Day: March 13, 2023

Another One Bites The Dust

For the past week or so there has been the failure of a couple of banks…..something not happening since 2008 and Lehman Bros. Well a 3rd bank has failed.

The government has taken what the AP calls “extraordinary steps” to avert a potential banking crisis in the wake of Silicon Valley Bank’s failure, with the Treasury Department, Federal Reserve, and FDIC issuing a joint statement Sunday assuring SVB clients they would all be protected and that depositors, starting Monday, will be able to access their money, even if their holdings exceed the FDIC’s $250,000 insurance limit. The statement also notes that “no losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.” As the AP points out, there has been no bailout of the actual bank—banks, actually; more on that below:

Another bank fails: Signature Bank, which is based in New York, also failed and was being seized Sunday, regulators announced. The feds’ statement says “a similar systemic risk exception” will apply to Signature Bank: “All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.” It’s the third-largest bank failure in the nation’s history at more than $110 billion in assets (SVB was the nation’s second-largest ever). It’s also the third bank failure in recent days after Silvergate Bank and then SVB.

  • Shoring up other banks: The feds’ statement said “additional funding” will be available “to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors,” and First Republic Bank has already announced it’s getting access to that funding as well as funding from JPMorgan Chase. The Wall Street Journal has more on that.
  • Emergency lending program: The Fed also announced an emergency lending program Sunday, under which banks that need to raise money to pay depositors can borrow it from the Fed instead of dumping Treasuries or other securities, as SVC was forced to do at a loss to cover customer withdrawals. MarketWatch has more on the program.
  • Who’s not protected: The feds’ joint statement notes that “shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed.” Axios reports that SVB had reportedly paid out bonuses to some US employees hours before it was seized.
  • Biden comments: Speaking as he boarded Air Force One Sunday on his way back to Washington, Biden said he was “firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.” He said he’d address the situation in further remarks Monday.
  • What will Monday look like? Analysts predicted financial markets would be soothed a bit by Sunday’s moves. “Monday will surely be a stressful day for many in the regional banking sector, but today’s action dramatically reduces the risk of further contagion,” economists at Jefferies, an investment bank, said in a research note.

Is this the beginning of another economic crisis?

Shades of 2008!

You might want to keep an eye on your accounts in these large banks….you may be in line for a problem.

I Read, I Write, You Know

“lego ergo scribo”

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Far Right Demands

Let’s start the week with some outrageous Right wing demands.

These are the demands being made by House far righters, the Freedom Caucus, (love the name it is anything but about freedom)….

The debt ceiling debate is about to begin and these are the demands from the far right for that debate.

A cadre of far-right Republicans announced Friday that they may only vote to raise the debt ceiling if Congress agrees to cut hundreds of billions of dollars in social spending, limit federal agencies’ future budgets, and abandon progressive elements of President Joe Biden’s economic agenda.

Since Washington’s arbitrary and arguably unconstitutional borrowing limit was breached in January, the Treasury Department has implemented “extraordinary measures” enabling the U.S. government to meet its obligations for a few additional months. Unless the Biden administration takes unilateral action to disarm the debt ceiling, Congress has until sometime between July and September to increase or suspend the nation’s borrowing cap. If Republicans refuse to do so, the U.S. is poised to suffer a catastrophic default.

Led by Rep. Scott Perry (R-Pa.), the House Freedom Caucus said Friday in a statement that its 45 members would “consider voting” to raise the debt limit if their colleagues in the House and Senate agree to:

  • Eliminate Biden’s $400 billion student debt cancellation plan;
  • Rescind unspent Covid-19 relief funds;
  • Nix nearly $400 billion worth of clean energy investments approved in the Inflation Reduction Act (IRA);
  • Repeal the IRA’s roughly $80 billion funding boost for the Internal Revenue Service (IRS);
  • Restore Clinton-era work requirements on welfare recipients;
  • Require congressional approval before any major federal regulations can take effect;
  • Cap future federal spending at 2022 levels for the next 10 years; and
  • Find “every dollar spent by Democrats that can be reclaimed for the American taxpayer.”

This is the official release from the Caucus…

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I see lots that will effect the common voter and very little about actually decreasing the “reach” of government.

I love these ‘small government’ conservatives and their alt-right blowhards.

What crap!

I Read, I Write, You Know

“lego ergo scribo”