[tomder55]

Another Bank went down this weekend This is now the 2nd and 3rd largest bank collapse .It happened in less than a week.

Signature Bank based in NY was also a heavy better of crytpo.

Silvergate ;another cryto investing bank announced it's liquidation last week.

The Treasury Department and federal regulators insisted there was no systemic risk to the banking system .Yet they were scrambling over the weekend . Emergency measures were taken to guarantee deposits of SVB’s and Signature's customers........and of course US taxpayers will not be on the hook for the bailout .</sarc> .

The American people and American businesses can have confidence that their bank deposits will be there when they need them.

Statement from President Joe Biden on Actions to Strengthen Confidence in the Banking System | The White House

Hubba Hubba Hubba who do you trust ?
Hubba Hubba Hubba who do you trust - Google Search

[tomder55]

This has the signature of a nationwide bank crisis . This morning First National ;a bank for the rich in California had a 60% fall in shares value . JP Morgan Chase told the bank it was willing to assist. So now this is spiraling upwards and the big banks are getting involved . Clueless Joe says all is safe .

[jlisenbe]

No problem. We can just print more dollars.

[tomder55]

yes bail out the rich with monopoly money . I call SS a ponzi scheme .But now it is apparent that the whole house of cards economy is a ponzi scheme .

[tomder55]

correction it is called 'liquidity infusion'

First Republic Gets Additional Funding From Fed, JPMorgan - WSJ

[Curlyben]

Sounds better than the Bank of England version, Quantitative Easing.

[tomder55]

1st . Central Banks ;ECB and the Fed ;have to virtually print monopoly money (Quantitative Easing ) to have it available to give to local banks (liquidity injection)

This is how it worked in the past . The central bank printed more virtual monopoly money and used it to buy back bonds it had sold to the banks. The banks in turn kept the money to make their bottom line look good instead of circulating the money into the economy. They did speculate in the stock market ;and the balance they sent back to the Central Banks to invest in interest bearing bonds. You heard some government apologists claim the central banks got all the money back . This was true .Except that instead of banks repaying the money they received from the central banks with interest ;they used the money to buy bonds with the central banks owing them the interest from bonds .

I think the best illustration of this was in the Spanish Netflix show 'Money Heist ' . A gang of bank robbers break into the Royal Mint of Spain ;not to steal what is in the vaults . Instead they use the printing press to create billions of euros .

In a pivotal scene the gang leader 'the professor' explains to the police inspector what they are doing ..... a liquidity injection.

money heist liquidity injection - Google Search

[tomder55]

What a surprise !!! The 'Oracle of Omaha'.....Warren Buffet's Berkshire Hathaway reduced it's exposure to regional banks in the 4th quarter of last year slashing it's shares of Bank of New York Mellon, and U.S. Bancorp . Both stocks were down substantially today . BNY Mellon fell 6.3%, while U.S. Bancorp slipped 9% due to the current banking crisis . It's almost like he knew this would happen.</sarc>

Past performance not indicating future results ;Buffet has a habit of buying bank stocks from banks who's value has plummeted during banking crisis in the past

[tomder55]

More liquidity injection ..... Credit Suisse is going to "borrow " $54 billion from the Swiss National Bank to keep the bank afloat . Too big too fail ? Remember than 2008 mantra ?



ECB may ditch plans for a hefty interest rate hike that is IMO needed to combat world wide run away inflation. That is the only course to take to correct inflation (well that and nanny state governments need to stop reckless and prolific spending ) . It was predictable that there would be fall out from aggressive rate hikes. These economic "experts " who predicted a 'no landing' or ' soft landing' recession were delusional .

[tomder55]

and still more liquidity infusion

First Republic secures $30 billion rescue in aftermath of SVB and Signature Bank collapse | CNN Business

Meanwhile execs of First Republic cashed in $12million right before the sh*t hit the fan.

Banking executives sold millions in stock before crash: WSJ | The Hill

[jlisenbe]

Meanwhile execs of First Republic cashed in $12million right before the sh*t hit the fan.

The Biden admin exercises its usual due diligence.

[tomder55]

Here is a good one . Rep Lois Frankel managed to trade both sides of the Chase take over of First Republic. She traded First Republic sold First Republic stock March 16 and purchased Chase stock March 22 . Is it a coincidence that Monday the government forced the sale of First Republic to Chase Monday ? Another Dem has the market luck of an Evita cattle future trade.

Of course the Pelosi crime family is the worse. But it is all legal.

Strange bed fellows Matt Gaitz and AOC are teaming up in a bipartisan bill to put an end to this corruption . Good luck to them . As long as the likes of Madam Mimi run the government it won't happen.

[tomder55]

Sounds better than the Bank of England version, Quantitative Easing.

Most of the central banks got lured into this theft . Now the bill is coming due at the worse possible time . As interest rates have risen to combat run away inflation ;the assets the banks purchased are becoming due ;or the banks have to unload them at a loss.

Central Banks before the financial panic of 2008 had relatively small balance sheets . But QE was purchasing assets with printed money . Suddenly they all had huge assets on their books. This was what priming the pump was really .

The crisis was over . They had the assets on the books and they left interest rates low. That was the time to off load the assets if they could. Some banks had gov bonds. In the US the Fed bought garbage mortgage backed securities. Now they became asset managers . Since the assets they held were junk; suddenly central banks were in the position of losing money . They can't just make that go away.

They either realize the loss by selling the asset; or they have paper losses on their balance sheets .

Ask any of the geniuses in 2008 if that was their intent ? Of course not . Actually they had no intent (except conspiracy theorist like me who think that this scheme was an intentional theft of national wealth). They had no plan except this was the new normal.

Fast forward to today. Sweden's Riksbank has asked the government to make an equity injection (see the link to 'Money Heist') . They purchased $94 billion in bonds and assets between 2015-2021.

“The loss and negative equity are due to the sharp rise in interest rates in 2022. This has led to a fall in the value of the bonds purchased by the Riksbank during the period 2015-2021 to maintain confidence in the inflation target, secure the credit supply during the coronavirus pandemic and contribute to good economic development,” said Mr Thedéen.
When the value of the Riksbank's holdings of bonds decreases, it leads to unrealised losses that burden the Riksbank's result and equity. “A negative equity does not affect the Riksbank’s ability to conduct monetary policy in the short term. But to maintain confidence in an independent monetary policy in the long term, it is necessary that the Riksbank is financially independent, that is, has sufficient equity and earnings to cover its costs,” continued Mr Thedéen.

The Riksbank proposes that equity be restored to the statutory base level | Sveriges Riksbank

The Brits are in the hole for $165 billion.

Quantitative tightening (QT) is the converse of quantitative easing (QE). QE is the purchasing of government debt by the Bank in order to stimulate the economy. The Bank of England implemented QE repeatedly in the thirteen years following the 2008 financial crash, creating £875 billion of new money.
As part of QT, the Bank is directly selling government debt back into the market.
In 2022, amid the outbreak of inflation, the Bank of England became the first major central bank to vote to sell debt back to the market as part of QT. The Bank’s Governor, Andrew Bailey, told the Committee that doing so would give them more space to purchase gilts again in future should the UK economy require it.

Bank of England has taken a leap in the dark on quantitative tightening, Treasury Committee concludes - Committees - UK Parliament

Brit taxpayers are on the hook.

The US Fed is doing this under the radar. They wait for the bonds to mature before writing them off.

In response to inflation running well above its long-run target, the Fed began unwinding its accommodative monetary policy this year. This entailed ending QE in March and then beginning QT in June. When QE ended, the Fed reinvested any maturing securities to maintain the size of its balance sheet. With QT, the Fed stopped reinvesting up to $30 billion in maturing Treasuries and $17.5 billion in maturing MBS every month, passively shrinking its assets as those securities "roll off" without being replaced. Those caps are scheduled to rise to $60 billion and $35 billion, respectively, in September.

The Fed Is Shrinking Its Balance Sheet. What Does That Mean? | Richmond Fed

This is a clever way to hide the fact that they hold $1.3 trillion in unrealized losses.

Pro Take: Fed Operating Losses Are Piling Up Amid Higher Interest Rates - WSJ

The problem is that the interest on those assets doesn't go away . As interest rates have risen; more $ is needed to finance the debt. Tens of $$$ billions a year in the federal budget will be used to pay off the interest .

Does that deter the government ? Do their reign in their spending ? On the contrary. They spend like drunken sailors (a huge insult to drunken sailors )

Today when you see the high costs of food and housing ,you can thank the central banks for picking your pocket.

Inflation: Grocery prices reaccelerate, now 25% higher than pre-pandemic (yahoo.com)

Home price inflation is so high, it's changing American economic life - Marketplace