Jysin
Ahn'Qiraj Raider
- 6,545
- 4,552
My first CD with my bank in the early 2000s, I remember was $20k for 5yrs at just over 6%.
- 3
Investing General Discussion
- Thread starter Furious
- Start date
-
Guest, it's time once again for the massively important and exciting FoH Asshat Tournament!
Go here and give us your nominations!Who's been the biggest Asshat in the last year? Give us your worst ones!
Zzen
Potato del Grande
- 2,950
- 3,640
OU Ariakas
Diet Dr. Pepper Enjoyer
- 7,530
- 21,476
Someone please nitpick my basic banking knowledge and assumptions here. I saw the new rule that the backstop would protect deposits but not investors and creditors. This seems like an ideal situation (even as a huge proponent of the capitalist risk/reward structure) because it protects the people that would just like somewhere to hold their money but that are not trying to make anything other than a non-negative return. They were not trying to "invest" in the bank, they were just making a deal with the bank that they would allow them to lend out the money as long as the bank guaranteed to *not* play fast and loose with it. The old style of banks that just used those deposits to fund boring loans with high lending requiremnts meant that there was never fear that they would quickly lose 10% of their valuation due to default. Now we have to worry that our banks are buying shit like crypto, sketchy loans from pure mortgage close/sell institutions, and actual investments that carry quite a bit more risk than they did in the past. Given that depositors are still just looking for a place to plant money at an assumed 0% return why would it be a bad thing to guarantee they are all paid and that the investors and creditors get paid last? If the answer is that "no investors will fund banks that are propping up bad mortgages with investments (or vice versa)," well that is the world that I want to be in.
- 2
Falstaff
Ahn'Qiraj Raider
- 8,475
- 3,420
OU Ariakas
Diet Dr. Pepper Enjoyer
- 7,530
- 21,476
It is highly constrained capitalism, and what we have now is better than a 3rd world "bank" where you go instead of hiding your valuables in your rectum and are just praying that the "bank" doesn't just leave with everyone's money every day. But if we are going to have a ton of regulations around starting and maintaining banks in our version of "capitalism" then why does the government wait until a crisis to protect the depositors that make up the backbone of the system? Shit, if it wasn't a fucking complicated mess to do I'd go start a bank whose mission was to keep depositors safe and aim for 1% growth per year. We call these large companies institutions but the reality is none of them have been acting like institutions for the last 25 years. They have been chasing short term (less than a decade) growth and revenue targets instead of being bellwethers that plod along slowly gaining low single digits per year over a half centry or more.
Kithani
Blackwing Lair Raider
- 1,294
- 1,660
I would presume a lot of companies used that bank because they offered a higher rate on their deposits or other favorable conditions. I don’t think they randomly picked that bank because it was down the street from their office. I don’t think I would consider it truly “placing a deposit with 0% return.”
I mean I definitely look for higher interest rates on my savings account even if I don’t consider it an “investment” and I do not consider it risky due being under the FDIC limit. People do actually take that into account IMO because I remember a few better “savings” accounts offered related to the crypto area over the past few years but people pointed out that those accounts were not FDIC insured.
Sanrith Descartes
You have insufficient privileges to reply here.
- 45,786
- 126,279
Trade recco of the day. C puts expiring 4/6 (the week before earnings). 24 day hold to expiry. The $35 strike is a 23% drop from current price. IV of Citi shot up with today's bank fuckery. This put is paying 34-38 cents premium. Either A> you get the free premium or B> you get C at roughly $34.65 a share which pays over a 4.5% dividend yield and you spin around and sell covered calls against it.
- 1
Falstaff
Ahn'Qiraj Raider
- 8,475
- 3,420
Silicon Valley Bank might as well have been a cult amongst tech/venture capital. Everyone was using them and I don't think it had anything to do with rates they were being offered. It was like your mom and pop bank for these people... except mom and pop had a couple hundred billion in assets.
- 1
iamacynic37
FoH Honkler - HONK HONK MFr
- 289
- -247
WHO the FUCK thought a bank that did not back 95% of it's transactions would work?
I'm not an MBA Risk Analyst but that seems fucking retarded
I'm not an MBA Risk Analyst but that seems fucking retarded
- 1
Sanrith Descartes
You have insufficient privileges to reply here.
- 45,786
- 126,279
Kuro
Naxxramas 1.0 Raider
- 9,198
- 24,430
You can't worry about the present when you're building the future maaaaan
- 1
Jysin
Ahn'Qiraj Raider
- 6,545
- 4,552
Hot off the Fed press:
Key takeaway (to me):
III. Collateral 10) What is eligible collateral? Eligible collateral includes any collateral that (i) is eligible for purchase by the Federal Reserve Banks in open market operations (see 12 CFR 201.108(b)), and (ii) was owned by the borrower as of March 12, 2023.
11) How is collateral valued? The collateral valuation will be par value or equal to the outstanding face amount. Margin will be 100% of par value. There will be no haircuts applied.
12) If your institution already has eligible collateral pledged to the discount window, can this collateral be used for the Program? Yes. Please contact your local Reserve Bank for more information. For contact information for each District, visit https://www.frbdiscountwindow.org/pages/select‐your‐district.
13) Are advances extended under the Program made with recourse? Yes. Advances made under the Program are made with recourse beyond the pledged collateral to the eligible borrower.
14) Can a borrower pledge eligible collateral for the purpose of requesting an extension of credit under the Program at a later date? Yes.
Key takeaway (to me):
III. Collateral 10) What is eligible collateral? Eligible collateral includes any collateral that (i) is eligible for purchase by the Federal Reserve Banks in open market operations (see 12 CFR 201.108(b)), and (ii) was owned by the borrower as of March 12, 2023.
11) How is collateral valued? The collateral valuation will be par value or equal to the outstanding face amount. Margin will be 100% of par value. There will be no haircuts applied.
12) If your institution already has eligible collateral pledged to the discount window, can this collateral be used for the Program? Yes. Please contact your local Reserve Bank for more information. For contact information for each District, visit https://www.frbdiscountwindow.org/pages/select‐your‐district.
13) Are advances extended under the Program made with recourse? Yes. Advances made under the Program are made with recourse beyond the pledged collateral to the eligible borrower.
14) Can a borrower pledge eligible collateral for the purpose of requesting an extension of credit under the Program at a later date? Yes.
- 1
- 1
- 7,343
- 11,061
Sanrith Descartes
You have insufficient privileges to reply here.
- 45,786
- 126,279
Everyone bank and their moms will be selling low interest bonds and MBS to the FED for par.
- 1