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Bank failures and rescue test Yellen's decades of experience

9 Comments
By FATIMA HUSSEIN

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9 Comments
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Bank can get away with stealing your money,they face no real penalty for misappropriation of depositer funds,all the major bank are on somekind of bank sanction for shady bank dealing ,the big 5 banks are the usual suspects Google US Banks Under Investigation For Consumer Fraud

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Banks, especially the central banks are as a group flat broke on any basis that correctly marks to market their true balance sheets, entire global financial system becoming more toxic as inflations continues unabated.

Any wonder those counties with hard assets are so happy about right now?! That would be especially Russia, the catalyst for much of this inflation cancer!

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The Federal Reserve was looking for a recession and it got a great recession! The problem is that inflation is still a problem...

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A former Federal Reserve governor, Sarah Bloom Raskin, said Yellen and other policymakers will now have to determine “how two banks that many didn’t think would pose a systemic risk to the banking system" could so threaten the nation's financial health.

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They did not till

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The crisis became apparent on Wednesday, March 8. Silicon Valley Bank's chief executive officer, Greg Becker had sent a letter to shareholders stating that the bank would need to raise $2.25 billion to shore up its finances after suffering significant losses.

The bank held an unusually high level of uninsured deposits, and many investments in long-term government bonds and mortgage-backed securities had tumbled in value as interest rates rose.

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So a rise in interest rates cause long term bounds and mortgage-back securities to quickly lose so much value, the bank needed to raise $2.25 billion fast to survive.

Thought banks were supose to have reserves to cover things like this.

To protect their customers from such dangers of losing their money if the bank failed.

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Yellen came up with the idea of using bank funds to save First Republic and first raised it with Powell, Gruenberg and other regulators. Then she had a call with Dimon and broached the idea. After that call, Dimon reportedly said “we have our marching orders” and proceeded to build a coalition of banks, according to two people briefed on the matter, speaking anonymously because they were not authorized to discuss details of a private conversation.

Billionaire financial maestro who benefits from the public weal finds the finances of the proles difficult to understand.

https://www.youtube.com/watch?v=2WLuuCM6Ej0

These are who "advise" the national bankers.

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Competent oversight would prevent incompetent thievery by bankers. Decades of experience doing what? Protecting the banker class with bailouts?

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High inflation and high interest rates kill economies and create poverty at an industrial rate. The latter is not a solution to the former. It is like releasing cane toads to kill beetle pests of sugar cane.

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If Trump had allowed Yellen to continue her tapering policy, this problem wouldn't have occurred. He fired her and appointed Powell, who then loosened policy despite a hot economy. That is the origin of the banks' travails.

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A representative from Dimon's office did not respond to a request for comment.

J.P. Morgan's Dimon is one of the leading execs who always want socialist guarantees for themselves and their financial risk-taking but free-market capitalism for everyone else.

https://www.theguardian.com/commentisfree/2023/mar/19/svb-collapse-us-banks-socialism-capitalism

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