A fool and his actual money are soon parted
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@dkf said in A fool and his actual money are soon parted:
It would be a humdrum bank failure except for the clientele.
And we would have gotten away with it, too, if it weren't for those meddling clients!
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Under the new program, banks and other lenders will be able to pledge Treasurys and mortgage-backed securities for cash. Banks can pledge collateral at par, or face value, rather than marking the assets to their current market value.
"Let's just pretend this mortgage didn't have a default risk of 90%, we'll buy it for whatever it says on the tin!" Haven't had that in a while
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@LaoC said in A fool and his actual money are soon parted:
Under the new program, banks and other lenders will be able to pledge Treasurys and mortgage-backed securities for cash. Banks can pledge collateral at par, or face value, rather than marking the assets to their current market value.
"Let's just pretend this mortgage didn't have a default risk of 90%, we'll buy it for whatever it says on the tin!" Haven't had that in a while
I repeat myself, let the fucking banks burn to the ground when they do stupid shit. And go after the CxO suite of people for accountability. Bailing them out is the wrong move, as proven by Iceland.
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@Carnage said in A fool and his actual money are soon parted:
I repeat myself, let the fucking banks burn to the ground when they do stupid shit. And go after the CxO suite of people for accountability. Bailing them out is the wrong move, as proven by Iceland.
I'm a lazy bastard; could you summarize? Was this the 2008 Great Recession?
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@Carnage said in A fool and his actual money are soon parted:
I repeat myself, let the fucking banks burn to the ground when they do stupid shit.
That’s exactly what I do!
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@Carnage said in A fool and his actual money are soon parted:
@LaoC said in A fool and his actual money are soon parted:
Under the new program, banks and other lenders will be able to pledge Treasurys and mortgage-backed securities for cash. Banks can pledge collateral at par, or face value, rather than marking the assets to their current market value.
"Let's just pretend this mortgage didn't have a default risk of 90%, we'll buy it for whatever it says on the tin!" Haven't had that in a while
I repeat myself, let the fucking banks burn to the ground when they do stupid shit. And go after the CxO suite of people for accountability. Bailing them out is the wrong move, as proven by Iceland.
I'm not sure you're prepared to deal with the fallout. "Supply chain" issues in the financial industry make for interesting times for everybody. Especially as this is what's happening already with the bailout:
Not like it wasn't entirely predicted
able. Or how would anyone imagine you'd curb supply-chain driven inflation with interest rate hikes if not by shutting down businesses and creating unemployment to bring demand down?
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@PotatoEngineer said in A fool and his actual money are soon parted:
Was this the 2008 Great Recession?
Yes, Iceland basically said "fuck the banks" and instead of bailing them out they went prosecuting CxOs (and apparently also some ex-government officials).
First link I could find about the events: https://www.bbc.com/news/business-35485876
IMHO this still leaves too many of the shareholders off the hook (those that bailed at the right time); they tend to be the ones pushing for these kinds of shenanigans. CEO doesn't play along, shareholders just replace them with someone who does.
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@LaoC said in A fool and his actual money are soon parted:
@Carnage said in A fool and his actual money are soon parted:
@LaoC said in A fool and his actual money are soon parted:
Under the new program, banks and other lenders will be able to pledge Treasurys and mortgage-backed securities for cash. Banks can pledge collateral at par, or face value, rather than marking the assets to their current market value.
"Let's just pretend this mortgage didn't have a default risk of 90%, we'll buy it for whatever it says on the tin!" Haven't had that in a while
I repeat myself, let the fucking banks burn to the ground when they do stupid shit. And go after the CxO suite of people for accountability. Bailing them out is the wrong move, as proven by Iceland.
I'm not sure you're prepared to deal with the fallout. "Supply chain" issues in the financial industry make for interesting times for everybody. Especially as this is what's happening already with the bailout:
Not like it wasn't entirely predicted
able. Or how would anyone imagine you'd curb supply-chain driven inflation with interest rate hikes if not by shutting down businesses and creating unemployment to bring demand down?Yeah, especially when you continue to worsen the part of the supply chain that you could most easily improve, namely oil and natural gas. Not going to be an easy climb out of this one.
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@ixvedeusi said in A fool and his actual money are soon parted:
@PotatoEngineer said in A fool and his actual money are soon parted:
Was this the 2008 Great Recession?
Yes, Iceland basically said "fuck the banks" and instead of bailing them out they went prosecuting CxOs (and apparently also some ex-government officials).
First link I could find about the events: https://www.bbc.com/news/business-35485876
IMHO this still leaves too many of the shareholders off the hook (those that bailed at the right time); they tend to be the ones pushing for these kinds of shenanigans. CEO doesn't play along, shareholders just replace them with someone who does.
Relative to the size of its economy, Iceland's systemic banking collapse was the largest experienced by any country in economic history. The crisis led to a severe economic slump in 2008–2010 and significant political unrest.
At the end of the second quarter of 2008, Iceland's external debt was 9.553 trillion Icelandic krónur (€50 billion), more than 7 times the GDP of Iceland in 2007. The assets of the three banks totaled 14.437 trillion krónur at the end of the second quarter 2008,[6] equal to more than 11 times the national GDP. Due to the huge size of the Icelandic financial system in comparison with the Icelandic economy, the Central Bank of Iceland found itself unable to act as a lender of last resort during the crisis, further aggravating the mistrust in the banking system.
They were simply unable to finance the things everybody else did.
The financial crisis had a serious negative impact on the Icelandic economy. The national currency fell sharply in value, foreign currency transactions were virtually suspended for weeks, and the market capitalisation of the Icelandic stock exchange fell by more than 90%. As a result of the crisis, Iceland underwent a severe economic depression; the country's gross domestic product dropped by 10% in real terms between the third quarter of 2007 and the third quarter of 2010.[8] A new era with positive GDP growth started in 2011, and has helped foster a gradually declining trend for the unemployment rate.
That's with stuff like strict capital controls that I don't suppose would be at all popular with the "let it crash" crowd. -90% stock market crash compared to the Dow's -30% in 2008 …
Unemployment had more than tripled by late November 2008, with over 7000 registered jobseekers (about 4% of the workforce) compared to just 2136 at the end of August 2008. As 80% of household debt is indexed and another 13% denominated in foreign currencies, debt payment is going to be more costly. Since October 2008, 14% of the workforce have experienced reductions in pay, and around 7% have had their working hours reduced.
Bear in mind Iceland has the population of a minor suburb of LA. Its banking sector may be huge in comparison but nowhere big enough to cause much worldwide headache. Now scale that up to the US by a factor of almost 1000 and you get a shitshow of biblical proportions.
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@LaoC but eyes! And teeth! And there's people pissing right into running water!
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@Zecc said in A fool and his actual money are soon parted:
@LaoC said in A fool and his actual money are soon parted:
∈ ?
Bear in mind?
$~$
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No circling of funny parts for you.
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The rabbit hole on Axios's takes on SVB gets reeeaaaally hot:
https://www.axios.com/2023/03/17/the-fdics-long-game
Between the lines: Now that it's possible to get a 5% rate of interest just by keeping your money in Treasury bills, greed alone is enough to get Americans to move billions of dollars out of deposit accounts.
What, pray tell, does Axios think people put their money in a deposit account for?
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@izzion I'd say that it's a mixture of some folks who genuinely don't trust their government (ref: sovereign citizen movement, freemen on the land, etc.) and some who just plain don't know about the possibility.
But mostly because it's easier (less awkward-tedious) to get your money out of a deposit account when you need it.
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Logged into my HSA/FSA account today and I'm getting this message:
Can't imagine why that's showing up now. Anyways, joke's on them because I've already spent all that money.
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The U.S. Federal Deposit Insurance Corporation said in a statement that it estimates the failure will cost its Deposit Insurance Fund about $20 billion.
Glad to know that they managed to backstop uninsured deposits at no additional cost </sarc>
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There used to be joke about Merkel saying that the surest way to know a minister with some kind of a political problem is definitely done for is when Merkel expresses her complete trust in them.
Scholz has just expressed his trust in the safety and profitability of the EU banking system and Deutsche Bank in particular.
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This is inevitable. Opinion having been granted the stage with fact, and driven it off, banks need not have any troubles, to fail. Enjoy the oncoming punishment from your owners, which they will phrase as uncontrollable, after having caused it.
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@izzion glad to know you still can't relate a third-party statement accurately
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@Gribnit said in A fool and his actual money are soon parted:
This is inevitable. Opinion having been granted the stage with fact, and driven it off, banks need not have any troubles, to fail.
Toby faire, "credit" never had anything to with with fact and all with opinion to begin with.
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Fortunately, not everyone at the school is as foolish as her:
McGee claims she was scammed online by a fake Elon Musk after spending months talking to this person in hopes of getting the space pioneer to invest millions in the school in exchange for a $100,000 upfront investment.
The school's business manager got wind of what happened and canceled the check before it was cashed, but at a sometimes chaotic and packed school board meeting Tuesday night, other school administrators say McGee was repeatedly warned it was a scam and laid out other issues they say led to a toxic work environment.
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If only the people getting soaked by this were venture capitalists...