Posted on 03/12/2023 1:04:01 PM PDT by Berlin_Freeper
The three announced Republican 2024 presidential candidates weighed in over the weekend on the shocking collapse of Silicon Valley Bank (SVB), with former President Trump's campaign blaming the Biden administration’s "anti-America policies," and former Ambassador Nikki Haley and entrepreneur Vivek Ramaswamy sounding off against a possible taxpayer bailout.
The SVB, which had been the 16th-largest bank in the U.S., based in Santa Clara, California, collapsed last week and is now under the control of federal regulators.
The Federal Deposit Insurance Corporation (FDIC) only insures deposits up to $250,000, and some investors are saying a government bailout is necessary to protect depositors. Deposits that are insured by FDIC are supposed to be available by Monday morning, sparking fears that a run of withdrawals will create a domino effect.
Some liberals blamed Trump for signing a bipartisan bill in 2018 that rolled back elements of Dodd-Frank, prompting his campaign to fire back.
(Excerpt) Read more at foxnews.com ...
Steve Lookner now on Rumble about to discuss it
Silicon Valley Bank Collapse: Government Action Today? - LIVE Breaking News Coverage
President Trump is correct, as usual.
This should start a discussion as to whether woke business decisions are proper or not.
I am waiting Nikki Haley’s response with baited breath. What she says today will be contradicted tomorrow.
From what i’ve read (and i’ve read a lot), the root cause is that the bank bought low yielding bonds and MBSs in a low interest rate environment. Then interest rates popped, their investments were underwater, and they couldn’t raise the cash to handle withdrawals. And the panic set in, and thats all she wrote.
They really didn’t do anything irresponsible. They just made a bad bet on interest rates staying low.
Perhaps the billionaire venture capitalists should bail out the billionaire venture capital bank.
RE: Trump blames out of control Democrats
ABSOLUTELY! The seeds of this problem were sown in 2021 and continues today. Congress and the free spending Biden administration is ULTIMATELY the culprit here. This newly elected Congress has to put the breaks to this mess that was created.
It’s all an extension of Fed policy to curb inflation, reversing a 13-year zero-rate policy. And why did inflation occur? Isn’t it because of the massive increase in government spending, which resulted in huge printing of money ?
This of course pushed up rates in the middle and right side of the yield curve, devaluing existing bond holdings locked into older rate patterns. Investors noticed and then depositors too. The high-flying institution that specialized in providing liquidity in industries that have lost their luster suddenly found itself very vulnerable.
In addition, the SVB and probably other banks were exposed with a portfolio of collateralized mortgage obligations and mortgage-backed securities. But with rates rising, those are coming under stress too as high leverage in housing and real estate become untenable amidst falling valuations. Borrowers are finding themselves under water and that in turn adds to stress on lenders.
And where did SVB, and the entire banking industry, get the funds to bulk up their portfolios with such debt holdings? You guessed it: STIMULUS PAYMENTS!’
Hundreds of Billions flooded in and it had to be parked somewhere making some return. At the time it seemed like a good deal, until Fed policy changed.
Immense government spending which produced debt that was quickly monetized and eventually caused inflation, prompting the Fed to reverse course with the largest/fastest rate increases in history. And guess what? IT’s STILL GOING ON!
This destabilized (or restabilized) production structures away from the right side of the yield curve toward the left, shifting capital in search of return to the consumer-goods sector. Labor has begun to follow, thus creating a surplus of resources in information tech and a shortage in retails.
It was always naïve to think that this shift would take place without touching the banking institutions that shoveled leverage in the direction of industries that thrived during lockdowns but are cutting back massively
I wish I had a collection of outrageous headlines and accusations made during the four years of PDJT.
Well, actually, there is such a collection, right here. Hmm.
That’s as good an explanation as I’ve seen thus far. I’m not a financial expert, but it seems that the higher interest rates are a contributing factor in this.
Interesting. Thanks for posting.
Lookner is a lightweight compared to these guys.
Well, mostly right. But he has learned to not blame the RINOs who are equally to blame, at this point. He will deal with them once he gets back into the presidency position.
She will take a conservative position with an opening for the deep state.
“and why did inflation occur? Isn’t it because of the massive increase in government spending, which resulted in huge printing of money ?”
Yes. Some truth to that although spending was also out of control under Obama and Trump as well.
One huge driver of higher inflation more recently was rising energy prices. This can be directly land at the feet of the Biden administration to appease the GW crowd. Gasoline prices practically doubled. Higher energy costs affects the whole supply chain.
Biden created high inflation and the Fed reacted with rising interest rates which hurt bond markets and banks. It was quite predictable.
They also bought long term Treasuries when they should have bought very short term Treasuries. It was mismatched duration with deposits which can be withdrawn quickly, a major banking mistake that violates good banking tenets. On a scale of 1 to 10 on the stupidity scale for banking, this is a 10.
The people they hired don’t really understand bond pricing.
Maybe even Becker himself doesn’t.
One thing about the Santa Clara Valley is that for the past 40 years almost anyone could make money even if they had room temperature IQs.
The spillover from the actually smart made it possible. But at some point, it’s not possible to evade the inevitable.
Who? Which "investors" are saying this?
And this is what I fear. The Biden regime will bail out a lot of these left-leaning groups. This is exactly how Obama and Biden operate by raiding the treasury to help and reward the liberal political class.
Make the woke Si Valley Venture Capitalists buy it.
One or more VCs told clients to make a run on the bank.
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