Posted on 03/12/2023 4:34:10 PM PDT by Angelino97
The Federal Reserve on Sunday night announced that all those with money in collapsed Silicon Valley Bank will get their money back, as a second bank was revealed to have closed.
The Federal Deposit Insurance Cooperation on Sunday held an auction of Silicon Valley Bank's assets, hoping to secure the bank before the market opened on Monday. CNN reported that no buyer was found.
Shortly after, the Federal Reserve issued a statement saying they would step in.
'After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, in a manner that fully protects all depositors,' the statement said.
'Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.'
The statement - which was jointly issued by Janet Yellen, the Treasury Secretary; Jerome Powell, chair of the Federal Reserve; and Martin Gruenberg, chair of the FDIC - revealed for the first time that Signature Bank was also teetering.
Signature Bank had 38 private client offices throughout New York, Connecticut, California, and North Carolina.
It was founded in 2001 for wealthy clients, with more than $250,000 in assets.
'We are going after the guy who started his business in Brooklyn and is now worth $20 million,' said founder and chief executive Joseph DePaolo in an interview with Crain's New York Business.
'We are also announcing a similar systemic risk exception for Signature Bank, which was closed today by its state chartering authority. All depositors of this institution will be made whole.
'As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.'
(Excerpt) Read more at dailymail.co.uk ...
Someone once challenged her, "You wouldn't be with him if he wasn't a billionaire."
She flatly answered, "So what? He wouldn't be with me if I wasn't hot."
I hate the lie that taxpayers won’t bear the burden. I’m sure they mean the fed will print money, which is an indirect tax.
That said, I’m not sure I would classify this as the rich getting bailed out. This is a bank that dealt with a lot businesses. So, there is a LOT of payroll going through those accounts.
I would call this protecting a bunch of small-medium businesses from disappearing overnight, along with the jobs.
A little math. Suppose your company has a $10m monthly payroll. If they want the monthly float insured, they have to spread that $10m over 40 banks. That isn’t logistically possible. Now add in that you can’t have a balance of only one month’s payroll. Your reserves have to live somewhere.
Now imagine that there is a bank run across even the too big to fail banks because of fear. They are all leveraged based on the deposits - the ratio is (or was) regulated. They all become insolvent. At that point, just about every US company has no funds to pay their employees.
It’s extreme. But that, I think, is the slippery slope they are trying to avoid.
they need to stop fibbing about who is footing the bill though
anyone stupid enough to have more than the insured $250,000 in that bank deserves to lose it, and since I know there is like a nearly 99% chance they are all liberal techies, I have zero sympathy for them.
Plenty of mid-sized companies have payroll runs greater than 250K. Do they deserve to lose their deposits that were intended for people's paychecks?
it goes back further than that ... about 100 years further ...
We’ve always been a socialist country for the wealthy. No matter who’s in charge.
Freerepublic is NOT filled with government employees.
Yes, this country and our founding principles of free minds, free markets, free society has ALWAYS been under assault. But the string of the pandemic and shutdowns, the riots and andtined lawlessness, the election, the shots and attendant us vs them tribalism compounded by the OSHA mandate, and other things, have caused usually stalwart citizens to adopt a "what difference does it make?" attitude.
I've seen borderline anti-capitalist enthusiasm here, with people CHEERING on a market crash. They've also supported the DOJ breaking up big tech (right...Garland will do the right thing), and the stupidity with the Russia-Ukraine obsession is as bad as the Trump-DeSantis foodfights. Soft bigotry has also become popular.
I believe people have thrown in the towel on their American morals, and have decided to join the rest of the herd. "They're just going to lie and cheat, it's all rigged, so I'm going to lie and cheat first before they get me" is the new normal.
Just like immoral men running Churches will never make me turn away from Christ, Bidet et al will never make me turn away from America.
Your mileage may vary.
OMG! We gotta save Prince Harry of Canada!!! He was conned into putting “all” his money into SVB!!! God save the Prince! And Oprah too! Meanwhile… back in reality…. How’s your cake tasting tonight, Marie?
Add the part about the VCs telling their clients to pull their money from the bank. That’s reportedly what started the run.
Too bad! Do your homework. Banks fail! “Where’s my insurance? Waaaahhh! We are a socialist nation….. nobody dares take a loss for being stupid. “I’m stupid…. Insure me for free! ” Banks are like, like, um, the perfect Disney Experience! This can’t be happening to meeeeee.
Yup, the rich and well connected are getting a bail out at our expense.
Sucks to be us.
There is a positive aspect to all of this.
The losses in the absolute sense are probably not going to be that heavy now that there is a potential plan for an orderly resolution that forestalls a panic that results in much more serious losses - at least compared to what would happen in a widespread panic.
More importantly, the problem is systemic and this is only the first test case which kicks the can down the road and delays the potentially inevitable day of reckoning.
Wake up call for people with serious cash positions to give them some breathing room to start planning an appropriate exit strategy
It would be an insult to retards to call that word salad retarded.
The choice is not between communism and capitalism. There are many gradations, mixes, and alternate economic systems.
I'm no longer the fervent supporter of unbridled Randian capitalism I was in my youth. I'm more of a populist.
Theodore Roosevelt was a trust-buster. That wasn't so bad.
And the federal government relied on protectionist tariffs as its primary source of income for much of U.S. history. That wasn't so bad.
Just because you want to clamp down on capitalist excesses doesn't make you a Communist. (I traveled Eastern Europe before the Iron Curtain came down, so do not try and tell me about Communism.)
Conservatism is not unbridled capitalism.
Conservatism is about honoring this nation's historical, European, and Christian heritage. It's about electing men of prudence and virtue to high office. It's about promoting decorum, civility, and dignity in public spaces.
Conservatism is not about the maximization of profits without regard to any other values. It's not about outsourcing jobs to Third World slave labor, or importing Third World slave labor.
Let's take the enthusiastic support for breaking up Big Tech on FR. There is no Constitutional basis for such activity. It rests on a bastardized interpretation of the Commerce Clause. To support break-ups is akin to supporting the equally-flimsy Constitutional basis for Roe. I guess it's ok to just let the govt do whatever, as long as it is OUR side calling the shots.
The anti-Wall Street sentiments on FR are cousins of the anti-1 percent rabble. All that's missing on our side is the absence of hygiene and dreads.
To be fair, most FReepers remain classical liberals on 95% of the issues. But whereas the 5% disagreement was simply about minutiae yesteryear, today disagreement is like DU planted a chip in their head.
I hope that makes sense.
I totally agree, on this and your other points.
However, to my point, Santos the POS Republican liar in NY gets DEFENDED on this board. "He lied to win like a Democrat. I hope he used vote harvesting as well. The left is at war with us. We need to start using their tactics and stop pretending we simply have polite disagreements."
When there is no difference between Us and Them, it's a problem.
Almost all investors in SVB bank were major Democrat donors.
Of course, THOSE people will be made whole.
Bear in mind, these same manipulations to “save” the SVB depositors cannot be used to bail out all the bank failures about to happen.
This is more of the same organized crime at the highest Washington DC levels.
“resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.”
“Taxpayer”
But NOT the consumer/customer of the banks. Watch for any new slimy wording for news fees. Possibly service fees such as below minimum balances. Fine print “tack ons”
And policy collusion of all member banks.
Without collusion, they may not be able to pull this off if customers are on their game and move their money elsewhere.
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