There seems to be a narrative that X regulation would save a bank from a run. No bank can withstand a determined on- going run. The reason is as old as banking: depositors lend short term. loans e.g. mortgages are long term. The deposit CAN be locked in for a term, but most want instant access to their money. The borrower never wants his loan called suddenly. A bank that did that would make few loans.
A version of the bank run occurs with the ongoing toilet paper scares: the rumor of a shortage first started as a prank became self-fulfilling. The bank run is on turbo however because. well, it's money. This is why there has to be a central bank, which if need be, can create money and debit its account.
Hint for the US: in the Depression about 10,000, ten thousand banks went under, taking many deposits with them. No one lost a dime in a Canadian bank. Last time was Home Bank, before the Depression. But in the late eighteen hundreds, Canada had a lot of banks go under. Decision: no more small regional banks. In the last few years, the US has closed over 500 banks. Canada, zero.
With 5000 banks, or 50 times per person of Canada, the US is grossly overbanked. The idea that small is good is the opposite for banks. Pleasantville. with its library, bars, etc. will just fine with a branch, not a separate bank. Winthrop Boone V, his brother, son- in- law, etc. may have to enter another line of work.
Funny how the circuit breakers at the NYSE didn't trip when my FRC stock plummeted downward, but now that it appears the bank is OK they are tripping the breaker while it tries to recover.
If you lend your money out for 5, 10 or even 30 years at a rate of 3% but then within 12 months have to pay 5% - 7% on your deposits, or 3% - 4% to borrow money from the Fed, then you have a problem. Your money expenses are more than your money income.
This is what happened to SVB and is happening to many other non-tech-bro-douch banks too. This may force the Fed to cut interest rates.
That's no ordinary rabbit...
https://www.youtube.com/wat...
Well that would be Nice Times!
Has anybody mentioned how boring the banks are in Iceland since the ladies took charge?
Ta, Dok.
There seems to be a narrative that X regulation would save a bank from a run. No bank can withstand a determined on- going run. The reason is as old as banking: depositors lend short term. loans e.g. mortgages are long term. The deposit CAN be locked in for a term, but most want instant access to their money. The borrower never wants his loan called suddenly. A bank that did that would make few loans.
A version of the bank run occurs with the ongoing toilet paper scares: the rumor of a shortage first started as a prank became self-fulfilling. The bank run is on turbo however because. well, it's money. This is why there has to be a central bank, which if need be, can create money and debit its account.
Hint for the US: in the Depression about 10,000, ten thousand banks went under, taking many deposits with them. No one lost a dime in a Canadian bank. Last time was Home Bank, before the Depression. But in the late eighteen hundreds, Canada had a lot of banks go under. Decision: no more small regional banks. In the last few years, the US has closed over 500 banks. Canada, zero.
With 5000 banks, or 50 times per person of Canada, the US is grossly overbanked. The idea that small is good is the opposite for banks. Pleasantville. with its library, bars, etc. will just fine with a branch, not a separate bank. Winthrop Boone V, his brother, son- in- law, etc. may have to enter another line of work.
If the US did that, we'd all be stuck with BofA, Wells Fargo and Citibank.
They'd just stripmine the depositors of all their money legally, without needing a run.
It could be a vorpal rabbit, Julia, Did you ever consider that???
How about a mere 1000 banks, or just 10 times the number per person of Canada's?
Swiss Mariachi Music!
Oh no, I didn't! Oops.
Funny how the circuit breakers at the NYSE didn't trip when my FRC stock plummeted downward, but now that it appears the bank is OK they are tripping the breaker while it tries to recover.
A little Bulgarian mob money laundering never helped too many banks. When they get caught. https://uploads.disquscdn.c...
If you lend your money out for 5, 10 or even 30 years at a rate of 3% but then within 12 months have to pay 5% - 7% on your deposits, or 3% - 4% to borrow money from the Fed, then you have a problem. Your money expenses are more than your money income.
This is what happened to SVB and is happening to many other non-tech-bro-douch banks too. This may force the Fed to cut interest rates.
May also force the Feds to indict Peter Thiel for causing a bank run.
That horse didn't just see a balloon, it was savagely attacked by one. No wonder it got spooked.
Vegan Baby Buttholes sold separately