Here We Go Again. Wall St. Billionaires Demanding Bailouts Of Big Banks

[Toddsterpatriot]

Somebody will buy the bank. The federal government is pretty good at strong arming other banks into eating the loss for them under threat of investigations into some practice or the other.

In this case, however, they had to take a couple billion in losses by selling off low interest bonds to try to increase cash on hand which signaled they were out of cash which caused a run on the bank, particularly by people who had deposits over the FDIC insured limits.

This liquidity problem is going to be more common over the next few years with the Fed addicted to interest rate hikes.

The federal government is pretty good at strong arming other banks into eating the loss for them under threat of investigations into some practice or the other.

The buyer isn't going to take any losses.

 

[Toddsterpatriot]

That's my point. They grossly over value the equity, then borrow against it, meanwhile paying themselves big bonuses and dividends while the market booms. Then when the bubbles burst, they walk away and leave the losses to others to eat.

They should also go after the shareholders' dividends and bonuses the execs paid themselves as well if they wanted to be fair and honest.

They didn't pay a dividend.

 

[Missourian]

The fact that Silicon Valley Bank (SVB) has been seized by federal regulators is a big deal and will have a huge impact on Silicon Valley’s startup scene. They are the financial institution for every new tech company in Northern California.

Something is really rotten at SVB. The bank has $209 billion in assets and $175.4 billion in deposits, yet it collapsed because it failed to raise a mere $1.75 billion in new financing. The consequences should ripple across a significant segment of the economy, particularly in the San Francisco-San Jose region.

But whatever, shit happens, right? Economic sectors are disrupted all the time, and this one, at least, should hit a more affluent crowd. We’re not talking the destruction of manufacturing in small towns all across America, and Silicon Valley is resilient enough to bounce back. It always does.

Except this isn’t small-town America. This is some of the wealthiest, most powerful interests in our country. And if there’s one thing wealthy financial interests love more than anything else, it’s privatizing profits but socializing the risks. So like clockwork …

Here we go again: Wall Street billionaires demanding public bailouts of failed banks

UPDATE: Friday, Mar 10, 2023 · 8:19:42 PM +00:00 · kos Just watch, all the usual suspects will make the same f’n arguments: They can f’ themselves. I am so livid, I am still throwing shit around my house. Sorry if you come into my house and see the...

www.dailykos.com

No. Hell no. Fuck no. Eat shit and fucking die no.

This one time I agree 100%.

If Billionaire Bill Ackerman thinks they need a bailout...he can help by using HIS money to do it.

Time to put up or shut up Bill.

 

[Missourian]

That wouldn't be happening if more banks/more home-owners failed?

The problem...and this is the absolutely number one problem with our form of government...is there is no incentive to make the tough choice and deal with the pain of fixing problems.

Doing what the country needs and doing what is politically necessary to not lose power are nearly in every case not the same solution.

So we stick a bandaid on and kick it further down the road.

This process continues until the wound is completely encased in bandaids and now the wound underneath is gangrenous...but you can't treat it, because the bandaids are now in the way.

Today the game is to hold it together and pray to G-d the limb doesn't fall off until the next set of lawmakers can take the blame...when the pain of a little shot of penicillin and the sting of some alcohol early on would have been all it took to be healthy again...but no one had the political will to do what needed to be done.

Just look at Trump and Tarriffs.

Or Trump and keeping the economy open during Covid.

Or Trump and the wall.

Here was a leader who was willing to say ... "hey... we're going to have to take some lumps here ... but in the end, things are going to be better all around."

And that in our political environment is election suicide.

Which is why we aren't going to make it.

We are politically...and economically... adverse to painful decision.

 

[B. Kidd]

Maybe not --- I just this minute read they have sold some of the bank assets already ----

Of course, that could be just propaganda. I am a little surprised how much sound and fury is on the Internet, lots of scaremongering. I do think ANYthing could happen and we should just wait and see what does. I'm expecting to spend tomorrow in front of the TV.

See my post #72. I said similar.
Except I'm putting bug killer around my house foundation tomorrow....

 

[DudleySmith]

Link?

, yes, this thread , dumbass.

 

[DudleySmith]

Who forced Fannie and Freddie to buy so many risky loans?

Who made up so many fraudulent loan applications? Who forced Goldman and others to hide them in big traches of other loans for resale? Who then leveraged those tranches in CDO's at 35 to 50 times the averages values in the overnight markets?

 

[the other mike]

That wouldn't be happening if more banks/more home-owners failed?

Banks, at least not locally owned ones, and homeowners are not the reason we're spending a trillion dollars a year on 'defense' and the national debt is $32 trillion and spiraling up.

 

[Dekster]

The federal government is pretty good at strong arming other banks into eating the loss for them under threat of investigations into some practice or the other.

The buyer isn't going to take any losses.

Oh yes they will for the same reason that the bank got seized. The only way you are going to sell mortgages, bonds, etc with a 2.5-3% yield in today's interest environment is to offer them at a deep discount. It would take 2 or 3 plus of those to cover a new loan at 6.5%

 

[DudleySmith]

I thought I read that what happened is that the assets fell drastically, during the rapid Powell interest rise. So when SVB needed to sell them fast, they didn't have nearly enough value.

But what I think REALLY happened is that Peter Thiel was transferring money in from other banks on Wednesday, smelled a rat when there were unspecified "problems and delays" and instantly bailed out his entire account down to the last penny. Which resulted in bank collapse.

That still doesn't justify bad banking decisions. They ignored that possibility and were irresponsible. Unfortunately these crooks get to hide behind 'limited liability' laws that shield the money they steal from the bankruptcy courts and victims. Of course none of the 'free market morons' here ever snivel about that, because corporate officers and shareholders are always completely blameless and should never ever pay for their bad judgment and thievery. that's what the little people are for.

Look up the 'mark to market' rule these so-called 'financial experts' all completely ignore.

Mark to Market

The term mark to market refers to a method under which the fair values of accounts that are subject to periodic fluctuations can be measured

corporatefinanceinstitute.com

This is supposed to make the swindlers more prudent, but then the limited liability laws mean they don't have to care what happens down the road, and neither do shareholders. They rake in while the market bubbles then leave the wreckage for others to pay for.

 

[beagle9]

I guess the woke mentality doesn't bode well in banking. I wonder what else will fail because of the woke mentality in the economy?

Lot's

 

[DudleySmith]

Oh yes they will for the same reason that the bank got seized. The only way you are going to sell mortgages, bonds, etc with a 2.5-3% yield in today's interest environment is to offer them at a deep discount. It would take 2 or 3 plus of those to cover a new loan at 6.5%

They will be lucky to get 10 cents on the dollar. they will just get their buddies in govt. to 'refinance' it at zero interest rates, and then repeat the same swindles all over again, same as they have since Reagan and the Savings and Loan swindles. Same thing over and over and over.

 

[B. Kidd]

Lot's

Magic 8-ball sez another GM failure is in the cards. Even bigger next time around!!

 

[beagle9]

Well the fact is the govt. and these financial swindlers are the same people; all the regulators come from the industires they allegedly regulate, and they go back to work for them after they do a stint as regulators. They are all the same people, business people and bankers. They have the same morals, i.e. none to speak of.

Nice way of saying the government is involved, especially after your long drawn out post early on saying basically that it wasn't involved. LOL

 

[Toddsterpatriot]

, yes, this thread , dumbass.

Where in this thread is the right suddenly complaining about deregulation and lack of govt. oversight? Moron.

 

[DudleySmith]

Nice way of saying the government is involved, especially after your long drawn out post early on saying basically that it wasn't involved. LOL

Yes, we see you can't refute anything, and are desperate now. lYou're the one crying about deregulation all of a sudden. Now you pretend you aren't. You can't cover your ideological rubbish arguments so roll out the strawmen. lol

 

[Toddsterpatriot]

Who made up so many fraudulent loan applications? Who forced Goldman and others to hide them in big traches of other loans for resale? Who then leveraged those tranches in CDO's at 35 to 50 times the averages values in the overnight markets?

Who forced Fannie and Freddie to buy so many risky loans?
Was it the federal government?

Who then leveraged those tranches in CDO's at 35 to 50 times the averages values in the overnight markets?

What does this gibberish even mean?

 

[DudleySmith]

Where in this thread is the right is suddenly complaining about deregulation and lack of govt. oversight? Moron.

Your buddy Beagle is moron. Nobody was talking to you anyway, dumbass. Post some stupid graph or other, babble something about 'free markets n stuff' get a few point from the other dumbasses and move on, troll.

 

[DudleySmith]

Who forced Fannie and Freddie to buy so many risky loans?
Was it the federal government?

Who then leveraged those tranches in CDO's at 35 to 50 times the averages values in the overnight markets?

What does this gibberish even mean?

Of course you don't know; you don't know squat.

 

[Toddsterpatriot]

Oh yes they will for the same reason that the bank got seized. The only way you are going to sell mortgages, bonds, etc with a 2.5-3% yield in today's interest environment is to offer them at a deep discount. It would take 2 or 3 plus of those to cover a new loan at 6.5%

Oh yes they will for the same reason that the bank got seized.

No they won't. Even you aren't stupid enough to buy this bank at a loss.

The only way you are going to sell mortgages, bonds, etc with a 2.5-3% yield in today's interest environment is to offer them at a deep discount.

If SVB bought $2 billion worth of bonds and lost $1 billion on them, do you think the buyer is going to pay $2 billion for them? DURR.