Is the SVB failure the beginning of the recession?

[saxitoxin]

In other news, Secretary of the Treasury Yellen is now confirming that the U.S. Government will make sure Oprah is able to safely withdraw her $500 million by forcing every electrician, bus driver, and stay-at-home mother in America to chip in a few bucks in extra fees tacked on to their checking account.

[saxitoxin]

UPDATE - Senator Hawley just announced he's introducing legislation to exempt Missourians from being forced to pay the Tribute to Oprah.



Of course, Biden will just veto it. Missouri can't get a pass. Each of the districts must pay the Tribute or it won't work.

[bigtoughralf]

'There was a civil war' is such a vanilla reason for that tribute imo. In the original myth the Athenians had to send tribute to Crete because it was at their Olympics that the Cretian king's son was killed, by a bull that had previously cuckolded the Cretian king.

Now that is epic drama.

[ConfederateSS]

-----------Are You Sure we can't go back to 1976A.D...JP4fun.....That would be KOOL ....
------------ Recelebrate the Bicentennial... ...The Bird , The Bird , The Bird is the Word..Well in Detroit(Tigers)... ...Why can't we go back to doing things ourselves...The Pride , Enjoyment of getting things done, with your own hands...Today kids are literally killing themselves, because they don't know who they are anymore (Thank the LEFT), they don't know what to do with themselves, Thank Technology.... ...Build a Treehouse, Fly a Kite..., (I know thanks to crime in the Big Cities, it's hard and sad to try and get some fresh air)...Get off the phone, away from it , go outside...The sad thing is, people in their 20's/30's are like this, raising kids to be just like them...
------------ In 1976 A.D. we had a President,like today....Ford couldn't walk up stairs either without falling.... Vietnam had just falling, like today Afghanistan just fell back to the Taliban...
------------ The next for years brought inflation, recession, wars around the world, Death, hostages in the Middle East...Ah,The Carter years... Sounds a like , we are already back in the late 70's A.D...America...in 2023 A.D. , Biden's America... Although at least Carter got to see, I'm not the worst President...He is Thankful Biden is President... .... ConfederateSS.out!(The Blue and Silver Rebellion)....

[KoolBak]

DoD....aren't there a lot of people / groups that just enjoy the collapse of society? Those that trash transfer stations, etc?

I don't personally believe it. Just throwing some info out that folks don't typically know about banks and how they function at a VERY slim margin. And fodder for the curmudgeons that constantly harp at each other here and grasp at the slightest straw for dirty laundry

[Dukasaur]

DoD....aren't there a lot of people / groups that just enjoy the collapse of society? Those that trash transfer stations, etc?

I don't personally believe it. Just throwing some info out that folks don't typically know about banks and how they function at a VERY slim margin. And fodder for the curmudgeons that constantly harp at each other here and grasp at the slightest straw for dirty laundry

Yeah, fair enough.

But I also wonder about HR's earlier point: our sensitivity to interest increases as indebtedness increases. Everyone, across the board -- governments, corporations, and individuals -- tend to run bigger and bigger debt loads every decade, so running a bank on as thin a reserve as one could say 30 years ago may not be possible today.

But there's plenty of blame to go around. From the Planet Money article:
https://www.npr.org/sections/money/2023/03/14/1163200179/the-collapse-of-silicon-valley-bank

But who is actually responsible?

Depositors, who failed to insure their cash properly, and then panicked and pulled their money out of Silicon Valley Bank before taking a breath?

The bank's management, for not effectively managing their bond portfolio and churning it as interest rates rose?

The Federal Reserve, for hiking interest rates and devaluing so many banks' investments, or for being too lax in preventing banks from taking on risk?

Federal and state regulators, for not keeping a closer eye on banks' investments and anticipating the effects of a fast-rising interest rate environment on the financial system?

Congress, for watering down the Dodd Frank bill, and allowing banks to have cash cushions that clearly aren't cushiony enough to deal with a sharp downturn?

Donald Trump for signing into law a rollback of certain regulations in Dodd Frank?

Bill Clinton for signing the repeal of the Glass Steagall Act of 1933?

The banking lobby, for pushing for less regulation and lighter capital buffers?

[KoolBak]

Bingo

[saxitoxin]

It's obviously a very serious situation. Biden is even rolling out of bed before 10 a.m. it's that serious.

[HitRed]

https://www.usdebtclock.org/

US Debt Clock
endless fun!

In 2008 the U.S. national debt exceeded $10 trillion.

[bigtoughralf]

The US is like that 'self-made CEO' guy on Insta who's always flashing his nice car (monthly payments), Dubai holidays (took out a loan) and top end sneakers (returns them after the photo shoot). He's not actually living on his own money, he's just banking on dying before his lines of credit run out. If it actually lived within its means it'd be riding the bus to McDonald's for dinner like everyone else.

[saxitoxin]

The Democratic Party ruler of California, Gavin Newsom, aggressively called in favors and has lobbied the White House for the last week to bail-out Silicon Valley Bank's uninsured depositors.

Governor Gavin Newsom today issued the following statement in response to the appointment of the Federal Deposit Insurance Corporation (FDIC) as receiver of Silicon Valley Bank.

“Over the last 48 hours, I have been in touch with the highest levels of leadership at the White House and Treasury. Everyone is working with FDIC to stabilize the situation as quickly as possible, to protect jobs, people’s livelihoods, and the entire innovation ecosystem that has served as a tent pole for our economy.”

https://www.gov.ca.gov/2023/03/11/gover ... lley-bank/

A new report today -- compiled with the help of tips from insiders -- reveals that the Ruler failed to mention or disclose that three of the sprawling wineries he owns kept all of their funds in Silicon Valley Bank, meaning Newsom stands to personally benefit to the tune of millions of dollars. He also kept a large portion of his massive fortune in the bank.

https://theintercept.com/2023/03/14/che ... -a-client/

Just another Tuesday for the party of equity and progress.

[jusplay4fun]

Key point by Duk:

But there's plenty of blame to go around.

[HitRed]

Should be interesting to see foreign purchases of our debt in the next few months.

[Maxleod]

What about that swiss bank going bankrupt too? Is it really in motion?

[HitRed]

We have returned to QE

[mookiemcgee]

What about that swiss bank going bankrupt too? Is it really in motion?

I believe they are getting a loan from the actual national swiss bank (so crisis temp adverted)

[mookiemcgee]

We have returned to QE

BRRRRRRRRRRRRRRRRRRRRRRRR






It's just such a crazy time in the world. Part of me believes a decade of 4-6% inflation would do wonders for the national debt, but Fed's so called mission is returning it to 2% and I'm inclined to believe they keep tightening rates, even if the treasury is also printing bail out money trying to keep it all from falling apart. The big orange coin thesis is legit in this environment...but also so easily cucked at least for short periods by the larger entities that control financial systems.

[HitRed]

I talked to an economist an he believes that high inflation is good for the national dept. said something like under Carter the National debt went down. The government paid off debt with devalued currency.

[mookiemcgee]

I talked to an economist an he believes that high inflation is good for the national dept. said something like under Carter the National debt went down. The government paid off debt with devalued currency.

Yeah it's a double edged sword. Inflation will reduce the real value of gov't debt , but make future borrowing more expensive.

[Dukasaur]

I talked to an economist an he believes that high inflation is good for the national dept. said something like under Carter the National debt went down. The government paid off debt with devalued currency.

Yeah it's a double edged sword. Inflation will reduce the real value of gov't debt , but make future borrowing more expensive.

Inflating away the debt was a winning formula for Queen Victoria.

It's not as effective if you're not the Queen. The further downstream your income is from the mint, the less enjoyable is a high-inflation regime.

[jimboston]

I talked to an economist an he believes that high inflation is good for the national dept. said something like under Carter the National debt went down. The government paid off debt with devalued currency.

Yeah it's a double edged sword. Inflation will reduce the real value of gov't debt , but make future borrowing more expensive.

Inflating away the debt was a winning formula for Queen Victoria.

It's not as effective if you're not the Queen. The further downstream your income is from the mint, the less enjoyable is a high-inflation regime.

Inflation is a double-edged sword as many say.

It makes life “harder” in the short term as it reduces the amount and quality of goods and services you can buy.

It hurts people who have been smart and have limited debt and good savings.

It helps people who have significant debt as the cost of repaying that debt. goes down… but only if that debt is at a fixed rate.
If you have credit card debt and your rates also go up then it can hurt.

Anyone who has significant credit card debt now should consider consolidating YESTERDAY into a fixed interest personal loan or fixed interest home equity… if these tools are even still available to people. Obviously if you hold significant credit card debt then your ability to get loans like this is lower.

[mookiemcgee]

I talked to an economist an he believes that high inflation is good for the national dept. said something like under Carter the National debt went down. The government paid off debt with devalued currency.

Yeah it's a double edged sword. Inflation will reduce the real value of gov't debt , but make future borrowing more expensive.

Inflating away the debt was a winning formula for Queen Victoria.

It's not as effective if you're not the Queen. The further downstream your income is from the mint, the less enjoyable is a high-inflation regime.

Yeah for average citizen there is no upside, unless you start getting paid more and have a mountain of low interest debt you locked in at pre/early covid rates then it's marginally better but for most it's bad lol

[jimboston]

I talked to an economist an he believes that high inflation is good for the national dept. said something like under Carter the National debt went down. The government paid off debt with devalued currency.

Yeah it's a double edged sword. Inflation will reduce the real value of gov't debt , but make future borrowing more expensive.

Inflating away the debt was a winning formula for Queen Victoria.

It's not as effective if you're not the Queen. The further downstream your income is from the mint, the less enjoyable is a high-inflation regime.

Yeah for average citizen there is no upside, unless you start getting paid more and have a mountain of low interest debt you locked in at pre/early covid rates then it's marginally better but for most it's bad lol

Over time salaries will increase… hopefully…

The “mountain” of debt doesn’t have to be low interest…it just has to be debt that doesn’t have an interest rate that increases as the Fed Rate increases… any fixed rate debt will benefit relative to the economy.

So a new homeowner with a fixed-rate mortgage will benefit… or a recent graduate with significant college debt will benefit.

Even people with large Credit Card debt may benefit a few years hence… as the relative cost/value of that debt goes down in relation to the economy and the value of the dollar.

This is all assuming the job market doesn’t completely tank and/or the recession is fairly short lived.

We are obviously hitting a recessionary bump… and anyone who loses their job and remains unemployed; or anyone who takes new/more debt won’t benefit.

[mookiemcgee]

I talked to an economist an he believes that high inflation is good for the national dept. said something like under Carter the National debt went down. The government paid off debt with devalued currency.

Yeah it's a double edged sword. Inflation will reduce the real value of gov't debt , but make future borrowing more expensive.

Inflating away the debt was a winning formula for Queen Victoria.

It's not as effective if you're not the Queen. The further downstream your income is from the mint, the less enjoyable is a high-inflation regime.

Yeah for average citizen there is no upside, unless you start getting paid more and have a mountain of low interest debt you locked in at pre/early covid rates then it's marginally better but for most it's bad lol

Over time salaries will increase… hopefully…

The “mountain” of debt doesn’t have to be low interest…it just has to be debt that doesn’t have an interest rate that increases as the Fed Rate increases… any fixed rate debt will benefit relative to the economy.

So a new homeowner with a fixed-rate mortgage will benefit… or a recent graduate with significant college debt will benefit.

Even people with large Credit Card debt may benefit a few years hence… as the relative cost/value of that debt goes down in relation to the economy and the value of the dollar.

This is all assuming the job market doesn’t completely tank and/or the recession is fairly short lived.

We are obviously hitting a recessionary bump… and anyone who loses their job and remains unemployed; or anyone who takes new/more debt won’t benefit.

If job market tank, inflation goes down fast. Possible but not really a strong chance of that in current setup.

Credit card debt holders with 25-29% interest rates won't benefit lol, they might sink less slowly but inflation isn't bailing them out of that situation unless we start looking like Venezuela level of inflation lol.

[jimboston]

I talked to an economist an he believes that high inflation is good for the national dept. said something like under Carter the National debt went down. The government paid off debt with devalued currency.

Yeah it's a double edged sword. Inflation will reduce the real value of gov't debt , but make future borrowing more expensive.

Inflating away the debt was a winning formula for Queen Victoria.

It's not as effective if you're not the Queen. The further downstream your income is from the mint, the less enjoyable is a high-inflation regime.

Yeah for average citizen there is no upside, unless you start getting paid more and have a mountain of low interest debt you locked in at pre/early covid rates then it's marginally better but for most it's bad lol

Over time salaries will increase… hopefully…

The “mountain” of debt doesn’t have to be low interest…it just has to be debt that doesn’t have an interest rate that increases as the Fed Rate increases… any fixed rate debt will benefit relative to the economy.

So a new homeowner with a fixed-rate mortgage will benefit… or a recent graduate with significant college debt will benefit.

Even people with large Credit Card debt may benefit a few years hence… as the relative cost/value of that debt goes down in relation to the economy and the value of the dollar.

This is all assuming the job market doesn’t completely tank and/or the recession is fairly short lived.

We are obviously hitting a recessionary bump… and anyone who loses their job and remains unemployed; or anyone who takes new/more debt won’t benefit.

If job market tank, inflation goes down fast. Possible but not really a strong chance of that in current setup.

Credit card debt holders with 25-29% interest rates won't benefit lol, they might sink less slowly but inflation isn't bailing them out of that situation unless we start looking like Venezuela level of inflation lol.

Well yeah if you have shit credit and carry a ton of shit credit card debt you’re screwed… but you’re always screwed in that case.