'NOT Trump's Fault' - Govt Rapid Rate Hikes Reduced Bank Bonds' Worth - 'Single Biggest Monetary Mistake In Half a Century'

[CrusaderFrank]

Yes. Exactly. The same old moral hazard.

And now our Too Big To Fail banks are bigger than ever. They are Too Big To Save.

There's no better bottom line accountability than an owner with his capital at risk

 

[g5000]

Ray Epps encouraged Silicon Valley Bank's customers to start a bank run.

 

[g5000]

There's no better bottom line accountability than an owner with his capital at risk

Well, that's the thing, see. Michael Lewis has made a good point that ever since banks and broker-dealers went public, they have put their shareholders' capital at higher and higher risk.

I agree. We should go back to privately owned banks.

 

[martybegan]

'The failure of three banks in the last two weeks, including Silicon Valley Bank on Friday and Signature Bank on Sunday, is a saga of utter government incompetence. Call these bank collapses Biden's Banking Busts. The Biden administration has been obsessing on woke causes while banks teeter toward insolvency.

Three days before Silicon Valley Bank collapsed, Treasury Secretary Janet Yellen cautioned that climate change puts the banking industry at risk. Yellen was in la-la land, speculating that future storms and tornadoes could diminish the value of banks' assets.

Weather is a risk, but she was oblivious to the much more immediate problem facing banks -- the plummeting value of the bonds they own. She was heedless to the impending downfall of SVB and possibly several other small banks that had purchased long-term bonds when interest rates were near zero.

In 2022, after doing nothing to tame inflation the previous year, the Federal Reserve hiked rates repeatedly to make up for their previous inaction. Those rapid rate hikes, the most drastic in decades, made the banks' bonds lose value.

A week before Yellen's climate change harangue, Moody's Investors Service already had delivered bad news to SVB that it was about to be downgraded several notches because its inventory of bonds was not worth enough to repay depositors (due to bonds' decreased values due to Fed Rate Hikes).A day before Yellen's loony speech, Federal Deposit Insurance Corp. Chairman Martin Gruenberg also cautioned that the diminishing value of the bonds held by banks meant a $620 billion problem ahead.

The Office of the Comptroller of the Currency, a part of Yellen's Treasury, is responsible for examining the financial condition of banks. It failed to avert the SVB collapse.'


Again, as experts have explained, the Bipartisan legislation Trump signed into law had nothing to do with 3 (now) bank collapses, including the SVB.

Govt incompetence and sudden rapid interest rate increases in an attempt to get Biden's inflation under control destabilized the banks, already on the brink of collapse, pushing them over the edge.

Biden's banking busts include this single biggest monetary policy mistake in half a century

The failure of three banks in the last two weeks is a saga of utter government incompetence.

www.foxnews.com

'B...b....but Trump...'
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No, NOT Trump's fault at all.

Another 'Desperate Finger-Pointing FAIL' by President Joe 'The Buck Stops Here' Biden and his incompetent administration.

The Fed had to do it. But this has been going on for over a year now and the banks had time to adjust to the situation, and should have adjusted to the situation. How long was SVB's risk lead position left open?

They did not. I won't say they were too busy worrying about DEI bullshit to the exclusion of doing their jobs, but I will say they were worrying about DEI stuff to the detriment of doing their actual jobs.

 

[g5000]

The Fed had to do it. But this has been going on for over a year now and the banks had time to adjust to the situation, and should have adjusted to the situation. How long was SVB's risk lead position left open?

They did not. I won't say they were too busy worrying about DEI bullshit to the exclusion of doing their jobs, but I will say they were worrying about DEI stuff to the detriment of doing their actual jobs.

It was more like with home prices during the mortgage bubble. Everyone thought house prices would always go up and never down.

Same thing with bond prices. Really stupid assumptions were made.

 

[CrusaderFrank]

Well, that's the thing, see. Michael Lewis has made a good point that ever since banks and broker-dealers went public, they have put their shareholders' capital at higher and higher risk.

I agree. We should go back to privately owned banks.

If you're FDIC insured, you cannot play games in the market. Dull, boring, pay 3% on deposits collect 6% on loans. If you want to play the market, talk to your friends and family and you CANNOT used the insured bank assets as collateral

 

[martybegan]

It was more like with home prices during the mortgage bubble. Everyone thought house prices would always go up and never down.

Same thing with bond prices. Really stupid assumptions were made.

But the housing bubble collapsed far more quickly. Interest rates have been rising for two years now, and anyone who knows anything about finance knew the money dumped into the economy during COVID would have to be rectified to prevent or at least mitigate inflation. This was a foreseeable risk, which SVB either ignored or didn't notice. Not having a head of risk assessment/management for months on end probably didn't help.

 

[g5000]

But the housing bubble collapsed far more quickly. Interest rates have been rising for two years now, and anyone who knows anything about finance knew the money dumped into the economy during COVID would have to be rectified to prevent or at least mitigate inflation. This was a foreseeable risk, which SVB either ignored or didn't notice. Not having a head of risk assessment/management for months on end probably didn't help.

Actually, the housing bubble peaked in 2006. But it took three to five years for ARMs to reset, which is why the collapse didn't start until 2008.

The bond bubble peaked two years ago, but is only now seeing the negative results.

 

[LeftofLeft]

Does anyone see a positive correlation in Financial regulators and financial risk managers working in climate change and LBGQT causes as part of their analysis and assessment process?

 

[g5000]

Does anyone see a positive correlation in Financial regulators and financial risk managers working in climate change and LBGQT causes as part of their analysis and assessment process?

Um...no.

Like I said. It's just a matter of time before you all start blaming the negroes.

 

[martybegan]

Actually, the housing bubble peaked in 2006. But it took three to five years for ARMs to reset, which is why the collapse didn't start until 2008.

The bond bubble peaked two years ago, but is only now seeing the negative results.

Good point.

Still MBS's were new securities vehicles (relatively) and as such didn't have the history that bond price responses to interest rate increases has as a benchmark to determine risk, or forecast outcomes.

I can see the MBS market collapse being a surprise, but sorry I can't see people being surprised that interest rate increases hurts the government bond market.

 

[L.K.Eder]

it was antifa. i am sure of it. i think i read it in the navarro report.

 

[easyt65]

The desperation of Trump supporters to try to deflect blame from Trump's damaging repeal of regulations is palpable.

Your ignorance is palpable.

You don't have the 1st clue about economics, bonds, intetest rates, or the banking industry ... you should be a Democrat Bank Risk Assessor ... or work for Yellen.

 

[Catsnmeters]

Your ifnorance is palpable.

You don't have the 1st clue about economics, bonds, intetest rates, or the banking industry ... you should be a Democrat Bank Risk Assessor ... or work for Yellen.

Thanks for telling me about myself.

Good grief what an empty reply.

 

[easyt65]

FoxNews said it, that is all the OP needs to know. They tell him what to think and he says "thanks"

No, the economic experts explained the problem, making it easy enough for even snowflakes to understand, or so they thought.

Its funny to watch f*tards respond to economic facts with such raw emotions, feelings, and dedication to remain ignorant as long as it means they get to keep blaming Trump.

 

[Harpy Eagle]

No, the economic experts explained the problem, making it easy enough for even snowflakes to understand, or so they thought.

Its funny to watch f*tards respond to economic facts with such raw emotions, feelings, and dedication to remain ignorant as long as it means they get to keep blaming Trump.

The economic experts paid by FoxNews explained it to you, and you would never question them. To do so would mean facing the ire of your tribe.

So, do tell, do you blindly believe what the economic experts paid by CNN or MSNBC explain each day? Or is it just the ones paid by FoxNews that we are not allowed to question?

 

[easyt65]

Thanks for telling me about myself.

'Nuh-uh, YOU ARE!'


Thank you for proving my point with that withering intellectual respone, f*tard.

Go back to the kids' table and let tbe grown-ups talk.

 

[easyt65]

The economic experts paid by FoxNews explained it to you,

Again, NO, f*tard. This is the 2nd thread dealing with this issue in which I have poated nunerous sources quoting numerous economic experts. You just proved you haven't read any of them.

It seems you partisan bias is a major reason you are stupid as hell.

 

[Catsnmeters]

View attachment 766313
'Nuh-uh, YOU ARE!'


Thank you for proving my point with that withering intellectual respone, f*tard.

Go back to the kids' table and let tbe grown-ups talk.

Lol. It's funny you refer to yourself as a grownup while at the same time posting cope memes and ad hominem.

The irony drips.

 

[Harpy Eagle]

Again, NO, f*tard. This is the 2nd thread dealing with this issue in which I have poated nunerous sources quoting numerous economic experts. You just proved you haven't read any of them.

It seems you partisan bias is a major reason you are stupid as hell.

Your OP has a link to FoxNews and nothing else.

Why lie when it is so easy to show that you did so?