Elon Musk Warns the Banking Crisis May Lead to Something Bigger

[bhaigan]

The crisis of confidence in banks caused by Silicon Valley Bank's collapse shows no signs of abating. 

That crisis is reflected in the market pressure on regional banks' shares, which have lost billions of dollars of value since March 10. That's when SVB collapsed, becoming the second-largest failure of a bank in U.S. history after the failure of Washington Mutual in 2008.

Emergency interventions by regulators have so far failed to restore calm.

The Federal Deposit Insurance Corp. guaranteed all of SVB's deposits, even those above $250,000, removing the regulatory limit. 

The Fed also created a new loan facility, called the Bank Term Funding Program, designed to safeguard institutions affected by the collapse of SVB.

A Bank Bailout Is Off the Table

The facility provides loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions that pledge U.S. Treasury securities, agency debt, mortgage-backed securities and other qualifying assets as collateral.

These assets will be accepted as collateral at par value, which means at their original value, regardless of the rise in interest rates in recent months. Those higher rates have reduced the value of long-term bonds that were purchased when rates were low. The Fed wants to avoid institutions being forced to sell their bonds for big losses.

 

[bhaigan]

@dasari4kntr @Spartan @ramudu @csrcsr 

aa something bigger ento idea unda bhayya's ?

[kevinUsa]

May be he knows more than avg Joe on the street 

[bhaigan]

1 minute ago, kevinUsa said:

May be he knows more than avg Joe on the street 

we should have made elon musk as president

[bhaigan]

@tennisluvrredux

[csrcsr]

[TampaBangaram]

4 minutes ago, bhaigan said:

@dasari4kntr @Spartan @ramudu @csrcsr 

aa something bigger ento idea unda bhayya's ?

@Vaampire - need your inputs also anna

[*Prince Charming]

1 minute ago, bhaigan said:

we should have made elon musk as president

Appudu inkaa fast ga gudisipoye vallam like Twitter......

[Vaampire]

2 minutes ago, TampaBangaram said:

@Vaampire - need your inputs also anna

@TampaBangarami dont what musk was referring to.

but in general, current situation is in total mess. Interest rates penchakapothey inflation thaggaku. Penchithey banks assam. Now fed has to choose between controlling inflation or saving banks. Either way, hard landing is guarenteed

[gattimelam]

9 minutes ago, bhaigan said:

The crisis of confidence in banks caused by Silicon Valley Bank's collapse shows no signs of abating. 

That crisis is reflected in the market pressure on regional banks' shares, which have lost billions of dollars of value since March 10. That's when SVB collapsed, becoming the second-largest failure of a bank in U.S. history after the failure of Washington Mutual in 2008.

Emergency interventions by regulators have so far failed to restore calm.

The Federal Deposit Insurance Corp. guaranteed all of SVB's deposits, even those above $250,000, removing the regulatory limit. 

The Fed also created a new loan facility, called the Bank Term Funding Program, designed to safeguard institutions affected by the collapse of SVB.

A Bank Bailout Is Off the Table

The facility provides loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions that pledge U.S. Treasury securities, agency debt, mortgage-backed securities and other qualifying assets as collateral.

These assets will be accepted as collateral at par value, which means at their original value, regardless of the rise in interest rates in recent months. Those higher rates have reduced the value of long-term bonds that were purchased when rates were low. The Fed wants to avoid institutions being forced to sell their bonds for big losses.

 

adani, nirav modi, modi vaipe kada nee hintuuu

[tennisluvrredux]

13 minutes ago, bhaigan said:

we should have made elon musk as president

Aa Inka. Do you even know the basic requirement to be a president? You need to be born in the US.

[hyperbole]

22 minutes ago, bhaigan said:

@dasari4kntr @Spartan @ramudu @csrcsr 

aa something bigger ento idea unda bhayya's ?

US economy is a consumer based and in order to drive the consumer demand you need capital infusion- car loans, housing, credit cards. Banks daggara daggara liquidity leka pote anni dominos will fall, there will be wide spread lay offs and collapse of industires.

for example say Tesla manufactures million cars but if there are no banks that are ready to offer financing then basically million cars has to sit on the park lots, he may to suspend manufacturing, fire employees until demand picks up.

this is comparable to everyone and every industry 

 

[bhaigan]

5 minutes ago, tennisluvrredux said:

Aa Inka. Do you even know the basic requirement to be a president? You need to be born in the US.

I know it was a sattire

[bhaigan]

2 minutes ago, hyperbole said:

US economy is a consumer based and in order to drive the consumer demand you need capital infusion- car loans, housing, credit cards. Banks daggara daggara liquidity leka pote anni dominos will fall, there will be wide spread lay offs and collapse of industires.

for example say Tesla manufactures million cars but if there are no banks that are ready to offer financing then basically million cars has to sit on the park lots, he may to suspend manufacturing, fire employees until demand picks up.

this is comparable to everyone and every industry 

 

Exactly right. Not just US everywhere in the world

[bhaigan]

 

 maa musk mawa em taggatledu