US treasury bonds are an eminently safe investment, backed by the full faith and credit of the US government. That’s a good thing, right? It wasn’t for Silicon Valley Bank (SVB). T-bonds weren’t the primary cause of SVB’s collapse, but these long-term securities played a part. A Wall Street Journal video.
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How can we stop these bank failures? Make banking boring again. Bring back the Glass-Steagall Act.
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Banks may be crashing in the US and shaky in Switzerland, but in Germany bank business in booming. Literally, because thieves are blowing up ATMs (aka cashpoints, cash machines, automatic teller machines). There have been more than 450 incidents so far this year where explosives and incendiary devices were used to blast open German ATMs for unauthorized withdrawls. German authorities just arrested 42 suspects in the robberies, many of them Dutch, presumably because banks in the Netherlands have already closed down ATMs due to these kinds of attacks.
More:
“German police nab 42 suspects over ATM explosions,” Richard Connor, DW News
Update:
“Germans fret over exploding ATMs as cross-border crime wave hits,” Tom Sims and Nette Noestlinger, Reuters
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Image by Mike Licht. Download a copy here. Creative Commons license; credit Mike Licht, NotionsCapital.com
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“Why Starbucks is Actually a Bank,” a PolyMatter video by Evan Edinger. Read more about this here.
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After Union victory in the Civil War, the government opened the Freedman’s Bank to provide a safe place for newly-freed black workers to place their funds. By 1871, 37 branches were open in the US, with over 70,000 people depositing $60 million into this bank. Then, in 1873, there was a depression. Narrated by Dr. Henry Louis Gates, with Hasan Jeffries and Vincent Brown, from Black History in 2 Minutes (Or So).
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Shortlink: https://wp.me/p6sb6-wEp
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Following the lead of pizza czar Herman Cain, Trump Federal Reserve Board nominee and alimony cheat Stephen Moore has withdrawn himself from consideration. In his bid to exert influence on the independent central bank regulatory agency, President Trump is having difficulties finding stooges with any degree of plausibility.
More:
“Stephen Moore says people don’t want to debate his economic ideas, but those are bad, too,” Matt O’Brien, Washington Post
“Why Stephen Moore’s Fed Bid Failed,” David A. Graham, The Atlantic
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Image (“Trump Fed Capture Attempt”) by Mike Licht. Download copies here. Creative Commons license; credit Mike Licht, NotionsCapital.com.
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Former Bank of England Governor Mervyn King explains why and how banks fail.
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Unregulated derivatives trading crashed the U.S. economy back in 2008, and two years later Congress passed laws to prevent that from happening again. But Citigroup just wrote derivatives deregulation into the $1.1 trillion federal funding bill, and Congress passed it. Now Citi can blow people’s savings on bad exotic derivatives bets, and taxpayers will likely cover the losses.
Here’s what Senator Elizabeth Warren (D-MA) had to say about that:
JPMorgan Chase & Co. had an awkward moment recently when it bet its hedges instead of hedging its bets. This resulted in a $2 Billion loss, some management changes, and loss of CEO Jamie Dimon’s ability to lobby against Wall Street reform with a straight face.
“Goldman Sachs, the global investment bank and financial services firm, announced Friday morning that it is running for president of the United States.”
“… the conglomerate will forgo donations altogether and instead finance the campaign with a portion of the $10 billion in taxpayer-funded bailout money the investment bank received in 2009. “
— “Goldman Sachs announces presidential run,” K.M. Breay, Salon
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Image by Mike Licht. Download a copy here. Creative Commons license; credit Mike Licht, NotionsCapital.com
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