5 ms·

US officials lead urgent rescue talks for First Republic

31 points by porsager 3y ago

slaw 3y ago
Fed printed money for SVB, Fed will print for First Republic. https://europeanconservative.com/articles/analysis/silicon-valley-bank-fed-starts-printing-money-again/ https://europeanconservative.com/articles/analysis/silicon-v...
- SeanAnderson 3y ago
  I don't fully understand your take here. The fed lifeline policy is still in effect. It was put into effect after SVB to prevent future issues. There is now contagion with the policy still in place. What am I not understanding?
  - henriquez 3y ago
    > What am I not understanding? Fed will print money.
    - SeanAnderson 3y ago
      Are you saying you feel a new policy will be implemented in response to FRB going into receivership? Or just memeing? :s
  - slaw 3y ago
    See the title. > US officials lead urgent rescue talks for First Republic There is no need for any urgent rescue talks. Fed will print money.
    - SeanAnderson 3y ago
      If that were true then the stock price wouldn't have tanked 50% today, IMO. FRB is going into receivership in about five hours, bet.
      - JumpCrisscross 3y ago
        > then the stock price wouldn't have tanked 50% today Depositors are probably protected. Bondholders and equity holders, probably not. Last I heard, PNC was the front runner.
  - flangola7 3y ago
    >There is now contagion with the policy still in place. The situation is worse than it appears. SVB was a lung tumor, but the lungs aren't the only organs that have metastasized.
    - SeanAnderson 3y ago
      I'm not completely convinced by that. Do you have any source information to back it up? I would love to have more to read. I went through the Top 20 US banks by AUM this morning and none are down except for First Republic. This contrasts what occurred in March where the entire sector was panicked. From my POV, if there is contagion outside of startup tech banks then investors aren't signaling that FRB is a canary in the coal mine for them. I don't have any deeper or private knowledge of the financial sector, though.
- JumpCrisscross 3y ago
  > Fed printed money for SVB It created the BTFP [1], a short-term fix for the stupid way we account for Treasuries held to maturity in American banking, after SVB collapsed. Against $80bn in collateral (and for $100mm of fees), the Fed has issued $65bn of cash [2]. > Fed will print for First Republic First Republic isn't saved by the BTFP. Their issues are broader than a HTM shortfall. [1] https://www.federalreserve.gov/financial-stability/bank-term-funding-program.htm https://www.federalreserve.gov/financial-stability/bank-term... [2] https://www.federalreserve.gov/publications/files/13-3-report-btfp-20230411.pdf https://www.federalreserve.gov/publications/files/13-3-repor...
  - slaw 3y ago
    Yes, BTFP is printing money.
    - kasey_junk 3y ago
      By that rationale any policy decision that preserves bank deposits is printing money. Which is a cogent argument but not a mainstream one.
    - JumpCrisscross 3y ago
      > BTFP is printing money Straw man. I never said it wasn’t. I said it didn’t exist when SVB was resolved and that it’s irrelevant to First Republic.
- HyperSane 3y ago
  Is printing money fundamentally different than taxation?
64operator 3y ago
The contagion will spread until the munny printers catch fire from overuse.
- SeanAnderson 3y ago
  You generally have to print money to recover from deleveraging. https://www.youtube.com/watch?v=PHe0bXAIuk0&t=1470s https://www.youtube.com/watch?v=PHe0bXAIuk0&t=1470s
mauvins12 3y ago
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31 points by porsager 3y ago

slaw 3y ago

Fed printed money for SVB, Fed will print for First Republic. https://europeanconservative.com/articles/analysis/silicon-valley-bank-fed-starts-printing-money-again/ https://europeanconservative.com/articles/analysis/silicon-v...

SeanAnderson 3y ago
I don't fully understand your take here. The fed lifeline policy is still in effect. It was put into effect after SVB to prevent future issues. There is now contagion with the policy still in place. What am I not understanding?
- henriquez 3y ago
  > What am I not understanding? Fed will print money.
  - SeanAnderson 3y ago
    Are you saying you feel a new policy will be implemented in response to FRB going into receivership? Or just memeing? :s
- slaw 3y ago
  See the title. > US officials lead urgent rescue talks for First Republic There is no need for any urgent rescue talks. Fed will print money.
  - SeanAnderson 3y ago
    If that were true then the stock price wouldn't have tanked 50% today, IMO. FRB is going into receivership in about five hours, bet.
    - JumpCrisscross 3y ago
      > then the stock price wouldn't have tanked 50% today Depositors are probably protected. Bondholders and equity holders, probably not. Last I heard, PNC was the front runner.
- flangola7 3y ago
  >There is now contagion with the policy still in place. The situation is worse than it appears. SVB was a lung tumor, but the lungs aren't the only organs that have metastasized.
  - SeanAnderson 3y ago
    I'm not completely convinced by that. Do you have any source information to back it up? I would love to have more to read. I went through the Top 20 US banks by AUM this morning and none are down except for First Republic. This contrasts what occurred in March where the entire sector was panicked. From my POV, if there is contagion outside of startup tech banks then investors aren't signaling that FRB is a canary in the coal mine for them. I don't have any deeper or private knowledge of the financial sector, though.
JumpCrisscross 3y ago
> Fed printed money for SVB It created the BTFP [1], a short-term fix for the stupid way we account for Treasuries held to maturity in American banking, after SVB collapsed. Against $80bn in collateral (and for $100mm of fees), the Fed has issued $65bn of cash [2]. > Fed will print for First Republic First Republic isn't saved by the BTFP. Their issues are broader than a HTM shortfall. [1] https://www.federalreserve.gov/financial-stability/bank-term-funding-program.htm https://www.federalreserve.gov/financial-stability/bank-term... [2] https://www.federalreserve.gov/publications/files/13-3-report-btfp-20230411.pdf https://www.federalreserve.gov/publications/files/13-3-repor...
- slaw 3y ago
  Yes, BTFP is printing money.
  - kasey_junk 3y ago
    By that rationale any policy decision that preserves bank deposits is printing money. Which is a cogent argument but not a mainstream one.
  - JumpCrisscross 3y ago
    > BTFP is printing money Straw man. I never said it wasn’t. I said it didn’t exist when SVB was resolved and that it’s irrelevant to First Republic.
HyperSane 3y ago
Is printing money fundamentally different than taxation?

64operator 3y ago

The contagion will spread until the munny printers catch fire from overuse.

SeanAnderson 3y ago
You generally have to print money to recover from deleveraging. https://www.youtube.com/watch?v=PHe0bXAIuk0&t=1470s https://www.youtube.com/watch?v=PHe0bXAIuk0&t=1470s

mauvins12 3y ago

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