Banks R US

It has been bubbling around in my frontal globe since I first heard about the bailout of SVB — and it was a bailout. It brought up issues particularly reminiscent of 2008.

But then Janet Yellen testified about plans for future failing banks, where she said the administration, her and FDIC will decide to cover all deposits if [their regime] considers the situation presents a systemic risk. Never mind — and don’t you worry — if covering all the deposits would create a systemic risk by itself.

The administration doesn’t appear concerned about that. Just as long as this cabal can make a case that the particular bank or institution presents a systemic risk in the markets. I don’t know about you but that scares me in every way.

The administration will selectively decide if all deposits shall be covered? Well, translate that: if the bank, or institution, plays political football in the proper way carrying the left’s agenda; then they are good and worthy of full protections.

Because if they are not onboard the political train to the Left’s funny farm, then they can be fed to the wolves of the market. In other words, they must be punished fiercely unless they cooperate with the administration’s political ideals. That’s how Biden’s game works. Give us what we demand and want, or we will cut you to pieces and destroy you outright.

Why wouldn’t some of us, in a free country, be worried about exactly that scenario? Can anyone give me a good reason why it will not work that way?

I just do not want politics deciding if all bank deposits are covered — read insured — or not.  Why would any honest person want that? But that also means this political footsie game they are playing, as with most corporations, leads directly to nationalizing the banks. At least the big, good ones who cooperate with Biden’s political agenda. If not, “adios!”

An investor and turn around expert, “Mr Wonderful”– Kevin O’Leary, is making the rounds on Fox. While being rightly against bailouts, he claims the time for small, regional, or community banks is over. He makes the case against them. So he wants big banks to be the only ones left in the ocean, so says the Shark Tank investor.

This> guy  –  ….  [Video link]
“Those [other] countries have their entire economies run by four or five behemoth banks, highly regulated. We don’t need hundreds of thousands of tiny, little banks that don’t have a reason to exist anymore; because 99% of transactions today are done online. … It’s an old model that doesn’t work anymore.”

He unabashedly argues for a few large banks to do all our transactions.

He claims these regionals are all obsolete with the new ways of banking. I don’t agree.  Not that I stand for preserving dinosaurs, but I just don’t believe they are dinosaurs as a category. I don’t need to list all the things regional or community banks can do. Rather I don’t think that functionality can be replaced by a handful of big banks. I don’t see how that works? So we don’t just lose diversity; we lose functionality in the market.

Right Ring | Bullright | 2023


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