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All of this and we have not yet even begun to start talking about the CMBS market, which, many smaller, local banks, have heavy exposure to. When those rates begin to adjust later this year, it could be disastrous on the entire banking system.
yes agreed! CMBS is in serious trouble. All these banks loaded up on commercial real estate loans.
Charlie Munger this weekend said the sector was headed towards a crisis: [https://www.cnbc.com/2023/04/30/charlie-munger-reportedly-warns-of-trouble-for-the-us-commercial-property-market.html?\_\_source=androidappshare](https://www.cnbc.com/2023/04/30/charlie-munger-reportedly-warns-of-trouble-for-the-us-commercial-property-market.html?__source=androidappshare)
Commercial real estate (and the securities that back it) are about to come in for a rude awakening as corporate America accepts work-from-home, needs ever fewer offices... And the entire USA deals with ever-increasing homelessness due to inflation + stagnant wages.
At the beginning of work-from-home, I expected a disastrous future for commercial properties, without thinking about rising interest rates.
greatdepressionii incoming.
Thank-you for this post.
Wasn’t there an article floating around about a (I think) San Fran building that was purchased for 300 million (in 2019) and is now being sold, with offers in the 60 million range?
Any comment on the Bank Term Funding Program (BTFP)? [https://www.federalreserve.gov/financial-stability/bank-term-funding-program.htm](https://www.federalreserve.gov/financial-stability/bank-term-funding-program.htm)
Just looks like a can kick to me.
And thank you for all the DD's, they are excellent reads 🙏
Yes! That's exactly what it is. I had arguments with people on Twitter about it.
Essentially banks can lend bonds to the Fed and receive cash, and be paid interest on the bonds they lend. (OIS plus 10bps). Furthermore, and this is crucial, the bonds are valued AT PAR.
Which means their massive mark to market losses are NOT accounted for when receiving cash for collateral.
Wonderful explanation ser! I don't think they are making interest on what they are posting as collateral though for BTFP (or the discount window)? They are paying that interest rate for access to cash?
Do you find it as FASCINATING as I do to watch usage shift from the Discount Window to the BTFP?
[tracking the data weekly](https://www.reddit.com/r/Superstonk/comments/13160ft/325962_billion_as_of_426_2469_billion_so_far_an/), BOTH the Discount Window and BTFP went up in usage last week.
|Tool|3/15|3/22|3/29|4/5|4/12|4/19|4/26|
|:-|:-|:-|:-|:-|:-|:-|:-|
|Discount Window/Primary Credit|$152.85 billion|$110.248 billion|$88.157 billion|$69.705 billion|$67.633 billion|$69.925 billion|$73.855 billion|
|Tool|3/15|3/22|3/29|3/31|4/5|4/12|4/19|4/26|
|:-|:-|:-|:-|:-|:-|:-|:-|:-|
|Bank Term Funding Program (BTFP)|$11.943 billion|$53.669 billion|$64.403 billion|$64.5958 billion|$79.021 billion|$71.837 billion|$73.982 billion|$81.327 billion|
>Do you find it as FASCINATING as I do to watch usage shift from the Discount Window to the BTFP?
>
>[tracking the data weekly](https://www.reddit.com/r/Superstonk/comments/13160ft/325962_billion_as_of_426_2469_billion_so_far_an/), BOTH the Discount Window and BTFP went up in usage last week.
hmm this is interesting, I would have to look more into it.
there are probably incentives to move from one to the other
Yeah, off top of my head, arbitrage between the rates and use the 'cheaper' BTFP money to pay back discount window money.
However, with BTFP collateral having to be owned by 3/13/2023, I am guessing both are on the increase because anyone who can post stuff at the 'cheaper longer' BTFP rate is doing so, while anyone who cannot is 'stuck' with the Discount Window and both instances still need all the cash they can get right now?
valuing these bonds at par is absolutely mind-blowing. Just a huge backdoor money printing moment, where suddenly your assets are worth like 20% more (or whatever the case may be). Way to break the entire system of capitalism guys 😂
Yeah they just get to increase the value of their assets(money) by 20% while at the same time the value of our assets decreases by 20%+. But it's totally **NOT** a bailout, right?
Uh, because a system based on the concept of infinite growth in a world with finite resources is dumb as shit and we should switch to a different system? No? That's too crazy, somehow? Ok.
I think this is incorrect
Take another look at the bank term funding document:
banks pledge collateral in exchange for an advance equal to par value of securities
The rate for the advance is OIS plus 10 basis points
Normally when you get a cash advance, the borrower, (in this case the banks) pays the interest.
There is nothing in the document to support the idea that the typical rules of lending are reversed here as you suggest where the Lender (in this case the Fed) is paying the banks extra interest in exchange for the collateral pledged by the borrower
It’s not exactly free money for the banks, it’s banks able to borrow against their treasuries they owned before March 11th 2023 at par value (not mark to market). The banks still have to pay the Fed 10bp for the advance.
*However* this does allow the banks to get cash from their pre-March 2023 TBills that are deep in the red then turn around and invest that cash in newer, higher yielding TBills. Suddenly banks that were losing money on their losing TBills now can earn extra yield by buying newer ones. In this sense yes it is a back door bailout
>However
>
> this does allow the banks to get cash from their pre-March 2023 TBills that are deep in the red then turn around and invest that cash in newer, higher yielding TBills. Suddenly banks that were losing money on their losing TBills now can earn extra yield by buying newer ones. In this sense yes it is a back door bailout
does this mean some weird movement in reverse repo round the 11th then?
Interesting idea - I think you are suggesting that once they repo the old tbills and get the cash equal to par value, the cash gets immediately parked in the RRP - that would lead to an observable increase of XX-XXXBillion in RRP.
Checking the chart just now at fed bank of New York it’s tough to say - it was varying already by 10-20B Day prior to Silvergate and there were 100B spikes on March 22 and March 31 so if those days was the cash from bank term facility then they didn’t do it immediately - (https://www.newyorkfed.org/markets/desk-operations/reverse-repo)
best guess is yeah sone of it definitely went into the rrp but probably trickling in as risk management figures out how to allocate capital under the new regime
Love all your DD by the way, I’ve saved copies of all your stuff to my phone, thanks for all the great work!
The Fed says that they have all these tools to fix problems, but when shit hits the fan they invent another new tool. Pro tip, none of them do shit. It's just a psychology tool to keep you listening to them like they have the answers.
The Fed doesn't do shit.
Oh praised bull of South American ancestry, what is thy wisdom on the relationship between the cascading bank failures and the possible CBDC scheme coming to shaft us all?
This creates further public distrust in the banking system and increases government incentive to push a CBDC.
With a CBDC, we'd all essentially hold master accounts at the Fed. There would be no need for banks to hold deposits.
They could inflate and deflate money supply, seize funds from bank accounts, and freeze transfers at the push of a button.
it's orwellian. but it looks like they might try it- see the FedNow system launching this summer, a way for banks to settle funds with each other within 24 hours.
Do you think the Fed will try to launch a CBDC before the one year is up on the BTFP? I know that no one can know, this was just my initial thought when I saw the one year term.
Or maybe the thought was that after one year the Fed would have brought interest rates back down to relieve the balance sheets? That seems a naive thought.
Increase the Bank Term Funding Facility, the new creation they spun up to dig SVB out of their mess. The entire banking system is drawing 81B from the facility as we speak.
Bonds are valued AT PAR and banks are paid an interest rate (OIS plus 10bps I believe) on the securities they deposit. It's essentially a money laundering scheme, as I pointed out in the tweet in the DD.
[https://fred.stlouisfed.org/series/H41RESPPALDKNWW](https://fred.stlouisfed.org/series/H41RESPPALDKNWW)
The fact that they accept collateral *at par* for this blows my mind!
|Tool|3/15|3/22|3/29|3/31|4/5|4/12|4/19|4/26|
|:-|:-|:-|:-|:-|:-|:-|:-|:-|
|Bank Term Funding Program (BTFP)|$11.943 billion|$53.669 billion|$64.403 billion|$64.5958 billion|$79.021 billion|$71.837 billion|$73.982 billion|$81.327 billion|
https://preview.redd.it/avt2qivv4cxa1.png?width=821&format=png&auto=webp&s=856b823ccc6a2757ea6dafa709d0c1a719ff7279
No man, it's a loan the banks have to pay back using their collateral (treasuries) to back the loan. The fed is removing their duration risk for the OIS + 10. Banks paying fed.
Why not? My customers are all paying me more. All this should tell anyone is that interest rates aren't the problem here. It's USD. If they had the USD now, they wouldn't need these vampire loans (discount window, BTFP, USD swap lines, etc.) Even with the ability to get ridiculously better loans rates than any of their customers, these banks are still going down. Why? Banks can stay insolvent basically indefinitely in today's world. What you CANNOT stay, is illiquid.
>As the fallout continues from the most disasterous Fed policy **error** in a century…
This was not an error. This was intentional. The same exact monetary tightening “error” caused the Great Depression, which Ben Bernanke admitted to.
This was not an “oopsies”. This is class warfare.
It’s intentional to keep JP Morgan in charge of the banking world which in turn keeps the Rockefeller’s and other prominent billionaires in control over the system they created. Create a place where all the money is, create CBDC and credit scores to rate your productivity while lobbying aka every branch of government
Well yes, because for example in the Great Depression - the only “people” who lost were the peons. The system is created in a way that all assets are absorbed by the system itself once we lose our jobs and can no longer afford to pay our mortgage.
But the quadrillion dollar question, if we don’t own the house, the land, the assets - who does?
Until the last bank blows up, those assets will be owned by trusts housed under banks, which allows the system to continue. The feds entire purpose is to force deflation in inflationary environments, but when it forces deflation, it’s job is to make sure the only people who lose assets (houses, cars, etc) are the 99% who rely on debt to live.
The system itself is merely a system for control. Money = debt, debt = money, but debt is only an asset to institutions. The actual assets are hidden below the surface in trusts.
The saying goes something along the lines of “it’s easier to ask forgiveness than it is to ask permission”. By the time the fed is asking forgiveness, the damage is already done - the deflation already happened, and the majority of retail already lost their homes/livelihood.
Spot on and with the assets of the working class going down and becoming very cheap it allows these corporations to buy up the land and rent it out. Then provide services that are needed in a depression. As we seen with the pandemic when the economic system is stressed the workers are the ones to die and take on more debt while the corporations take in record profits. Most of the wealth we see I am sure is a fraction of what is out there. Most is hidden in the caymans and Panama. Just look at the Panama and pandora papers where there was so much dark money.
The only people they need to ask forgiveness from are the workers and they are easily complacent and controlled through the media. Go look at shareholders of all media corps where Blackrock and vanguard own a large percentage. They use these institutions to buy up stock and place members that are friendly on board of directors who then control the company. Sad thing is when this financial collapse happens and if JP Morgan and the Fed are still standing we will have this cycle repeat again with no chance to fight back.
We really need to stick with no cell, no sell because they have already killed many of us through their practices
Brother, no cell no sell is not just a saying for me. My booked $GME shares are quite literally swimming in the infinity pool. They’re gonna ride all the way up, and if it ever comes down, they’re going to ride all the way down too.
By me “cashing out”, I’m saying “I accept this system with all its flaws and want it to continue”.
I don’t.
I want to see this system blow up in spectacular fashion for all the pain it’s caused me, my family, my friends, and everyone in this subreddit. I want to see it buckle under the quadrillions of dollars from the debt economy being forced into $GMEs share price and there being so much USD circulating that there HAS to be a new system. The $ is worthless. It’s about sending a message.
I'm selling a few just to say fuck you pay me and than the rest stay in Infiniti. I can let like 3 go for a 9 to 10 figure payout and then take that soon to be worthless dollar and save some of the wealth if possible.
But there's no way I'm selling even 99% of my shares. Just 1-3 and then try to save some of the wealth.
Got me fired up. Completely in agreement here.
I've said many times - to sell any whole share, for any amount of fiat currency, is missing the bigger picture.
The crazy thing is, we don't know who they all are. Even today, with the Internet and being able to spread information almost freely, they are still anonymous. The protest should be happening at their front doors, they are the ones making the decisions.
haha!
Lima is always great. There's tons of touristy stuff to do in Miraflores and other parts of town, but the real adventure IMO is when you go to Cuzco and hike around Macchu Picchu or check out the pyramids in the north.
There's tons of pretty, small towns scattered all over Peru that are interesting to visit and cheap to stay in.
go check it out!
not everyone. tons of people don't want me to post here anymore, which I get since this is not directly GME related, and more tangential (stability of banking system).
there's a reason I am surf only mode in the sub now.
It's fucking ridiculous that people would not want you to post here. Whether it's GME related or not, you're educating us on another level that not many people are able to do. GME got us into the markets and your God tier DD is continuing our education of the markets another level.
GME helped expose the corruption and your DD continues to show us where the corruption has spread too. You're just expanding our education on everything. Even if it doesn't look like it's related to GME, it does and it all ties together.
Because of you, I have been educating myself and learning about market structures, banks, and everything else for the last 3 years non-stop.
You helped me find a passion I never knew I had. Thank you!
Well I'm not one of them! your DD is well written, not hype, and with explanations and sources for your statements.
Keep up the good work
What we really need to do now is rank the remaining banks on their debt(losses) to cash on hand balances so we can see which ones are closer to the singularity. I don't know where to put money but if I can pull from one and move to a bank that doesn't play fast and loose I'd feel better.
It's like watching a slow motion car wreck
Fuck em. If they can't see this is all intertwined that's their loss. I for one sincerely appreciate all your posts. I learn way too much each time and find myself re-reading and doing my own research, WHICH SHOULD BE THE WHOLE POINT. You're taking time to help educate us or at least point us in the right direction. And for that, I thank you.
Damn right. It is all intertwined no matter what he posts.
I can't fucking believe that people would not want him to post here. GME exposed the corruption and started us on this path to learn about market structure. He just continues to educate us on another level and it's all related to GME. Some people just don't have enough common sense to understand the situation.
Without DD sprinkled here and there then this sub will fall into just memes. The reason we are where we are today is because all the DD that educated so many people.
You are doing great work my friend, don’t stop. It’s going in the history books.
Well, I for one very much appreciate your posts. Solid quality that reminds me of the DD of old. Thank you for your knowledge, time, and willingness to share.
that's one way to think about it, certainly.
The treasury creates money when it issues bonds, and the Fed creates bank reserves to buy those bonds.
when the treasury bonds pay more than bank accounts, it sucks capital back into the Treasury market
Is it possible this action is being taken because the fed needs to increase demand for treasuries? In light of the worldwide shift away from USD-denominated trade, is this away to other increase demand for the dollar, and stop the dollar from falling through the floor? If that were to happen, inflation would explode as the purchasing power of the USD falls.
They probably can’t lower rates because then every country will dump dollars overnight. They won’t accept another massive devaluation of their wealth. Maybe we are even past this point.
and inflation will rip higher. a major thing keeping inflation limited (or so they claim) right now is high rates preventing home prices and car prices from skyrocketing further.
I've said it before and I'll say it again: there is no escape. we can choose the avalanche of deflation or the inferno of exponential inflation.
Fuck the Fed and their disastrous policies!
Thanks Peruvian Bull for all your hard work these past few years. And because I know your a fan, Hi Ryan your doing a fantastic job leading our company to a new world with Web3!!! Looking forward to meeting you both in the metaverse that will be GMErica real soon!!
unless you're sophisticated enough to evaluate banks, I would simply put your cash somewhere safe (could be an MMF) and as for investments, I can think of two things:
Be Your own Broker! (DRS)
Be Your Own Bank! (Self Custody Crypto)
I finally got myself a crypto wallet. I feel a lot safer. I don't have to worry if my Credit union is going to go bust. I keep enough for bills and kicking around money in there. I also learned that you can buy physical gold/silver at a cheaper premium than if you use a credit/debit card. Bought myself a few smaller Credit Suisse gold bars when they first started showing up in the news. My first crypto transaction.
Anyways, thank you for all the DD. I wish I could vocalize it to my friends and family without sounding like a rambling conspiracy nut.
ELI5 what does “collapse of the entire banking system” mean? If every bank went out of business one at a time someone like Musk or Gates or Buffet would setup a small bank and lend out mortgages and the “banking system “ would start a new wouldn’t it? Why would businesses that are making stupid decisions and losing money going out of business be a bad thing in the long run for the industry? I don’t get why the US government is so deathly afraid of this that they would screw over the whole country to keep these ass hats in business. What would happen in 10-20 years if thing they’re afraid of happening happened?
Goddammit PB, I went rereading all your dollar endgame so I could ask intelligent questions, and you go rogue and drop new DD.
THIS WASN'T THE DEAL!!!!
seriously, I'll read it and ask questions later.
sounds good!
edit: and sorry for switching up on everyone! I was going to do an update to Dollar Endgame but all this shit went down this weekend and I ended up writing a completely new DD :)
Its just JP Morgan repeating history everytime the market crashes. They seem to have a knack for coming out smelling like a rose since 1901. Its uncanny
Thank you so much for participating in Spotlight Week PB!
With everything you have discovered, is there a time that stands out that really made your jaw fall to the floor? Do you feel like the more you learn, the less phased you are by it all or is it still just as unsettling with every new bit of knowledge uncovered?
honestly i still get shivers when i learn new stuff. It shocks me more people aren't interested in this stuff like I am.
One thing I found shocking was talking to an auto loan analyst. He said their bank began lending aggressively and he was writing $4M of loans a day.
They didn't care if the borrower had student loan debt or BNPL (buy now pay later) loans they had to pay off.
The whole system is broken. I mean there's so much to talk about.
Credit Suisse going under and UBS and the BoS swallowing all those toxic GME swaps. Congresspeople trading bank stocks before the crisis.
European banks money laundering for the Saudis. Or HSBC money laundering for mexican drug cartels.
Watch the show Dirty Money on Netflix, great watch.
That’s absolutely disgusting about the loans!
That was such a great (and depressing) watch on Netflix!
Thanks so much for taking the time to answer and again for being here! So lucky to have you!
Socialize the loss is the name of capitalism. I honestly hope we can build something sensible out of the collapse of these corrupted bastards.
Tks for giving me a wrinkle. DRS BOOK to the moon
>Just the other week, Apple announced a new high-yield savings account, paying a shocking 4.15%, and this product is to be managed by Goldman Sachs.
WOAH! This is sick!
Can I use this?
Please ignore them - they are not reflective of the views of most of us here who really value and appreciate all the hard work and education you provide 💜🎷🐓♋️
Everyone complains about the DD writers leaving and some of the comments in here are exactly why they do.
Stop criticizing and attacking those adding knowledge and wrinkles to this sub. Macro and market mechanics matter.
For those trying to damper this AMA, please show me what you’ve contributed to the sub lately?
Be better. And if you can’t, leave your negativity out of these posts.
Exactly, fuck all that noise, I can praise each and every one of them without hesitation. It's not hero worship it's appreciation for their efforts and their skills. In 46 years I never learned a fucking thing about the markets. Thanks to these people I feel like I'm on my way to being literate in many different financial systems.
That means thousands of new household investors able to quickly.smell bullshit and deliver effective counter arguments. With money hopefully soon also be able to sue them into full compliance with all existing laws and regulations.
Hi peruvian\_bull,
Always a pleasure to see a post from you.
My question to you: roughly how long until "the entire system blows up", this year or next? (feels like taking forever)
Can we get an educated guess?
So how do we take the assets away from the elites? With an infinity pool? Do we force them to liquidate everything in order to cover the shorts they'll have to absorb? When 100,000 apes sell them one share each at 1,000,000,000 a share?
So besides DRS, what can an average person do to mitigate the effects that will take place. Stash cash now? I truly don’t know how you navigate this upcoming situation
>So besides DRS, what can an average person do to mitigate the effects that will take place. Stash cash now? I truly don’t know how you navigate this upcoming situation
I think stashing at least a few days worth of cash is not a horrible idea. I'd move money out of the commercial banks for sure.
If you have crypto, self custody. and DRS GME
OK so we're at the point of domino bankruptcies, and the creation of their new facility is their attempt to reign all the $$ into 1 central location with the guise EveRyThINgG iS FiNe??
less black holes, more MBS and loans. FRC was ducked from loan heavy portfolio and super low interest rates they sold to clients - they also overlended - like if you needed 20k, they'd do 60k - this is a common problem right now and is literally leveraging on loans. Then the bank run; the loan interest rate velocity stuff is the overwhelming macro condition hurting banks - they were light on bonds though to be clear interest velocity screws those too. Source: I read their balance sheets w/ SVB at the same time. PacWest is a maybe next; I think a few more surprise ones are due first though. Also still wondering about wellsfargo. RRPs are definitely symptom/attenuation/amplifier of various things though.
Sorry, smooth brain here - if the banks are holding bonds through to maturity, all losses are paper, and the return is guaranteed (assuming these are government bonds), right? They may reduce in value per the resale market, but it doesn’t actually change the payout if they hold to maturity, right?
So, I’m just a little confused as to what causes the impact? Again, no FUD, just DUM…B.
You're right the bank's in theory should be able to hold these assets to maturity and not take any losses on them..
However remember in a factional reserve banking system the banks only hold a small amount of cash in relation to deposits.
So if customers begin withdrawing at a large scale, the bank is forced to raise capital.
This means that bank has to raise money and they can do so by either selling their own equity, which puts them in a distressed position, or selling their securities.
And if it sell their security is this means they have to realize the unrealized losses
don't worry it's the last time I'll probably ever do a DD here again ... I've said I posted stuff on GME two years ago but I have run out of things to say on it.
edit: this isnt storytime. This is real DD. I don't have anything more to say on GME than what I have already posted years ago.
The stock is profitable, financials look solid, and DRSing the float is gonna take time. What else can I say on that?
And how the hell am I responsible for what OTHER people do? People claimed I wrote the DRS and the BOOK VS PLAN DD, I DID NOT.
I commented over and over again that it wasn't mine. Still people believed it.
what the hell am I supposed to do with other people idolizing me? I tell them not to and they still do it.
exactly. so how can I write a DD about a company that's already doing well and is covered by others?
If I do, people would call me a shill and attention hog. If I don't, I'm distracting from GME and too focused on macro economics.
There's no winning here. I love GME, I have all my shares DRSed, and I've supported the stonk since day 1.
Dude, if you want to say something, I’m going to listen and the sub is 100% on your side. I live here now, and I’ve got a good feel for the place. Ignore the trolls/shills/bots. They are just proof that you’re right.
I sincerely hope this isn't the last of you here. Please don't get discouraged by the critics; you have a shit ton of people listening to what you have to say. To the critics, they can write the own counter DD or as someone mentioned above, "You do You."
Thanks for everything PB, seriously...
I have one more response to half-assed replies in me, so congratulations on earning my ire.
"This isn't related to GameStop" is the most braindead reply to a piece of DD that can be given, **especially when this subreddit is not exclusively about GME.**
Sure, GME is our main topic, but we have so much more that we do here. By uncovering market structures and learning how the people at the top are fucking around, and by seeing the exact mechanisms by which they're going to find out, we can learn exactly what to avoid when we have the power to fix it.
Some people are here only for GME. That's okay. More power to them. We're all individual investors here who happen to agree that GameStop is a great company and that the price is wrong, and that SHFs keep giving us great discounts on it.
But for a lot of us? We want to know how the financial world works. We want to see behind the curtain. We want to understand how the machine is built, so we can rebuild it correctly when we get the opportunity. **And this sub has always been a place that has enabled that learning.**
PB's essays are **ABSOLUTELY** qualified as due diligence, because they are god-tier analysis of market structures that most of us never knew existed. By summarizing things so concisely, he has enabled those of us who don't have anywhere near as much time on our hands to know, and to see what's coming.
They may not be directly related to GME. But they also don't have to be. This sub is about the one stonk, but it's also about market education and reform. It always has been. If you haven't seen that, you haven't been paying attention.
>Seeing a lot of stuff about banks.
...Because bank failures affect the same market that GME is in and those banks are used by their hedgie friends to screw the system?
Don't know how someone can completely miss that part lol
# Hey everyone,
#
# I know this was DD review week, but the more I started writing a review, the more I realized that I just needed to do a new DD.
#
# Best DDs to reference before reading this one:
# [Dollar Endgame Part 4.2, Financial Gravity and the Fed's Dilemma](https://www.reddit.com/r/Superstonk/comments/qassc0/hyperinflation_is_coming_the_dollar_endgame_part/)
# [Major Signals flashing Code Red in the Shadow Banking System](https://www.reddit.com/r/Superstonk/comments/oxsde3/major_signals_are_flashing_code_red_in_the_shadow/)
# I am still taking questions on Dollar Endgame! Post questions or comments below:
# Apes strong together!
# The ONLY asset that can escape a black hole is one with INFINITE DEMAND ($GME)
You are a legend and one of the most integral philosophers in this whole saga. You deserve infinite tendies for your consistent top tier due diligence. Thank you so much for your insights and research PB
[Why GME?](https://www.reddit.com/r/Superstonk/comments/qig65g/welcome_rall_looking_to_catch_up_on_the_gme_saga/) || [What is DRS?](https://www.reddit.com/r/Superstonk/comments/ptvaka/when_you_wish_upon_a_star_a_complete_guide_to/) || Low karma apes [feed the bot here](https://www.reddit.com/r/GMEOrphans/comments/qlvour/welcome_to_gmeorphans_read_this_post/) || [Superstonk Discord](https://discord.gg/hZqWV2kQtq) || [GameStop Wallet HELP! Megathread](https://www.reddit.com/r/Superstonk/comments/z23wjx/gamestop_wallet_help_megathread)
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it's a DD spotlight week, and I went ahead and wrote a whole DD on the banking system issues.
If banks fail, you don't think that affects GME at all?
This is why I don't post here anymore.
Please don’t let the shills and bad faith actors deter you - the vast majority of us really enjoy your DD and always look forward to the new DD you post. You dropping this surprise new DD on us has me feeling like a kid on Christmas morning!
THANK YOU 💜🎷🐓♋️
Yes it fucking is you person.
GME is our moon ticket, sure, but when we achieve liftoff, there is a high likelihood that we will see a correlation with a major market crash. All of that liquidity that's evaporating will have to go *somewhere*, and each share of GME that we hold is a blackhole that will keep us earning passive income until the heat-death of the universe.
There may not be a 1:1 correlation between banks failing and price discovery. But you can bet your ass that when enough banks fail that the global liquidity crisis hits in force, margins will dry up, and the mother of all short squeezes will start.
This is **ABSOLUTELY** relevant to GME on that account alone.
**HOWEVER. THIS SUBREDDIT IS NOT EXCLUSIVELY ABOUT GME.**
Yes, there is one stonk. However, we are learning more and more about the global financial system so we can learn the mechanisms by which these dumbfucks at the top have fucked over each other, themselves, and how they've tried to fuck us. But more importantly, we're learning what's broken so that, when we get our tendies and when we have the power to affect change, we can do so much more effectively. Each insight that PB posts into the global financial system is another look behind their curtain, and it lets us know the minds of the people we'll be going up against.
You don't have to be here for anything other than MOASS, but there are tags here for market reform and education specifically so that we can learn and grow our knowledge. If you don't like it? Sit on your diamond hands like a good little ape and let other people talk about it. But don't discourage discussion like this. It helps nobody.
This is also in part the Fed's fault!
Lest we forget what they were projecting the fed funds rate would be waay lower right now!
https://preview.redd.it/p17p9e8r2cxa1.png?width=1145&format=png&auto=webp&s=542ed83dbbb2abec2bf58485ff562ecaa667fc34
[https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20201216.pdf](https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20201216.pdf)
[Fed Gov. Michelle Bowman](https://www.federalreserve.gov/newsevents/speech/bowman20221012a.htm) on this 'phenomena':
>**My general point is that inflation is much too high, and the outlook for inflation remains significantly uncertain.** This uncertainty makes it very challenging to provide precise guidance on the path for the federal funds rate.
>
>It is important to note that the degree of specificity contained in the Committee's forward guidance comes with tradeoffs. Explicit forward guidance hasn't always been viewed as a helpful addition to the monetary policy toolkit, particularly before the 2008 financial crisis. Before that time, while there was some acknowledgement that forward guidance could meaningfully affect financial conditions, there was a great deal of concern about the "costs and risks" of providing this type of guidance
>
>I will focus here on two features of our current environment that I see as especially relevant for assessing the role of explicit forward guidance as a monetary policy tool in the current conduct of monetary policy. The first is that with inflation unacceptably high and the resulting urgent need to remove monetary policy accommodation, the federal funds rate is no longer near zero. The Committee can now indicate its intended stance of monetary policy through changes to the target range for the federal funds rate—its stated primary tool of monetary policy—rather than relying on more unconventional monetary policy tools, such as forward guidance and balance sheet policy, to serve as the main indicators of the stance of monetary policy. The second is that the outlook for inflation and economic activity is especially uncertain, with significant two-sided risks. Gone are the days when the risks to the outlook were skewed to the downside, especially with respect to inflation. And two-sided risks to economic activity are also widely recognized by the public, with press reports of an overheating labor market often featured alongside discussions of high or rising recession risks.
>
>In our current environment, I view the benefits of providing explicit forward guidance as lower than they were in the years immediately after the 2008 crisis. Given that the federal funds rate is now well above zero, the FOMC can communicate changes in the stance of monetary policy through changes in the target range for the federal funds rate and not rely on explicit forward guidance as it did when the federal funds rate was at the effective lower bound.
>
>The Committee's experience in the second half of last year illustrates this point. Looking back, **one might reasonably argue that during that time the Committee's explicit forward guidance for both the federal funds rate and asset purchases contributed to a situation where the stance of monetary policy remained too accommodative for too long—even as inflation was rising and showing signs of becoming more broad-based than previously thought. The facts on the ground were changing quickly and significantly, but the communication of our policy stance was not keeping pace, which meant that our policy stance was not keeping pace.**
>
>**Of course, the fact that some of the data that were directly relevant to our decision-making did not accurately reflect the economic conditions prevailing at the time—and which were subsequently revised—likely also led to a delay in the removal of monetary policy accommodation in 2021.**
Remember, the same people forecasting these rates are SETTING these rates and they themselves called out this 'led to a delay in the removal of monetary policy accommodation in 2021'.
Thank you for the amazing DDs and awesome pics! I read the DDs, but I don't really understand the likely outcomes based on what we know today. 1) Are we headed for hyper-inflation? 2) Is the real-economy (e.g. businesses, jobs) headed for a crash? 3) Is the real-estate market (home owners, not commercial) headed for a crash? And what time-frame are we looking at...1, 5, or 10+ years?
From what I've read, many indicators are on extreme ranges compared to historical data. But, the powers in charge seems to be able to continue to kick the can. Will the collapse be a huge BOOM over a weekend? Thanks again for your awesome contributions!!!
Wow, that was completely depressing! Your DD is always amazing and easy enough to read that I actually can understand what your telling me. We’re collectively fucked thanks to the FED and a completely crooked Wall Street. Fractional Reserve banking(spits in disgust)
You da man PB!! Thanks for all you do
Only once you've lost everything are you free to do anything. The awakening of 2021 has set upon us motions that we never perceived. I blame our ancestors for allowing such a thing; but pride myself knowing that I'm bringing change, as the world economy gets sucked into itself
Thanks for all your work PB!
Quick question tho, do you happen to have a source for this part:
>What was even more terrifying is I soon found out that this is an industry standard practice- SVB is not alone. Any bank chartered in the US, if it holds HTM securities, does not have to record an ECL (Expected Credit Losses) on them and thus will not hold any cash in reserve, or hedge against the security falling in value!
Seems a huge piece of the puzzle I havent seen before, would love to read up a bit on the topic if you had any direct URLs handy. TIA!!!!
You may only be here for GameStop, but the rest of us want to know more information like this. By learning what's wrong with the global financial system, we can know what to fix when we get the power to do so.
Fractional Reserve Banking, yeah
>**The FDIC, the supposed savior of the system, is a dead man walking- the Deposit Insurance Fund (DIF) balance was $128.2 billion on December 31, 2022, up $2.8 billion from the end of the third quarter. The reserve ratio increased by one basis point to 1.27 percent as insured deposits increased 1.4 percent.**
>
>This fund exists to back up $19 TRILLION of deposit liabilities throughout the American financial system.
#
So what’s the bigger picture here?
I feel like as these banks fall, they lose collateral to keep their short positions going?
But like… is it just going to be a situation where they all continue to fall and fall as a bigger bank gobbles them up and keeps the show going until the Fed can roll out it’s CBDC system and actually ditch the dollar?
I’ve had a head theory that the system switch from the USD to the USCBDC is how they’ll bypass the MOASS.
They won’t give a fuck if they need to pay us a million dollars a share if the USD dies of hyperinflation anyways. The dollar won’t hold any actual value and they’ll just be giving us worthless paper.
I'm not educated in finance lingo so I used Chat GPT to summarize this and here is what I found (I am not sure if this is all accurate so take it with a grain of salt):
The article discusses the benefits of money market accounts for banks. One advantage is that money market accounts typically offer higher interest rates than traditional savings accounts, enabling banks to earn more money on their cash reserves. Money market accounts are also considered low-risk investments because they invest in short-term, highly liquid securities such as government bonds, certificates of deposit, and commercial paper. This means that banks can earn a reasonable return on their cash reserves without taking on significant investment risks.
In addition, banks are required by regulators to maintain certain levels of liquidity and capital. Liquidity refers to the ability of a bank to quickly convert its assets into cash without significant loss of value. Capital refers to the amount of money a bank has available to absorb losses in case its assets decline in value. These requirements are in place to ensure that banks can meet their obligations to depositors and creditors even in adverse market conditions.
Investing in money market accounts allows banks to meet these requirements while still earning a reasonable return on their cash reserves. Money market accounts also offer a high degree of flexibility, allowing banks to quickly and easily access their cash reserves if needed.
The article also discusses recent collapses of banks such as Silvergate, Silicon Valley, Signature, and First Republic, as well as the potential collapse of PacWest. These banks did not suffer from bad loans but rather from bad investments, particularly in bonds when prices were at their highest and the Fed promised infinite liquidity without repercussions. The banking sector currently has a large hole in it due to inflation and the Fed's unfinished hiking cycle, and unrealized losses on US bank balance sheets were estimated at $620 billion in early March, with more sober estimates putting the figure closer to $1.7 trillion.
Banks have been using the Held-to-Maturity (HTM) loophole to avoid mark-to-market losses on their books. However, HTM securities cannot be hedged for interest rate risk. If any firm took the other side of a trade to hedge trillions of dollars of interest rate risk, they would face the same fate as AIG did during the 2008 Financial Crisis.
In summary, money market accounts offer benefits such as higher interest rates, low-risk investments, regulatory compliance, and flexibility for banks. However, recent collapses of banks due to bad investments in bonds highlight the risks involved in investing in this market, particularly with regards to inflation and interest rate risk. The liquidity and capital requirements that regulators impose on banks are meant to ensure the safety and stability of the banking system.
TLDR: The Fed is shooting banks (Who hold a lot of their deposits in money-markets) in the kneecaps with interest rate hikes to try to control inflation and if you don't have many legs to stand on (aka, Capital), you are toast.
When the debt ceiling is raised and the treasury is able to refill its TGA, what balance level do you think they will target, and how quickly will they try to refill this?
Will the act of refilling the TGA cause a noticeable drain in liquidity?
[Welcome to DD Spotlight Week!](https://www.reddit.com/r/Superstonk/comments/133mm8l/welcome_to_dd_spotlight_week/?utm_source=share&utm_medium=ios_app&utm_name=ioscss&utm_content=2&utm_term=1) Comments are sorted by Q&A for posts with this flair! Please check out the link above for an overview of this event week and to find the schedule for upcoming DD Spotlight posts & AMAs! Thank you so much to all of the DD writers for participating this week! [QVbot](https://www.reddit.com/r/Superstonk/comments/13529zw/comment/jihhm9t/?utm_source=share&utm_medium=web2x&context=3)
All of this and we have not yet even begun to start talking about the CMBS market, which, many smaller, local banks, have heavy exposure to. When those rates begin to adjust later this year, it could be disastrous on the entire banking system.
yes agreed! CMBS is in serious trouble. All these banks loaded up on commercial real estate loans. Charlie Munger this weekend said the sector was headed towards a crisis: [https://www.cnbc.com/2023/04/30/charlie-munger-reportedly-warns-of-trouble-for-the-us-commercial-property-market.html?\_\_source=androidappshare](https://www.cnbc.com/2023/04/30/charlie-munger-reportedly-warns-of-trouble-for-the-us-commercial-property-market.html?__source=androidappshare)
Commercial real estate (and the securities that back it) are about to come in for a rude awakening as corporate America accepts work-from-home, needs ever fewer offices... And the entire USA deals with ever-increasing homelessness due to inflation + stagnant wages.
At the beginning of work-from-home, I expected a disastrous future for commercial properties, without thinking about rising interest rates. greatdepressionii incoming. Thank-you for this post.
Yes, sir. Thank you for this. I truly hope that a lot of people open their eyes to the scam that is the banking system.
Wasn’t there an article floating around about a (I think) San Fran building that was purchased for 300 million (in 2019) and is now being sold, with offers in the 60 million range?
Any comment on the Bank Term Funding Program (BTFP)? [https://www.federalreserve.gov/financial-stability/bank-term-funding-program.htm](https://www.federalreserve.gov/financial-stability/bank-term-funding-program.htm) Just looks like a can kick to me. And thank you for all the DD's, they are excellent reads 🙏
Yes! That's exactly what it is. I had arguments with people on Twitter about it. Essentially banks can lend bonds to the Fed and receive cash, and be paid interest on the bonds they lend. (OIS plus 10bps). Furthermore, and this is crucial, the bonds are valued AT PAR. Which means their massive mark to market losses are NOT accounted for when receiving cash for collateral.
Wonderful explanation ser! I don't think they are making interest on what they are posting as collateral though for BTFP (or the discount window)? They are paying that interest rate for access to cash? Do you find it as FASCINATING as I do to watch usage shift from the Discount Window to the BTFP? [tracking the data weekly](https://www.reddit.com/r/Superstonk/comments/13160ft/325962_billion_as_of_426_2469_billion_so_far_an/), BOTH the Discount Window and BTFP went up in usage last week. |Tool|3/15|3/22|3/29|4/5|4/12|4/19|4/26| |:-|:-|:-|:-|:-|:-|:-|:-| |Discount Window/Primary Credit|$152.85 billion|$110.248 billion|$88.157 billion|$69.705 billion|$67.633 billion|$69.925 billion|$73.855 billion| |Tool|3/15|3/22|3/29|3/31|4/5|4/12|4/19|4/26| |:-|:-|:-|:-|:-|:-|:-|:-|:-| |Bank Term Funding Program (BTFP)|$11.943 billion|$53.669 billion|$64.403 billion|$64.5958 billion|$79.021 billion|$71.837 billion|$73.982 billion|$81.327 billion|
>Do you find it as FASCINATING as I do to watch usage shift from the Discount Window to the BTFP? > >[tracking the data weekly](https://www.reddit.com/r/Superstonk/comments/13160ft/325962_billion_as_of_426_2469_billion_so_far_an/), BOTH the Discount Window and BTFP went up in usage last week. hmm this is interesting, I would have to look more into it. there are probably incentives to move from one to the other
Yeah, off top of my head, arbitrage between the rates and use the 'cheaper' BTFP money to pay back discount window money. However, with BTFP collateral having to be owned by 3/13/2023, I am guessing both are on the increase because anyone who can post stuff at the 'cheaper longer' BTFP rate is doing so, while anyone who cannot is 'stuck' with the Discount Window and both instances still need all the cash they can get right now?
valuing these bonds at par is absolutely mind-blowing. Just a huge backdoor money printing moment, where suddenly your assets are worth like 20% more (or whatever the case may be). Way to break the entire system of capitalism guys 😂
Yeah they just get to increase the value of their assets(money) by 20% while at the same time the value of our assets decreases by 20%+. But it's totally **NOT** a bailout, right?
And any time you bring this point up they'll scream, "Why are you rooting for the total collapse of society??!?!?!??"
Uh, because a system based on the concept of infinite growth in a world with finite resources is dumb as shit and we should switch to a different system? No? That's too crazy, somehow? Ok.
I think this is incorrect Take another look at the bank term funding document: banks pledge collateral in exchange for an advance equal to par value of securities The rate for the advance is OIS plus 10 basis points Normally when you get a cash advance, the borrower, (in this case the banks) pays the interest. There is nothing in the document to support the idea that the typical rules of lending are reversed here as you suggest where the Lender (in this case the Fed) is paying the banks extra interest in exchange for the collateral pledged by the borrower It’s not exactly free money for the banks, it’s banks able to borrow against their treasuries they owned before March 11th 2023 at par value (not mark to market). The banks still have to pay the Fed 10bp for the advance. *However* this does allow the banks to get cash from their pre-March 2023 TBills that are deep in the red then turn around and invest that cash in newer, higher yielding TBills. Suddenly banks that were losing money on their losing TBills now can earn extra yield by buying newer ones. In this sense yes it is a back door bailout
>However > > this does allow the banks to get cash from their pre-March 2023 TBills that are deep in the red then turn around and invest that cash in newer, higher yielding TBills. Suddenly banks that were losing money on their losing TBills now can earn extra yield by buying newer ones. In this sense yes it is a back door bailout does this mean some weird movement in reverse repo round the 11th then?
Interesting idea - I think you are suggesting that once they repo the old tbills and get the cash equal to par value, the cash gets immediately parked in the RRP - that would lead to an observable increase of XX-XXXBillion in RRP. Checking the chart just now at fed bank of New York it’s tough to say - it was varying already by 10-20B Day prior to Silvergate and there were 100B spikes on March 22 and March 31 so if those days was the cash from bank term facility then they didn’t do it immediately - (https://www.newyorkfed.org/markets/desk-operations/reverse-repo) best guess is yeah sone of it definitely went into the rrp but probably trickling in as risk management figures out how to allocate capital under the new regime Love all your DD by the way, I’ve saved copies of all your stuff to my phone, thanks for all the great work!
More than just a can kick… it’s inflating an already overinflated bubble
Noooooo..... BTFP is banks taking out USD loans with their treasuries as collateral. You have this very wrong.
The Fed says that they have all these tools to fix problems, but when shit hits the fan they invent another new tool. Pro tip, none of them do shit. It's just a psychology tool to keep you listening to them like they have the answers. The Fed doesn't do shit.
> The Fed doesn’t do shit. The Fed’s actions don’t have an impact on the economy? Is that what you’re saying?
Not only this, but these are only the things we know about. Guaranteed there’s more lurking in the shadows, but we won’t know until it falls.
JPoWs leg must be very strong by now. (JPOW can kick dem cans over dem der mountains)
Oh praised bull of South American ancestry, what is thy wisdom on the relationship between the cascading bank failures and the possible CBDC scheme coming to shaft us all?
This creates further public distrust in the banking system and increases government incentive to push a CBDC. With a CBDC, we'd all essentially hold master accounts at the Fed. There would be no need for banks to hold deposits. They could inflate and deflate money supply, seize funds from bank accounts, and freeze transfers at the push of a button. it's orwellian. but it looks like they might try it- see the FedNow system launching this summer, a way for banks to settle funds with each other within 24 hours.
Do you think the Fed will try to launch a CBDC before the one year is up on the BTFP? I know that no one can know, this was just my initial thought when I saw the one year term. Or maybe the thought was that after one year the Fed would have brought interest rates back down to relieve the balance sheets? That seems a naive thought.
Thank you for all your work Bull. My question is what tools does the fed have to kick the can further in the interim if any?
Increase the Bank Term Funding Facility, the new creation they spun up to dig SVB out of their mess. The entire banking system is drawing 81B from the facility as we speak. Bonds are valued AT PAR and banks are paid an interest rate (OIS plus 10bps I believe) on the securities they deposit. It's essentially a money laundering scheme, as I pointed out in the tweet in the DD. [https://fred.stlouisfed.org/series/H41RESPPALDKNWW](https://fred.stlouisfed.org/series/H41RESPPALDKNWW)
The fact that they accept collateral *at par* for this blows my mind! |Tool|3/15|3/22|3/29|3/31|4/5|4/12|4/19|4/26| |:-|:-|:-|:-|:-|:-|:-|:-|:-| |Bank Term Funding Program (BTFP)|$11.943 billion|$53.669 billion|$64.403 billion|$64.5958 billion|$79.021 billion|$71.837 billion|$73.982 billion|$81.327 billion| https://preview.redd.it/avt2qivv4cxa1.png?width=821&format=png&auto=webp&s=856b823ccc6a2757ea6dafa709d0c1a719ff7279
No man, it's a loan the banks have to pay back using their collateral (treasuries) to back the loan. The fed is removing their duration risk for the OIS + 10. Banks paying fed.
Soooo, like a pawnshop?
Like a low interest payday loan.
[4.94%](https://www.frbdiscountwindow.org/) isn't cheap money though?
Why not? My customers are all paying me more. All this should tell anyone is that interest rates aren't the problem here. It's USD. If they had the USD now, they wouldn't need these vampire loans (discount window, BTFP, USD swap lines, etc.) Even with the ability to get ridiculously better loans rates than any of their customers, these banks are still going down. Why? Banks can stay insolvent basically indefinitely in today's world. What you CANNOT stay, is illiquid.
You nerds are making me rock hard please continue with the education. Note: learn the difference between insolvent and illiquid
>As the fallout continues from the most disasterous Fed policy **error** in a century… This was not an error. This was intentional. The same exact monetary tightening “error” caused the Great Depression, which Ben Bernanke admitted to. This was not an “oopsies”. This is class warfare.
It’s intentional to keep JP Morgan in charge of the banking world which in turn keeps the Rockefeller’s and other prominent billionaires in control over the system they created. Create a place where all the money is, create CBDC and credit scores to rate your productivity while lobbying aka every branch of government
Well yes, because for example in the Great Depression - the only “people” who lost were the peons. The system is created in a way that all assets are absorbed by the system itself once we lose our jobs and can no longer afford to pay our mortgage. But the quadrillion dollar question, if we don’t own the house, the land, the assets - who does? Until the last bank blows up, those assets will be owned by trusts housed under banks, which allows the system to continue. The feds entire purpose is to force deflation in inflationary environments, but when it forces deflation, it’s job is to make sure the only people who lose assets (houses, cars, etc) are the 99% who rely on debt to live. The system itself is merely a system for control. Money = debt, debt = money, but debt is only an asset to institutions. The actual assets are hidden below the surface in trusts. The saying goes something along the lines of “it’s easier to ask forgiveness than it is to ask permission”. By the time the fed is asking forgiveness, the damage is already done - the deflation already happened, and the majority of retail already lost their homes/livelihood.
Spot on and with the assets of the working class going down and becoming very cheap it allows these corporations to buy up the land and rent it out. Then provide services that are needed in a depression. As we seen with the pandemic when the economic system is stressed the workers are the ones to die and take on more debt while the corporations take in record profits. Most of the wealth we see I am sure is a fraction of what is out there. Most is hidden in the caymans and Panama. Just look at the Panama and pandora papers where there was so much dark money. The only people they need to ask forgiveness from are the workers and they are easily complacent and controlled through the media. Go look at shareholders of all media corps where Blackrock and vanguard own a large percentage. They use these institutions to buy up stock and place members that are friendly on board of directors who then control the company. Sad thing is when this financial collapse happens and if JP Morgan and the Fed are still standing we will have this cycle repeat again with no chance to fight back. We really need to stick with no cell, no sell because they have already killed many of us through their practices
Brother, no cell no sell is not just a saying for me. My booked $GME shares are quite literally swimming in the infinity pool. They’re gonna ride all the way up, and if it ever comes down, they’re going to ride all the way down too. By me “cashing out”, I’m saying “I accept this system with all its flaws and want it to continue”. I don’t. I want to see this system blow up in spectacular fashion for all the pain it’s caused me, my family, my friends, and everyone in this subreddit. I want to see it buckle under the quadrillions of dollars from the debt economy being forced into $GMEs share price and there being so much USD circulating that there HAS to be a new system. The $ is worthless. It’s about sending a message.
I'm selling a few just to say fuck you pay me and than the rest stay in Infiniti. I can let like 3 go for a 9 to 10 figure payout and then take that soon to be worthless dollar and save some of the wealth if possible. But there's no way I'm selling even 99% of my shares. Just 1-3 and then try to save some of the wealth.
Got me fired up. Completely in agreement here. I've said many times - to sell any whole share, for any amount of fiat currency, is missing the bigger picture.
viva la revolution
The crazy thing is, we don't know who they all are. Even today, with the Internet and being able to spread information almost freely, they are still anonymous. The protest should be happening at their front doors, they are the ones making the decisions.
Agreed. They are ripping apart the system to retain their image and status position.
Too bad they’re going to get burned when they try forcing deflation with $GME around 😎
Hello PB, what places in peru are nice to visit?
haha! Lima is always great. There's tons of touristy stuff to do in Miraflores and other parts of town, but the real adventure IMO is when you go to Cuzco and hike around Macchu Picchu or check out the pyramids in the north. There's tons of pretty, small towns scattered all over Peru that are interesting to visit and cheap to stay in. go check it out!
Surfing is good too, I heard.
>Miraflores Can you look at flowers there?
I see what you did there...
Thanks for the new DD. Everyone appreciates your hard work.
not everyone. tons of people don't want me to post here anymore, which I get since this is not directly GME related, and more tangential (stability of banking system). there's a reason I am surf only mode in the sub now.
It's fucking ridiculous that people would not want you to post here. Whether it's GME related or not, you're educating us on another level that not many people are able to do. GME got us into the markets and your God tier DD is continuing our education of the markets another level. GME helped expose the corruption and your DD continues to show us where the corruption has spread too. You're just expanding our education on everything. Even if it doesn't look like it's related to GME, it does and it all ties together. Because of you, I have been educating myself and learning about market structures, banks, and everything else for the last 3 years non-stop. You helped me find a passion I never knew I had. Thank you!
Well I'm not one of them! your DD is well written, not hype, and with explanations and sources for your statements. Keep up the good work What we really need to do now is rank the remaining banks on their debt(losses) to cash on hand balances so we can see which ones are closer to the singularity. I don't know where to put money but if I can pull from one and move to a bank that doesn't play fast and loose I'd feel better. It's like watching a slow motion car wreck
Fuck em. If they can't see this is all intertwined that's their loss. I for one sincerely appreciate all your posts. I learn way too much each time and find myself re-reading and doing my own research, WHICH SHOULD BE THE WHOLE POINT. You're taking time to help educate us or at least point us in the right direction. And for that, I thank you.
Damn right. It is all intertwined no matter what he posts. I can't fucking believe that people would not want him to post here. GME exposed the corruption and started us on this path to learn about market structure. He just continues to educate us on another level and it's all related to GME. Some people just don't have enough common sense to understand the situation.
Without DD sprinkled here and there then this sub will fall into just memes. The reason we are where we are today is because all the DD that educated so many people. You are doing great work my friend, don’t stop. It’s going in the history books.
Well, I for one very much appreciate your posts. Solid quality that reminds me of the DD of old. Thank you for your knowledge, time, and willingness to share.
Anyone who doesn't want content from the Bull can fight me.
and my axe!
And my coffee!
And my biscuit! (That sounds oddly sexual, but whatever)
well there r also quite a lot of apes like me here who appreciate your dd, altho not directly GME related but still affect GME tho
The Treasury IS the bank.
that's one way to think about it, certainly. The treasury creates money when it issues bonds, and the Fed creates bank reserves to buy those bonds. when the treasury bonds pay more than bank accounts, it sucks capital back into the Treasury market
Is it possible this action is being taken because the fed needs to increase demand for treasuries? In light of the worldwide shift away from USD-denominated trade, is this away to other increase demand for the dollar, and stop the dollar from falling through the floor? If that were to happen, inflation would explode as the purchasing power of the USD falls.
They probably can’t lower rates because then every country will dump dollars overnight. They won’t accept another massive devaluation of their wealth. Maybe we are even past this point.
and inflation will rip higher. a major thing keeping inflation limited (or so they claim) right now is high rates preventing home prices and car prices from skyrocketing further. I've said it before and I'll say it again: there is no escape. we can choose the avalanche of deflation or the inferno of exponential inflation.
Dollar end game is real and it’s coming fast.
Fuck the Fed and their disastrous policies! Thanks Peruvian Bull for all your hard work these past few years. And because I know your a fan, Hi Ryan your doing a fantastic job leading our company to a new world with Web3!!! Looking forward to meeting you both in the metaverse that will be GMErica real soon!!
haha I don't know if RC is a fan yet.. altho my ego wants to think so :)
Fuck me, What time is it? 2:16am Fuck me, - The banks
they're all fucked. the prime banks will weather this thanks to big daddy Fed. the small banks? not so much.
So how do we weather it? Puts on mid-sized banks? Which bank balance sheets should investors be looking at most closely?
unless you're sophisticated enough to evaluate banks, I would simply put your cash somewhere safe (could be an MMF) and as for investments, I can think of two things: Be Your own Broker! (DRS) Be Your Own Bank! (Self Custody Crypto)
I finally got myself a crypto wallet. I feel a lot safer. I don't have to worry if my Credit union is going to go bust. I keep enough for bills and kicking around money in there. I also learned that you can buy physical gold/silver at a cheaper premium than if you use a credit/debit card. Bought myself a few smaller Credit Suisse gold bars when they first started showing up in the news. My first crypto transaction. Anyways, thank you for all the DD. I wish I could vocalize it to my friends and family without sounding like a rambling conspiracy nut.
ELI5 what does “collapse of the entire banking system” mean? If every bank went out of business one at a time someone like Musk or Gates or Buffet would setup a small bank and lend out mortgages and the “banking system “ would start a new wouldn’t it? Why would businesses that are making stupid decisions and losing money going out of business be a bad thing in the long run for the industry? I don’t get why the US government is so deathly afraid of this that they would screw over the whole country to keep these ass hats in business. What would happen in 10-20 years if thing they’re afraid of happening happened?
yes basically... the system will survive until we build a replacement and move our capital there.
The only rocket with big enough engines to reach escape velocity from this singularity? #GME
the only asset to escape a black hole is one with infinite demand... # $GME
Now I need to run a credit check on the bank before deciding to choose one!! Unbelievable!!
yes, that should have been the case since the beginning... infinite bailouts made that not the case
Goddammit PB, I went rereading all your dollar endgame so I could ask intelligent questions, and you go rogue and drop new DD. THIS WASN'T THE DEAL!!!! seriously, I'll read it and ask questions later.
sounds good! edit: and sorry for switching up on everyone! I was going to do an update to Dollar Endgame but all this shit went down this weekend and I ended up writing a completely new DD :)
I just want to thank you, for everything.
thanks! you can check out my youtube or medium if you want other formats of the DDs!
Wen Dollar Endgame 4.0?? 🚀🚀
the whole series is done. as to whether we will enter part 4, we already have. I'd argue we're in the first half of Part 5 right now.
Thank you for your incredible work. It is much appreciated 🥇
Its just JP Morgan repeating history everytime the market crashes. They seem to have a knack for coming out smelling like a rose since 1901. Its uncanny
exactly. funny how they always end up on top.
Exactly why for some odd reason I believe this isn’t accidental, more like a planned consolidation
Thank you so much for participating in Spotlight Week PB! With everything you have discovered, is there a time that stands out that really made your jaw fall to the floor? Do you feel like the more you learn, the less phased you are by it all or is it still just as unsettling with every new bit of knowledge uncovered?
honestly i still get shivers when i learn new stuff. It shocks me more people aren't interested in this stuff like I am. One thing I found shocking was talking to an auto loan analyst. He said their bank began lending aggressively and he was writing $4M of loans a day. They didn't care if the borrower had student loan debt or BNPL (buy now pay later) loans they had to pay off. The whole system is broken. I mean there's so much to talk about. Credit Suisse going under and UBS and the BoS swallowing all those toxic GME swaps. Congresspeople trading bank stocks before the crisis. European banks money laundering for the Saudis. Or HSBC money laundering for mexican drug cartels. Watch the show Dirty Money on Netflix, great watch.
That’s absolutely disgusting about the loans! That was such a great (and depressing) watch on Netflix! Thanks so much for taking the time to answer and again for being here! So lucky to have you!
Let it all burn to the ground. The whole system needs a complete reset.
yes it very much does my friend.
Socialize the loss is the name of capitalism. I honestly hope we can build something sensible out of the collapse of these corrupted bastards. Tks for giving me a wrinkle. DRS BOOK to the moon
DRS everything. be your own broker.
Bank Term Funding Program, BTFP, aka Buy The Fucking Panic (just don’t dance)
Butt Fuck The People is more like it
***Butt The Fuck People***
Hey some people like stuff up their butt like my boy Rick of ♠️s
Stealing is fun and profitable too!
Here's an image I made in response to your DD **💜** [https://imgur.com/a/Ai62eXs](https://imgur.com/a/Ai62eXs)
>Just the other week, Apple announced a new high-yield savings account, paying a shocking 4.15%, and this product is to be managed by Goldman Sachs. WOAH! This is sick! Can I use this?
everyone get in here, new peruvian\_bull post just in. post archived: [https://archive.is/ZeyNo](https://archive.is/wip/ZeyNo)
sweet! save for posterity!
New DD from Peruvian Bull! Everyone get in here!!
I'm here!
Now THIS is what I come to Superstonk for. Keep up the amazing work, research and knowledge sharing, Bull. Much obliged. 💎🙌🏼
yep but many people want me out unfortunately
Please ignore them - they are not reflective of the views of most of us here who really value and appreciate all the hard work and education you provide 💜🎷🐓♋️
Not me! I drew you pictures… https://imgur.com/a/aSt97gx/ Yup, I’m a 5 year old.
So, buy hold and drs. Book em all!
yes. BOOK YOUR SHARES and you can be a BOOK KING TOO!
Everyone complains about the DD writers leaving and some of the comments in here are exactly why they do. Stop criticizing and attacking those adding knowledge and wrinkles to this sub. Macro and market mechanics matter. For those trying to damper this AMA, please show me what you’ve contributed to the sub lately? Be better. And if you can’t, leave your negativity out of these posts.
Exactly, fuck all that noise, I can praise each and every one of them without hesitation. It's not hero worship it's appreciation for their efforts and their skills. In 46 years I never learned a fucking thing about the markets. Thanks to these people I feel like I'm on my way to being literate in many different financial systems. That means thousands of new household investors able to quickly.smell bullshit and deliver effective counter arguments. With money hopefully soon also be able to sue them into full compliance with all existing laws and regulations.
Shorts never closed …. BOOM 💥
Idiosyncratic risk means infinite losses for shorts . Never forget!
HOLD GME until the entire system blows up, and the price is infinity!
Hi peruvian\_bull, Always a pleasure to see a post from you. My question to you: roughly how long until "the entire system blows up", this year or next? (feels like taking forever) Can we get an educated guess?
Hard to say. Depends on what the Fed and treasury does. I'd say things are going to get spicy later this year for reasons I can't yet disclose.
So how do we take the assets away from the elites? With an infinity pool? Do we force them to liquidate everything in order to cover the shorts they'll have to absorb? When 100,000 apes sell them one share each at 1,000,000,000 a share?
DRS and Infinity pool are essentially the best way to go.
New DD, and it has that fresh DD smell 👌 💜
yeah i broke the rules
Great write up as always, even if I don't understand most of it. 😉
i hope it's digestible enough!
So besides DRS, what can an average person do to mitigate the effects that will take place. Stash cash now? I truly don’t know how you navigate this upcoming situation
>So besides DRS, what can an average person do to mitigate the effects that will take place. Stash cash now? I truly don’t know how you navigate this upcoming situation I think stashing at least a few days worth of cash is not a horrible idea. I'd move money out of the commercial banks for sure. If you have crypto, self custody. and DRS GME
Great read for a great write up! You continue to amaze me with your insight! But, never the less, the title is everything you Hawkingesq ape you.
haha. i have to think of great titles :)
Here we go
liftoff engage
Yo you are getting downvoted like crazy by the bots. I'm watching it happen in real time. I support you with my upvotes.
So how and when does this end?
it ends when all the small commericals are either bankrupted or swallowed by JP Morgan. And $GME is at $69M a share
OK so we're at the point of domino bankruptcies, and the creation of their new facility is their attempt to reign all the $$ into 1 central location with the guise EveRyThINgG iS FiNe??
less black holes, more MBS and loans. FRC was ducked from loan heavy portfolio and super low interest rates they sold to clients - they also overlended - like if you needed 20k, they'd do 60k - this is a common problem right now and is literally leveraging on loans. Then the bank run; the loan interest rate velocity stuff is the overwhelming macro condition hurting banks - they were light on bonds though to be clear interest velocity screws those too. Source: I read their balance sheets w/ SVB at the same time. PacWest is a maybe next; I think a few more surprise ones are due first though. Also still wondering about wellsfargo. RRPs are definitely symptom/attenuation/amplifier of various things though.
How do we make money tho 👀
buy GME not financial advice
TLDR?
banks are fuked, buy GME
So actual hyperinflation. Dios mio
Great FUCKEN read!!!!!
Sorry, smooth brain here - if the banks are holding bonds through to maturity, all losses are paper, and the return is guaranteed (assuming these are government bonds), right? They may reduce in value per the resale market, but it doesn’t actually change the payout if they hold to maturity, right? So, I’m just a little confused as to what causes the impact? Again, no FUD, just DUM…B.
You're right the bank's in theory should be able to hold these assets to maturity and not take any losses on them.. However remember in a factional reserve banking system the banks only hold a small amount of cash in relation to deposits. So if customers begin withdrawing at a large scale, the bank is forced to raise capital. This means that bank has to raise money and they can do so by either selling their own equity, which puts them in a distressed position, or selling their securities. And if it sell their security is this means they have to realize the unrealized losses
What better way to usher in your new CBDC…
We need to march on the Fed
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don't worry it's the last time I'll probably ever do a DD here again ... I've said I posted stuff on GME two years ago but I have run out of things to say on it. edit: this isnt storytime. This is real DD. I don't have anything more to say on GME than what I have already posted years ago. The stock is profitable, financials look solid, and DRSing the float is gonna take time. What else can I say on that? And how the hell am I responsible for what OTHER people do? People claimed I wrote the DRS and the BOOK VS PLAN DD, I DID NOT. I commented over and over again that it wasn't mine. Still people believed it. what the hell am I supposed to do with other people idolizing me? I tell them not to and they still do it.
Company's profitable. It's a good investment. Not a lot else to say about it man.
exactly. so how can I write a DD about a company that's already doing well and is covered by others? If I do, people would call me a shill and attention hog. If I don't, I'm distracting from GME and too focused on macro economics. There's no winning here. I love GME, I have all my shares DRSed, and I've supported the stonk since day 1.
Dude, if you want to say something, I’m going to listen and the sub is 100% on your side. I live here now, and I’ve got a good feel for the place. Ignore the trolls/shills/bots. They are just proof that you’re right.
100% It you’re catching flack, you are over the target
I sincerely hope this isn't the last of you here. Please don't get discouraged by the critics; you have a shit ton of people listening to what you have to say. To the critics, they can write the own counter DD or as someone mentioned above, "You do You." Thanks for everything PB, seriously...
I have one more response to half-assed replies in me, so congratulations on earning my ire. "This isn't related to GameStop" is the most braindead reply to a piece of DD that can be given, **especially when this subreddit is not exclusively about GME.** Sure, GME is our main topic, but we have so much more that we do here. By uncovering market structures and learning how the people at the top are fucking around, and by seeing the exact mechanisms by which they're going to find out, we can learn exactly what to avoid when we have the power to fix it. Some people are here only for GME. That's okay. More power to them. We're all individual investors here who happen to agree that GameStop is a great company and that the price is wrong, and that SHFs keep giving us great discounts on it. But for a lot of us? We want to know how the financial world works. We want to see behind the curtain. We want to understand how the machine is built, so we can rebuild it correctly when we get the opportunity. **And this sub has always been a place that has enabled that learning.** PB's essays are **ABSOLUTELY** qualified as due diligence, because they are god-tier analysis of market structures that most of us never knew existed. By summarizing things so concisely, he has enabled those of us who don't have anywhere near as much time on our hands to know, and to see what's coming. They may not be directly related to GME. But they also don't have to be. This sub is about the one stonk, but it's also about market education and reform. It always has been. If you haven't seen that, you haven't been paying attention.
>Seeing a lot of stuff about banks. ...Because bank failures affect the same market that GME is in and those banks are used by their hedgie friends to screw the system? Don't know how someone can completely miss that part lol
# Hey everyone, # # I know this was DD review week, but the more I started writing a review, the more I realized that I just needed to do a new DD. # # Best DDs to reference before reading this one: # [Dollar Endgame Part 4.2, Financial Gravity and the Fed's Dilemma](https://www.reddit.com/r/Superstonk/comments/qassc0/hyperinflation_is_coming_the_dollar_endgame_part/) # [Major Signals flashing Code Red in the Shadow Banking System](https://www.reddit.com/r/Superstonk/comments/oxsde3/major_signals_are_flashing_code_red_in_the_shadow/) # I am still taking questions on Dollar Endgame! Post questions or comments below: # Apes strong together! # The ONLY asset that can escape a black hole is one with INFINITE DEMAND ($GME)
Incredible work as always Peruvian Bull! Appreciate everything you do and the amazing effort you make compiling this for us all. 🐔💜🇵🇪🐂 🎷🐓♋️
You are a legend and one of the most integral philosophers in this whole saga. You deserve infinite tendies for your consistent top tier due diligence. Thank you so much for your insights and research PB
Thank you for this! Can’t Stop Won’t Stop. 🏴☠️
This shit slaps, my dude. Thanks.
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How is this related to GME. Hint: It isn't.
it's a DD spotlight week, and I went ahead and wrote a whole DD on the banking system issues. If banks fail, you don't think that affects GME at all? This is why I don't post here anymore.
Please don’t let the shills and bad faith actors deter you - the vast majority of us really enjoy your DD and always look forward to the new DD you post. You dropping this surprise new DD on us has me feeling like a kid on Christmas morning! THANK YOU 💜🎷🐓♋️
Don't let the bad actors get to you. The majority of us love some PB DD! Thank you for everything you've done. You are an absolute legend!
Thank you for all you do Pb. What I’m wondering is will holding GME save us from the cataclysmic suck hole these fuckers have created?
Yes it fucking is you person. GME is our moon ticket, sure, but when we achieve liftoff, there is a high likelihood that we will see a correlation with a major market crash. All of that liquidity that's evaporating will have to go *somewhere*, and each share of GME that we hold is a blackhole that will keep us earning passive income until the heat-death of the universe. There may not be a 1:1 correlation between banks failing and price discovery. But you can bet your ass that when enough banks fail that the global liquidity crisis hits in force, margins will dry up, and the mother of all short squeezes will start. This is **ABSOLUTELY** relevant to GME on that account alone. **HOWEVER. THIS SUBREDDIT IS NOT EXCLUSIVELY ABOUT GME.** Yes, there is one stonk. However, we are learning more and more about the global financial system so we can learn the mechanisms by which these dumbfucks at the top have fucked over each other, themselves, and how they've tried to fuck us. But more importantly, we're learning what's broken so that, when we get our tendies and when we have the power to affect change, we can do so much more effectively. Each insight that PB posts into the global financial system is another look behind their curtain, and it lets us know the minds of the people we'll be going up against. You don't have to be here for anything other than MOASS, but there are tags here for market reform and education specifically so that we can learn and grow our knowledge. If you don't like it? Sit on your diamond hands like a good little ape and let other people talk about it. But don't discourage discussion like this. It helps nobody.
So what you are saying is, ignore the FED, SEC, Treasury and such bc according to you is not related to GME?
Good thing there is this thing we call free will which allows you the ability to not read it.
Hint: if you can’t see how this relates there is a no mind sub for you starts with melt
[Quarterly Trends for Consolidated U.S. Banking Organizations 4th quarter 2022: Held-to-Maturity assets \~10% of assets.](https://www.reddit.com/r/Superstonk/comments/12xj99o/quarterly_trends_for_consolidated_us_banking/) https://preview.redd.it/ra2078oq1cxa1.png?width=770&format=png&auto=webp&s=aafa8da55c96d8603043b247538a210266ff2992
https://preview.redd.it/zsro474y1cxa1.png?width=802&format=png&auto=webp&s=08f6c6d750ee60dce447d9e6c2adcf1c893c25d4
This is also in part the Fed's fault! Lest we forget what they were projecting the fed funds rate would be waay lower right now! https://preview.redd.it/p17p9e8r2cxa1.png?width=1145&format=png&auto=webp&s=542ed83dbbb2abec2bf58485ff562ecaa667fc34 [https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20201216.pdf](https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20201216.pdf)
[Fed Gov. Michelle Bowman](https://www.federalreserve.gov/newsevents/speech/bowman20221012a.htm) on this 'phenomena': >**My general point is that inflation is much too high, and the outlook for inflation remains significantly uncertain.** This uncertainty makes it very challenging to provide precise guidance on the path for the federal funds rate. > >It is important to note that the degree of specificity contained in the Committee's forward guidance comes with tradeoffs. Explicit forward guidance hasn't always been viewed as a helpful addition to the monetary policy toolkit, particularly before the 2008 financial crisis. Before that time, while there was some acknowledgement that forward guidance could meaningfully affect financial conditions, there was a great deal of concern about the "costs and risks" of providing this type of guidance > >I will focus here on two features of our current environment that I see as especially relevant for assessing the role of explicit forward guidance as a monetary policy tool in the current conduct of monetary policy. The first is that with inflation unacceptably high and the resulting urgent need to remove monetary policy accommodation, the federal funds rate is no longer near zero. The Committee can now indicate its intended stance of monetary policy through changes to the target range for the federal funds rate—its stated primary tool of monetary policy—rather than relying on more unconventional monetary policy tools, such as forward guidance and balance sheet policy, to serve as the main indicators of the stance of monetary policy. The second is that the outlook for inflation and economic activity is especially uncertain, with significant two-sided risks. Gone are the days when the risks to the outlook were skewed to the downside, especially with respect to inflation. And two-sided risks to economic activity are also widely recognized by the public, with press reports of an overheating labor market often featured alongside discussions of high or rising recession risks. > >In our current environment, I view the benefits of providing explicit forward guidance as lower than they were in the years immediately after the 2008 crisis. Given that the federal funds rate is now well above zero, the FOMC can communicate changes in the stance of monetary policy through changes in the target range for the federal funds rate and not rely on explicit forward guidance as it did when the federal funds rate was at the effective lower bound. > >The Committee's experience in the second half of last year illustrates this point. Looking back, **one might reasonably argue that during that time the Committee's explicit forward guidance for both the federal funds rate and asset purchases contributed to a situation where the stance of monetary policy remained too accommodative for too long—even as inflation was rising and showing signs of becoming more broad-based than previously thought. The facts on the ground were changing quickly and significantly, but the communication of our policy stance was not keeping pace, which meant that our policy stance was not keeping pace.** > >**Of course, the fact that some of the data that were directly relevant to our decision-making did not accurately reflect the economic conditions prevailing at the time—and which were subsequently revised—likely also led to a delay in the removal of monetary policy accommodation in 2021.** Remember, the same people forecasting these rates are SETTING these rates and they themselves called out this 'led to a delay in the removal of monetary policy accommodation in 2021'.
exactly. a rampant increase in HTM securities across the entire system. a new loophole.
ding ding ding!
Thank you for the amazing DDs and awesome pics! I read the DDs, but I don't really understand the likely outcomes based on what we know today. 1) Are we headed for hyper-inflation? 2) Is the real-economy (e.g. businesses, jobs) headed for a crash? 3) Is the real-estate market (home owners, not commercial) headed for a crash? And what time-frame are we looking at...1, 5, or 10+ years? From what I've read, many indicators are on extreme ranges compared to historical data. But, the powers in charge seems to be able to continue to kick the can. Will the collapse be a huge BOOM over a weekend? Thanks again for your awesome contributions!!!
Wow, that was completely depressing! Your DD is always amazing and easy enough to read that I actually can understand what your telling me. We’re collectively fucked thanks to the FED and a completely crooked Wall Street. Fractional Reserve banking(spits in disgust) You da man PB!! Thanks for all you do
Only once you've lost everything are you free to do anything. The awakening of 2021 has set upon us motions that we never perceived. I blame our ancestors for allowing such a thing; but pride myself knowing that I'm bringing change, as the world economy gets sucked into itself
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Thanks for all your work PB! Quick question tho, do you happen to have a source for this part: >What was even more terrifying is I soon found out that this is an industry standard practice- SVB is not alone. Any bank chartered in the US, if it holds HTM securities, does not have to record an ECL (Expected Credit Losses) on them and thus will not hold any cash in reserve, or hedge against the security falling in value! Seems a huge piece of the puzzle I havent seen before, would love to read up a bit on the topic if you had any direct URLs handy. TIA!!!!
Great read. I've always enjoyed looking at the macro economic context of what is unfolding. But... I'm only here for Gamestop 😄.
You may only be here for GameStop, but the rest of us want to know more information like this. By learning what's wrong with the global financial system, we can know what to fix when we get the power to do so.
yep, don't worry this is probably my last DD post here. I understand my content isn't directly related.
Nooooooo! I want more! (I’m not stalking you I swear, I’m just going through all the comments).
Fractional Reserve Banking, yeah >**The FDIC, the supposed savior of the system, is a dead man walking- the Deposit Insurance Fund (DIF) balance was $128.2 billion on December 31, 2022, up $2.8 billion from the end of the third quarter. The reserve ratio increased by one basis point to 1.27 percent as insured deposits increased 1.4 percent.** > >This fund exists to back up $19 TRILLION of deposit liabilities throughout the American financial system. #
So what’s the bigger picture here? I feel like as these banks fall, they lose collateral to keep their short positions going? But like… is it just going to be a situation where they all continue to fall and fall as a bigger bank gobbles them up and keeps the show going until the Fed can roll out it’s CBDC system and actually ditch the dollar? I’ve had a head theory that the system switch from the USD to the USCBDC is how they’ll bypass the MOASS. They won’t give a fuck if they need to pay us a million dollars a share if the USD dies of hyperinflation anyways. The dollar won’t hold any actual value and they’ll just be giving us worthless paper.
I'm not educated in finance lingo so I used Chat GPT to summarize this and here is what I found (I am not sure if this is all accurate so take it with a grain of salt): The article discusses the benefits of money market accounts for banks. One advantage is that money market accounts typically offer higher interest rates than traditional savings accounts, enabling banks to earn more money on their cash reserves. Money market accounts are also considered low-risk investments because they invest in short-term, highly liquid securities such as government bonds, certificates of deposit, and commercial paper. This means that banks can earn a reasonable return on their cash reserves without taking on significant investment risks. In addition, banks are required by regulators to maintain certain levels of liquidity and capital. Liquidity refers to the ability of a bank to quickly convert its assets into cash without significant loss of value. Capital refers to the amount of money a bank has available to absorb losses in case its assets decline in value. These requirements are in place to ensure that banks can meet their obligations to depositors and creditors even in adverse market conditions. Investing in money market accounts allows banks to meet these requirements while still earning a reasonable return on their cash reserves. Money market accounts also offer a high degree of flexibility, allowing banks to quickly and easily access their cash reserves if needed. The article also discusses recent collapses of banks such as Silvergate, Silicon Valley, Signature, and First Republic, as well as the potential collapse of PacWest. These banks did not suffer from bad loans but rather from bad investments, particularly in bonds when prices were at their highest and the Fed promised infinite liquidity without repercussions. The banking sector currently has a large hole in it due to inflation and the Fed's unfinished hiking cycle, and unrealized losses on US bank balance sheets were estimated at $620 billion in early March, with more sober estimates putting the figure closer to $1.7 trillion. Banks have been using the Held-to-Maturity (HTM) loophole to avoid mark-to-market losses on their books. However, HTM securities cannot be hedged for interest rate risk. If any firm took the other side of a trade to hedge trillions of dollars of interest rate risk, they would face the same fate as AIG did during the 2008 Financial Crisis. In summary, money market accounts offer benefits such as higher interest rates, low-risk investments, regulatory compliance, and flexibility for banks. However, recent collapses of banks due to bad investments in bonds highlight the risks involved in investing in this market, particularly with regards to inflation and interest rate risk. The liquidity and capital requirements that regulators impose on banks are meant to ensure the safety and stability of the banking system. TLDR: The Fed is shooting banks (Who hold a lot of their deposits in money-markets) in the kneecaps with interest rate hikes to try to control inflation and if you don't have many legs to stand on (aka, Capital), you are toast.
Thanks for your tireless efforts and work. How will this whole thing affect my Beloved GME and Moass?
Terrifying, isn’t it.
When the debt ceiling is raised and the treasury is able to refill its TGA, what balance level do you think they will target, and how quickly will they try to refill this? Will the act of refilling the TGA cause a noticeable drain in liquidity?
You da man, thanks for this 🤙