? I thought that when people deposit money in a bank account that money should be their when they come back. If the bank charges a fee to maintain the account and a part of that fee is spent on investments, I don't see how my deposit should be lost. If the bank screws up and can't pay it's operation costs from the fee's they charge, they fucking give me my deposit and close their doors.

What am I missing that's so complicated?

The part about how the bank uses people's deposits. What you are asking for is called a safe, not a bank. Banks use your money. They used to pay you for that, but so much anymore. It is how our economy works. A bank needs likely some smaller percentage on hand to manage daily withdrawals, but overall, the money most people put in banks isn't be spent. It is on reserve.

The saying goes when it's free, you're the product. Thus funds in "free checking accounts" are leveraged by the bank to earn money. If we stupid Americans would stop being products and instead pay for the services just maybe banks will be banks instead of the lucrative gambling houses they are today. I don't see why we can't change the banking system in a way that they invest their own money and leave ours alone. They have a service that modern civilization can't go without. How is it possible that they can't earn money managing our transactions & use the money they earn to invest without touching ours? It's insane to me. FDIC insurance is great and much needed in emergencies but the emergency it has been used for the most can be avoided.

They also earn money by giving out loans from loans they obtain themselves from the feds. They have money that materializes out of thin air at their disposal and they still can't earn enough to not fuck around with money that isn't theirs? The hell is going on round here?

Money is fungible. When you deposit money in a bank account, the money is "theirs"... until you want it back, when it becomes "yours" again.

You're entirely at liberty to stuff that money into your mattress in the form of banknotes if you prefer it not to become "theirs".

Your understanding of what money is appears to be about a century out of date - most money has no physical existence whatsoever; And money materialising out of thin air (and disappearing back into thin air) is routine, and a necessary element of modern economics.

Back in the day, people tried to have money that physically existed, and it was a complete disaster unless the amount of stuff people did, turned out to exactly match up with the amount of precious metals they dug out of the ground. That works for pre-industrial economies as long as there are few natural disasters or big gold strikes, but it's just not compatible with an economy driven by manufacturing, or by innovation, or by services.

The amount of money that exists changes constantly to match these amount needed to get things done. People get the shits if the amount in their own pockets or bank accounts changes without notice, so we have banks to insulate the microeconomic system of day to day life from the macroeconomic situation of banks and financial institutions.

Occasionally, people try to break the system by all asking for "their" money to be handed over at the same time - and then banks collapse, because the system depends on people not doing that.

Obviously people get pretty annoyed when "their" money disappears; But the system that disappeared it is the same system that made it appear to begin with, and is the reason why most people no longer have the life-long level of personal wealth we typically associate with medieval peasants.

 

[ZiprHead]

Woke Silicon Valley Bank donated over $73 million to Black Lives Matter-related social justice groups in the years before it collapsed, while failed Signature Bank donated $850,000, it has been revealed. A database by the conservative Claremont Institute shows that SVB donated around $73,450,000 to the movement and other social-justice related causes as it worked to increase its Environmental, Social and Governance rating.

Daily Mail

Go woke, go broke!

It deserves everything that is coming to it.

Bank failures under Donald Trump compared to Joe Biden

Some 16 banks failed during Trump's four-year presidency, but none was as big as Silicon Valley Bank, which closed on Friday.

www.newsweek.com

Journalist Aaron Rupar pointed out the falseness of Donald Trump Jr's statement, tweeting: "There were actually 16 bank failures between 2017 and 2020. SVB Bank is the first to collapse since Biden took office." He sourced data from the Federal Deposit Insurance Corporation (FDIC), which reports that eight banks failed in 2017, four in 2019 and four in 2020.

 

[Jimmy Higgins]

Woke Silicon Valley Bank donated over $73 million to Black Lives Matter-related social justice groups in the years before it collapsed, while failed Signature Bank donated $850,000, it has been revealed. A database by the conservative Claremont Institute shows that SVB donated around $73,450,000 to the movement and other social-justice related causes as it worked to increase its Environmental, Social and Governance rating.

Daily Mail

Go woke, go broke!

It deserves everything that is coming to it.

I love how it says "Black Lives Matter-related social justice groups". What does that even mean? Nothing. I also know what it doesn't mean... it isn't donations to #BLM.

Incredible people fall for that crap. Wait... not fall... seek it out like it is a drug that makes them higher than Alyssa Milano (it is pre-season four, so a legit reference). GO woke, go broke... that is more noise than Alyssa Mila... wait that doesn't work. It is more noise than the static on an old CRT TV not tuned to a station. Really goes to show how obsessed with "woke" the alt-right is. They see it in everything.

 

[Gospel]

I think that FDIC insurance should dramatically increased.

I don't think increasing it would improve things. What ought to be done is to restrict banks from investing what is not theirs to invest. They do that and FDIC would be pointless.

That isn't how it works. FDIC fees going up with help manage banks that go out of business, because banks have always and will always go out of business. It's a thing. So pump more into FDIC to cover the inevitable failures, and then reassess the level of bank that doesn't get stress tested quite as much. And maybe try to streamline the ability to determine the status of a bank. I understand that finance is murky, but if we can approximate properties of soil just using moisture contents, I think we can do likewise with banks (small metrics providing larger understanding).

Huh woah wait what now? I thought that when people deposit money in a bank account that money should be their when they come back. If the bank charges a fee to maintain the account and a part of that fee is spent on investments, I don't see how my deposit should be lost. If the bank screws up and can't pay it's operation costs from the fee's they charge, they fucking give me my deposit and close their doors.

What am I missing that's so complicated?

The part about how the bank uses people's deposits. What you are asking for is called a safe, not a bank. Banks use your money. They used to pay you for that, but so much anymore. It is how our economy works. A bank needs likely some smaller percentage on hand to manage daily withdrawals, but overall, the money most people put in banks isn't be spent. It is on reserve.

The saying goes when it's free, you're the product. Thus funds in "free checking accounts" are leveraged by the bank to earn money. If we stupid Americans would stop being products and instead pay for the services just maybe banks will be banks instead of the lucrative gambling houses they are today. I don't see why we can't change the banking system in a way that they invest their own money and leave ours alone. They have a service that modern civilization can't go without. How is it possible that they can't earn money managing our transactions & use the money they earn to invest without touching ours? It's insane to me. FDIC insurance is great and much needed in emergencies but the emergency it has been used for the most can be avoided.

They also earn money by giving out loans from loans they obtain themselves from the feds. They have money that materializes out of thin air at their disposal and they still can't earn enough to not fuck around with money that isn't theirs? The hell is going on round here?

Money is fungible. When you deposit money in a bank account, the money is "theirs"... until you want it back, when it becomes "yours" again.

You're entirely at liberty to stuff that money into your mattress in the form of banknotes if you prefer it not to become "theirs".

Your understanding of what money is appears to be about a century out of date - most money has no physical existence whatsoever; And money materialising out of thin air (and disappearing back into thin air) is routine, and a necessary element of modern economics.

Back in the day, people tried to have money that physically existed, and it was a complete disaster unless the amount of stuff people did, turned out to exactly match up with the amount of precious metals they dug out of the ground. That works for pre-industrial economies as long as there are few natural disasters or big gold strikes, but it's just not compatible with an economy driven by manufacturing, or by innovation, or by services.

The amount of money that exists changes constantly to match these amount needed to get things done. People get the shits if the amount in their own pockets or bank accounts changes without notice, so we have banks to insulate the microeconomic system of day to day life from the macroeconomic situation of banks and financial institutions.

Occasionally, people try to break the system by all asking for "their" money to be handed over at the same time - and then banks collapse, because the system depends on people not doing that.

Obviously people get pretty annoyed when "their" money disappears; But the system that disappeared it is the same system that made it appear to begin with, and is the reason why most people no longer have the life-long level of personal wealth we typically associate with medieval peasants.

What in the world is that perversion of reality? Currency (digital and paper) is a replacement for the bartering system. It is so that people don't need to carry around things of value to trade but rather trade a peace of paper (or digital currency especially after the gold standard was dropped) that represents that thing of value because it's easier. It's an essential part of economical growth. Yes I'm aware that money today is all materialized out of no where, however it still holds true that said currency represents something of value to the holder. It's not just a perception thing but people actually provided tangible real world services &/or materials in exchange for it. When you gamble with the owner(s) fiat and make it vanish it has real world consequences because now said owner(s) have lost the means to trade the value it once represented. How do you explain how fiat money when mishandle has real world consequences if this view is outdate? Come on man!

The monitory system works, it would just be better off without the extra land of make-believe economic practices like trading value's that aren't yours to trade.

 

[Politesse]

The very idea that a bank could be ""woke"....



... is proof that conservatives have no goddamned clue what that word actually means.

 

[bilby]

What in the world is that perversion of reality? Currency (digital and paper) is a replacement for the bartering system. It is so that people don't need to carry around things of value to trade but rather trade a peace of paper (or digital currency especially after the gold standard was dropped) that represents that thing of value because it's easier.

Currency isn't a thing, an object, or a possession; It's a fungible and flexible debt. The entire point of currency is that you can't do anything with it except exchange it for stuff.

And the entire point of fiat currency is that what you can exchange it for isn't fixed to anything - money is worth what two people engaged in a transaction agree that it is worth at one specific point in time, and that value can be completely different for each transaction.

That's not a perversion of reality; It's been a fact of our existence for the entire lives of all but the oldest humans alive today.

That most people don't understand it at all - to the point where they consider a simple description of the exact world in which they live to be "a perversion of reality" - is the major reason why they persist in voting for perverse economic policies such as "balanced budgets".

It's not even particularly complicated to learn - but it's not intuitive, and so most people just believe stuff that's not so, rather than ever learning how things really are.

Belief as a substitute for understanding is the most widespread and popular flaw in human history.

Money is just debt. You can't do anything with it except ask society to repay it in a specific and concrete way; And it's not until you ask for that to happen that you know for sure what it's actually worth.

If you mow someone's yard in exchange for a hamburger, that's barter.

If you mow their yard for $5, and Burger King will sell you a Whopper for $5, that looks like much the same thing; But if you rock up to the drive through window at BK and the new price list has a Whopper at $50 (hyperinflation!) then your lawn mowing job just lost 90% of its value. Nine tenths of your hamburger (or nine tenths of your hard work) just vanished into nothingness in the time it took you to drive from work to BK.

Nobody had to hold a gun to your head and demand nine-tenths of a burger. You just made the rookie error of thinking that money is something you own, rather than a mere placeholder for the possibility that one day you might own something.

 

[TomC]

The very idea that a bank could be ""woke"....



... is proof that conservatives have no goddamned clue what that word actually means.

But, similarly, there are people who think banks are being racist when they apply the same standards to loans in declining areas as they do improving areas.
Tom

 

[Oleg]

The very idea that a bank could be ""woke"....

When an organization puts box checking over competency and merit, that’s woke.

 

[Swammerdami]

A number of SVB executives sold their stock days before the bank's collapse. Insider trading at its best.

Wasn't Martha Stewart sent to federal penitentiary for much less?

Forget the latest George Floyd. I want to see protests until those execs get five to ten years in stir.

 

[ZiprHead]

A number of SVB executives sold their stock days before the bank's collapse. Insider trading at its best.

Wasn't Martha Stewart sent to federal penitentiary for much less?

Forget the latest George Floyd. I want to see protests until those execs get five to ten years in stir.

I thought it was perjury that got her in the slam.

ETA:

After a highly publicized six-week jury trial, Stewart was found guilty in March 2004 of felony charges of conspiracy to obstruct, of obstruction of an agency proceeding, and of making false statements to federal investigators and was sentenced in July 2004 to serve a five-month term in a federal correctional facility and a two-year period of supervised release (including five months of electronic monitoring).[53]