Once again the working class taxpayers will bail out the millionaire SVB depositors even though FDIC protection limits are clear as day. The likes of Mark Cuban will have it no other way. The financial elite in this country control things and you can bet their interests will be protected at our expense.
I don't disagree with the sentiment, but I don't really see an alternative. If big companies can't park their cash somewhere safe, then our economy will implode. Take an example corporation with 10,000 employees, making on average $1000 per week - so a paltry 52K per year. 10,000 x $2000 for a biweekly check is $20M. These companies need to be able to put this money somewhere to make payroll. Spreading it in $250K increments across 80 banks doesn't seem that plausible either.
I'm related to some "financial elites" and I agree. Most of the time they don't think about you at all and when they do all they see are "suckers who never learned to play the game." My wife's cousin's words...not mine.
No bailout...it will be sold whole or chopped up and sold as pieces. SVB isn't a result of a systemic issue and its scope is nothing like the MBS/credit default swap fiasco of 2008 which would've really taken down the entire banking sector. This was a unique combination of 1. >90% of accounts have more than $250k; 2. A heavy bond position made worse by rising interest rates and taking a loss on devalued bonds they had to sell to cover deposits; 3. Moody's threatening to downgrade them. If depositors didn't get squirely they would've been fine but the run becomes a self-perpetuating event.
I agree with your statement. But the system needs to be changed. Money for corporate payrolls should be protected, but money for things like investments should not be (above $250K).
Makes me wonder if Elon would want to buy the bank and connect it to Twitter somehow. I can see all these tech bros pulling their money out because Elon bought it though.
Reading that article closely indicates from both Yellen and Senator Mark Warner that the depositors will be taken care of, and the stockholders are going to come up empty handed. The headline is technically correct, but missleading.
They are truly horrible people and if it makes you feel better unhappier than most other people I know. Money doesn't buy...
There you go. Another example of the working class bailing out the financial elite. They will have it no other way. I wonder how many working class people there are who invested heavily in SVB, and are now going to be wiped out while multimillionaire depositors will walk away unscathed. It's going to happen.
Of course. I am assuming you meant a safe place to put their money...
My parents had some lifetime friends who became extremely wealthy. They called the working class "the little people".
In general, I think we're past the idea that the market will "work it out". Long gone is the idea that the individual/company will do "what's right" because that is what's best in the long term. I don't think anyone could've imagined the magnitude of greed that exists today. These execs make decisions that are best for them, make enough money to never work again, and move on long before they ever take any blame. Regulations are needed for one thing - to attempt to contain greed. Not that it always works...
