5 ms·

Does this fix the market? Or are we just putting out fires as they crop up.

downvotetruth 3y ago
fix the market? sir, this is a casino. $40 B market cap is chump change in the quadrillions derivatives market https://twitter.com/gaborgurbacs/status/1637522483476680710?lang=en https://twitter.com/gaborgurbacs/status/1637522483476680710?...
- deleted 3y ago
  [deleted]
- tootie 3y ago
  You can't compare a notional value to assets under management.
  - downvotetruth 3y ago
    market cap is not assets under management
- kyaghmour 3y ago
  Warren Buffet on derivatives: "financial weapons of mass destruction."
- collegeburner 3y ago
  thats like summing the value of all written insurance policies, meaningless number the figure is way lower netted out
Zetice 3y ago
My layperson understanding is that this is a Bad Thing, but not the surprising outcome SVB was. The market, other banks, consumers, etc had a long window to digest this, so it won’t cause new panic the same way. Considering all of the stops the fed pulled out to prevent future bank liquidity failures, this probably means some gross negligence was revealed by the market state that goes well beyond even blatant risk mismanagement. Or not, I’m not an expert!
JumpCrisscross 3y ago
> Does this fix the market? On its own, no. The Fed has proposed a solid package of rules that largely restore those rolled back in 2017 [1]. That is the systemic solution. [1] https://www.bloomberg.com/news/articles/2023-04-28/fed-seeks-sweeping-changes-to-bank-rules-in-aftermath-of-svb?srnd=premium https://www.bloomberg.com/news/articles/2023-04-28/fed-seeks...
collegeburner 3y ago
no, u cant rly fix this market easy without causing huge price level problems, again, worse only solution is to smooth over until assets start rolling off/inflation cools enough for rate cuts towards 2%
DonsDiscountGas 3y ago
Businesses go under sometimes, that's the free market. Banks are a weird type of business which is why the FDIC exists, but this isn't a broken market, it's the market working.

fix the market? sir, this is a casino. $40 B market cap is chump change in the quadrillions derivatives market https://twitter.com/gaborgurbacs/status/1637522483476680710?lang=en https://twitter.com/gaborgurbacs/status/1637522483476680710?...

deleted 3y ago
[deleted]
tootie 3y ago
You can't compare a notional value to assets under management.
- downvotetruth 3y ago
  market cap is not assets under management
kyaghmour 3y ago
Warren Buffet on derivatives: "financial weapons of mass destruction."
collegeburner 3y ago
thats like summing the value of all written insurance policies, meaningless number the figure is way lower netted out

Zetice 3y ago

My layperson understanding is that this is a Bad Thing, but not the surprising outcome SVB was. The market, other banks, consumers, etc had a long window to digest this, so it won’t cause new panic the same way. Considering all of the stops the fed pulled out to prevent future bank liquidity failures, this probably means some gross negligence was revealed by the market state that goes well beyond even blatant risk mismanagement. Or not, I’m not an expert!

JumpCrisscross 3y ago

> Does this fix the market? On its own, no. The Fed has proposed a solid package of rules that largely restore those rolled back in 2017 [1]. That is the systemic solution. [1] https://www.bloomberg.com/news/articles/2023-04-28/fed-seeks-sweeping-changes-to-bank-rules-in-aftermath-of-svb?srnd=premium https://www.bloomberg.com/news/articles/2023-04-28/fed-seeks...

collegeburner 3y ago

no, u cant rly fix this market easy without causing huge price level problems, again, worse only solution is to smooth over until assets start rolling off/inflation cools enough for rate cuts towards 2%

DonsDiscountGas 3y ago

Businesses go under sometimes, that's the free market. Banks are a weird type of business which is why the FDIC exists, but this isn't a broken market, it's the market working.