For what it's worth, claims that the Fed is turning the money printer on to bail out the banks doesn't seem quite accurate.
1. Because they're explicitly allowing these institutions to fail.
2. The banks have sufficient assets on their balance sheets to pay out all deposits. The only issue is the maturity dates on those assets, relative to deposit durations. The mechanisms they appear to be using do not seem to involve any injection of taxpayer capital or money creation by the Fed.
Largely doesn’t matter. Political talking heads will control the narrative and decide how 90% of ppl feel about this
True!
Why would the banks need to fail if they didn't need a bailout? Their obligations and maturities aren't aligning.
It may not be a money printer bailout, but it is still a bailout in deed due to the Fed raising rates and them holding long maturities at low rates.
Seems accurate , so far. We'll see how it goes tomorrow and this week. 🍿
Based on what?
https://www.fdic.gov/news/press-releases/2023/pr23017.html
Favorable rates, federally sponsored, it seems. Not an expert here, will be curious to read more details.
There is a systemic, generalized cost, though - that everyone pays to fund the insurance and reduced premium on federal loans, etc.
If the Fed allows the banks to borrow against their assets at par, isn't that money printing?
