That was a lot of words. Given that your questions were already answered ad nauseum above, and that they show a lack of comprehension of the post that you replied to, I will just point you to previous posts:

They are up from here. Use the scroll function to see them.

(As an aside, you believe that the Fed caused SVB to purchase long-term bonds and that they forced them to not hedge duration? You believe that anyone here has said that the Fed is perfect? If so, you believe that people have said things that they didn't say. Those were retorical questions)

To give u a little perspective .

Ps: I never said svb made no fault, on the contrary .
But half u said is wrong in saying the fed had no role in it .

And fwiw I have no idea why some corporations have no blame either in the situation .
Holding 500 million+ in 1 bank like Roku or circle did is pretty stupid when u should know you are only protected up to 250k .

Guest makes no sense. Says the Fed caused this by lowering rates then raising them quickly. But doesn't articulate why this is causing banks to fail, esp since he blames SVB's failure on the bank rather than the Fed even though SVB failures precisely because it loaded up on long-term paper without hedges.

I guess if you want to live in a world where banks don't need to adjust to changing conditions, don't need to hedge risk, don't need to diversify their customer base, and don't need to plan, then sure, it was all the Fed's fault.

Of course the Fed had a "role" in the failure. But that's like saying a title loan company had a role in causing me to have to ride the bus to work after my car was repossessed.

Finally, you want a company with $500 million cash to spread it around to enough banks to make sure it's all insured?

There was nothing else to buy because of QE ?
and obv the lack of hedges by svb was incredibly stupid .
But I guess not having a chief risk officer produces those kind of things .
Makes me think about the « margin call » movie kinda When they fired their risk management.

I guess what he says is you will make more and more insolvent on paper as raising rates continue because at some points the hedges will cost too much .
The coupons from very low securities won’t be enough to cover it .

Then buy nothing and just park it at your account at the Fed. Or buy long-term paper and hedge. Basically do what every other bank in the country did that wasn't being greedy to goose earnings and bonuses.

They can buy t bills , treasuries, they can go at much bigger banks like Jp morgan , money market funds , there is the CDARS (expansion of fdic),etc.

I don’t think bill gates has only 1 bank.

Well only banks can have account at the fed and not all banks do .

Ps: all banks are greedy and get paid high bonuses.
It’s called buyback shares .
And they get paid tremendous amount of money just sitting at the fed now .

FRC suspending dividend. Got $30b from other banks. https://www.reuters.com/markets/us/first-republic-bank-tumbles-drags-down-shares-other-regional-lenders-2023-03-16/

And just like that risk is back on in the stock market. Another win for plunge protection team lol

fwiw is far from over imo .
Not a single .75% interest rates hike been fully incorporated in the economy yet .

[QUOTE=Montrealcorp;58064646]Well only banks can have account at the fed and not all banks do .

"Silicon Valley Bank is a member of the FDIC and of the Federal Reserve System."

Source: https://www.svb.com/private-bank/dis...the-fine-print

And? You seem to just be making statements without any correlation to your arguments. Or correlation to any point.

Remember that family that drove off a cliff on the 101 a few years back? The mom did it on purpose. Just aimed and drove right off the cliff.

Obviously God was at fault for putting a cliff there. I mean, He knew about gravity since he made that too.

The Fed's Balance sheet just expanded by 300 billion dollars in a week.

QE is officially back.

The United States is a banana republic.

The Fed Balance sheet will hit a new all time high by the end of the month.

Most of the balance sheet expansion was discount window loans.

QE = buying long-term debt to reduce the effective borrowing cost and encourage lending.

Discount Window = loaning at market rates to provide short-term liquidity.

The discount window is not expansionary. It's not QE.

It is QE. They are just buying bonds from commercial banks instead of from the government.

The commercial banks will then use the new liquidity as they please, which is going to create massive new inflation.

"Banks took an all-time high $152.9 billion from the Fed's traditional lender-of-last resort facility known as the discount window as of Wednesday, while also taking $11.9 billion in loans from the Fed's newly created Bank Term Lending Program."

Source: https://www.reuters.com/markets/us/b...se-2023-03-16/

"Quantitative easing (QE) refers to the Federal Reserve’s purchases of large quantities of Treasury securities and mortgage-backed securities issued by government-sponsored enterprises and federal agencies to achieve its monetary policy objectives."

Source: https://www.cbo.gov/publication/58457

You forgot that if you squint hard enough, lending is the same as buying. Additionally, lending is the same as QE, but you have to squint and press on your left eye with your thumb really hard.

You can call it QE or you can call it something else if you want.

The fact is the Fed is buying underwater treasuries and morgage backed securities from commercial banks and paying them par which is massive money printing that the commercial banks can use as they please.

Until today the ECB got interest rates up to 2.5 percent. Inflation has been 9 percent for a year and a half. Why don't they just do a Paul Volker and raise interest rates up to 12 percent tomorrow.

They know they can't. This inflation fight is all show. The Fed and ECB are all bark and no bite.

They aren't paying them par. They arent paying them at all. Lending isn't borrowing.

You can call a car a cheeseburger if you wish, but that doesn't make it lunch

The money lent to the banks through the discount window is to cover demand-deposit liabilities, ie customer deposits. It's a one-for-one exchange when their customers make withdrawals. It's not expansionary since that money is withdrawn and can't be loaned against anymore, which is how credit/money is expanded.

I'm going to ask if my boss can lend me money instead of paying me, since they are the same

Ya they're loans.

Credit Suisse got a loan for 44 billion today and lost 7 billion last year.

They'll pay it back, lol.

Ummm, you do know that Credit Suisse isn't an American bank, right?

You're a silly billy. Yes I know Credit Suisse is a Swiss bank.

You're the one that's confused.

Banks typically hold ten percent of depositors money in cash so they can withdraw funds if they need to and they use the remaining 90 percent to generate yield.

How did commercial banks generate yield the last 12 years. Well they bought 10 to 30 year treasuries at less than 3 percent and they wrote 30 year mortgages at less than 3 percent.

They are generating tiny amounts of interest income on these bonds especially after paying all their staff and other expenses, so they can't pay depositors the current market interest rate, which is about 5 percent after the Feds rate hikes.

That's why if you have your money in your bank account, you are not getting any interest despite all these rate hikes.

Well if commercial banks can't pay depositors 5 percent why would they leave their money in the commercial banks. They will just move their money to a money market fund where goverment treasuries will pay them the current market rate of 5 percent.

So to prevent a run on all the banks now American commercial banks get to sell the underwater bonds that they purchased over the last 12 years to the Federal Reserve at lets say 80 cents on the dollar. The commercial banks get par. The Fed takes a massive loss.

Where is the Federal reserve going to get the 20 percent difference to pay the commercial banks. They are just going to print it.

This is the biggest bailout in US history.

I guess this is that in a picture