, this crisis could bring down the whole banking system. Making that guarantee would insulate not just depositors, of course, but also the shareholders in other medium-sized banks who fear they'll be subject to the same Old Testament justice as their peers at SVB.
Beyond the technical merits of the argument, Ackman and the"guarantee it all" crew's caterwauling is problematic because, like fire, bank runs feed on oxygen."The longer people talk about this, the more risk there is," the bank executive told me. The more people hear that the system is on the verge of collapse, the more likely it is to become a self-fulfilling prophecy as more people get scared and yank their money from the bank unnecessarily.
"It's been quite an interesting seven weeks," Powell said at his latest press conference to nervous laughter. He added:"It's not a surprise that there are institutions that have unhedged long positions in long-duration securities that have lost value as longer-term rates have gone up due to our rate increases."
Translation: If you're a bank and you're offside, Powell isn't going to change the rules of money to ensure you can keep playing the game. The new rules — higher interest rates — will remain for the foreseeable future. But the future is a moving target. At the beginning of this year it seemed as if the Fed would have to hike dramatically because the economy was so strong and the stock market was rallying. Then the Silicon Valley Bank run happened, and some called for the Fed to cut rates to help the banks. Now all we can do is wait. When banks have problems, they lend more slowly. When lending slows, the economy slows. And when the economy slows, inflation cools — at least in theory.
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Wall Street elite investors will profit from banking crisis, stock market chaosWall Street’s sharks are circling and investors who thrive on uncertainty are ready to make a killing. lopezlinette breaks down how the chaos from the banking crisis is giving some of Wall Street’s sharpest minds the chance to rake in a lot of money. ⬇️ The pandemic era was a boom time for the market, and these are the kinds of mistakes that come to light as boom times end. 💸 When the Fed hiked interest rates to 4.75% from 0% over the course of a year, the rules of money changed. lopezlinette Hi sir, I hope you'll be fine. I want to talk about the paid guest post or article for publishing on your website. I know there would be an editorial fee and I am ready to pay. Kindly reply or give the contact information of your editorial team. Thanks Regards lopezlinette The article states that the initial FDIC insurance was set at $100,000 in 1933. That’s incorrect. The initial cap was $2,500 in 1933. It wasn’t raised to $100,000 until 1980. You should correct this error.
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