Viewing a single comment thread. View all comments

Aarschotdachaubucha t1_jdc9r14 wrote

Reply to comment by nexxcotech in 4 Trillion dollar corrective response by Theorysquatch

He's well aware of what he was asking. He's from Bloomberg and writes economics articles on the same team as Matt Levine and many other econ-nerds. Some samples from his Twitter this week:

> For all the fears generated by massive Twitter misunderstanding of the central bank swap lines announcement yesterday... Today @ecb had one bid for $5 million; @bankofengland , BOJ , @SNB_BNS had zero. No funding stress at the moment.

> Why new @federalreserve lending isn't QE or the end of QT: The Bank Term Lending Program accepts Treasuries and MBS for one year from #banks looking to shore up their balance sheets. That money is not going to be used by those banks for investments or loans. 1/2

> And they're not going to buy Treasuries or MBS with it. It's not going into the economy. And it has to be paid back, with (admittedly nominal) interest. Loans to @FDICgov receiver banks also have to be paid back and aren't going into the economy. 2/2

Dude is 100% cutting to the heart of the matter and doesn't care about whatever retail / cryptoscam narratives are being pumped on Youtube and Fintwit.

118

Commercial-Brief9458 t1_jdcr2zi wrote

I was waiting for someone to finally say this. If anything, he was laughing at the absurdity of it all. I'm alarmed to conclude that this website is full of children now, and has been diluted to the point where very little can be extracted amidst the noise.

51

pofwiwice t1_jdcswqc wrote

I mean IIRC before the apes arrived we had a few hundred thousand members I think? Now there’s 13 million+

Insane dilution. Actually makes me a little sad to think about.

32

qazwer001 t1_jdczjjx wrote

When it was below 100k the subreddit theme added a digit to subscriber count. I joined when there were 13k or so degenerate gamblers. I miss the good old days of penny stocks and fscomeau or however his username is spelt. He was a paper trading fraud but still. Good times.

13

bahkins313 t1_jdcdglt wrote

Sounds like he’s full of img from his calls getting rekt

0

mattenthehat t1_jdduv25 wrote

>It's not going into the economy.

Then I suppose the people withdrawing their money are just stuffing it in their mattresses?

−2

Aarschotdachaubucha t1_jddwgvr wrote

They're moving it from one bank to another in most cases. In the cases where its being spent down (i.e. a lot of the startups that are burning VC cash on payroll, OPEX/CAPEX, etc.) that money was going into the economy either way, regardless of which bank it sat at.

What is happening though is a bunch of banks are getting defacto taxed to cover SVB and Signature's shortfalls on asset sales just to make sure those depositors can move banks, and that money that gets taxed will be replenishing the empty FDIC piggy bank for insurance. For the banks not affected by SVB, they're recapitalized with the funds they've borrowed, and then pay it back with minor interest to Treasury which gets to use it against the US budget anyways.

2

mattenthehat t1_jddy6tf wrote

Right, and the new bank will just deposit it back at the fed, not loan it out or buy treasuries, right? ...right?

The whole thing just adds a layer of obfuscation.

2

Aarschotdachaubucha t1_jde5pbr wrote

They literally can't. The new bank is using it to meet capital requirements in a tight market. The fear that other banks are failing might infect them makes them not want to lock up funds in investments.

1

mattenthehat t1_jdegsjx wrote

Shouldn't or can't?

2

Aarschotdachaubucha t1_jdehz9n wrote

The "can" scenario involves them getting bailed out then immediately killing the tool that stops them from being insolvent. If they want to suicide, they can just do nothing for the same effect.

1