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Date Posted: 14:35:34 5/02/23 Tue
Author: Jasper
Subject: Biden bails out svb but not willing to foot the bill for other banks.

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The White House baulked at a blanket guarantee for all deposits because that would look like social welfare for the rich. Besides, the FDIC has only $127bn of assets (and less very soon) and may ultimately require its own bailout.
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Mr Whalen said US banks and bond investors (i.e. pension funds and insurance companies) are “holding the bag” on $5 trillion of implicit losses left by the final blow-off phase of the Fed’s QE experiment. “Since US banks only have about $2 trillion in tangible equity capital, we have a problem,” he said.

He predicts that the banking crisis will keep moving up the food chain from the original outliers to mainstream banks until the Fed backs off and slashes rates by 100 basis points.

The Fed has no intention of backing off. It plans to raise rates further. It continues to shrink the US money supply at a record pace with $95bn of quantitative tightening each month.

The horrible truth is that the world’s superpower central bank has made such a mess of affairs that it has to pick between two poisons: either it capitulates on inflation; or it lets a banking crisis reach systemic proportions. It has chosen a banking crisis.

https://www.msn.com/en-us/money/companies/half-of-america-s-banks-are-potentially-insolvent-this-is-how-a-credit-crunch-begins/ar-AA1aDhwV?ocid=hpmsn&cvid=4069562a2cc54d80ab9d4e8ae8d7797c&ei=26

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