Treasury Secretary Yellen says not all uninsured deposits will be protected in future bank failures

This is exactly what the deep state wants. Get rid of the smaller regional banks. It will give the tyrannical government more control over the people. Next everyone will be moved to digital currency. No more paper or coin money will be put in the hands of the citizens.

 

It was a bipartisan vote and the bill was introduced in congress first. The reason for the change was to keep regional banks competitive with the larger banks. Barney Franks' of Dodd-Franks helped to change the bill he coauthored while he was in congress when he joined a bank after leaving congress.

 

I'm talking about his throwing a fit when Powell tried to start raising rates in 2018. The biggest problem we have today is the speed that they have had to raise rates. Powell wanted to do it more gradually, but Trump threw a hissy fit, and demanded he lower rates instead.

Anyhow, it wasn't really biparitisan. Most democrats opposed it, sure there were a handful from red or purple districts that are bought off by the banking industry.

Barney Frank is an amoral tool. He has always been a person of poor moral character, it doesn't have anything to do with what he's done since leaving Congress.

 

The Federal Reserve does not work for the President. Powell is weak. Powell needed to speed up the process the due to Biden's huge spending bills. Elizabeth Warren acknowledged it was a bipartisan bill. And it was designed to keep regional banks competitive with the larger banks. SVB should have known what rising interest rates would do to their long term Treasure Notes. They failed to see the problem coming even as the Feds continued to raise rates many times.

 

Powell wanted to raise rates. Trump threatened to fire him.

This isn't about SVB. The fed is having to raise rates at a quicker pace than is safe because Donald J. Trump screwed the economy at every turn for four years, and the chickens are coming home to roost. Trump only cared about short term success for his political aims.

 

Lol! OK...

 

FYI, some insight of the FDIC.

https://en.wikipedia.org/wiki/Federal_Deposit_Insurance_Corporation
To qualify for deposit insurance, member banks must follow certain liquidity and reserve requirements. Banks are classified in five groups according to their risk-based capital ratio:

• Well capitalized: 10% or higher
• Adequately capitalized: 8% or higher
• Undercapitalized: less than 8%
• Significantly undercapitalized: less than 6%
• Critically undercapitalized: less than 2%

If banks don't have that insurance they are more free to make riskier investments, but of course there is the risk. I suggest if one is depending on ones deposits, consider the bank that has FDIC, they usually advertise it.

 

The move is designed to effectively nationalize the banking system -- IOW, more irrational Hitlerian stupidity.

 

The short story.

Democrat supporting banks and depositors will get special treatment.

Banks in small areas and their conservative customers will not... in they will foot the bailout to SVB and Signature.

 

That's absolutley false, a strawman, and a weak rebuttal.

Nobody is opposed to FDIC insurance and protecting depositors. But there is a policy maximum, and making special exceptions for some at the cost of others who don't enjoy the same protection isn't right.

I realize this is difficult to defend, because it doesn't make any sense, but take your partisan glasses off for a second and try.

 

That's false.

It's amazing the mental cartwheels the left has to impose to stay partisan.

The rates were raised to combat inflation... which the left also claims wasn't in any way Bidens fault.

It wouldn't matter where rates were at, inflation would necessitate further raising.

 

It must be exhausting transferring blame and having zero accountability on every negative issue.

Anything to tow the partisan line.

 

It's not. We were all alive when this happened. You should remember it, but even if you didn't you would have googled it if you were the least bit curious. But you aren't even curious.

 

I’ll make a note of it.

 

The FDIC account
They are also extending 1year term loans to banks to keep this from spreading as other banks potentially face a cash run.

This is what should have happened in 2008 instead of just throwing money at the shareholders and CEO’s

 

It’s fascinating that most of them have no clue that
1) this is the same person
2) they inverted rates to prop up trumps failed gdp growth
3) they are overdoing to Biden

Most analysts on this have said they need to slow down or completely stop or they will cause a recession but there seems to be no end in sight.

I am beginning to believe it is malicious

 

Well, it's more than that.

The Fed

'bailout'

First, what the Fed claimed:

'It was only Tuesday of last week that the Fed Chairman testified before a committee of concerned senators who thought the Fed may be tightening monetary policy (i.e. raising interest rates) too quickly.'

Banks take in deposits and buy bonds.
Bond value decreases as interest rates increase.

As a result of interest rate increases, 'banks across the US have more than $600 billion in unrealized losses on their bond portfolios.'

Just 3 days after the Fed claimed that everything was fine: 'one of the larger banks in the US imploded, multiple bank runs unfolded across the country, the bond market fell into turmoil, and the Fed had to essentially guarantee the entire US banking system in order to restore confidence.'

'After Silicon Valley Bank went bust, the FDIC announced that they will guarantee ALL deposits at the bank. This is a departure from the FDIC’s normal pledge to guarantee deposits of up to $250,000. The FDIC is not funded by taxpayers. The FDIC is funded by charging fees to its member banks.'

Now the Fed bailout: 'There are LOTS of other banks that are sitting on massive unrealized losses, just like SVB. In order to prevent these banks from going under, the Fed invented a new facility they’re calling the “Bank Term Funding Program”, or BTFP.
When banks borrow money from the Fed, they have to post collateral, banks use their financial assets as collateral– specifically their bonds. Banks are in financial trouble because their bond portfolios have lost so much value. Some banks (like SVB) are even insolvent because of this. With the BTFP, the Fed will now accept banks’ sagging bond portfolios as collateral, but loan the bank MORE money than the bond portfolios are worth.'

If you’re a 'bank that invested, say, $100 billion in bonds. Those bonds are now worth $85 billion, and your bank is about to go under. The bank simply posts their bond portfolio (which is only worth $85 billion) as collateral, and the Fed will loan the bank the full $100 billion… as if those losses never occurred.' The financial risk has now been assumed by the Fed.

 

The FDIC account gets it's funds from the bank insurance on FDIC deposits $250,000 or less. I'm wondering where the funds for the coverage for deposits over that amount are coming from.

 

The larger insurance pool. They have something like $100B in that insurance pool.

This is a direct result of FED policy and removing regulations under trump that were enacted by Obama to prevent these types of things going forward.

 

Your response did nothing to combat my points.

Because you can't.

So you turned into a "Nuh uh!" response.

 

You said it's false that Trump threatened to fire Powell because he wanted to raise rates. He absolutely did, and Powell not being able to gradually increase rates over the last two years of Trump, is a big reason we are here today.

I can't help it if you are oblivious to events that happened while you were alive.

 

Having a larger insurance pool to cover amounts not previously insured by FDIC is due to Trump removing regulations?

I admit, I'm not following you, but I would appreciate any links you have about that larger insurance pool.

 

The FDIC is an insurance — they paid those funds out of that pool which means taxpayers will not be liable.

I don’t understand how you combined two separate sentences — trump rolled back regulations that were meant to prevent things like this and current FED policies led the investments made by banks like these to plummet in value.

 

Here's Joe Blogs to detail what is happening here.



LTIR...this isn't 2008. Relax.

 

True garbage. It is government profligate spending that has caused the problem. Raising interest rates doesn't address that. It is obvious since all the prior rate increases have accomplished nothing other than to reduce demand and hurt the economy even further. The FED is doing what they do in a situation in which it doesn't fix anything. It embarrasses me that these smart people can't see that. If you want a stable economy you have start with a government that lives within its means. PERIOD.