Bitcoin et al.

[GrantDawg]

Because any buyer has to have the liquidity to take on the depositors and pay for the assets. This makes it much easier to get full value out of those assets instead of the pennies on the dollar that would have happened without it.

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[RainMaker]

Originally Posted by GrantDawg

This is allowing depositors to keep their money and stay in business. I don't see how that is a bad thing.

This is a lot of work to say they are bailing out wealthy depositors who made bad and risky decisions on where to keep their money.

[RainMaker]

Originally Posted by GrantDawg

Because any buyer has to have the liquidity to take on the depositors and pay for the assets. This makes it much easier to get full value out of those assets instead of the pennies on the dollar that would have happened without it.

That's not our problem.

[GrantDawg]

Are you a member of the Fed? How is it your problem at all?

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[RainMaker]

Originally Posted by GrantDawg

Are you a member of the Fed? How is it your problem at all?

The Fed should not be picking winners and losers in business. They should not be protecting a small class of people over everyone else. Especially at a time when they are actively trying to increase the unemployment rate.

It's a system that is supposedly owned by all of us that actively works for a small group of people at the expense of everyone else.

The Fed's job here should be to cover the insured losses up to $250k and help in the closure of the bank. That's it. Uninsured deposits can get in line with other creditors. Sorry the people who screech about capitalism at all times made a bad decision with their money and would have to pay for it.

[Edward64]

Hmmmm. But there may be a real bailout coming ...

This could get interesting as interest rates continue to go up. But that's for another day.

Stocks week ahead: US banks sitting on unrealized losses of $620 billion | CNN Business

Silicon Valley Bank’s collapse last week sent tingles of panic down investors’ spines as it highlighted a larger problem across the banking sector: The widening gap between the value large lenders place on the bonds they hold and what they’re actually worth on the market.

SVB’s downfall was tied, in part, to the plunge in the value of bonds it acquired during boom times, when it had a lot of customer deposits coming in and needed somewhere to park the cash.

But SVB isn’t the only institution with that issue. US banks were sitting on $620 billion in unrealized losses (assets that have decreased in price but haven’t been sold yet) at the end of 2022, according to the FDIC.

[GrantDawg]

They aren't and they are. The bank lost, and they are using bank funds to save the jobs of thousands of people that did nothing wrong. Your way, those people are unemployed and the large banks buy assets for pennies and make even more money. That is the way that benefits the billionaires at the price of workers.

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[JPhillips]

How many of these tech bro assholes will attack Biden for being a socialist?

[RainMaker]

Originally Posted by GrantDawg

They aren't and they are. The bank lost, and they are using bank funds to save the jobs of thousands of people that did nothing wrong. Your way, those people are unemployed and the large banks buy assets for pennies and make even more money. That is the way that benefits the billionaires at the price of workers.

So it's about the little guy now? Weird how that only comes up when some very wealthy people are about to lose money.

Didn't hear people complaining about unemployed people as the tech industry has been slashing jobs over the past few months. Didn't hear the complaining when the Fed intentionally raised rates to increase the unemployment rate and drive down salaries.

This is a bullshit excuse to protect wealthy people who made bad decisions with their money.

[RainMaker]

Originally Posted by JPhillips

How many of these tech bro assholes will attack Biden for being a socialist?

None. They spent all weekend crying about how they need a bailout since this time it was their money at stake.

Whoops pic.twitter.com/MFaMlcdMDl

— jordan (@JordanUhl) March 12, 2023

Life comes at you fast pic.twitter.com/D2JehRDzpj

— laurence (@functi0nZer0) March 10, 2023

[GrantDawg]

The people that made bad decisions were the investors, management, and the board of the bank. They all have nothing. I don't see how you can equate that with being a depositor in a bank. I work for a small company, and so does my wife. I know my job would be probably be gone if our bank went under, and I wouldn't be blaming my boss. So would my wife. And their "risky" action would have been depositing money in a bank? That is exactly the kind of thing the Fed should protect.
This is the banks (who are the ones that pay into the funds being used) protecting depositors. Again, I don't see this as a major negative.

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[RainMaker]

Originally Posted by GrantDawg

The people that made bad decisions were the investors, management, and the board of the bank. They all have nothing. I don't see how you can equate that with being a depositor in a bank. I work for a small company, and so does my wife. I know my job would be probably be gone if our bank went under, and I wouldn't be blaming my boss. So would my wife. And their "risky" action would have been depositing money in a bank? That is exactly the kind of thing the Fed should protect.
This is the banks (who are the ones that pay into the funds being used) protecting depositors. Again, I don't see this as a major negative.

If your boss is keeping significant uninsured deposits at a bank that would wipe out the company, you should absolutely blame them. It's an incredibly dumb decision.

So are we going to now insure the jobs for every company that makes poor financial decisions? Or just when it has the potential to cost a few wealthy people money. Businesses go under all the time for making bad investments.

[RainMaker]

It seems unfair that all those Blockbuster employees had to lose their jobs through no fault of their own because executives at the company made bad decisions. Can we fire up the money printing machine to make them whole too?

[GrantDawg]

But know that isn't even close to the same thing.

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[RainMaker]

Originally Posted by GrantDawg

But know that isn't even close to the same thing.

What's the difference? Company makes bad financial decision. In one scenario, they go out of business. The other, they have their losses covered by the government.

[GrantDawg]

Because bank deposits are not supposed to be risks.

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[GrantDawg]

The best way to put this is this is "banks are being forced to pay the failure of banks" because this is what is happening. An industry taking care of itself is the right thing to do.

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[RainMaker]

Uninsured deposits absolutely are a risk. This is just like the folks in 2008 who believed home prices only go up.

If you keep covering the failures of wealthy people, they'll continue to take even bigger risks knowing there are no consequences for it.

[GrantDawg]

You aren't.

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[RainMaker]

These same people have been telling us that government fees and taxes get passed on to the consumer. Is that still true or is this one of those very narrow exceptions that seem to be made when the government has to help wealthy people?

Also, FDIC is backed by the full credit of the United States government. So maybe they can use their pool of money from insured depositors to cover those who were not insured. But it wasn't set up that way and it leaves taxpayers in a much riskier position if other banks fail.

And then there is the moral issue. Should the government be picking winners and losers in business? Is it fair to a business that did not take risks (and made less money) to have to compete with a company that did take risks but had it covered through a special exception? Why is FDIC collecting for accounts up to $250k when it's pretty clear that the government will cover it all? Seems a nice tax break for the rich.

[GrantDawg]

Actually, they are using a larger fund set up after 2008 that the banks pay into for just this kind of issue. Basically, it is an insurance to protect the whole industry. Any short fall will come from a further special assessment of the banks as needed. This was a regulatory setup that was asked for, but now the very people that asked for it to make the banks more responsible are crying about its use.

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[Edward64]

Originally Posted by GrantDawg

Actually, they are using a larger fund set up after 2008 that the banks pay into for just this kind of issue. Basically, it is an insurance to protect the whole industry. Any short fall will come from a further special assessment of the banks as needed. This was a regulatory setup that was asked for, but now the very people that asked for it to make the banks more responsible are crying about its use.

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Assume you are referring to this?

https://www.cnbc.com/2023/03/13/wall...ef-plans-.html

Plans announced Sunday to fully reimburse deposits made in the collapsed Silicon Valley Bank and the shuttered Signature Bank will rely on Wall Street and large financial institutions — not taxpayers — to foot the bill, Treasury officials said.

“For the banks that were put into receivership, the FDIC will use funds from the Deposit Insurance Fund to ensure that all of its depositors are made whole,” said a senior Treasury Department official, who spoke to reporters Sunday about the plan on the condition of anonymity.

“The Deposit Insurance Fund is bearing the risk,” the official emphasized. “This is not funds from the taxpayer.”

The Deposit Insurance Fund is part of the FDIC and funded by quarterly fees assessed on FDIC-insured financial institutions, as well as interest on funds invested in government bonds.

The DIF currently has over $100 billion in it, a sum the Treasury official said was “more than fully sufficient” to cover SVB and Signature depositors.

[GrantDawg]

Right. The DIF is a fund whose sole purpose is to insure deposits above the 250,000 insured by the FDIC. It was set up after 2008 just for instances like this. If the Fed didn't use these funds for this, what is the purpose of having it?

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[Edward64]

I think Bernie is okay with the plan ...

Now is not the time for U.S. taxpayers to bail out Silicon Valley Bank. If there is a bailout of Silicon Valley Bank, it must be 100 percent financed by Wall Street and large financial institutions.

[RainMaker]

Originally Posted by GrantDawg

Actually, they are using a larger fund set up after 2008 that the banks pay into for just this kind of issue. Basically, it is an insurance to protect the whole industry. Any short fall will come from a further special assessment of the banks as needed. This was a regulatory setup that was asked for, but now the very people that asked for it to make the banks more responsible are crying about its use.

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No, it was not setup that way. It was setup for accounts up to $250k. If it was setup for all deposits, there wouldn't be a $250k limit posted everywhere. I'm fine with having FDIC cover all deposits if it means banks funding it. This is just selective enforcement and making rules up as you go along.

The FDIC has a little over $100 billion to cover $10 trillion in insured deposits right now.

When FDIC insures deposits that did not pay in to the fund, it adds risk as the fund becomes depleted. Plus the moral hazard that wealthy depositors have realized they can make riskier moves with their money because the government will cover their losses and make others pay the fees for it.

[GrantDawg]

Wrong: The DIF is a private, industry-sponsored insurance fund that insures all deposits above Federal Deposit Insurance Corporation (FDIC) limits at our member banks.

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[RainMaker]

Originally Posted by GrantDawg

Wrong: The DIF is a private, industry-sponsored insurance fund that insures all deposits above Federal Deposit Insurance Corporation (FDIC) limits at our member banks.

Who backs it? Like when the fund runs out of money and a bank goes under, who pays?

[Edward64]

Wish me luck. Just signed up for Coinbase.

Not going to put much money so I'll worry about a cold wallet later.

@Hammer, expecting you to tell me when to put my $200 to use!

[GrantDawg]

Banks. Banks are assessed a special assessment to make up the short fall.

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[GrantDawg]

Straight from the Fed announcement: Shareholders and certain unsecured debtholders will not be protected," the statement read. "Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law."

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[RainMaker]

Originally Posted by GrantDawg

Banks. Banks are assessed a special assessment to make up the short fall.

I know who funds it. I'm asking who backs it.

I mean if this is all taken care of through a private fund with banks, what's the government's role? Seems like the banks have this sorted out between them.

[GrantDawg]

If all banks fail, I imagine it will be the government. But I imagine if all banks fail, it really won't matter, because there won't be a government for long

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[GrantDawg]

It is really amazing how anti-insurance you are Rsinmaker. I guess you are against home insurance as well? Car insurance? Life insurance? "If you made the bad business decision to buy a house that could catch fire, you deserve to loose everything..."

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[RainMaker]

Geico isn't backed by the United States Treasury.

Insurance is great. If I took out a $250k policy on my home and it burned down, I would not expect a check for $1 million though.

And it doesn't require every bank to fail so that taxpayers are on the hook. FDIC was depleted in the 90's and 2000's. It just takes a few regional banks to go under and that money is gone. And it doesn't fill up the next day. In fact, the FDIC didn't fill its fund up from the 2008 crisis until 2018.

[RainMaker]

Here are my two big issues:

1) If all deposits are to be insured, then the fund needs to be much larger. As it stands, banks are paying for insurance on $250k but receiving insurance on everything. Subsidy, handout, whatever you want to call it. Like with all insurance, you pay based on the risk you pose. Banks pose far greater risk than they are being charged to fund.

2) Moral hazard. If everyone is covered, you can be risky. You said depositors lost money through "no fault of their own". All these depositors have access to sweep accounts, money markets, and other safer vehicles. They chose not to because it would cost them a fraction more to bank. That was a risk they took.

When the government covers risky behavior of a business, they are picking winners and losers. They are telling businesses to not worry about risk. That's an extremely dangerous position and is going to continue to lead to taxpayers having to back the losses of wealthy people.

[Hammer]

Originally Posted by Edward64

Wish me luck. Just signed up for Coinbase.

Not going to put much money so I'll worry about a cold wallet later.

@Hammer, expecting you to tell me when to put my $200 to use!

Ah, I can't go there. Couple of things I will say. Mount Gox creditors are expecting Bitcoin back soon. This will bring selling pressure should it happen. Not a huge amount but more than normal.

Secondly Eth is set for a large unlock early April. This also brings the risk of sell pressure.

Btc resistance around $25k, support around $20k.

If you buy now expect to be in a loss at some point. With a 2.5 year time frame I would be pretty confident saying you will double your money at some point. Probably significantly more. But I reserve the right to be wrong. Crypto is around 15% of my portfolio. 3% of my entire net worth which is mainly real estate. Slightly more than my Tesla position. That is my personal risk tolerance and confidence level. I am big in to diversification.

I like DCA on steroids. For example $25 a week below $25k. $50 below $20k, $75 below $19k and so on. You layer can out using the same method.

If you really are only putting in $200 you might want to consider alt coins for shits and giggles. You might see a 5x-7x if you are lucky on BTC in 2 years but the market cap prohibits huge gains now.

[Edward64]

Uh oh on First Republic.

Should be an interesting week.

San Francisco’s First Republic shares lost 70% in premarket trading Monday after declining 33% last week. PacWest Bancorp dropped 37%, and Western Alliance Bancorp lost 29% in the premarket. Zions Bancorporation shed 11%, while KeyCorp fell 10%. Bank of America lost 6% in premarket trading, while Charles Schwab tumbled 20% early Monday.

[Edward64]

Originally Posted by Hammer

Ah, I can't go there. Couple of things I will say. Mount Gox creditors are expecting Bitcoin back soon. This will bring selling pressure should it happen. Not a huge amount but more than normal.

Secondly Eth is set for a large unlock early April. This also brings the risk of sell pressure.

Btc resistance around $25k, support around $20k.

If you buy now expect to be in a loss at some point. With a 2.5 year time frame I would be pretty confident saying you will double your money at some point. Probably significantly more. But I reserve the right to be wrong. Crypto is around 15% of my portfolio. 3% of my entire net worth which is mainly real estate. Slightly more than my Tesla position. That is my personal risk tolerance and confidence level. I am big in to diversification.

I like DCA on steroids. For example $25 a week below $25k. $50 below $20k, $75 below $19k and so on. You layer can out using the same method.

If you really are only putting in $200 you might want to consider alt coins for shits and giggles. You might see a 5x-7x if you are lucky on BTC in 2 years but the market cap prohibits huge gains now.

Thanks for the advice.

[Edward64]

IMO, it seems the FDIC, Yellen & team have addressed the immediate situation for now. Nothing Joe says will make things more "reassuring" (to me) and makes me question if there is more to be concerned about that I know. Or he sees this as an opportunity for more politicking with "there will not be bank bailouts".

Market futures were nicely up on Sun. They are now mixed with +/- .50%. Don't make it worse Joe!

President Joe Biden said he will address the developing situation in the US banking system on Monday morning.

"Yes. I'll talk to you tomorrow morning," he told reporters in response to a question about addressing the situation as he boarded Air Force One to return to the White House.

Later, the White House released a daily guidance for Monday, noting that Biden is scheduled to make remarks on the banking system at 8 a.m. ET before departing for San Diego where he is scheduled to meet the prime ministers of the United Kingdom and Australia.

[Edward64]

And bitcoin is up 12% today.

Weirdly, this incident may be a vote of confidence for decentralized, non-shit coins ... stored in cold wallets.

[Hammer]

Originally Posted by Edward64

And bitcoin is up 12% today.

Weirdly, this incident may be a vote of confidence for decentralized, non-shit coins ... stored in cold wallets.

For sure. I think light is finally being thrown on the issues within the banking system. The general public don't really want to hear this stuff until things start to break. The fractional reserves held. Plus like only 1-4% (depending on your country) of the funds in the pot that would actually be necessary to insure what they claim to insure.

All that said, even if I had no Bitcoin I think I would take a gamble and not buy now. $25k resistance has been broken. I am fairly sure it will be retested as support again, like 85% or so. Maybe 60% sure the $20k resistance (that is now support) will be tested again. That will take some breaking now. It might be several months, but based on history there will usually be something to shake the tree and send us down before we lift off in 2024.

I haven't sold any recently but I am more in take profits mode at this point. For me buying time will always be when the sky is falling, exchanges are going bankrupt. Which tends to freak out most people, but in reality it means nothing. Unless someone hacks the Bitcoin blockchain or it hits some sort of problem which we haven't seen since it began operations in 2008, it is just noise and something to be taken advantage of in my opinion.

[Edward64]

I read somewhere that Binance is likely going to be found guilty of some/most of the charges. The question is will the fine be significant enough.

If true, not good for a major player in the crypto market.

9 eye-popping allegations in the U.S. government’s lawsuit against Binance - MarketWatch

[Edward64]

A little more on Binance.

The bolded caught my eye. I assume there would be an orderly process to transfer out existing accounts etc. if/when this happens.

The CFTC lawsuit against Binance is a big deal for the crypto industry, given its general belief that the CFTC doesn’t pursue small crypto players without merit. This was evident in the Bitfinex case back in 2018, in which the crypto exchange settled with a hefty fine in 2021.

Adam Cochran, a crypto observer, reiterated a similar stance, saying the CFTC “doesn’t go after small frequent cases like the SEC,” adding that “It’s a different beast and its cases are often fatal.”

In his Twitter thread, Cochran commented that the early evidence gathered by the CFTC could prove fatal for Binance. He added that Binance could either fight the case in the U.S. or settle it outside the court, but in all likelihood, it would be forced to cease operations in the United States.

[Hammer]

Lol, the media still don't get it. Or is it purposeful FUD?
Would it be a big deal for the U.S. Dollar if a large U.S. bank had a lawsuit against it? Of course not.

[Edward64]

Stock Chart Icon

Monday’s drop came after Binance tweeted Sunday that the Bitcoin network was “experiencing a congestion issue” and that it was temporarily closing bitcoin withdrawals as a result until the network stabilized. Some market participants have argued that the Bitcoin network is stable and Binance should have prepared for a high-fee environment on Bitcoin.

I actually didn't know below. The 7-10 transactions per second seems like an awfully low bar.

The issue has highlighted a long-known setback of the Bitcoin network: It wasn’t designed to handle a large number of transactions at scale. It processes just seven to 10 transactions per second, making it unviable as a potential rival to companies such as Visa and Mastercard — an idea many have explored over the years but largely put to rest. This is why projects such as the Lightning Network, which helps speed up transactions without affecting the network, have gained in popularity.

[Edward64]

SEC is pitching a fit this week.

I assume there's merit to the charges, some negotiated settlement, promises of reform etc. Let's not have another FTX collapse.

SEC sues Coinbase over exchange and staking programs, stock drops 16%

Investors pull $790 million from crypto exchange Binance after SEC charges

[Radii]

I made a small profit gambling with bitcoin. I had planned to hold for awhile and see if it would climb back up to 60k+, but some stuff has come up that makes the $$ not quite as expendable so I'm playing it safe. Made 25% on my money since about December though, so that's cool.

[Edward64]

Binance is in a world of hurt. They prob don't need US to survive though.

https://www.cnbc.com/2023/06/08/bank...ange-says.html

Binance.US customers will no longer be able to use U.S. dollars to buy crypto on the platform as early as June 13, hobbling the exchange’s ability to do business in the United States, after both payment and banking partners “signaled their intent to pause USD fiat channels,” the exchange said.

Binance announced the change late Thursday night on Twitter, and blamed the Securities and Exchange Commission’s “unjustified civil claims against our business.” The exchange said it had preemptively disabled customers’ ability to buy and deposit U.S. dollars.

If you have coins in Binance, prob should put them somewhere else.

Customers won’t lose their money — those who haven’t withdrawn their money by the shutdown date could still theoretically convert it to a stablecoin such as tether, then withdraw that and convert it back to dollars elsewhere. But it suggests that Binance’s banking partners have decided the exchange is too risky a client to keep on, and that the revelations from the SEC case have grown too significant to ignore.

[Hammer]

Originally Posted by Hammer

All that said, even if I had no Bitcoin I think I would take a gamble and not buy now. I am fairly sure $25k will be retested as support again, like 85% or so. Maybe 60% sure the $20k resistance (that is now support) will be tested again. That will take some breaking now. It might be several months, but based on history there will usually be something to shake the tree and send us down before we lift off in 2024.

I think if you have no Bitcoin, the next 3-4 months is likely to be your best chance to jump in. Most likely we will see a summer lull and my best guess is a $20k-$26k range, but I wouldn't be at all upset about buying $25k and being in a loss for a few months. I would be fearful of waiting for lower prices and missing out. Retesting the lows will take some world wide uber nuke most likely, which is unlikley. Of course anything is possible.

Some points to consider.

1. Bitcoin has been ruled a commodity in the U.S. so isn't caught up in this SEC security back and forth.

2. Rulings in the U.S. are not all that important anyway. Been consistently around 14% of worldwide spot volume over the past few months. Don't over estimate the significance of what you see on the news. Buying when FTX went down and fear was sky high was the textbook no brainer time to buy. Another example of something that really doesn't matter crashing prices, when in reality it has nothing to do with Bitcoin and therefore Bitcoin price.

3. Because the U.S. is backing off crypto China is doing the opposite. They appear to be reversing their ban as they will want to take advantage if the U.S. walks away. Wouldn't be surprised to see this cycle continue. Asia is over 50% of crypto volume for the last few months and it's increasing.


I have bought a few alt coins with profits from Bitcoin today that I had been holding in cash. Just a small position in half a dozen projects I plan to hold for a couple of years. Lottery tickets pretty much, less than 10% of my crypto portfolio. Solana and Atom mainly. Also some Graph, Polkadot, Arweave, XRP and Cardano.

I think the likes of XRP and Cardano are scammy, shit projects but they seem to have retail suckered and I can see them jumping back in down the road as they are emotionally attached to them.

The others look to have something, but could easily crash and burn. If 1 works out it is the type of investment which could still profit even if all the rest crash and burn.

[GrantDawg]

Huh.

North Korean hackers have stolen more than $3 billion in crypto over the last 5 years, and their heists are now funding fully half of its ballistic missile program, alarming U.S. officials. Here's how they did it. w/ @bobmcmillan https://t.co/Kx0djViDB2 pic.twitter.com/I1GgQpVXkx

— Dustin Volz (@dnvolz) June 11, 2023