State of the country

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seattlefan-daBronx
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Re: State of the country

Post by seattlefan-daBronx » Mon Mar 13, 2023 8:12 pm

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seattlefan-daBronx
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Re: State of the country

Post by seattlefan-daBronx » Mon Mar 13, 2023 8:33 pm

https://www.cnbc.com/2023/03/12/stock-m ... -news.html

5 days straight losses...and the dominos begin to fall...

Amazing how the Demonrats don't complain about the woke SVB bailout right?!?!? Corruption stinks to high heaven.
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douche
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Re: State of the country

Post by douche » Mon Mar 13, 2023 8:38 pm

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gil
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Re: State of the country

Post by gil » Tue Mar 14, 2023 7:47 pm

Here is something I don't understand: A lot of us believe that the free market works better - a LOT better - than socialism, right? But then when something goes wrong in the free market, the government gets blamed.

Take Silicon Valley Bank. Paul Krugman wrote in The NY Times: "Just a few years ago, S.V.B. was one of the midsize banks that lobbied successfully for the removal of regulations that might have prevented this disaster, and the tech sector is famously full of libertarians who like to denounce big government right up to the minute they themselves needed government aid."

As I understand it, deposits up to $250,000 are insured by the FDIC. When an individual or business deposits more than 250K in one bank, he or she is taking a risk. Just like the banks are taking risks with their investments. But when there was a bank run, who does the fault lie with?
(a) investors who didn't insure their positions
(b) the bank that left itself exposed
(c) the Biden Administration.

As it turns out, the Biden administration is guaranteeing SVB deposits above 250K. So yes, it's a bailout by the government, saving the asses of rich investors. And yes, the bank's managers got big bonuses just days before the run and failure. And yes, the bailout will be paid for by increased bank fees - i.e., money paid to the FDIC by other banks. Which of course, affects other people and other business who use banks.

Kind of like that train derailment in Ohio.
Act I: Industry lobbies for deregulation and is successful.
Act II: Horrible accident.
Act III: People who believe in free markets blame the accident on the Biden Administration for its insufficient oversight.
Last edited by gil on Tue Mar 14, 2023 8:58 pm, edited 1 time in total.

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douche
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Re: State of the country

Post by douche » Tue Mar 14, 2023 8:52 pm

Can't disagree.

The sad reality is that people seem to crave freedom, but don't actually know what to do with it once they have it. As if it's too much responsibility to bear. And from a fault perspective, most humans' first reaction is to find someone to blame rather than accept it themselves. And complain about it. As a result, government becomes the resident whipping boy. The entity that is at fault for everything.

That said, the system of government is completely broken. It's nothing more than a crooked, corrupt drain on society.

Not sure what the answer is. Not sure anyone does.

GL_Storm
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Re: State of the country

Post by GL_Storm » Wed Mar 15, 2023 1:26 am

seattlefan-daBronx wrote:
Mon Mar 13, 2023 8:33 pm
https://www.cnbc.com/2023/03/12/stock-m ... -news.html

5 days straight losses...and the dominos begin to fall...

Amazing how the Demonrats don't complain about the woke SVB bailout right?!?!? Corruption stinks to high heaven.
It's important to distinguish that while deposits are being guaranteed, SVB as an institution is finished and the shareholders are wiped out.

Also, there's no fraud in this case. The basic problem is that rising interest rates were causing deposits to flee to other institutions simultaneous with the devaluation of the bank's long term assets, which had to be sold at a loss to maintain liquidity. As I understand it, every bank in the US has this problem to some degree, but the issue was amplified at SVB because of their industry concentration.

I suspect one of the lessons that should be learned here is that long-term near-zero interest rates have cascading consequences when you try to raise those interest rates to combat inflation.

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douche
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Re: State of the country

Post by douche » Wed Mar 15, 2023 11:58 pm

gil wrote:
Tue Mar 14, 2023 7:47 pm
Here is something I don't understand: A lot of us believe that the free market works better - a LOT better - than socialism, right? But then when something goes wrong in the free market, the government gets blamed.

Take Silicon Valley Bank. Paul Krugman wrote in The NY Times: "Just a few years ago, S.V.B. was one of the midsize banks that lobbied successfully for the removal of regulations that might have prevented this disaster, and the tech sector is famously full of libertarians who like to denounce big government right up to the minute they themselves needed government aid."

As I understand it, deposits up to $250,000 are insured by the FDIC. When an individual or business deposits more than 250K in one bank, he or she is taking a risk. Just like the banks are taking risks with their investments. But when there was a bank run, who does the fault lie with?
(a) investors who didn't insure their positions
(b) the bank that left itself exposed
(c) the Biden Administration.

As it turns out, the Biden administration is guaranteeing SVB deposits above 250K. So yes, it's a bailout by the government, saving the asses of rich investors. And yes, the bank's managers got big bonuses just days before the run and failure. And yes, the bailout will be paid for by increased bank fees - i.e., money paid to the FDIC by other banks. Which of course, affects other people and other business who use banks.

Kind of like that train derailment in Ohio.
Act I: Industry lobbies for deregulation and is successful.
Act II: Horrible accident.
Act III: People who believe in free markets blame the accident on the Biden Administration for its insufficient oversight.
Here's an interesting bit:

Fear of Freedom

Most people live their lives surrounded by authoritarian hierarchies, from families, to schools, to businesses, to all levels of “government.” As a result, most people have a hard time even beginning to imagine a “leaderless” civilization, a society of equals, an existence devoid of rulers, a world without “legislators” and their “laws.” The very thought, in most people’s minds, conjures up images of chaos and mayhem.

People are more comfortable with whatever they are accustomed to, and fear the unknown. People are so attached to whatever is familiar to them that even those who live in very high crime areas or war zones rarely leave the world they know to search for something better. Similarly, it is a well-documented fact that some long-term prisoners develop a fear of being released, and when they are, commit further crimes with the
intention of being sent back to prison. Even slaves can exhibit a dread of being freed. This is because the life of a prisoner or a slave, though not likely fulfilling, is predictable, and imagining a new, drastically changed life, in a strange place, among strangers, with all of the related uncertainties... How will I eat? Where will I live? What will it be like? Will I be safe?... scares almost everyone. So it is when most people contemplate human society without a ruling class. The concept is so foreign to everything they have ever known and ever thought about, and everything they were taught is necessary and good, that they hardly know how to begin to imagine it. Even our very language illustrates our fear of living in society as free equals, because such a state is defined as “anarchy” (a term also used to describe chaos and destruction). We have grown so accustomed to the mental cage which the myth of “authority” has formed around each of us that most of us are terrified of the idea of life without that cage. We are literally scared of our own freedom.

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Walla Walla Dawg II
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Re: State of the country

Post by Walla Walla Dawg II » Sun Mar 19, 2023 2:29 pm

gil wrote:
Tue Mar 14, 2023 7:47 pm
Here is something I don't understand: A lot of us believe that the free market works better - a LOT better - than socialism, right? But then when something goes wrong in the free market, the government gets blamed.

Take Silicon Valley Bank. Paul Krugman wrote in The NY Times: "Just a few years ago, S.V.B. was one of the midsize banks that lobbied successfully for the removal of regulations that might have prevented this disaster, and the tech sector is famously full of libertarians who like to denounce big government right up to the minute they themselves needed government aid."

As I understand it, deposits up to $250,000 are insured by the FDIC. When an individual or business deposits more than 250K in one bank, he or she is taking a risk. Just like the banks are taking risks with their investments. But when there was a bank run, who does the fault lie with?
(a) investors who didn't insure their positions
(b) the bank that left itself exposed
(c) the Biden Administration.

As it turns out, the Biden administration is guaranteeing SVB deposits above 250K. So yes, it's a bailout by the government, saving the asses of rich investors. And yes, the bank's managers got big bonuses just days before the run and failure. And yes, the bailout will be paid for by increased bank fees - i.e., money paid to the FDIC by other banks. Which of course, affects other people and other business who use banks.

Kind of like that train derailment in Ohio.
Act I: Industry lobbies for deregulation and is successful.
Act II: Horrible accident.
Act III: People who believe in free markets blame the accident on the Biden Administration for its insufficient oversight.
The free market is better than socialism!!!
But there needs to be guidelines. That's where the feds come in. But the guidelines need to be fair and unassuming for all no matter your sexual orientation, etc...
This bank was a clusterfuck for the last few years. Made bad investments and deserved to fail. Those at the top (in this bank) in this bank, need to be stripped of all property and wealth and it should be given to it's patrons, the ones with the least amount of wealth first.

GL_Storm
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Re: State of the country

Post by GL_Storm » Sun Mar 19, 2023 6:19 pm

Walla Walla Dawg II wrote:
Sun Mar 19, 2023 2:29 pm
gil wrote:
Tue Mar 14, 2023 7:47 pm
Here is something I don't understand: A lot of us believe that the free market works better - a LOT better - than socialism, right? But then when something goes wrong in the free market, the government gets blamed.

Take Silicon Valley Bank. Paul Krugman wrote in The NY Times: "Just a few years ago, S.V.B. was one of the midsize banks that lobbied successfully for the removal of regulations that might have prevented this disaster, and the tech sector is famously full of libertarians who like to denounce big government right up to the minute they themselves needed government aid."

As I understand it, deposits up to $250,000 are insured by the FDIC. When an individual or business deposits more than 250K in one bank, he or she is taking a risk. Just like the banks are taking risks with their investments. But when there was a bank run, who does the fault lie with?
(a) investors who didn't insure their positions
(b) the bank that left itself exposed
(c) the Biden Administration.

As it turns out, the Biden administration is guaranteeing SVB deposits above 250K. So yes, it's a bailout by the government, saving the asses of rich investors. And yes, the bank's managers got big bonuses just days before the run and failure. And yes, the bailout will be paid for by increased bank fees - i.e., money paid to the FDIC by other banks. Which of course, affects other people and other business who use banks.

Kind of like that train derailment in Ohio.
Act I: Industry lobbies for deregulation and is successful.
Act II: Horrible accident.
Act III: People who believe in free markets blame the accident on the Biden Administration for its insufficient oversight.
The free market is better than socialism!!!
But there needs to be guidelines. That's where the feds come in. But the guidelines need to be fair and unassuming for all no matter your sexual orientation, etc...
This bank was a clusterfuck for the last few years. Made bad investments and deserved to fail. Those at the top (in this bank) in this bank, need to be stripped of all property and wealth and it should be given to it's patrons, the ones with the least amount of wealth first.
I don't know that the bank was a clusterfuck for the last several years or not. What I do know is that they appear to have locked a significant number of their assets into long term treasuries at a low rate right at the time when interest rates were predicted to rise. This meant that in the present day, a year or so later, those same assets had to be sold for less than dollar value, maybe 90 cents on the dollar or something like that. From there it's just a math problem: if too many deposits start shifting out of the bank looking for higher return, there's a point where the bank is simply done. It wasn't fraud but it was bad risk management and an over-reliance on large depositors that all knew each other.

There's a very good argument that the deposits shouldn't have been guaranteed the way they were, which is that large depositors need to take a more active role in oversight of their bank. This, apparently, is what is supposed to happen when people put hundreds of millions into a bank, and yet it doesn't. In this case, letting the bank fail and forcing depositors to take a haircut (most would get back 95 cents on the dollar) would have served to set that precedent across the economy, and that would be a good thing for the long term safety of the banking system.

I think as well that the legislation from a few years ago that exempted SVB and similar-sized banks from the FDIC stress testing should obviously be rolled back.

Mel Bradford
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Re: State of the country

Post by Mel Bradford » Sun Mar 19, 2023 6:36 pm

Apparently, only one member of the SVB board has experience in the banking business. The rest were rich liberals who have now proven their knowledge and honesty equivalency in the industry to that of a dumb rock. No doubt lawyered up and running for the hills i.e. Sam Fried.

Consider Silicon Valley, the gushing stream of tech wealth. If anyone could screw it up...a liberal could.

But banking schemes are nothing new. "For the love of money is a root of all kinds of evil," 1 Timothy 6:10

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