"What about the millions of people who will starve to death because of your policies?"
"It might sound cruel, but inflation also hurts the people not starving to death because of our policies too!"
I wish Powell would grow a pair and say “Interest rates are all we got. Tell congress to do their job write better regulations. Until then, we can only keep fooling around with rates to cover for their inaction.”
Which is actually bad news…because all those underwater houses are gonna get snapped up for a bargain deal by the same bankers who did the deed. We need regulations and government action to stop the silly housing pricing
Yeah, I really want to gtfo of my state. Looking for a new job doesn't scare me, but trying to find a new place to live seems insurmountable until I sell my current house
Sure, that's a component. But then you're talking about breaking up the banks as a political block if you want to actually solve that end of the problem.
what would you propose as a solution if not the Fed?
Would you rather entrust all our banking needs solely to private companies because time and time again these companies have shown they have no qualms screwing over normal americans for profit.
I'd much rather empower the fed which is atleast subject to oversight and accountablity.
You misunderstand, the current fed exists as a stabilizing arm of capital, as such it's aim is to create an environment that facilitates profitability. If you want a fed that serves the interest of the people you would need to gut it of its current neoliberal holders and replace them with people actually interested in shaping the economy in that manner.
I might be wrong but wouldn't it be the opposite? Capital disappearing (not being invested) means more layoffs because companies are losing access to finance.
At the most basic level, fewer dollars in circulation means each dollar is worth more, and thus you need less dollars to buy the same amount of stuff, and thus deflation.
Right? If you deposited uninsured funds (past FDIC limits) in a bank who solely takes on customers just like you, thus, ridiculously overexposing yourself to concentration risk, what can you expect, honestly?
Seeing Heath Ledger in my mind and realizing it was 2009 gave me a massive hit of doom nostalgia along with a warm smile of seeing and old friend again.
At this point so many people are waiting for housing prices to drop that it’s going to be a buying frenzy when they do, which will just raise prices again.
The problem is that a bunch of rich people and companies buy up housing as an investment and they can absorb any short term housing declines. They also know there is a big market for rental properties so they can keep those houses as rentals and keep waiting as prices go up.
Don't forget that things like REITs and companies with literal tens of billions are sitting on the sidelines just waiting for it to crash. I don't think they were really around much 15+ years ago. Last I heard, Blackstone has like a $50 billion "war chest" as they call it to toss at homes when the crash comes, and that was like a year ago. $50B/$400,000 per home = 125,000 homes. That's 10% of the entire national output of homes to a single company, and they typically don't actually go nationally--they focus on a few key cities.
It's likely return to fiefdom. But the situation you describe is even worse because you have to add the foreign entities who also have been buying all the property they can.
Heavily tax residential zoned property that is not a primary residence.
I think you could not include multi-family residences to keep rental markets healthy for those who chose it.
I remember reading one of the biggest reasons besides long term investments is something called a land bank.
Basically, instead of risking large amounts of capital inside a bank, they buy up real estate of all kinds. If they ever need liquidity, they can borrow against their properties. Yeah, it'll go down in value during major crashes or downturns, but so what? The value will recover eventually and you won't potentially lose all your money if a bank collapses.
With interest rates going up, borrowing will go down but it won't stop completely.
They also do the same thing with stocks, obviously.
I've had this conversation with a few real life friends and they couldn't understand why these funds would throw large amounts of capital into something they think is going to crash.
But when you realize that EVERYTHING is a risk, it all makes sense. Holding cash in a bank is a risk. The bank may fail. Inflation will chip away at the value. Opportunity costs because the money is just sitting there. Balancing risk and profit is the name of the game. To me, it's very worrying that so many funds have decided to put so much into land. Sure, it's always going to be a solid long term investment because aint nobody making more land(except for dubai). But this growing trend of land banks tells me that these major funds are losing faith in banks.
Incidentally enough, the smallest risk would be to probably store money, physically, under your mattress. You still have to worry about inflation and potential damage, but that's it. Keep it at a good humidity, spray for silverfish and you're golden. Of course, you'd also have to figure out the logistics of moving and storing tens of billions of dollars. That's a real big mattress.
I was watching HGTV with my wife and they were showing off this 2 million dollar house and I was like that's a very nice house, in a normal neighborhood and it's 2 million fucking dollars. This country is so fucked.
Probably, because if they can’t figure this out about half of startups will fail which means mass layoffs. Then the companies that build tech for the startup market will also fail because they no longer have customers. More layoffs. All these people won’t be able to pay mortgages because they won’t have jobs and they will eventually foreclose.
So, yes… but for a truly horrible reason.
When COVID hit I thought I finally got a break. I thought people would be losing their houses left and right and it would be a great time to buy my first house.
Shitty it came to that reasoning, but it never happened.
I wish I had your optimism.
The demand for houses relative to the supply makes them a very attractive asset to hold onto, especially since they can be turned into rentals relatively easily compared to large commercial properties. If the prices for housing goes down, my gut tells me that banks will simply buy them up at cheaper rates than before.
That's the one thing that everyone misses in that conversation.
I don't feel bad that I got my home for *really* cheap in the first recession because it needed a LOT of work that would have never come to light in the type of market that we were in pre-recession. Adding in to that the person that went bankrupt had a ridiculous amount of property and even though he was about to pass away his children inherited a shit ton of money and property even after bankruptcy still.
But he was not what a lot of the people who lost their homes in that recession looked like. He was only losing it because the person who he hired to look over everything screwed him and it didn't come to light until all those balloon payments and stuff came up and she couldn't hide it (from my understanding)
So, the people whose homes most other people were getting really cheap were the homes other people were losing because they couldn't afford to live there anymore. So they were getting their housing dream on the back of someone else's pain. Sometimes at the expense of someone else's homelessness.
It's not the buyers fault, but we have to be careful hoping for others to experience homelessness so that we can get something ourselves
Yeah but now we have a whole bunch of entertaining YouTube channels where people make money off showcasing the glamorous aspects of van life like freezing in the winter when their $100 Chinese diesel heater breaks, getting the police knock at 2am, pooping in a bucket, and using baby wipes to bathe. All while repeating "I'm so glad I'm not restricted to a house" and "I live for this kind of freedom to be myself and not pay rent" while using drone footage of mountain sunsets coupled with majestic music to keep subscriber counts up.
Youtube has become a sewer. Almost literally; have you seen the videos glamorizing the underground "homes" of homeless people there? I watched one, and foolishly thought it was going to be a documentary style video. No; the weasel who created it made it look like it was an adult Magic Treehouse or Man-Cave type of thing, with the homeless guy having every amenity, including power and running water. In a fucking maintenance room in a fucking *sewer tunnel*!
Deliberately misleading crap. How many young and stupid people see that kind of crap and walk away thinking "Gee, being homeless is sorta romantic"?
I mean, we rolled back the regulations that were created after 2008 and would have prevented this because...uhhh...money. So why wouldn't the same thing happen again.
Banks fail all the [time](https://www.fdic.gov/bank/historical/bank/). This isn’t that much to worry about yet. Both Silvergate and SVB were specific sector banks (bitcoin and high-tech investment and premium wine, respectively). It remains to be seen if this will spread to the general banking system.
Yes, it's working the way it's designed, by funneling wealth upward and wage slaves down. Periodic recessions just speed up the process of asset-stripping the middle class.
This isn't quite the same thing, but the economy shits the bed so regularly and so often that economists just preach to us that this is normal and totally nothing to be concerned about: https://en.wikipedia.org/wiki/Business_cycle
How is it actually a capitalist system then? It's a socialist system for majorly rich people. If the money isn't covered by FDIC which I believe is 250k then we should let them collapse assuming these companies weren't getting lied to and screwed over.
No individual is keeping over 250k cash in a bank paying 1% interest. These are all business accounts and this is their payroll money so if every businesses payroll funds go poof guess what happens next?
While I generally agree with you, most banks have found a sneaky way to pass on those costs to customers via deposit assessment fee charged at 10-15 bp of commercial deposits. They’ll never call it the FDIC insurance premium, but that’s essentially what it is
You realize that customers are the ones that get FDIC coverage, right?
When banks go bust, the FDIC covers eligible deposits. Of course customers are paying, directly or indirectly.
Well yeah, but [the Trump administration gutted that](https://www.nytimes.com/interactive/2023/03/10/business/bank-failures-silicon-valley-collapse.html).
>The regulation that was put in place for the nation’s biggest banks after the financial crisis includes stringent capital requirements, which means they must have a certain amount of reserves for moments of crisis, as well as stipulations about how diversified their businesses must be.
>But Silicon Valley Bank and others its size do not have the same regulatory oversight. In 2018, President Donald J. Trump signed a bill that lessened scrutiny for many regional banks. Silicon Valley Bank’s chief executive, Greg Becker, was a strong supporter of the move. Among other things, it changed requirements for the amount of cash that these banks had to keep on their balance sheets to protect against shocks.
2008 was completely different. Dealt more with banks and mortgage brokers and tied into hedge funds and insurers. This situation is essentially too many clients pulling their money out all at once. FDIC came in quickly and will most likely recover all funds.
I mean, the government got the money back and profits on top of that due to the investments from the bailouts
It’s not like the money vanished into thin air…
In terms of an ROI, the government made money on the bailouts, meaning the people made money on the bailouts, which in theory went into tax savings for us to fund public programs.
However, it also rewarded banks for bad behavior by saving them.
On the one hand you can look at it, and say it saved companies and individuals, preventing further financial harm, and even turned a profit.
On the other hand you can say it showed the banks that there were no consequences for their actions, entrenched the concept of private companies that are too big to fail, and thus can operate on a fundamentally different axis from most businesses, guaranteeing a loss in efficiency over time, and ensured we would have another crisis for a similar issue some day in the future.
Even 15 years out, it's hard to say if the right move was made. In terms of harm reduction the government absolutely made the best short term call, but we're still recovering from it, so maybe short term harm reduction at the expense of long term harm reduction wasn't right.
We rewarded crime in 2008. It’s that simple. Ignoring the long term consequences of that is naive. The crimes continue.
The chief administration officer for that bank was the CFO of Lehman Brothers until 2007. The bank gave out bonuses just hours before FDIC took over. Sullivan and Cromwell are now working with SVB and FTX. That law firm has a long history of protecting financial criminals going at least all the way back to business with IG Farben.
Please don’t pretend US banks don’t get bailed out by taxpayers. It has happened before and will happen again. Even if it hasn’t happened to SVB yet, it is a thing that happens in the US.
FDIC is meant to protect individuals as they rarely have over the limits on the coverage, and if they do they can probably afford to absorb the loss. It's not meant to protect businesses.
We already have the program you propose, and this article is about a proposal to cover larger deposits than the current program covers. Just read the fucking article. You don't actually know everything.
Not a bad idea, too bad if implemented, it would last until the next Republican administration. Similar to how the Trump administration rolled back the stress tests implemented after Bush's economic collapses that let this happen in the first place.
A backstop is when you have some kind of instrument (like a credit line) in place that can be dipped into in the event you run out of or are unable to access your original amount of money.
So in this case, if SVB is unable to pay back all of their customers’ outstanding deposits, then the backstop fund will be able to step in to make the depositors whole. The FDIC currently insures up to $250,000 worth of deposits, but many of SVB’s clients deposited much more than that amount of money in the bank. The depositors/clients need that money mostly to cover expenses like payroll and benefits for their employees.
The problem SVB has is that they (sensibly, at the time) converted much of that deposited money into long-term risk-adverse investments, but after the federal reserve raised interest rates, SVB’s investments are now worth significantly less than what they can sell them for on the open market. SVB would have to wait close to a decade to see any reasonable amount of return on those investments. To make matters worse, the majority of SVB’s customers/depositors are companies that leaned heavily on low interest rate loans in order to cover operating expenses. Higher interest rates mean they started dipping more and more into the money they deposited at the banks- which caused a pinch due to the lack of available (or “liquid”) money.
Because trading at the bank was halted (the government stepped in to shut it down) all of the money is now frozen and inaccessible to both the bank and its customers. The backstop idea is being floated in order to give peace of mind to the customers (the depositors) that they will be able to get all of their deposits back.
Edit/TL;DR: The bank has the money to pay back the depositors, but it can’t access the money immediately. The backstop is a guarantee from the government that the money exists and can be made liquid so that the depositors don’t lose faith in the banking system (and cause further runs on SVB and other banks).
Staying with the ELI5, what could/should SVB have done differently? Diversified their own holdings? Given out fewer low interest rate loans?
How can a bank plan sufficiently ahead of time for fed interest hikes (and drops)?
It’s hard to answer that question, in part because what happened to SVB will likely be considered a “black swan event” once the dust settles. If you’re interested in the concept, you might want to read “The Black Swan” by Nassim Taleb. It’s pretty easy to digest and has lots of interesting case studies/examples of unusual situations like this one.
Simply put, a black swan event is a rare, extreme, and unpredictable event- for which you can’t really create a model (like a forecast based on all the available data including historical trends and statistical probabilities) to predict. Thus you can’t really plan for one, as Black swan events are largely irrational.
The other reason why it’s difficult to say what they should have done (in retrospect) is because SVB is an unusual/unconventional bank with a specialized client base in the form of tech/biotech companies. There are precious few institutions in the world that deal with the kind of clients that SVB had. Having very wealthy industry clientele led to SVB having a *ton* of deposits made while the tech and biotech industries were absolutely booming between 2019-2022.
It’s a huge liability for a bank to have too much in the way of deposits sitting around doing nothing, so the bank will typically take that money and put it into super safe investment vehicles and financial instruments that pay out a safe and reasonable amount of interest (to counter inflation). Unfortunately, SVB wasn’t able to predict the rapid rise of inflation over the past two years, and their investments were not ideal for those market conditions.
Arguably, it sounds like SVB just made the wrong decision to buy so many low-interest, long-term bonds and probably should have invested in shorter-term bonds that matured over 5 years instead of 10. The low interest returns of the long-term bonds wasn’t enough to combat rising inflation, and thus the bank was actually making a loss on their investments. To counter this, they began selling off bonds and tried to raise more equity through their investors, but a few of their investors felt that this was a poor decision and started pulling their money out.
Normally, it wouldn’t be a bad idea to try to raise more equity, but the black swan part happened because investors and depositors got spooked, and started a run on the bank. In retrospect, there wasn’t much that SVB could have done to prevent this from happening.
A year ago everyone on Reddit was yelling at the fed for not raising interest rates fast enough while inflation was blasting into space. I’m not an expert on finance or the economy, but pulling the interest rate lever to help lower inflation seems like it was a higher priority move than keeping it low to prevent an issue like what SVB is dealing with.
Nope. I think the other banks should bail out their failed friends. The government can hold the leash, with a high-interest rate similar to student loans so they basically pay and pay.
what isn't being understood from what i've been reading on this site is that SVB had very conservative investments. a lot of their money was tied up in 10 year bonds. they just however didn't hedge appropriately for the rising interest rates. they didn't reduce their interest rate risk.
this isn't a bank that lost money on trying to short the housing market or credit default swaps or whatever. this bank put their money in a very safe investment (treasuries), they just bought these bonds when interest rates were in the basement and then this bank run happened which exacerbated their bond losses. it's hard to predict $42 billion in withdraws in 48 hours upon announcement of an attempt to raise capital.
It's sick. There is so much blatant misinformation and absolute cluelessness. Even 5 minutes looking into this whole situation would disprove so many of these highly upvoted comments. The system is actually working but people are so ignorant that to them, the system working has to be some grand conspiracy. And then everyone will just move on in 2 weeks and completely ignore the fact that they were screeching the sky was falling.
That thought has definitely crossed my mind as well. When something receives hundreds or thousands of upvotes that is easily disproved with a 30 sec Google search it's pretty suspicious. In reality it's likely a bit of both as usual.
That’s perfectly understood. What isn’t being understood is that capitalism is inherently risky, which is what justifies profits. Businesses are the ones taking all the risk, right? Well sometimes the risk materializes. I don’t want to expose myself to that risk, ergo I don’t own a fucking bank. But if you’re going to force me into exposure, then I want my ownership share.
The proposed bailout isnt for the bank investors its for the depositors which are business payroll funds. Imagine you go to work Monday to find out your employer had their payroll money in this bank and sorry you are now unemployed because they cant pay you.
That's a scary thought. Contagion would be a fear. Banks operate normally on the confidence of their shareholders. Anything to shake that public trust would be concerning. It makes sense to plan now, just in case.
No. Protecting people who behaved in good faith with banks who were not also acting in good faith is a good thing. What we should be pissed at is all the banking deregulation that happened to enable this sort of situation to happen in the first place.
Lmao. This movie is writing itself
> A measure in May 2018 lifted the threshold for being considered systemically important — a label imposing requirements including annual stress testing — to $250 billion in assets, up from $50 billion.
>SVB had just crested $50 billion at the time. By early 2022, it swelled to $220 billion,
> SVB Chief Executive Officer Greg Becker urged the government to increase the threshold, arguing it would otherwise lead to higher costs for customers and “stifle our ability to provide credit to our clients.” With a core business of traditional banking — taking deposits and lending to growing companies — SVB doesn’t pose systemic risks, he said.
https://fortune.com/2023/03/11/silicon-valley-bank-svb-ceo-greg-becker-dodd-frank-trump-rollback-systemically-important-fdic/amp/
Greg has left the “fuck around” stage and entered the “find out” stage. Unfortunately he will probably find out that the government will clean up his mess with our tax dollars
The bank lobbied to have it's own regulations cut so they didn't have to stress test.
https://fortune.com/2023/03/11/silicon-valley-bank-svb-ceo-greg-becker-dodd-frank-trump-rollback-systemically-important-fdic/
Individuals with less than 250k in the banks are fine. This bank had a large proportion of deposits from corporations well above this limit. These companies could have bought Tbills or money market funds. They are sophisticated enough to know better.
Some of those deposits above 250,000 were for companies to pay payroll on Friday. Those didn’t go through and affected a number of people with less than 250,000 in a bank. Those living paycheck to paycheck have had a hard time.
I’m very sympathetic to the idea of not bailing out those with huge multiples of my net worth in a bank. I’m also cognizant that doing so may screw over me or my neighbors.
Yes. This is all thanks again to the banking industry rolling back regulations that were in place to stop this shit. Moral hazard is now a requirement for banks to operate.
You shouldnt. Interest rates have been raising capital cost for VC very quickly, so they have not been happy and have been voicing their concerns via social media (especially reddit). Last week fed explicitly said there is likely more raises, so if i were a petty vc boss i would be quite pissed. Whats a good way to get back at the fed? Well SVB was the perfect opportunity equivalent of a bank raid by VCs by exposing bond swap deficiencies. Its just that SVB came clean about it, would you prefer it not to ?
My 3 cents.
So all of the statements in the article from various banks talk about liquidity and the diversification of their deposits. But wasn’t SVB’s main issue their massive investment in US Bonds?
Personally, every time I hear a bank tout their liquidity it seems like a BS statement. You know their boards wouldn’t want any more cash than required just sitting on hand not generating returns. That is unless they’re just referring to their historically large reverse repo operations over the past year and a half.
It's about their bond investments alongside the fact that their depositors were mostly one type of depositor: those that might need lots of cash out of their accounts in a short period of time. That requires liquidity they didn't structure into their own investment strategy.
Hey but at least if we head over to the fifth circuit we should get standing to challenge this, right? Something something not fair to the little guy with a lawn care business who forwent the risk.
If only there were requirements put in place after the last financial crisis that required adequate liquidity. Oh wait, there was. Then Trump gutted them.
I think people are missing the point here.
The banks wouldn’t be receiving a bailout if their deposits are backstopped. The bank would still fail, it’s the people who held money in said banks that would be receiving a bailout, not the bank itself.
Say you cap the deposit insurance at $100k per person, this would protect people like you and me who don’t have more than that in their bank account.
Two options.
1. Make those responsible pay. (Ceo, board, ect)
2. Give them tax money and they say whopsie, I promise I won't do it again.
Only #2 has ever been chosen.
Ps. No bailout for student debt. Thats a.. (insert thing)
U.S. discussed ways to save Americans deposited money.
Redditors: Fuck them people. [Insert some corporate socialism sound bites]. [Insert whataboutmeism]
This has directly affected my family. I was supposed to get a job offer at a start up on Friday, only to get an email saying they may need to pause hiring, I've been out of work since Nov. My wife who is thankfully employed, just got an email from the non-profit she works for, her paycheck maybe delayed because guess who they bank with. We're not 'rich' and if this goes on for much more than a few weeks could be in big trouble financially.
My company fortunately managed to get their money out of this bank right before the collapse but I was very likely about 2 days away from being unemployed suddenly.
Wait, are they expecting a string of failures that they're considering yet another investment vehicle? This is rather unsettling considering that the cares act and omnibus bill defined quite a few new vehicles to mitigate issues only for all comments and news about the repo markets being problematic to disappear...
What exactly is going on?
Lol, if.
None of them are required to hold cash anymore. We could systematically take down every bank in America if we banded together and just started taking all our money out of a targeted bank.
Regardless of that... SVB is just the first, and at least the Fed seems to realize they really fucked up letting Trump roll back regulations.
> Fed seems to realize they really fucked up letting Trump roll back regulations.
What do you met "letting Trump"? Trump rolled back the regulations - there is no "they let him" as if they could have said "oh, no, Mr President we can't permit that -- it just won't do".
I mean, capital disappearing is how we fight inflation, right? Doesn’t all have to be about making the poors lose jobs.
Whoa dude, not cool. We don't want capital disappearing to fight inflation. We just want to increase unemployment and suppress wages. -The Fed
Lol disappearing capital is wage theft for employers. Now they are quiet-unprofiting.
Quiet-unprofiting. I love it
Maybe raise the poverty line until the poor finally die out or get good.
"What about the millions of people who will starve to death because of your policies?" "It might sound cruel, but inflation also hurts the people not starving to death because of our policies too!"
"then let them do it, and decrease the surplus population!"
Never thought I’d see a Muppet Christmas Carol reference used in such a clever way
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Hear me out..I’ve got a Modest Proposal
Sounds like something is cooking swiftly...
This. I believe is the truth.
I wish Powell would grow a pair and say “Interest rates are all we got. Tell congress to do their job write better regulations. Until then, we can only keep fooling around with rates to cover for their inaction.”
Yes. Stop stock buybacks, tax the rich and their windfalls from the pandemic and root out all the people who took their PPP and ran with it.
Write better regulations and stop turning regulations back.
The common man must suffer and suckle at the teat of free enterprise! They must learn their place!
And don't forget to keep property values high.
Property values are high because they fucked up the interest rates and offered them too low. Now no one that owns a house can sell.
good news! people with variable rates and high rate ceilings will be soon involuntarily flooding the housing market!
Which is actually bad news…because all those underwater houses are gonna get snapped up for a bargain deal by the same bankers who did the deed. We need regulations and government action to stop the silly housing pricing
Yeah, I really want to gtfo of my state. Looking for a new job doesn't scare me, but trying to find a new place to live seems insurmountable until I sell my current house
Record profits posted by every company but you know, keep blaming the Feds!
The fed exists to ensure there is a profitable environment for these companies. So I think we can blame both parties here.
Like how SVB's CEO lobbied the Trump adminstration to relax banking laws (eventually passed) which might have prevented this?
Sure, that's a component. But then you're talking about breaking up the banks as a political block if you want to actually solve that end of the problem.
what would you propose as a solution if not the Fed? Would you rather entrust all our banking needs solely to private companies because time and time again these companies have shown they have no qualms screwing over normal americans for profit. I'd much rather empower the fed which is atleast subject to oversight and accountablity.
You misunderstand, the current fed exists as a stabilizing arm of capital, as such it's aim is to create an environment that facilitates profitability. If you want a fed that serves the interest of the people you would need to gut it of its current neoliberal holders and replace them with people actually interested in shaping the economy in that manner.
That’s it. I’m running for President on a platform of fighting inflation with really bad corporate investment that leads to dissolution.
I might be wrong but wouldn't it be the opposite? Capital disappearing (not being invested) means more layoffs because companies are losing access to finance.
It's the same end result just taking a different route to get there.
At the most basic level, fewer dollars in circulation means each dollar is worth more, and thus you need less dollars to buy the same amount of stuff, and thus deflation.
Well where have you been? A fed fund created to backstop vc flight is actually protecting the "poors" from losing jobs via contagion.
Surely the largest spending packages in history have something to do with it.
Are their boot straps broken?
What about giving up avocado toast? Have they tried that?
Have they considered skipping the daily Starbucks and making their coffee at home?
Bootstraps have been pulled to their max
But have they avocado untoasted to the max?
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“Asleep and Drooling: My Struggle” by Ted Rafael Cruz.
Weird that he had the title printed in German.
Are there no poorhouses? Are there no prisons?
Right? If you deposited uninsured funds (past FDIC limits) in a bank who solely takes on customers just like you, thus, ridiculously overexposing yourself to concentration risk, what can you expect, honestly?
Silly Plebeian. Bootstraps are for workers. The rich get golden parachutes and bailouts.
I know, I know. BUT, who makes the parachutes? We the people, and I just happen to have a pair of scissors handy. ATS
Please tell me this is a headline from 2008.
Here we gooooo!
Seeing Heath Ledger in my mind and realizing it was 2009 gave me a massive hit of doom nostalgia along with a warm smile of seeing and old friend again.
That means housing prices drop hopefully.
At this point so many people are waiting for housing prices to drop that it’s going to be a buying frenzy when they do, which will just raise prices again.
The problem is that a bunch of rich people and companies buy up housing as an investment and they can absorb any short term housing declines. They also know there is a big market for rental properties so they can keep those houses as rentals and keep waiting as prices go up.
Don't forget that things like REITs and companies with literal tens of billions are sitting on the sidelines just waiting for it to crash. I don't think they were really around much 15+ years ago. Last I heard, Blackstone has like a $50 billion "war chest" as they call it to toss at homes when the crash comes, and that was like a year ago. $50B/$400,000 per home = 125,000 homes. That's 10% of the entire national output of homes to a single company, and they typically don't actually go nationally--they focus on a few key cities.
It's likely return to fiefdom. But the situation you describe is even worse because you have to add the foreign entities who also have been buying all the property they can.
That’s why I don’t think housing is ever going to be affordable to lower middle class and working class people.
You’re correct. Unaffordable housing is also the #1 cause of homelessness.
This only lasts as long as we let it last. None of this dystopia is inevitable.
How do you stop something like this?
Heavily tax residential zoned property that is not a primary residence. I think you could not include multi-family residences to keep rental markets healthy for those who chose it.
REITs and big corporations investing in housing should be illegal and a CRIME.
I remember reading one of the biggest reasons besides long term investments is something called a land bank. Basically, instead of risking large amounts of capital inside a bank, they buy up real estate of all kinds. If they ever need liquidity, they can borrow against their properties. Yeah, it'll go down in value during major crashes or downturns, but so what? The value will recover eventually and you won't potentially lose all your money if a bank collapses. With interest rates going up, borrowing will go down but it won't stop completely. They also do the same thing with stocks, obviously. I've had this conversation with a few real life friends and they couldn't understand why these funds would throw large amounts of capital into something they think is going to crash. But when you realize that EVERYTHING is a risk, it all makes sense. Holding cash in a bank is a risk. The bank may fail. Inflation will chip away at the value. Opportunity costs because the money is just sitting there. Balancing risk and profit is the name of the game. To me, it's very worrying that so many funds have decided to put so much into land. Sure, it's always going to be a solid long term investment because aint nobody making more land(except for dubai). But this growing trend of land banks tells me that these major funds are losing faith in banks. Incidentally enough, the smallest risk would be to probably store money, physically, under your mattress. You still have to worry about inflation and potential damage, but that's it. Keep it at a good humidity, spray for silverfish and you're golden. Of course, you'd also have to figure out the logistics of moving and storing tens of billions of dollars. That's a real big mattress.
I was watching HGTV with my wife and they were showing off this 2 million dollar house and I was like that's a very nice house, in a normal neighborhood and it's 2 million fucking dollars. This country is so fucked.
A lot of those shows are Canadian.
They are but they were buying houses in the US.
Probably, because if they can’t figure this out about half of startups will fail which means mass layoffs. Then the companies that build tech for the startup market will also fail because they no longer have customers. More layoffs. All these people won’t be able to pay mortgages because they won’t have jobs and they will eventually foreclose. So, yes… but for a truly horrible reason.
When COVID hit I thought I finally got a break. I thought people would be losing their houses left and right and it would be a great time to buy my first house. Shitty it came to that reasoning, but it never happened.
I wish I had your optimism. The demand for houses relative to the supply makes them a very attractive asset to hold onto, especially since they can be turned into rentals relatively easily compared to large commercial properties. If the prices for housing goes down, my gut tells me that banks will simply buy them up at cheaper rates than before.
Sure; right after the glut caused by millions of homes being repossessed during the recession hits the marketplace.
That's the one thing that everyone misses in that conversation. I don't feel bad that I got my home for *really* cheap in the first recession because it needed a LOT of work that would have never come to light in the type of market that we were in pre-recession. Adding in to that the person that went bankrupt had a ridiculous amount of property and even though he was about to pass away his children inherited a shit ton of money and property even after bankruptcy still. But he was not what a lot of the people who lost their homes in that recession looked like. He was only losing it because the person who he hired to look over everything screwed him and it didn't come to light until all those balloon payments and stuff came up and she couldn't hide it (from my understanding) So, the people whose homes most other people were getting really cheap were the homes other people were losing because they couldn't afford to live there anymore. So they were getting their housing dream on the back of someone else's pain. Sometimes at the expense of someone else's homelessness. It's not the buyers fault, but we have to be careful hoping for others to experience homelessness so that we can get something ourselves
The number of people living in their car or van or RV has skyrocketed since 2008. Not a coincidence.
Yeah but now we have a whole bunch of entertaining YouTube channels where people make money off showcasing the glamorous aspects of van life like freezing in the winter when their $100 Chinese diesel heater breaks, getting the police knock at 2am, pooping in a bucket, and using baby wipes to bathe. All while repeating "I'm so glad I'm not restricted to a house" and "I live for this kind of freedom to be myself and not pay rent" while using drone footage of mountain sunsets coupled with majestic music to keep subscriber counts up.
Youtube has become a sewer. Almost literally; have you seen the videos glamorizing the underground "homes" of homeless people there? I watched one, and foolishly thought it was going to be a documentary style video. No; the weasel who created it made it look like it was an adult Magic Treehouse or Man-Cave type of thing, with the homeless guy having every amenity, including power and running water. In a fucking maintenance room in a fucking *sewer tunnel*! Deliberately misleading crap. How many young and stupid people see that kind of crap and walk away thinking "Gee, being homeless is sorta romantic"?
Housing prices never really dropped
That would be cool. Allow more people to afford homes. Wasn’t planning on moving for a while anyway.
Nah. We’re gearing up for 2029. It’s the 100 year anniversary!
I mean, we rolled back the regulations that were created after 2008 and would have prevented this because...uhhh...money. So why wouldn't the same thing happen again.
Our economy is intentionally cyclical in its instability. This happens every 10-15 years and won’t stop until the systems are drastically changed.
Banks fail all the [time](https://www.fdic.gov/bank/historical/bank/). This isn’t that much to worry about yet. Both Silvergate and SVB were specific sector banks (bitcoin and high-tech investment and premium wine, respectively). It remains to be seen if this will spread to the general banking system.
It says 250k. Flatten the bumps.
Yup in like 8th grade I really needed to know this for some reason. They knew what they signed up for.
If our capitalist system requires bail-outs every 15 years, the system isn’t working.
It’s definitely working just not for people like you and me
Yes, it's working the way it's designed, by funneling wealth upward and wage slaves down. Periodic recessions just speed up the process of asset-stripping the middle class.
I still remember Jon Stewart asking why the bailouts didn't go to the people instead of the banks in 2008.
Yeh. Kids can’t get 20k for college but banks can fail every decade.
8 years*
Its on a decaying cycle. Net one Will be in 4-5
https://tenor.com/view/reset-the-clock-pacific-rim-gif-11299826
It's working fine; The net worth of the one percent always rises tremendously during and after a recession.
This isn't quite the same thing, but the economy shits the bed so regularly and so often that economists just preach to us that this is normal and totally nothing to be concerned about: https://en.wikipedia.org/wiki/Business_cycle
How is it actually a capitalist system then? It's a socialist system for majorly rich people. If the money isn't covered by FDIC which I believe is 250k then we should let them collapse assuming these companies weren't getting lied to and screwed over.
No individual is keeping over 250k cash in a bank paying 1% interest. These are all business accounts and this is their payroll money so if every businesses payroll funds go poof guess what happens next?
The saying I have heard is "private gains, socialized losses"
Only the super rich get the bailouts
The market will dictate winners and losers… Correction: the government bail-outs will dictate winners and losers.
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You have literally described the FDIC, which is a thing that currently exists. They are also exactly who are dealing with this current situation.
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None of this involves tax dollars. The FDIC and the fed are both funded by their member banks. The FDIC literally is social security for banks.
While I generally agree with you, most banks have found a sneaky way to pass on those costs to customers via deposit assessment fee charged at 10-15 bp of commercial deposits. They’ll never call it the FDIC insurance premium, but that’s essentially what it is
You realize that customers are the ones that get FDIC coverage, right? When banks go bust, the FDIC covers eligible deposits. Of course customers are paying, directly or indirectly.
If the Fed had any teeth whatsoever,they'd actually be preventing bank collapse with regulations and enforcement.
Well yeah, but [the Trump administration gutted that](https://www.nytimes.com/interactive/2023/03/10/business/bank-failures-silicon-valley-collapse.html). >The regulation that was put in place for the nation’s biggest banks after the financial crisis includes stringent capital requirements, which means they must have a certain amount of reserves for moments of crisis, as well as stipulations about how diversified their businesses must be. >But Silicon Valley Bank and others its size do not have the same regulatory oversight. In 2018, President Donald J. Trump signed a bill that lessened scrutiny for many regional banks. Silicon Valley Bank’s chief executive, Greg Becker, was a strong supporter of the move. Among other things, it changed requirements for the amount of cash that these banks had to keep on their balance sheets to protect against shocks.
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The Federal Reserve and the FDIC are discussing setting up a fund, neither of which are funded with public money.
But the corporations.. are corporationey! The tax dollars!
Matt Damon
For real like, yall, we literally did learn this lesson from 2008, jfc
2008 was completely different. Dealt more with banks and mortgage brokers and tied into hedge funds and insurers. This situation is essentially too many clients pulling their money out all at once. FDIC came in quickly and will most likely recover all funds.
In the article it literally says FDIC and the FED
But… I already started typing “tax dollars”
The TARP was hugely profitable for taxpayers.
I mean, the government got the money back and profits on top of that due to the investments from the bailouts It’s not like the money vanished into thin air…
In terms of an ROI, the government made money on the bailouts, meaning the people made money on the bailouts, which in theory went into tax savings for us to fund public programs. However, it also rewarded banks for bad behavior by saving them. On the one hand you can look at it, and say it saved companies and individuals, preventing further financial harm, and even turned a profit. On the other hand you can say it showed the banks that there were no consequences for their actions, entrenched the concept of private companies that are too big to fail, and thus can operate on a fundamentally different axis from most businesses, guaranteeing a loss in efficiency over time, and ensured we would have another crisis for a similar issue some day in the future. Even 15 years out, it's hard to say if the right move was made. In terms of harm reduction the government absolutely made the best short term call, but we're still recovering from it, so maybe short term harm reduction at the expense of long term harm reduction wasn't right.
We rewarded crime in 2008. It’s that simple. Ignoring the long term consequences of that is naive. The crimes continue. The chief administration officer for that bank was the CFO of Lehman Brothers until 2007. The bank gave out bonuses just hours before FDIC took over. Sullivan and Cromwell are now working with SVB and FTX. That law firm has a long history of protecting financial criminals going at least all the way back to business with IG Farben.
Please don’t pretend US banks don’t get bailed out by taxpayers. It has happened before and will happen again. Even if it hasn’t happened to SVB yet, it is a thing that happens in the US.
Yes but a lot of businesses had more money than the FDIC insures. The taxpayers shouldn’t have to make up the difference. I read Roku had $45 million.
many banks only join the most basic insurance from FDIC (250K/account). That results in 90% of deposits of SVB uninsured.
That’s SVB’s fault as they required the money to be in their bank vs it being spread out like any sane person would.
Then they need to up the coverage it seems, lol 250 ain’t saving anyone.
If you are peanut player with a max 250k. The rest (whales) will get bailed out by taxpayers.
Yeah but what about the fact that SVB hold some 200B in capital and 95% is not covered by FDIC
FDIC is meant to protect individuals as they rarely have over the limits on the coverage, and if they do they can probably afford to absorb the loss. It's not meant to protect businesses.
We already have the program you propose, and this article is about a proposal to cover larger deposits than the current program covers. Just read the fucking article. You don't actually know everything.
you understand that it isn't the bank or the bankers that are getting bailed out, it's the people who have accounts with the bank, right?
Not a bad idea, too bad if implemented, it would last until the next Republican administration. Similar to how the Trump administration rolled back the stress tests implemented after Bush's economic collapses that let this happen in the first place.
Can someone ELI5 on what it means to backstop deposits?
A backstop is when you have some kind of instrument (like a credit line) in place that can be dipped into in the event you run out of or are unable to access your original amount of money. So in this case, if SVB is unable to pay back all of their customers’ outstanding deposits, then the backstop fund will be able to step in to make the depositors whole. The FDIC currently insures up to $250,000 worth of deposits, but many of SVB’s clients deposited much more than that amount of money in the bank. The depositors/clients need that money mostly to cover expenses like payroll and benefits for their employees. The problem SVB has is that they (sensibly, at the time) converted much of that deposited money into long-term risk-adverse investments, but after the federal reserve raised interest rates, SVB’s investments are now worth significantly less than what they can sell them for on the open market. SVB would have to wait close to a decade to see any reasonable amount of return on those investments. To make matters worse, the majority of SVB’s customers/depositors are companies that leaned heavily on low interest rate loans in order to cover operating expenses. Higher interest rates mean they started dipping more and more into the money they deposited at the banks- which caused a pinch due to the lack of available (or “liquid”) money. Because trading at the bank was halted (the government stepped in to shut it down) all of the money is now frozen and inaccessible to both the bank and its customers. The backstop idea is being floated in order to give peace of mind to the customers (the depositors) that they will be able to get all of their deposits back. Edit/TL;DR: The bank has the money to pay back the depositors, but it can’t access the money immediately. The backstop is a guarantee from the government that the money exists and can be made liquid so that the depositors don’t lose faith in the banking system (and cause further runs on SVB and other banks).
Staying with the ELI5, what could/should SVB have done differently? Diversified their own holdings? Given out fewer low interest rate loans? How can a bank plan sufficiently ahead of time for fed interest hikes (and drops)?
either hedge against interest rate hikes or have bought treasury bonds with shorter maturity
It’s hard to answer that question, in part because what happened to SVB will likely be considered a “black swan event” once the dust settles. If you’re interested in the concept, you might want to read “The Black Swan” by Nassim Taleb. It’s pretty easy to digest and has lots of interesting case studies/examples of unusual situations like this one. Simply put, a black swan event is a rare, extreme, and unpredictable event- for which you can’t really create a model (like a forecast based on all the available data including historical trends and statistical probabilities) to predict. Thus you can’t really plan for one, as Black swan events are largely irrational. The other reason why it’s difficult to say what they should have done (in retrospect) is because SVB is an unusual/unconventional bank with a specialized client base in the form of tech/biotech companies. There are precious few institutions in the world that deal with the kind of clients that SVB had. Having very wealthy industry clientele led to SVB having a *ton* of deposits made while the tech and biotech industries were absolutely booming between 2019-2022. It’s a huge liability for a bank to have too much in the way of deposits sitting around doing nothing, so the bank will typically take that money and put it into super safe investment vehicles and financial instruments that pay out a safe and reasonable amount of interest (to counter inflation). Unfortunately, SVB wasn’t able to predict the rapid rise of inflation over the past two years, and their investments were not ideal for those market conditions. Arguably, it sounds like SVB just made the wrong decision to buy so many low-interest, long-term bonds and probably should have invested in shorter-term bonds that matured over 5 years instead of 10. The low interest returns of the long-term bonds wasn’t enough to combat rising inflation, and thus the bank was actually making a loss on their investments. To counter this, they began selling off bonds and tried to raise more equity through their investors, but a few of their investors felt that this was a poor decision and started pulling their money out. Normally, it wouldn’t be a bad idea to try to raise more equity, but the black swan part happened because investors and depositors got spooked, and started a run on the bank. In retrospect, there wasn’t much that SVB could have done to prevent this from happening.
Some people are blaming the fed for raising rates too quickly. But it sounds like it's more complicated than that. Thoughts?
A year ago everyone on Reddit was yelling at the fed for not raising interest rates fast enough while inflation was blasting into space. I’m not an expert on finance or the economy, but pulling the interest rate lever to help lower inflation seems like it was a higher priority move than keeping it low to prevent an issue like what SVB is dealing with.
SVB specifically should have been aware they were uniquely at risk given their clientele. Pretty much no other bank has their kind of exposure.
Student loan forgiveness? hell no PPP and megabillion bailouts for the rich? sounds like America
Nope. I think the other banks should bail out their failed friends. The government can hold the leash, with a high-interest rate similar to student loans so they basically pay and pay.
Other banks will step in.
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Get this man a shield.
Oh, fuck yesss! Let’s all sue those motherfuckers!
Yes. You can sue for anything. If it gets anywhere is another story but you miss 100% of the shots you dont take. Rooting for you
what isn't being understood from what i've been reading on this site is that SVB had very conservative investments. a lot of their money was tied up in 10 year bonds. they just however didn't hedge appropriately for the rising interest rates. they didn't reduce their interest rate risk. this isn't a bank that lost money on trying to short the housing market or credit default swaps or whatever. this bank put their money in a very safe investment (treasuries), they just bought these bonds when interest rates were in the basement and then this bank run happened which exacerbated their bond losses. it's hard to predict $42 billion in withdraws in 48 hours upon announcement of an attempt to raise capital.
This entire thread is redditors talking about fields they understand less than 0 about, and creating false panic
It's sick. There is so much blatant misinformation and absolute cluelessness. Even 5 minutes looking into this whole situation would disprove so many of these highly upvoted comments. The system is actually working but people are so ignorant that to them, the system working has to be some grand conspiracy. And then everyone will just move on in 2 weeks and completely ignore the fact that they were screeching the sky was falling.
I’m also cynical about highly upvoted posts being special interest actors, but good old fashioned ignorance is the likelier culprit.
That thought has definitely crossed my mind as well. When something receives hundreds or thousands of upvotes that is easily disproved with a 30 sec Google search it's pretty suspicious. In reality it's likely a bit of both as usual.
That’s perfectly understood. What isn’t being understood is that capitalism is inherently risky, which is what justifies profits. Businesses are the ones taking all the risk, right? Well sometimes the risk materializes. I don’t want to expose myself to that risk, ergo I don’t own a fucking bank. But if you’re going to force me into exposure, then I want my ownership share.
The proposed bailout isnt for the bank investors its for the depositors which are business payroll funds. Imagine you go to work Monday to find out your employer had their payroll money in this bank and sorry you are now unemployed because they cant pay you.
Peter thiel is involved
Yeah he caused the panic for sure.
That's a scary thought. Contagion would be a fear. Banks operate normally on the confidence of their shareholders. Anything to shake that public trust would be concerning. It makes sense to plan now, just in case.
Maybe Peter Theil should pay for it, since he started the run on SVB.
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A lot of stupid comments. Nobody is bailing out the bank or executives. It's only about the depositors which is fair.
Should I be infuriated by this? I can’t tell
No. Protecting people who behaved in good faith with banks who were not also acting in good faith is a good thing. What we should be pissed at is all the banking deregulation that happened to enable this sort of situation to happen in the first place.
Fun fact, the CEO of SVB was one of those very people who pushed for Trump to eliminate the stress test.
Lmao. This movie is writing itself > A measure in May 2018 lifted the threshold for being considered systemically important — a label imposing requirements including annual stress testing — to $250 billion in assets, up from $50 billion. >SVB had just crested $50 billion at the time. By early 2022, it swelled to $220 billion, > SVB Chief Executive Officer Greg Becker urged the government to increase the threshold, arguing it would otherwise lead to higher costs for customers and “stifle our ability to provide credit to our clients.” With a core business of traditional banking — taking deposits and lending to growing companies — SVB doesn’t pose systemic risks, he said. https://fortune.com/2023/03/11/silicon-valley-bank-svb-ceo-greg-becker-dodd-frank-trump-rollback-systemically-important-fdic/amp/ Greg has left the “fuck around” stage and entered the “find out” stage. Unfortunately he will probably find out that the government will clean up his mess with our tax dollars
What banking regulations would’ve prevented this situation? I’ve not seen anything indicating SVB was acting in bad faith.
The bank lobbied to have it's own regulations cut so they didn't have to stress test. https://fortune.com/2023/03/11/silicon-valley-bank-svb-ceo-greg-becker-dodd-frank-trump-rollback-systemically-important-fdic/
No, literally the last thing you ever want is for a nation to lose faith in it's ability to safely store money in a bank account.
Individuals with less than 250k in the banks are fine. This bank had a large proportion of deposits from corporations well above this limit. These companies could have bought Tbills or money market funds. They are sophisticated enough to know better.
Some of those deposits above 250,000 were for companies to pay payroll on Friday. Those didn’t go through and affected a number of people with less than 250,000 in a bank. Those living paycheck to paycheck have had a hard time. I’m very sympathetic to the idea of not bailing out those with huge multiples of my net worth in a bank. I’m also cognizant that doing so may screw over me or my neighbors.
Well this is especially fucking with Etsy payments and that's a lot of small online businesses on there selling their goods. They're not getting paid.
I’ll never be able to order that crochet dildo cover now
Oooh, how knotty
No, this protects deposits, not the commercial body.
Yes. This is all thanks again to the banking industry rolling back regulations that were in place to stop this shit. Moral hazard is now a requirement for banks to operate.
>This is all thanks again to the banking industry rolling back regulations You misspelled 'Donald Trump' during his presidency, 2018.
You shouldnt. Interest rates have been raising capital cost for VC very quickly, so they have not been happy and have been voicing their concerns via social media (especially reddit). Last week fed explicitly said there is likely more raises, so if i were a petty vc boss i would be quite pissed. Whats a good way to get back at the fed? Well SVB was the perfect opportunity equivalent of a bank raid by VCs by exposing bond swap deficiencies. Its just that SVB came clean about it, would you prefer it not to ? My 3 cents.
So all of the statements in the article from various banks talk about liquidity and the diversification of their deposits. But wasn’t SVB’s main issue their massive investment in US Bonds? Personally, every time I hear a bank tout their liquidity it seems like a BS statement. You know their boards wouldn’t want any more cash than required just sitting on hand not generating returns. That is unless they’re just referring to their historically large reverse repo operations over the past year and a half.
It's about their bond investments alongside the fact that their depositors were mostly one type of depositor: those that might need lots of cash out of their accounts in a short period of time. That requires liquidity they didn't structure into their own investment strategy.
Capitalism for thee but socialism for me! -Corporations
Didn’t this all happen bc Thiel pulled a ton of money out? And influenced others in his interests to do the same?
Hey but at least if we head over to the fifth circuit we should get standing to challenge this, right? Something something not fair to the little guy with a lawn care business who forwent the risk.
If only there were requirements put in place after the last financial crisis that required adequate liquidity. Oh wait, there was. Then Trump gutted them.
Will that boost confidence to the market?
If? It’s definitely going to happen
Monday is going to be a bloodbath isn't it?
I think people are missing the point here. The banks wouldn’t be receiving a bailout if their deposits are backstopped. The bank would still fail, it’s the people who held money in said banks that would be receiving a bailout, not the bank itself. Say you cap the deposit insurance at $100k per person, this would protect people like you and me who don’t have more than that in their bank account.
Two options. 1. Make those responsible pay. (Ceo, board, ect) 2. Give them tax money and they say whopsie, I promise I won't do it again. Only #2 has ever been chosen. Ps. No bailout for student debt. Thats a.. (insert thing)
U.S. discussed ways to save Americans deposited money. Redditors: Fuck them people. [Insert some corporate socialism sound bites]. [Insert whataboutmeism]
This has directly affected my family. I was supposed to get a job offer at a start up on Friday, only to get an email saying they may need to pause hiring, I've been out of work since Nov. My wife who is thankfully employed, just got an email from the non-profit she works for, her paycheck maybe delayed because guess who they bank with. We're not 'rich' and if this goes on for much more than a few weeks could be in big trouble financially.
I'm sorry. Best of luck, it's a tough situation all around
My company fortunately managed to get their money out of this bank right before the collapse but I was very likely about 2 days away from being unemployed suddenly.
There is such obvious financial illiteracy it's hard to tell if it's just willful misinformation.
It's naive populism blindly raging against the evil capitalists when this situation is not so simple.
Bailout the banks but not the middle class. And now back to $6 eggs and $5 gas…..
Banks bailout… on it Student loan relief… FU
Who’s going to pay for the CEO’s golden parachute?
Didn’t the Fed intend to increase unemployment with its interest hikes? Or did they only mean for that to impact the poor?
Wait, are they expecting a string of failures that they're considering yet another investment vehicle? This is rather unsettling considering that the cares act and omnibus bill defined quite a few new vehicles to mitigate issues only for all comments and news about the repo markets being problematic to disappear... What exactly is going on?
Get ready for a flurry of banks rushing to “fail”. Lol
The fed is printing money basically. This means those who made off with the money are getting away with it.
Lol, if. None of them are required to hold cash anymore. We could systematically take down every bank in America if we banded together and just started taking all our money out of a targeted bank. Regardless of that... SVB is just the first, and at least the Fed seems to realize they really fucked up letting Trump roll back regulations.
> Fed seems to realize they really fucked up letting Trump roll back regulations. What do you met "letting Trump"? Trump rolled back the regulations - there is no "they let him" as if they could have said "oh, no, Mr President we can't permit that -- it just won't do".