Posted on 03/12/2023 7:14:06 PM PDT by Beave Meister
Yea.
My State Street fund will drop quite a bit.
Just go on Twitter and see all the blue check mark accounts who have "Founder @" or "Serial Entrepreneur" or "VC" or "Tech CEO @AppalachiaCapital, formerly @Apple, @Zoom, @PayPal, @Uber, @Splunk" on their profiles and having been whining all week for a bailout.
How do you figure that?
SVB had a disproportionate share of wealthy depositors with large accounts.
The numbers I saw suggest that only 2.7% of accounts had balance of 250K or less.
WINNER WINNER CHICKEN DINNER! BTW: Didn't that hapless stupid broad Janet Yellen say there would be no bailout of SV Bank?
It would be a damn' shame if her plane mysteriously goes down on its way to Ukraine.
Just sayin'.
The FDIC probably added up the numbers and realized that the gap between the sellable assets and the deposits was very small. The other creditors may be out of luck.
State Street is recklessly managed, IMO. They have been for a long time. The flight to safety is on as I type. As a State Street client yourself, you'd know there are four major players in that space. State Street is not the place to be.
What was the “moral hazard” in the case of the SVB failure?
“Financial institutions — not taxpayers — to foot the bill, Treasury officials said.”
OHHHHH I get it! So the Banks will pay for it! And they will never pass those losses to their customers in dozens of ways.... right? Customers also known as “”taxpayers”.
So let me understand this, accounts that the bank has not been paying premiums on for the FDIC insurance are now going to be covered by the insurance? That is one way to drive the program into the ground.
LOL! The banks pass the cost on to the consumer. The consumers all pay.
Also, the bond holders and stock investors just got wiped out. I suspect the bank was withholding pertinent information from investors. 90% of their deposits were not FDIC insured. In addition, with all the financial gurus recommending this stock over the past few weeks, I suspect a classic pump and dump was in the works as they were trying to pump the stock price up before the corporate board sold stock and bailed. Bonuses were provided to employees last week (up to $150,000), and they should be clawed back.
Heads should role. The SVB Board failed in their fiduciary duty to investors. However, they will get away with it.
The fact that the Chief Administrative officer, Joseph Gentile, was previously the Chief Financial Officer at Lehman Global Investment should have been a clue.
Bank Corporate Boards know now that they aren’t at any risk. Bail-outs are the “new norm”.
What entity is buying the loans and investments? That must still not be know .
That money must go to the FDIC insurance fund, because the FDIC never had money set aside for anything beyond $250,000 per account.
The FDIC is getting screwed, here, to help uninsured depositors.
This is wrong. The government sees private monies and it takes them, whenever it can.
Basically, consumers just bailed out big tech in California. How is that for a kick in the balls after the past two years?
That’s $9.3665 billion dollars, just to cover those SVB accounts to $250,000 each.
There is probably a similar situation at Signature Bank.
This is just eating up the private FDIC fund.
It’s like a homeowner who defaults on a $400,000 mortgage. If the value of the home has declined to $300,000 by the time this happens, the bank is going to have a problem. But if the home is worth $550,000 then the bank can foreclose on the property and sell it for enough to cover all its costs and pay off the loan.
Yep.
My problem is with this Treasury quote:
“For the banks that were put into receivership, the FDIC will use funds from the Deposit Insurance Fund to ensure that all of its depositors are made whole,” said a senior Treasury Department official…”
As reported:
“The Deposit Insurance Fund, which will cover the deposits, is funded with quarterly fees assessed on financial institutions and interest on government bonds.”
Watch all the “fees” that banks and financial institutions will jack up later this week and next to cover their new costs.
The quote above reminds me of politicians saying “this will be paid for by increased taxes on business” without ever stating where business will be the money for the new taxes.
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