Posted on 04/04/2023 5:47:08 AM PDT by Kaiser8408a
JPMorgan Chase’s Jaime Dimon is channeling country crooners Marty Stuart and Travis Tritt by warbling “This One’s Gonna Hurt You (For A Long, Long Time).”
Silicon Valley Bank’s blunders were encouraged by US regulation, went untested by the Federal Reserve and were “hiding in plain sight” until Wall Street and depositors grew alarmed.
That’s JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon’s assessment of the US banking crisis that sent markets careening last month, an episode he predicts is “not yet over” and will be felt for years. He said US authorities shouldn’t “overreact” with more rules.
“Ironically, banks were incented to own very safe government securities because they were considered highly liquid by regulators and carried very low capital requirements,” Dimon said. “Even worse,” he added, the Federal Reserve didn’t stress-test banks on what would happen as rates jumped.
When Silicon Valley Bank’s uninsured depositors realized it was losing money selling securities to keep up with withdrawal requests, they raced to pull their cash. Regulators then intervened and seized it.
Yes. Banking regulators were so focused on credit-exposure of banks (remember the subprime crisis of 2008?) that they really screwed up by having banks load-up on low credit-risk assets that usually have interest rate risk associated with them like Treasuries and mortgage-backed securities (MBS). What could go wrong?
What went wrong was that interest rates rose and unrealized losses on Treasuries and Agency MBS exploded.
Here is a chart of urealized losses on investment securities that banks have accumulated.
Apparently, The Fed and FDIC (and the myriad of Federal and State regulators) sit high on a mountain top and ignore interest rate risk.
The face of regulatory stupidity.
(Excerpt) Read more at confoundedinterest.net ...
But Joe said everything was AOK. He wouldn’t lie would he?
In response to the question at post 1. Because the Regulators are more interested in DEI, ESG, and Climate Change?
It appears this has affected precious metals. https://sdbullion.com/updates
Banks are supposed to stress test their balance sheets for rate and liquidity risk. SVB was badly out of alignment as to liquidity.
Any investment advisor worth a damn was telling clients to bail out of long-term U.S. Treasury debt ten years ago.
STUPID is supposed to hurt. That’s how NORMAL people learn. Democrats on the other hand are SOOOOOO STUPID that STUPID seems normal to them and as such they are incapable of learning.
Joey Crappy Pants and Senator Uncle Fester, the two Poster Children of Democrats. Yep it’s going to hurt!!
Much like the COVID “vaccine”, they are TESTING IT ON US RIGHT NOW!!
They are trying to see who will and will not survive in this debacle of an economy!
You know, the spitting, sputtering, belching economy which the White House, with the undying support of our enemedia, is trying to gaslight Americans to believe is purring like a 1950s Buick straight-8 engine with an oil-bath quiet air cleaner installed!!
Look at who the regulators are. Look at the individual. He/she/it isn’t working at a financial institution. There’s a reason for that. Think about that for a moment. The financial regulatory framework and many of the regulations, but not all, are anticompetitive, non transparent and overly complicated.
Financial institutions on the other hand contribute to regulations. They lobby and spend tens of millions on influencing to get regulations that benefit them. When I started reading this article and saw Dimon’s name, the first things I thought were, what was he pitching, how would it benefits JP Morgan and how it would hurt other banks and everyday Americans.
At least Dimon is a serious guy. There’s a helluva lot of non serious people in business and government these days. The serious few are manipulating and taking advantage of everyone else.
There are about zero serious people in government.
Regulations should be few. Regulations should be simple and understandable. Regulations should foster competition among the many, not the few. (Just take a look at how regional banks have gobbled up small banks, and large banks have acquired regional banks. Compare the number of banks in 1980 to today. There’s thousands less, but the number of customers is vastly larger.)
Regulation should focus on transparency. The technology exists today to deliver near perfect information (the economic concept). That allows everyone to be the regulator, not a bunch of lazy ass government employees counting the days until retirement and calculating their pension payouts. The market should be the regulators. It only needs the information to do so.
We are on borrowed time. 2008 will look like a cake walk in comparison to what’s coming.
Because something else way more sinister is at work here.
“STUPID is supposed to hurt. That’s how NORMAL “
Mother Theresa said wisdom is acquired through suffering.
Today the attention is on patching up our financial wounds but the underlying cause is the money printing and debt accumulation over the past few years.
There is no way for most of us to escape today’s pain.
But be careful to support his position too much. JPMorgan Chase is the largest private bank in the world (obviously not including China's communist owned banks). One reason Chase grew to be the largest bank is because of the mergers banks did in the 2008 crisis due to "regulations" to "fix" the problem.
We're all better off if there are many banks to provide health competition to each other. The gubment shouldn't bail out the failing banks. The free market would be a better judge of where to put one's savings.
Did he say, “Not a joke”??? /s
“Banks are supposed to stress test their balance sheets for rate and liquidity risk.”
That sounds like the Risk Officer’s job.
https://nypost.com/2023/03/11/silicon-valley-bank-pushed-woke-programs-ahead-of-collapse/
Hopefully they are properly vetted to meet all affirmative action and diversity and equity requirements first...
Bwahahahahahahahaha.
“Regulatory capture” by the regulated industries has been a “thing” for centuries.
Homo sapiens is really good at this.
Building Back Better means destroying first.
It’s not a bug, it’s a feature!
As one who has been long gold and silver for many years -— Wow!
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