14 Comments
Mar 16, 2023Liked by Claudia Sahm

Too many people can't think for themselves, so they believe stupid crap like SVB failed because of "woke" policies. Who believes crap like that? A lot of the mistrust is intentional. It's no wonder people are skittish.

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Mar 16, 2023Liked by Claudia Sahm

I agree 100% in that we have to rise above the politics and the finger pointing here because it honestly doesn't solve anything at the end of the day. I see Yellen is doing her best to reassure the American people that there won't be any banking turmoil but now I'm convinced next week there will be a pause on rates.

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Mar 16, 2023Liked by Claudia Sahm

Great piece--we all know there is and always will be a "back-room" and just want to be in it, even its just enough to keep our "trust."

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Mar 16, 2023Liked by Claudia Sahm

Claudia, trust would be easy for me if you were the Fed chair. As for trusting Jerome Powell, whom I think is basically corrupt, not going to happen.

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Mar 16, 2023Liked by Claudia Sahm

Fed governors haven’t been shy about talking publicly until now. Powell should be the lone voice and keep competing egos off the stage. It’s the good way to have a consistent message.

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You should do a chart on how much this fiasco increased concentrating of money at larger banks.

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author

I was reading yesterday about how much went to one Too Big to Fail bank already.

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founding

Thanks for your expertise and sharing it with us! I have to admit the recent conversation between Janet Yellen and the Senator? from Oklahoma was disconcerting. My take home was she said ‘we will decide who fails and who gets bailed out’…. 😳. It definitely leads me to think that big ‘systemically important’ banks will be favored by regulators. The fact that SVB and Signature were just deemed that (because we said so) shows that they are making up the rules as they go….which is bad for trust. ☹️

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author

I agree, sadly. That conversation was disconcerting, especially now.

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I think there has been lingering distrust to some extent between the Federal Reserve and the banking industry for the past 15 years and counting. The PBS Frontline documentary Age of Easy Money was a reminder of that in my opinion.

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Mar 17, 2023·edited Mar 17, 2023

Good post! How do we make it happen?

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As if the tension between preserving financial stability and fighting inflation wasn’t enough, Powell now has to find credibility when announcing emergency measures “without the use of taxpayer money”. That was the promise of the post GFC reforms, which the Fed weaken…..

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so, if the bank is paid, it's a bailout. but if the depositors are paid, it's not a bailout. :-). Just trying to get my terms straight. Remember when "bailouts" used to be authorized by an act of Congress? that was sooo 2008

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