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There js an absolute disconnect between the bonuses and compensation that the c-suite are given and the performance of their companies. When a company like this fails so miserably requiring a bailout from the government the executives should have their compensation slashed and their bonuses used to pay for their failure. That's already treading lightly. They should be on the hook financially for their poor decision making.
 
Ezekiel2517 said:
The prior administration reduced regulation and lessened safety margins for banks, which is why a "stress test" didn't work in this scenario. The threshold for stress testing and more regulation went from 50 billion to 250 billion. A question to ask is how many other niche or smaller banks, esp those w/ heavy long term bond interest rate risk like SVB had, can fall through the cracks and collapse.
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Shhh… don’t tell the “we need less regulation cos corporations will do whats best for people and not their shareholders” Republicans
 
anbuitachi said:
i wonder what the publics reaction will be to his action by the government in the future. will it be another 'bail out the rich' like 2008 type of reaction?
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Even if it is, what will be different?
Nothing.

We can protest, we can bitch.. but in the end, the rule makers are bought & paid for by the breakers (or will eventually be breakers), and the regular folks are just collateral damage in their never ending, cancerous quest to accumulate more wealth
 
epidural man said:
Okay,

I need someone to explain this whole situation to me like I was 10 years old - because there are somethings I don't understand.

I get why SVB was stressed.

They bought bonds (the safest investment anyone could make) that paid (let's make up a number) 1.5%, probably long term.
Interest rates rise, so the secondary market price for those treasury bonds drop. But who cares, because if you hold them to maturity, you still make money. BUT, it sounds like SVB needed some liquidity, so they had to sells those BONDS at a loss. But that is investing and really not a big deal. It is unclear to me WHY the word started spreading that money needed to be withdrawn, which I think the real crook is the guy that started this whole thing by telling his clients to withdraw all their money from SVB. That's like yelling "FIRE" in a crowd.

Anyway, here are my questions:

#1: Why are people saying that SVB was being risky? or that the CEO should go to jail? What did they do that was risky? T-Bills risky?

#2: Why would SVB failing, cause other banks stress? We know another bank failed today. I don't understand the connection - unless it caused others to run on smaller banks.
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its because SVB invested like 90B or something ridiculous in long term bonds at 1.7% interest rate. now interest 2.5x and its worth way less. Furthermore, they had no interest risk hedge which is insane for a bank their size. they didnt even have a chief risk person for close to a year. every bank need to hedge their risks or risk getting wiped out. they also didnt understand basic macroeconomics. rate went up, funding was drying up, so startup clearly need to withdraw more money and use their savings. so more outflow. so bank need liquidity.
last year their deposits increased like crazy due to like VC, IPO, SPAC, etc, that dried up and they did absolutely nothing to prepare for it. it doesnt take a big accomplished banker to know last year fed was going to raise rates. they literally told us, all the time

their customer is also mostly startup/vc. basically risky stuff, many generate no profit. they burn up money.

the management at SVB is SHOCKINGLY bad. crazy for a top 20 bank by asset
epidural man said:
Here is what I would like someone to answer.

I've tried reading a lot of stuff about this but can't find a good answer.

SVB had a "run" of 42 billion.

People are criticizing the deregulation that made it so SVB didn't have to undergo the federal stress test annually.

So - IF they were part of the stress test, would it have made a difference? Because 42 billion is likely MORE than what the stress test required.

And like a said before, ANY bank would fail, no matter the amount of regulation, if there is a sufficient RUN on them.
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I think you are mixing two similar but different things. No bank will survive if 100% of their customers withdraw their money. THey'll have no deposits to work with. No bank will survive a full bank run. Also customers really have no reason to just run the bank...

it is true bank run ended SVB, but it is also true that SVBs terrible management precipitated a bank run. if there is evidence a bank is mismanaging your money and you may lose your uninsured money, would you remove your money? many would, its not worth the risk.

word finally got out that SVB is mismanaging risk and dont know what they are doing and putting customer money at risk, and once word gets out, especially with SVB's customer base, it can spread like wildfire quickly.
 
epidural man said:
By the way, to answer your excellent and fun question you asked in another thread, but for some very strange and unclear reason, @Arch Guillotti closed it - I am whatever party Yang claims. I love that guy.
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Because the guy who started it seems to only want to engage in political fodder rather than the expressed subject of this forum. Political threads devolve, complaints are received and threads are shut down. Figured I would get out ahead of this one. There are more appropriate forums on this site for you and your little friend to argue politics.
 
Arch Guillotti said:
Because the guy who started it seems to only want to engage in political fodder rather than the expressed subject of this forum. Political threads devolve, complaints are received and threads are shut down. Figured I would get out ahead of this one. There are more appropriate forums on this site for you and your little friend to argue politics.
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Why would you cave to complainers? That is strange.

Complainers can choose to not read the thread, right?

Is there a rule that I missed that each thread has to be read? I think I may be breaking the rules.
 
Dr. Rude said:
Supposedly, the new facility will take the assets on the books. Long term Treasurys, MBS, whatever. Also FDIC insurance premiums paid by all banks will be increased. In addition I expect some of the major banks to pay something for the customer base. That does have some value.
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So when every bank’s FDIC premiums go up, you think they’re going to just let that eat into their profits? Like hell. They’re going to stick it to their customers with higher fees and interest rates. It’s all coming from tax payers one way or another.
 
epidural man said:
Why would you cave to complainers? That is strange.

Complainers can choose to not read the thread, right?

Is there a rule that I missed that each thread has to be read? I think I may be breaking the rules.
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We don’t cave. Most complaints are dismissed. Nothing is strange about the moderation here. It is more lax than every other forum on this site but we still adhere to basic decorum and toe the line.

No idea how you expect people not to read threads or comments that they may not like. Very curious logic!
 
Beeftenderloin said:
So when every bank’s FDIC premiums go up, you think they’re going to just let that eat into their profits? Like hell. They’re going to stick it to their customers with higher fees and interest rates. It’s all coming from tax payers one way or another.
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It's all a game. The statement from FDIC gov kept saying it's not tax payers money. Instead the banks will pass cost to consumers. Banking consumers and tax payers have a lot of overlap. ...but government knows most Americans won't make that connection
 
I have a feeling things will drop again once the new employment numbers come in.
 
Man, so why won’t inflation go down? I feel like raising interest rates isn’t helping unless we’re trying to break down banks, etc.
 
It is now widely reported that Silicon Valley Bank (SVB) and Signature Bank aggressively lobbied for the Economic Growth, Regulatory Relief, and Consumer Protection Act. This 2018 Bipartisan law was signed by Pres Trump and exempted banks from stringent stress testing ( raising the stress capital to $250 billion from $ 50 billion)and thereby weakening the 2010 Dodd-Frank Act that was implemented in response to the financial crisis of 2008.

So if the above bill is bipartisan, aren’t both the parties equally culpable for this mess?
 
Young&Wise said:
It is now widely reported that Silicon Valley Bank (SVB) and Signature Bank aggressively lobbied for the Economic Growth, Regulatory Relief, and Consumer Protection Act. This 2018 Bipartisan law was signed by Pres Trump and exempted banks from stringent stress testing ( raising the stress capital to $250 billion from $ 50 billion)and thereby weakening the 2010 Dodd-Frank Act that was implemented in response to the financial crisis of 2008.

So if the above bill is bipartisan, aren’t both the parties equally culpable for this mess?
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It was mostly republicans with a few dens sprinkled in.
 
Arch Guillotti said:
It was mostly republicans with a few dens sprinkled in.
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Looking back, 16 Senate Democrats and independent Angus King of Maine, who usually votes with Democrats, joined all the Republicans to vote for this bill.

More than 90%of the Trump administration's deregulatory policies affecting almost every area such as environment/ immigration/ infrastructure etc efforts have been blocked in federal courts,or withdrawn after a lawsuit.
so how did this particularly important deregulation not get challenged or involved in a legal battle?
 
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Our economy is screwed basically. Inflation is 7%, so either you raise rates to decrease inflation and maybe more banks fail due to their long term T bills or you don't raise interest rates to "save" the banks and continue inflation turning into stagflation.

Good times....
 
Young&Wise said:
It is now widely reported that Silicon Valley Bank (SVB) and Signature Bank aggressively lobbied for the Economic Growth, Regulatory Relief, and Consumer Protection Act. This 2018 Bipartisan law was signed by Pres Trump and exempted banks from stringent stress testing ( raising the stress capital to $250 billion from $ 50 billion)and thereby weakening the 2010 Dodd-Frank Act that was implemented in response to the financial crisis of 2008.

So if the above bill is bipartisan, aren’t both the parties equally culpable for this mess?
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It was as bipartisan as the Trump impeachment....
 
Young&Wise said:
Looking back, 16 Senate Democrats and independent Angus King of Maine, who usually votes with Democrats, joined all the Republicans to vote for this bill.

More than 90%of the Trump administration's deregulatory policies affecting almost every area such as environment/ immigration/ infrastructure etc efforts have been blocked in federal courts,or withdrawn after a lawsuit.
so how did this particularly important deregulation not get challenged or involved in a legal battle?
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lobbied hard for it thats why.
 
ChiDO said:
Our economy is screwed basically. Inflation is 7%, so either you raise rates to decrease inflation and maybe more banks fail due to their long term T bills or you don't raise interest rates to "save" the banks and continue inflation turning into stagflation.

Good times....
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bank thing is over. government not letting them fail anymore. also inflation is down 6%. didnt you see sotck market today. its almost all green. bank is way up
 
Remember when the law makers tried to pass law regarding 3 year clawback of bonus? That went no where in congress.

Image of doctors are allowed to create havoc with no 3 year statue for filing malpractice. We be all Scott free like these bank crooks.

People think twice before doing shady things if they have to pay back 3 years of bonus if they did something wrong.

The only clawback laws in place are accounting errors (or manipulation of data). But that’s not the same as what these crooks are doing.
 
ChiDO said:
Our economy is screwed basically. Inflation is 7%, so either you raise rates to decrease inflation and maybe more banks fail due to their long term T bills or you don't raise interest rates to "save" the banks and continue inflation turning into stagflation.

Good times....
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This wouldn’t bother me so much if Medicare reimbursement was tied to inflation like everything else. We have been getting screwed by governmental payers in the name of a balanced budget for so long it just stings when people who are supposedly taking calculated risks always get bailed out.
 
ambiturner said:
This wouldn’t bother me so much if Medicare reimbursement was tied to inflation like everything else. We have been getting screwed by governmental payers in the name of a balanced budget for so long it just stings when people who are supposedly taking calculated risks always get bailed out.
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So we have resorted to leveraging the supply/demand imbalance. What percentage of anesthesia practices aren’t subsidized these days?
 
anbuitachi said:
lobbied hard for it thats why.
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As it turns out, Barney Frank, the architect of the Dodd-Frank banking regulations implemented in the aftermath of the 2008 financial crisis, played a key role in the 2018 bipartisan effort to weaken those very same regulations he helped craft, and he downplayed the risks with the deregulation process —after he had received more than $1 million while serving on Signature Bank’s board following his departure from Congress.

Follow the money!
 
Dr. Rude said:
So we have resorted to leveraging the supply/demand imbalance. What percentage of anesthesia practices aren’t subsidized these days?
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Yeah we’re still doing ok thanks to subsidies but it’s a thin reed to lean on and my bigger concern is we’ll have less control of how we practice as a result of it. I’m afraid of what the job will look like when we have neither control nor other pots of money to borrow from…

But until then, this isn’t a bad gig if you don’t kind the rest of the white collar job market, including staff nurses, making wage gains on you every year.
 
Young&Wise said:
As it turns out, Barney Frank, the architect of the Dodd-Frank banking regulations implemented in the aftermath of the 2008 financial crisis, played a key role in the 2018 bipartisan effort to weaken those very same regulations he helped craft, and he downplayed the risks with the deregulation process —after he had received more than $1 million while serving on Signature Bank’s board following his departure from Congress.

Follow the money!
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i mean its exactly how this country works. many politicians worked for big companies before. and many politicians go work on board or advisory or whatever for companies. its a huge mix.

Between 2018 and 2020, Yellen received over $7 million in speaking fees from financial companies such as Barclays, Citigroup, Goldman Sachs, and the hedge fund Citadel after leaving the Federal Reserve
 
RadOncDoc21 said:
Man, so why won’t inflation go down? I feel like raising interest rates isn’t helping unless we’re trying to break down banks, etc.
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In the early 1980s, interest rates on my wife's HEAL loans were 17%. I heard , Paul Voelker I believe, say inflation won't come down unless interest rates were above the inflation rate. It took several years for inflation and interest rates come down. Our first mortgage was 10.75 % and we were giddy to secure such cheap money. I believe a soft landing isn't possible with the stock market dropping and bonds getting crushed with rising interest rates. History tells us unemployment rates will have to rise also before inflation is checked..This isn't going away soon. It took from 1974 where unemployment was 7.2% till 1987 for unemployment to get to 5% where that is considered full employment. I'm not saying it will take that long, but with our gdp to debt ratio at 129%, there arent many arrows in our quiver to battle inflation. I don't believe we will see a snap back recovery.
 
Young&Wise said:
It is now widely reported that Silicon Valley Bank (SVB) and Signature Bank aggressively lobbied for the Economic Growth, Regulatory Relief, and Consumer Protection Act. This 2018 Bipartisan law was signed by Pres Trump and exempted banks from stringent stress testing ( raising the stress capital to $250 billion from $ 50 billion)and thereby weakening the 2010 Dodd-Frank Act that was implemented in response to the financial crisis of 2008.

So if the above bill is bipartisan, aren’t both the parties equally culpable for this mess?
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Lol, you really gonna try to both-sides this?


In the House, the bill passed by a 258-159 vote with support from all but one Republican (the exception being Walter B. Jones Jr.) and 33 out of 193 Democrats. In the Senate, the bill passed by a 67-31 vote with support from all Republicans and 17 out of 47 Democrats. Within the Democratic caucuses, progressives strongly opposed the bill.[13][14]​
 
vector2 said:
Lol, you really gonna try to both-sides this?

​
In the House, the bill passed by a 258-159 vote with support from all but one Republican (the exception being Walter B. Jones Jr.) and 33 out of 193 Democrats. In the Senate, the bill passed by a 67-31 vote with support from all Republicans and 17 out of 47 Democrats. Within the Democratic caucuses, progressives strongly opposed the bill.[13][14]​
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Yes, the 2018 deregulation bill is truly bipartisan based on the facts you have posted above.
Getting 17 Dem senators to vote for it along with all the GOP senators while getting a filibuster-proof majority in 2018 in polarized country & congress is a feat in itself!

Now as you mention, the progressives led by Warren & Co. did vote against it in 2018, but then they never bothered to take it up again, even in 2021 and 2022, when Dems had all 3 on their side.

Of course, now Warren & Co. are floating their back-to-2008 regulation bill when they very well know that it cannot pass muster in senate and clearly not in the GOP led house at this time.

Clearly, the progressive Dems have “collective convenient amnesia”from 2018-2023. Even a broken clock gets it right x2/day-lol!
 
Young&Wise said:
Yes, the 2018 deregulation bill is truly bipartisan based on the facts you have posted above.
Getting 17 Dem senators to vote for it along with all the GOP senators while getting a filibuster-proof majority in 2018 in polarized country & congress is a feat in itself!

Now as you mention, the progressives led by Warren & Co. did vote against it in 2018, but then they never bothered to take it up again, even in 2021 and 2022, when Dems had all 3 on their side.

Of course, now Warren & Co. are floating their back-to-2008 regulation bill when they very well know that it cannot pass muster in senate and clearly not in the GOP led house at this time.

Clearly, the progressive Dems have “collective convenient amnesia”from 2018-2023. Even a broken clock gets it right x2/day-lol!
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It wasn't 67 Dem senators (there aren't that many), it was 17.
 
Young&Wise said:
Yes, that’s what I stated: 17 Dem senators + all GOP senators
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Is it to safe to say that 100% of republicans are for it excluding one lone wolf in the house? I’m not sure I would consider that “bipartisan” but technically there were a few Dems sprinkled in that turd.
 
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The deregulation of 2018 was a major cause undoubtedly, but other elements created a perfect storm of events.

Infact Barney Frank, the Dem architect of the 2008 regulation bill now states that it was not deregulation but the crypto currency issues last year that caused this collapse. ( of course, he has crossed the street now as the director of Signature Bank and actually argued for 2018 deregulation)

SVB was overexposed to tech industry, and had mostly large depositors, which is unusual for a community lender. Also pandemic stimulus checks and surging stocks gave too much available cash to the investors and many venture capitalists. Of course Feds were a big part of the problem with keeping rock-bottom rates and easy-money policies until last Spring.

However, for the progressive democrats to recreate the futile 2008 bill now is just plain grand-standing, when they could have showed some real gravitas in doing this in the past 4 years. So yes, this is a bipartisan failure by all definitions!
 
I think the bank mostly collapsed due to the spiking interest rates which caused their long-term bonds to loose value with a run on the bank causing them to sell their bonds at a loss..
 
Young&Wise said:
Yes, that’s what I stated: 17 Dem senators + all GOP senators
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Calling a bill passed by virtually 100% of republicans and a small minority of democrats "bipartisan" is essentially the definition of disingenuous. But I think you know that already.
 
I am also okay with calling the disastrous December 2022 bill that was passed to the tune of $2 Trillion as reckless Bipartisan failure that is going to pass the debt to the future generation for years to come. For the above, the senate voted 68-29 vote, with all Dems and “sprinkling” of republicans voting for it.
Nonetheless, I call it a “Bipartisan failure”.
Or if I apply your logic, maybe I should refer to the 2018 Deregulation bill as GOP failure ,but you wouldn’t agree to it, if I call the December 2022 Bill as Dem failure!
 
vector2 said:
Calling a bill passed by virtually 100% of republicans and a small minority of democrats "bipartisan" is essentially the definition of disingenuous. But I think you know that already.
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I have no dog in this fight, but this is ridiculous. Calling over a third of the senate democrats "a small minority" or referring to it as a "sprinkling of Democrats" is the definition is disingenuous. Republicans brought this about, but it enjoyed quite a lot of support from the Democrats, too, as all politicians are out for themselves first and foremost.
 
psychbender said:
I have no dog in this fight, but this is ridiculous. Calling over a third of the senate democrats "a small minority" or referring to it as a "sprinkling of Democrats" is the definition is disingenuous. Republicans brought this about, but it enjoyed quite a lot of support from the Democrats, too, as all politicians are out for themselves first and foremost.
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Getting 17 opposing party members to agree with you on a piece of legislation is a G*D* miracle either way.
 
psychbender said:
I have no dog in this fight, but this is ridiculous. Calling over a third of the senate democrats "a small minority" or referring to it as a "sprinkling of Democrats" is the definition is disingenuous. Republicans brought this about, but it enjoyed quite a lot of support from the Democrats, too, as all politicians are out for themselves first and foremost.
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This is just a wild take, with probably the worst offense being that many here are purposefully ignoring that Congress is a bicameral body. 33 out of 193, or a whopping 17% of house Democrats supported the bill. 17 out 47 senate dems, or a staggering 36% of Senate Democrat supported the bill.

In grand total, a fking astounding 20.8% of the democrats - not even one quarter - that represent the party in Congress voted for the bill.... but we're going to pretend the bill was bipartisan? Lmfao.

Even if a bill doesn't necessarily require an outright majority of both parties' support to be considered bipartisan, the word still connotes that there was substantive cooperation and compromise between the parties to get it done. There really wasn't in this case. And pointing to 17 dem senators who value moneyed interests over their constituents' values doesn't change that either.
 

CNN noted at the time that almost all of the Democratic supporters in the Senate were "either up for re-election this fall and/or from red or purple states."​

My mistake. The 17 senate dems voted for it in an attempt to gain favor with their conservative and/or Republican constituents.

Yes, truly both parties are fully at fault.
 
Young&Wise said:
I am also okay with calling the disastrous December 2022 bill that was passed to the tune of $2 Trillion as reckless Bipartisan failure that is going to pass the debt to the future generation for years to come. For the above, the senate voted 68-29 vote, with all Dems and “sprinkling” of republicans voting for it.
Nonetheless, I call it a “Bipartisan failure”.
Or if I apply your logic, maybe I should refer to the 2018 Deregulation bill as GOP failure ,but you wouldn’t agree to it, if I call the December 2022 Bill as Dem failure!
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I guess that's your prerogative, but it's not that you simply called both bills bipartisan. You specifically said: "So if the above bill is bipartisan, aren’t both the parties equally culpable for this mess?

By your logic, because the 2022 spending bill was "bipartisan," does this mean that Republicans are "equally culpable" for our substantial support of Ukraine's military? After all, the bill did contain another $45 billion in aid.
 
vector2 said:
This is just a wild take, with probably the worst offense being that many here are purposefully ignoring that Congress is a bicameral body. 33 out of 193, or a whopping 17% of house Democrats supported the bill. 17 out 47 senate dems, or a staggering 36% of Senate Democrat supported the bill.

In grand total, a fking astounding 20.8% of the democrats - not even one quarter - that represent the party in Congress voted for the bill.... but we're going to pretend the bill was bipartisan? Lmfao.

Even if a bill doesn't necessarily require an outright majority of both parties' support to be considered bipartisan, the word still connotes that there was substantive cooperation and compromise between the parties to get it done. There really wasn't in this case. And pointing to 17 dem senators who value moneyed interests over their constituents' values doesn't change that either.
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CNN as well as Politico, Vox, and the New York Times on a cursory search all referred to the the bill as bipartisan as well.

And no, it doesn’t require a majority of both parties support. However, substantive appears to mean something different to you than several liberal leaning new sources.

Just seems like a weird point to double down on. Not many here arguing it wasn’t a sht bill.
 
DocMcCoy said:
CNN as well as Politico, Vox, and the New York Times on a cursory search all referred to the the bill as bipartisan as well.

And no, it doesn’t require a majority of both parties support. However, substantive appears to mean something different to you than several liberal leaning new sources.

Just seems like a weird point to double down on. Not many here arguing it wasn’t a sht bill.
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See my post just above yours. Ultimately in the current hyperpartisan political age the word "bipartisan" has been so bastardized that it's lost any worthwhile meaning. Scalia was confirmed 98-0. That's bipartisan.

I guess we (and all media, liberal or conservative) use the word nowadays to mean we sniped off well, well under a majority of opposition senators and a tiny minority of opposition house members to ram a bill through, but that usage just seems newspeaky and absurd to me.

But the word usage isn't really the hill I'd die on. The mantle I'd take up against is assigning equal culpability to both parties because a purportedly "bipartisan" bill (supported by barely 20% of the opposition) passed.
 
vector2 said:
​
CNN noted at the time that almost all of the Democratic supporters in the Senate were "either up for re-election this fall and/or from red or purple states."​

My mistake. The 17 senate dems voted for it in an attempt to gain favor with their conservative and/or Republican constituents.

Yes, truly both parties are fully at fault.
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So what’s exactly wrong with those 17 Dem senators representing the interest of their republican-leaning constituents? Isn’t that their job to do just that? If the constituents don’t feel adequately represented, then they need to say that at the ballot box. No one is saying Democracy is perfect.
 
Young&Wise said:
So what’s exactly wrong with those 17 Dem senators representing the interest of their republican-leaning constituents? Isn’t that their job to do just that? If the constituents don’t feel adequately represented, then they need to say that at the ballot box. No one is saying Democracy is perfect.
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So both parties are "equally culpable" even though dem senators voted that way to appease constituents of the other party?

Make it make sense!
 
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