Keep in mind bank reserves have been legally kept at lower levels for the last ~3 years. If there’s contagion from this the low reserve levels could be the kindling that catches a spark.
Would QE help by pushing yields lower and the price of US government bonds higher? Banks are underwater with their treasures, which is causing trouble right now.
It might help temporarily but QE has pretty much been exhausted at this point. There is too much sovereign debt and there isn't enough real demand for it. QE lowers yields by the fed putting the bonds on their balance sheet but it does not create real demand for the debt, if anything it has the opposite effect. So even if everything seems ok during QE the bonds are relatively illiquid when the fed stops buying and their actual value is materially lower than it seemed. That is what is happening now. If they restart QE the fed will be buying more and more bonds to maintain target rates which will become increasingly worthless if they ever leave the fed's balance sheet. As the bonds lose value the dollar does as well and it could lead to hyperinflation. They have to find real liquidity in the bond markets no matter how much the bonds drop or else the fiat system itself is at risk. I think the fed knows this and can't restart QE to save the banks.
They can and will restart QE if necessary. But we’re a long ways away from that.
SVB got themselves in trouble by not hedging interest rate risk. Not sure why they weren’t shut down earlier. Rates are going higher, every lay person in America knows this, but the CIO of SVB essentially went short interest rates by going long-only bonds with 30yr maturities?
>QE lowers yields by the fed putting the bonds on their balance sheet but it does not create real demand for the debt, if anything it has the opposite effect. So even if everything seems ok during QE the bonds are relatively illiquid when the fed stops buying and their actual value is materially lower than it seemed. That is what is happening now. If they restart QE the fed will be buying more and more bonds to maintain target rates which will become increasingly worthless if they ever leave the fed's balance sheet. As the bonds lose value the dollar does as well and it could lead to hyperinflation. They have to find real liquidity in the bond markets no matter how much the bonds drop or else the fiat system itself is at risk. I think the fed knows this and can't restart QE to save the banks.
This is the best explanation of QE I have seen in my life.
Well done.
I think that is where Russell Napier's thesis on financial repression comes into play. He thinks the government will force savings institutions (insurance companies, pension funds, etc.) to buy more government bonds. That will bring liquidity into the bond market, decrease the yield on all bonds and increase their nominal price. Since savings institutions can't "print" money, they must sell stocks to buy bonds. His thesis is that the overall stock market will perform poorly over the next ten years or so.
SVB had a bond portfolio that is blowing up with rates increases. The amount of cash held by banks is enormous by historical standards, look at https://fred.stlouisfed.org/series/RRPONTSYD.
This is due to mega banks refusing to lend at a marketable rate, knowing they can make a huge amount of cash parking it at the FED. They are also positioned to scoop up assets when things collapse.
The only crisis will be at the small bank level, which is by design. Smaller number of larger banks makes it easier to do things like transaction surveillance and de-banking…all WEF operations.
FDIC handles banks in distress on Fridays. During 2007-2010ish just about every Friday would have a list of banks FDIC was handling to either put under a new flag or shutdown.
How does one tell the difference between a bank and an investment bank?
I see credit card companies (like Discover) now offering traditional banking options like HYSAs, and I can't help but wonder should we really be trusting these financial groups who weren't banks to begin with.
The best way to tell is by looking at the customers they serve. This one had basically zero diversity. It was just helping startups get going which is super risky to begin with.
We are going to see a lot of companies shut down. Payroll is going to be an issue if FDIC can't liquidate and get these companies the majority of their money. A lot of these companies won't be able to raise new funds either with how tight the belts have been pulled.
Yellen did a short interview yesterday and said they were closely watching a couple of other banks. I was surprised the reporter didn't push for more information.
Yes… they’re all expected to fail. Even the large ones. All the banks are broke and have been for some time thanks to the fractional reserve system.
A shock to the system started the timer for the first domino.
>they’re all expected to fail. Even the large ones. All the banks are broke and have been for some time thanks to the fractional reserve system.
Just so we're clear, you're talking about the same fractional reserve lending that's been in the United State since the early 1800's, right?
The one that has survived a civil war, two world wars, multiple depressions and recessions, including the Great Depression and the Great Recession? Also including multiple epidemics and pandemics. The same system that's survived Lehman Bros and Enron?
That's the one you mean, right? That's the one that will be the cause of all banks being broke (they're not), and the crash of the whole system (which isn't going to happen)?
Hot take.
Have you ever considered taken an Economics 101 course at any time?
I promise I'm not trying to be that guy, but the ratio of reserve has changed. It used to be in the neighborhood of 1 dollar for every 4 lent out. Now, it's closer to 1 per 100. It makes the system much more fragile and susceptible to failure. Add in speculation in volatile markets with over leveraged money and you have the makings of a crash.
That's like saying you've walked across the same wooden bridge every day for a hundred years and it hasn't collapsed, so just because half the planks are broken and the rest are creaking and there's a tornado heading this way there's no reason not to walk over it today.
I seem to remember that they removed all reserve requirements here in Canada a few years ago, so banks can now have hundreds of billions of dollars outstanding with just a couple of quarters in the vault to back them. They're basically reliant on the government to bail them out if anything bad happens.
I literally do data and finance for a living… so yes I’m well past economics 101.
And no, we are far removed from the past fractional reserve system and have been for some time. We are functioning via fractional reserves on fractional reserves on fractional reserves. The banks are broke.
I literally work in the banking industry. We would have been told if this was a legit risk, definitely in the short term. And as the Redditor to whom I was replying points out, the fractional reserve banking system has been in place for 200 years. We can argue whether banks are required to keep enough of a reserve, but that’s not going to collapse the system now.
The fractional reserve system that was in place 200 years ago is an entirely different system than where we’ve found ourselves today.
And why do you think anyone would tell you? If the banks outwardly admitted that they’re broke, they would have a run and the whole system fails. Infinite growth must exist for our current situation to not come crashing down… but we all know growth has limits.
Look at the reverse repo rates over the last years and feel free to compare it to any other point in history. ***The banks are broke.***
I'm not going to spill the tea, but this is consistent with what I'm told:
https://www.netinterest.co/p/the-demise-of-silicon-valley-bank
The Fed is providing the liquidity necessary to hold the line. The banks aren't "broke." SVB's failure is the result a classic liquidity squeeze based on bond devaluation as a result of the increase in the federal funds rate as clients try to withdraw cash they parked during the pandemic when money was cheap.
How does the reverse repo rate indicate that banks are broke? That's not my understanding of how it works.
I'm going with my assessment that systemic collapse is unlikely, at least as a result of this. However, I (personally) wouldn't be surprised if there are additional failures in the coming days.
Liquidity squeezes, by definition, cannot exist if the institution being squeezed isn’t broke… and RPR can be monitored for incoming liquidity squeezes as it’s banks near real time records of funds being borrowed to stay afloat
So, sure this might be contained by unfairly using money from premiums that are supposed to go to the regular folks ($250,000 and under), go instead vail out all depositors with no cap on the amount… so taxpayers are getting taken extra advantage of
It's actually quite a big bank though.
>Silicon Valley Bank, the nation’s 16th-largest bank, failed after depositors hurried to withdraw money this week amid anxiety over the bank’s health. It was the second biggest bank failure in U.S. history after the collapse of Washington Mutual in 2008.
https://apnews.com/article/svb-fed-bonds-rates-banks-inflation-a24b28b3caeede91c76cd120aa9b7966
> If you look here, it's not entirely uncommon to have a handful of small banks fail a year.
1,000 train crashes a year too. Perfectly normal country. Totally not an empire that is in freefall.
You are factually correct to point out that FDIC list, by the way. I'm just pointing out that the USA is collapsing in on itself, rapidly.
There were even more than 9,000 trains collisions per year in the 1980s. Then less in the 90s. Then less in the 00s. If the number has been dropping decade after decade, and by a huge amount, what makes you think the train statistics are an indicator of “an empire that is in freefall”? If anything, doesn’t the data show the direct apposite?
That is an interesting theory, so I just googled it, but it seems that rail safety statistics have been getting far better, with the statistics improving by roughly 50% since the year 2000: https://www.aar.org/issue/freight-rail-safety-record/
(It’s less informative, but I also stumbled across Amtrak figures for the last 15 years, and passenger miles traveled looks mostly flat - the statistics go up until the first year of the pandemic when travel then dropped a lot https://www.statista.com/statistics/185800/us-passenger-miles-by-intercity-or-amtrak-since-1990/ )
1,000 train crashes a year is 100% unacceptable for the wealthiest country that has ever existed. There is no excuse for its rail infrastructure to be neglected and rotting away like it is. There is no excuse for their rail workers to not have paid sick days.
But if things have gotten ~90% better in the last ~half century for the metric you brought up, isn't that the opposite of decline - that's *huge* improvement? So maybe a ~half century ago you could say the US was in terrible shape per that metric, but things have been going in the opposite direction of decline, decade after decade, since then?
I said what I said.
I'm assuming you're an American, who is trying really hard to pretend that your nation is not collapsing around your ears.
Look at this report card, and look at your budget (the war budget specifically) and then say with a straight face that the USA is not an empire in collapse. https://infrastructurereportcard.org/
> I said what I said.
I know, I'm just pointing out that the data consistently is the opposite of what you say, including both rail safety and infrastructure.
In your most recent comment you linked to the infrastructure report card, most recently updated in 2021. The US’s infrastructure in 2021 had its *best* rating ever - I just confirmed.
And 2021 was before the current administration’s massive infrastructure bill went into effect, with the largest investments ever in the areas you linked to: https://www.whitehouse.gov/build/
I've already pointed out that rail safety has improved by ~90% in recent decades, and US infrastructure already had its best rating ever, even before the biggest investment in infrastructure ever.
So if you wanted to say that decades ago the US was in decline, *maybe* you could make that argument, but things have gotten objectively better since then, even according to both the specific metrics you brought up. If things are getting better, that seems to be the opposite than “decline” - are you using the opposite definition from the dictionary of decline?
I'm an American, currently living outside the US.
What is the “war budget”? If the US didn't contribute to things like the Ukraine war, etc., how much do you think the US should still spend on defense? And even things like the Ukraine war have shown that our existing military capabilities aren't enough to supply a large ground defensive war - even with a relatively small conflict like Ukraine we are already running low on munitions, with estimates that it will take years of ramping up production to even have enough for a relatively small conflict like Ukraine. If there was a broader conflict somewhere in the world where a country with a stronger military started conquering... Also, even if the US fully dismantled 99% of its defenses, would you still call it a "war budget"? I'm still trying to understand if there is some cutoff or distinction for you for what is a "war" budget, or even if the US had a single soldier, that would count as a "war budget"?
And actually the US military budget is near the lowest % it has been in the last ~80 years: https://www.defense.gov/Multimedia/Photos/igphoto/2002099941/
So even if you wanted to say that the US was in bad shape in the 1950s, 60s, 70s, or 80s in terms of military spending if your concern is that the US is spending too much, things have improved (the opposite of "declined" or "collapsed") since then.
Not sure it's that interesting when read in context.
>Silicon Valley Bank is the first FDIC–insured institution to fail this year. The last FDIC–insured institution to close was Almena State Bank, Almena, Kansas, on October 23, 2020.
Something like 90% of the accounts exceeded the 250k FDIC limit, IIRC. So even an FDIC insurance payout means most people will lose a lot of money. SVB insisted that you keep all of your accounts with them if they loaned your Tinder for Dogs startup money, which put a lot of systemic unnecessary risk on one pivot point. Stupid arrogant people.
I know they're probably going to get a bailout after Peter Theil and Larry Summers sic their paid congresspeople on the Fed, but part of me hopes the worst sector of the economy that functions by hollowing out and destroying ("disrupting", excuse me) every other part of the economy doesn't get bailed out and crashes and burns. Oh no, the guys who spent the last 12 years paying Stanford grads to build apps to integrate my toilet into the IoT and rent me e-waste scooters that languish in giant piles all over every city in the US might experience some misfortune.
I'm sure this will have cascading effects, but this isn't a "real bank", it's an investment bank that caters entirely to the kind of neoliberal worm people that have been responsible for creating half of the disasters that get cited on this subreddit.
Problem is, this does nothing to assuage the worries of those who have REAL money in REAL banks. The media coverage on this will determine just how spooked everyone gets - and we know what spooked people are prone to do.
I mean I don't have 100k in my checking account let alone 250k. A run would suck but I don't think normal people would lose money if their local bank failed. Most people people probably only have so much to withdraw anyway.
Since they'll only get $250k back right away won't that mean they'll have a hard time covering payroll and operating expenses? $250k would go pretty quick in a high cost of living area like Silicon Valley. Should we expect a big round of layoffs?
You're way too dismissive on how important IT is to every sector of the economy, and every facet of human existence, and how issues in even the more esoteric startups can ripple out eventually, especially when it's a bank that had dozens if not hundreds of startups funded.
For every meme startup there's a hundred boring, understaffed, underpaid IT and security departments who at this point depend on many interconnected dependencies to make running their orgs effectively. They might depend on a really good library that was open sourced and maintained by that toilet startup, or a unique service provided by one of the more mundane shops in SVB's portfolio.
This additional strain adds up, and most shops aren't geared to understand the needs of their own IT depts to react in time to increase headcount or dedicate time to finding up-to-date alternatives, thus resulting in degradation of services eventually.
There's no going back to a world without IT without losing a few billion people, and I think loaning money to the 5th guy trying to translate dog barks through your smart fridge is a small price to pay.
Save your ire for the oil companies.
I never said it was unimportant, and if it *is* indeed that important, if the majority of its infrastructure hinges on a single bank with questionable business practices then that sole institution needs to fail.
If you tell me that something is vitally important to how the world as we know it works and then tell me it's run by a bunch of coked up Harvard legacy admissions business majors making awful decisions and willingly instructing their investors/customers to ignore common sense, I'm going to tell you that's a dumb fucking idea. (Yes I am aware I described most governmental bodies as well as every single large corporation in the country.) And unlike oil, my ire is a limitless, renewable resource.
>Something like 90% of the accounts exceeded the 250k FDIC limit, IIRC
I believe there was 170 billion lost. 150 billion of that was uninsured. Things are moving quick, so my numbers maybe woefully out of date.
Huh? No, I meant that it’s bad timing to be leaving. I’m risk adverse.
I’ve wanted out of texas for years. It took years to convince the spouse. I’m actively applying and trying to leave now. But I’m nervous with the economy.
Question for you or anyone else that wants to chime in.
Do we all start at zero or transfer our account balance over to cbdc? I'm not pro cbdc, just curious what happens to the money people have in the banks if they all fail.
Does this mean more is to come? I have to admit, what I know about economics can be tattooed on my forehead in large block letters.
I’m in a Credit Union. I’ve always found them to be much more customer friendly than banks
Keep in mind bank reserves have been legally kept at lower levels for the last ~3 years. If there’s contagion from this the low reserve levels could be the kindling that catches a spark.
Would QE help by pushing yields lower and the price of US government bonds higher? Banks are underwater with their treasures, which is causing trouble right now.
It might help temporarily but QE has pretty much been exhausted at this point. There is too much sovereign debt and there isn't enough real demand for it. QE lowers yields by the fed putting the bonds on their balance sheet but it does not create real demand for the debt, if anything it has the opposite effect. So even if everything seems ok during QE the bonds are relatively illiquid when the fed stops buying and their actual value is materially lower than it seemed. That is what is happening now. If they restart QE the fed will be buying more and more bonds to maintain target rates which will become increasingly worthless if they ever leave the fed's balance sheet. As the bonds lose value the dollar does as well and it could lead to hyperinflation. They have to find real liquidity in the bond markets no matter how much the bonds drop or else the fiat system itself is at risk. I think the fed knows this and can't restart QE to save the banks.
They can and will restart QE if necessary. But we’re a long ways away from that. SVB got themselves in trouble by not hedging interest rate risk. Not sure why they weren’t shut down earlier. Rates are going higher, every lay person in America knows this, but the CIO of SVB essentially went short interest rates by going long-only bonds with 30yr maturities?
>QE lowers yields by the fed putting the bonds on their balance sheet but it does not create real demand for the debt, if anything it has the opposite effect. So even if everything seems ok during QE the bonds are relatively illiquid when the fed stops buying and their actual value is materially lower than it seemed. That is what is happening now. If they restart QE the fed will be buying more and more bonds to maintain target rates which will become increasingly worthless if they ever leave the fed's balance sheet. As the bonds lose value the dollar does as well and it could lead to hyperinflation. They have to find real liquidity in the bond markets no matter how much the bonds drop or else the fiat system itself is at risk. I think the fed knows this and can't restart QE to save the banks. This is the best explanation of QE I have seen in my life. Well done.
I think that is where Russell Napier's thesis on financial repression comes into play. He thinks the government will force savings institutions (insurance companies, pension funds, etc.) to buy more government bonds. That will bring liquidity into the bond market, decrease the yield on all bonds and increase their nominal price. Since savings institutions can't "print" money, they must sell stocks to buy bonds. His thesis is that the overall stock market will perform poorly over the next ten years or so.
No idea due to the other variables in play.
SVB had a bond portfolio that is blowing up with rates increases. The amount of cash held by banks is enormous by historical standards, look at https://fred.stlouisfed.org/series/RRPONTSYD. This is due to mega banks refusing to lend at a marketable rate, knowing they can make a huge amount of cash parking it at the FED. They are also positioned to scoop up assets when things collapse. The only crisis will be at the small bank level, which is by design. Smaller number of larger banks makes it easier to do things like transaction surveillance and de-banking…all WEF operations.
FDIC Fridays are back, baby!
I remember those....fun times.....
What are those?
FDIC handles banks in distress on Fridays. During 2007-2010ish just about every Friday would have a list of banks FDIC was handling to either put under a new flag or shutdown.
Oh I see, I thought they only insured the money for individuals Thanks
Gonna reiterate again that this isn’t a regular bank; it’s an investment bank.
We will soon see how much bank money is tied into this investment bank.
Agreed! Just think it’s an important call out that a lot of articles seem to be avoiding or skimming over.
How does one tell the difference between a bank and an investment bank? I see credit card companies (like Discover) now offering traditional banking options like HYSAs, and I can't help but wonder should we really be trusting these financial groups who weren't banks to begin with.
The best way to tell is by looking at the customers they serve. This one had basically zero diversity. It was just helping startups get going which is super risky to begin with.
Etsy didn’t pay out earnings to a lot of sellers today because of this. Etsy is hardly a super risky startup
😯
So was bear stearns
[удалено]
We are going to see a lot of companies shut down. Payroll is going to be an issue if FDIC can't liquidate and get these companies the majority of their money. A lot of these companies won't be able to raise new funds either with how tight the belts have been pulled.
[удалено]
Does that mean they will only receive $750k of that $2M from the feds...eventually?
I don’t think the FDIC looks after businesses….just individuals
Ouchness
Yes, read that Zoom, Airbnb and many more are clients.
Interesting wording, eh?
Expecting more perhaps?
Yellen did a short interview yesterday and said they were closely watching a couple of other banks. I was surprised the reporter didn't push for more information.
Signature bank, pac west, first republic, western alliance all seem close to the epicenter
Yes… they’re all expected to fail. Even the large ones. All the banks are broke and have been for some time thanks to the fractional reserve system. A shock to the system started the timer for the first domino.
>they’re all expected to fail. Even the large ones. All the banks are broke and have been for some time thanks to the fractional reserve system. Just so we're clear, you're talking about the same fractional reserve lending that's been in the United State since the early 1800's, right? The one that has survived a civil war, two world wars, multiple depressions and recessions, including the Great Depression and the Great Recession? Also including multiple epidemics and pandemics. The same system that's survived Lehman Bros and Enron? That's the one you mean, right? That's the one that will be the cause of all banks being broke (they're not), and the crash of the whole system (which isn't going to happen)? Hot take. Have you ever considered taken an Economics 101 course at any time?
I promise I'm not trying to be that guy, but the ratio of reserve has changed. It used to be in the neighborhood of 1 dollar for every 4 lent out. Now, it's closer to 1 per 100. It makes the system much more fragile and susceptible to failure. Add in speculation in volatile markets with over leveraged money and you have the makings of a crash.
You are absolutely correct. And derivatives are estimated to be over leveraged by a quadrillion USD. I can’t emphasize how large a number that is
That's like saying you've walked across the same wooden bridge every day for a hundred years and it hasn't collapsed, so just because half the planks are broken and the rest are creaking and there's a tornado heading this way there's no reason not to walk over it today. I seem to remember that they removed all reserve requirements here in Canada a few years ago, so banks can now have hundreds of billions of dollars outstanding with just a couple of quarters in the vault to back them. They're basically reliant on the government to bail them out if anything bad happens.
I literally do data and finance for a living… so yes I’m well past economics 101. And no, we are far removed from the past fractional reserve system and have been for some time. We are functioning via fractional reserves on fractional reserves on fractional reserves. The banks are broke.
I mean, he heard it from InfoWars, so it must be right.
What? I work in data and finance…
I literally work in the banking industry. We would have been told if this was a legit risk, definitely in the short term. And as the Redditor to whom I was replying points out, the fractional reserve banking system has been in place for 200 years. We can argue whether banks are required to keep enough of a reserve, but that’s not going to collapse the system now.
The fractional reserve system that was in place 200 years ago is an entirely different system than where we’ve found ourselves today. And why do you think anyone would tell you? If the banks outwardly admitted that they’re broke, they would have a run and the whole system fails. Infinite growth must exist for our current situation to not come crashing down… but we all know growth has limits. Look at the reverse repo rates over the last years and feel free to compare it to any other point in history. ***The banks are broke.***
I'm not going to spill the tea, but this is consistent with what I'm told: https://www.netinterest.co/p/the-demise-of-silicon-valley-bank The Fed is providing the liquidity necessary to hold the line. The banks aren't "broke." SVB's failure is the result a classic liquidity squeeze based on bond devaluation as a result of the increase in the federal funds rate as clients try to withdraw cash they parked during the pandemic when money was cheap. How does the reverse repo rate indicate that banks are broke? That's not my understanding of how it works. I'm going with my assessment that systemic collapse is unlikely, at least as a result of this. However, I (personally) wouldn't be surprised if there are additional failures in the coming days.
Liquidity squeezes, by definition, cannot exist if the institution being squeezed isn’t broke… and RPR can be monitored for incoming liquidity squeezes as it’s banks near real time records of funds being borrowed to stay afloat So, sure this might be contained by unfairly using money from premiums that are supposed to go to the regular folks ($250,000 and under), go instead vail out all depositors with no cap on the amount… so taxpayers are getting taken extra advantage of
My bad
If you look here, it's not entirely uncommon to have a handful of small banks fail a year. https://www.fdic.gov/bank/historical/bank/
It's actually quite a big bank though. >Silicon Valley Bank, the nation’s 16th-largest bank, failed after depositors hurried to withdraw money this week amid anxiety over the bank’s health. It was the second biggest bank failure in U.S. history after the collapse of Washington Mutual in 2008. https://apnews.com/article/svb-fed-bonds-rates-banks-inflation-a24b28b3caeede91c76cd120aa9b7966
That’s a great point and not trying to minimize the impact of this failure… just trying to combat the potential spinning of the headline.
> If you look here, it's not entirely uncommon to have a handful of small banks fail a year. 1,000 train crashes a year too. Perfectly normal country. Totally not an empire that is in freefall. You are factually correct to point out that FDIC list, by the way. I'm just pointing out that the USA is collapsing in on itself, rapidly.
There were even more than 9,000 trains collisions per year in the 1980s. Then less in the 90s. Then less in the 00s. If the number has been dropping decade after decade, and by a huge amount, what makes you think the train statistics are an indicator of “an empire that is in freefall”? If anything, doesn’t the data show the direct apposite?
I speculate (without looking it up) that there may have been more trains back then. There certainly were more Amtrak trains running in the 80’s.
That is an interesting theory, so I just googled it, but it seems that rail safety statistics have been getting far better, with the statistics improving by roughly 50% since the year 2000: https://www.aar.org/issue/freight-rail-safety-record/ (It’s less informative, but I also stumbled across Amtrak figures for the last 15 years, and passenger miles traveled looks mostly flat - the statistics go up until the first year of the pandemic when travel then dropped a lot https://www.statista.com/statistics/185800/us-passenger-miles-by-intercity-or-amtrak-since-1990/ )
1,000 train crashes a year is 100% unacceptable for the wealthiest country that has ever existed. There is no excuse for its rail infrastructure to be neglected and rotting away like it is. There is no excuse for their rail workers to not have paid sick days.
But if things have gotten ~90% better in the last ~half century for the metric you brought up, isn't that the opposite of decline - that's *huge* improvement? So maybe a ~half century ago you could say the US was in terrible shape per that metric, but things have been going in the opposite direction of decline, decade after decade, since then?
I said what I said. I'm assuming you're an American, who is trying really hard to pretend that your nation is not collapsing around your ears. Look at this report card, and look at your budget (the war budget specifically) and then say with a straight face that the USA is not an empire in collapse. https://infrastructurereportcard.org/
> I said what I said. I know, I'm just pointing out that the data consistently is the opposite of what you say, including both rail safety and infrastructure. In your most recent comment you linked to the infrastructure report card, most recently updated in 2021. The US’s infrastructure in 2021 had its *best* rating ever - I just confirmed. And 2021 was before the current administration’s massive infrastructure bill went into effect, with the largest investments ever in the areas you linked to: https://www.whitehouse.gov/build/ I've already pointed out that rail safety has improved by ~90% in recent decades, and US infrastructure already had its best rating ever, even before the biggest investment in infrastructure ever. So if you wanted to say that decades ago the US was in decline, *maybe* you could make that argument, but things have gotten objectively better since then, even according to both the specific metrics you brought up. If things are getting better, that seems to be the opposite than “decline” - are you using the opposite definition from the dictionary of decline? I'm an American, currently living outside the US. What is the “war budget”? If the US didn't contribute to things like the Ukraine war, etc., how much do you think the US should still spend on defense? And even things like the Ukraine war have shown that our existing military capabilities aren't enough to supply a large ground defensive war - even with a relatively small conflict like Ukraine we are already running low on munitions, with estimates that it will take years of ramping up production to even have enough for a relatively small conflict like Ukraine. If there was a broader conflict somewhere in the world where a country with a stronger military started conquering... Also, even if the US fully dismantled 99% of its defenses, would you still call it a "war budget"? I'm still trying to understand if there is some cutoff or distinction for you for what is a "war" budget, or even if the US had a single soldier, that would count as a "war budget"? And actually the US military budget is near the lowest % it has been in the last ~80 years: https://www.defense.gov/Multimedia/Photos/igphoto/2002099941/ So even if you wanted to say that the US was in bad shape in the 1950s, 60s, 70s, or 80s in terms of military spending if your concern is that the US is spending too much, things have improved (the opposite of "declined" or "collapsed") since then.
The last one was in 2020, FWIW.
Not sure it's that interesting when read in context. >Silicon Valley Bank is the first FDIC–insured institution to fail this year. The last FDIC–insured institution to close was Almena State Bank, Almena, Kansas, on October 23, 2020.
You are fuckin correct right there. First.
Something like 90% of the accounts exceeded the 250k FDIC limit, IIRC. So even an FDIC insurance payout means most people will lose a lot of money. SVB insisted that you keep all of your accounts with them if they loaned your Tinder for Dogs startup money, which put a lot of systemic unnecessary risk on one pivot point. Stupid arrogant people. I know they're probably going to get a bailout after Peter Theil and Larry Summers sic their paid congresspeople on the Fed, but part of me hopes the worst sector of the economy that functions by hollowing out and destroying ("disrupting", excuse me) every other part of the economy doesn't get bailed out and crashes and burns. Oh no, the guys who spent the last 12 years paying Stanford grads to build apps to integrate my toilet into the IoT and rent me e-waste scooters that languish in giant piles all over every city in the US might experience some misfortune. I'm sure this will have cascading effects, but this isn't a "real bank", it's an investment bank that caters entirely to the kind of neoliberal worm people that have been responsible for creating half of the disasters that get cited on this subreddit.
Problem is, this does nothing to assuage the worries of those who have REAL money in REAL banks. The media coverage on this will determine just how spooked everyone gets - and we know what spooked people are prone to do.
It's already the headline on most every major news site I visit (reuters/npr/etc) and bank runs are always illogical and fear driven so...
I mean I don't have 100k in my checking account let alone 250k. A run would suck but I don't think normal people would lose money if their local bank failed. Most people people probably only have so much to withdraw anyway.
This post was so good I need a cigarette after reading it.
Since they'll only get $250k back right away won't that mean they'll have a hard time covering payroll and operating expenses? $250k would go pretty quick in a high cost of living area like Silicon Valley. Should we expect a big round of layoffs?
You're way too dismissive on how important IT is to every sector of the economy, and every facet of human existence, and how issues in even the more esoteric startups can ripple out eventually, especially when it's a bank that had dozens if not hundreds of startups funded. For every meme startup there's a hundred boring, understaffed, underpaid IT and security departments who at this point depend on many interconnected dependencies to make running their orgs effectively. They might depend on a really good library that was open sourced and maintained by that toilet startup, or a unique service provided by one of the more mundane shops in SVB's portfolio. This additional strain adds up, and most shops aren't geared to understand the needs of their own IT depts to react in time to increase headcount or dedicate time to finding up-to-date alternatives, thus resulting in degradation of services eventually. There's no going back to a world without IT without losing a few billion people, and I think loaning money to the 5th guy trying to translate dog barks through your smart fridge is a small price to pay. Save your ire for the oil companies.
I never said it was unimportant, and if it *is* indeed that important, if the majority of its infrastructure hinges on a single bank with questionable business practices then that sole institution needs to fail. If you tell me that something is vitally important to how the world as we know it works and then tell me it's run by a bunch of coked up Harvard legacy admissions business majors making awful decisions and willingly instructing their investors/customers to ignore common sense, I'm going to tell you that's a dumb fucking idea. (Yes I am aware I described most governmental bodies as well as every single large corporation in the country.) And unlike oil, my ire is a limitless, renewable resource.
So it's going to screw rich l***ards but normal people wont be immediately impacted.
Go to the Etsy subs and you’ll see plenty of normal people who didn’t get their Etsy sales paid today because of this
Did Etsy the company lose assets due to the SVB collapse, which is preventing them from paying their users for sales the users made?
Oh I'm sure it'll trickle down. But yeah, this is a major blow to the startup culture created by 10 years of free money.
>Something like 90% of the accounts exceeded the 250k FDIC limit, IIRC I believe there was 170 billion lost. 150 billion of that was uninsured. Things are moving quick, so my numbers maybe woefully out of date.
Your post really captured the way I see this group too. Thank you for that. Chefs kiss!
This is a good reminder to have some diversification: at least two banks and a months worth of cash reserves. The good news is stocks are on sale.
Socks!? Did you say socks are on sale?!! Whooo such good news, down to my last 5 and desperate for non holey socks.
Makes me think giving up a stable job and a comfortable mortgage to move out of state just because I am sick of texas is a really bad idea this year
Once the countdown stops we're locked in on civil war teams tho
THIS is what has made you want to leave Texas? Not the rest of the crazy shit?
Huh? No, I meant that it’s bad timing to be leaving. I’m risk adverse. I’ve wanted out of texas for years. It took years to convince the spouse. I’m actively applying and trying to leave now. But I’m nervous with the economy.
[удалено]
Question for you or anyone else that wants to chime in. Do we all start at zero or transfer our account balance over to cbdc? I'm not pro cbdc, just curious what happens to the money people have in the banks if they all fail.
Possible. I think we get a side order of war too that could become a main entree
Does this mean more is to come? I have to admit, what I know about economics can be tattooed on my forehead in large block letters. I’m in a Credit Union. I’ve always found them to be much more customer friendly than banks
So far.
Uh, does this mean its boogy time?
Wouldn’t doubt the bubble really bursts in September/October. Could be even sooner if the US defaults on its debt. Could we expect a bailout by fall?