dChan - Q Origins Project Archive

>>18492873 lb US banks sitting on unrealized losses of $620 billion

>>18493045 More than 3,500 CEOs and founders representing some 220,000 workers signed a petition started by Y Combinator appealing directly to Yellen

Silicon Valley Bank, FDIC, Federal Reserve Stress Tests (a joke and always have been) and Hold to Maturity (HTM) for TBTFs and others

This is for non-financial oriented anons and provides an explanation of what these losses are and how they are allowed to accrue and it's relations to the FRB Stress Tests. Only a handful of banks (the TBTF ones) go through this but since they all share counter-party risk across the entire system it is important to know what they do and don't look at in these places-a total of 23 will go through this next one

from 020923

Federal Reserve Board releases hypothetical scenarios for its 2023 bank stress tests

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20230209a.htm

Over the next week you'll see the Fed (and the talking heads in Fin Media) saying "well these big banks passed the stress tests that the FED does so no reason to worry" Well that isn't entirely accurate since most of all banks are sitting on the same problem…"Le dreaded" 'unrealized losses' in Treasury notes/bills. I completely get that they are trying to trigger overall bank runs on purpose with SIVB so hear me out on this angle and set that part of it aside for a moment.

When the FED does it's annual Stress Tests (and rubber stamps them-it's awfully hard to not pass this for the following reason). All of these banks can place assets into what is called 'Hold-to-Maturity' accounting bucket-not just the TBTFs. This is where a lot of US Treasuries go and in SIVB's case where they sold them from to 'realize' that $1.8B loss. You can't put equities in here by the definition of HTM but I'm sure there is massive abuses here becasue the FED does not look here so how would they really know if something wasn't supposed to be here…it's a trust/CONfidence game. And BTW Robert Reich can GFH as he certainly knows that all financial institutions are largely SROs (Self-Regulatory Organizations) as all exchanges are and you can read moar about that below but blaming 45 for SIVB being 'deregulated' is quite 'precious"-fuckin midget.

The ones who have the power to regulate don't….S.E.C. (and FINRA falls under them) basically settles everything and accepts pay-offs to do so…you should ask yourself where does that money go? It's a business model that all these places thrive on..if you can settle the malfeasance for pennies on the dollar (compared to what you gained by it) and then not have to admit ANY wrong-doing then of course you'd do that.

https://www.investopedia.com/terms/s/sro.asp

Here is the 'book' definition of HTM

Held-to-Maturity (HTM) Securities: How They Work and Examples

Held-to-maturity (HTM) securities are purchased to be owned until maturity. For example, a company's management might invest in a bond that they plan to hold to maturity. There are different accounting treatments for HTM securities compared to securities that are liquidated in the short term. Bonds and other debt vehicles—such as certificates of deposit (CDs)—are the most common form of HTM investments. Bonds and other debt vehicles have determined (or fixed) payment schedules, a fixed maturity date, and they are purchased to be held until they mature. Since stocks do not have a maturity date, they do not qualify as held-to-maturity securities. For accounting purposes, corporations use different categories to classify their investments in debt and equity securities. In addition to HTM securities, other classifications include "held-for-trading" and "available for sale." On a company's financial statements, these different categories are treated differently in terms of their investment value, as well as related gains and losses.

moar here

https://www.investopedia.com/terms/h/held-to-maturity-security.asp

So this relates to the Federal Reserve Stress Tests since once these assets are placed into that accounting bucket (HTM) the Stress Test does NOT look at them so they are exempt from any examination during that process against what they are also looking at on it's books: so you never have a full picture of what any institution's balance sheet really looks like in comparison to what they hold in short term debt/assets etc. Since the Yeilds have risen so much on US Bills andNotes (inverted curve) all the ones that have been purchased over the years have lost value and Yields have gone up but they are still only paying the much lower coupon rate (Yield) when they were purchased. So to sum it up: All these regional banks are sitting on a lot of these unrealized losses in that area that the Federal Reserve 'Stress Tests' do not look at in the TBTF banks-but as mentioned above they all share counter-party risk. So unless (you) do it-look at what each one has in the HTM bucket-you are not getting a complete picture of what any of them who go through those "tests" (and as mentioned passed with flying colors ftmp-they used to "fail" them when it first started but now they just pass them as say "do this" ..they "do that" and then continue on bidness as usual) have total'''

And that "Emergency Meeting" scheduled for tomorrow was already on the books as the FED does do closed-door meetings from time-to-time so that is not unique…they changed the title to reflect the current habbeings is what habbened with that one.

Closed Board Meeting on March 13, 2023

Advanced Notice of a Meeting under Expedited Procedures.

It is anticipated that the closed meeting of the Board of Governors of the Federal Reserve System at 11:30 a.m. on Monday, March 13, 2023, will be held under expedited procedures, as set forth in section 261b.7 of the Board's Rules Regarding Public Observation of Meetings, at the Board’s offices at 20th and C Streets, N.W., Washington, D.C. and by audio/video conference call. The following items of official Board business are tentatively scheduled to be considered at that meeting. Review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.

https://www.federalreserve.gov/aboutthefed/boardmeetings/20230313closed.htm

You can see the other occurrences of those same type of meetings here

https://www.federalreserve.gov/aboutthefed/boardmeetings/meetingdates.htm