Fdic to cover all depositors

https://www.investors.com/market-tr...ancial-collapse-watch-these-bank-stocks/

Thanks for posting Donnersurvivor

The way I read it the FED is covering depositors above $250,000?

"Shortly after Dow futures opened, the Federal Deposit Insurance Corp. and Federal Reserve issued a joint statement that SVB Financial's "[d]epositors will have access to all of their money starting Monday, March 13."

I have a friend who's wife helped start a company and all their money is in this bank, he has been updating me as he thought they just lost everything

Nothing like rewarding bad behavior

Why do people put money in these wonky fly by night banks in the first place.

So is that not a bailout?

It's not a bailout.

They will sell the bank and take and hold the Bonds to get the money back that they will forward to the depositors so the depositors can withdraw/transfer their funds.

It sounds like it will at least be a loan. Then they (the federal government) will try to get their money back.

Just like the bank of NAFA.

of course it is a bail out. if all the bank had to do was sell its assets to cover ALL deposits then they could do that without the fdic paying the depositors...the feds want this issue off the radar asap and by any means possible. kick the can down the road. eventually the us govt and dollar will need a bailout...I bet that is all planned for already.

the taxpayers and our future generations are covering this bailout along with all the lifelong welfare recipients, illegal aliens, refugees and others that the govt taxpayers support.

Donner, last week I was just informed that one of my main mine contracts that I had for spring time was over. Ended abruptly, I don't think they have even let the mine workers know yet. Hope your are wrong, but my gut tells me you ain't.

any moron can figure out that the feds cannot cover all $ in banks that is above the fdic $250,000 limit and some of those people will act accordingly. I am certainly no finance expert but it seems that we teeter on the edge of an abyss....but at least all the big shots involved in finance learned a valuable lesson which is: fill your pockets anyway possible because you will never be held accountable for that as long as you make the right campaign/other contributions.

It's been starting for awhile. I know of several home developments that were canceled last fall. They told us we were going to have the busiest summer ever putting pipe last fall. Now they say it's going to be tight.

After getting some time to do some research I agree with white this should be contained to SVB. Pretty poor management practices and sound like they almost bet it all on red with little hedging if it came up black.

Watch out for First Republic and First Horizon.

It is absolutely a bail out IMO. Not only that but this is a terrible precedent.

We have just crossed the Rubicon. FDIC no longer applies and the US government is now guaranteeing all deposits of any size. Too big to fail. Systemically important.

No taxpayer funds will be used........HOGWASH. They claim the banks will pay more fees up front going forward. Who do you think actually pays those fees . CUSTOMERS. You will pay higher mortgage rates or receive lower interest rates on savings. How about overdraft protection ? Credit card fees and rates ?


But here is the kicker. The Fed the Treasury and FDIC will make loans available to banks that need liquidity. Those banks must put up collateral in the form of Agency MBS or treasuries. The bonds received as collateral will:

"They'll have to pledge high-quality collateral such as Treasuries, agency debt and mortgage-backed securities. Notably, that collateral will be [b]valued at par, not mark to market[/b]...."

If you don't understand what that means ( and I think they are hoping that you don't) here is a short explanation.

PAR value of a bond is the same as FACE value. A bond with a $1000 face value is at par when its market value is at $1000.

But these banks' bonds will not be "marked to market" as all other financial instruments are on a daily basis.

In other words.......A needy bank can go to the Fed or treasury an borrow a million dollars. The bank hands over a million dollars FACE VALUE bonds as collateral.

The problem is..........on the open market those bonds .....if marked to market may only be worth $850,000.

Is the missing 150,000 a gift or what ?

Who is the giver of that gift ?

I'll give you one guess.

Tell me again how this isn't a bail out.
But......IMO the worst part is the precedent it sets.

Now banking risk is completely socialized.
The banks can take bigger, imprudent risks. If they make a bunch of money that's great. But if they lose .........that's ok too because we will all pick up the tab.

Individualize profits but socialize losses.

Shameful ! But I'm not surprised

Thanks White17.

Your financial knowledge exceeds my own and I appreciate the insight.

Yes, Thank you all for your contributions.

Lots of wisdom on this post. Sure do appreciate it, very much.

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