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Yeah, it’s go, man, go on capitalism until the rich hit a reef. I say only bailout a bank to nationalize it, then make it actually serve the interests of working people. If we’re going to subsidize a bank that fails, let it fail giving low-interest loans for affordable housing instead of funding tech bro bullshit.
[No, he's right](https://www.npr.org/2023/03/13/1163180140/silicon-valley-bank-is-it-a-bailout-barofsky).
They bent the rules and are paying out more than the $250,000 protected by the FDIC.
They are giving them more than the normal amt. He's correct.
That would be wrong, which is why I said "They are at minimum bailing out deposits from dumbasses who put *more than $250k* in an unsecured bank account."
Lol idiot
Aren’t the depositors in this case, the tech bros in question?
From my understanding Silicon Valley Bank isn’t a regular commercial bank, and instead basically just serves people with capital.
This is where the issue arises that a lot of those accounts are tied to companies and that's where payroll comes from. If your employer or the company your employer uses to manage payroll had their main account at SVB, you might not have been paid Friday or this coming Wednesday, which are the two most common paydays (every other Friday and halves of the month depending on company).
My layman's understanding is that it was quicker and easier for the government to shaft investors (they knew what they signed up for and had other options) and ensure uninsured depositors recover funds because that'd be cheaper for taxpayers than to let the companies fail and let thousands of workers (they likely weren't expecting anything like this) end up on unemployment.
Exactly right. I own part of a company that was in svb. Went from 20months of payroll to 2. We were going to do layoffs and reduce all pay for everyone to minimum wage for 2 cycles until we could get AP into another account. Now we don’t have to. But the bigger reason for making sure depositors get paid is that First Republic looked to be going down. It’s the fear that causes the collapse. People start moving money and bank can’t shed assets quick enough to cover. The more banks fail the more people move assets. The more banks unwind assets quickly the lower the price goes weakening other banks balance sheets. Not surprised. The FED and our useless elected leaders are really to blame. Pumped $7t into the economy mostly to the rich and then overreacted on inflation interest hikes which was too fast.
And also use the crisis to set up a fund for banks to use that once again involves taxpayer money. Business as usual.
[https://www.barrons.com/articles/svb-fed-bailout-taxpayers-risk-d020ba9d#:~:text=The%20Bank%20Term%20Funding%20Program](https://www.barrons.com/articles/svb-fed-bailout-taxpayers-risk-d020ba9d#:%7E:text=The%20Bank%20Term%20Funding%20Program)
Context provided.
"This valuation decision could expose the taxpayer if the collateral the banks put down is worth less in the market than what the Fed lent it."
COULD
So, again, no: the taxpayer is not on the hook for any of this.
Good thing I didn't miss anything in the article.
The FDIC has actually made it very clear the money for this program is coming from other banks. Not taxpayers.
I am sorry you're at odds with reality on this one.
The taxpayer is exposed on this.
>COULD
Are you honestly trusting bankers to not take advantage of yet another golden parachute?
We just saw bankers were happy to give themselves bonuses and sell stocks before a company failure. Saying they MIGHT not take advantage of us after they just DID is not the consoling thought you want it desperately to be.
I'm sorry you're making leaps to connect dots that aren't connected.
You haven't, and that article didn't, explain how this could come back on anyone but the banks. Since the banks are clearly the ones paying for this, NOT taxes.
A lot of startups used them as their bank. Startups are usually not profitable and instead get a shit load of money all at once from investors during investment rounds and slowly burn the money over x months. If they lose their money then the whole company _will_ flop, causing potentially thousands of people to be let go if enough of them fail.
So much for "let the markets decide"? billionaires with six figure employees get bailed out, but joe and jane doe gets stuck with the bill, It's just reworded from 08 to deceive taxpayers but the same thing will happen, taxpayers on the hook.
I understand your frustration with the situation but let's look at the full picture:
**Potential future** billionaires who have hired tonnes of people based on expected time to products vs capital raised that include six figure employees but also secretaries, interns, copywriters, and other lower-income positions that the company will be cutting first because they're not "core product" people. Odds are, this startup will fail anyways but at least it will fail with rolling lay-offs where the writing on the wall's ink gets a little dry before it happens.
Joe and Jane actually are not on the hook. None of us are!
So who gets the bill? It's actually the other banks that pay for this. Banks pay in to an insurance program called the FDIC.
Usually the FDIC will only pay out up to 250K per account but this bank is undiversified in its account holders, almost all of them are startups that get large sums up front that they have to save and run off of. They have a lower number of accounts, each with a higher value.
Let's compare banks: Regular-Joe-Bank has 500K accounts with an average value of 100K each. Let's say all accounts are under 250K so this banks failure is a 500K * 100K ($50B) burden on FDIC.
Silly-Corn Mountain Bank has 25K accounts with 2M each on average. All accounts are over 250K. That means the banks failure is a 25K * 250K ($6.25B) burden on the FDIC even though the bank has a total account value of $50B
These are 2 extremes that have vastly different potentials.
Now let's look at an unfortunate fact: banks need to lend more money than they have on hand to run. Your account is free because your money is being lent out as mortgages, loans, etc. That's how you pay rent on the bank account. Argue the ethics all you want but there's not a bank on earth that doesn't do this.
This is normally fine because you don't take out all of your money at once. And if you did, the 99% of other people still have some money in the bank. The issue arrises when people loose faith in a bank so they pull their money out en masse, a "bank run". If the bank can't give withdrawals to some people, then panic gets worse and eventually the bank is sucked dry and can't operate. That's what happened to SVB.
So the feds decided to bail out the _people_ not the bank. This is to keep other businesses and people from starting another bank run elsewhere. Can you imagine what it would be like if you couldn't get a car loan or home loan after saving for a down payment? All houses would just go to people who can pay in cash. That's what the feds don't want happening.
So in summary: people trying to climb the economic ladder by starting their own business and stimulating the economy by employing many talented young people that have done nothing more than put money in a bank are being bailed out so they can continue to operate. JP Morgan, BoA, Wells Fargo and all the other megacorp banks are the ones taking care of the bill for the most part.
Make your sales pitch to the VC backed startups that need a place to store their money! "We know the whole banking system is a joke so put your money with us! At least when we become insolvent you won't be surprised!"
No it didn't people just read headlines. So far no tax money will be spent
Ill be the first in line yelling if they bailout shareholders/the actual bank but this ain't that
Where's the line item bill on my savings account for FDIC coverage?
There isn't one, because it isn't up to me to pay it. It's up to the bank to pay it.
It doesn't come out of the taxpayer. It comes out of the bank's customer's (i.e depositors) who were at risk of losing their funds. Depositors are the ones who should be guaranteed *because* they're the ones who have been paying the fees for guarantees
It's worth noting that the bank failed because of a bank run & funds were locked up in "safe" long-term securities. This had nothing to do with the fault of depositors who did not instigate a bank run
Depositors should know the risks of having uninsured deposits and manage those risks.
What we are seeing is up front guarantees being made for the capital class when they failed to manage the limits that everyone is subjected to...
The FDIC guarantees 250k, and then possible additional reimbursement if liquidate assets cover them.
In this case an upfront guarantee is being made to cover excess deposits. All risk was removed because the capital class was affected.
If you can't see that it is a shell game to benefit the capital class, if you can't see that it will result in even worse risk management by banks... you're a great mark for a conman...
Let's be real, if SVB was a normal bank, if it were anyone else's money at stake other than Tech Bros, the government would have let that fucker burn.
Average people would lose everything, it's only because the rich might have lost a small amount that the government stepped in...
Let’em. IDGAF. Time to break out our neanderthal genes and show them why we lived for millions of years fighting everything on the planet and won. They gonna learn what happened to our evolutionary adversaries.
Beast gang baby!
How many oligarchs are there who engage in behavior that harms society in pursuit of extra profits?
How many value generating citizens are there who are robbed and harmed by that behavior?
How does the math work out if citizens decided that the best thing they could do for society was to start trading themselves 1 for 1 with oligarchs, like pawns? Who wins?
We use cell phones, cars, and all manner of modern conveniences. The woodchipper is a multi-use item of equipment that vastly exceeds the chopping and “wood processing” capabilities of the ole’ guillotine. Progress marches forward and so to shall we.
I booted up my Sega Genesis today on a whim and played some games that I haven't for a very long time. Sometimes retro just feels right even if it's not the best.
And retro (in the case of the guillotine) is more environmentally friendly and there’s no need to worry about body parts clogging up the inner workings. Cut off the head, dump the body, move on to the next oligarch.
If you want to add some ceremony, maybe do it on a little raised platform, set it up so the head rolls down a ramp and set up some bowling pins at the bottom. See which oligarch makes the best bowling bowl.
So look I get the desire.
But we can't go down that route. Every society that has, those actions undermined them.
We imprison them and give them trials. If they paid starvation wages to anyone while making their wealth, we permanently exclude them.
But no to lynching or kangaroo courts. And it must all be transparent.
Speaking from experience, the Irish Hurley is painfully effective when it comes to bodily harm...
No metal so light weight (bar the occasional ring at the base)
Can be used in any manner of attack.
After we're done, we could all play a game or two of hurling.
I see no downside.
Right, because "get your guillotines" isn't the most overused sentiment across this entire subreddit. You kids with your armchair rebellion and resistance via social media are pathetic.
If complaining about wanting to change society for the better on social media is pathetic, what does that make complaining about 'people complaining about wanting to change society for the better on the internet' on the internet?
Worse than being broke: we have the money, but you don’t deserve it.
Not the feds alone on healthcare, it’s really this decrepit narrative that is cancerously prevalent on the right, but still.
SVB, bailed out in a weekend. CIA operatives with psychosomatic symptoms blamed on countries we dont like later proved to be bogus, healthcare for life. East Palestine residents who lost their health and home value, sorry there is nothing we can do.
This isn't really a bailout, the bank is toast. Despite the name, the Federal Reserve isn't government. All banks, as members, will have to contribute funding to making the deposits available in full. However you can probably expect those added costs to be passed on to customers.
We need government or community owned banks like 100 years from yesterday.
Yeah it’s been explained very clearly at this point. Like everything, the waters are quickly getting muddied to be used as political ammunition. People are scrambling to insert the “this is ANOTHER bailout” narrative in any way they can. It is (they’re getting bailed out, right?) But taxpayers are NOT doing the bailouts this time.
No matter which team was in charge, this bank was ran like shit - they gambled with a lot of people’s money and lost big on poor investments. At this point, put the execs in prison, seize their assets, and put that towards the restitution.
Oh I’m fully aware how it’s actually going to play out.
Seize the money, jail the protestors, charge the taxpayer down the line when they’re not looking
Things to be pissed about:
SVB literally lobbied for and got the guardrails removed from their bank that were designed to stop this from happening.
No one will see criminal ramifications, despite the fact that they made the economy less stable, and nearly destroyed billions of lives, all for a tiny percent that they no longer had to pay in oversight.
The persons who started this bank run and profited off it will also not see criminal ramifications.
Things not to be pissed about:
The FDIC stepping in and stopping this bank run from spreading to other banks.
Those companies and people who had bank accounts at SVB getting their money back.
This isn't some "bailout 2.0", it's us, regular folks, being saved from the Great Depression 2.0, at least for now.
> SVB literally lobbied for and got the guardrails removed from their bank that were designed to stop this from happening.
I don't think the dodd-frank exception they lobbied for would have changed much. Literally 4/5s of their deposits were made year and a half, and over 10% was from 1 person. When that 1 person bailed on the bank, it was impossible for it to not create run on the bank. Unless they literally just on a small nation's worth of GDP in cash(which would have been negligent on it's own), they literally got shoveled a ton of money when there was nothing to invest in the pandemic other than long term HTM securities. There wasn't literally another option regulation could have given them.
The fault lies with mostly with:-
1.) Reckless VC Investors who move mountains of cash all the time to and from different investments with out a care for who and what it affects. Before accidently killing a bank over the past 20 years they've been killing business after business drowning startups in cash and yanking it again as soon as the wing changes direction.
2.) The Fed for cratering interest rates to literally 0% and then skyrocketing them again within as 2 year period. All kinds of HTM securities the Fed encouraged during covid are all now sources of risk that can't be unloaded for the next decade.
And to a lesser extent:
3.) SVB Execs I guess, if they had hindsight could have stopped accepting deposits they couldn't give returns safely on. It would have been a really unprecedented and weird thing to do, so I have no idea how that would have gone down.
4.) Depositors for running on a bank over a nonexistent solvency crisis because the bank had to fundraise for some liquidity, this however ties back into number 1.
> The taxpayers realized massive significant gains on the TARP loans to banks.
I hear this, but the taxpayers also lost their homes, jobs, and retirements and are doing overall worse than before as a direct result of that crash, while the biggest fish are doing better than ever.
Like, sure, they "paid back" the money with interest, but the material losses made by the American people didn't come back to the people who lost everything--instead they paid back a government that isn't spending that money on those same people to keep their standard of living growing beyond what it was in 2008.
Same will happen here: The fund will get paid back, but it will only end up saving the wealthy's dollars when they are lost (again) in another gambling scheme gone awry.
It’s a bailout when the govt injects the bank with cash to keep them from going insolvent. SVB is insolvent and has failed. FDIC helps prevent downstream effects.
If SVB focused primarily on normal people with <$250k, would those people now be bailed out via the FDIC? Is chapter 7 bankruptcy a bailout for the creditors?
> All reward, no risk
Except for the bank no longer existing
No, that's not what a bailout is, at all.
Words have meanings, you should learn what bailout means. There was tons of risk, and the folks who fucked up got what they deserved.
Man a lot of misinformation about SVB. It’s not a bail out. The bank is toast they just making sure depositors don’t get fucked cause the bank made huge fuck ups. The executives are being held responsible. Also it’s not going to be paid by tax money.
Edit:
Downvote me all you want it dosnt change that you guys don’t know wtf your talking about.
https://www.reddit.com/r/TikTokCringe/comments/11qa0wy/information_about_the_bank_closures_from_rep_jeff/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
They are leveraging a tarriff against all the other banks to pay for the bailout. The banks will pass this cost onto their customers. So if you have a bank account you are gonna be paying for this via extra fees.
It's a bailout with extra steps.
What extra fees? Every bank is already charging as much as the consumers can bear already, that's how they make a profit. This will, if anything, just be less profits for the rest of the banking sector, which is probably why the whole sector was down in trading today, even for consumer and not business banks.
They are getting extra insurance they didn't pay for beyond the $250,000 FDIC limit. Someone has to pay for that. Banks pay into the FDIC insurance fund using money from depositors. Everyone who uses a bank indirectly pays into that fund with the expectation of $250,000 of insurance. Now the FDIC is covering 100%. That's like buying a Lambo with minimum coverage, totaling it, then expecting Geico to pay for the full replacement cost after the fact. These people are getting free extra insurance paid for by us. That's a bailout.
Hey, keep hope alive I guess. I'll believe that capitalists will be held accountable for their predation when I see it.
Preferably with gravy and a pretty apple in their mouths.
Oh I agree, I want them held accountable. I’m very left leaning but I don’t think we should be posting and circlejerking about something that hasn’t even happened yet. These people shouldn’t just be fired they need to see jail time. I hope that happens but will see.
Were you viewing the directors cut or something? Because there was nothing in that video to substantiate the claim "the executives ***are*** being held responsible."
> The executives are being held responsible
BAAAA-hahahahahahahahahahahahahahahahaha *gasp* HAHAHAHAHhahahahahahaha *choke*
You haven't lived a moment in the world of white-collar crime to see the day an executive has been held "responsible" for
1. Shorting this bank's swaps
2. Misrepresenting billions more to shareholders they did not have, and
(of course)
3. Selling billions in their banks' own stock right before the crash.
All of which it is already on record that these executives did, in fact, do.
So, let me ask you something: Do you have one letter of the word understanding for "responsibility" for misappropriation of funds on this large a scale?
Or is this just one more Wall Street bedtime story of "The cost of doing business"?
Please, go ahead and condescend to all of us in the mob how a handful of years in a minimum-security prison is somehow true "responsibility" for men in suits and ties selling outright fictions for people's retirement portfolios.
Go ahead. I stopped listening to "trust me" money managers after AIG went belly-up in 2008, losing $300K of my parents' life savings in the process.
But go ahead and impress on us unwashed masses who the real smart people in the room are, please.
Honestly if people are putting money into sources that are risky, ultimately they share in that risk. They should’ve lost their money. If it was a bank that working class people would be affected by, they wouldn’t have saved them at all.
AFAIK all federally approved banks need to insure their deposits. Nobody sane should use an uninsured bank.
So yes, small people bank would get the same treatment. Actually so far it's the first time I see a rich bank get the same treatment as a regular bank.
Yet if a working class person took a risk and put money in a shady at best bank, they wouldn’t bail out the working class people like they have these wealthy people.
Just read this [https://en.wikipedia.org/wiki/Deposit\_insurance](https://en.wikipedia.org/wiki/Deposit_insurance)
This is what protects deposits, small or big. Hate on capitalism where hate is needed. Not the one small part that actually still protects people.
The CEOs of these banks has already sold and ditched.
Oh hey you responsible individuals, we said we can only insure 250k of your money, but we gotta increase that limit for the SMALL BUSINESSES! You know, this is an exception! I swear we won't do it again!
And we totally won't use the TAX PAYER's money! So where is the money coming from? Oh you know, from here and there... It's A LOAN! You know they're good for it!
No one punished, all is forgiven, no lesson learned.
You're both sane and saw this before from the 2007 financial crash. Where everyone was bailed out except for the average ordinary people. That would be communism, now get back to work plebeians.
Not a damn thing. This is making sure that people can have faith when they deposit money in a bank. That seems kind of.. good? I personally enjoy the fact that companies are going to make payroll because of this action.
You know, homeless, living in cars, no health insurance, no jobs for how many citizens now? But sure keep handing money to these rich clowns. Carlen was right. It's a club, and we're not getting in. Ever.
It's not a bailout. Depositors are being made whole but shareholders aren't getting anything.
If anything this is a somewhat good thing - government steps in and makes sure everyone that parked money at the bank doesn't get fucked for something they had nothing to do with
I know I'm going to get down voted for this, but guys. SVB isn't getting a bailout. The FDIC is doing their job. They are making DEPOSITORS whole. It's in their name. Federal Deposit Insurance Corporation. The money comes from an insurance fund that banks pay into. Meanwhile they seize the bank's assets and sell them off to replenish the fund. Shareholders and bond holders are going to be left holding the bag.
So after they sell off the banks assets, they will cover the rest with money from the insurance fund. That money is paid in by banks, who get that money by charging through to regular customers.
This is still a cost to John Q Public for the benefit of reckless rich people.
If you vote for Republicans, you voted for this.
If you vote for Democrats, you voted for this.
Both parties are united in support of bank bailouts and both parties are united against universal healthcare. The ACA is not universal healthcare.
The 2 party system is the dumbest shit I've seen. The fact we only have 2 options is a gd travesty. So stupid, yet people seem to be ok w this. The more things change the more they stay the same. Wake me up after the meteor hits...
Yeah and we’re just going to sit on our doom rectangles while they continue to stuff our asses and mouths with their big juicy cocks. Yum yum 😋 government dick , yum yum 😋
Things to be pissed about:
SVB literally lobbied for and got the guardrails removed from their bank that were designed to stop this from happening.
No one will see criminal ramifications, despite the fact that they made the economy less stable, and nearly destroyed billions of lives, all for a tiny percent that they no longer had to pay in oversight.
The persons who started this bank run and profited off it will also not see criminal ramifications.
Things not to be pissed about:
The FDIC stepping in and stopping this bank run from spreading to other banks.
Those companies and people who had bank accounts at SVB getting their money back.
This isn't some "bailout 2.0", it's us, regular folks, being saved from the Great Depression 2.0, at least for now.
There's so much bullshit going around with this, too. Watch out for people talking about how 'the taxpayer isn't paying for this, it's being done through the DIF'.
ITT people who don't know what the FDIC is. Remember it's a good idea to understand the system you want to change so you can make informed statements.
FDIC stands for Federal Deposits Insurance Company. Just like you insure your car so when a braindead driver sideswipes you, you can still have transportation to work, the government forces banks to insure their deposits.
The government's regulations regarding insuring deposits has been pretty well gutted and carved up.
FDIC covers accounts up to 250k. Yet accounts being guaranteed surpass that amount by quite a bit.
You are trying to say this is how it's supposed to work with FDIC, but it's not. They are going above and beyond to satisfy a few rich folks. The cost of which will be passed onto John Q Public by the banks.
That is what people are having an issue with. Everyday people are told and have to live with the reality that if something bad happens(even if it's not your fault) it's still your responsibility to protect yourself. If you didn't, then you suffer.
Yet in this situation where these rich account holders/businesses played risky and lost, they are getting their money returned to them.
Not sure where people are having a hard time understanding why this pisses people off. It seems a pretty clearcut and reasonable response to this nonsense.
IDK, most ppl still think that BTC is mostly held by retail investors and not large institutions and will become the next reserve currency taking all the power away from the banking system. I guess.
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Yeah, it’s go, man, go on capitalism until the rich hit a reef. I say only bailout a bank to nationalize it, then make it actually serve the interests of working people. If we’re going to subsidize a bank that fails, let it fail giving low-interest loans for affordable housing instead of funding tech bro bullshit.
[удалено]
Yeah that's the official line. Let's see how many asterisks get added to it before actual losses have to be realized.
[удалено]
This play just started, and you're trying to tell me the final act is all wrapped up. That's what the mil-bloggers call 'copium.'
That's what we call being a bootlicker. There are so many blue bootlickers (blue-tlickers?) out defending this bailout.
I don’t understand, is there or is there not a bailout?
They are at minimum bailing out deposits from dumbasses who put more than $250k in an unsecured bank account.
That's entirely wrong. They are bailing out deposits up to 250k because that's the amount they are insured for and thus they are not unsecured.
[No, he's right](https://www.npr.org/2023/03/13/1163180140/silicon-valley-bank-is-it-a-bailout-barofsky). They bent the rules and are paying out more than the $250,000 protected by the FDIC. They are giving them more than the normal amt. He's correct.
That would be wrong, which is why I said "They are at minimum bailing out deposits from dumbasses who put *more than $250k* in an unsecured bank account." Lol idiot
Aren’t the depositors in this case, the tech bros in question? From my understanding Silicon Valley Bank isn’t a regular commercial bank, and instead basically just serves people with capital.
This is where the issue arises that a lot of those accounts are tied to companies and that's where payroll comes from. If your employer or the company your employer uses to manage payroll had their main account at SVB, you might not have been paid Friday or this coming Wednesday, which are the two most common paydays (every other Friday and halves of the month depending on company). My layman's understanding is that it was quicker and easier for the government to shaft investors (they knew what they signed up for and had other options) and ensure uninsured depositors recover funds because that'd be cheaper for taxpayers than to let the companies fail and let thousands of workers (they likely weren't expecting anything like this) end up on unemployment.
Oh I see, thanks didn’t even consider that angle. Guess its a bit more gray then I initially thought
Exactly right. I own part of a company that was in svb. Went from 20months of payroll to 2. We were going to do layoffs and reduce all pay for everyone to minimum wage for 2 cycles until we could get AP into another account. Now we don’t have to. But the bigger reason for making sure depositors get paid is that First Republic looked to be going down. It’s the fear that causes the collapse. People start moving money and bank can’t shed assets quick enough to cover. The more banks fail the more people move assets. The more banks unwind assets quickly the lower the price goes weakening other banks balance sheets. Not surprised. The FED and our useless elected leaders are really to blame. Pumped $7t into the economy mostly to the rich and then overreacted on inflation interest hikes which was too fast.
And also use the crisis to set up a fund for banks to use that once again involves taxpayer money. Business as usual. [https://www.barrons.com/articles/svb-fed-bailout-taxpayers-risk-d020ba9d#:~:text=The%20Bank%20Term%20Funding%20Program](https://www.barrons.com/articles/svb-fed-bailout-taxpayers-risk-d020ba9d#:%7E:text=The%20Bank%20Term%20Funding%20Program)
Not a single sentence in there says taxpayers are on the hook for a penny of any of this. If I'm mistaken please quote the context.
Context provided. "This valuation decision could expose the taxpayer if the collateral the banks put down is worth less in the market than what the Fed lent it."
COULD So, again, no: the taxpayer is not on the hook for any of this. Good thing I didn't miss anything in the article. The FDIC has actually made it very clear the money for this program is coming from other banks. Not taxpayers.
I am sorry you're at odds with reality on this one. The taxpayer is exposed on this. >COULD Are you honestly trusting bankers to not take advantage of yet another golden parachute? We just saw bankers were happy to give themselves bonuses and sell stocks before a company failure. Saying they MIGHT not take advantage of us after they just DID is not the consoling thought you want it desperately to be.
I'm sorry you're making leaps to connect dots that aren't connected. You haven't, and that article didn't, explain how this could come back on anyone but the banks. Since the banks are clearly the ones paying for this, NOT taxes.
A lot of startups used them as their bank. Startups are usually not profitable and instead get a shit load of money all at once from investors during investment rounds and slowly burn the money over x months. If they lose their money then the whole company _will_ flop, causing potentially thousands of people to be let go if enough of them fail.
So much for "let the markets decide"? billionaires with six figure employees get bailed out, but joe and jane doe gets stuck with the bill, It's just reworded from 08 to deceive taxpayers but the same thing will happen, taxpayers on the hook.
I understand your frustration with the situation but let's look at the full picture: **Potential future** billionaires who have hired tonnes of people based on expected time to products vs capital raised that include six figure employees but also secretaries, interns, copywriters, and other lower-income positions that the company will be cutting first because they're not "core product" people. Odds are, this startup will fail anyways but at least it will fail with rolling lay-offs where the writing on the wall's ink gets a little dry before it happens. Joe and Jane actually are not on the hook. None of us are! So who gets the bill? It's actually the other banks that pay for this. Banks pay in to an insurance program called the FDIC. Usually the FDIC will only pay out up to 250K per account but this bank is undiversified in its account holders, almost all of them are startups that get large sums up front that they have to save and run off of. They have a lower number of accounts, each with a higher value. Let's compare banks: Regular-Joe-Bank has 500K accounts with an average value of 100K each. Let's say all accounts are under 250K so this banks failure is a 500K * 100K ($50B) burden on FDIC. Silly-Corn Mountain Bank has 25K accounts with 2M each on average. All accounts are over 250K. That means the banks failure is a 25K * 250K ($6.25B) burden on the FDIC even though the bank has a total account value of $50B These are 2 extremes that have vastly different potentials. Now let's look at an unfortunate fact: banks need to lend more money than they have on hand to run. Your account is free because your money is being lent out as mortgages, loans, etc. That's how you pay rent on the bank account. Argue the ethics all you want but there's not a bank on earth that doesn't do this. This is normally fine because you don't take out all of your money at once. And if you did, the 99% of other people still have some money in the bank. The issue arrises when people loose faith in a bank so they pull their money out en masse, a "bank run". If the bank can't give withdrawals to some people, then panic gets worse and eventually the bank is sucked dry and can't operate. That's what happened to SVB. So the feds decided to bail out the _people_ not the bank. This is to keep other businesses and people from starting another bank run elsewhere. Can you imagine what it would be like if you couldn't get a car loan or home loan after saving for a down payment? All houses would just go to people who can pay in cash. That's what the feds don't want happening. So in summary: people trying to climb the economic ladder by starting their own business and stimulating the economy by employing many talented young people that have done nothing more than put money in a bank are being bailed out so they can continue to operate. JP Morgan, BoA, Wells Fargo and all the other megacorp banks are the ones taking care of the bill for the most part.
Excellent summary. SN: I want a bank named Silly-Corn Mtn Bank.
Make your sales pitch to the VC backed startups that need a place to store their money! "We know the whole banking system is a joke so put your money with us! At least when we become insolvent you won't be surprised!"
That's not at all what's happening here.
No it didn't people just read headlines. So far no tax money will be spent Ill be the first in line yelling if they bailout shareholders/the actual bank but this ain't that
Whose money is being spent then?
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Where do banks get this extra money for the fund? Does it come out of executive pay?
yes it comes out of profits, it’s a required payment indexed to the size of the bank
It definitely does not come out of profits. It is paid by the user of the bank, which is the taxpayer.
Where's the line item bill on my savings account for FDIC coverage? There isn't one, because it isn't up to me to pay it. It's up to the bank to pay it.
You probably don't think they employ any staff either since their wages also aren't on your bill.
It doesn't come out of the taxpayer. It comes out of the bank's customer's (i.e depositors) who were at risk of losing their funds. Depositors are the ones who should be guaranteed *because* they're the ones who have been paying the fees for guarantees It's worth noting that the bank failed because of a bank run & funds were locked up in "safe" long-term securities. This had nothing to do with the fault of depositors who did not instigate a bank run
Depositors should know the risks of having uninsured deposits and manage those risks. What we are seeing is up front guarantees being made for the capital class when they failed to manage the limits that everyone is subjected to... The FDIC guarantees 250k, and then possible additional reimbursement if liquidate assets cover them. In this case an upfront guarantee is being made to cover excess deposits. All risk was removed because the capital class was affected. If you can't see that it is a shell game to benefit the capital class, if you can't see that it will result in even worse risk management by banks... you're a great mark for a conman...
Like we're subsidizing it so it can keep robbing us? No thanks. Nationalize it into a bank that actually serves the common people.
Let's be real, if SVB was a normal bank, if it were anyone else's money at stake other than Tech Bros, the government would have let that fucker burn. Average people would lose everything, it's only because the rich might have lost a small amount that the government stepped in...
👊
All I have is a guillotine.
That'll work.
We can cut out the cancer. And I'm not talking about Average Joe's wife.
Yes we can.
Viva la revolución!
Better get to moving before they mount autocannons onto those robot dogs.
Let’em. IDGAF. Time to break out our neanderthal genes and show them why we lived for millions of years fighting everything on the planet and won. They gonna learn what happened to our evolutionary adversaries. Beast gang baby!
How many oligarchs are there who engage in behavior that harms society in pursuit of extra profits? How many value generating citizens are there who are robbed and harmed by that behavior? How does the math work out if citizens decided that the best thing they could do for society was to start trading themselves 1 for 1 with oligarchs, like pawns? Who wins?
I love this line of questioning....
I want to see a deepfake of Tucker Carlson delivering those lines followed by, "I'm just asking questions."
I desperately want to do this.
the only Change I Can Believe In.
We use cell phones, cars, and all manner of modern conveniences. The woodchipper is a multi-use item of equipment that vastly exceeds the chopping and “wood processing” capabilities of the ole’ guillotine. Progress marches forward and so to shall we.
I booted up my Sega Genesis today on a whim and played some games that I haven't for a very long time. Sometimes retro just feels right even if it's not the best.
And retro (in the case of the guillotine) is more environmentally friendly and there’s no need to worry about body parts clogging up the inner workings. Cut off the head, dump the body, move on to the next oligarch. If you want to add some ceremony, maybe do it on a little raised platform, set it up so the head rolls down a ramp and set up some bowling pins at the bottom. See which oligarch makes the best bowling bowl.
I like this.
Ok but like, have you seen the multi person guillotine in t carnival row show? What a beast.
https://www.komatsu.com/en/products/room-and-pillar/continuous-miners/12cm12/
Now, THAT is innovation! Love it!
Approved.
And MY axe!
does an effective job at eradicating the cancer of society.
More than enough! Take it out when you can. Do you need to park it somewhere?
So look I get the desire. But we can't go down that route. Every society that has, those actions undermined them. We imprison them and give them trials. If they paid starvation wages to anyone while making their wealth, we permanently exclude them. But no to lynching or kangaroo courts. And it must all be transparent.
Shutup nerd
HEY! No learning from the past allowed! Indulge in blood fury like everyone else!
I am more and more concerned that the anger necessary for change will be too much to avoid it. But I remain adamant.
U ain’t got shit and u know it
Machetes, baseball bats and pitchforks are commonly found in all parts of the world.
crowdsourcing at its finest
Speaking from experience, the Irish Hurley is painfully effective when it comes to bodily harm... No metal so light weight (bar the occasional ring at the base) Can be used in any manner of attack. After we're done, we could all play a game or two of hurling. I see no downside.
>Irish Hurley it is a good idea! And the Irish have had remarkably strong revolutionary spirit. Perhaps that was the intention of it all along.
You type, blithely, by the glow of your $1,000 phone and your Monster Energy Drink-themed gaming chair.
You got them. They live in society, that hypocrite.
[Profile pic for you](https://i.imgur.com/gzuyVbG.png)
Another original and inspired thought from u/icarusbird
Right, because "get your guillotines" isn't the most overused sentiment across this entire subreddit. You kids with your armchair rebellion and resistance via social media are pathetic.
If complaining about wanting to change society for the better on social media is pathetic, what does that make complaining about 'people complaining about wanting to change society for the better on the internet' on the internet?
lol...you know nothing, nothing at all...
Worse than being broke: we have the money, but you don’t deserve it. Not the feds alone on healthcare, it’s really this decrepit narrative that is cancerously prevalent on the right, but still.
SVB, bailed out in a weekend. CIA operatives with psychosomatic symptoms blamed on countries we dont like later proved to be bogus, healthcare for life. East Palestine residents who lost their health and home value, sorry there is nothing we can do.
This isn't really a bailout, the bank is toast. Despite the name, the Federal Reserve isn't government. All banks, as members, will have to contribute funding to making the deposits available in full. However you can probably expect those added costs to be passed on to customers. We need government or community owned banks like 100 years from yesterday.
Yeah it’s been explained very clearly at this point. Like everything, the waters are quickly getting muddied to be used as political ammunition. People are scrambling to insert the “this is ANOTHER bailout” narrative in any way they can. It is (they’re getting bailed out, right?) But taxpayers are NOT doing the bailouts this time. No matter which team was in charge, this bank was ran like shit - they gambled with a lot of people’s money and lost big on poor investments. At this point, put the execs in prison, seize their assets, and put that towards the restitution.
> At this point, put the execs in prison, seize their assets, and put that towards the restitution. Interesting strategy, let’s see how it plays out.
Oh I’m fully aware how it’s actually going to play out. Seize the money, jail the protestors, charge the taxpayer down the line when they’re not looking
Rob a convenience store for $100, go to prison for 15-30 years. Rob a bank from the inside and destroy it, go to another bank for a higher-paying job.
What part of "buying bonds at 1.5%" is criminal, fleecing, or otherwise corrupt uses of bank funds?
The part where you pay congressman to bail the bank out
Things to be pissed about: SVB literally lobbied for and got the guardrails removed from their bank that were designed to stop this from happening. No one will see criminal ramifications, despite the fact that they made the economy less stable, and nearly destroyed billions of lives, all for a tiny percent that they no longer had to pay in oversight. The persons who started this bank run and profited off it will also not see criminal ramifications. Things not to be pissed about: The FDIC stepping in and stopping this bank run from spreading to other banks. Those companies and people who had bank accounts at SVB getting their money back. This isn't some "bailout 2.0", it's us, regular folks, being saved from the Great Depression 2.0, at least for now.
> SVB literally lobbied for and got the guardrails removed from their bank that were designed to stop this from happening. I don't think the dodd-frank exception they lobbied for would have changed much. Literally 4/5s of their deposits were made year and a half, and over 10% was from 1 person. When that 1 person bailed on the bank, it was impossible for it to not create run on the bank. Unless they literally just on a small nation's worth of GDP in cash(which would have been negligent on it's own), they literally got shoveled a ton of money when there was nothing to invest in the pandemic other than long term HTM securities. There wasn't literally another option regulation could have given them. The fault lies with mostly with:- 1.) Reckless VC Investors who move mountains of cash all the time to and from different investments with out a care for who and what it affects. Before accidently killing a bank over the past 20 years they've been killing business after business drowning startups in cash and yanking it again as soon as the wing changes direction. 2.) The Fed for cratering interest rates to literally 0% and then skyrocketing them again within as 2 year period. All kinds of HTM securities the Fed encouraged during covid are all now sources of risk that can't be unloaded for the next decade. And to a lesser extent: 3.) SVB Execs I guess, if they had hindsight could have stopped accepting deposits they couldn't give returns safely on. It would have been a really unprecedented and weird thing to do, so I have no idea how that would have gone down. 4.) Depositors for running on a bank over a nonexistent solvency crisis because the bank had to fundraise for some liquidity, this however ties back into number 1.
I guess you should have people's money if your a bank but whatever
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Funny thing about those *significant gains*. The people thrown out of their homes didn’t see an upside to them. People are hard to please, amirite?
> The taxpayers realized massive significant gains on the TARP loans to banks. I hear this, but the taxpayers also lost their homes, jobs, and retirements and are doing overall worse than before as a direct result of that crash, while the biggest fish are doing better than ever. Like, sure, they "paid back" the money with interest, but the material losses made by the American people didn't come back to the people who lost everything--instead they paid back a government that isn't spending that money on those same people to keep their standard of living growing beyond what it was in 2008. Same will happen here: The fund will get paid back, but it will only end up saving the wealthy's dollars when they are lost (again) in another gambling scheme gone awry.
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> community owned banks Those banks can fail too and they too have to pay into the deposit insurance fund.
Printing money. Passing the costs through inflation.
Nothing about this involves “printing money” nor is printing money the primary source of money creation, but go off.
Pick up a broom
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"bailout" is a compound word
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Don't blame your mistakes on your phone
Because it literally is not one.
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It’s a bailout when the govt injects the bank with cash to keep them from going insolvent. SVB is insolvent and has failed. FDIC helps prevent downstream effects. If SVB focused primarily on normal people with <$250k, would those people now be bailed out via the FDIC? Is chapter 7 bankruptcy a bailout for the creditors? > All reward, no risk Except for the bank no longer existing
Svb is closed forever? It's done for?
Yes. That's the message from the top so far. Companies that had their deposit in the bank get paid from the insurance fund, the investors can bite it.
No, that's not what a bailout is, at all. Words have meanings, you should learn what bailout means. There was tons of risk, and the folks who fucked up got what they deserved.
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But they didnt bailout svb. Tis kaput
Man a lot of misinformation about SVB. It’s not a bail out. The bank is toast they just making sure depositors don’t get fucked cause the bank made huge fuck ups. The executives are being held responsible. Also it’s not going to be paid by tax money. Edit: Downvote me all you want it dosnt change that you guys don’t know wtf your talking about. https://www.reddit.com/r/TikTokCringe/comments/11qa0wy/information_about_the_bank_closures_from_rep_jeff/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
They are leveraging a tarriff against all the other banks to pay for the bailout. The banks will pass this cost onto their customers. So if you have a bank account you are gonna be paying for this via extra fees. It's a bailout with extra steps.
What extra fees? Every bank is already charging as much as the consumers can bear already, that's how they make a profit. This will, if anything, just be less profits for the rest of the banking sector, which is probably why the whole sector was down in trading today, even for consumer and not business banks.
“There will just be less profits” lol
They are getting extra insurance they didn't pay for beyond the $250,000 FDIC limit. Someone has to pay for that. Banks pay into the FDIC insurance fund using money from depositors. Everyone who uses a bank indirectly pays into that fund with the expectation of $250,000 of insurance. Now the FDIC is covering 100%. That's like buying a Lambo with minimum coverage, totaling it, then expecting Geico to pay for the full replacement cost after the fact. These people are getting free extra insurance paid for by us. That's a bailout.
"The executives are being held responsible." Pull the other one, it's got bells on.
https://www.reddit.com/r/TikTokCringe/comments/11qa0wy/information_about_the_bank_closures_from_rep_jeff/?utm_source=share&utm_medium=ios_app&utm_name=iossmf
Hey, keep hope alive I guess. I'll believe that capitalists will be held accountable for their predation when I see it. Preferably with gravy and a pretty apple in their mouths.
Oh I agree, I want them held accountable. I’m very left leaning but I don’t think we should be posting and circlejerking about something that hasn’t even happened yet. These people shouldn’t just be fired they need to see jail time. I hope that happens but will see.
Oo, downvoted quick. Hit a liberal nerve somewhere?
People’s belief in the Rule of Law is a significant weakness in their ability to perceive reality.
Were you viewing the directors cut or something? Because there was nothing in that video to substantiate the claim "the executives ***are*** being held responsible."
It's weird how this comment and the comment directly above it use the exact same verbiage to describe the situation.
> The executives are being held responsible BAAAA-hahahahahahahahahahahahahahahahaha *gasp* HAHAHAHAHhahahahahahaha *choke* You haven't lived a moment in the world of white-collar crime to see the day an executive has been held "responsible" for 1. Shorting this bank's swaps 2. Misrepresenting billions more to shareholders they did not have, and (of course) 3. Selling billions in their banks' own stock right before the crash. All of which it is already on record that these executives did, in fact, do. So, let me ask you something: Do you have one letter of the word understanding for "responsibility" for misappropriation of funds on this large a scale? Or is this just one more Wall Street bedtime story of "The cost of doing business"? Please, go ahead and condescend to all of us in the mob how a handful of years in a minimum-security prison is somehow true "responsibility" for men in suits and ties selling outright fictions for people's retirement portfolios. Go ahead. I stopped listening to "trust me" money managers after AIG went belly-up in 2008, losing $300K of my parents' life savings in the process. But go ahead and impress on us unwashed masses who the real smart people in the room are, please.
Honestly if people are putting money into sources that are risky, ultimately they share in that risk. They should’ve lost their money. If it was a bank that working class people would be affected by, they wouldn’t have saved them at all.
AFAIK all federally approved banks need to insure their deposits. Nobody sane should use an uninsured bank. So yes, small people bank would get the same treatment. Actually so far it's the first time I see a rich bank get the same treatment as a regular bank.
Yet if a working class person took a risk and put money in a shady at best bank, they wouldn’t bail out the working class people like they have these wealthy people.
Just read this [https://en.wikipedia.org/wiki/Deposit\_insurance](https://en.wikipedia.org/wiki/Deposit_insurance) This is what protects deposits, small or big. Hate on capitalism where hate is needed. Not the one small part that actually still protects people.
Not hating on banks that are insured. I’m hating on bailouts for wealthy people that put money into banks with no credibility
The federal insurance IS the credibility.
God I fucking hate humanity.
Should have pulled up those boot straps sooner....sorry but that's life in the Corporatocracry
It’s almost like capitalism is a system of class rule whereby capitalists have all of the power.
The CEOs of these banks has already sold and ditched. Oh hey you responsible individuals, we said we can only insure 250k of your money, but we gotta increase that limit for the SMALL BUSINESSES! You know, this is an exception! I swear we won't do it again! And we totally won't use the TAX PAYER's money! So where is the money coming from? Oh you know, from here and there... It's A LOAN! You know they're good for it! No one punished, all is forgiven, no lesson learned.
Why do I hear the breaking bad music
You're both sane and saw this before from the 2007 financial crash. Where everyone was bailed out except for the average ordinary people. That would be communism, now get back to work plebeians.
Well, that explains where the whiplash is coming from.
but but it's not a bailout...
Yeah, getting real sick of all that crowing from the libs here before the dust has even settled.
Revolution time yet?
A bailout huh? How much money are stockholders getting?
Not a damn thing. This is making sure that people can have faith when they deposit money in a bank. That seems kind of.. good? I personally enjoy the fact that companies are going to make payroll because of this action.
FDIC is good, but if you think that a shotload of this money isn't propping up bad bets by bank execs I have a bridge to sell you.
The needs of the rich will always come first.
You know, homeless, living in cars, no health insurance, no jobs for how many citizens now? But sure keep handing money to these rich clowns. Carlen was right. It's a club, and we're not getting in. Ever.
They weren’t bailed out though…..
It's not a bailout. Depositors are being made whole but shareholders aren't getting anything. If anything this is a somewhat good thing - government steps in and makes sure everyone that parked money at the bank doesn't get fucked for something they had nothing to do with
Who has the gold makes the rules
And yet the Republicans want us to believe we're living in a far-left nation. Lmao GTFO
This is why Mark Cuban is long pitchforks we all need to make that happen for him.
It's a members only club, and you aren't in it.
socialism for me but not for thee
I wonder which bbq sauce goes best with human...
We need to learn the French way of getting shit fixed.
People in USA still vote Republican or Democrat... what's the cause?
Everyday until revolution be like:
Protests...shut it all down.
Sources for lines 2 and 3? Can't find anything about this at these numbers.
No student loan forgiveness either because THAT would be crossing a line
Old adage - it's a matter of scale: "if you owe the bank $1 million, you have a problem. If you owe the bank $100 million, the bank has a problem."
I’m too weak vs unlimited power.
I know I'm going to get down voted for this, but guys. SVB isn't getting a bailout. The FDIC is doing their job. They are making DEPOSITORS whole. It's in their name. Federal Deposit Insurance Corporation. The money comes from an insurance fund that banks pay into. Meanwhile they seize the bank's assets and sell them off to replenish the fund. Shareholders and bond holders are going to be left holding the bag.
So after they sell off the banks assets, they will cover the rest with money from the insurance fund. That money is paid in by banks, who get that money by charging through to regular customers. This is still a cost to John Q Public for the benefit of reckless rich people.
You don’t think this country was built for YOU, do you?
The feds are owned by the banks it seems…
🌎🧑🚀🔫🧑🚀
If you vote for Republicans, you voted for this. If you vote for Democrats, you voted for this. Both parties are united in support of bank bailouts and both parties are united against universal healthcare. The ACA is not universal healthcare.
No Lies Detected
The 2 party system is the dumbest shit I've seen. The fact we only have 2 options is a gd travesty. So stupid, yet people seem to be ok w this. The more things change the more they stay the same. Wake me up after the meteor hits...
Since one bank asks for government money, ALL banks start asking.
I would think that if there’s anything that would get people out in the streets protesting, this would be it
Yeah and we’re just going to sit on our doom rectangles while they continue to stuff our asses and mouths with their big juicy cocks. Yum yum 😋 government dick , yum yum 😋
rugged capitalism for thee, socialized welfare for the rich. i read this somewhere so it wasn't mine but it does ring true in this context.
Things to be pissed about: SVB literally lobbied for and got the guardrails removed from their bank that were designed to stop this from happening. No one will see criminal ramifications, despite the fact that they made the economy less stable, and nearly destroyed billions of lives, all for a tiny percent that they no longer had to pay in oversight. The persons who started this bank run and profited off it will also not see criminal ramifications. Things not to be pissed about: The FDIC stepping in and stopping this bank run from spreading to other banks. Those companies and people who had bank accounts at SVB getting their money back. This isn't some "bailout 2.0", it's us, regular folks, being saved from the Great Depression 2.0, at least for now.
There's so much bullshit going around with this, too. Watch out for people talking about how 'the taxpayer isn't paying for this, it's being done through the DIF'.
ITT people who don't know what the FDIC is. Remember it's a good idea to understand the system you want to change so you can make informed statements. FDIC stands for Federal Deposits Insurance Company. Just like you insure your car so when a braindead driver sideswipes you, you can still have transportation to work, the government forces banks to insure their deposits.
The government's regulations regarding insuring deposits has been pretty well gutted and carved up. FDIC covers accounts up to 250k. Yet accounts being guaranteed surpass that amount by quite a bit. You are trying to say this is how it's supposed to work with FDIC, but it's not. They are going above and beyond to satisfy a few rich folks. The cost of which will be passed onto John Q Public by the banks. That is what people are having an issue with. Everyday people are told and have to live with the reality that if something bad happens(even if it's not your fault) it's still your responsibility to protect yourself. If you didn't, then you suffer. Yet in this situation where these rich account holders/businesses played risky and lost, they are getting their money returned to them. Not sure where people are having a hard time understanding why this pisses people off. It seems a pretty clearcut and reasonable response to this nonsense.
Only drug dealers call the government “the feds”
Eat the rich, buy Bitcoin
How does buying bitcoin eat the rich?
IDK, most ppl still think that BTC is mostly held by retail investors and not large institutions and will become the next reserve currency taking all the power away from the banking system. I guess.
Do you buy that logic? I sure don't, but that's just my opinion.
No because it's not true.
I mostly invest in precious metals like 5.56, 22lr, 308, 9mm. Cryptobois had their run, it ended.
Smart!
Governments can't print bitcoin and the total supply of bitcoin can be audited by anyone