With the number of banks, large ones at that, falling one after another in just a matter of months, this is really indicative of a much bigger problem. The sad thing is that all of this might just be the opening salvo. Surely, the ripple effect of what's been happening might even be worse. If the depositors lose trust and confidence of the banks, more billions will flow out. That will cause more damage.
People should now begin to seriously look for a better alternative. Bitcoin offers that.
Topic: First Republic Bank fall: fear of more others to follow. - page 2. (Read 370 times)
If the banks are capable to pay out all the deposits to the people, who want to withdraw them, there's nothing to worry about.
The real problem will appear, when the banks don't have any money to pay their depositors. It seems that First Republic Bank is handling the situation very well. It's normal for the banks to start facing difficulties. The interest rate hikes are intended to drive the financial sector into stagnation. This will lower the inflation and the economy will stop depending on the money printing machine(at least for a while).
The key word here is "if". The very architecture of the modern banking system is such that not a single bank in the world can withstand the "raid of depositors." Typically, banks' reserve requirements for equity capital do not exceed 10-15% (and this is an optimistic estimate). No one knows how many paper unrealized losses that arose after a sharp rise in the key rate are in reality on the balance sheets.The real problem will appear, when the banks don't have any money to pay their depositors. It seems that First Republic Bank is handling the situation very well. It's normal for the banks to start facing difficulties. The interest rate hikes are intended to drive the financial sector into stagnation. This will lower the inflation and the economy will stop depending on the money printing machine(at least for a while).
Right, and the first one that are withdrawing are just average and ordinary Joe, I don't think that individuals that have millions on the banks are the one starting this bank runs. And when banks are overwhelm with this massive withdrawals, they will have to act fast, maybe selling their bonds immediately to cover it in time.
And I have also the same reasons that the Fed interest rate hikes could have affected or one of the factors. Perhaps depositors doesn't want their money sitting on banks because it will not earn them any. So we might as well withdraw it and put it to other assets like crypto.
Any bank will surely go bankrupt if its depositors pull out their money. Remember bank don't have that huge capital. They mostly rely on the profit from the investment using the money deposited by its client to maintain their operation. The survivability of a bank relies on the trust of its depositors so if the depositors lost trust in the banking system, it is obvious what will happen next. With the current economic crisis where lots of company is unable to pay their loans it is not a surprise that banks get bankrupt and in the presence of more profitable venturer, depositors are pulling out their funds to invest personally in another venture.
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If the banks are capable to pay out all the deposits to the people, who want to withdraw them, there's nothing to worry about.
The real problem will appear, when the banks don't have any money to pay their depositors. It seems that First Republic Bank is handling the situation very well. It's normal for the banks to start facing difficulties. The interest rate hikes are intended to drive the financial sector into stagnation. This will lower the inflation and the economy will stop depending on the money printing machine(at least for a while).
Yes, there shouldn't be any reason for alarm if the banks still operating and paying the depositor and account holders their funds but it would be a call for alarm if you're one of the bank shares holders.The real problem will appear, when the banks don't have any money to pay their depositors. It seems that First Republic Bank is handling the situation very well. It's normal for the banks to start facing difficulties. The interest rate hikes are intended to drive the financial sector into stagnation. This will lower the inflation and the economy will stop depending on the money printing machine(at least for a while).
Although, the First Republic Bank seems to have everything under control since their shares rebounded today but I believe the issue happening lately with banks should make people know that they need to diversify in cryptocurrency.
I am not surprised by the recent cracks and failures in the banking system, the system was propped up with free money and almost everyone feels like a genius but now that the free money has dried up, the men are being separated from the boys, this is not an issue associated with the banking sector alone but the whole economy, there are a lot of zombie companies now that will default and fail in coming months just be prepared, until the Central banks turn on the tap this trend is likely going to continue
I admire your ability to provide a clear perspective on the matter. The recession's impact on the American economy and financial state is undeniable, and it can no longer be ignored. However, I hold the belief that the market will improve in the near future.
I am not surprised by the recent cracks and failures in the banking system, the system was propped up with free money and almost everyone feels like a genius but now that the free money has dried up, the men are being separated from the boys, this is not an issue associated with the banking sector alone but the whole economy, there are a lot of zombie companies now that will default and fail in coming months just be prepared, until the Central banks turn on the tap this trend is likely going to continue
It makes no sense to withdraw at this moment, but if people are so worried then banks should be able to. Which money did people withdrew? Their own money, so you are telling me that if people want their own money back, the bank would collapse? Don't they suppose to have everyoens money and then some profits on top of that? I give it 100 bucks, it loans it to someone else for 110, and they make 10 profit, so they should be making a profit let alone be in debt.
So if they can't give everyone's money back, then they should maybe be taken over by government and pay people their money back and then close shop, they can sell the buildings and every other asset in there to pay it if they have to. I do not think that banks who fail to pay people their money back should be allowed to operate.
So if they can't give everyone's money back, then they should maybe be taken over by government and pay people their money back and then close shop, they can sell the buildings and every other asset in there to pay it if they have to. I do not think that banks who fail to pay people their money back should be allowed to operate.
I'm curious why the bank allow the depositors to withdraw $100 Billion of money? I think when the depositor want to withdraw a huge amount of money, the bank will make difficult for them to withdraw. The bank will investigating the money he have, only allow him to withdraw some portion of his total money, etc giving an excuse about any other bullshit reasons.
It doesn't feel right for the banks, maybe there's something behind that we're don't know...
It doesn't feel right for the banks, maybe there's something behind that we're don't know...
That shouldn't be the case. It's their money, not the bank's, isn't it?
I find it funny that people are so used to being fucked by these institutions, that they see a normal action of allowing clients to withdraw as something abnormal.
What was happening in China where the banks were being protected by the military so that people would not be able to withdraw is the pathological state that some of us have to live in.
I'm curious why the bank allow the depositors to withdraw $100 Billion of money? I think when the depositor want to withdraw a huge amount of money, the bank will make difficult for them to withdraw. The bank will investigating the money he have, only allow him to withdraw some portion of his total money, etc giving an excuse about any other bullshit reasons.
It doesn't feel right for the banks, maybe there's something behind that we're don't know...
The most likely explanation is that those that withdrew that amount of money were the kind of people you cannot say no to, so we are talking about powerful politicians or incredibly rich people, as anyone which has tried to withdraw a decent amount of money out of their bank account knows that you cannot do so without being interrogated by the bank staff, and even then they can refuse to do so by using any excuse they may like at the time. It doesn't feel right for the banks, maybe there's something behind that we're don't know...
If the banks are capable to pay out all the deposits to the people, who want to withdraw them, there's nothing to worry about.
The real problem will appear, when the banks don't have any money to pay their depositors. It seems that First Republic Bank is handling the situation very well. It's normal for the banks to start facing difficulties. The interest rate hikes are intended to drive the financial sector into stagnation. This will lower the inflation and the economy will stop depending on the money printing machine(at least for a while).
The key word here is "if". The very architecture of the modern banking system is such that not a single bank in the world can withstand the "raid of depositors." Typically, banks' reserve requirements for equity capital do not exceed 10-15% (and this is an optimistic estimate). No one knows how many paper unrealized losses that arose after a sharp rise in the key rate are in reality on the balance sheets.The real problem will appear, when the banks don't have any money to pay their depositors. It seems that First Republic Bank is handling the situation very well. It's normal for the banks to start facing difficulties. The interest rate hikes are intended to drive the financial sector into stagnation. This will lower the inflation and the economy will stop depending on the money printing machine(at least for a while).
The architecture of the modern system. The entire system is fucked up:
Quote
Kwon, suspected of being the one behind the losses of over 40 billion dollars, was arrested at the airport in Montenegro’s capital of Podgorica on March 23.
His company in Serbia was registered with the main activity of “consultancy services,” and was established with 100 Serbian dinars in capital, which is less than a euro.
- Source: Arrested “crypto king” sets up company in Serbia while evading InterpolHis company in Serbia was registered with the main activity of “consultancy services,” and was established with 100 Serbian dinars in capital, which is less than a euro.
I saw and heard about many systematic scams in which many institutions were involved. But did we ever have some real closure? I don't think so...
And banks are at the top of the pyramid, everything goes through them in the end. And whatever shit they make the governments will bail them out and the board of directors will receive their bonuses at the end of the year.
I simply want to ask a question - what is the US government doing? Don't they have the slightest responsibility to save the depositor's money? They are sitting on trillions of dollars. What about quantitative easing? Are they doing anything at all?
The banking crisis is real and the banking system is the backbone of the economy. So in such cases, the government needs to step in and provide provisions to help the bank survive. In my country, when two banks showed signs of collapse, the government immediately stepped in and provided them provisions to survive and now they are back on track. I gambled a little with their shares and now I am standing at around 270% profit on my investment.
During weak economic scenario, banks fail. But what's the use of paying IRS if the government doesn't come to rescue? For what people are paying taxes?
The banking crisis is real and the banking system is the backbone of the economy. So in such cases, the government needs to step in and provide provisions to help the bank survive. In my country, when two banks showed signs of collapse, the government immediately stepped in and provided them provisions to survive and now they are back on track. I gambled a little with their shares and now I am standing at around 270% profit on my investment.
During weak economic scenario, banks fail. But what's the use of paying IRS if the government doesn't come to rescue? For what people are paying taxes?
They still guarantee the $250K. That's what the influencers are saying upon defending the failed banks. Kind of funny sometimes even the smartest people we know in the past like Kevin Oleary who was recently interviewed in Kitco.
QE will only make the worse for inflation. For a bank and even the government, it's really a hard situation to get out of this crisis. So FED prefers to kill the demand and yet the government never stops spending Billions outside the country.
While it is true that banks being able to pay out all deposits is important for the stability of the financial system, it is not necessarily a guarantee of the absence of problems. Banks can face difficulties due to a variety of factors such as loan defaults, market volatility, and changes in regulatory requirements.
Regarding interest rate hikes, while they can have an impact on inflation and the economy, their effects can be complex and unpredictable. It is also worth noting that the decision to raise interest rates is typically made by central banks, not individual banks. The goal of central banks in raising interest rates is typically to manage inflation and ensure economic stability, rather than to drive the financial sector into stagnation.
Regarding interest rate hikes, while they can have an impact on inflation and the economy, their effects can be complex and unpredictable. It is also worth noting that the decision to raise interest rates is typically made by central banks, not individual banks. The goal of central banks in raising interest rates is typically to manage inflation and ensure economic stability, rather than to drive the financial sector into stagnation.
I simply want to ask a question - what is the US government doing? Don't they have the slightest responsibility to save the depositor's money? They are sitting on trillions of dollars. What about quantitative easing? Are they doing anything at all?
The banking crisis is real and the banking system is the backbone of the economy. So in such cases, the government needs to step in and provide provisions to help the bank survive. In my country, when two banks showed signs of collapse, the government immediately stepped in and provided them provisions to survive and now they are back on track. I gambled a little with their shares and now I am standing at around 270% profit on my investment.
During weak economic scenario, banks fail. But what's the use of paying IRS if the government doesn't come to rescue? For what people are paying taxes?
The banking crisis is real and the banking system is the backbone of the economy. So in such cases, the government needs to step in and provide provisions to help the bank survive. In my country, when two banks showed signs of collapse, the government immediately stepped in and provided them provisions to survive and now they are back on track. I gambled a little with their shares and now I am standing at around 270% profit on my investment.
During weak economic scenario, banks fail. But what's the use of paying IRS if the government doesn't come to rescue? For what people are paying taxes?
Wondering how banks are failing if they have the reserve banks' support? Maybe they will just file for bankruptcy if more than 10-20% of the assets are withdrawn from that particular bank. Considering the fact that they are giving away money off the other assets, for example, fixed deposit interests, loans that they might have lent, and mortgages that are just having shitty values and salaries. They will have no choice but to file for it.
The real question is why there was such sudden withdrawal from the depositors anyway?
The real question is why there was such sudden withdrawal from the depositors anyway?
Q1 financial report was released and it showed their earnings are poor, so naturally depositors would want their money away from the institution that isn't involved in healthy investments. First Republican doesn't have banking by the federal government, they've explicitly said they won't be providing them with aid.
Naturally, the bigger banks would come in and provide some liquidity because they're already in 30B due to previous investments when SVB fell. And if not, First Republic gets seized and sent over to FDIC to redistribute funds to depositors.
I'm curious why the bank allow the depositors to withdraw $100 Billion of money? I think when the depositor want to withdraw a huge amount of money, the bank will make difficult for them to withdraw. The bank will investigating the money he have, only allow him to withdraw some portion of his total money, etc giving an excuse about any other bullshit reasons.
It doesn't feel right for the banks, maybe there's something behind that we're don't know...
It doesn't feel right for the banks, maybe there's something behind that we're don't know...
Why it doesn't feel right?
That's how things are supposed to be, people deposit money when they want, and people should withdraw money when they want.
What's really surprising in this whole situation is that the whole panic started after someone managed to get 72 billion out of the bank without a hiccup, proving the bank had that 72 billion and not by somebody not being able to get his money out. Furthermore, the other action that triggered more panic and the price dwindling on the stock market is that they plan on liquidating close to 100 billion in assets to prepare for more withdraw and balance sheets, thus proving they still have at least another 100 billion ready. This is a bit of fucked up situation where a bank that has the money is going down while others who are probably in worse situations are watching calmly from the sure simply because their users are not that keen to cash out.
Anyhow, I don't know why everyone is panicking now, the major storm was back in March when they went down from 120$ to 12$ per share.
I'm curious why the bank allow the depositors to withdraw $100 Billion of money? I think when the depositor want to withdraw a huge amount of money, the bank will make difficult for them to withdraw. The bank will investigating the money he have, only allow him to withdraw some portion of his total money, etc giving an excuse about any other bullshit reasons.
It doesn't feel right for the banks, maybe there's something behind that we're don't know...
It doesn't feel right for the banks, maybe there's something behind that we're don't know...
It's just your thought, it depends on each bank, each country, not the bank as well as you say. Not every bank makes it difficult or prevents people from withdrawing money, they have the right to get it all back as long as they follow the bank's regulations.
The Fed or the US government is more than capable of saving these banks, but there must be a reason why they shouldn't. Many people look at it and think the banking and fiat systems are collapsing, which is a rather short-sighted view. For me, it's just a purge and reset game because we have millions of banks in the world.
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The truth of the matter remains that the financial world is shifting, and it's time people start embracing bitcoin, all this things happening are just indications, it is high time people start learning to become their own bank.
There is always a good news in every bad news, and the good news here is that, stuffs like this are actually good for the adoption of bitcoin, the collapse of banks simply will drive some people into looking for an alternative, and bitcoin is here to be that alternative - adoption is coming to bitcoin, sooner than we think.
There is always a good news in every bad news, and the good news here is that, stuffs like this are actually good for the adoption of bitcoin, the collapse of banks simply will drive some people into looking for an alternative, and bitcoin is here to be that alternative - adoption is coming to bitcoin, sooner than we think.
Wondering how banks are failing if they have the reserve banks' support? Maybe they will just file for bankruptcy if more than 10-20% of the assets are withdrawn from that particular bank. Considering the fact that they are giving away money off the other assets, for example, fixed deposit interests, loans that they might have lent, and mortgages that are just having shitty values and salaries. They will have no choice but to file for it.
The real question is why there was such sudden withdrawal from the depositors anyway?
That does not work like that mate.
It's your money when you deposit in the banks. There is no rule on how much you can withdraw OR how much you can spend from your bank account as long as everything is within the law.
We have seen denominations crisis in a few countries and governments have halted the money withdrawal. But have you seen the riots that followed after that? That's because its personal savings, and one has all the right to withdraw it.
In addition, that's collective amount that was withdrawn, it wasn't from an individual.
The real question is why there was such sudden withdrawal from the depositors anyway?
I'm curious why the bank allow the depositors to withdraw $100 Billion of money? I think when the depositor want to withdraw a huge amount of money, the bank will make difficult for them to withdraw. The bank will investigating the money he have, only allow him to withdraw some portion of his total money, etc giving an excuse about any other bullshit reasons.
It doesn't feel right for the banks, maybe there's something behind that we're don't know...
It doesn't feel right for the banks, maybe there's something behind that we're don't know...
That does not work like that mate.
It's your money when you deposit in the banks. There is no rule on how much you can withdraw OR how much you can spend from your bank account as long as everything is within the law.
We have seen denominations crisis in a few countries and governments have halted the money withdrawal. But have you seen the riots that followed after that? That's because its personal savings, and one has all the right to withdraw it.
In addition, that's collective amount that was withdrawn, it wasn't from an individual.
That's nothing compared to the whole situation that has been going on in the US banking sector for years. They've all been living on borrowed time, artificially. All they needed to crash and burn was a tiny nudge and last year's inflation + recession in United States ensured their demise.
If we thought 2008 mess was bad, the 2023-4 messes will be much worse specially since this time the world is slowly dumping the US dollar.
Remember buy bitcoin and HODL.
If we thought 2008 mess was bad, the 2023-4 messes will be much worse specially since this time the world is slowly dumping the US dollar.
Remember buy bitcoin and HODL.
I'm curious why the bank allow the depositors to withdraw $100 Billion of money? I think when the depositor want to withdraw a huge amount of money, the bank will make difficult for them to withdraw. The bank will investigating the money he have, only allow him to withdraw some portion of his total money, etc giving an excuse about any other bullshit reasons.
It doesn't feel right for the banks, maybe there's something behind that we're don't know...
It doesn't feel right for the banks, maybe there's something behind that we're don't know...
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