If our executive branch can spend $ on whatever it wants.
……the precedent here.
I understand that they want to prevent a panic, but this is a short term fix that cannot be supported if the trend continues.
The thing that undermines credibility as much as anything (beyond incompetence in the past by the Fed such as claiming that the inflation was transitory) is the claim that it won’t cost the tax payers a thing. The alternative is to print the money which will worsen inflation and make the tax payers cover it in a less obvious way.
Any money in reserve will have to be replaced. This will end on the tax payers shoulders.
Instead, Treasury, the Fed and FDIC let them go belly up, then are going to magically back-stop the deposits.
The money isn't there. It has been loaned out except for about 10%. So, it has to come from somewhere.
This was entirely predictable.
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So much for making Billionaires pay their share. 87% of SVB deposits uninsured at normal FDIC Levels. As for the taxpayers paying nothing, we will pay with the cruelest tax of all...........Inflation
Link: https://thelibertydaily.com/fed-moves-to-protect-their-woke-big-tech-donors-by-making-fdic-insurance-limitless/
for small companies. So, keeping those companies afloat has value.
That said, this is an odd way to do it, especially when the impact of increasing interest rates was predictable.
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….”what’s a “little” more at this point?”.
In truth, they are likely lying. They will raise taxes again down the road after the spotlight dims.
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Based on the actions of the CEO (selling stock right before going belly up), management (paying employees bonuses) and their legal staff (approving what are preferences under bankruptcy law), SVB seems pretty shady or at the very least incompetent.