Coffee Talk VI: The Undiscovered Country

[sabresfaninthesouth]

Don't know a lot about the situation, but couldn't a larger bank scoop up the remains and get a bailout to fix the problem?

I used to work for a bank that scooped up a smaller failed bank that had made a hash of the housing bubble and made a ton. Feels like this situation parallels.

Usually once the FDIC actually steps in, it's game over for getting bought.

Odds are they - both the bank and FDIC - were trying to find a suitor in the last few days or weeks, but nobody wanted it. The FDIC regs are weird and I'm certainly no expert, but my understanding is that once FDIC pulls the trigger, the sale options dwindle automatically.

 

[forty_three]

Usually once the FDIC actually steps in, it's game over for getting bought.

Odds are they - both the bank and FDIC - were trying to find a suitor in the last few days or weeks, but nobody wanted it. The FDIC regs are weird and I'm certainly no expert, but my understanding is that once FDIC pulls the trigger, the sale options dwindle automatically.

It's looking like the payroll company that ran everything through SVB used by most of the startups has switched everything over to JP Morgan Chase. And that's more what I was talking about, not so much someone buying up the dead bank, but the assets and books from it. Now all that FDIC money is moving to Chase and they will claim some sort of hardship and I am sure get breaks in the future for it.

Removing a lot of future incentive for other banks to help the next time someone runs a double pyramid scheme.

 

[Comeds]

 

[sabresfaninthesouth]

It's looking like the payroll company that ran everything through SVB used by most of the startups has switched everything over to JP Morgan Chase. And that's more what I was talking about, not so much someone buying up the dead bank, but the assets and books from it. Now all that FDIC money is moving to Chase and they will claim some sort of hardship and I am sure get breaks in the future for it.

Removing a lot of future incentive for other banks to help the next time someone runs a double pyramid scheme.

Yeah, valuable things like a book of business can go elsewhere, which can obviously be valuable to the new bank who is doing business with them. The assets themselves are what makes it tricky. As soon as FDIC steps in, the assets are frozen, which often includes all or a substantial portion of a specific depositor's funds.

They're making a big deal about this being the second biggest bank failure, etc. But that's only because the government successfully "brokered" (read: forced) a couple of large sales back in 2008, most notably Wachovia to Wells Fargo. I've heard stories from colleagues who are banking experts and some who were working at Wachovia at the time (they were headquartered here in Charlotte) that Wachovia was within literal hours of failing - much worse than the very bad that was talked about at the time - and that the only reason the government slapped them with the too big to fail moniker was because Wachovia failing right on the heels of WaMu would have made FDIC itself insolvent, which would've created a domino effect that would make the Great Depression look like a picnic.

TThankfully this is, for now at least, a much different scenario which hopefully won't bleed into the more traditional banks.

 

[forty_three]

Yeah, valuable things like a book of business can go elsewhere, which can obviously be valuable to the new bank who is doing business with them. The assets themselves are what makes it tricky. As soon as FDIC steps in, the assets are frozen, which often includes all or a substantial portion of a specific depositor's funds.

They're making a big deal about this being the second biggest bank failure, etc. But that's only because the government successfully "brokered" (read: forced) a couple of large sales back in 2008, most notably Wachovia to Wells Fargo. I've heard stories from colleagues who are banking experts and some who were working at Wachovia at the time (they were headquartered here in Charlotte) that Wachovia was within literal hours of failing - much worse than the very bad that was talked about at the time - and that the only reason the government slapped them with the too big to fail moniker was because Wachovia failing right on the heels of WaMu would have made FDIC itself insolvent, which would've created a domino effect that would make the Great Depression look like a picnic.

TThankfully this is, for now at least, a much different scenario which hopefully won't bleed into the more traditional banks.

The government is still doing it. The one I was talking about was 2012, and they had a big hand in that former employer's most recent "merger" 2 years ago. It was sold as a merger but it was pretty much "you take them over and we'll pay you".

They had asked the company I was working for to be in on the Wachovia thing too, but they declined. Each of those cases was something big gone wrong for the failing bank due to mistakes they made, but you do have to wonder if and when it's going to catch another, larger bank. And who that's gonna be. When I left they were in talks to acquire another bank and I wonder if that one has some kind of major issue.

 

[sabresfaninthesouth]

The government is still doing it. The one I was talking about was 2012, and they had a big hand in that former employer's most recent "merger" 2 years ago. It was sold as a merger but it was pretty much "you take them over and we'll pay you".

They had asked the company I was working for to be in on the Wachovia thing too, but they declined. Each of those cases was something big gone wrong for the failing bank due to mistakes they made, but you do have to wonder if and when it's going to catch another, larger bank. And who that's gonna be. When I left they were in talks to acquire another bank and I wonder if that one has some kind of major issue.

Some of the reforms passed following that mess, like Dodd-Frank for example, are legitimately helping limit the risk of this again in the future. At least until SCOTUS and the Repubs get their way and strip the law away.

ETA: I won't argue that D-F doesn't have plenty of bloat in it too (it does), but it's got some very good regulations as well.

 

[Bloody Brian Burke]

Some of the reforms passed following that mess, like Dodd-Frank for example, are legitimately helping limit the risk of this again in the future. At least until SCOTUS and the Repubs get their way and strip the law away.

ETA: I won't argue that D-F doesn't have plenty of bloat in it too (it does), but it's got some very good regulations as well.

Well so did G-S and y’all tore that to shit too.

Tis tradition now.

 

[mattola]

 

[All-Star Benchwarmer]

I live in Clark County, Ohio. This happened on the East side of Springfield, next to the industrial park. I don't know why it became national news, other than reporters trying to scoop East Palestine, part 2.

Investigators found that an order of train cars delivered to NS had wheels not properly tightened. One of those train cars was the cause of the train accident in Springfield. The train cars were recalled until they could be repaired by the manufacturer, so NS isn't to blame on this one.

 

[sabresfaninthesouth]

Well so did G-S and y’all tore that to shit too.

Tis tradition now.

Yeah, pretty much, failing to learn from history is one of our specialties.

 

[mattola]

 

[mattola]

 

[buffhockey]

 

[sbb122]

That’s the Mucinex booger

 

[dare2be]

Yeah, I'm not watching that.

 

[mooger_35]

Is anyone else’s Twitter feed being flooded by far right leaning posters (or bots) like mine its all of a sudden!?

 

[dare2be]

Is anyone else’s Twitter feed being flooded by far right leaning posters (or bots) like mine its all of a sudden!?

It's just the TruthTM

 

[thedddd]

Is anyone else’s Twitter feed being flooded by far right leaning posters (or bots) like mine its all of a sudden!?

Yeah mine has been that way for a while now. I have to go search for stuff now but remember to click the tab "following" vs for you.
In the for you tab this is what I get:

 

[thedddd]

 

[thedddd]

/thread

Anyway from the Q&A this might get uglier than it already is, as their autopsy already contradicts what was reported.