Miscellaneous And Off Topic Subjects

[Mike]

Well, lobbied against a certain provision of the bill that was widely unpopular. Far be it from me to defend Barney Frank but that also had a direct benefit to the bank for whose board he sat on, Signature. It loosened some oversight for banks with $50B-$250B in assets. This is the portion of Dodd-Frank that is being reported in prog media as "Trump rolled back the bank regulation that caused SVB to fail". The particular rollback passed the Senate 67-31 and the House 258-159 in 2018. Funny that no other banks failed as a result, just the one ran by the Silicon Valley geniuses.

Given that I have financed furniture in the past, high finance isn't exactly my forte so (anyone) please correct me if I'm wrong.

The Biden administration pumped several trillion dollars into the economy that caused it to overheat as we came out of the pandemic. Soaring inflation ensued (which even I could see coming). Money for this type of massive spending largely comes from the sale of government bonds. The government then encouraged large banks to acquire said bonds when interest rates were near zero. Then, to stem the afore mentioned SOARING INFLATION, the Fed needed to raise interest rates. Repeatedly. Rates went from practically 0% to 4.75%. During this time SVB thought it would be awesome to sell $20B in government bonds at a steep loss in a move that would lead Moody's to downgrade SVB's credit rating which precipitated the bank run from the only people SVB served who all think the fucking same.

In summation: BIDEN BOOM!!

[Hannibal]

Economics always wins in the end. But it can take a really long time for that to happen.

[Mike]

And I might add that this is a perfect example of progressive policies creating a problem and then the solution to the problem is to throw more public money at it which created the fucking problem in the first place. Well, that and stupid fucking bank managers.

[Hannibal]

A failed interest rate play is being credited with this collapse, but I wonder how much of that play was needed to subsidize losses from their core business of loaning money to con artists who need government regulations and subsidies to make money. It's like how the securitized mortgage business was at the core of the 2008 financial meltdown, but those securities ultimately arose as a way for banks to offset their "socially responsible" lending.

Green energy companies are notorious for outright collapsing or, at best, being behind schedule on cash flows and loan repayments.

[Hannibal]

CNN has Desantis over Trump by 2 points.

IBD/TIPP poll has Trump over Desantis by 29 points.

Margin of error +/- 3 🙄

[Mike]

A failed interest rate play is being credited with this collapse, but I wonder how much of that play was needed to subsidize losses from their core business of loaning money to con artists who need government regulations and subsidies to make money. It's like how the securitized mortgage business was at the core of the 2008 financial meltdown, but those securities ultimately arose as a way for banks to offset their "socially responsible" lending.

Green energy companies are notorious for outright collapsing or, at best, being behind schedule on cash flows and loan repayments.

I can't really speak to those sorts of specifics. My very layman understanding is it that their underlying financials weren't really that bad. It was the hyperventilating over Moody's impending downgrade that caused the bank run and, in all likelihood was entirely avoidable.

[Mike]

CNN has Desantis over Trump by 2 points.

IBD/TIPP poll has Trump over Desantis by 29 points.

Margin of error +/- 3 🙄

Trump certainly isn't up 29.

[Dr. Strangelove]

Well, lobbied against a certain provision of the bill that was widely unpopular. Far be it from me to defend Barney Frank but that also had a direct benefit to the bank for whose board he sat on, Signature. It loosened some oversight for banks with $50B-$250B in assets. This is the portion of Dodd-Frank that is being reported in prog media as "Trump rolled back the bank regulation that caused SVB to fail". The particular rollback passed the Senate 67-31 and the House 258-159 in 2018. Funny that no other banks failed as a result, just the one ran by the Silicon Valley geniuses.

Given that I have financed furniture in the past, high finance isn't exactly my forte so (anyone) please correct me if I'm wrong.

The Biden administration pumped several trillion dollars into the economy that caused it to overheat as we came out of the pandemic. Soaring inflation ensued (which even I could see coming). Money for this type of massive spending largely comes from the sale of government bonds. The government then encouraged large banks to acquire said bonds when interest rates were near zero. Then, to stem the afore mentioned SOARING INFLATION, the Fed needed to raise interest rates. Repeatedly. Rates went from practically 0% to 4.75%. During this time SVB thought it would be awesome to sell $20B in government bonds at a steep loss in a move that would lead Moody's to downgrade SVB's credit rating which precipitated the bank run from the only people SVB served who all think the fucking same.

In summation: BIDEN BOOM!!

On the last part I believe it's the other way around. Moody's told them they needed more liquidity or they were getting downgraded. Which caused SVB to sell billions in bonds well before their maturity date.

[Dr. Strangelove]

I forget how Talent put it earlier but there's blame to go around. The bank was irresponsible by not transitioning to shorter term bonds in 2021/early 2022. The customers panicked more than they should have and killed the bank. And the people supposedly in charge of making sure banks don't colossally fuck up had fallen asleep.

[Hannibal]

WRT government regulation of risk, it's really hard if not impossible to craft a regulation that legitimately addresses the issue, since risk models are intensely quantitative and probably unique to each situation. There's no universal methodology for it.

[Hannibal]

On the last part I believe it's the other way around. Moody's told them they needed more liquidity or they were getting downgraded. Which caused SVB to sell billions in bonds well before their maturity date.

Hanging onto those bonds likely wouldn't have improved the situation. Higher interest rates might be here to stay for a while.

[Mike]

On the last part I believe it's the other way around. Moody's told them they needed more liquidity or they were getting downgraded. Which caused SVB to sell billions in bonds well before their maturity date.

Thank you for the correction. I think you're on point with the trifecta of responsible parties: bank managers, panicked customers, and regulators.

[crashcourse]

SVB fell 60plus percent last year before rebounding. Wonder how they wiggled off the hook that time

SVB did a lot of questionable loans for DEI related stuiff--Silicon Valley Bank Commits to $5 Billion in Sustainable Finance and Carbon Neutral Operations to Support a Healthier Planet (svb.com)

Just one of many loans I'm sure--woke going broke but just like before there is no risk to to these silicon valley clowns.

They get the profit when they strike it rich and we get the bill when they crash and burn

[Whitley]

And I might add that this is a perfect example of progressive policies creating a problem and then the solution to the problem is to throw more public money at it which created the fucking problem in the first place. Well, that and stupid fucking bank managers.

I will submit a LARGE part of inflation comes from 1) many corporations deciding to hike prices because they can due 2) supply chain issues and 3) a few corporations control large swaths of their particular market.

Also some industries (looking at you airlines) laid off people as soon as they can. Then they are shocked when people started wanting their product again and were unable to scale back up.

Now, that is a direct result of a conscious decision by the federal government to not furlough (I think that is the right term) people from businesses and give them like 80-90% of their wages and pick up the health care tab. When the pandemic was done that would allow businesses to scale back up. Instead, they opted for plus up in unemployment and COBRA (a give away to the insurance industry).

So the people on the bottom that were not essential workers were at home. And a lot of them decided....you know I liked the people at my job but the job itself sucked. So they went to better jobs/industries. Good for them.

[Mike]

We increased the money supply 43% as a result of pandemic spending. It ain't rocket surgery.