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A comment on Yellen says government will help SVB depositors but rules out bailout. Parent comment

Re:Yellen says government will help SVB depositors but rules... by jliptzin on Sunday March 12, 2023 @11:33AM (#35121279)
Not in today’s environment. My Citi savings account pays 0.12% interest despite fed funds being at ~5%. Big banks don’t need more deposits, they can’t even make enough on their existing deposits. They especially don’t need to get involved in another bank during a bank run.
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Re:Yellen says government will help SVB depositors but rules... by metalspot on Sunday March 12, 2023 @11:45AM (#35121461)
that's the thing. SVB has a loan portfolio paying much higher interest rates. but if that loan portfolio is to a bunch of companies that are going to go bankrupt, then it isn't worth anywhere close to what it is on the books at.

the game here is very simple: SVB loans money to cash burning startups and they keep that money in SVB accounts, so it looks like they have cash, and it looks like SVB has deposits, but all of that is created out of thin air by SVB giving loans to companies that couldn't get them from a real bank. If those companies actually take the money SVB loaned them out of their SVB account, then the scam collapses.

that is what happened. everybody knows it.

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Re:Yellen says government will help SVB depositors but rules... by jliptzin on Sunday March 12, 2023 @11:57AM (#35121661)
Ok, maybe that's true, maybe it's not? We don't know yet. Is that worth the collapse of the regional banking system in this country even if that is true? I'd prefer to have choices with my money, not just Citibank, Chase, and Wells Fargo.
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