Yesterday, @SecYellen made reassuring comments that led the market and depositors to believe that all deposits were now implicitly guaranteed. That coupled with a leak suggesting that @USTreasury, @FDICgov and @SecYellen were looking for a way to guarantee all deposits reassured the banking sector and depositors. This afternoon, @SecYellen walked back yesterday’s implicit support for small banks and depositors, while making it explicit that systemwide deposit guarantees were not being considered. We have gone from implicit support for depositors to @SecYellen explicit statement today that no guarantee is being considered with rates now being raised to 5%. 5% is a threshold that makes bank deposits that much less attractive. I would be surprised if deposit outflows don’t accelerate effective immediately. A temporary systemwide deposit guarantee is needed to stop the bleeding. The longer the uncertainty continues, the more permanent the damage is to the smaller banks, and the more difficult it will be to bring their customers back.
Yesterday, @SecYellen made reassuring comments that led the market and depositors to believe that all deposits were now implicitly guaranteed. That coupled with a leak suggesting that @USTreasury, @FDICgov and @SecYellen were looking for a way to guarantee all deposits reassured the banking sector and depositors. This afternoon, @SecYellen walked back yesterday’s implicit support for small banks and depositors, while making it explicit that systemwide deposit guarantees were not being considered. We have gone from implicit support for depositors to @SecYellen explicit statement today that no guarantee is being considered with rates now being raised to 5%. 5% is a threshold that makes bank deposits that much less attractive. I would be surprised if deposit outflows don’t accelerate effective immediately. A temporary systemwide deposit guarantee is needed to stop the bleeding. The longer the uncertainty continues, the more permanent the damage is to the smaller banks, and the more difficult it will be to bring their customers back.
@BillAckman @SecYellen @USTreasury @FDICgov It would have been if she hadn’t said anything either way. Just left the implied support whilst having enough slack politically to deny any possible bailout
@BillAckman @SecYellen @USTreasury @FDICgov Protecting the regional banking sector is important, but blanket deposit guarantees are neither feasible nor desirable as they encourage even more risky behavior than what we saw with SVB
@BillAckman @biancoresearch @SecYellen @USTreasury @FDICgov Why do small banks even exist? Should be like 4 per country, max
@BillAckman @SecYellen @USTreasury @FDICgov Maybe that’s the intention here: The longer the uncertainty continues, the more permanent the damage is to the smaller banks, and the more difficult it will be to bring their customers back. @BillAckman
@BillAckman @SecYellen @USTreasury @FDICgov Why don't banks just start offering more competitive deposit rates?
@BillAckman @SecYellen @USTreasury @FDICgov Or…. Smart investors should put all their deposits in T bills.
@BillAckman @SecYellen @USTreasury @FDICgov @BillAckman does the repercussions to international banks not concern you? Would there not be a worldwide run on banks to the US?
@BillAckman @SecYellen @USTreasury @FDICgov @SecYellen apparently didn't know that computers could move capital from bank to bank in minutes either. "WE HAD NEVER SEEN THE SPEED...... #hacks
@BillAckman @SecYellen @USTreasury @FDICgov Buy some $BTC Bill. These guys are going to let the whole thing collapse.
@BillAckman @biancoresearch @SecYellen @USTreasury @FDICgov Please stop begging it’s embarrassing- there are real poor people who are harmed by raging inflation