Congressman Massie (R-KY) explains in a single, elegant tweet what has been going on in the banking industry in the last few days.
Both Silicon Valley Bank and Manhattan’s Signature Bank collapsed after investing heavily in Big Tech and Crypto, respectively.
Rep. Massie explains it all succinctly:
The last 5 days simplified:
A group of wealthy speculators got upset that their money ended up locked into a 10 year obligation at less than 2% return,
so they convinced government it was in everyone’s best interest to help them out of their jam at the expense of everyone else.
— Thomas Massie (@RepThomasMassie) March 14, 2023
The locked-in 10-year low-yield bonds aren’t making as much as the new investments now that rampant Democrat spending has caused inflation which in turn pushed the Biden admin to bump up interest rates.
And you know who’s going to be stuck there holding the bag? The average American taxpayer.
The cost of bailing out two banks that catered to the tech industry will likely be paid by average Americans in the former of more fees, less service and potentially higher taxes — despite President Biden’s pledge otherwise, experts warned Monday.
The dire predictions came as the price of regional bank stocks fell due to fears of further collapses, with trading in more than a dozen of them paused during a massive market sell-off.
The extraordinary rescue announced Sunday night will use the Federal Deposit Insurance Corp.’s Deposit Insurance Fund to make whole all customers of the Silicon Valley Bank and Manhattan’s Signature Bank, which did business with tech startups and the cryptocurrency industry, respectively.
But the fund gets its money in quarterly payments from FDIC-insured banks, which will likely make customers shoulder the burden of any added costs, said William Luther, director of the American Institute for Economic Research’s Sound Money Project.
Source: New York Post
It looks like Rep. Massie is right.
And while Biden and The Fed insist that everything is totes kewl, eh… that might not be the case.
UH-OH: Moody’s Is NOT Buying Biden’s Claim That Everything Is Fine In The Banking Sector
Massie had tweeted on Sunday that his colleague Sen. Mark Kelley (D-AZ) had been asking if there was a way to use social media to censor reports to stop a run on banks.
Just got off of a zoom meeting with Fed, Treasury, FDIC, House, and Senate.
A Democrat Senator essentially asked whether there was a program in place to censor information on social media that could lead to a run on the banks.
— Thomas Massie (@RepThomasMassie) March 13, 2023
Democrat Senator suggested last night that government should work with social media companies to censor information that could lead to a run on banks.https://t.co/GIzwL4KRyF
— Thomas Massie (@RepThomasMassie) March 13, 2023
Typical. Biden lies about who is going to shoulder the bailout and Kelly wants to use social media to censor Americans to prevent a run on banks.
Never change, Democrats. Never change.
Source:
Barrabi, Thomas; Christenson, Josh; Moynihan, Lydia; and Zilber, Ariel. “How Silicon Valley Bank bailout will be a financial burden for US bank customers.” New York Post. March 13, 2023. https://nypost.com/2023/03/13/how-silicon-valley-bank-bailout-will-hurt-us-bank-customers/
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