Bank collapse

[SaltyTiger 7,789]

On 3/14/2023 at 11:15 PM, AUDub said:

Privatizing the profits yet socializing the losses seems like a good way to run an economy. /s

https://abcnews.go.com/Business/bailout-federal-government-bailout-silicon-valley-bank-signature/story?id=97846142

Klein’s point is that the depositors being made whole beyond the original $250,000 guarantee are, in essence, getting bailed out. 
 

 

Edited March 16, 2023 by SaltyTiger

[TitanTiger 20,472]

1 hour ago, Mims44 said:

I haven't seen near enough talk about fixing the issue. I honestly care a WHOLE lot less about them giving me or my wife money to pay off our loans, and a whole lot more about my kids not needing to take out insanely large loans if/when they want to go to college.

On this we agree.  The $10k loan forgiveness thing is a short term, but still meaningful for a whole lot of people, measure.  Long term, we need to really get a hold on what the drivers of escalating public university costs are and address those.

[TexasTiger 12,829]

Good insights on this dilemma:

https://www.reuters.com/breakingviews/deposit-insurance-is-addiction-not-medication-2023-03-16/?utm_medium=Social&utm_source=twitter

[SaltyTiger 7,789]

3 hours ago, TexasTiger said:

Good insights on this dilemma:

https://www.reuters.com/breakingviews/deposit-insurance-is-addiction-not-medication-2023-03-16/?utm_medium=Social&utm_source=twitter

Dilemma meaning should the depositors have been saved or not? 

[TexasTiger 12,829]

17 minutes ago, SaltyTiger said:

Dilemma meaning should the depositors have been saved or not? 

Essentially. It creates broader systemic issues to retroactively provide unlimited insurance in the millions to individual account holders.

[SaltyTiger 7,789]

14 minutes ago, TexasTiger said:

Essentially. It creates broader systemic issues to retroactively provide unlimited insurance in the millions to individual account holders.

In simpler words, we should all expect like treatment.

[TexasTiger 12,829]

5 minutes ago, SaltyTiger said:

In simpler words, we should all expect like treatment.

There are systemic risks when insurance is unpredictable and some customers are deemed more valuable than others, especially by the federal government.

[SaltyTiger 7,789]

6 minutes ago, TexasTiger said:

There are systemic risks when insurance is unpredictable and some customers are deemed more valuable than others, especially by the federal government.

No would have sufficed counselor Tex.

[TexasTiger 12,829]

12 minutes ago, SaltyTiger said:

No would have sufficed counselor Tex.

The rationale may elude others.😉

[Mims44 1,867]

15 hours ago, TitanTiger said:

On this we agree.  The $10k loan forgiveness thing is a short term, but still meaningful for a whole lot of people, measure.  Long term, we need to really get a hold on what the drivers of escalating public university costs are and address those.

You seem pretty knowledgeable about the subject so I'll ask you, but others feel free to chime in of course

I don't want to say any exact numbers as I can't remember them from before. But has any work been done to figure out why college costs went from the % of a median salary they were in 1960, to the many times a median salary it costs these days? It can't be professor salaries, besides the few big wigs who were nationally renowned most of my professors were making average to slightly below average salaries compared to the median for the area.

 

Also, when they say debt forgiveness, they aren't making the lenders suck up the loss right? They ARE taking it from taxpayer money and giving it to the lenders?

Has there been any talk of moving the debt instead of the one time hand out? IE: government buys out the student debt and then the people pay back their loans but maybe at a 0% interest rate?

[TitanTiger 20,472]

1 hour ago, Mims44 said:

You seem pretty knowledgeable about the subject so I'll ask you, but others feel free to chime in of course

I don't want to say any exact numbers as I can't remember them from before. But has any work been done to figure out why college costs went from the % of a median salary they were in 1960, to the many times a median salary it costs these days? It can't be professor salaries, besides the few big wigs who were nationally renowned most of my professors were making average to slightly below average salaries compared to the median for the area.

I'm not an expert but the main things I've heard are (not in order of impact necessarily):

1.  Colleges have been rapidly expanding/building/upgrading facilities and services to attract students.  If you went to Auburn or any other state school in the 80s and 90s and you look around now, the insane level of comfort and amenities at dorms, the dining options, the "free" workout facilities and so on have multiplied many times over.  Schools are using these perks to get students and if you don't do them, you can't compete.

2.  Colleges have also greatly expanded the size of the school administration.  I'm not sure if this is due to the increased student services, Title IX obligations, or what, but many say that the amount of salary and resources going to maintain these bloated administrations is quite excessive.

3.  The student loan situation itself is causing costs to go up.  Because colleges know that these loans are passed out like candy with little to no regard for an eventual graduate's ability to pay, no evaluation of whether the major they are choosing is likely to lead to a salary that would indicate ability to pay, and so on, they have little incentive to reign in costs - and that this contributes to #1 and #2 above.  If the money supply were tighter, the market would adjust down to account for what people can afford to pay.  In addition, student loans are almost completely (if not completely) immune to bankruptcy filings.  So if you owe on these, it doesn't matter if you file for bankruptcy, you're on the hook for it regardless.  So the risk is very low for lenders.  They have zero incentive to be more selective as to who and how much they lend out.

 

1 hour ago, Mims44 said:

Also, when they say debt forgiveness, they aren't making the lenders suck up the loss right? They ARE taking it from taxpayer money and giving it to the lenders?

Yes, the federal government (i.e. taxpayers) pays up to $10k of outstanding student loans.  

 

1 hour ago, Mims44 said:

Has there been any talk of moving the debt instead of the one time hand out? IE: government buys out the student debt and then the people pay back their loans but maybe at a 0% interest rate?

If there has, I haven't heard about it.  I'm sure lenders would have a fit though - essentially it sets the federal government up as a competitor with private lenders for these loans and that's not a fair fight.  They probably have a point there, but then I also think there's some merit to the idea that student loans are too easy to get or that they should be more tied to the student's salary prospects based on their field of study.

 

[icanthearyou 4,462]

Worth watching.  Remember, the Fed is NOT a government institution.  IMHO, the Fed should be taken over by the government.  If Wall St. has to be bailed out by the American taxpayer,,, then, they should not have ownership in the U.S. central bank.

 

[icanthearyou 4,462]

An even better explanation of the situation.

The bottom line is this:  Our economy is no longer based on industrialization (productivity/consumption).  Our economy is based on financialization, primarily a greed and exploitation (by capital) model.  By design it serves the few at the expense of the many. 

This is where I agree with DKW.  Both parties participate in the financialization model.  Both are beholden to the capital class through contributions, privatization patronage, lobbying.  Both fear the ramifications from attempting to regulate this system.

This system has never been able to sustain it's own weight.  Unless we are very fortunate, it will fail and, as a country, a society, so will we.  Moreover, it is grotesquely unfair, unequal, unjust.  And, the more we attempt to push this system upon the world, the more resistance we will encounter.

IMHO, this is the real political issue of our time.  Real politics is truly nothing more than the power of capital versus the the power of everyone else.  And, the correct answer is almost always BALANCE.

[CoffeeTiger 5,099]

On 3/17/2023 at 6:59 AM, Mims44 said:

 

 

Also, when they say debt forgiveness, they aren't making the lenders suck up the loss right? They ARE taking it from taxpayer money and giving it to the lenders?

 

the 10k in forgiveness is only for Government subsidized loans. The government IS the lender in these cases.  Student loans from private companies aren't eligible for the forgiveness.