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American Banks implode after making unwise investments based on woke scores


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33 minutes ago, West said:

First it was the Silicon Bank now there are concerns with some of the others as the US races to legislate the banks. 

My guess is next round of bank implosion is the digital ID. You know they have to have full control because it's your fault 

I recall reading a thing on the internet that pretended to have correctly predicted coronavirus plandemic in 2020, the next big thing was supposed to be some sort of cyber-failure that made covid look like a warm-up.

It's scary if it does happen, because it will mean that the Dems and Libs still feel like they can hold onto power if the world takes an enormous dump while it's firmly in their control.

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This has been a long time coming.  Michael Burry has been warning about another major crash, like the one he saw coming in 2004 or so.  When it happened in 2008, he was ready for it and made something like 500% for his investment firm.

It could be a bloody Monday.

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And here’s more wreckage from the crisis:

https://finance.yahoo.com/news/us-regional-banks-remain-under-092829687.html

“Most banks are solvent under normal circumstances. The problem is, pretty much no bank can withstand a full bank run,” said Steve Sosnick, chief strategist at Interactive Brokers LLC. “The FDIC action removes the idea of a deposit bank run, but what we’re seeing is an investor bank run,” he added.

  • First Republic Bank sank 79% for a record drop, sparking multiple halts for volatility

  • Western Alliance Bancorp lost 85%, its biggest drop ever

  • PacWest Bancorp was down 60%, hitting a record low

  • Among other regional banks sinking more than 20% on Monday and triggering halts: Customers Bancorp Inc., Comerica Inc., Zions Bancorporation, East West Bancorp and Bank of Hawaii

 

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11 minutes ago, sharkman said:

And here’s more wreckage from the crisis:

https://finance.yahoo.com/news/us-regional-banks-remain-under-092829687.html

“Most banks are solvent under normal circumstances. The problem is, pretty much no bank can withstand a full bank run,” said Steve Sosnick, chief strategist at Interactive Brokers LLC. “The FDIC action removes the idea of a deposit bank run, but what we’re seeing is an investor bank run,” he added.

  • First Republic Bank sank 79% for a record drop, sparking multiple halts for volatility

  • Western Alliance Bancorp lost 85%, its biggest drop ever

  • PacWest Bancorp was down 60%, hitting a record low

  • Among other regional banks sinking more than 20% on Monday and triggering halts: Customers Bancorp Inc., Comerica Inc., Zions Bancorporation, East West Bancorp and Bank of Hawaii

 

So how do low stock prices affect the OPERATION of banks?

The problem at SVB was too many accounts with deposits unprotected by FDIC which caused the depositor run.

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1 hour ago, robosmith said:

So how do low stock prices affect the OPERATION of banks?

The problem at SVB was too many accounts with deposits unprotected by FDIC which caused the depositor run.

To be honest with you, I’ve never working in the banking industry in any capacity.  I do, however, have the ability to say that when 3 banks collapse in 4 days, that dropping stock prices, as well as investors heading for the exits, seem to be detrimental to a bank’s health.

 

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28 minutes ago, sharkman said:

To be honest with you, I’ve never working in the banking industry in any capacity.  I do, however, have the ability to say that when 3 banks collapse in 4 days, that dropping stock prices, as well as investors heading for the exits, seem to be detrimental to a bank’s health.

 

I'm only seeing 2 failed banks. SVB and Signature.

Silicon Valley Bank, Signature Bank failures explained, live updates on new developments

Quote

Why did Signature Bank fail? 

Signature Bank, a New York-based financial institution that became a big lender in the crypto industry, was ordered to close over the weekend. The bank was part of only a handful of financial institutions allowing customers to deposit crypto assets. 

That didn't bode well for the bank when crypto plunged as a result of FTX's collapse last year. 

We all knew crypto was very risky.

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12 minutes ago, sharkman said:

Perhaps your sources aren’t that reliable.  Look up Silvergate Bank.  

My source is FDIC website. Siivergate liquidation is voluntary.

Quote

“In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward,” the company said in a statement.

 

Edited by robosmith
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3 minutes ago, sharkman said:

Either way, it was caused by the same economic conditions and market.  You want to believe their press release while they no doubt line their own pockets?  Knock yourself out.

Signature and Silvergate were the RESULT of risky crypto investments, not "the market."

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Trump signs the biggest rollback of bank rules since the financial crisis

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President Donald Trump signed the biggest rollback of bank regulations since the global financial crisis into law Thursday.

The measure designed to ease rules on all but the largest banks passed both chambers of Congress with bipartisan support. Backers say the legislation will lift burdens unnecessarily put on small and medium-sized lenders by the Dodd-Frank financial reform act and boost economic growth.

 

Opponents, however, have argued the changes could open taxpayers to more liability if the financial system collapses or increase the chances of discrimination in mortgage lending.

“Dodd-Frank was something they said could not be touched. And honestly, a lot of great Democrats knew that it had to be done and they joined us in the effort,” Trump said before he signed the bill, surrounded by lawmakers from both major parties. “And there is something so nice about bipartisan, and we’re going to have to try more of it. Let’s do more of it.”

The measure eases restrictions on all but the largest banks. It raises the threshold to $250 billion from $50 billion under which banks are deemed too important to the financial system to fail. Those institutions also would not have to undergo stress tests or submit so-called living wills, both safety valves designed to plan for financial disaster.

So loosening regulations in response to bank lobbyists is WHY SVB imploded.

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Experts rebut notion that "woke" policies prompted collapse

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What about the role of "woke" policies? Several high-profile Republicans and a presidential hopeful argued that Silicon Valley Bank's promotion of diversity equity and inclusion, or DEI, initiatives and environmental, social and governance, or ESG, investments led to its downfall.

DeSantis, U.S. Rep. James Comer of Texas and Republican presidential candidate Vivek Ramaswamy echoed that sentiment in comments to Fox News. 

"Now we see coming out that they were one of the most 'woke' banks in their quest for the ESG-type policy," Comer said March 12. "This could be a trend, and there are consequences for bad Democrat policy." 

Silicon Valley Bank's 2022 Environmental, Social and Governance report detailed more than $17 billion in planned investments. They included:

• An $11.2 billion community benefits plan to support small businesses, finance affordable housing, reinvest in low- and moderate-income communities in Massachusetts and California by 2026, and support charitable causes through philanthropy and volunteering.

• $1.3 billion in residential mortgages to low- and moderate-income communities and borrowers and in low- and moderate-income communities census tracts by 2026.

• $5 billion in sustainable finance commitment; the company would invest this money by 2027 into helping clients build sustainable businesses. The bank also aimed to have its operations carbon-neutral by 2025.

But experts told PolitiFact that none of the policies or investments conservatives highlighted would have created the key conditions that prompted the sudden nosedive.

"No, I don't see this playing any role," Allen said. "For this critique to have any plausibility, Silicon Valley Bank would have to have made 'woke' investments that failed and caused it to implode." 

Also, many financial institutions have made similar investments without prompting a bank run. The accounting and consulting firm PricewaterhouseCoopers projected in October that U.S. investments in environmental, social and governance-related assets would increase to $33.9 trillion in 2026.

Robert Lawless, a University of Illinois at Urbana-Champaign law professor, an expert in consumer finance and business law, agreed that "wokeness" didn't cause the bank’s collapse.

"It had nothing to do with it," Lawless said. "It's like saying, 'Why isn't 'blue' the answer to 1 plus 1?’' It's Banking 101. That's what was going on."

 

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51 minutes ago, robosmith said:

We all knew it was only a matter of time before the far left looney bins blamed Truuuuuump for their failures. 

Just like they blamed Bush for Clinton policy which gave out risky sub prime mortgages based on skin color. 

Go woke and this is the result

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2 hours ago, West said:

We all knew it was only a matter of time before the far left looney bins blamed Truuuuuump for their failures. 

Sad that ^this deflection is all you have to defend Trump's deregulation of the banks which enabled SVB to evade stress tests. 

2 hours ago, West said:

Just like they blamed Bush for Clinton policy which gave out risky sub prime mortgages based on skin color. 

Go woke and this is the result

I never blamed Bush for Clinton repealing Glass-Steagall and signing the Commodity Futures Modernization Act of 2000 deregulation of wall street.

But Bush was responsible for keeping interest rates artificially low and creating the the subsequent housing bubble as part of Rove's plan for a "permanent Republican majority." Of course that didn't work.

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Way t' go Joe! Ya fckin' brainless woke twit.

From the open border, Fentinyl and millions of illegal aliens...to the cowardly surrender of Afghanistan...the threat of nuclear war over a nothing state...and the trashing of energy independence...and now the collapse of banks...

Job Biden is a failure.

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9 hours ago, West said:

We all knew it was only a matter of time before the far left looney bins blamed Truuuuuump for their failures. 

Just like they blamed Bush for Clinton policy which gave out risky sub prime mortgages based on skin color. 

Go woke and this is the result

So one side says the bank failed because of their “woke” policy, and the other says it failed because of deregulation. 
 

Can you explain to us why the SVB bank failed? 

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40 minutes ago, Rebound said:

So one side says the bank failed because of their “woke” policy, and the other says it failed because of deregulation. 
 

Can you explain to us why the SVB bank failed? 

They failed because they provided nonsensical investment based on wokeism

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On 3/12/2023 at 7:28 PM, Americana Antifa said:

You unironically said "woke" so you're automatically wrong.

Actually he's right. SVB's Chief Invertebrate had been pushing woke bullshit for years. Bullshit like this:

https://www.svb.com/news/company-news/svb-included-in-bloomberg-gender-equality-index-for-fifth-year

Rest In Pieces, SVB. ;)

As the Great Donald Trump always sez - "Everything woke turns to shit". 

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Trump-era banking law paved way for Silicon Valley Bank’s collapse

Nicole NareaMar 13, 2023, 7:05pm EDT

Silicon Valley Bank was a test case for Congress’s 2018 bipartisan banking deregulation law. It failed.

By Nicole Narea@nicolenarea  Mar 13, 2023, 7:05pm EDT
 
 

The collapse of Silicon Valley Bank and other similarly sized banks in recent days has put a spotlight on Congress’s 2018 bipartisan banking deregulation law, which was signed by then-President Donald Trump.

Notably, the 2018 law changed which banks are considered “systemically important” to regulators. It increased the threshold from institutions holding at least $50 billion in assets to those with $250 billion. That means only the largest banks face stricter regulation, including requirements to maintain certain levels of liquidity and capacity to absorb losses; comply with company- and government-run stress testing; and submit a living will to prepare for potential failure.

SVB had $209 billion in assets, making it the 16th-largest bank in the US by the time it was taken over by the Federal Deposit Insurance Corporation (FDIC) on Friday. But it still wasn’t big enough to be subject to the strictest standard of scrutiny under the 2018 law. 

Sen. Bernie Sanders (I-VT) noted in a statement Sunday that the Republican director of the Congressional Budget Office warned of this exact scenario five years ago — that the bill would increase what he thought was a small “likelihood that a large financial firm with assets of between $100 billion and $250 billion would fail.”

 

SVB lobbied for deregulation — and may have brought about its own demise

In a statement to a Senate committee in 2015, SVB CEO Greg Becker specifically advocated for raising the $50 billion threshold and argued that failing to do so would saddle mid-sized banks like his with “significant burdens that inherently and unnecessarily will reduce our ability to provide the banking services our clients need.” 

He argued that the compliance costs and human resources associated with having to meet the regulatory requirements would have forced the bank to “divert resources and attention from making loans to small and growing businesses that are the job creation engines of our country, even though our risk profile would not change.”

He also touted SVB’s “deep understanding of the market it serves,” “strong risk management practices,” and the “fundamental strength of the innovation economy” on which SVB relied, as well as the bank’s ability to lend to almost 8,000 clients while maintaining strong credit. 

The bank spent half a million dollars on lobbying in the leadup to the law’s passage, including on hiring two former senior staffers for now House Speaker Kevin McCarthy. It continued to lobby the FDIC even after the law was passed.

The Dodd-Frank regulations that SVB fought against might have helped identify the bank’s pitfalls earlier. Because the bank catered to Silicon Valley startups and investors with deposits that generally exceeded the $250,000 FDIC deposit insurance limit, 97 percent of its deposits were uninsured — an abnormally large share compared to other consumer banks. That left the bank vulnerable to instability in the tech sector, which has seen more than 120,000 layoffs in 2023 alone.

https://www.vox.com/business-and-finance/2023/3/13/23638655/silicon-valley-bank-trump-fdic-banking-law

 


 

 

 
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