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roamer65

(37,806 posts)

64. Hard to sell bonds when the Federal Reserve is constricting M1 money supply.

Reply to LuckyCharms (Original post)

Sun Mar 12, 2023, 10:18 PM

Mar 2023

https://fred.stlouisfed.org/series/M1SL

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As I understand it, here's a very simplistic explanation of what happened with Silicon Valley Bank. [View all] LuckyCharms Mar 2023 OP

Thank you! ggma Mar 2023 #1

That is a nice summary lapfog_1 Mar 2023 #2

Correction: Fiendish Thingy Mar 2023 #3

Correction Johnny2X2X Mar 2023 #8

I choose to focus on the entire collection of legislators who passed this law Fiendish Thingy Mar 2023 #12

I'll choose to focus on those who tried to stop it Johnny2X2X Mar 2023 #14

Lemme guess: Banks must have paid high-priced LOBBYISTS to promise campaign donations Justice matters. Mar 2023 #16

Thank you for some critical thinking instead of falling for consertive Stargazer99 Mar 2023 #68

Isn't it amazing how it only works one way too? Johnny2X2X Mar 2023 #73

Well, I would encourage you to downplay it maxrandb Mar 2023 #23

I've always wondered about you. DoBotherMe Mar 2023 #30

Have you? Fiendish Thingy Mar 2023 #45

Same here. wnylib Mar 2023 #70

"entire collection" krkaufman Mar 2023 #78

*cough cough* W_HAMILTON Mar 2023 #43

You can assume my contempt for the anti-worker, fascist republicans as a given. Fiendish Thingy Mar 2023 #46

You find it healthier for you to criticize Democrats over Republicans? W_HAMILTON Mar 2023 #55

If it's good enough for Reuben Gallego, it's good enough for me. Fiendish Thingy Mar 2023 #60

Is he slamming """Democrats""" for Sinema's actions? W_HAMILTON Mar 2023 #61

Well, if your mind is made up, I need say no more Fiendish Thingy Mar 2023 #62

HA! Good one. betsuni Mar 2023 #69

+1 progressoid Mar 2023 #66

Does anyone have a list of the 17 Ds who voted for it? nt in2herbs Mar 2023 #4

No Johnny2X2X Mar 2023 #17

A-fucking-men. W_HAMILTON Mar 2023 #44

sure. progressoid Mar 2023 #67

Thank you n/t Delphinus Mar 2023 #71

Is the fed trying to tank the economy and Biden? usonian Mar 2023 #5

I don't know about the FED, but I think Thiel would definitely try to harm Biden politically. Lonestarblue Mar 2023 #9

I agree about powell.. sprinkleeninow Mar 2023 #63

Yep...you got it...when Fed began to raise rates...the bank got squeezed as the bonds lost market values... ashredux Mar 2023 #6

Dumb on the part of the bank, not the Fed. Fiendish Thingy Mar 2023 #13

+1 dalton99a Mar 2023 #20

Pardon if that was not clear.....THE STUPID BANK MANAGEMENT ashredux Mar 2023 #24

+1, but the bank ... KNEW ... the feds were going to increase rates and held that dumb position uponit7771 Mar 2023 #52

This is a good analysis but it over looks one thing. flashman13 Mar 2023 #7

Powell shares blame for waiting too long to begin hikes Fiendish Thingy Mar 2023 #15

Nope.... It was not the federal reserves fault. The bank management did not do their job. ashredux Mar 2023 #26

I think you are missing the big picture. While a single bank can suffer from bad decisions, flashman13 Mar 2023 #48

"because the balance sheets of many other institutions look the same as SVB." SVB held on to bonds uponit7771 Mar 2023 #53

That's the story I've heard paleotn Mar 2023 #10

ABSOLUTELY spot on point! flashman13 Mar 2023 #49

Mine's simpler Warpy Mar 2023 #11

What happened w/this? Do all these partners have exposure to this collapse at the Wall Street Backseat Driver Mar 2023 #18

Researching stuff too, I also came across this Goldman-Sak "Marcus" easy to start high-yield Backseat Driver Mar 2023 #31

Thanks for this great information. Knowledge is good, even if you have no $$$. n/t Paper Roses Mar 2023 #19

Two additional points... brooklynite Mar 2023 #21

Good points. n/t LuckyCharms Mar 2023 #22

Again spot on! It is just unforgiving mathmatics. flashman13 Mar 2023 #50

So SVB did nothing wrong. Just too conservative with investments mainer Mar 2023 #25

They did everything wrong. They failed banking 101. ashredux Mar 2023 #27

So incompetence but not corruption? mainer Mar 2023 #34

This point, not enough data to make that determination. But crypto might be in the mix. ashredux Mar 2023 #38

They played fast and loose in regard to risk management. LuckyCharms Mar 2023 #33

Disagree, SVB should've known their bonds were going to lose at minimum short term value and ... uponit7771 Mar 2023 #54

Hedging is prudent investment strategy. jaxexpat Mar 2023 #28

Thanks for the clear summary and discussion jmbar2 Mar 2023 #29

Cripto is the 2022's Tulip Bulb folly ashredux Mar 2023 #41

In some ways, like the Orange County bankruptcy in 1994 peppertree Mar 2023 #32

Very nice synopsis of it tornado34jh Mar 2023 #35

Well, I recall 2008, and some awfully big, big boys failed.... You had to keep certain regulations in ashredux Mar 2023 #39

Indeed tornado34jh Mar 2023 #42

Yep...that appears correct... ashredux Mar 2023 #47

Where is the depositors' money? mainer Mar 2023 #36

If they are far over weighted in long term bonds, LuckyCharms Mar 2023 #37

You've said this a few times now and it's not quite accurate; A HERETIC I AM Mar 2023 #56

Agree. LuckyCharms Mar 2023 #58

Afraid not.... long-term bonds they held are selling at a discount... ashredux Mar 2023 #40

YEP!! "SBV over-weighted the amount of depositor's funds that were used to buy [FED BONDs]" uponit7771 Mar 2023 #51

Can anyone knowledgeable comment on this Twitter thread? mainer Mar 2023 #57

Banks should not "just need time" to get you your money. LuckyCharms Mar 2023 #59

Hard to sell bonds when the Federal Reserve is constricting M1 money supply. roamer65 Mar 2023 #64

I am wondering if they were also involved in the Bitcoin debacle..... William Gustafson Mar 2023 #65

All banks are insolvent by definition lonely bird Mar 2023 #72

I understand this is a blow to new tech development orangecrush Mar 2023 #74

Can I leave this here? DJ Porkchop Mar 2023 #75

the imbecile republican way - they are stupid and drag the rest of us down samsingh Mar 2023 #76

Doesn't this mean that the government can simply return the bonds ecstatic Mar 2023 #77