Less than 25% is right, would have to flip this vote:
Now imagine a bunch of tech startups with billionaire VC money in them took a 10-15% haircut on their cash deposits. Odds the regulation would be passed again? o/u 50%?
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Per Forbes:
The bank faced $42 billion in deposit withdrawals on Thursday, March 8 alone. The bank run was the combined outcome of increased cash burn with its startup clients and uncertainty surrounding the bank’s solvency position. SVB had barely 4% in non-interest-bearing deposits and was paying 0.60% more than its peers on its interest-bearing deposits.
So they were paying 60 bips more than their competitors.
Think rich tech bro response to a SVB haircut would be a lot of whining then a combination of putting money in biggest banks that these regulations already apply to and some weird self-banking shit.
First Republic is toast. Cramer just said their CEO told him it’s business as usual, no sizable outflows, no liquidity issue, very stable.
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SWONGKS
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But wealthy people don’t walk into a bank branch and say, “Give me my $X million in cash.” They do it with wires. Lack of in-person activity doesn’t necessarily mean much, right?
Second guy is a dumbass. Withdrawals happen with a few clicks online these days, maybe need to get on the phone if it’s an especially large withdrawal.
The reverse of this:
C’mon guys. I certainly understood your posts before I posted mine. That’s why the tweet with no mayhem is funny.
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Fed Reserve doesn’t regulate the banks by itself. it’s a shared responsibility with FDIC and OCC and boards in each state, and really only FDiC has a very detailed look at the balances, and there’s good reason why that’s very much secret before the agents come in to take over.
also, the bank in question was deregulated by executive power above the Fed in 2018. that pretty much absolves powell of knowledge that the bank failure is coming. sure, he knows there’s probably some banks sitting on unrealized losses in bonds, and there is a risk they will be insolvent if he raised rates, but just like he couldn’t compel banks to give out loans without lower rates, he does not control what they buy at that moment.
Is this just crypto nonsense or is the traditional banking system going to be jammed up as well?
SVP was not really crypto related at all, nor are a few of the others that appear to be teetering afaik (First Republic, Western Alliance). They appear to be banks for the wealthy that are susceptible to runs that didn’t have enough liquidity and now people know, so there are runs.
Right, forgot, Powell primarily uses backwards looking, high level jobs and inflation data when making his decisions and doesn’t really look into much beyond that. Genius, trying to think one or two steps ahead is a fool’s errand so don’t even bother trying!
Good thing his decisions don’t have much of an impact on anybody…
Actually, crypto is pumping right now on fears that the traditional banking system is more risky. 
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wat? do you have data from the future that rhe fed refuses to look at? huge if true.
Inflation is still 6.4%, it still needs to be cut roughly in half. This should be deflationary, but we’ll see how much. I think we see a pause 3/22, but I don’t think they’re done yet. Wouldn’t be surprised if it’s a pause and warning to banks to get their houses in order.
Watching CNBC right now and the wealthy are definitely absolutely fucking DONE caring about inflation. But one way or another, there has to be a price to pay for the extended zero rate environment and the printing. One way or another. We’re seeing the ramifications play out through the strong rate hikes side of the decision tree. If he backed off, and inflation was higher at 8-10%, you’d be seeing a whole different set of very bad consequences.
I place far more blame on Bernanke/Yellen for keeping the rate too low for too long after 08-09. Powell has been dealt a shit hand.
I have information that if you personally are in charge of the entire US economy, you personally set rates at 2%, you personally guide that rates will gradually increase from there and then you turn around and double them in one year that then that will result in trillions in paper losses throughout the US economy and now you are putting out fires everywhere. Not great, Jerome.
his decisions did not cause any bank run, and no he shouldn’t base rate hikes based on what he expects cable tv and message board investors to start screaming before transferring their accounts on monday. it is as much a serious threat to global economy as predicting that crypto will have 300% yoy growth until 2035. it’s forward looking, but it isn’t based on any data.
Now do the one where you keep them at 2% or take them to 2.25% or 2.5% and inflation spikes to 10%. Great, Jerome?
Lots of people who have a vested interest in the rates staying lower are trashing him for this, but the circumstances were not good and the reality is we were likely going to see a crisis one way or the other. @boredsocial may remember me ranting about this on the phone like a year ago. I told him we were either going to see rate spikes that crashed the market and caused unforeseen issues, or runaway inflation that eventually caused a crash in consumer confidence and discretionary spending that ate into earnings and crashed the market. Threading the needle was going to be a miracle.