Inflation and a recession are now here :(

[lawpoke87]

Ugg. More rate hikes ahead. Maybe time for the Admin to work with the Fed to reduce inflation

Wholesale prices rose 0.7% in January, more than expected, fueling inflation increase

The producer price index, a measure of what raw goods fetch on the open market, rose 0.7% in January.

www.cnbc.com

 

[lawpoke87]

Not great news coming out this am on the inflation and economic front. More pain for the american consumer is on the way

 

[lawpoke87]

No mention of the second largest bank failure in US history which occurred yesterday on the board ? Possible contagion ? Will the Fed’s make depositors whole? Is there a white Knight in the wings?

 

[URedskin54]

No mention of the second largest bank failure in US history which occurred yesterday on the board ? Possible contagion ? Will the Fed’s make depositors whole? Is there a white Knight in the wings?

A couple friends that know more than me about that stuff are getting pretty pessimistic

 

[lawpoke87]

A couple friends that know more than me about that stuff are getting pretty pessimistic

Some banks have investing a significant portion of their cash reserves in long term T bills. When a run starts on the bank they are forced to cash in those treasuries. Due to rapidly rising inflation and interest rates they are taking significant losses on those redemptions. You can figure out the rest. Insolvency.

 

[drboobay]

Well there was certainly a tech bubble during the pandemic that was unsustainable post lockdown.

 

[lawpoke87]

Hold on boys and girls

 

[astonmartin708]

Hold on boys and girls

View embedded media

The real question is will this migrate out of the tech sector?

 

[lawpoke87]

The real question is will this migrate out of the tech sector?

There’s going to be lots of nervous people come Monday. Early next week will be interesting.

 

[HuffyCane]

I’m going to enjoy watching the anti-student loan bailout/buyout/relief folks with their “they knew what they were signing” rationale get in front of the camera and pivot to explain to middle class grandparents (whose 40 year old kids just started families and are making $300,000 and still can’t buy a house with their student loans) should be footing the tax bill to bailout the crypto speculation and disastrous Biden monetary policy evident here.

90% of the depositors at this bank had accounts with balances over the federally insured $250,000 and the means to purchase private deposit insurance and/or the knowledge to avoid risk to the excess amounts. It’s clear these people either were arrogant, ignorant, willfully negligent or all three.

Is there a lesser deserving demographic in America than these folks?

Tell me again why they should get a bailout and a 41 year old single mom from Uvalde TX doesn’t who has been paying on a student loan held by the federal government for 18 years and owes more than she initially borrowed because when she was 18 and had straight As someone told her she can sign a piece of paper and go to SMU, not sign and get a job at Whataburger and go to a community college, or join the Army in wartime. What do you say to her when Stanford MBAs with multimillion dollar homes from multimillionaire families get their business follies written off, while her parents were clueless to stop her because they didn’t speak English, didn’t go to college themselves, and wanted the very best for their child.

What do you tell her?

 

[lawpoke87]

There will be no bailout. SVB will be allowed to fail….as it should.

The Fed’s will take steps to maintain stability and confidence in the US financial system. Businesses with deposits in SVB will not be allowed to fail imo. I assume the Fed’s will ensure those thousands of employees of those businesses receive payroll checks in the coming weeks. Whatever that might look like. As I said, maintaining stability in the US financial system will be the priority.

 

[URedskin54]

I’m going to enjoy watching the anti-student loan bailout/buyout/relief folks with their “they knew what they were signing” rationale get in front of the camera and pivot to explain to middle class grandparents (whose 40 year old kids just started families and are making $300,000 and still can’t buy a house with their student loans) should be footing the tax bill to bailout the crypto speculation and disastrous Biden monetary policy evident here.

90% of the depositors at this bank had accounts with balances over the federally insured $250,000 and the means to purchase private deposit insurance and/or the knowledge to avoid risk to the excess amounts. It’s clear these people either were arrogant, ignorant, willfully negligent or all three.

Is there a lesser deserving demographic in America than these folks?

Tell me again why they should get a bailout and a 41 year old single mom from Uvalde TX doesn’t who has been paying on a student loan held by the federal government for 18 years and owes more than she initially borrowed because when she was 18 and had straight As someone told her she can sign a piece of paper and go to SMU, not sign and get a job at Whataburger and go to a community college, or join the Army in wartime. What do you say to her when Stanford MBAs with multimillion dollar homes from multimillionaire families get their business follies written off, while her parents were clueless to stop her because they didn’t speak English, didn’t go to college themselves, and wanted the very best for their child.

What do you tell her?

No bailouts for anyone

 

[lawpoke87]

No bailouts for anyone

The Fed’s won’t abandon the depositors. Too many negative short and long term ramifications.

 

[HuffyCane]

The Fed’s won’t abandon the depositors. Too many negative short and long term ramifications.

And the media elites wonder why poor people don’t vote for progressives anymore.

Bailing out Ellis from Die Hard’s $500,000 private bank account won’t poll well, for sure. Neither will all the woke depositors and causes this bank was knee deep in. Their Chief Risk Officer appears to have spent a substantial amount of time on gender identity issues. Waiting for the spin on that one from both sides …

 

[HuffyCane]

‘Kaufman asked customers to use the code “BANKRUN” to save 40% off all merchandise —‘

Might get worse before it gets better …

 

[lawpoke87]

Fed’s just shut down Signature Bank out of New York. There will be more to follow

 

[drboobay]

Government guaranteeing all deposits via a banking sector reserve fund.

 

[HuffyCane]

How we lookin’ bank-wise this morning?

 

[lawpoke87]

How we lookin’ bank-wise this morning?

Panic has subsided….at least for now. I still assume there are some problematic balance sheets out there. I can’t imagine any to the extent of SCB however. Imagine being a risk management professional and investing a large portion of your cash reserves in 10 year T bills knowing high inflation is on the horizon. Guess they believed the Biden Admin’s “transitory” crap?

 

[HuffyCane]

Panic has subsided….at least for now. I still assume there are some problematic balance sheets out there. I can’t imagine any to the extent of SCB however. Imagine being a risk management professional and investing a large portion of your cash reserves in 10 year T bills knowing high inflation is on the horizon. Guess they believed the Biden Admin’s “transitory” crap?

Likely the least of bad alternatives and they figured Uncle Joe would bail them out.

 

[lawpoke87]

Likely the least of bad alternatives and they figured Uncle Joe would bail them out.

Not sure how there’s a worst alternative than locking yourself into a ten year security yielding 2.5% when inflation is running 2 to 3 times above said yield. But then again I’m not in risk management in the banking sector.

 

[lawpoke87]

Moody’s moves it outlook on the US banking system from stable to negative. Not good

Moody's cuts outlook on U.S. banking system to negative, citing 'rapidly deteriorating operating environment'

The firm, part of the big three rating services, said it was making the move in light of key bank failures.

www.cnbc.com

 

[HuffyCane]

Moody’s moves it outlook on the US banking system from stable to negative. Not good

Moody's cuts outlook on U.S. banking system to negative, citing 'rapidly deteriorating operating environment'

The firm, part of the big three rating services, said it was making the move in light of key bank failures.

www.cnbc.com

When they change the rating of the nation’s major Mormon owned bank from stable to negative, you know things must be teetering.

 

[astonmartin708]

When they change the rating of the nation’s major Mormon owned bank from stable to negative, you know things must be teetering.

How much trust do you want to put into their system when SVB had investment grade ratings right up until the day it collapsed?

 

[astonmartin708]

• Part of the Dodd-Frank Act, the oversight threshold was initially set at $50 billion, but raised to $250 billion in 2018, a major victory for the banking lobby.
• The collapsed Silicon Valley Bank had assets of around $209 billion, leading Democrats to argue that the collapse could have been averted if SVB had been subjected to the higher oversight standard.

 

[HuffyCane]

Barney Frank Under Fire for Downplaying Deregulation While Being Paid by Signature Bank

After he had received more than $1 million as a Signature board member, the architect of the Dodd-Frank banking regulations minimized the risks of weakening rules he helped enact post-2008 financial crisis.

www.commondreams.org

 

[watu05]

SVB would not have survived Dodd Frank stress test. The bank’s execs have some explaining to do.

 

[lawpoke87]

Europe joins the misery

 

[lawpoke87]

…and another California bank appears to be in trouble

First Republic Bank Cut to Junk by S&P on Deposit Outflow Risk

 

[lawpoke87]

Saudi’s just don’t give a damn about the US or Europe.

Saudis, other oil giants announce surprise production cuts - POLITICO

 

[TUMU]

Some inflation numbers down a lot over past 15 or so months.
Still more to go.

 

[TUMU]

At 3%, CPI is one third of where it peaked a year ago. Inflation is slowing across a growing number of categories. Possibly reducing pressure on the Fed to keep hiking the rate. Probably another hike this month.

Year ago comparisons will become tougher in headline Inflation, but we could see moderation in core inflation if lower used vehicle prices and further easing in some housing cost. Housing still largest contributor to core CPI, but June increase was the smallest rent increase since the end of 2021.

 

[TUMU]

do you get credit for fixing something, if you were the one that f--ked it up to begin with.

oh by the way the harm is done and that cant be fixed

Sure, all Politicians take credit for all good things and never accept blame for bad things. Both sides do it.

 

[lawpoke87]

The historic rate hikes are having their anticipated effects. The question now becomes will the Fed be as low to act when the economy starts to slow (it will) as they were when we saw the first signs of inflation ? P

 

[drboobay]

ups drivers want $42/hr: thats 80k a year. Give me a FxxKing break.

Good for them if they can get it.

 

[Gmoney4WW]

then nurses should make $175, teacher $85, computer engineers $150, ...

You place the importance of a nurse at twice that of a teacher? And place a computer engineer at slightly below that of a nurse. Apparently you are unduly influenced by your needs for a nurse at your present age.

 

[astonmartin708]

then nurses should make $175, teacher $85, computer engineers $150, ...

Since when is a Nurse worth more per hour than a computer engineer? lol

 

[drboobay]

I don't employ delivery personnel. So I don't care what they get paid. Good for them if they can get a nice increase. Good for UPS if the can limit the increase.

I hope it is resolved quickly either way because we do rely on shipping service.

 

[Gmoney4WW]

expect to pay more for shipping, lots more!
other types of employment will command an increase, so the price you pay for some products will also increase.

You really have no clue. Increased shipping costs don't lead to increased cost(of labor) in products of any sort. Maybe for other services, but not products.

 

[noble cane]

You really have no clue. Increased shipping costs don't lead to increased cost(of labor) in products of any sort. Maybe for other services, but not products.

Well.. when 1 union gets a big raise.. then other unions will want a big raise.. so.. costs will go up... many unions have wage increase tied to the minimum wage, so they love those increases.. and well if the teamsters get an increase then the cost of raw materials shipped to manufacturers will go up and thus costs overall will go up..