First, it is good that Silicon Valley Bank bondholders and shareholders are wiped out. It is good that depositors will get their money back. This post is not about Silicon Valley Bank. This is about the other banks that made poor investment decisions. Today the Fed announced a Bank Term Funding Program for banks who find themselves in the same position as Silicon Valley Bank. Buy a Treasury bond that has decreased in value? Don't worry, you can take out a loan from the US taxpayer using the original value of bond as collateral. It is like using your stock portfolio as collateral for a loan, but with its 2021 prices. Worst of all, the cost of this loan is only 0.1% over the overnight interest rate at the Federal Reserve. This is practically free money, courtesy of the US taxpayer. You should be angry. These banks deserve to fail. The bondholders and equity holders deserve to get wiped out when that happens. Now this will not happen. These banks get an easy loan from the government on account of making poor investment decisions. Again and again, the government bails out banks when they are in trouble. Let us fail when we deserve it. This is capitalism.
so fed will continue to do so until one day nobody can save the fed
All this does is make inflation worse. Fed still exists, bc Fed tasked with regulating inflation. 💀
What we need is a good regulation and enforcement. Where is the prevent before happening rule?
We had it until the last couple decades
Remember folks before deregulation there’s always regulation
Lol you're an idiot. You've worked at Goldman and can't understand why the government institutions wont let confidence in the nation's banking system collapse?
That’s exactly what they’re doing by bailing out the banks and helping their friends on Wall Street.
I dont think you understand how they are securing these deposits and ensuring that the tax payers dont bear the burden. The shareholders aka wall street are getting fucked
I fail to see what good can happen if banks do fail. 99% of people dont have their funds in assets. If banks go under, those people who have everything in a bank will no longer be able to buy things. Entire sectors of the economy would die. Large purchases would be impossible and years of peoples wealth would be wiped out in an instant. Which would you rather have? Anarchy or an extra $50/year on your taxes?
The executives, bondholders, and equity holders should pay a price. A price that is more than 0.1%. Depositors should be protected.
99% of the population doesn't have over 250k in checking or savings account
Let's say these bank do not buy or hold mortgage bonds then how will you buy the house. If they do not buy corporate bonds then companies won't expand and you won't have employment. OK with consequences?
Where did I say that?
Then why are you saying banks deserve to fail?
The USA is not a capitalist system. We have a hybrid of some free market and some socialism
Yes. Take large risks and donate to political funds, get government protection when your business fails. Work as a teacher or construction worker, get no protection when you’re laid off and can’t pay your mortgage. 🎉
“It's Called the American Dream Because You Have To Be Asleep to Believe It" – George Carlin.
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@op what is wrong with this measure? The prices of the bonds they purchased have gone down at a given point in time. Eventually they are gonna receive at the face value. Incase of dire situations like these keeping in mind govt has to maintain public faith in the US financial institutions, it can be a good alternative to atleast be able to take loans on the bonds they purchased and stay afloat. In order to pay price for the poor investment decisions, yes there can be a debate on what interest rate they should be charged (definitely higher). It should be high enough for them to be held accountable, and also not so much high that it goes bankrupt. The alternative your suggesting is to just let them crumble and all the stakeholders loose.
Then why have private banks? Not all banks have this issue. Don't let the US taxpayers bail out the weak ones. Bondholders, equity holders, and bank executives should not profit because their bank was poorly run.
You claim "nobody sees it", yet it happens over and over, again and again... Time to wake up and "see it"?
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Does this promo code exclude pickup like those Uber eats promo codes?
are you a regular person? then yes it excludes you