16 Burst results for "Bank Of Circle"
The Café Bitcoin Podcast
"bank circle" Discussed on The Café Bitcoin Podcast
"Hello, and welcome to the Cafe Bitcoin Podcast brought to you by Swan Bitcoin, the best way to buy and learn about Bitcoin. I'm your host, Alex Danson, and we're excited to announce that we're bringing the Cafe Bitcoin Conversations Twitter Spaces to you on this show, the Cafe Bitcoin Podcast, Monday through Friday every week. Join us as we speak to guests like Michael Saylor, Len Alden, Corey Clifston, Greg Foss, Tomer Strohle, and many others in the Bitcoin space. Also, be sure to hit that subscribe button. Make sure you get notifications when we launch a new episode. You can join us live on Twitter Spaces Monday through Friday, starting at 7 a.m. Pacific and 10 a.m. Eastern every morning to become part of the conversation yourself. Thanks again. We look forward to bringing you the best Bitcoin content daily here on the Cafe Bitcoin Podcast. Good morning, and you'll be very happy to know that I spun up a node last night and I've got how much of the I've got 73 percent of the time chain downloaded. Ooh, nice, 73 percent. So what is that, like five days left? I just I just spun it up last night. Yeah, you got a little time to go. Does it slow down eventually? Well, you got to think about it. I mean, like in the beginning, those blocks go by pretty fast. It's like time travel a little bit when you when you do your IBD, you get to see all those blocks coming back in and you go by the years and you start to see some of these years are going to take a little longer, especially as you get closer to the finish line there to today's blocks, you know. Why why is that? We're using it more, man. So there's just there's just more data in the blocks, is that. Yeah, like these last blocks have been pretty full, right? Like you get we had a whole era of blocks being like, you know, packed even in this last year. So I mean, you're going to see some of those are going to take forever. That last little ninety nine percent to one to one hundred. That's fun, though, if nobody's ever pulled the IBD, I mean, you should. This this thing that you're going through right now is a it's another piece that every Bitcoin or should be, you know, should have under their belt. But IBD. Initial block download. So what's like the move going forward, it's kind of it almost sounds to me like in a sense like the block size war is a good thing we kept it low, but seems like people are going to have to start getting nodes sooner rather than later, as it takes longer and longer to set one up. Yeah, I mean, this is why it's important to keep small blocks, you know, I mean, I still don't see this as a huge I mean, obviously I'm in the West, I have some pretty fast Internet, whatever. But, you know, I mean, you want to keep it as small as possible. I would go for smaller blocks, but then what we currently have, but. I mean, it does take a while, I mean, this is the whole point. Download the whole history. But, you know, once you get it, then then you're good, you know, I mean, you you can turn your note off whenever you want to spend, you can or validate something, you can turn it back on, you can download what you missed. I mean, that's the whole point of it. You can join the network at will. You can leave the network at will. Good morning, everyone. How are you guys? Welcome to Cafe Bitcoin. What's up, Wicked? What's up, Mitchell, Terrence, Peter? And how are you guys doing? Doing good, good morning. Kind of catching up on some morning readings. You guys see this, like Coinbase took a minority stake in Circle, the stablecoin for everyone who doesn't know. I don't know if anyone had thoughts around that, but that's an interesting piece of news, in my opinion. I think Coinbase has like had some of these tweets over the last year or so, kind of slyly talking shit about Tether while talking about the merits of stability around USDC. And now to see them take a minority stake in it, it all kind of makes some sense. Do we think that Circle has a significant position in Coinbase as well? Well, I know this, I know Coinbase, their revenues, a large concentrated portion of their revenues over the last year or even more has come from interest on their USDC. They even note that as a risk factor in their SEC filings because of how concentrated their revenues are because of that. And so I know that USDC is an important part of Coinbase's business, especially during the bear market with trading volumes so far down. And it's just interesting because the Fed's policies of jacking interest rates has what kept Circle so profitable. So it's like, yeah, and Tether, right? So the Fed jacking interest rates has actually helped these stablecoins, these private banks are carrying so much yield on their T-bills and all the things that they back their stablecoins with. And so interesting dynamics, you know, just to have a major exchange now own part of USDC. It's almost like, you know that there's a lot of surveillance going on with Coinbase as well. And it's a step away from a from a CBDC. It's not state backed, but it has all of the problems of surveillance in a digital dollar, except it's just a privately issued and controlled by a private company. Probably look, it's probably going to look similar to the PayPal one that just recently was announced. But now we have Coinbase involved. So I think it's interesting news. Is that issued on Ethereum? Is that a new RC-20? Yeah, well, their plan, yeah, yeah, I believe so. And then part of their plan was to expand USDC to like six new blockchains. But, you know, I don't know if you guys have followed like the stablecoins, but USDT, like Tether, has any market share rapidly and USDC has been dropping. It's been a lot of people have been speculating why that is really since the banking crisis. I don't know if you guys remember when Silicon Bank went down, Silicon Valley Bank, Circle came under a lot of pressure because they held a lot of their reserves there. And the peg broke and there was a lot of worry around them. And ever since then, they've really lost market share. So I don't know if it's worries around, you know, US regulations and USDC where people are flooding to Tether. There's a lot of speculation around Binance kind of moving their stablecoins into Tether. And so that could be part of the factors why Tether is going up. You know, Tether is really popular in Asia, whereas USDC is popular in the USA. So perhaps, you know, Asian markets are just loving Tether. There's theories that people are dumping Tether or dumping USDC for other options in the U.S. to gain higher yields, like money market funds, whereas people who hold Tether abroad, because it's mostly in Asia, don't have access to those investment vehicles as easily. So they're not redeeming their Tether like the USDC folks are redeeming them to get these other yield. But now we have Coinbase investing in USDC. And so these stablecoins, I've always thought the stablecoins are where a lot of the regulations headed and where it's concentrated around. And this is a move by Coinbase. And so we'll see what happens. Were any of the stablecoins named in the SEC lawsuits against Coinbase and Binance? No, not for my knowledge. They don't look like securities as much. Yeah, they don't look like securities as much because nobody's buying stablecoins, expecting a stablecoin to go from a dollar per USDC to a dollar, you know, 50 or something. So there's no expectation of profit, really, or not a significant one. So they don't look like securities as much as all these other shitcoins. What about the yields, Aaron? The yields are going to USDC. So the reason USDC and Tether are such great businesses is because you, when you buy this, right, as a customer or a Tether holder or USDC holder, you're giving them an interest free loan. Then, like Sam said, they go and take it and buy US Treasuries and in a higher rate environment, they're just making bank. The problem is what they're doing looks like they're either doing a bond, taking a like a bank deposit, like a checking account deposit where they pay no interest and they make interest on it, or doing a loan or a money market fund. These are financial products. You can't go around selling financial products to US retail and not be regulated or super lightly regulated. That's why I think in this case, with respect to crypto, with respect to Tether, USDC, the banks and Wall Street are frenemies with Bitcoiners and we're on the same side for now. It's a marriage of convenience sort of where everybody's against this stuff, meaning like Bitcoiners and Wall Street are against it because Wall Street's like, what the fuck? This is a regulated product. Like this, we get to make these interest free loans, right? We get these interest free loans from bank depositors and whatever, not the Tether and USDC boys. Tether's just better at evading regulation and shutdown than USDC is more useful. It seems to be more sense resistant, seems to be more confiscation resistant than USDC. USDC is just much more centralized and easier to shut down. That's what I think.
The Café Bitcoin Podcast
A highlight from TAB Conference "A Technical Bitcoin Conference" with Michael Tidwell - August 22nd, 2023
"Hello, and welcome to the Cafe Bitcoin Podcast brought to you by Swan Bitcoin, the best way to buy and learn about Bitcoin. I'm your host, Alex Danson, and we're excited to announce that we're bringing the Cafe Bitcoin Conversations Twitter Spaces to you on this show, the Cafe Bitcoin Podcast, Monday through Friday every week. Join us as we speak to guests like Michael Saylor, Len Alden, Corey Clifston, Greg Foss, Tomer Strohle, and many others in the Bitcoin space. Also, be sure to hit that subscribe button. Make sure you get notifications when we launch a new episode. You can join us live on Twitter Spaces Monday through Friday, starting at 7 a .m. Pacific and 10 a .m. Eastern every morning to become part of the conversation yourself. Thanks again. We look forward to bringing you the best Bitcoin content daily here on the Cafe Bitcoin Podcast. Good morning, and you'll be very happy to know that I spun up a node last night and I've got how much of the I've got 73 percent of the time chain downloaded. Ooh, nice, 73 percent. So what is that, like five days left? I just I just spun it up last night. Yeah, you got a little time to go. Does it slow down eventually? Well, you got to think about it. I mean, like in the beginning, those blocks go by pretty fast. It's like time travel a little bit when you when you do your IBD, you get to see all those blocks coming back in and you go by the years and you start to see some of these years are going to take a little longer, especially as you get closer to the finish line there to today's blocks, you know. Why why is that? We're using it more, man. So there's just there's just more data in the blocks, is that. Yeah, like these last blocks have been pretty full, right? Like you get we had a whole era of blocks being like, you know, packed even in this last year. So I mean, you're going to see some of those are going to take forever. That last little ninety nine percent to one to one hundred. That's fun, though, if nobody's ever pulled the IBD, I mean, you should. This this thing that you're going through right now is a it's another piece that every Bitcoin or should be, you know, should have under their belt. But IBD. Initial block download. So what's like the move going forward, it's kind of it almost sounds to me like in a sense like the block size war is a good thing we kept it low, but seems like people are going to have to start getting nodes sooner rather than later, as it takes longer and longer to set one up. Yeah, I mean, this is why it's important to keep small blocks, you know, I mean, I still don't see this as a huge I mean, obviously I'm in the West, I have some pretty fast Internet, whatever. But, you know, I mean, you want to keep it as small as possible. I would go for smaller blocks, but then what we currently have, but. I mean, it does take a while, I mean, this is the whole point. Download the whole history. But, you know, once you get it, then then you're good, you know, I mean, you you can turn your note off whenever you want to spend, you can or validate something, you can turn it back on, you can download what you missed. I mean, that's the whole point of it. You can join the network at will. You can leave the network at will. Good morning, everyone. How are you guys? Welcome to Cafe Bitcoin. What's up, Wicked? What's up, Mitchell, Terrence, Peter? And how are you guys doing? Doing good, good morning. Kind of catching up on some morning readings. You guys see this, like Coinbase took a minority stake in Circle, the stablecoin for everyone who doesn't know. I don't know if anyone had thoughts around that, but that's an interesting piece of news, in my opinion. I think Coinbase has like had some of these tweets over the last year or so, kind of slyly talking shit about Tether while talking about the merits of stability around USDC. And now to see them take a minority stake in it, it all kind of makes some sense. Do we think that Circle has a significant position in Coinbase as well? Well, I know this, I know Coinbase, their revenues, a large concentrated portion of their revenues over the last year or even more has come from interest on their USDC. They even note that as a risk factor in their SEC filings because of how concentrated their revenues are because of that. And so I know that USDC is an important part of Coinbase's business, especially during the bear market with trading volumes so far down. And it's just interesting because the Fed's policies of jacking interest rates has what kept Circle so profitable. So it's like, yeah, and Tether, right? So the Fed jacking interest rates has actually helped these stablecoins, these private banks are carrying so much yield on their T -bills and all the things that they back their stablecoins with. And so interesting dynamics, you know, just to have a major exchange now own part of USDC. It's almost like, you know that there's a lot of surveillance going on with Coinbase as well. And it's a step away from a from a CBDC. It's not state backed, but it has all of the problems of surveillance in a digital dollar, except it's just a privately issued and controlled by a private company. Probably look, it's probably going to look similar to the PayPal one that just recently was announced. But now we have Coinbase involved. So I think it's interesting news. Is issued that on Ethereum? Is that a new RC -20? Yeah, well, their plan, yeah, yeah, I believe so. And then part of their plan was to expand USDC to like six new blockchains. But, you know, I don't know if you guys have followed like the stablecoins, but USDT, like Tether, has any market share rapidly and USDC has been dropping. It's been a lot of people have been speculating why that is really since the banking crisis. I don't know if you guys remember when Silicon Bank went down, Silicon Valley Bank, Circle came under a lot of pressure because they held a lot of their reserves there. And the peg broke and there was a lot of worry around them. And ever since then, they've really lost market share. So I don't know if it's worries around, you know, US regulations and USDC where people are flooding to Tether. There's a lot of speculation around Binance kind of moving their stablecoins into Tether. And so that could be part of the factors why Tether is going up. You know, Tether is really popular in Asia, whereas USDC is popular in the USA. So perhaps, you know, Asian markets are just loving Tether. There's theories that people are dumping Tether or dumping USDC for other options in the U .S. to gain higher yields, like money market funds, whereas people who hold Tether abroad, because it's mostly in Asia, don't have access to those investment vehicles as easily. So they're not redeeming their Tether like the USDC folks are redeeming them to get these other yield. But now we have Coinbase investing in USDC. And so these stablecoins, I've always thought the stablecoins are where a lot of the regulations headed and where it's concentrated around. And this is a move by Coinbase. And so we'll see what happens. Were any of the stablecoins named in the SEC lawsuits against Coinbase and Binance? No, not for my knowledge. They don't look like securities as much. Yeah, they don't look like securities as much because nobody's buying stablecoins, expecting a stablecoin to go from a dollar per USDC to a dollar, you know, 50 or something. So there's no expectation of profit, really, or not a significant one. So they don't look like securities as much as all these other shitcoins. What about the yields, Aaron? The yields are going to USDC. So the reason USDC and Tether are such great businesses is because you, when you buy this, right, as a customer or a Tether holder or USDC holder, you're giving them an interest free loan. Then, like Sam said, they go and take it and buy US Treasuries and in a higher rate environment, they're just making bank. The problem is what they're doing looks like they're either doing a bond, taking a like a bank deposit, like a checking account deposit where they pay no interest and they make interest on it, or doing a loan or a money market fund. These are financial products. You can't go around selling financial products to US retail and not be regulated or super lightly regulated. That's why I think in this case, with respect to crypto, with respect to Tether, USDC, the banks and Wall Street are frenemies with Bitcoiners and we're on the same side for now. It's a marriage of convenience sort of where everybody's against this stuff, meaning like Bitcoiners and Wall Street are against it because Wall Street's like, what the fuck? This is a regulated product. Like this, we get to make these interest free loans, right? We get these interest free loans from bank depositors and whatever, not the Tether and USDC boys. Tether's just better at evading regulation and shutdown than USDC is more useful. It seems to be more sense resistant, seems to be more confiscation resistant than USDC. USDC is just much more centralized and easier to shut down. That's what I think.
The Bitboy Crypto Podcast
"bank circle" Discussed on The Bitboy Crypto Podcast
"The best time to get a great deal on a Jeep SUV is now during the Summer of Jeep event. Visit jeep.com or your local Jeep brand dealer to find the perfect Jeep SUV for you. Hurry in and make this the Summer of Jeep. Right now during the Summer of Jeep, purchasing at 10% below MSRP on the 2023 Jeep Compass Limited 4x4 or Renegade Latitude 4x4. Not compatible with lease offers or with any other consumer incentive offers. Contact dealer for details. Residency restrictions apply. Take retail delivery by 731-23. Jeep is a registered trademark. Doesn't it seem to you that banking is becoming progressively worse and it's really happened in the last few years? Well, it's because it has. And this is just the beginning. Do you know how they say the larger banks are too big to fail? Well, unfortunately, for small town USA, the regional banks are too small to succeed. All of the money is systematically leaving smaller regional banks. It's going to larger ones, and it's all by design. This is the beginning of a seismic shift for the future of the banking sector, and it's time to take a dive into the mega bank monopoly. Let's get it! Welcome to BitBoy Crypto! My name is Ben. In this video, we're going to zoom in on the idea that our own government is encouraging the largest banks in America to engulf the smaller banks in a coordinated effort to centralize control. Understand that in today's financial climate, being a smaller bank is like bringing a slingshot to a shootout. We all know that money is power, and if my journey in crypto and politics has taught me anything, it's that America cares about one thing, having control. If you think things got bad in the last 20 years, just think about how much more control they'll have 20 years from now. And narrowing down who gets to control all the money is a great place to start. Now, before we get down into the nitty gritty, I want to keep it real with you. It's complicated as all this is about to get. I want to start off with a very basic concept so you can see firsthand how bad the situation already is. Let's take a quick look at this chart of the largest banks in the US. Does anything about this chart seem suspicious to you? Does anything seem wrong here? Look at the drastic difference between the big four and everyone else. Now, I can prove my point with just this chart. It's no secret who the big four banks are in the United States. JP Mortgage Ace, Bank of America, Citibank and Wells Fargo. And Wells Fargo has over a trillion dollars more than US Bank who's in fifth place. These four banks are the main players in the game, and it's most likely going to stay that way because these banks are the main benefactor and the dilemma our own government created. You should know that all of these banks are defined as GSIBs, or Globally Systematically Important Banks. Basically, they're held to a higher standard because of the risk they pose to the system if they were to fail. They get special treatment to avoid another terrible ending to a nonfiction movie. Alternatively, now that things have worsened for smaller regional banks, the Biden administration wants to change small bank standards so they have similar liquidity requirements to the larger ones. This tougher standard gives the smaller banks less wiggle room. When you pair this with high inflation and higher interest, what you'll eventually get is a seismic shift in the banking world because that standard is unattainable for more banks than you would think, and they're going to reach a point where the only way out is to consolidate. This concept is just the tip of the iceberg. Now, remember that first chart? Now, look at this one. This is a chart of deposits by bank size. How in the world are the small banks going to be competitive when they're getting outperformed this badly? It's like a high school team having to play, I don't know, the Georgia Bulldogs or maybe like another college team having to play the Georgia Bulldogs. They're that good. Believe me when I tell you though, banking is Darwinism at its finest. It's survival of the fittest. So, what do large fund investors think about this from an investment standpoint? We'll just ask Bill Negrin from Oakmark. Watch this. At Oakmark, our view has been that the largest banks have a strong competitive advantage versus smaller banks, and that the natural tendency is for the number of banks to shrink and the big to get bigger. They just have advantages when it comes to regulatory requirements, meeting regulatory requirements, mobilization, fraud control. If you're 10 times as big as somebody else, those costs aren't 10 times as large. Now, I want you to ask yourself, would investors on this scale waste their time investing in smaller banks? Of course not. Why would they? He said it himself. The number of banks is going to shrink, and the mega banks will keep adding zeros. To be fair, the US has more banks than all the other G7 countries combined. So, of course, there will be some consolidation, but when and where will it end? The problem is the standards of banking are what caused all the recent bank failures, and those same standards are preventing the smaller banks from getting larger. It's a double-edged sword. And there's no incentive for the government to find a middle ground. What do you think our government would rather do? Help the little man or continue co-signing to consolidation's decentralized control? I feel like you already know that answer. Now, I'm not exaggerating when I say that these banks are light years ahead of their competitors, and they really are too big to fail. Think of the enormity of advantage the big four has over the rest of the game. It's like playing Monopoly against the banker. They always roll doubles and don't play free parking. Instead, landing on Boardwalk and paying luxury tax out the wazoo. Now, why don't you play along with us and become a member of the BitSquad? Be sure to subscribe, smash that like button and ring the bell for notifications. Also, big thanks to Stake for sponsoring this video. They're our No. 1 sponsor. Check out bitboycrypto.com slash stake. Okay, let's look at the banking failures in recent history. You know, Silvergate, First Republic, Silicon Valley. And now look at that through the lens of how small businesses were forced to shut their doors because they couldn't compete with Walmart. It's the same thing. Look at it through the lens of cell phone companies. Yeah, there are smaller ones out there, but let's be honest. The majority go with either Verizon, T-Mobile or AT &T. It's not supposed to get boiled down to three like cell phones. It's advantageous for your everyday American to have multiple banking options because it forces the banks to be competitive with each other and actually have customer service. Stifling that competition leads to higher rates and less choices for customers, not to mention it sets the standard for anti-capitalism. It will also hinder innovation because smaller banks are more likely to offer innovative products and services to stand out in the crowd. With less banks to choose from, you won't be able to take your money and go down the street, shop for a better rate on a car loan. Unethical banking practices will only get worse because where are you going to go? Who are you going to go to? Do you think the bigger banks have any sense of sportsmanship for the smaller banks? Absolutely not. They don't want competition. This is a win for them. They want to crush them. It's all greed. Back before the sell-offs, the mega banks circled over Silicon Valley and First Republic like vultures. Did you know that JP Morgan's profits in Q2 this year jumped 67%? Why? Because they bought out First Republic Bank, and in the process, they kept as many of their customers as they could, and not to mention interest rates are higher. One bank loss is another bank's gain. According to the Wall Street Journal, the 25 biggest US banks gained $120 billion in deposits in the days after Silicon Valley Bank collapsed. All the banks below that level lost $108 billion over the same time span. Some people like Jamie Dimon will tell you the worst is over. He's wrong. It's yet to come. Think about this. If the small banks have no choice but to keep consolidating the predatory practices the banks already pull on us, well, they're just going to multiply. Think about how much control your bank already has over you today. Hidden fees, higher rates and bidding over backwards just to get a small loan is one thing. But what about the headache you have to go through just to spend your own money? A bank shouldn't be able to tell you what you can or cannot spend your hard-earned money on. But they do this every single day. Don't even get me started. I can't even go to a normal bank. I really can't. They won't take me. And I'm not alone. Ask Drew about the time his bank didn't want him to take his own money out to buy a house. Ask AJ about the time his debit card got shut off with no warning. Ask Nick about the time they shut down his bank account for no reason at all. When he asked for an explanation, they told him they didn't have to tell him why. I can go on and on and on. Those are just people I know. And I'm sure you've got a personal nightmare story of your own. But the point I'm making here is it already feels like we have very little control in the institutions that were put there to protect our money. They don't respect us as humans. And it's all about the algorithms designed to facilitate the transfer of control. Unfortunately, the smaller banks are going to be forced to continue consolidating, giving all the money, all the power, all the control to the chosen elite. Obvious side note. Of course, they hate crypto. It's the only thing that gives the power back to the people. That's why they're pushing so hard to eliminate it. It scares them. You want to know what scares me more than anything? Regardless, if it's one bank, four banks or whatever with all the control, America's debt is at $32.6 trillion and counting. Maybe not in my lifetime, but there has to come a moment where we stop kicking the can down the road, when you stop spreading risk around and centralized control. We enter a situation where there's a single point of failure, which would make this 10 times worse if it all comes crashing down. We don't even need a debt ceiling crisis to ruin the US credit system. We're already centralizing all the risk into four players. So how did it get this way? And why did these consolidations happen? Well, I'm sure you remember the 2008 banking crisis that ended in a bailout. Since the government and the FDIC don't want to take another den of that magnitude, they raised the standards for liquidity and put harsh restrictions on what banks can or cannot invest in. Some of you would know this as the Volcker Rule, which was part of the Dodd-Frank Wall Street Reform Bill. You can thank our old friend the banking broad Elizabeth Warren for that one. This rule is why banks can no longer invest in anything that is deemed too risky. Sure, it prevents them from getting wrecked, but it also prevents them from using money to make money. And, of course, who suffers the most? The average Joe. You and me. So what are the banks doing now that they can't take risks on? To answer this, I want you to think back to the days when interest rates were much lower. Remember when money was cheap? It was easy to go to the bank and get a loan if you wanted to go buy a house. Why do you think so many people under 30 don't own homes now? Because they can't. That flexibility is gone. Anyway, back when interest rates were low and money was cheap, there was a lot of extra liquidity moving around the banking system. Because of that, you would see a lot of big investors and venture capitalist money moving into riskier startups and starting new businesses, and, of course, they'll get the money to do that from easier to get banking loans. When the conditions were like this, you would see a lot of uninsured deposits at the bank. Remember, since the banks can't take risk, they had to take safer long-term investments with their money. For the most part, they went heavy into government bonds and mortgage-backed securities, the kind of investments that are long-term and low risk. This move they were forced into making is part of what took them down. When the banks bought those safer securities, they essentially made a bet that the interest rates wouldn't go higher. And unfortunately, we all know what happened last year. Of course, myself, himself, Jerome Powell and the gang spent the entirety of 2022 hiking interest rates to fight against inflation. They spent the entire year creating more problems to combat a problem they created. It was a perfect storm in the worst way for your everyday American. Between higher rates and a tight money supply, people had no choice but to withdraw money out of the banks. And when banks start to see money flying out by the boatload, they get to a point where they have to sell those safer securities they bought with their excess money. The problem was because the rates were higher, the bonds they were forced to sell were sold at a loss. Because Trump rolled back some of the Dodd-Frank rules, some banks didn't have to report unrealized losses. But when unrealized losses become real losses, it became a much different story between taking those losses, bad management and making terrible risk assessments. That's when the dominoes started to fall. That's when banks like First Republic and Silicon Valley had no choice but to sell stocks and borrow large quantities of money from other banks. This caused their investor and customer base to lose confidence and try to pull their money out as fast as possible, especially those uninsured deposits who have more than 250 grand because the rest is uninsured. This right here is a main reason why so many people are siding with the big four banks because even if the FDIC insurance rate of 250K is the same for small and large banks, it would take catastrophic circumstances for large banks to fail, not to mention the government wouldn't let it happen anyways. People know that big banks won't fail, and they're not about to put their life savings into a circumstance where they can only get a quarter million back if the bottom falls out. And trust me, the interest rates, well, they're not quite done hiking yet. This cycle will repeat itself as many times as it has to. By now, you're thinking, is there some sort of plan? What are the regulators going to do? Watch this. This clip here really sums it all up. The regionals are problematic because they keep losing their deposits and have to keep reducing their balance sheet. So for the regionals, I don't think earnings have bottomed. And I wouldn't even think about buying them until I thought that they had. You know, you could traffic a little bit in the larger banks, but the problem is that Michael Barr, who's vice chair of financial services, just said that he's going to raise capital requirements for the large banks by 20%, which would take our ways down by 100 to 200 basis points. There's an irony in this, by the way. All the problems that happened in the banks were in the mid cap banks. The large banks, because of all the regulatory changes, were fine. So what do the regulators do? They go fight the last war and they're raising capital requirements of the large banks. Why? I mean, there's absolutely no reason for it, but that's what they're doing. Do the regulators do anything at all to help out the smaller banks? Of course not. In fact, they intend to raise capital requirements by 20% for the larger banks, a surefire way to ensure the failure of everyone that's beneath them. It's as if they want to consolidate the power. Imagine that. The man from the previous clip, well, that's Steve Eisman. He's famous on Wall Street. If you've ever seen the movie The Big Short, his character was played by Steve Carell. And, yes, he really did answer his phone in that meeting. Prime losses will stop at 5%. Zero. Excuse me. I have to take this. He must be from Bank of America. All jokes aside here, what he just said in that clip is directly in line with the narrative of the regional banks failing and the larger banks taking over. I agree with him on that. Of all people, this guy knows dumpster fire when he sees one. I agree with him. The smaller banks have no choice but to keep reducing their balance sheets, and that's why they haven't hit their bottom. My opinion differs from him though when he says that there's absolutely no reason for the regulator's large bank reaction to the problems with the smaller banks. I have to disagree. The reason is right in front of our faces. The regulators are raising capital requirements for the larger banks to encourage them to keep getting bigger, and that consequently makes it that much harder for smaller banks to grow. On the flip side, the Treasury Secretary herself, Janet Fellen Yellen, aka the Tweety Bird Monster, will tell you that they're not encouraging this type of activity. Another classic example of watch what they do, not what they say. Now, this clip is my favorite. Check it out. So what is your plan to keep large depositors from moving their funds out of community banks into the big banks? We have seen the mergers of banks over the past decade. I'm concerned you're about to accelerate that by encouraging anyone who has a large deposit in a community bank to say, we're not going to make you whole. But if you go to one of our preferred banks, we will make you whole at that point. That's certainly not something that we're encouraging. That is happening right now. That is happening because depositors are concerned about the bank failures that have happened and whether or not other banks could also fail. No, it's happening because you're fully insured no matter what the amount is. If you're in a big bank, you're not fully insured if you're in a community bank. Well, in all my years of watching Janet no tell and yell and lie to Americans about how she's protecting them, I've never once seen her stumble and fumble over words like she did in this clip. The best part is 30 seconds after getting put in the political equivalent of a stone-cold stunner, she says that her judgment is that the banking system is safe and sound and depositors should have confidence. Hysterical. Then when asked why some banks get special treatment and why others don't, she said that she didn't know and it's up for the FDIC to decide. The links people like Janet yell and go to protect depositors all while simultaneously hurting depositors is astounding. Reminds me of Gary Gensler. And in that lies a part of the problem. Getting a straight answer from a politician is like asking your mom for $5 and she tells you to ask your dad and he tells you to ask your mom and you never get the $5. Lack of accountability in our government has a lot to do with the fact that it's so easy for a three-letter agency to point the finger at another three-letter agency to pass the buck. With this, they all maintain a level of plausible deniability and get to go home and tell their families they're making a difference. What a joke. It's a joke. But wait, this is our money. This is our freedom. It's not a joke. And what's anybody going to do about it? Look, it's as simple as this. Politicians and regulators need to wake up and get it through their heads that small town America needs smaller banks. Where are we supposed to go to get loans of the banks that used to support small businesses? Have their hands tied. And Jamie Dimon has the key. We need that competition for competitive rates, and we need small banks to keep innovating to earn their market share. At this point, with the way things are going for the regional banks to survive, they'll be forced to tighten lending standards, make fewer loans, slowing down the economy for everybody. And now, with Biden's knee-jerk push to heighten capital requirements on small banks, politicians cannot sit there with a straight face and say they're not encouraging the consolidations. I'm also not saying this great consolidation will happen overnight, take years, maybe even decades, let the right people get elected and care enough to prevent it. Don't get me wrong. I'm not saying small banks shouldn't have regulations. Of course they do. Just the right kinds of regulations that involve common sense. Banks should be transparent. They should take stress tests. They still need enough wiggle room to be competitive as well as profitable. Sad part is it would take nothing short of a miracle for the public's faith to be restored in smaller banks. Obviously, everyone wants their money to be safe, so don't blame anyone personally for jumping ship to a bigger bank if they have to or if you're allowed to. But when this happens in droves and the government is backing it, you have to play the tape out and see how slippery this slope really is. So, at this point, other than voting in the polls and with our wallets, there's only so much we can do to hold on to the little bit of control we have left. And we have to make the most of it that we can. First of all, you have to be aware that the landscape is changing. With that, you need to do your part and self-educate yourself and become self-reliant. I don't say it lightly. And if you made it this far in this video, you obviously care about your financial future, but you need to keep going. If you're someone who's struggling or even someone who's just trying to level up, you need to plan out every minute of your day so you can make time to be studying at least three to four hours a day minimum. If you're someone that's got a lot of moving parts, there's no shame in hiring a financial advisor or someone that can help you be more active with your wealth management. Understand that at the end of the day, the big banks don't care about you or your self-interest. It's only about the bottom line for them. So that's why you need to learn as much as you can and take the time to figure out what works for you. With that, don't make the mistakes, the same mistakes the banks are making. Don't put all your eggs in one basket and expose yourself to the risk of having a single point of failure. You cannot stress how important it is for you to diversify. Split everything up so if one vertical fails, you're still well above water. Consider buying gold, buying stocks, holding cash, buying digital assets like Bitcoin, or even ammunition. If diplomacy fails, water and ammunition will become currency. It's clear I've been hanging out with Drew too much, but, hey, he's right. He's also kind of scary, but I like him. He's a good guy. At the end of the day, your financial future is up to you. So I wish you the best on your journey and your never-ending pursuit of financial education. That's all I got. Be blessed. BitBoy out.
The Bitboy Crypto Podcast
A highlight from Behind Closed Vaults (The PREDATORY Nature Of Mega Banks)
"The best time to get a great deal on a Jeep SUV is now during the Summer of Jeep event. Visit jeep .com or your local Jeep brand dealer to find the perfect Jeep SUV for you. Hurry in and make this the Summer of Jeep. Right now during the Summer of Jeep, purchasing at 10 % below MSRP on the 2023 Jeep Compass Limited 4x4 or Renegade Latitude 4x4. Not compatible with lease offers or with any other consumer incentive offers. Contact dealer for details. Residency restrictions apply. Take retail delivery by 731 -23. Jeep is a registered trademark. Doesn't it seem to you that banking is becoming progressively worse and it's really happened in the last few years? Well, it's because it has. And this is just the beginning. Do you know how they say the larger banks are too big to fail? Well, unfortunately, for small town USA, the regional banks are too small to succeed. All of the money is systematically leaving smaller regional banks. It's going to larger ones, and it's all by design. This is the beginning of a seismic shift for the future of the banking sector, and it's time to take a dive into the mega bank monopoly. Let's get it! Welcome to BitBoy Crypto! My name is Ben. In this video, we're going to zoom in on the idea that our own government is encouraging the largest banks in America to engulf the smaller banks in a coordinated effort to centralize control. Understand that in today's financial climate, being a smaller bank is like bringing a slingshot to a shootout. We all know that money is power, and if my journey in crypto and politics has taught me anything, it's that America cares about one thing, having control. If you think things got bad in the last 20 years, just think about how much more control they'll have 20 years from now. And narrowing down who gets to control all the money is a great place to start. Now, before we get down into the nitty gritty, I want to keep it real with you. It's complicated as all this is about to get. I want to start off with a very basic concept so you can see firsthand how bad the situation already is. Let's take a quick look at this chart of the largest banks in the US. Does anything about this chart seem suspicious to you? Does anything seem wrong here? Look at the drastic difference between the big four and everyone else. Now, I can prove my point with just this chart. It's no secret who the big four banks are in the United States. JP Mortgage Ace, Bank of America, Citibank and Wells Fargo. And Wells Fargo has over a trillion dollars more than US Bank who's in fifth place. These four banks are the main players in the game, and it's most likely going to stay that way because these banks are the main benefactor and the dilemma our own government created. You should know that all of these banks are defined as GSIBs, or Globally Systematically Important Banks. Basically, they're held to a higher standard because of the risk they pose to the system if they were to fail. They get special treatment to avoid another terrible ending to a nonfiction movie. Alternatively, now that things have worsened for smaller regional banks, the Biden administration wants to change small bank standards so they have similar liquidity requirements to the larger ones. This tougher standard gives the smaller banks less wiggle room. When you pair this with high inflation and higher interest, what you'll eventually get is a seismic shift in the banking world because that standard is unattainable for more banks than you would think, and they're going to reach a point where the only way out is to consolidate. This concept is just the tip of the iceberg. Now, remember that first chart? Now, look at this one. This is a chart of deposits by bank size. How in the world are the small banks going to be competitive when they're getting outperformed this badly? It's like a high school team having to play, I don't know, the Georgia Bulldogs or maybe like another college team having to play the Georgia Bulldogs. They're that good. Believe me when I tell you though, banking is Darwinism at its finest. It's survival of the fittest. So, what do large fund investors think about this from an investment standpoint? We'll just ask Bill Negrin from Oakmark. Watch this. At Oakmark, our view has been that the largest banks have a strong competitive advantage versus smaller banks, and that the natural tendency is for the number of banks to shrink and the big to get bigger. They just have advantages when it comes to regulatory requirements, meeting regulatory requirements, mobilization, fraud control. If you're 10 times as big as somebody else, those costs aren't 10 times as large. Now, I want you to ask yourself, would investors on this scale waste their time investing in smaller banks? Of course not. Why would they? He said it himself. The number of banks is going to shrink, and the mega banks will keep adding zeros. To be fair, the US has more banks than all the other G7 countries combined. So, of course, there will be some consolidation, but when and where will it end? The problem is the standards of banking are what caused all the recent bank failures, and those same standards are preventing the smaller banks from getting larger. It's a double -edged sword. And there's no incentive for the government to find a middle ground. What do you think our government would rather do? Help the little man or continue co -signing to consolidation's decentralized control? I feel like you already know that answer. Now, I'm not exaggerating when I say that these banks are light years ahead of their competitors, and they really are too big to fail. Think of the enormity of advantage the big four has over the rest of the game. It's like playing Monopoly against the banker. They always roll doubles and don't play free parking. Instead, landing on Boardwalk and paying luxury tax out the wazoo. Now, why don't you play along with us and become a member of the BitSquad? Be sure to subscribe, smash that like button and ring the bell for notifications. Also, big thanks to Stake for sponsoring this video. They're our No. 1 sponsor. Check out bitboycrypto .com slash stake. Okay, let's look at the banking failures in recent history. You know, Silvergate, First Republic, Silicon Valley. And now look at that through the lens of how small businesses were forced to shut their doors because they couldn't compete with Walmart. It's the same thing. Look at it through the lens of cell phone companies. Yeah, there are smaller ones out there, but let's be honest. The majority go with either Verizon, T -Mobile or AT &T. It's not supposed to get boiled down to three like cell phones. It's for advantageous your everyday American to have multiple banking options because it forces the banks to be competitive with each other and actually have customer service. Stifling that competition leads to higher rates and less choices for customers, not to mention it sets the standard for anti -capitalism. It will also hinder innovation because smaller banks are more likely to offer innovative products and services to stand out in the crowd. With less banks to choose from, you won't be able to take your money and go down the street, shop for a better rate on a car loan. Unethical banking practices will only get worse because where are you going to go? Who are you going to go to? Do you think the bigger banks have any sense of sportsmanship for the smaller banks? Absolutely not. They don't want competition. This is a win for them. They want to crush them. It's all greed. Back before the sell -offs, the mega banks circled over Silicon Valley and First Republic like vultures. Did you know that JP Morgan's profits in Q2 this year jumped 67 %? Why? Because they bought out First Republic Bank, and in the process, they kept as many of their customers as they could, and not to mention interest rates are higher. One bank loss is another bank's gain. According to the Wall Street Journal, the 25 biggest US banks gained $120 billion in deposits in the days after Silicon Valley Bank collapsed. All the banks below that level lost $108 billion over the same time span. Some people like Jamie Dimon will tell you the worst is over. He's wrong. It's yet to come. Think about this. If the small banks have no choice but to keep consolidating the predatory practices the banks already pull on us, well, they're just going to multiply. Think about how much control your bank already has over you today. Hidden fees, higher rates and bidding over backwards just to get a small loan is one thing. But what about the headache you have to go through just to spend your own money? A bank shouldn't be able to tell you what you can or cannot spend your hard -earned money on. But they do this every single day. Don't even get me started. I can't even go to a normal bank. I really can't. They won't take me. And I'm not alone. Ask Drew about the time his bank didn't want him to take his own money out to buy a house. Ask AJ about the time his debit card got shut off with no warning. Ask Nick about the time they shut down his bank account for no reason at all. When he asked for an explanation, they told him they didn't have to tell him why. I can go on and on and on. Those are just people I know. And I'm sure you've got a personal nightmare story of your own. But the point I'm making here is it already feels like we have very little control in the institutions that were put there to protect our money. They don't respect us as humans. And it's all about the algorithms designed to facilitate the transfer of control. Unfortunately, the smaller banks are going to be forced to continue consolidating, giving all the money, all the power, all the control to the chosen elite. Obvious side note. Of course, they hate crypto. It's the only thing that gives the power back to the people. That's why they're pushing so hard to eliminate it. It scares them. You want to know what scares me more than anything? Regardless, if it's one bank, four banks or whatever with all the control, America's debt is at $32 .6 trillion and counting. Maybe not in my lifetime, but there has to come a moment where we stop kicking the can down the road, when you stop spreading risk around and centralized control. We enter a situation where there's a single point of failure, which would make this 10 times worse if it all comes crashing down. We don't even need a debt ceiling crisis to ruin the US credit system. We're already centralizing all the risk into four players. So how did it get this way? And why did these consolidations happen? Well, I'm sure you remember the 2008 banking crisis that ended in a bailout. Since the government and the FDIC don't want to take another den of that magnitude, they raised the standards for liquidity and put harsh restrictions on what banks can or cannot invest in. Some of you would know this as the Volcker Rule, which was part of the Dodd -Frank Wall Street Reform Bill. You can thank our old friend the banking broad Elizabeth Warren for that one. This rule is why banks can no longer invest in anything that is deemed too risky. Sure, it prevents them from getting wrecked, but it also prevents them from using money to make money. And, of course, who suffers the most? The average Joe. You and me. So what are the banks doing now that they can't take risks on? To answer this, I want you to think back to the days when interest rates were much lower. Remember when money was cheap? It was easy to go to the bank and get a loan if you wanted to go buy a house. Why do you think so many people under 30 don't own homes now? Because they can't. That flexibility is gone. Anyway, back when interest rates were low and money was cheap, there was a lot of extra liquidity moving around the banking system. Because of that, you would see a lot of big investors and venture capitalist money moving into riskier startups and starting new businesses, and, of course, they'll get the money to do that from easier to get banking loans. When the conditions were like this, you would see a lot of uninsured deposits at the bank. Remember, since the banks can't take risk, they had to take safer long -term investments with their money. For the most part, they went heavy into government bonds and mortgage -backed securities, the kind of investments that are long -term and low risk. This move they were forced into making is part of what took them down. When the banks bought those safer securities, they essentially made a bet that the interest rates wouldn't go higher. And unfortunately, we all know what happened last year. Of course, myself, himself, Jerome Powell and the gang spent the entirety of 2022 hiking interest rates to fight against inflation. They spent the entire year creating more problems to combat a problem they created. It was a perfect storm in the worst way for your everyday American. Between higher rates and a tight money supply, people had no choice but to withdraw money out of the banks. And when banks start to see money flying out by the boatload, they get to a point where they have to sell those safer securities they bought with their excess money. The problem was because the rates were higher, the bonds they were forced to sell were sold at a loss. Because Trump rolled back some of the Dodd -Frank rules, some banks didn't have to report unrealized losses. But when unrealized losses become real losses, it became a much different story between taking those losses, bad management and making terrible risk assessments. That's when the dominoes started to fall. That's when banks like First Republic and Silicon Valley had no choice but to sell stocks and borrow large quantities of money from other banks. This caused their investor and customer base to lose confidence and try to pull their money out as fast as possible, especially those uninsured deposits who have more than 250 grand because the rest is uninsured. This right here is a main reason why so many people are siding with the big four banks because even if the FDIC insurance rate of 250K is the same for small and large banks, it would take catastrophic circumstances for large banks to fail, not to mention the government wouldn't let it happen anyways. People know that big banks won't fail, and they're not about to put their life savings into a circumstance where they can only get a quarter million back if the bottom falls out. And trust me, the interest rates, well, they're not quite done hiking yet. This cycle will repeat itself as many times as it has to. By now, you're thinking, is there some sort of plan? What are the regulators going to do? Watch this. This clip here really sums it all up. The regionals are problematic because they keep losing their deposits and have to keep reducing their balance sheet. So for the regionals, I don't think earnings have bottomed. And I wouldn't even think about buying them until I thought that they had. You know, you could traffic a little bit in the larger banks, but the problem is that Michael Barr, who's vice chair of financial services, just said that he's going to raise capital requirements for the large banks by 20%, which would take our ways down by 100 to 200 basis points. There's an irony in this, by the way. All the problems that happened in the banks were in the mid cap banks. The large banks, because of all the regulatory changes, were fine. So what do the regulators do? They go fight the last war and they're raising capital requirements of the large banks. Why? I mean, there's absolutely no reason for it, but that's what they're doing. Do the regulators do anything at all to help out the smaller banks? Of course not. In fact, they intend to raise capital requirements by 20 % for the larger banks, a surefire way to ensure the failure of everyone that's beneath them. It's as if they want to consolidate the power. Imagine that. The man from the previous clip, well, that's Steve Eisman. He's famous on Wall Street. If you've ever seen the movie The Big Short, his character was played by Steve Carell. And, yes, he really did answer his phone in that meeting. Prime losses will stop at 5%. Zero. Excuse me. I have to take this. He must be from Bank of America. All jokes aside here, what he just said in that clip is directly in line with the narrative of the regional banks failing and the larger banks taking over. I agree with him on that. Of all people, this guy knows dumpster fire when he sees one. I agree with him. The smaller banks have no choice but to keep reducing their balance sheets, and that's why they haven't hit their bottom. My opinion differs from him though when he says that there's absolutely no reason for the regulator's large bank reaction to the problems with the smaller banks. I have to disagree. The reason is right in front of our faces. The regulators are raising capital requirements for the larger banks to encourage them to keep getting bigger, and that consequently makes it that much harder for smaller banks to grow. On the flip side, the Treasury Secretary herself, Janet Fellen Yellen, aka the Tweety Bird Monster, will tell you that they're not encouraging this type of activity. Another classic example of watch what they do, not what they say. Now, this clip is my favorite. Check it out. So what is your plan to keep large depositors from moving their funds out of community banks into the big banks? We have seen the mergers of banks over the past decade. I'm concerned you're about to accelerate that by encouraging anyone who has a large deposit in a community bank to say, we're not going to make you whole. But if you go to one of our preferred banks, we will make you whole at that point. That's certainly not something that we're encouraging. That is happening right now. That is happening because depositors are concerned about the bank failures that have happened and whether or not other banks could also fail. No, it's happening because you're fully insured no matter what the amount is. If you're in a big bank, you're not fully insured if you're in a community bank. Well, in all my years of watching Janet no tell and yell and lie to Americans about how she's protecting them, I've never once seen her stumble and fumble over words like she did in this clip. The best part is 30 seconds after getting put in the political equivalent of a stone -cold stunner, she says that her judgment is that the banking system is safe and sound and depositors should have confidence. Hysterical. Then when asked why some banks get special treatment and why others don't, she said that she didn't know and it's up for the FDIC to decide. The links people like Janet yell and go to protect depositors all while simultaneously hurting depositors is astounding. Reminds me of Gary Gensler. And in that lies a part of the problem. Getting a straight answer from a politician is like asking your mom for $5 and she tells you to ask your dad and he tells you to ask your mom and you never get the $5. Lack of accountability in our government has a lot to do with the fact that it's so easy for a three -letter agency to point the finger at another three -letter agency to pass the buck. With this, they all maintain a level of plausible deniability and get to go home and tell their families they're making a difference. What a joke. It's a joke. But wait, this is our money. This is our freedom. It's not a joke. And what's anybody going to do about it? Look, it's as simple as this. Politicians and regulators need to wake up and get it through their heads that small town America needs smaller banks. Where are we supposed to go to get loans of the banks that used to support small businesses? Have their hands tied. And Jamie Dimon has the key. We need that competition for competitive rates, and we need small banks to keep innovating to earn their market share. At this point, with the way things are going for the regional banks to survive, they'll be forced to tighten lending standards, make fewer loans, slowing down the economy for everybody. And now, with Biden's knee -jerk push to heighten capital requirements on small banks, politicians cannot sit there with a straight face and say they're not encouraging the consolidations. I'm also not saying this great consolidation will happen overnight, take years, maybe even decades, let the right people get elected and care enough to prevent it. Don't get me wrong. I'm not saying small banks shouldn't have regulations. Of course they do. Just the right kinds of regulations that involve common sense. Banks should be transparent. They should take stress tests. They still need enough wiggle room to be competitive as well as profitable. Sad part is it would take nothing short of a miracle for the public's faith to be restored in smaller banks. Obviously, everyone wants their money to be safe, so don't blame anyone personally for jumping ship to a bigger bank if they have to or if you're allowed to. But when this happens in droves and the government is backing it, you have to play the tape out and see how slippery this slope really is. So, at this point, other than voting in the polls and with our wallets, there's only so much we can do to hold on to the little bit of control we have left. And we have to make the most of it that we can. First of all, you have to be aware that the landscape is changing. With that, you need to do your part and self -educate yourself and become self -reliant. I don't say it lightly. And if you made it this far in this video, you obviously care about your financial future, but you need to keep going. If you're someone who's struggling or even someone who's just trying to level up, you need to plan out every minute of your day so you can make time to be studying at least three to four hours a day minimum. If you're someone that's got a lot of moving parts, there's no shame in hiring a financial advisor or someone that can help you be more active with your wealth management. Understand that at the end of the day, the big banks don't care about you or your self -interest. It's only about the bottom line for them. So that's why you need to learn as much as you can and take the time to figure out what works for you. With that, don't make the mistakes, the same mistakes the banks are making. Don't put all your eggs in one basket and expose yourself to the risk of having a single point of failure. You cannot stress how important it is for you to diversify. Split everything up so if one vertical fails, you're still well above water. Consider buying gold, buying stocks, holding cash, buying digital assets like Bitcoin, or even ammunition. If diplomacy fails, water and ammunition will become currency. It's clear I've been hanging out with Drew too much, but, hey, he's right. He's also kind of scary, but I like him. He's a good guy. At the end of the day, your financial future is up to you. So I wish you the best on your journey and your never -ending pursuit of financial education. That's all I got. Be blessed. BitBoy out.
Bloomberg Radio New York
"bank circle" Discussed on Bloomberg Radio New York
"Prices around the world is shutting down or reducing the IT cost is to reduce less of cloud resources. So for Amazon, I would say, is the growth decline has been quite a bit in their cloud business because of the consumption roles or the consumption model of that. And then we expect the same thing that happened to Microsoft, I think Microsoft cloud is going to have a continued pressure. It's not going to be a turnaround, at least in this quarter. This is what that's telling me. All right, interesting, real quick. Just 30 seconds here. I mean, is he cloud story still a play? Oh, yes, but it's a question of what is your time horizon? If your time horizon is 5 years, it's definitely in play. But if your time horizon is the next 6 to 9 months, then we have no idea where the bottom is. It's definitely doesn't look like that this quarter will see a bottom and if banks keep on reducing their consumption of IT resources, we will see perhaps even more pressure over the next 6 months. All right, thanks so much. We really appreciate getting your perspective on this some news out of Amazon laying off an additional 9000 employees on a rock run. He's our senior technology analyst for Bloomberg intelligence does a great job there. The story of the day destroyed over the last several days, quite frankly, particularly in Europe and banking circles has been the acquisition by UBS of Credit Suisse, my Alma mater there. We really want to get some perspective of what it means for the European banking community. We're going to do that in just moments right now. We're going to get a Bloomberg business flash from
Bloomberg Radio New York
"bank circle" Discussed on Bloomberg Radio New York
"A while back. Great financial crisis. Yeah, so this is certainly something on the radar. Nevertheless, so FRC is your ticker down about 18%. I think the key word for them is acquisition. Someone has to be interested in it. Similar to New York community Bancorp, NYCB, this is a company that is going to take over signature bank. And this is going to acquire at NYCB is your ticket shares up about 29% in the pre market. So you can see, by the way, in the market as a whole is up two tenths of 1%. So this is a substantial substantial move regardless. It's worth noting how the acquisition for lack of a better term. Acquirers. That's the word I'm looking for. I'm sorry. Acquirers, can you tell it's Monday morning? Yes. The acquirers seem to be trading positively, which is weird because when it's like so non traditional or counterintuitive to the traditional M and a kind of trade. And acquire target. Why am I struggling with the terminology? I know this are the opera Friday night. Fanta has the opera was fantastic. That's the terminology I do know inside and out. But regardless, the targets are trading lower and it's usually the opposite. So I think that's an interesting trade to keep an eye on. I think the dishes are just getting good deals. So pennies on the dollar are pretty good to thank so much for joining us. Lisa brahmo it's you and John Farrell killed yesterday. I was watching a switching back and forth between March Madness and your afternoon show talking breaking down the UBS credit Swiss deal, but it's obviously a huge deal for European banking in general, not just our good friends in Switzerland. So it's really cliche, but people were saying, this is the March Madness you were looking for. You heard that a lot yesterday. The question really now is just have we gone past it. Is this enough? And we've been asking that again and again and earlier this morning, the answer was it looks like not really. And now you can see the losses completely erased on UBS shares, even into gains. So does that give you some sense that maybe it does make everything okay. We'll see, let's bring in Allison Williams. She's a Bloomberg intelligence senior banks analyst. She's really been covering UBS credit Swiss a lot of these global banks for a long time. She really has great perspective. And Alison, what's your take here? I mean, just from reading the news stories this morning, it feels to me like they're getting a lot of really good assets at a bargain price and I think we've got a lot of backstop by the government. It seems like over the long term, this could be a win win for UBS. It does seem like over the long term. I mean, it's really like the way that we normally do valuations is to look at the price compared to the assets. And I mean, we're talking 30, 40 basis points. Obviously, it depends on sort of where the assets settled out. A lot of protections built in. The AT ones, as we know, were zeroed out so that gives them more capital protection. I think the negatives are just that they're talking 2027 for accretion. There's going to be several years of execution risk. And their buybacks are on hold. But again, those are all sort of the near term challenges, but over the long term, keeping the shift towards wealth management, that structurally better returns, better for capital management and they just got a lot closer to a $6 trillion that they tricked 6 trillion asset target that they talked about a couple of years ago. Allison, you cover big U.S. banks. You have through and through for your entire career. And I'm curious what they're doing with all the deposits that they're inevitably getting. The billions and billions of dollars of assets that they probably don't even want for medium sized banks that are seeing deposit outflows. Well, you know, that's sort of how we got here in the first place was all of the banking system getting so much deposits that they had nothing to do with. And so a lot of those banks did put them into bonds. I think to the extent that banks are getting deposits today that they would hope that they are clients that are going to stay with them. But really what the banks have to do when they get all this access deposit is to try to give a haircut to how much they think might be hot money. How much do you think is going to be stable? And they want to make sure that they stay liquid enough so that if those assets go away from them, they still have very good liquidity. So I used to work a credit Swiss Allison, so I have I'm paying attention, extra attention here. I'm wondering, what's going to happen with that deal, the Michael Klein creditors first Boston spin out of the investment bank is that dead on arrival now? Yeah, so I think that what's going to happen, it's interesting because UBS. is very much following the strategy that Credit Suisse was already sort of implementing for their investment bank, which is sort of getting rid of trading. Credits we had already contracted to sell some assets they've already sold a bunch of those. And so in fact, they're already sort of at that level of investment banking assets to 25% of the total that they want to be. But Credit Suisse did have some very good bankers as you would know. And so I think that they did talk about accelerating their presence in global banking and research. I know a lot of good research analysts there. And they talked about expanding their U.S. footprint and some of the M and a bankers that they're picking up in high growth areas. Now, the question is, do those bankers want to come on board? Is it going to be a fit? I think culture, as you know, is very difficult. But I'm not sure what happens with Michael Klein and the buyout that was announced a couple of years ago, but it does seem that the carve out is off the table. All right, Allison, very much appreciate getting your time. I know you're really busy here piecing together this UBS credit Swiss deal. Allison Williams senior bank analyst for Bloomberg intelligence and you just wonder if is this enough Lisa to kind of stem some of the concern in European banking circles. From your perspective, how emotional was it over the weekend? Yeah, it is. But all the people I know at credit Swiss are gone. But I mean, when I was at credit Swiss, there was not any
The Bitboy Crypto Podcast
"bank circle" Discussed on The Bitboy Crypto Podcast
"To weaponize recent instability in the banking sector, catalyzed by catastrophic government spending and unprecedented interest rate hikes are deeply inappropriate and could lead to a broader financial stability. Time members that I send a letter to FDIC chairman Gruber who are reports the FDIC's weaponizing recent stability purge legal crypto activity from the United States. I already told you guys about this a little bit earlier, is that Barney Frank these days? Yeah. Wow. What? Isn't Barney Frank? Is he kind of famous for being like one of the first politicians to do or something? Yeah? He is, right? I think so. I think that's the right guy. Yeah. He doesn't look nearly the same. And he's the Frank and Dodd Frank. He looks totally different, honey? On Monday, Frank say signature board member said in an interview, target of the bank and send an anti crypto message. And I just like, let's talk about these things are not necessarily mutually exclusive, okay? They can still be going after banks to shut down crypto and signature bank could have been involved in tons of money laundering. Like those things are not mutually exclusive. It's not one or the other. It's probably a combination of both. So Jessica thought I maybe still be yelling for yesterday? Barney is your uncle who drinks too much? I don't have an upload drinks too much. Drinks just to write them out. We're trying to save crypto from the banks. Circle CEO. Hilarious. Well, I told you his son is on a crusade, talking about anti CBDC. It's ridiculous. Let's see, he isn't buying any narratives, which is traditional banking system needs to be protected from crypto. He believes the opposite to be true. This is what do they call this op? This is offset here. Oh, we got $3.3 billion in trans in transit, talking about their money from silicon bank. Coinbase issues an alert, a crypto trader says it will know our support 6 Ethereum based altcoins. Coinbase just issued an alert crypto traders warning it's preparing to end support for 6 altcoins.
Coin Journal
Circle says 3.3B of USDC reserves stuck at Silicon Valley Bank
"6 a.m. Saturday March 11th, 2023. Circle says 3.3 B of USD C reserved stuck at Silicon Valley bank. Circle said it failed to remove 3.3 billion from Silicon Valley bank. SVB is under FDIC receivership following its collapse. USD C depict following the news, falling 8 to hit lows of 0.91 on Saturday morning. Circle, the blockchain payments company that issues the USD C stablecoin has confirmed that 3.3 billion worth of USD C reserves are. The post circle says 3.3 B of USD C reserved stuck at Silicon Valley bank appeared first on coin journal.
Cryptocurrency for Beginners: with Crypto Casey
"bank circle" Discussed on Cryptocurrency for Beginners: with Crypto Casey
"Sinking ship, taking us all down with it. Why is it so? Well, the short answer is because the Federal Reserve keeps raising interest rates. So let's explore the longer answer that's a lot simpler than we would think. Hello, I'm crypto Casey and welcome to another episode of crypto this week. Let's take a look at the global news stories and the state of the current macro environment. Please check out our sponsors coin ledger, NordVPN, and ledger. Start getting your crypto taxes sorted out with coin ledger's cryptocurrency and NFTs tax awkward, that will save you time and help maximize your refund, secure your data privacy and access to important financial and cryptocurrency accounts from hackers and trackers by using virtual private network services, provided by NordVPN, which we can redeem for a special discount with the link below, and please make sure you are taking complete control and ownership of all your digital assets and cryptocurrencies by using secure cold storage hover watts like ledger devices. So make sure to scroll down and use the links below to access the correct and official sites, as well as redeem any special offers they have for us. Sweet. So when we deposit U.S. dollars into a bank account, the bank doesn't keep it in cash. They lend it out to other people and businesses, or they invest it. And they usually invest it in US Treasury bonds or T bills. US Treasury bonds in finance are regarded as one of the safest investments available. And so it makes sense that many banks buy them in order to generate some yield on our deposit. So banks that bought long-term ten year treasury bonds over a year or so ago when interest rates or the cost to borrow money was zero, they were getting 1.5% or so income from the investments. Now that the Federal Reserve has increased interest rates higher and higher over the past several months to 4.5% plus all of the bank's US Treasury bonds are worth less than what they originally bought them for, so they are sitting on massive losses, so key fact we should all keep in mind as investors is that the value of U.S. treasuries decreases when interest rates go up. And since banks invested their customer funds into these long-term bonds, that at one point were maintaining their value and generating yield, while in the recent short term, interest rates have increased faster and more aggressively than the market has seen in decades. Most banks are underwater. However, just like we saw with Silicon Valley bank, the problem gets exponentially worse when depositors run on the bank and try to withdraw all their funds at once. Because since the banks don't keep a lot of cash on hand, in order to give the positives their funds, they are forced to sell their treasuries at a loss. So when a lot of people start withdrawing funds all at once, it causes the bank to go insolvent. Now there are financial instruments like rate swaps that banks can use to hedge against rising interest rates, but for some reason, Silicon Valley bank do not do this. And as they were one of the top 20 largest banks in the U.S., it's best to go ahead and assume that a lot of other banks have not been hedging either. Scary. So the fallout from this particular bank largely affected a lot of tech startups, founders, and venture capitalists, who will have problems making payroll and staying afloat in general unless the government or another bank swoops in and saves them very soon, which doesn't look like the case right now. However, in response to this tweet, I think Twitter should buy Silicon Valley bank and become a digital bank. Elon Musk replied, I'm open to the idea. That would be something, and as we discussed in previous episodes a few months ago, Elon Musk wants to add the ability to transact value on Twitter, so maybe acquiring a bank would jive with his plan. We shall see. At the end of the day, although this is a bad blow for the tech sector and innovation at large, this could not have been a better wake-up call to a better group of people, because people in tech will absolutely start using cryptocurrency and will likely start building an innovating in the space, which is what we need. There are not enough developers in the space, and the collapse of Silicon Valley bank could have just inspired a new wave of tech talent to join the industry. And some of the tech companies affected are already here. Check out this tweet. Seeing private messages from crypto startup saying, yes, we banked with Silicon Valley, but don't worry, we diversified and to eat, so we can still make payroll. Imagine using eth to hedge against dollars in your bank account, strange times. Who could have predicted it very interesting indeed. Unfortunately, due to the interconnectedness of the entire financial system, the crypto space has also been severely affected by the collapse of Silicon Valley bank. Stablecoins have been losing their peg. Uncertainty stands around multi-billion dollar USD C empire as issuer circle held reserves at Silicon Valley bank. Circle's USD C instability causes domino effect on die, USD D, stablecoins, following USD C's de pegging, three stablecoins, die, USD D, and fracks also depict from the U.S. dollar. And to make matters worse, coinbase made the following announcement. We are temporarily pausing USD C to USD conversions over the weekend while banks are closed. During periods of heightened activity, conversions rely on USD transfers from the banks that clear during normal banking hours. When banks open Monday, we plan to recommence conversions. Yikes, and at the time of this video, USD C hit a low of 87 cents, and is now sitting at about 94 cents. So as we can see, there's risk with keeping our cash in banks and in stablecoins, regardless of whether we have them in our own wallets. Because of the banks, stablecoin providers like circle keep their reserves in. So what can we do to protect our money we need to live off of need for liquidity and need for staying on the sidelines for investment opportunities. While there are a couple of things. One, make sure we are keeping less than $250,000, and each bank account, so it's below the maximum FDIC insurance limit. But even with FDIC, if there was a big systemic banking problem, there would not be enough to go around. Two, we can consider diversifying anti treasury bills, which, while being safe, also generates yields of up to 5% right now. Three, we can consider diversifying cash into credit unions, as they are structured differently than banks, in that they are not for profit financial cooperatives, owned and controlled by their members, while banks on the other hand are for profit institutions owned by shareholders. And fun fact, credit unions have been statistically less likely to fail in the past. According to the national credit union administration, in the UA, which regulates and ensures credit means, there were 19 federally insured credit union failures between 2016 and 2020 during the same period, the federal deposit insurance corporation, FDIC, which regulates and ensures banks reported 137 bank failures. So banks failed more than credit unions by a factor of 7 during that time range, which is interesting to note, I consider. Cool. So those are some options to consider if we need to stay as close to cash as possible with little volatility as possible. Other options include diversifying into semi liquid assets, with more price volatility like stocks, bonds, gold, and of course Bitcoin are either. Something extremely important to keep in mind is that hackers and scammers love to exploit events like the collapse of silvergate, Silicon Valley bank, and more by sending out emails, texts in all kinds of messages pretending that your accounts are similar, have been compromised. Then they try to get you to send them information by yourself like usernames passwords to factor authentication, wallet seed phrases, private keys, et cetera, or sometimes they say you owe fees or need to send them money or crypto to retrieve your phones to protect your funds or similar. They also set up fake websites that look the same as your bank, crypto exchange, or similar to try to steal your login credentials. And when we panic, we tend to freak out and try to act quickly, and that substantially increases our chance of being scammed. So make sure when we are looking to make some moves to protect our funds and digital assets to always stay calm, go slowly and carefully, and always double and triple check website URLs. And to help protect us in our wallets when transacting online, there's a free browser extension currently in beta called wallet guard that acts as a security companion to our crypto wallet of choice. So we can browse Internet and interact with web three more securely. I've been using it for the past month, and it's been working great so far. Popping up warnings, helping check everything out before transacting. So definitely worth checking out and giving it a go in this crazy macro environment. While guard uses machine learning algorithms to detect fishing before a scammer can access your crypto assets. In their most recent update, the app now offers multi layer protection services for our wallets. So an interacting with smart contracts like minting NFTs, when accessing the site, wall guards fishing protection layer, executes, in warns you if the website might be harmful, it feels created recently and has low trust, and if you proceed to do so with caution. And when we do, before attempting to verify a transaction with our wallet, a second layer of protection is executed, with a clear human readable warning about what exactly will happen if you decide to proceed with the transaction. Like if it is going to drain your wallet instead of actually mint the NFT. It can also detect and will notify you if the site is making multiple attempts to interact with your wallet, trying to hack or steal your phones. So while guard is basically it all in one security dashboard for web three. So make sure to scroll down and use the link below to access the correct and official site to download, wallet guard spree extension to protect your wallet anchored assets today. So in light of all this vague chaos caused by the fed, what will be their next move. Savage Finn Henrik tweets usually they cut rates at times like this, and now we are seeing more headlines like this. Financial system risks put a smaller march rate hike by the Federal Reserve back in play. Why is it so? Well, as we've been discussing on the channel, the Federal Reserve is only going to stop increasing interest rates if one of two things happen. One, we reach their 2% inflation target, or two, something big breaks. And the wolf of all streets nailed it in this tweet. Well done Jerome Powell, you broke something. Now you can smile and pivot since bond yields and bank stocks are crashing. So is it possible that my random wild guess I made a few months ago about hitting the market bottom march 25th, going to play out? I'm not sure. We shall see. Jerome Powell will announce the Federal Reserve's interest rate decision on Wednesday, march 22nd. And considering the speed with which a top 20 U.S. bank collapsed, a mere 48 hours, a lot more can happen over the next week and a half. Let me know what you think the bet is going to do in the comments below. Cool. If you've been watching some of the latest content, you know that I'm pretty skeptical about the fed's ability to successfully launch an enforced globally their fed now Central Bank digital currency system. And this tweet by Caitlin long is an additional thing to consider in light of recent events. If you think bank runs happen fast, just wait until fed now comes online later this year. Today, withdrawing the man deposits takes hours via fed wire or days via ACH. Fed now will be real-time 24/7 360 five limited to 100 K at first. So banks will inherently need to be less leveraged and hold a more liquidity. Yeah, banks are not going to like the system at all. So we shall see. In the meantime, this bank failure, stablecoin scares, and increasing interest rates is further putting people off the U.S. dollar. The U.S. government in regulators are destroying any chance the U.S. dollar has a remaining the world's observed currency in the long run. And at the end of the day, this is all bullish for crypto. Bitcoin and ether are the future of the Internet, the future of money at large. It's the only way we can truly own and control our assets. In these bank failures are a huge wake-up call for the world, and a huge highlight of crypto's use case. Despite all the craziness, Bitcoin and ether have held up well, because people and countries are starting to realize the importance of a worldwide neutral, financial infrastructure, as it is truly freedom money. The value of U.S. dollars are constantly inflated away becoming worth less and less every day. Banks are only open weekdays, 9 a.m. to 5 p.m., except on every holiday known to man. The government can freeze and take our U.S. dollars any time. And banks can collapse in a matter of hours, losing all of our funds. When we deposit U.S. dollars into a bank, we are unknowingly, giving an unsecured loan to a heavily leveraged borrower. The banks. We need to do our part by spreading awareness about how the financial system works and the importance of crypto, so we can try to build a better future together. Also, if you would like to learn more about the implications of a U.S. Central Bank digital currency, and why it's important to spread awareness about it, check out this video. If you would like to have that Eureka moment and finally understand how wallet raises private keys and public addresses work, check out this video and use this link on the screen here for a free download of the wallet guard app extension to protect your wallets today. Like and subscribe for more, be safe out there.
Thinking Crypto News & Interviews
"bank circle" Discussed on Thinking Crypto News & Interviews
"And the world. Number two, there doesn't need to be a bailout. There are acquirers and enough assets to recover funds, equity investors and as VB will rightly get $0. Three, this doesn't just affect investors or rich people. There are hundreds of thousands of people who will be unemployed soon if nothing changes. Number four, companies initiated transactions to send or protect money. But those transactions were blocked or delayed. ACH and wires didn't send. Number 5, even funds that were FDIC insured or in acid backed accounts are currently unavailable. Number 6 payroll has already missed for tens of thousands because SVB has rails the payroll travels through. That money was withdrawing from businesses, but never made it. So right away, crypto businesses exchanges and so forth who are using SVP will have a shoes. Making payroll and business operations and so forth. So this is bad. And what we're seeing here, a report from Bloomberg today. Here's the headline. U.S. discusses fun to backstop deposits in more bank fails. So they're looking to create a fund that will help the regulators to backstop more deposits at banks that run into trouble following Silicon Valley's collapse. So they already anticipating there is a contagion effect here, right? They're looking at we need to start a fund because other banks may fail as well. So see what's coming here, my Friends. It's something just like 2008, right? And Caitlin retweeted here some folks showing long lines at banks some who were recently acquired by Silicon Valley bank like Boston private bank, where it's like straight up the person said here, shades of 1930s were people lining up trying to go get their money. Well, we know the bangs don't have. Cash, everybody's cash. It's fractional reserve. It's lent out. It's invested. So things are not looking good. And here, Caitlyn long said, I forgotten that Silicon Valley bought Boston private bank, so it operates operations are in Massachusetts. Unless you tag Elizabeth Warren, she said Elizabeth Warren Senate district. Her anti tech anti crypto acolytes are among those who got this bank run ball rolling in D.C. happy at question mark. So this is a mess, right? And it's backfiring big time on Elizabeth Warren in these folks. Caitlin also highlighted some articles of Reuters saying end of QT is coming. So I think once again, the fed has a narrative on starting QE and I think they could introduce that new CBDC system and my Friends. But nevertheless, it's going to be a lot of pain. So I don't know how this impacts many of you, whether it be crypto or just in your regular life, your job, whatever it may be. So we have to keep a close eye on this because once again, it's not just Silicon Valley bank. You could have a contagion spread to other banks. And right now, Eleanor turenne, she shared a list here of regional banks to watch. He said a list of U.S. regional banks who shares fell more than 10% last week, there were 52 with a combined market cap as a Friday of $369 billion. They're all down, my Friends. So it's ugly times ugly. Like I said, guys, and here, circle, they confirmed that they had $3.3 billion of their reserves with Silicon Valley bank. Circle of course, the issuer of the USD C stablecoin. Not good. Now the good thing, they were smart enough to diversify their holdings with different banks.
Crypto Banter
"bank circle" Discussed on Crypto Banter
"Breaking. The banks are breaking. If the banks break the technology sector in the United States is going to break. If the technology sector in the United States is going to break, the lifeblood of the United States breaks. That is what's happening right now. And so the market is starting to price in less of an interest rate increase. And in fact, I think that we may not even get an interest rate increase because power is going to look and say, if we do if we carry on like this, we're going to destroy the banks. There's only really one way out of this for the banks for the fed. And that is to lower interest rates and put more money into the economy. Otherwise, they risk a total banking collapse. We're on the verge of a total total total banking collapse. You can see it. If they continue to increase interest rates, you saw what happens to the price of a ten year T bills that these banks are holding. And so now, I think that Powell probably isn't going to increase interest rates. Or if it does, it's going to be 25 basis points. Why? Because a, the banks are breaking B, the jobs numbers, the non farm payrolls claims numbers were higher than expected, which is good. And then Biden says, he says he's confident that CPI is heading in the right direction. He says I'm optimistic that CPI makes people be inside a shape. They usually warn us of this, they usually want us to or leak this to us. And so I think that now what's going to happen is the banks, Powell is going to have to pull up the handbrake and so it stopped maybe even reduce interest rates and maybe even better out the banks by printing more money. I think that we're seeing another 2008 moment. If they don't, if they don't get in now, if they don't get enough, then there's going to be a serious banking collapsing in the United States. And as I said to you guys before. The reason why Bitcoin was created was in the 2008 banking crisis because of the fact that people couldn't trust their money in the banks, not today you're in exactly the same situation. You can't trust your money in the bank. So where do you put your money? You could put it in stablecoins. The problem is that we saw what happened to the stablecoins yesterday, or if unless you've been living under a rock, if you have been living under a rock, that's what the stablecoins look like. USD C is not trading at 91 cents per dollar. Why? Because where do the stablecoins put their money? The stablecoins put their money into the bank. Circle, the stablecoin, the stablecoin creator, the big regulated, stablecoin in the United States, had 3.3% $3.3 billion
Bloomberg Radio New York
"bank circle" Discussed on Bloomberg Radio New York
"$3.6 million in prize money and regain his world number one ranking with the wind, Taylor finishes solo second at 17 under par and earns over $2 million John romp finished third Justin Thomas was fourth at 13 under 6 backs. Scores from the pitch from La Liga's action Barcelona with the type one over via real one nil, Athletico Madrid Elton's edges delta ego one nil, and valladolid and also sooner finishing a one or nil nil draw. I'm Pete Fox. That's your Bloomberg world sports update. Doug's RIP thank you well, Japanese prime minister kishida seems to have chosen an outsider as the next governor of the bank of Japan will bring in Bloomberg's Kathleen Hayes, our global policy and economics editor to take a closer look at this story. So what we know is that The Economist and former BOJ member Cosworth has been nominated or will be nominated as of Tuesday. That's what our sources are saying. It's being reported by a number of different media outlets. Initially, if you look at the way the market was reacting, hey, this guy is a hawk. Not so much. We don't know for sure. We do know that he was at the BOJ on the board from 1998, 2005, so he was on the board when they ushered in negative rates. And quantitative easing. So obviously, he is not a stranger or afraid of using innovative, even aggressive monetary policy tools. To provide stimulus. But he hasn't been at the board for a long time. He is a professor got his PhD at MIT. We were talking a lot about that, Stanley Fisher, and with the likes of Ben Bernanke and Mario Draghi, so he's going to be well respected. And I think well accepted among central banking circles around the world. So that's certainly a plus. But he hasn't written much lately. He hasn't said much lately on Friday when this was announced, he said, monetary policy current monitoring policy is appropriate more monetary easing is the thing to do at this point. Again, he's certainly as people say, he's probably a dub. Maybe not established, how do you cook Corona manager placing? But you take that, he's not a hawk either, but he's somebody who's supposed to use a pragmatist or expected to be, someone's going to have to continue to adjust or yes. This whole yield curve control. And that's gotten tougher because the bond market's fighting back. So it remains PC and how I handle that. Well, up until Friday afternoon, the smart money was on masayoshi amamiya, who turned the job down. A hawk compared to Emma. And are you surprised him? I'm here to attend the job done. Does he maybe view this as a bit of a poison Chalice? You know, I was so, I thought the headline was wrong when I saw it. I thought, oh, somebody accidentally popped something out that was really from 20 years ago. I could not believe it. And then the more I've talked to people, I realize that you've raised all the right questions. Would it be worth his while in a sense? The bank of Japan lifer to try to steer this boat when it's so thankless. Within the LDP, there are factions who do not want an end to aggressive monetary easing. They need money. They need money to finance their deficit and to increase defense spending. And if you don't want to raise taxes, you're going to have some more bonds. So you want, you don't want bond yields be rising now. That's one of the arguments. But another one is that, again, thankless, why have a BOJ representative the bank of Japan, a lifer, a man who's dedicated his life to why do you want your guy to be the one in that seat? Maybe you want someone from the ministry of finance or someone from outside. So having a way to just seems to suit everybody. And it does seem though that mister amia was ready to go and he's going to be gone. What do we know about the way that the politics of it all kind of entered into this perhaps? I mean, what's going on in the broader economy in Japan, how people are feeling generally about yen weakness and the fact that the economy has been as sluggish as it has been. I mean, is there concern here that the politics of it all may have played a larger role than it would otherwise? Well, I think what I just said in terms of the budget deficit and financing it, that is definitely that's definitely a factor within the LDP. In terms of worrying about inflation and how that, oh yeah, that's one of the reasons why Keisha is so unpopular. And that's another part of this puzzle. He is not a strong popular strong prime minister Abe was at many times. This is a very different situation now. So I think that's why one reason why it's so delicate and why this might have been part of the tradeoff or the idea that he that can handle it now and then as they see how the inflation progresses and how the economy professors and that they do need to do something he'll be potentially the right guy at the right time. And there's two deputy governors, one from the BOJ, one from the ministry of finance, both very experienced. He's never run a large institution with my sources say that's one of the other things that deputy governors will help a way to do. What's the future of yield curve control underweight? Because the markets constantly testing that 50 basis point level. That's the big question, isn't it? Because we've already seen some testing a little bit lately since this announcement will yield curve control be yanked out immediately. No, you can't do it. It'd be too destabilizing. 2D disabled. Thank you. He fills in so many words for me. I love it. But yeah, and that's another thing, although I dug and I have talked about this. I have a theory that
Bloomberg Radio New York
"bank circle" Discussed on Bloomberg Radio New York
"Morning rush Okay excellent stuff Let's get on to another big corporate story of the day Credit Suisse ousting its chairman after a probe into him breaking COVID rules Antonio rota was appointed just 9 months ago to steer the bank passed a series of scandals and here's another one Right joining us is Bloomberg finance reporter Marianne half demar who's been across this story for us Maren just run us through what led up to this decision and where it leaves Credit Suisse Hi there Good morning Yes So basically what happened is we have the new chairman of Credit Suisse I'm turning over to our zoro We discover in December that he has in fact reached some quarantine roles in Switzerland And a few weeks later another report comes out that he'd actually previously breached some rules for the UK as well So this sort of started to mount a little bit because he's asked credit fees and employees To be risk managers take responsibly for their actions after a year of scandals and then we have the chairman himself sort of having some conduct that's not really what he's asking the bank to be So this sort of led to a big investigation on the board of directors and that has led to the news today Which I'm turning on handing in his resignation due to his action I mean is this a surprise Because that's a very high standard isn't it that they're holding auto osorio two Isn't it the breaches where were two And I know that the Swiss rules around lockdown and self isolation after travel are very rigid but was it a surprise It was a bit of a surprise We would have expected perhaps more of a public reprimand I mean the chairman was very key to the turnaround strategy He was seen as the man who would save the banks So certainly a surprise in all circles That being said I think it's being somewhat welcomed because it does show that credit uses is taking responsibility for its action It sort of hearkens back to the time of tjs yam the former CEO and how he was also ousted after some very public scandals about what was around spying But that festered in the press for a lot longer So I think here was the incredibly learned from past lessons and try to take things in hand and take actions quickly Yeah acting acting arguably acting very decisively on this issue What do we know then marrying about the new chairman So the new chairman has a long history in Swiss banking He was a former UBS executive he ran the Swiss business for UBS And he was also a risk officer at the insurance group So you've definitely noticed financing definitely knows risk and either safe pair of hands or credit suites That being said he's not very well known outside of Swiss banking circles So I think it will take some time for the investors outside of Brooklyn to get used to him and get to know him It does also put another swift executive at the helm of the bank typically both of the big Swiss banks have had an international executive and a Swiss executive to balance out the interests If we look back time brief that it was how much did he manage to move Credit Suisse forwards in getting over the scandals and also the trading failure significant trading failures that they suffered from He definitely came in right at the right moment They were in a big crisis when he came in I think it was May 1st sort of in his first day He's done quite a lot He did a lot of risk overhaul and he did reviews We had a huge report come out over the summer into the trading into the trading scandal and what went wrong And then some brief measures taken kind of swift brief measures taken to overhaul the risk structure And employ more people And then in October we had a strategy revamp renewal come out where he's effectively decided to leave prime brokerage for example and concentrate the bank's effort on their wealth business So you did do a lot in his 9 months but right now we're about to enter the execution phase and he won't be there for that Okay Bloomberg's finance reporter Marian halftime has been across the story for us throughout the morning and of course notice company very well indeed Thank you And of course we'll keep across what is happening with credit risk after they ousted their German Well some of the COVID pandemic rules catching up with some if they have not obeyed them Let's get over to Bloomberg's Hannah George She's got all the latest.
The Drill Down
"bank circle" Discussed on The Drill Down
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We're joined now by. Ceo of voyager digital steve. erlich Steve glad to have you on the podcast of. Tell me about your business. And how do you guys make money. Yeah no thanks for having me car really appreciate being here today in Giving listeners a little bit more about voyager we are an agency crypto broker. So what we've done is build a connections to multiple exchanges makers liquidity providers over a dozen of them at this point and bring a depth liquidity across sixty plus crypto currencies to the marketplace to make it easier for people to access the marketplace in create. Well but the real additional thing that we do for folks is that we let them earn rewards on thirty plus the coin so they can actually earn a yield on more than thirty so you can really create wealth through crypto currencies with our platform and the most common currency people. Use us for Besides bitcoin Theory is our usd stable coin and they can earn nine percent annual rewards on that as well so you compare that to a bank circles created. That's the circle consortium coin were partners circle i. We bought a business from circle. A little over a year ago. Yeah so yeah. So so safes. Incorrect summarizes say your trading platform for crypto. We are. We are an online mobile only platform today. For trading crypto yup. And so. it's it's focused on consumers not on on an institutional trading. We are strictly focused on retail consumers from a training perspective and you compete with the likes of coin base and i suppose finance we do. We do compete with them but very interesting to me is a very different cost structure right further for the for the individual trader. The which is to say that ninety five percent of coin basis revenues and. They are substantial. Come from a from a charging. The trades right for commissions. You guys don't have any commissions that's right and where we really differentiate from From coin based which is the biggest player in the space in public company. As well as the you know what they have is the commission. We are commission free. We have spread on every trade. So we're trying to find the best price for consumers on every single trade but we're also agency right there in there. In exchange every trade comes back to their exchange we act more like the traditional online brokers and were connected to multiple exchanges market makers so we have a depth of liquidity that far exceeds what they have They're part of our our our exchange network out so he could see how the depth that we have which is more akin to the traditional equities options markets. Which is to say an order comes into you from a consumer and then you very quickly shop the order to try to find a better price in the consumer put into the of consumer said. I wanna sell my my. You know i want to sell three bitcoin. Forty thousand dollars and you. If you can somehow find a price for forty thousand in one dollars for those three you sell it for forty you keep the one you can sell it. Fifty thousand dollars seller for forty and keep ten thousand dollars per coin. What we do on that is exactly right and everything gets done in microseconds someone. A customer puts his order in east guaranteed order and if we can beat that we give them some more back as price improvement which is very well known in the equities. World but in our world crypto. It's not there and we're bringing that to the market and we give people a price better than what they thought they were going to get the trade and yet which probably seventy five percents time even a better pricing. Yeah and yet and yet some of that price improvement you keep and some of you share with customer. That's correct that's exactly right. Yeah so it's such an interesting model. It seems like it also is we use. We see in the equity world a lot for those people. Don't know that our framing people and i i strive to make this podcast about business not about trading because i think too much business journalism is look look at this wiggly line. It tells you a lot and the doesn't that's not how businesses work but from your perspective when you look at the way that crypto is traded. Do you see this. Great volatility that will allow that allows wider spreads that would allow for more price improvement. That's a great question you know. Thank you originally. Yes but we're seeing. That volatility decrease a little bit here and i think it varies versus different. Different of the crypto currencies. Where some of them are the bitcoin's becoming less volatile and spreads on that across multiple exchanges being tighter and tighter. that's correct it's just a a factor of the by the more volume. There is the more people participating the tighter the spreads the less volatility but some of less liquid coins were seeing a wider spreads on that because there aren't as much you know participating in buying and selling that market. So that's you know that's why we built them. All we did was because we looked at it and said over time there's going to be less volatility. We think consumers need to be in this space. We can help them. Create wealth and the model is completely different from the exchanges. How do you decide which Cryptos which coins whatever you wanna call him to trade and you're form he's got forty. Is that right. We got sixty three because he complicity. Yeah and a lot of it is is legal and regulatory right so we work with an internal and external counsel on looking at the coins. Understanding that there. We believe that their utilities in our analysis utilities rather than security tokens and. That's when you know that's the guiding factor for us to bring coins to the market but then we look at the test of again is one hundred years old so i don't know wasn't bill built around orange groves The how test we take them in and talk about that for a listener so the friends were ruling about one hundred years ago. And i wait. I should back up an announced my bias so for about a year a little bit. You almost exactly. you're i worked for. Ripple ripples a company that uses a cryptocurrency called x. are p In the in the pursuit of it's sort of though in the way that software works. Ripple software uses excerpts him make some transactions happen and Ripple is in the midst of an sec lawsuit and the at the crux of that suit seems to be the application of supreme court ruling called the howie ruling for surpreme court. Justice named howie last name and And the how we test was about some investments here in preaching now of promise only gets of test your directly to Was about an investment in an orange grove and people were buying something. They're buying a piece of the orange grove or something and investment contract and how the people the orange grow said this is not an investment contract. And the howie test looked at the thing and said it is an investment contract. You are buying. This is a security. You're selling security. I don't care what you call it. And here are the four parts of the test and steve or less four parts of the dust. I don't remember the foreparts. But i'll tell you what the the fact that were thinking. And you and. I are sitting here talking about an orange grove from nineteen thirty three of a ruling forty. I.
Bloomberg Radio New York
"bank circle" Discussed on Bloomberg Radio New York
"But I would say that with low interest rates, a very strong economy and likely very tight labor markets, the conditions for worrying about financial stability of probably going to grow over the course of this year and in the next year And a lot depends on exactly how the economy evolves, but it is an area that I'm going to be watching very carefully. Our new framework does highlight that we care about financial stability concerns. Many of my colleagues would prefer to you supervisory powers or other powers. As a first line of defense. We don't have that many tools to focus directly on financial stability, in fact, the counter cyclical capital charge for banks Is the primary tool that we have to really think about financial stability. One of the challenges of the United States is we don't have one supervisor who is responsible directly for financial stability looks that banks but also looks at other financial entities that that's a little different than Asia, right. Well, maybe that's something you'll you'll be able to push Congress towards one of these days. President Rosa Grant. I want to ask you about inflation because you you made it very clear today. Yes, there's going to be inflation pressures. But don't make too much of your over your numbers. It's going to go up to about 2% and probably stay somewhere around there. But, uh, a lot of people. Let's take it a big investor like Leon Cooperman he was on Bloomberg Television is gonna gonna be so high. It's going to force the Fed to hike rates in 2022. Janet Yellen, former Fed chair, not Treasury secretary said that with the massive stimulus in place now, you know, giving the economy more of a push. That rates might have to rise a little bit in order, make sure the economy doesn't overheat. She walked back to remarks later and said, Oh, I'm not telling the Fed what to do, but that's what she said. So clearly, that's what she sees. With so many things saying, Hey, inflation's going to go up. How can you be so sure there's going to be temporary? We could never be sure. But I would say if you look at private sector forecasts used the blue chip forecast and the talk that I gave today I have a chart. That shows what individual forecasters are expecting for inflation this year and next year and the average of those forecasters or 2.3% this year and 2% for next year. So why did they have inflation somewhat higher this year and somewhat lower next year is because they're likely to be temporary effects that are going to cause inflation to be higher this year. One of those effects is at the beginning of the pandemic. Prices were dropped quite substantially as firms tried to clear their inventory before the economy shut down and those observations air dropping out which is going to cause Ah Ah, year over your Look at inflation to look a little bit larger second. We definitely have had some supply shocks. You're seeing it and very low inventory levels. It's hard for many retailers to restock their shelves. You're seeing it in backup supports you're seeing it in shipping costs, but all those things are likely to mitigate overtime. S so I think there are going to be significant pressures in the near term that arm or related to supply problems, and I would highlight because a lot of people have differed consumption over the last year. Think about airlines. Think about restaurants. Think about hotels that many people are anxious to start spending again in spending in a way that they don't have to be socially distant. So there's likely to be a surge in demand at the same time that there are going to continue to be like constraints, and that's gonna push up inflation for this year. But we're not expecting that to persist into next year. And so the bed as a forecast that's very similar, almost like a second for well, But even so, you know, the Fed 2015 2018, you know, part of the new framework is based on the fact that Fed feels G. We thought inflation was going to go up when the plate when unemployment got really low. And it didn't. So now we've changed the paradigm. We're gonna let inflated economy run hot and we're gonna let inflation rise because we know it. So how we don't even think for sure that it's going to go much further. But are you are you kind of using the are you the victims of the old paradigm? Is it possible that this is a very different recovery? You're coming out from a strong economy. Big dip because of the pandemic. Now you're got You know, almost $60 million worth of stimulus already at your back. Is it possible that you're going to miss the fact that paradigm has changed again? This is a new paradigm and inflation pressures are going to build and they could get out of hand if the Fed Isn't a little more ready to even take tiny steps to address it. I think we're ready if there is clear evidence that inflation expectations or the underlying inflation processes going up, but I don't think we should overreact. To temporary measure inflation measures, So it's going to be easy to write headlines over the next couple of months, particularly if the time period that you've been for the way the annual eyes the data kind of highlights some of the supply shocks that we've seen. We've just gotten, you know from most of the period from 2000 the surprises of all that, But we've just gotten you know from most of the period from 2000. The surprises have all been on one side is that inflation has been lower. So I think if you use any kind of statistical modeling, it's going to be very hard to see a lot of sensitivity of wages and prices. Too tight labor markets Now you're right that the pandemic may have changed some of the behaviors of individuals and firms and we're gonna have to be looking very carefully at the data to make sure that's not occurring. But I think the weight of the evidence has to be that we actually have data that shows that underline liberal assumptions have changed enough that we should be more concerned that the underlying making rate's gonna be higher. What about the size of this table is itself a president Rosengren a couple days ago, I did interview with Raghuram Rajan. He's a central banker like you. As you know, former head of the Reserve Bank of India, you know, you know him well. In the central banking circles, and he said that he thinks the feds being overtaken by events, saying required to remain accommodative. All this stimulus is coming and the Fed is is probably going to force because it's going to boost the economy to rethink what it's doing, and the Fed may have to move sooner, including on tapering than it thinks, which is something something that could give the bond..
KCRW
"bank circle" Discussed on KCRW
"Thank you. What is that to be hopeless. No one feels Don't answer. Slow process it takes time. Yourself to know somebody in my bed. Hands around my neck. You gotta love coming here with some reason to those and know that your son is all that you don't think you've done enough hands around my neck. Here with a reason to know that you're done with all that You've done. Thank you done enough. Mm hmm. Leave it love it happened. Just tell me Banking circles coming girl. It's brown stuff. Bye. That's right. Damn it, man to man. Metropolis on KCRW with hot since 80 to this one. Titled Restless Leg. Gorgon City and Drama Before this with their new one. You've done enough tissue with Demba that features trio Dick Ali from London, England, Tisha And disclosure as well to begin the set and do, huh Betraying Fatoumata deal. Laura Music from disclosure. Metropolis comes to you every Saturday night 8 10 here on KCRW and on demand from KCRW's free mobile app. Take the metropolis mix. Get your fix anywhere. Anytime. Way. Got one more set for you on the guy that son of a quick break coming up at the top of the hour, Henry Rollins say, until 12 midnights on KCRW. There are lots of great ways to support KCRW joining as a member, of course, but also spreading the word to friends, subscribing to newsletters and writing reviews or donating that unused vehicle in your life unfold. Family car could be hard to let go. But donating it to KCRW is a really meaningful way to give back find out more kcrw dot com slash.