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

[Dragonlady]

'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...'
View attachment 766288

No, NOT Trump's fault at all.

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

FOX????? The admit they will only tell you what you want to hear. Nothing is ever Trump's fault. Not deregulation, not 1 million covid deaths, not the crashed economy. Nothing Trump did is his fault.

 

[easyt65]

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

My responses are tailored to tbe IQ of tbe recipient, f*tard. Snowflakes mainly fet memes and emojis because they have proven that is near the limit of what their tiny TDS-suffering brains can process.

I address the emotional / feeling centers of their brains because that is where the vast majotity of information processing goes on with them.

 

[easyt65]

Your OP has a link to FoxNews and nothing else.

Thank you for proving you are an ignorant f*tard who sucks at both reading and reading comprehension.

 

[easyt65]

Your OP has a link to FoxNews and nothing else.

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

Thank you for proving again what an ignorant f*tard you are, unable to read or comprehend what you read.

What do you NOT understand about 'MULTIPLE THREADS' on this issue in which I have posted, posting numerous links / articles citing numerous experts....

1 link in this thread? Well, lets see.....that's ONE MORE than you have posted.

Try debunking what is being reported ratber than childishly biasedly questioning the source.

Oh yeah, you can't debunk economic experts because you are a highly emotional, TDS-suffering biased f*tard.

 

[Catsnmeters]

My responses are tailored to tbe IQ of tbe recipient, f*tard. Snowflakes mainly fet memes and emojis because they have proven that is near the limit of what their tiny TDS-suffering brains can process.

I address the emotional / feeling centers of their brains because that is where the vast majotity of information processing goes on with them.

Of course they are. If the recipient deviates from your echo chamber, you do the above.

This has already been established.

 

[easyt65]

Of course they are. If the recipient deviates from your echo chamber, you do the above.

You can deviate all you want - you do know this is a chat board, right. You can continue to engage in your unsupported ignorant opining all you want. Its cute.

I just don't have patience with ignorant f*tards who attack me, without supporting counter evidence, because they believe their highly emotional and ill feelings for Trump make them smarter than the nations' top economists.

 

[g5000]

Oh yeah, you can't debunk economic experts because you are a highly emotional, TDS-suffering biased f*tard.

Dude, you are massively ignorant of economics. That's why you drink whatever piss Fox News pours for you.

“Certainly there would not have been the same kind of fallout and panic if the regulations had not been changed,” said Josh Lipsky, an economics policy expert at the Atlantic Council. “But,” he added, “that’s only part of it.”

7 key questions about Silicon Valley Bank's collapse, answered

President Trump-endorsed rollback of Dodd-Frank's tougher scrutiny of banks was a significant factor in SVB's problems. But it wasn't the only culprit.

www.latimes.com

A chief culprit, economists say, is legislation President Donald Trump signed into law in 2018, which rolled back key parts of the Dodd-Frank banking regulations passed in the wake of the 2008 financial crisis. That 2018 legislation, called the Economic Growth, Regulatory Relief, and Consumer Protection Act, passed with strong support from the Republican Party and critical support from some Democrats. Among those leading the charge was McCarthy, then House majority leader.

[snip]

“This was a 100 percent avoidable problem,” economist Dean Baker told The Intercept in an email, pointing to the Dodd-Frank repeal bill. “That bill raised the asset threshold above which banks have to undergo stress tests from $50 billion to $250 billion. SVB would have been required to undergo regular stress tests before the revision; among the stresses you look at are sharp rises in interest rates, which is apparently what did in SVB. Presumably, if its books had been subject to this test, the risk would have been detected and they would have been required to raise more capital and/or shed deposits.”

Silicon Valley Bank Used Former McCarthy Staffers to Weaken Regulations, Lobby FDIC

Two senior aides to House Speaker Kevin McCarthy were among the top lobbyists for Silicon Valley Bank, the bank at the center of a new financial crisis.

theintercept.com

 

[CrusaderFrank]

Calvin Coolidge for President!

Make America Grow Up Again!!

Adults can take a hit, learn and improve! Babied adolescents never learn, Babied Capitalists rob you until it hurts

 

[easyt65]

“Inflation is no longer the sole focus for the Federal Reserve, says Kathy Bostjancic, chief economist of Nationwide Mutual.'

Inflation is why the Biden Administration's Fed has rapidly made 7 interest rate hikes...which caused the bonds banks heavily invested in decreased in value, leaving them with not enough cash to cover investor's money.

Biden and Yellen were so panicked and so focused on inflation that they lost sight of what those rapid interest rates were doing, how they were undermining these banks.

Some economists expect Fed to keep interest rates unchanged amid Silicon Valley Bank crisis

Some economists expect the Fed to keep its key interest rate unchanged amid concerns about financial stability after the Silicon Valley Bank crisis.

www.usatoday.com

 

[Harpy Eagle]

the nations' top economists

How is this determined?

Is there a ranking system that you could link us to?

 

[easyt65]

"The Federal Reserve is flying blind as it tries to bring down inflation without breaking the financial system or crashing the US into a recession."
- Bloomberg


Oops...FAIL.

 

[Catsnmeters]

You can deviate all you want - you do know this is a chat board, right. You can continue to engage in your unsupported ignorant opining all you want. Its cute

I just don't have patience with ignorant f*tards who attack me, without supporting counter evidence, because they believe their highly emotional and ill feelings for Trump make them smarter than the nations' top economists.

I think you are confusing "attack" with spirited debate. Don't be so sensitive.

My initial response was just highlighting the barrage of posts trying to shift responsibility completely from Trump.

There was no ad hominem.

Of course your response was swift; as you proceeded to somehow tell me all the things I don't know about...which as I pointed out is a pretty pointless reply since you don't know me.

I just think you take these forum boards way to seriously. I have no personal animosity toward you. This is just a political forum. Take some deep breaths. It will be ok.

 

[easyt65]

No 'feelings', no 'emotion', no petty TDS Trump obsession, just put economic FACT:


WHY DID SVB COLLAPSE?

SVB's collapse came suddenly, following a frenetic 48 hours during which customers yanked deposits from the lender in a classic run on the bank.

But the root of its demise goes back several years. Like many other banks, SVB ploughed billions into US government bonds during the era of near-zero interest rates.

What seemed like a safe bet quickly came unstuck, as the Federal Reserve hiked interest rates aggressively to tame inflation.

When interest rates rise, bond prices fall, so the jump in rates eroded the value of SVB's bond portfolio. The portfolio was yielding an average 1.79% return last week, far below the 10-year Treasury yield of around 3.9%, Reuters reported.

At the same time, the Fed's hiking spree sent borrowing costs higher, meaning tech startups had to channel more cash towards repaying debt. At the same time, they were struggling to raise new venture capital funding.

That forced companies to draw down on deposits held by SVB to fund their operations and growth.

What sparked the bank run?​

While SVB's problems can be traced back to its earlier investment decisions (investments in govt bonds BEFORE the Fed stateted raising interest rates in an attempt to tame Biden's inflation), the run on the bank was triggered Wednesday when the lender announced that it had sold a bunch of securities at a loss and would sell $2.25 billion in new shares to plug the hole in its finances.

That set off panic among customers, who withdrew their money in large numbers.

The bank's stock plummeted 60% Thursday and dragged other bank shares down with it as investors began to fear a repeat of the global financial crisis a decade and a half ago.

By Friday morning, trading in SVB shares was halted and it had abandoned efforts to raise capital or find a buyer. California regulators intervened, shutting the bank down and placing it in receivership under the Federal Deposit Insurance Corporation, which typically means liquidating the bank's assets to pay back depositors and creditors."

https://www.google.com/amp/s/amp.cnn.com/cnn/2023/03/13/investing/silicon-valley-bank-collapse-explained/index.html

 

[easyt65]

I think you are confusing "attack" with spirited debate.

Debate is an e change of facts, not highly emotional, unsupported biased opinion, which is all you have presented.

Try READING the explanations from tbe experts before trying to prove with opinion you are smarter than they are.

Your uneducated opinions and biased feelings are a waste of time.

 

[Mac1958]

Inflation is why the Biden Administration's Fed has rapidly made 7 interest rate hikes...

Oh, my goodness. This is one of those posts I wish I hadn't seen.

The Fed is not the government. A President can't make them do anything. No one in the government can make them do anything.

Trumpsters from coast to coast are spectacularly, profoundly, and dangerously ignorant of markets & economics. What a disservice their media is providing.

 

[Harpy Eagle]

But the root of its demise goes back several years. Like many other banks, SVB ploughed billions into US government bonds during the era of near-zero interest rates.

What seemed like a safe bet quickly came unstuck, as the Federal Reserve hiked interest rates aggressively to tame inflation.

When interest rates rise, bond prices fall, so the jump in rates eroded the value of SVB's bond portfolio. The portfolio was yielding an average 1.79% return last week, far below the 10-year Treasury yield of around 3.9%, Reuters reported.

At the same time, the Fed's hiking spree sent borrowing costs higher, meaning tech startups had to channel more cash towards repaying debt. At the same time, they were struggling to raise new venture capital funding.

That forced companies to draw down on deposits held by SVB to fund their operations and growth.

If only we had something in place to catch this sort of thing before it became a problem.

 

[Catsnmeters]

Debate is an e change of facts, not highly emotional, unsupported biased opinion, which is all you have presented.

Try READING the explanations from tbe experts before trying to prove with opinion you are smarter than they are.

Your uneducated opinions and biased feelings are a waste of time.

So naturally you telling me what I know about economics is in keeping with your statement that is an emotional, unsupported biased opinion.

It's like you are calling yourself out and don't even realize it.

 

[LeftofLeft]

Um...no.

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

Where is that coming from? If financial regulators and risk managers were integrating right wing policies such as 2nd Amendment rights as part of their process for their assessments and analysis, I would have the same reaction.

 

[g5000]

Where is that coming from? If financial regulators and risk managers were integrating right wing policies such as 2nd Amendment rights as part of their process for their assessments and analysis, I would have the same reaction.

The ignorant pundits tried to blame the negroes for the 2008 crash.

Should this current banking crisis widen, they will do it again.

They are already blaming "wokism" and TH3 GAYZ.

 

[LeftofLeft]

The ignorant pundits tried to blame the negroes for the 2008 crash.

Should this current banking crisis widen, they will do it again.

They are already blaming "wokism" and TH3 GAYZ.

I fail to see how calling for more stringent financial metrics for mortgages is blaming Blacks. Mortgage qualification requirements were eased opening up mortgages in ranges where people could not keep up with payments and the result was a real estate crash…. This was across all races. Similarly, when social and political causes are injected into regulating and assessing from a financial perspective, it clouds judgement…. And when I say political or social causes, I mean anything left or right parts of the spectrum.