US officials lead urgent rescue talks for First Republic | Hacker News Reader

US officials lead urgent rescue talks for First Republic

reuters.com

31 pointsporsager16 comments

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The contagion will spread until the munny printers catch fire from overuse.

You generally have to print money to recover from deleveraging. https://www.youtube.com/watch?v=PHe0bXAIuk0&t=1470s

Fed printed money for SVB, Fed will print for First Republic.

https://europeanconservative.com/articles/analysis/silicon-v...

> Fed printed money for SVB

It created the BTFP [1], a short-term fix for the stupid way we account for Treasuries held to maturity in American banking, after SVB collapsed. Against $80bn in collateral (and for $100mm of fees), the Fed has issued $65bn of cash [2].

> Fed will print for First Republic

First Republic isn't saved by the BTFP. Their issues are broader than a HTM shortfall.

[1] https://www.federalreserve.gov/financial-stability/bank-term...

[2] https://www.federalreserve.gov/publications/files/13-3-repor...

Yes, BTFP is printing money.

By that rationale any policy decision that preserves bank deposits is printing money. Which is a cogent argument but not a mainstream one.

> BTFP is printing money

Straw man. I never said it wasn’t. I said it didn’t exist when SVB was resolved and that it’s irrelevant to First Republic.

I don't fully understand your take here. The fed lifeline policy is still in effect. It was put into effect after SVB to prevent future issues. There is now contagion with the policy still in place.

What am I not understanding?

>There is now contagion with the policy still in place.

The situation is worse than it appears. SVB was a lung tumor, but the lungs aren't the only organs that have metastasized.

I'm not completely convinced by that. Do you have any source information to back it up? I would love to have more to read.

I went through the Top 20 US banks by AUM this morning and none are down except for First Republic. This contrasts what occurred in March where the entire sector was panicked.

From my POV, if there is contagion outside of startup tech banks then investors aren't signaling that FRB is a canary in the coal mine for them. I don't have any deeper or private knowledge of the financial sector, though.

> What am I not understanding?

Fed will print money.

Are you saying you feel a new policy will be implemented in response to FRB going into receivership? Or just memeing? :s

See the title.

> US officials lead urgent rescue talks for First Republic

There is no need for any urgent rescue talks. Fed will print money.

If that were true then the stock price wouldn't have tanked 50% today, IMO. FRB is going into receivership in about five hours, bet.

> then the stock price wouldn't have tanked 50% today

Depositors are probably protected. Bondholders and equity holders, probably not. Last I heard, PNC was the front runner.

Is printing money fundamentally different than taxation?

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