Crash the train to stop it

[finnbow]

Originally Posted by Oerets

Rich just rich calling the removal of regulations as not needed.....then when problems arise complain and blame because something happens!

Height of hypocrisy, to be expected, nothing new from the Republicans.

Indeed not. They're big believers in privatizing profit and socializing losses.

[Rajoo]

Isn't it ironic that the crypto guys are using conventional banks?

[finnbow]

Originally Posted by whell

No, that's YOUR argument. I see you're confused again. I'm saying, like former Senator and Senate Banking Committee Chair Frank, that Dodd-Frank in any form - original, modified, whatever - was not relevant to the SVB collapse..

Trump disbanded the pandemic response team the Obama-Biden administration created. Crisis followed.

Trump curtailed rail regulations the Obama-Biden administration created. Crisis followed.

Trump curtailed banking regulations the Obama-Biden administration created. Crisis followed.

See a pattern? (Hint: Everything Trump touches dies.)

No wonder you're so feckin' defensive and your fellow Republicans found it necessary to blame Dr. Fauci, Pete Buttigieg and "wokeness" for these 3 crises.

[Rajoo]

Frustrated by 2008 bank bailouts, the president made clear to advisers that federal action must not rescue banks or their shareholders

I hope this comes through though not holding my breath. In the case of SVB, the CEO notified board members that they will be taking a $1.8B loss in selling bonds below face value. I suspect this led to insider trading and there was a run on their stocks which then led to a run on their cash.

By Sunday, the president had agreed to a sweeping intervention that would protect all the bank’s depositors, including large companies. Some Republicans say Biden did what he said he wouldn’t — offer a bailout that rewards the undeserving — but the White House argues that the president’s plan is aimed narrowly at protecting small businesses, nonprofits and thousands of ordinary workers whose jobs were at risk of being wiped out by the bank’s failure.

https://www.washingtonpost.com/polit...apse-politics/

[whell]

Originally Posted by Rajoo

As usual NYT has the story in simple words. This article is actually about Signature Bank (NY) which also got shut down two days after SVB. Zions bank is now being pummeled but they are a lot bigger than SVB and Signature.

Which of course he and his minions did.

And finally this:

I am not claiming that the $250 Billion threshold alone caused these banks to shut their doors, but they do have a correlation.

https://www.nytimes.com/2023/03/13/b...egulation.html

"...watered down the landmark regulatory reform act..." is a gross overstatement. Yes, some elements of the law were modified to lift some requirements from smaller banks. Federal Reserve stress testing ain't cheap, and large banks are more able to absorb the ongoing costs of stress testing.

However, SVB was done in by the reduction in the value of its liquid assets. There was no change in Dodd-Frank that relieved SVB of the requirements to maintain liquidity standards, and the requirement to periodically stress test for liquidity. The regs even specify the types of liquid assets the bank can use to meet liquidity requirements.

Whether SVB complied with these requirements, or to what degree they compiled, is not currently known. But these requirements existed prior to, during and after SVB's implosion. So, again, stating that changes to Dodd-Frank drove what went wrong with SVB Bank is, based on the evidence, disingenuous.

I'll still wait for a citation and elucidation from you about the elements of Dodd-Frank that were excised by those evil "minions" you cited above, and exactly how those elements impacted SVB's demise. I have no expectations that you'll actually find one or more, though.

[whell]

Originally Posted by finnbow

Trump disbanded the pandemic response team the Obama-Biden administration created. Crisis followed.

Trump curtailed rail regulations the Obama-Biden administration created. Crisis followed.

Trump curtailed banking regulations the Obama-Biden administration created. Crisis followed.

See a pattern? (Hint: Everything Trump touches dies.)

No wonder you're so feckin' defensive and your fellow Republicans found it necessary to blame Dr. Fauci, Pete Buttigieg and "wokeness" for these 3 crises.

The only pattern I see is your steadfast evasiveness. You made a claim, I asked you to be specific about your claim, and now you're unable (likely) or unwilling to so do.

You simply slide back to your default mode of blaming all the world's ills on Trump. You do it so much that I suspect you're no longer capable of honest assessment or root-cause analysis.

See my post above - the evidence currently suggests that lack of appropriate liquidity killed SVB (along with likely a healthy dose of mismanagement). Bank liquidity requirements were not impacted by any changes to Dodd-Frank.

SVB's issue was that, while it appears they had been in compliance with liquidity requirements until recently, it seems that they failed to react appropriately when the value of their liquid assets (long bonds) dropped due to rising interest rates. That's where the "mismanagement" part potentially comes into play.

The news about their lack of liquidity was made quite public when SVB announced the $2B loss on the sale of some of its liquid assets. That disclosure accelerated withdrawals that were already happening: startups were burning cash at a higher rate due to inflation.

Sometimes the simplest explanation is actually the correct explanation.

[whell]

Originally Posted by finnbow

Indeed not. They're big believers in privatizing profit and socializing losses.

So are Dems apparently. Carter bailed out Chrysler (and was celebrated for it). Obama stuck the US taxpayers with $11 billion for the GM bailout, and he's been referred to as the guy who saved GM. :-)

[whell]

...and, in other related news:

https://www.cnbc.com/2023/03/14/mood...vironment.html

In a harsh blow to an already-reeling sector, Moody’s Investors Service on Monday cut its view on the entire banking system to negative from stable.

The firm, part of the big-three rating services, said it was making the move in light of key bank failures that prompted regulators to step in Sunday with a dramatic rescue plan for depositors and other institutions impacted by the crisis.

“We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY,” Moody’s said in a report.

Further:

“We expect pressures to persist and be exacerbated by ongoing monetary policy tightening, with interest rates likely to remain higher for longer until inflation returns to within the Fed’s target range,” Moody’s said. “US banks also now are facing sharply rising deposit costs after years of low funding costs, which will reduce earnings at banks, particularly those with a greater proportion of fixed-rate assets.”

[finnbow]

Originally Posted by whell

The only pattern I see is your steadfast evasiveness. You made a claim, I asked you to be specific about your claim, and now you're unable (likely) or unwilling to so do...

I said that these events "can be reasonably tied to GOP deregulation fervor (at least in the public's imagination)." It appears that the GOP and their propaganda mouthpieces agree with my assessment as their vulnerability on this issue has them spewing all sorts of nonsense about "wokeness" being the cause of the SVB collapse, just as they blamed Fauci, Buttigieg, and Antifa for Trump's deadly Covid lies/malfeasance, the train derailment and J6, respectively.

[whell]

Originally Posted by finnbow

I said that these events "can be reasonably tied to GOP deregulation fervor (at least in the public's imagination)."

You also said that there was merit to the article Chicks posted which blamed Trump, Republicans and deregulation for SVB's failure.

You also said, when challenged on the above, in a second post: "There's a great deal of truth to Chick's assertion".

You also said "And the simple fact remains that SVB successfully lobbied to roll back Dodd-Frank provisions to reduce both oversight (e.g., "stress testing") and capital requirements on regional banks such as SVB."

Apparently, in the public imagination, and in your reality, these are "reasonable" assertions to make.

And by the way, right there next to SVB lobbying for a loosening of regs on small/medium-sized banks was Barney Frank, author of the Dodd-Frank legislation, and, on the board for Signature Bank: https://www.wsj.com/articles/barney-...board-e5c8819c

WASHINGTON—Former Rep. Barney Frank co-sponsored the law that tightened banking regulations after the financial crisis, but since leaving office he has been working the other side of the street—as a board member of Signature Bank, which regulators shut down Sunday.

The 2010 Dodd-Frank legislation set tougher regulatory safeguards on banks with more than $50 billion in assets. After leaving office and joining Signature’s board, Mr. Frank, a Massachusetts Democrat, publicly advocated for easing those new standards for smaller banks.

And once again, the liquidity standards for banks like SVB and Signature still exist and were not changed: https://www.occ.treas.gov/news-issua...n-2019-52.html