SVB Bank Run: Fed Calling Emergency Meeting
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Anonymous
Inflation is a global issue in the post pandemic era, which is coinciding with the massive exit of the Boomers from the work force. |
Anonymous
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Oh, please! Blaming Boomers now.
Five causes of inflation are the following: increased government spending. increased money supply. increase in production costs. increase in aggregate demand. workers bargaining for higher nominal wages. |
Anonymous
I know you want to deflect responsibility away from Joe and his inept administration. But we know better. Remember Obama's words..... "Don't underestimate Joe's ability to fck things up." |
Anonymous
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Hyper-credulous DCUM partisan Democrats: while the GOP probably does suck more on FINREG (and basically anything else), the Democrats also suck, they just suck a little bit less. We have these blowups where the private players most favored by the government get helped out *because* the capture is deeply bipartisan. Lessons from 2008 (or 2016!) are studiously avoided! |
Anonymous
This event has nothing to do with politics. This bank for its size has an alarmingly narrow depositor base concentrated on starts ups and entities funded by VC’s. As the VC market has declined, along with proceeds from new issuances, SVB lost demand deposits to the tune of 40 percent. A lot of their money was tied up in long term bonds diminished in value due to the recent rise in interest rates. The bank was squeezed, and once word got out, the depositors, who tend to all know each other (again, a narrow deposit base) all rushed to the exits. The bank could have held liquid assets such as T-bills, but of course at a cost to their margins. Such is the price of safety. In hindsight, the bank should have paid that price. I note Fox News in some clumsy way tried to connect the fall of the bank to the bank’s emphasis on DEI programs. While the value of DEI programs can be questioned, DEI programs have nothing to do with this collapse. It is due to poor treasury management. The bank does have a reputation of banking start up entities which would otherwise be unbanked- the reason Paul Krugman referred to them as Schmooze and Vibe - and it difficult to discern what impact their decisions over credit quality affected this mess. But the main peril here is having a depositor base focused on a single industry - and one which generates demand deposits from new issuances of start up cash as opposed to from operating funds. |
Anonymous
Cause #1: always simple-minded and now senile boomers needing to convince themselves that the ‘threats’ of yesteryears’ are still real. |
Anonymous
The money is coming from other banks and from the proceeds of the auction...this in total is a very shrewd move by the administraton. Secure the depositors but screw the bond holders. The overall negative impact will be minimal. |
Anonymous
It wasn't an issue under trump because the economy was in tatters, unemployment skyrocketed and the supply chains ground to a halt, but sure, it was otherwise great. Do you not remember 2020 at all? |
Anonymous
Yup, all of your factors are correct, but your attributions are way off. |
Anonymous
Why do you hold your fellow citizens in such contempt? It is not a good look. |
Anonymous
LOL. Find a way to blame the other guy. The mantra of this inept and corrupt administration. |
Anonymous
I hold people in contempt who make a point of slavish loyalty to evil and that includes your lot of inflation simpletons. The issues in consumer prices are almost entirely about bad consolidation (aka crappy regulation) leading to monopoly pricing power. This is easy to understand, since the generalized price level changes look very different than those in these industries where prices have gone parabolic. |
Anonymous
If you look at each of the reasons you cite, the root causes are, in fact, per the bolded. You are suggesting that increase in aggregate demand is a bad thing, but f course it isn't, particularly when rebounding from the malaise from the pandemic, as per one example. And the workers bargaining for nominal wages, again is a result of the rebound from the pandemic. It became clear who the essential workers were/are, and their wages went up. Please dispute the bolded in terms of root causes. You can't, at least not truthfully. |
Anonymous
DP. No, economists have the the attention span of gnats and worse memory than squirrels, who can't remember where they put any of their acorns. |
Anonymous
Consumer prices leapt up, while corporate profits skyrocketed. Connect the dots and it points to profiteering. Corporates gleefully went on that ride, driving inflation higher and higher. |