The collapse this past week of two banks is being followed by distress in the rest of the banking industry.
Silicon Valley Bank (SVB) on the west coast and Signature Bank on the east coast both catered to businesses and were tied to the technology industry and start-ups.
The tech industry has been experiencing problems due to sharp falls in cryptocurrencies. These are the largest banking failures since 2008.
With the fall of the two banks, the Federal Deposit Insurance Corporation stepped in to take over both banks, and an agreement was reached by Treasury Secretary Janet L. Yellen and Jamie Dimon, the JP Morgan Chase chief executive.
The US regulators unveiled extraordinary measures to assuage customers last weekend, promising to fully pay out uninsured deposits in the failed banks.
Insurance payouts that are indicated to be up to $250,000 have been upped to cover far more than the indicated insured amounts.
Yellen told the US Senate on Thursday that not all uninsured deposits would be protected in future bank failures, ONLY those banks that pose systemic risks. Regional banks will not be covered.
Economists are now estimating that 186 US banks may be prone to the same risks as Silicon Valley Bank. This number is likely higher as the pressures that regional banks are facing are ramping up.
This number comes from a recent economic study published on March 13.
The BBC reported, “Wall street’s biggest banks organized a whip-around to bail out another tech-focused bank, San Francisco-based First Republic. And the Federal Reserve, the U.S. central bank said there had been a surge in emergency lending to U.S. banks generally.”
BBC reported that the large Swiss bank, Credit Suisse, which has a reputation for stability, is now being taken over and that The Bank Of England has admitted it is watching the fate of Credit Suisse and the marathon meeting concerning the situation this past weekend.
Speculation on Twitter over interesting activity led to discussion on social media last last week, as over 20 private jets landed in Omaha on Saturday afternoon.
The jets came from the headquarters of regional banks, ski resorts and Washington DC.
The internet pondered if the activity could mean that Warren Buffett may have called banking CEOs together to offer a deal. The speculation is not far-fetched, as Buffett has been in touch with the Biden administration.
The Private Jets arrived in Omaha in multiple groups. Sometimes landing at almost the same exact time.
Did Buffett schedule some meetings with different groups of CEOs every hour?
Number of Jets arriving:
5 ~10am (est)
3 ~2pm
5 ~3:30pm
5 ~5pm
6 ~6:15pm
3 ~7:30pm pic.twitter.com/68Ok6zl8cA
— FuzzyPanda (@FuzzyPandaShort) March 17, 2023
Our List of the Private Jet flights Out of Omaha yesterday.
Who slept well in their own bed last night with a Buffett deal in their back pocket?
*Note – removed small planes & Omaha based co’s like Conagra* pic.twitter.com/8peIY4OMv2
— FuzzyPanda (@FuzzyPandaShort) March 17, 2023
We tracked the private jets in & out of Omaha by using the ADSB-exchange.
Then we researched each plane. The high amount of traffic for KOMA (the private part of OMA airport) yesterday was highly unusual.https://t.co/TVv0ks9hfw
— FuzzyPanda (@FuzzyPandaShort) March 17, 2023
Today’s Bloomberg story indicates what we said yesterday is true.https://t.co/MnW0c9oIOT
— FuzzyPanda (@FuzzyPandaShort) March 19, 2023
The Biden administration is becoming desperate. Late last week the Biden regime called on Warren Buffett as the regional banking crisis worsened. The Biden regime is asking Buffett to possibly invest in the US regional banking sector in some way.
Via Bloomberg:
Berkshire Hathaway Inc.’s Warren Buffett has been in touch with senior officials in President Joe Biden’s administration in recent days as the regional banking crisis unfolds.
There have been multiple conversations between Biden’s team and Buffett in the past week, according to people familiar with the matter, who asked not to be identified because the information is private. The calls have centered around Buffett possibly investing in the US regional banking sector in some way, but the billionaire has also given advice and guidance more broadly about the current turmoil.
Buffett has a long history of stepping in to aid banks in crisis, leveraging his cult investing status and financial heft to restore confidence in ailing firms. Bank of America Corp. won a capital injection from Buffett in 2011 after its stock plunged amid losses tied to subprime mortgages. Buffett also tossed a $5 billion lifeline to Goldman Sachs Group Inc. in 2008 to shore up the bank following Lehman Brothers Holdings Inc.’s collapse.
Representatives for Berkshire Hathaway and the White House didn’t immediately respond to requests for comment. Officials at the US Treasury Department declined to comment.
Warren Buffett has made statements in the past about opportunities to shore up the financial sector when it presented itself last in 2008, Liveandletsfly.com noted. Berkshire Hathaway provided $5 billion in liquidity for Goldman Sachs at that time.
At the time, Goldman Sachs stated. “The firm had the option of buying back the shares for US $5 billion plus a one-time dividend of US $500 million. Buffett stipulated that Goldman Sachs’ top executives pledge not to sell their own shares before Buffett sold his. Berkshire Hathaway would also acquire warrants to buy an additional US $5 billion of common stock at US $115 per share.”
The outlet noted that both Berkshire and Buffett profited well from that deal and the entire financial sector bailouts that ensued. If a deal is in the works, it may be that the deal between giants could be a private financial fix that does not put the onus on the taxpayers who are increasingly leery of yet another government rescue plan.
Whether the flight information on Twitter is indicative of such a private plan is yet to be seen, and eyes are on Omaha.
The post The Banking Crisis Gets Worse – Over 20 Private Jets Land In Nebraska appeared first on The Republic Brief.
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