The Post-Partisan Emporium

  MARCH 13, 2023   BY SCHIFFGOLD In the wake of two bank failures, the Federal Reserve and the US Treasury announced a bank bailout program. Last week,  Silicon Valley Bank was shuttered  by federal authorities after the bank suffered significant losses selling bonds in order to raise capital. When that news hit, depositors rushed to pull funds from the bank, making it functionally insolvent. Then over the weekend, federal authorities  shut down Signature Bank . On Sunday,  the FDIC created “bridge banks” to handle both insured and uninsured customer deposits . Banking regulators assured depositors that they would have full access to all of their funds. Meanwhile, the Federal Reserve  announced a loan program  that will allow other banks to easily access capital “to help assure banks have the ability to meet the needs of all their depositors.” The  Bank Term Funding Program  (BTFP) will offer loans of up to one year in length to banks, savings associations, credit unions, and other eli

Round 2!  If the following does happen... Absent JPMorgan, Citi or Bank of America acquiring SVB before the open on Monday, a prospect I believe to be unlikely, or the gov’t guaranteeing all of SVB’s deposits, the giant  sucking sound you will hear will be the withdrawal of substantially all uninsured deposits from all but the ‘systemically important banks’ (SIBs).  These funds will be transferred to the SIBs, US Treasury (UST) money market funds and short-term UST. There is already pressure to transfer cash to short-term UST and UST money market accounts due to the substantially higher yields available on risk-free UST vs. bank deposits.  These withdrawals will drain liquidity from community, regional and other banks and begin the destruction of these important institutions. ... This is one way the SRF & Billionaires are going to screw the herds of modern moron slaves around the Great USofT. Those that read the nonsense I write online may recall this little muffin! Well... I no DU

Round 1 What Did These 3 SVB Execs Know? As lines (real and virtual) full of anxious depositors grew last week outside of Silicon Valley Bank branches around the world, and reassurances of "liquidity" were gushed from the C-Suite, three individuals within the firm were perhaps less troubled than those seeking their hard-earned cash back from the soon-to-be-failed bank. 12 days ago (on Feb 27th), Gregory Becker, the  CEO of Silicon Valley Bank, sold $3.6 million worth (11%) of his shares ... Daniel Beck, the  CFO, sold 32% (around $600,000) of his holdings ... And finally,  CMO Michelle Draper sold 28% ... Notice that none of them had sold anything sizable for a year or so before this most recent (pre-collapse) sale (so it is a stretch to call this a pre-planned sale). Additionally,  Silicon Valley Bank on Friday paid out annual bonuses to eligible U.S. employees, just hours before the bank was seized  by the U.S. government,  Axios has learned from multiple sources . But hey,

"Worst Since Lehman": Banks Break The World Again Last week we detailed  BofA's Michael Hartnett's warning that  "The Fed will tighten until something breaks" . Well, something just broke... SVB's collapse - the second biggest US bank failure in history  - dominated any reaction to this morning's mixed bag from the BLS  (hotter than expected earnings growth, rising unemployment (especially for Latinos), better than expected payrolls gains). Things started off badly as SVB crashed 65% in the pre-market before being halted. SVB bonds were puking hard and when the FDIC headline hit, the bonds collapsed further... Source: Bloomberg A number of small/medium sized banks were clubbed like a baby seal... Source: Bloomberg And the KBW regional bank index crashed (down 9 of the last 10 days and 20% in that period).  The 18% drop this week was the index's worst drop since Lehman (Sept 2008) ... Source: Bloomberg And as you'll see below, that  started to