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   Alex Gleason (alex@gleasonator.com)'s status on Monday, 13-Mar-2023 08:06:12 JST Alex Gleason

   I don’t understand the Silicon Valley Bank situation. So, the government shut them down? Why? Then the government issued a press release about “increasing our trust in banking”? Also, did all those companies lose their money for good? Help me understand.

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     radix023 (radix023@noagendasocial.com)'s status on Monday, 13-Mar-2023 08:09:10 JST radix023

     in reply to

     @alex Jim Bianco's narrative is lots of retail/deposit customers pulled money out of 0.5% rates to put into money markets at 3.4% or more and this led to liquidity problem. Bank assets were in Fannie/Freddie mortgage backed securities that were yielding avg 1.5% and so lost tons of face value due to Powell raising rates. Regulators don't "mark to market" but let banks "hold until maturity" and ignore the notional loss. SVB had to auction security available for sale. *crash*

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     Ulysses (professionalbigot69@poa.st)'s status on Monday, 13-Mar-2023 08:09:57 JST Ulysses

     in reply to
     @alex SVB mismanaged money, lost, depositors want it back, only a small fraction of the bank's assets is actually in cash, certified financial bruh moment
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     Alex Gleason (alex@gleasonator.com)'s status on Monday, 13-Mar-2023 08:10:15 JST Alex Gleason

     in reply to

     • Ulysses

     @professionalbigot69 Thanks, that makes sense

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     Alex Gleason (alex@gleasonator.com)'s status on Monday, 13-Mar-2023 08:10:59 JST Alex Gleason

     in reply to

     • Ulysses

     @professionalbigot69 So basically it’s better to store your money as Bitcoin than in Silicon Valley Bank.

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     djsumdog (djsumdog@djsumdog.com)'s status on Monday, 13-Mar-2023 09:47:09 JST djsumdog

     in reply to
     I haven't been following it recently. FDIC insures all accounts (personal and corporate) for $250k ... so if a company had 30M in a bank that collapses .. they could stand to lose 29M+.
     
     Typically the federal government steps in, stops transactions, and finds a way for the bank to get bought out by another bank to accept its liabilities and keep a cash flow. In 2008, this allowed major banks to buy smaller ones. PNC bought National City in Ohio for $5 billion .. and then got a $5 billion tax credit (they got to buy National City for free on the tax payers dollar).
     
     There was an old video called Bank Eat Bank: Bailout Encourages Mergers. (Ivory. American News Project. November 21, 2008) and it use to be here: https://www.youtube.com/watch?v=_06mSZLhEhY but ANP deleted their account and it's gone now.
     
     I have no idea what the fuck they're going to try to pull this time. My personal theory: FDIC insurance won't pay people back in USD but in some new digital currency and this will be what's used to move America off the green back.
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     Archie_Kimkicker (midwitnavigator@poa.st)'s status on Monday, 13-Mar-2023 09:50:28 JST Archie_Kimkicker

     in reply to
     @alex Conventional banking for many decades has been problematic due to fractional reserve rules. Fractional reserve means a bank only needs to have a fraction of a sum of money on hand in order to lend it to another party. If this sound ridiculous, congratulations for being sane. During the pandemic, the Federal Reserve removed fractional reserve rules, which now means banks can loan money they doesn't even exist. As long as everything stays in the system as a digital dollar, this can be maintained for some time. But any liquidity crisis (inflation spikes are an example) can send it all flying apart.
     
     FDIC insures deposits for up to $250K, but some entitites had tens of millions of dollars tied up in SVB, and approx 95% of it was in asset classes that are not insurable under FDIC, so it is not at all clear what is going to happen. It also is left as an excerise to determine how FDIC is funded and how many dead banks they can eat before becoming insolvent themselves.
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