Posted on 03/12/2023 9:43:09 PM PDT by bitt
In order to offset svb’s losses, they had to print money and take over their low interest bonds. Printing = inflationary. Waiting on low interest bonds to mature = a loss. It exacerbates current problems.
That said, individuals were probably calmed.
Name that Senator.
Agree. Good post.
Thomas Massie Retweeted
Mike Benz
@MikeBenzCyber
Rep. Massie: DHS efforts are already underway to add censorship of “financial misinformation” to CISA’s portfolio of “critical infrastructure” domains it can classify tweets as a cyber attack on, & thus censor. See, e.g., link below:
https://cisa.gov/sites/default/files/publications/June%202022%20CSAC%20Recommendations%20%E2%80%93%20MDM_0.pdf
Quote Tweet
Thomas Massie
@RepThomasMassie
·
10h
Just got off of a zoom meeting with Fed, Treasury, FDIC, House, and Senate.
A Democrat Senator essentially asked whether there was a program in place to censor information on social media that could lead to a run on the banks.
11:34 PM · Mar 12, 2023
Mynd you, møøse and konspiracy theøristz ankl bites Kan be pretti nasti...
It looks like the bank wasn't liquid enough to be able to meet the withdrawal requirements of the depositors. So they had enough assets but couldn't sell them quickly enough. And they were having to recognize losses when selling the assets. And while they only recognized $2b of losses, that might have been enough to put them under the capitalization requirements. I'm not sure. Ultimately California decided the bank wasn't going to be able to withstand the run on deposits.
“SVB’s condition deteriorated so quickly that it couldn’t last just five more hours,” wrote Better Markets CEO Dennis M. Kelleher. “That’s because its depositors were withdrawing their money so fast that the bank was insolvent, and an intraday closure was unavoidable due to a classic bank run.”
I went looking for the exact criteria and I couldn't find it. The FDIC didn't say in their statement on SVB exactly why they closed it. According to the FDIC act, it looks like it is up to "in the opinion of the regulating authority" as to whether the bank can meet it obligations to depositors.
In this case it was California state authorities who pulled the plug according to Bloomberg article below.
From the Bloomberg article.
The bank had about $209 billion in total assets and about $175.4 billion in total deposits at the end of last year, the FDIC said on Friday.
Investopedia:
What Is Bank Failure?
A bank failure is the closing of an insolvent bank by a federal or state regulator. The comptroller of the currency has the power to close national banks; banking commissioners in the respective states close state-chartered banks. Banks close when they are unable to meet their obligations to depositors and others. When a bank fails, the Federal Deposit Insurance Corporation (FDIC) covers the insured portion of a depositor's balance, including money market accounts.
Understanding Bank Failures
A bank fails when it can’t meet its financial obligations to creditors and depositors. This could occur because the bank in question has become insolvent, or because it no longer has enough liquid assets to fulfill its payment obligations.
Given that the bank had $34b more assets than deposits, it wasn't insolvent in the sense of having less assets than liabilities. But it was insolvent in that it's investments weren't liquid enough to meet depositor demand in the bank run.
According to Bloomberg it was California state authorities that ordered the closing of SVB.
Silicon Valley Bank Swiftly Collapses After Tech Startups Flee
For what it’ll be worth by then, you might as well. Buy something of intrinsic value with it. Gold, silver, canned goods, bullets...
These eff’n bastards caused the crisis so the can strip our freedoms. There are zero Democrats and very few government employees that are competent. They know it and they are afraid. Censorship is for their own protection. But they will sell censorship to protect you. Bull chit.
This does nothing to help, the Democrats would have revealed the name, and Massie should have immediately done so, rather than making an off-hand tweet.
DEMS:
THEY LIE TO US
THEY WITH HOLD FROM US
Update...
https://public.substack.com/p/exclusive-senator-mark-kelly-called
Mark Kelly is the name on social media.
I’m just happy that the new fees I will be paying at my bank will help make Oprah, Harry and Mehgan and the CCP among others whole again. It’s kind of a warm all over feeling.
You are so practical.
Maybe I’ll get a couplehundred of cases of Chivas, Glenlivet 12, Jameson etc. and open a speakeasy in the basement.
Oh, so you must be a people person, who likes pleasing customers. I’m just a solitary SOB.
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