Erm...if by now people are still clinging to any illusions that everything that's happened over the last three years was not planned and orchestrated, they are in for the rudest awakening of their entire lives and probably will not survive the shock. Seriously. The Fed quietly zero'ed the formula for fractional reserve amounts during covid1984, AND they pulled back trillions of liquid cash from the system, taking it out of circulation. The paper printing was reportedly stopped in early 2022.
- All of this has been planned, all of it. Puppet governments in first world countries everywhere; embarrassing, incompetent, and corrupt (look at the US corporation with generals parading about in stilettos and lipstick, a drooling president with obviously advancing dementia, drunken congress critters, pedophilia apologizers, family racketeering connections.....you name it! It's a side show in the "greatest show on earth"!) .....breaking their own laws, ignoring all the fallout that is happening across the country, encouraging it all to continue. The people see it everywhere they turn; even the normies can't miss it, although a lot of them continue pretending that none of it matters.
- Why? So that we-the-people all across the planet will be so traumatized, terrorized, broke, sick and beaten down that we will happily embrace the savior of the world....the global one world government with its A.I. controlled social credit cattle tagged system of central bank digital currency.
- Get rid of the rose colored glasses and see the big picture. This shite is only going to get worse, and the longer that people deny it, the longer they fall for the divide and conquer narratives that keep being pushed. Pull your tribe together and circle the wagons.
I’m glad you’re addressing this matter today. When I first heard that it was ‘uninsured’ funds being transferred, I thought, is that going to be good enough to inspire depositors’ confidence? But what you say makes sense - the other banks will eventually have a shark fest, carving up and devouring the next big bank to go under.
This is the first time I’m hearing about the Fed’s new Bank Term Funding Program, so I know nothing about it. As time goes by, could you please let us know what you think of it? Is it a good idea, is it working out as planned, are there particular downsides to the program that you can see developing? Thanks!
The Bank Term Funding Program is, of course, part of the government's "backstop" erected post-SVB to head off future bank runs.
That 11 big banks plowed $30 Billion into First Republic AFTER the program was set up does not speak well of the program's efficacy thus far.
I will note that short term loans by the Federal Reserve have spiked this past week to recession-level highs. Some of that is BTFP lending, and the rest is through the Fed's traditional lending channels such as the discount window.
All this has been done to allow banks to kick the $620 Billion debt securities portfolio impairment can down the road, the can they have been avoiding resolving since interest rates first began rising in 2021 (BEFORE Powell started raising the federal funds rate in 2022).
In theory, it is the nature of banking that when you deposit your money with a bank, you authorize the bank to use a portion of the money as investment capital, in return for which you receive interest.
Given the lack of required reserves and low coverage ratios at even the major "systemically important banks", how far from this theory reality has strayed would be a topic for an entire book worth of articles!
The ethics of the bailout alone are murky at best.
However, it is indisputably to the benefit of First Republic's other depositors that the bank not collapse in a bank run. It is indisputably to the benefit of the small and regional banking sector that there be no more panicked bank runs.
By far the larger question in my mind is whether the banking sector as a whole will own up to being asleep at the wheel while Powell's rate hikes triggered a $620 billion erosion in the fair market value of banks debt securities portfolios.
Interest rates began rising in 2021, BEFORE Powell started raising the federal funds rate. The debt securities portfolios started losing money when the market rates started rising, BEFORE Powell started raising the federal funds rate.
Yet here we are, over a year down the road and the banks STILL don't have a plan for resolving the $620 Billion haircut they can't avoid getting.
Erm...if by now people are still clinging to any illusions that everything that's happened over the last three years was not planned and orchestrated, they are in for the rudest awakening of their entire lives and probably will not survive the shock. Seriously. The Fed quietly zero'ed the formula for fractional reserve amounts during covid1984, AND they pulled back trillions of liquid cash from the system, taking it out of circulation. The paper printing was reportedly stopped in early 2022.
- All of this has been planned, all of it. Puppet governments in first world countries everywhere; embarrassing, incompetent, and corrupt (look at the US corporation with generals parading about in stilettos and lipstick, a drooling president with obviously advancing dementia, drunken congress critters, pedophilia apologizers, family racketeering connections.....you name it! It's a side show in the "greatest show on earth"!) .....breaking their own laws, ignoring all the fallout that is happening across the country, encouraging it all to continue. The people see it everywhere they turn; even the normies can't miss it, although a lot of them continue pretending that none of it matters.
- Why? So that we-the-people all across the planet will be so traumatized, terrorized, broke, sick and beaten down that we will happily embrace the savior of the world....the global one world government with its A.I. controlled social credit cattle tagged system of central bank digital currency.
- Get rid of the rose colored glasses and see the big picture. This shite is only going to get worse, and the longer that people deny it, the longer they fall for the divide and conquer narratives that keep being pushed. Pull your tribe together and circle the wagons.
I’m glad you’re addressing this matter today. When I first heard that it was ‘uninsured’ funds being transferred, I thought, is that going to be good enough to inspire depositors’ confidence? But what you say makes sense - the other banks will eventually have a shark fest, carving up and devouring the next big bank to go under.
This is the first time I’m hearing about the Fed’s new Bank Term Funding Program, so I know nothing about it. As time goes by, could you please let us know what you think of it? Is it a good idea, is it working out as planned, are there particular downsides to the program that you can see developing? Thanks!
The Bank Term Funding Program is, of course, part of the government's "backstop" erected post-SVB to head off future bank runs.
That 11 big banks plowed $30 Billion into First Republic AFTER the program was set up does not speak well of the program's efficacy thus far.
I will note that short term loans by the Federal Reserve have spiked this past week to recession-level highs. Some of that is BTFP lending, and the rest is through the Fed's traditional lending channels such as the discount window.
https://fred.stlouisfed.org/graph/?g=11ma7
All this has been done to allow banks to kick the $620 Billion debt securities portfolio impairment can down the road, the can they have been avoiding resolving since interest rates first began rising in 2021 (BEFORE Powell started raising the federal funds rate in 2022).
https://fred.stlouisfed.org/graph/?g=11my9
"Out of the woods?"
For one thing, they do think it is their money!
Thirty billion dollars from 11 banks?
Thirty billion dollars. Not whose thirty billion dollars, just thirty billion dollars.
Oh well, compared to 6.9 trillion dollars, it is pocket change.
In theory, it is the nature of banking that when you deposit your money with a bank, you authorize the bank to use a portion of the money as investment capital, in return for which you receive interest.
Given the lack of required reserves and low coverage ratios at even the major "systemically important banks", how far from this theory reality has strayed would be a topic for an entire book worth of articles!
The ethics of the bailout alone are murky at best.
However, it is indisputably to the benefit of First Republic's other depositors that the bank not collapse in a bank run. It is indisputably to the benefit of the small and regional banking sector that there be no more panicked bank runs.
By far the larger question in my mind is whether the banking sector as a whole will own up to being asleep at the wheel while Powell's rate hikes triggered a $620 billion erosion in the fair market value of banks debt securities portfolios.
Interest rates began rising in 2021, BEFORE Powell started raising the federal funds rate. The debt securities portfolios started losing money when the market rates started rising, BEFORE Powell started raising the federal funds rate.
Yet here we are, over a year down the road and the banks STILL don't have a plan for resolving the $620 Billion haircut they can't avoid getting.
620 Billion here, 6.9 Trillion there, pretty soon you're talking Real Money.