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Depositors being covered by investors

Posted on 3/13/23 at 8:22 am
Posted by IMATIGERFAN
San Antonio, TX
Member since Apr 2007
1313 posts
Posted on 3/13/23 at 8:22 am
So they just drug old Joe out of bed early to make a statement that the depositors will be covered by the investors in these failed banks. Actually, I think that is how it should be, but it creates a few questions for me:
Are there enough investment $$ to cover all the depositors?
If not, where does the $$ come from, yeah, I know the answer to that one.
Is Sleepy joe really the best, most reassuring person to deliver this message that they have? He didn’t take any questions and ran out the door, doesn’t really instill confidence.

I think we are in for a long week.

Last thought is that this could be a referendum on Biden, since he went out there to reassure the public, if it doesn’t work, it shows that no one has any faith in him as well as the economy.
Posted by I Love Bama
Alabama
Member since Nov 2007
37764 posts
Posted on 3/13/23 at 8:27 am to
quote:

Are there enough investment $$ to cover all the depositors?


Not even close.

quote:

If not, where does the $$ come from, yeah, I know the answer to that one.


Like you said, you know


It's game over. FED is going to have to pivot soon and every time the fed pivots....well...we have history to look at.

The silver lining is there is going to be a MASSIVE opportunity in the next few years to make generational wealth.

The 2008 crash is what set me up for life and this one will be full of opportunities as well.

Good luck all.
Posted by Kolbysfan
Tennessee
Member since Jun 2007
1829 posts
Posted on 3/13/23 at 9:23 am to
Powder is dry
Posted by Big Scrub TX
Member since Dec 2013
33717 posts
Posted on 3/13/23 at 11:36 am to
It was a really easy decision from the gov's/fed's standpoint. There are enough collateral treasury securities in run off to make the depositors whole, even if it would take awhile (and that's independent of the insurance). Given that fact, why wouldn't the government attempt to prevent a panic by just pulling the inevitable forward.

Depositors are senior to ALL other creditors. Just look at the past:

Lehman BK - even the unsecured bonds got 37 cents back. That means all depositors were made whole (without bailout checks - and Lehman didn't have treasury collateral)

All the government is doing is backstopping deposits that are already collateralized by treasuries.

I would argue that stepping in didn't actually help the depositors - rather, it helped the taxpayer from having to defend the currency and, indeed, the entire banking system.

Posted by LSUFanHouston
NOLA
Member since Jul 2009
37228 posts
Posted on 3/13/23 at 1:43 pm to
quote:

Are there enough investment $$ to cover all the depositors?
If not, where does the $$ come from, yeah, I know the answer to that one.


The money will come from increased FDIC fees, which essentially come from profits, i.e. the investors.

Unless, of course, the banks are able to increase pricing / decrese interest payments to depositors to somewhat recover these fees.
Posted by matty3387
Metairie
Member since May 2018
938 posts
Posted on 3/13/23 at 11:16 pm to
What are some good opportunities if you don't mind sharing?
Posted by Big Scrub TX
Member since Dec 2013
33717 posts
Posted on 3/13/23 at 11:32 pm to
quote:


The money will come from increased FDIC fees
Nope.

quote:

which essentially come from profits, i.e. the investors.
Nope.

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