[elecush]

Does this fix the market? Or are we just putting out fires as they crop up.

[Zetice]

My layperson understanding is that this is a Bad Thing, but not the surprising outcome SVB was. The market, other banks, consumers, etc had a long window to digest this, so it won’t cause new panic the same way.

Considering all of the stops the fed pulled out to prevent future bank liquidity failures, this probably means some gross negligence was revealed by the market state that goes well beyond even blatant risk mismanagement.

Or not, I’m not an expert!

[downvotetruth]

fix the market? sir, this is a casino. $40 B market cap is chump change in the quadrillions derivatives market https://twitter.com/gaborgurbacs/status/1637522483476680710?...

[collegeburner]

thats like summing the value of all written insurance policies, meaningless number

the figure is way lower netted out

[kyaghmour]

Warren Buffet on derivatives: "financial weapons of mass destruction."

[tootie]

You can't compare a notional value to assets under management.

[downvotetruth]

market cap is not assets under management

[JumpCrisscross]

> Does this fix the market?

On its own, no. The Fed has proposed a solid package of rules that largely restore those rolled back in 2017 [1]. That is the systemic solution.

[1] https://www.bloomberg.com/news/articles/2023-04-28/fed-seeks...

[DonsDiscountGas]

Businesses go under sometimes, that's the free market. Banks are a weird type of business which is why the FDIC exists, but this isn't a broken market, it's the market working.

[collegeburner]

no, u cant rly fix this market easy without causing huge price level problems, again, worse

only solution is to smooth over until assets start rolling off/inflation cools enough for rate cuts towards 2%