I’m completely fine guaranteeing deposits. If they didn’t do that nobody in their right mind would use any bank other than Wells, JPM, Citi and BoA.
The equity is getting wiped out and all the execs are toast with their stock zeroed out.
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She said they wouldn’t bail out the bank or the shareholders, she didn’t say anything about backstopping deposits. There are definitely plenty of innocent people getting bailed out here, but also definitely some who knew what they were getting into and benefitted from it.
We’ll see. The executives sold a ton of stock right before it went under, and I wouldn’t be surprised if they made some other leveraged plays that got them back a lot of their equity.
So is fdic insurance unlimited starting today or this some case by case shenanigans now?
It’s effectively unlimited, because they’re going to say “systemic risk” every time it looks like.
Well, you know, assuming some billionaires bank at your bank. If it’s just middle class folks, fuck off and read the fine print!
If I ever have reason to have that much cash sitting in a bank definitely going to be Bank of America. I mean America is in the name, can’t let them lose depositors money
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Looks like the safest are JP Morgan, BOA, Citi, and Wells. And Wells sucks. BOA seems like a good choice. And Berkshire has a lot of BOA stock, so they must be rock solid.
It’s only unlimited if billionaires have exposure. If this was a small community bank/credit union I fucking guarantee you people who had more than $250k in their accounts would be fucked.
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So for all intents and purposes, the special assessment levied against all banks will end up being paid for by all bank customers in the long run, so taxpayers are paying for it.
My question is this: if the Fed/FDIC did everything they announced in the release today EXCEPT bail out SVB clients, AND promised to backstop deposits at all other banks that weren’t engaged in risky behavior… What would the difference be tomorrow?
Do we know how many % short the bank actually was yet?
This seems like…exceptionally good regulation?
:vince1:
Cramerrrrrrrrrrrrrrrrrrrrrrr
Does anyone know what other banks Cramer suggested investing in? I’d like to buy puts.
In all seriousness, isn’t it just htat Cramer is on every single day and he just scatter shots everything such that “there’s always a tweet?”
Wonder what % of possible US stocks Cramer has recommended? He has to do something to take up a lot of time
ETA
My pony also got Cramer vote of approval
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Perhaps but he has recommended a ton of the stuff that’s collapsed within months of when he recommended it. My theory is his buddies at the hedge funds and investment banks tell him what they need to unload when they’re stuck holding bags of shit, and he pumps them on CNBC in exchange for some bags.
He recommended Bear and Lehman as they were about to collapse. Then he pushes SVB and Signature shortly before their collapse?
Still shitshow because nobody knows what “risky behavior” means much less who engaged in it. Further, the whole reason for a lot of smaller banks to exist is to engage in “risky behavior” by making loans concentrated in their local communities, SVB is just a much larger and particularly risky and unsympathetic example of that.
If just SVB depositors were allowed to be haircut and everyone else was backstopped that would be very weird but practical result is a lot of hours for the lawyers sorting things out and lot of people/companies quasi-randomly losing a manageable amount of money that is ultimately fine, like your example of you possibly losing a few bucks from Moderna possibly having deposits at SVB.
Fair, I mean, they’d have to define it. Obviously retail customers wouldn’t know but they’re not the ones making the withdrawals that really threaten liquidity.
That’s also a good point, but how many of these smaller banks have many people with > $250K on deposit?
Perhaps weird but it would least set a precedent that banks engaging in risky behavior aren’t safe to bank with, it would significantly increase pressure to restore banking regulations to prevent that, and thus I think would be a good thing.
Right now, what’s your confidence level that old regulations will be restored? Mine is < 25%. IMO the ideal outcome is stress testing for all FDIC-backed banks, with an increased amount insured.