Silicon Valley Bank Collapse and Deregulation

[indy]

Wait, what? This article makes no sense. I get that 'bailout' is a loaded term that people like to throw around when something happens they don't necessarily like but there are several competing things at play here. WHO is being bailed out? The stock has gone to zero so it's not the owners of the company. The corporate debt was not assumed so the bank's creditors are not being bailed out. The government has 'provided financing' to JP Morgan but they didn't give them the money. There are some loss sharing agreements apparently and some other things. These are all interesting questions to examine but the basic question that wasn't answered is did the government (and therefore the American people) come away from this situation better than they would have if the bank had just failed? Maybe, I don't know. Potentially it is was the government that got bailed out but how would we know from this article? Most likely, it was a win-win situation which is being characterized as a bailout?

[andydp]

May 1, 2023 20:42:36 GMT indy said:

Wait, what? This article makes no sense. I get that 'bailout' is a loaded term that people like to throw around when something happens they don't necessarily like but there are several competing things at play here. 

I read that too.  If the Government lent them financing then its a loan and not a grant.  Ergo, there will be a payback if it hasn't already.  To me, it sounds like a takeover of a bankrupt company by a solvent one.

[goldenvalley]

May 1, 2023 19:56:51 GMT andydp said:

Here's a new one for the pile:



First Republic Bank fails: Was it a bailout?

The collapse of First Republic Bank on Monday left it under control of the U.S. government, which quickly sold the bank to JPMorgan Chase. The move aimed to shore up the financial system after a cascade of major bank failures.

JPMorgan Chase, the nation's largest bank, retained the majority of First Republic's assets and all of its deposits, JPMorgan Chase said on Monday. In turn, the deal fully protects depositors at First Republic, who immediately became customers of JPMorgan Chase.

To achieve the rescue, however, a federal agency provided $50 billion in financing to JPMorgan Chase, setting off questions about whether the government had orchestrated a bank bailout.


www.msn.com/en-us/money/companies/first-republic-bank-fails-was-it-a-bailout/ar-AA1aB2sX?ocid=msedgntp&cvid=cd46650c851f4108be80abae733bc841&ei=123

The writers of articles don't know or care what the deal really is....they have a deadline to meet and bailout is as good a word as anything else they can think of. Besides they've been conditioned to react to the government "giving" money to any entity as the evil thing called bail out. Like raising taxes is bad; amnesty for "illegals" is bad.  The writers don't think; they just see the subject matter and use these handy words to mask their lack of actually understanding what happened.