10 replies to this topic

[linrom1]

EOM.

[pdx5]

I have misplaced my reading glasses 

[fib_1618]

I have a better question: how many “backstop holes” can the Fed plug before the crumbling dam totally fails?

 

Fib

[skott]

I have a better question: how many “backstop holes” can the Fed plug before the crumbling dam totally fails?

 

Fib

 

I agree Fib. I'll say again all this talk of thinking the Fed "has our backs" is stupid. Where was the Fed in 2000? did it exist then as QQQ proceeded to drop 83% over a few years and took 20 years to recover? How about 2007/2008? did the Fed stop that? That crisis spawned the "solution" of zero rates. How is that working out now?  We are in a big mess and there may not be a way out.

[fib_1618]

 

I have a better question: how many “backstop holes” can the Fed plug before the crumbling dam totally fails?

 

Fib

 

I agree Fib. I'll say again all this talk of thinking the Fed "has our backs" is stupid. Where was the Fed in 2000? did it exist then as QQQ proceeded to drop 83% over a few years and took 20 years to recover? How about 2007/2008? did the Fed stop that? That crisis spawned the "solution" of zero rates. How is that working out now?  We are in a big mess and there may not be a way out.

 

 

And then you have to decide what one should do as far as possibly being the odd man out in such a situation? Do you move your money out of a "red state bank" for they're not likely to get the funds needed to survive over that of, let's say, Goldman Sachs, where they got a dollar for dollar bailout in 2008 because of Treasury Secretary Paulson...or do you move your money from this same more conservative leaning institution to a bank like, again, Goldman Sachs, to provide that additional backstop protection from loss of your capital even though you don't agree with their banking/company philosophy?

 

As we've seen over the last several years, laws don't matter any more...only political affiliations and their economics do...the very same stench we've smelled this past week.

 

Fib

Edited by fib_1618, 17 March 2023 - 11:59 AM.

[skott]

https://wolfstreet.c...-off-continued/

 

Fed Loaned $160 Billion to Banks and $142 billion to FDIC. But QT-Related Roll-off Continued by Wolf Richter •  Mar 16, 2023 • 176 Comments

At around 4.75%, plus collateral, these are expensive loans for banks.

[chem]

 

https://wolfstreet.c...-off-continued/

 

Fed Loaned $160 Billion to Banks and $142 billion to FDIC. But QT-Related Roll-off Continued by Wolf Richter •  Mar 16, 2023 • 176 Comments

At around 4.75%, plus collateral, these are expensive loans for banks.

 

This is NOT discount window lending. The BTFP lending is at the over-night swap rate so about 5 to 15 basis points on an annual basis for one year term at par (collateral's book value) essentially less than a 1/4% loan covering a large portion of a bank's BS assets. So the real question is do banks want or even need deposits at all?

[Iblayz]

 

 

I have a better question: how many “backstop holes” can the Fed plug before the crumbling dam totally fails?

 

Fib

 

I agree Fib. I'll say again all this talk of thinking the Fed "has our backs" is stupid. Where was the Fed in 2000? did it exist then as QQQ proceeded to drop 83% over a few years and took 20 years to recover? How about 2007/2008? did the Fed stop that? That crisis spawned the "solution" of zero rates. How is that working out now?  We are in a big mess and there may not be a way out.

 

 

And then you have to decide what one should do as far as possibly being the odd man out in such a situation? Do you move your money out of a "red state bank" for they're not likely to get the funds needed to survive over that of, let's say, Goldman Sachs, where they got a dollar for dollar bailout in 2008 because of Treasury Secretary Paulson...or do you move your money from this same more conservative leaning institution to a bank like, again, Goldman Sachs, to provide that additional backstop protection from loss of your capital even though you don't agree with their banking/company philosophy?

 

As we've seen over the last several years, laws don't matter any more...only political affiliations and their economics do...the very same stench we've smelled this past week.

 

Fib

 

Yes, and who gets to decide as to WHO poses "systemic risk" as opposed to who does not, and are those decisions reliable and just? Did SVB really pose systemic risk? If so, how? Or did they just pose systemic risk to a bunch of democratic donors?

Edited by Iblayz, 17 March 2023 - 05:52 PM.

[linrom1]

 

 

 

I have a better question: how many “backstop holes” can the Fed plug before the crumbling dam totally fails?

 

Yes, and who gets to decide as to WHO poses "systemic risk" as opposed to who does not, and are those decisions reliable and just? Did SVB really pose systemic risk? If so, how? Or did they just pose systemic risk to a bunch of democratic donors?

 

REVEALED: Only ONE member of failed SVB's board had a career in investment banking - and the rest were Obama, Clinton mega-donors who 'grieved' when Trump won including one who went to Shinto shrine 'to pray'

 

But he is the only one on the board with a career in the financial industry, while others are a former Obama administration employee, a prolific contributor to former House Speaker Nancy Pelosi and even a Hillary Clinton mega-donor who prayed at a Shinto shrine when Donald Trump won the 2016 presidential election.

 

 

https://www.dailymai...nt-banking.html

 

I saw this article on Drudge and was surprised that it was even posted, but it was quickly deleted, but not before I saved the link.

Edited by linrom1, 17 March 2023 - 07:14 PM.

[pdx5]

Are we now a banana republic?
Nah! Just a banana 🙄