14

Mar

10:44pm
Karl Fluri Canada
Largest Bank Collapse Since 2008 Crisis Hits the U.S.

Largest Bank Collapse Since 2008 Crisis Hits the U.S.

Karl Fluri Canada//10:44pm, Mar 14th '23

The United States (U.S.) is facing the most significant banking crisis since 2008, with three banks: Silicon Valley Bank (SVB), Signature Bank, and Silvergate Capital, collapsing in the last 48 hours. The most prominent being SVB.

SVB was a fixture in the tech industry, promoting many startup projects. In contrast, Signature Bank and Silvergate Capital were well-known in crypto. With the recent crypto crash and this last year's downturn in the tech market, all saw major losses. The Federal Reserve Bank (Fed) raising interest rates also devalued the banks' safer assets, such as treasury bonds and other long-term investments.

Top executives and shareholders had begun to divest themselves of their stake in these banks weeks before their collapse: in February, Gregory Becker, CEO of SVB, sold 3.6 million in stock, Daniel Beck, CFO, sold 32%, Michelle Draper, CMO, sold off 25%, Michael Zucker sold 19%.

Despite this, publicly, Greg Becker attempted to calm investors' concerns. But, these rising issues led to a run on the banks, forcing them to sell off their assets to meet depositors' demands. The need to sell off their long-term devalued assets meant the bank was taking a loss. Eventually, they were no longer facing a simple liquidity issue but, instead, insolvency.

The Treasury Department has now stepped in to guarantee that SVB depositors will have access to "all of their money", defending the move by stating that this is not a traditional bailout, as the banking sector experienced in 2008 since executives and shareholders will not be covered. Only depositors are being protected. But, as we've examined, major executives and shareholders have already divested themselves of large portions of their stakes.

If you read our blogs then why not our magazine!!!
Image
Click here to subscribe our monthly magazine

SVB executives not only caused this collapse with their irresponsible behaviour, but they were one of the most notable lobbyists against regulations which could have prevented or at least increased coverage for their sector. Greg Becker lobbied the federal government to relax some Dodd-Frank provisions on regional lenders. In 2018, then-President Donald Trump did exactly that. SVB also lobbied against recent provisions to increase Federal Deposit Insurance Corporation (FDIC) rates for funds to protect customers. This would have allowed for more extensive customer protection funded by the banks rather than having the taxpayer bail them out again.

This is just another example of how the capitalist class corrupts our government to steal from the people for their own gains and how this is normalised. Privatising profits and socialising losses. In fact, this isn't even the first time some of these individuals have been in this exact situation. Silicon Valley Bank (SVB) executive, Joseph Gentile, was a former Lehman Brothers' Global Bank executive before the bank's public collapse in 2008.

One of the major arguments for this move is that we must protect the workers. Ensuring that depositors are made whole is good since many businesses rely on these larger accounts for their payroll and expenses. This is true. Now, of course, in a just society, the banks, the executives, and the shareholders would all be stripped of their assets in exchange for the taxpayer dollars they receive. The banks and corporations, in turn, become the people's banks and the people's corporations. Executives' bank accounts, estates, etc., would all be seized, sold off, and redistributed to projects or programs that benefit the people since we've now collectively paid for all these things. This should happen with every bailout.

Though, with the capitalist class's stranglehold over Western governments, the people will only see justice once they are ready to take it for themselves. So, at this time, the taxpayer is paying the bill, and those who lobbied our government so they could be in a position to rob us are walking away with millions in profit. Again.

An Interview with the NYC Mayor Candidate Cathy Rojas
Debojit Banerjee interviews Cathy Rojas//12:06am, Aug 24th '21

An Interview with the NYC Mayor Candidate Cathy Rojas

On the behalf of The International Magazine, Debojit Banerjee spoke to Ms. Cathy Rojas, candidate who preached socialism for the New York City Mayor Election, member of the Party for Socialism and Liberation.....

Read More
THE ELEMENT OF SURPRISE IN ATTACKING TAIWAN
Luis Lazaro Tijerina USA//2:59pm, Aug 7th '22

THE ELEMENT OF SURPRISE IN ATTACKING TAIWAN

To describe the momentous shock of the eventual battle for Taiwan metaphorically, it will be a contest between the tiger and the dragon as deadly adversaries: the tiger being Taiwan, and the dragon being....

Read More
C'est Formid, C'est Sympa, C'est Sensass : Welcoming the Biden Administration
R.C.Roberts USA//1:04pm, Jan 29th '21

C'est Formid, C'est Sympa, C'est Sensass : Welcoming the Biden Administration

During the 1950s in France, there was a show over French radio and, eventually, on FrenchTelevision called “You’re Terrific”, hosted by Jean Nohain. In the years following the end of World War II,....

Read More
The Imperialist Farce of Women's Rights in Afghanistan
Yanis Iqbal India//8:26pm, Aug 19th '21

The Imperialist Farce of Women's Rights in Afghanistan

The Taliban takeover in Afghanistan has generated an imperial nostalgia among liberal feminists. Gayle Tzemach Lemmon writes in The Washington Post: “With the Taliban seizing control of Afghanistan....

Read More
FIFA Women's World Cup 2023, Capitalism And Patriarchy
Luis Lazaro Tijerina USA//11:37pm, Sep 19th '23

FIFA Women's World Cup 2023, Capitalism And Patriarchy

Not since the Spanish Civil War has the fire of political revolt within the Spanish people been so vibrant and militant as when millions of Spanish citizens, and other countless millions of citizens around....

Read More
Why And How Was Korea Divided?
Stephen Gowans //1:06am, Nov 28th '22

Why And How Was Korea Divided?

August 1945 was a momentous month for Koreans. At midnight on the tenth day of that month, two US army colonels, Dean Rusk and Charles Bonesteel were ordered by John J. McCloy, assistant secretary of war,....

Read More