After a month of sweet nothings from lying policymakers, bank crashes are back with a boom as yet another top-20 bank, First Republic, fell into the hungry mouth of JPMorgan.
Excellent analysis, Peter. There will be more banks failing, and it all comes back to the taxpayers. Government likes to feel that they're backstopping losses and protecting depositors, but it's us that pay for it.
The last crisis it was clear that Goldman was going to survive because the Fed chairman had all his wealth tied up there... I don't see Yellen having a history with any particular institution.. so she has no allegiance.. and Jamie knows he needed to sure up his support to be a top contender for support.
What do you think will happen to Chase in the end? ... Because I remember Lehman "thought" they were to big to fail... and found out different. I know Chase is in no better shape. I think Jamie is cooperating with the Fed in hopes to make sure he's still standing in the end.
Peter, when you say the special assessment is "a tax on your bank account," do you mean in the sense that it further drives up inflation, making my dollars worth less? Or do you mean that in a more literal sense?
Wouldn't banks typically have hedged their interest rate risk through derivatives? Seems like this would be a trivial and rational strategy that would mitigate all these "unrealized, hidden losses".
Excellent analysis, Peter. There will be more banks failing, and it all comes back to the taxpayers. Government likes to feel that they're backstopping losses and protecting depositors, but it's us that pay for it.
Yep, we always pay for it because they have nothing -- literally everything government gives it takes from us first 😬
I remember reading a prediction weeks ago that Credit Suisse and Republic would fall after SVB. Something was wrong with these banks.
"American banks are now sitting on at least $620 billion of unrealized, hidden, losses."
Good thing the Fed and Treasury can print $620 billion to bail them out at no cost to the productive taxpayers who did nothing to cause this problem.
No cost aside from stealing their dollars via inflation 🤗
Not a problem. Due to the Fed and the Treasury Department, the dollars are counterfeit anyway.
The last crisis it was clear that Goldman was going to survive because the Fed chairman had all his wealth tied up there... I don't see Yellen having a history with any particular institution.. so she has no allegiance.. and Jamie knows he needed to sure up his support to be a top contender for support.
Oh, she has tons of allegiances, more than most!
https://www.theguardian.com/business/2021/jan/01/janet-yellen-speaking-fees-us-treasury-secretary#:~:text=The%20incoming%20US%20Treasury%20secretary,according%20to%20newly%20disclosed%20documents.
What do you think will happen to Chase in the end? ... Because I remember Lehman "thought" they were to big to fail... and found out different. I know Chase is in no better shape. I think Jamie is cooperating with the Fed in hopes to make sure he's still standing in the end.
I'm certain they'd be bailed out. Possibly draining the voters so dry they lose appetite for subsequent, smaller banks being bailed out 🤔
Peter, when you say the special assessment is "a tax on your bank account," do you mean in the sense that it further drives up inflation, making my dollars worth less? Or do you mean that in a more literal sense?
Yep, it's literal: they fill (and replenish) FDIC by commanding your bank to take money out of your bank account. 🤯
Out of curiosity considering you cover legacy systems and want more corn, are you on nostr yet? If so, what’s your npub?
Wouldn't banks typically have hedged their interest rate risk through derivatives? Seems like this would be a trivial and rational strategy that would mitigate all these "unrealized, hidden losses".