Deja Vu All Over Again, Fed Opens the Spigot
(Continued from Silicon Valley Bank)
I gotta be honest sisters and brothers, I never thought back in ‘08 they could reflate the whole financial bubble, but they did, with a vengeance. After a couple years, the question became what would happen when the Fed tried to tighten? That would take another decade to begin answering. Last spring, when rates started to rise, I have to admit again, I didn’t think it’d get this far, but here we are.
With failure of the sixteenth largest bank, SVB, the Fed jumped in lightening quick with a new “emergency lending facility” to replace all funds at SVB, that is make whole all the Valley’s libertarian venture champions of unfettered capitalism. But better, also make whole the funds of Sunday’s shuttered New York Signature bank “one of the main banks to the cryptocurrency industry” — one of those not sure to laugh or cry moments.
There’s piles, well, mountains of bad debt and bad money out there, all propping up processes and powers in desperate need of change. Remember, as we enter this next round of what CNBC calls “the spreading banking crisis” and the FT states a “shoring up the US banking system,” (who knew, one bank fails we’re in a crisis and shoring up the system, good thing for Dodd-Frank, right?), it’s all politics and our broken politics are completely incapable of fixing an equally broken money system.
The best is the punchline, FT writes, “Bank Term Funding Program (BTFP), will offer loans of up to one year to lenders who pledge as collateral US Treasuries, agency debt, mortgage-backed securities and other 'qualifying ‘assets’.”
If you don’t get the joke, it’s on you.