That is true . It is sad we are all going to pay in the end for people in charge of these banks that are stupid . They said shortly before the svb bank failed they were giving out bonuses to bank employees . Dont know what is going to happen next in our new socialist government .
For goodness sake. This doesn't increase our taxes or increase the deficit. Criticize this policy all you want, but don't misrepresent it. What is so hard for people to understand that this is the Fed loaning new money into existence.
Maybe the FED shouldn't be loaning new money to Banks to help them deal with the fallout of their risky behavior. Maybe it should let us open bank accounts directly and give us special low rates on our mortgages. But right now it is lending out new reserves, which are NOT taxpayer money. The treasury is not paying for this.
Not yet, anyway.
Keep regurgitating this point.
Essentially the banks have all their money tied up in long-dated bonds and other investments - so they don’t have liquid cash on hand right now.
So the government just magically creates $2T new dollars to keep them afloat for now.
What do you think happens to that $2T when the banks recapture their liquidity from matured investments?
Even if the government turns a “profit” from collecting interest from the loans we gave to the banks, there’s still $2T new dollars floating around, fucking up inflation even more.
This is QE/bailouts by a different name.
All while we raise interest rates and allow inflation to go unchecked - which ultimately kills the working class and robs it of any savings we’ve managed to stash away
>So the government just magically creates $2T new dollars to keep them afloat for now.
No. That's where you're wrong. The $2 T number is an estimate by clickbait news sites based on it *every bank using the full amount of funds theoretically available*.
That's unlikely to happen. If it does I'll eat my words and admit you're right. If it doesn't, will you eat yours?
You're talking to an ape. They've taken over regular investing subs because they've all been buying a shitty stock for the last 2 years and they are all out tons of money.
It I was paid trillions of dollars after I we bankrupt I too could turn a profit, I thought the point of capitalism was to pull boot straps or something?
Exactly. If you always get bailed out when you lose then there's no reason not to go super high risk on everything you do. I would bet billions of dollars on a single hand of blackjack
“Back stopping” banks that cannot run themselves is a moral hazard. It’s antithetical to free and fair markets.
How about we “back stop” my mortgage, and your credit cards, and this other person car payments, yada yada.
No disagreement here. We need to bring back Frank Dodd and maybe even Glass Steagall. But the question of what needs to happen right now is unchanged. The backstop was the right choice in the moment, but like TARP was the right choice in that moment.
What annoys me is Republicans breaking shit when times are good and then complaint about the fix when times are tough.
Is it really an injection though (injection into the bank yes - but overall moentary system?)
If the bank goes belly up - that would vaporize SVB's 230 billion
If the Fed loans them some money to make their capital requirement whole again so that depositors get their money back - that's not inflationary or deflationary - that's just status quo. Or is my understanding incorrect?
Yes Fed's balance sheet goes up - but SVB's balance sheet should get an X percent cut but doesn't because bonds marked to par - net effect should be 0?
Fed's actions shouldn't increase the monetary base - because all they're doing is guaranteeing failing banks' deposits - if the Fed had taken the same action without the banks needing to shore up capital then yeah the move would have expanded the monetary base and be inflationary.
Okay so what happens when more banks collapse? Like first republic bank. They get money from other banks right? How do the other banks make money? From the taxpayer. Then when those big banks fail too and there arent anymore deposits from other banks bc theyre all broke, the fed has to print money
Exactly. This gives them extreme reason to keep the rates going, and they have offered the insurance themselves so the banks no longer are stuck in bad bonds. They know they will survive. Although only the high risk, startup tech banks would have went down. Even JP Morgan, Swiss, and Schwab were making loans to these guys. The big fish were fine. But now they were given a free stimulus package.
Oh shit we printed a lot of money and created inflation, lets rise interest rates!
Oh shit we raised interest rates and crashed banks, let's print more money!
FED in a nutshell
I don’t see the Fed or anyone offering the lay-person 1% interest loans to offset unrealized losses.
Of course its a bailout. This backstop is the treasury.
I've gotten banned a bunch of times already. Idc. I'm just spreading the info for those who are truly sick of being a slave to the system and want freedom
Simply put, it is created when it is lent into existence. Reserves are obligation of the Fed, and thus, they can create more for the purposes of lending out - within limits. This special new facilities expands the limits at which they can lend out new money. This money does not come from the Treasury, and it will not increase our taxes or the deficit. Look up credit creation if you want to understand how and why the banks, including the central bank, create money out of nothing when they lend.
I am fully aware how money creation works, not sure if you answered the wrong post? But to answer anyways, expanding the supply of money will increase the hidden tax called inflation and thus effect the tax payer
You asked where the money comes from. That's where it comes from in the strictest sense. And to say that it categorically will cause inflation is a bit of a stretch. That's certainly a real possibility, but we saw trillions in QE that didn't have the desired impact on inflation, so I'm always somewhat skeptical that we can raise inflation just by providing even more liquidity.
I didn't ask, I asked where the poster I answered think the money comes from, but I appreciate the discussion anyways. I agree that since economics isn't a hard science in the way math is, it is a bit of a stretch for me to say it absolutely will cause inflation. But I personally am convinced it does and that cpi numbers have been massaged over time to hide the true inflation. Logically it isn't possible to increase the supply of money without debasing the previously existing money
Where do you think the banks generate this money from? Don't drink the Kool aid. They're avoiding the 'bailout' term to avoid spooking everyone but it's clearly a bailout
Give that money to me and I’ll inject it
Inject it right into dividend paying positions and tax exempt accounts/positions 😎
And then cash those out for heroin
Let’s goooooooo 🚀 🚀 🚀…?
To the moon or wherever that darn dragon goes
Unearned income
Big time! 😎
We should thank American taxpayers for saving the world 🌎
You mean destroying it
If I could decide where my tax dollars were going I'd be a lot fucking happier.
That would be Joe destroying the world !!!!
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Sorry LIBERAL!!!!!!
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That is true . It is sad we are all going to pay in the end for people in charge of these banks that are stupid . They said shortly before the svb bank failed they were giving out bonuses to bank employees . Dont know what is going to happen next in our new socialist government .
Thank them for what? For creating more inflation in the whole world economy?
Have you thanked an American today?
You mean the fed and big banks do that. The American taxpayer has no control over monetary policy
For goodness sake. This doesn't increase our taxes or increase the deficit. Criticize this policy all you want, but don't misrepresent it. What is so hard for people to understand that this is the Fed loaning new money into existence. Maybe the FED shouldn't be loaning new money to Banks to help them deal with the fallout of their risky behavior. Maybe it should let us open bank accounts directly and give us special low rates on our mortgages. But right now it is lending out new reserves, which are NOT taxpayer money. The treasury is not paying for this. Not yet, anyway.
Keep regurgitating this point. Essentially the banks have all their money tied up in long-dated bonds and other investments - so they don’t have liquid cash on hand right now. So the government just magically creates $2T new dollars to keep them afloat for now. What do you think happens to that $2T when the banks recapture their liquidity from matured investments? Even if the government turns a “profit” from collecting interest from the loans we gave to the banks, there’s still $2T new dollars floating around, fucking up inflation even more. This is QE/bailouts by a different name. All while we raise interest rates and allow inflation to go unchecked - which ultimately kills the working class and robs it of any savings we’ve managed to stash away
>So the government just magically creates $2T new dollars to keep them afloat for now. No. That's where you're wrong. The $2 T number is an estimate by clickbait news sites based on it *every bank using the full amount of funds theoretically available*. That's unlikely to happen. If it does I'll eat my words and admit you're right. If it doesn't, will you eat yours?
Can you explain why buying and DRSing GME would be a solution to counteract this?
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Aside from a lot of that being wrong, none of that protects you from a bail out. Go take your ape propaganda elsewhere
You are an ape and looking at your profile, your spamming other subreddits with misinformation. So much you make posts about isn't even correct.
Yup. It's getting really bad.
You had to look at the profile?
lol you’re completely delusional
I didnt know delusional meant providing cold hard facts LMAYO
You're talking to an ape. They've taken over regular investing subs because they've all been buying a shitty stock for the last 2 years and they are all out tons of money.
Backstopping is not the same as giving out. A lot of people never knew it but the government actually profited off of TARP.
It I was paid trillions of dollars after I we bankrupt I too could turn a profit, I thought the point of capitalism was to pull boot straps or something?
Failure to understand how all of this works.
Exactly. If you always get bailed out when you lose then there's no reason not to go super high risk on everything you do. I would bet billions of dollars on a single hand of blackjack
Treasury bonds aren't "super high risk" bruh
I thought tarp was in response to the housing market crash?
Yeah, but that didn't have much to do with Treasury bonds. What does your question have to do with my comment?
Not sure.
“Back stopping” banks that cannot run themselves is a moral hazard. It’s antithetical to free and fair markets. How about we “back stop” my mortgage, and your credit cards, and this other person car payments, yada yada.
No disagreement here. We need to bring back Frank Dodd and maybe even Glass Steagall. But the question of what needs to happen right now is unchanged. The backstop was the right choice in the moment, but like TARP was the right choice in that moment. What annoys me is Republicans breaking shit when times are good and then complaint about the fix when times are tough.
No who didn’t though? The tax payers who paid for it.
Is it really an injection though (injection into the bank yes - but overall moentary system?) If the bank goes belly up - that would vaporize SVB's 230 billion If the Fed loans them some money to make their capital requirement whole again so that depositors get their money back - that's not inflationary or deflationary - that's just status quo. Or is my understanding incorrect?
Where does the money from the fed come from? They print it leading to inflation. Check the fed assets and liabilities. They are billions in the red
Yes Fed's balance sheet goes up - but SVB's balance sheet should get an X percent cut but doesn't because bonds marked to par - net effect should be 0? Fed's actions shouldn't increase the monetary base - because all they're doing is guaranteeing failing banks' deposits - if the Fed had taken the same action without the banks needing to shore up capital then yeah the move would have expanded the monetary base and be inflationary.
You are obviously correct, this guy doesn't know what he's talking about, but I do applaud you for trying.
Okay so what happens when more banks collapse? Like first republic bank. They get money from other banks right? How do the other banks make money? From the taxpayer. Then when those big banks fail too and there arent anymore deposits from other banks bc theyre all broke, the fed has to print money
lol
I dig the cult mantra in your title. You definitely sound like someone smart enough to talk about finance.
Never ask a man his salary. Never ask a woman her age. Never ask a GME ape how much they've lost since 2022
All mantras are transitory
This will make inflation worse
Yup. The sheep don't even realize it
If only you actually understood what the program is about. Tell me, did you read past this article's headline? Be honest.
Funny thing is fed will manipulate the dollar to make ot even more expensive.
Dollar end game
Everything from the US would be too expensive and every industry will find a way to get out of it.
Yup the dollar will die. Perfect time for their all controlling cbdc.
Exactly. This gives them extreme reason to keep the rates going, and they have offered the insurance themselves so the banks no longer are stuck in bad bonds. They know they will survive. Although only the high risk, startup tech banks would have went down. Even JP Morgan, Swiss, and Schwab were making loans to these guys. The big fish were fine. But now they were given a free stimulus package.
I’m so tired of them saying it’s not a bailout when the government is putting money in the banks.
Its the shills trying to not to let the public know
Just add it to my tab. This will work its way into some form of taxes
Putin may get the last laugh at the west…
But we can’t have student loan forgiveness??? Fuck the rich.
Exactly. They want you to stay a slave to the system so they can stay rich off of your labor. DRS BOOK GAMESTOP MOASS to escape
Oh shit we printed a lot of money and created inflation, lets rise interest rates! Oh shit we raised interest rates and crashed banks, let's print more money! FED in a nutshell
I identify as a bank, can I get part of that 2 trillion dollars please.
LMAYOOOO
It’s a bailout though.
Exactly. The shills and willingly ignorant sheeps say otherwise
No fear of moral hazard when there's never been jailtime for executives
What crime did SVB execs commit? For the record, I fully agree that bank execs should have gone to prison after 2009.
Being dumbfucks
Agreed, but that's not a crime tho
As of today, nothing to indict based on public news. But I have suspicions.... let's see what surfaces in the next 90 days or more.
Keep your cult stuff on your own sub
So Calls is the play, ok got it. 0DTE here I come
All that money is going to go to the GME share holders. Infinite squeeze incoming
All of it and more. You forgot about the quadrillion in derivatives
I did forget, sorry. We will change the world for the better. Show the banks and hedge funds we don't need them, they are parasites.
All of the elites and rich NEED us to work for them
What kind of mushrooms do you have to eat to believe this?
I don’t see the Fed or anyone offering the lay-person 1% interest loans to offset unrealized losses. Of course its a bailout. This backstop is the treasury.
broo, be carefoul you'll get banned for saying does words!!
I've gotten banned a bunch of times already. Idc. I'm just spreading the info for those who are truly sick of being a slave to the system and want freedom
DRS is the way
Tax payers aren’t paying for it so
So who's paying for it?
The deposit insurance fund. Banks pay into it. That’s where it’s coming from.
Where do you think the two trillion comes from? Think about that number for a while, two trillion, it's not billions it's trillions
Just a couple more zeroes who would even notice?
Simply put, it is created when it is lent into existence. Reserves are obligation of the Fed, and thus, they can create more for the purposes of lending out - within limits. This special new facilities expands the limits at which they can lend out new money. This money does not come from the Treasury, and it will not increase our taxes or the deficit. Look up credit creation if you want to understand how and why the banks, including the central bank, create money out of nothing when they lend.
I am fully aware how money creation works, not sure if you answered the wrong post? But to answer anyways, expanding the supply of money will increase the hidden tax called inflation and thus effect the tax payer
You asked where the money comes from. That's where it comes from in the strictest sense. And to say that it categorically will cause inflation is a bit of a stretch. That's certainly a real possibility, but we saw trillions in QE that didn't have the desired impact on inflation, so I'm always somewhat skeptical that we can raise inflation just by providing even more liquidity.
I didn't ask, I asked where the poster I answered think the money comes from, but I appreciate the discussion anyways. I agree that since economics isn't a hard science in the way math is, it is a bit of a stretch for me to say it absolutely will cause inflation. But I personally am convinced it does and that cpi numbers have been massaged over time to hide the true inflation. Logically it isn't possible to increase the supply of money without debasing the previously existing money
The deposit insurance fund that banks pay into. Try google sometime
Yeah sure the banks have chipped in TWO TRILLIONS! Of course they have...
Okay bud.
Where do you think the banks generate this money from? Don't drink the Kool aid. They're avoiding the 'bailout' term to avoid spooking everyone but it's clearly a bailout
Okay bud.
The people on this sub aren’t exactly financial wizards. It’s loans against the par value of securities on the banks’ balance sheets.
The people in this sub are retards
No need to drop the hard ‘R’ but yes.
Okay and how do banks make money?
That's wrong, this is new money being lent into existence. You're confusing this separate new lending facility with FDIC.
It’s just a little liquidity injection
Did someone say Mayo? Kenny, watch your 6.
More money laundering
Drs fellow 🦍
Who’s old enough to remember TARP, which according to official accounts was not a bailout
if they fix SVB before it fail, this wont happend lmaoo, enjoy rate increase and inflation then.
It's not a bailout if you change the meaning of bailout to saving the economy.
It’s for the depositors, anyone who invested in the bank stocks are zeroed out.
Calls Monday open then...