…on the other side, Nothing gets done, country falls apart, less policies and regulations, no gun restrictions, more orphans, richer politicians…mayhem ensues!
President Joseph Biden today signed an Executive Order stating that to decide the Republican Presidential Nomination;Donald Trump and Ron DeSantismust fight a duel “in the grand tradition of Aaron Burr and Alexander Hamilton”.
The duel will be declared over only when one or both of the participants are deceased.
President Biden state that this a far better example of culling the herd t han to attack innocent deer.
Well, now Al, this Biden scenario sure beats the Repub alternative of spending, inflation, tax hikes for the poor, tax breaks for the rich, and a million dead from the pandemic. And at least Biden’s buyout is to support the depositors, not the stockholders.
Actually, it is exactly what the 1st A is about -the right to criticize the government without fear of reprisal. That is something the left has forgotten. If they do not agree with it, the piece gets labeled disinformation and is therefore dangerous (to their version of the story).
Most of you are missing the point of the cartoon. The first domino is spending, of which the Biden Admin and congress have control. That first domino causes the other dominos to fall. Spending increases inflation which causes rate hikes which caused the demise of the 2 banks listed which promotes bailouts …For all of you that are trying to pin the blame on Trump for deregulating the smaller banks; you’re mistaken. Yes, he did ease some regulations in order to make the mid-sized banks more competitive with the “to big to fail” banks because they were slowly marginalizing the local and mid size banks. What he did not ease or eliminate is the responsibility of the regulators to keep watch on banks under their jurisdiction. These banks failed because the regulators failed to do their jobs. BTW, just so you know, Barney Frank (of Dodd-Frank fame) is/was on the board for SVB. Not that that makes a difference but he wasn’t aware of what the bank was doing either.
It’s easily arguable that the risk from massive spending dramatically increased inflation under Biden. Take for example the $1.9T inappropriately named American Rescue Plan. [PLINK, there goes a domino] Larry Summers, the former Treasury Secretary and economic advisor to Clinton and Obama warned us at the time of the impact on inflation even going so far as saying “I think this is the least responsible macroeconomic policy we’ve had in the last 40 years.” His prediction comes true. [PLINK, another domino]
So, to combat the resulting inflation, the Fed starts raising interest rates. [PLINK]
Now, with excess investment money coming into banks like SVB, SVB begins securing that money with low rate, long term treasury bonds, which are normally safe. This is seemingly a cautious move by SVB, until you realize that rates are likely to rise because of rate hikes (go figure) thereby making those tens of billions in treasury bonds worth less since new bonds are carrying a higher rate. SVB may have overlooked this risk because of pro-woke priorities instead of risk assessment for the sake of earnings. [PLINK]
Since the printing presses have slowed, investors realize that they more need more cash, they go to SVD to retrieve their money. [PLINK]
Enough of these runs on SVB and the bank doesn’t have the available cash to cover the withdrawal without selling bonds for a loss. When withdrawals reach the brink for SVB, it’s bye-bye SVB. [PLINK]
Then bye-bye Signature Bank. [PLINK]
Next is the decision on bailouts. How far will they go? Remember too-big-to-fail?
The only remaining question is, when the last domino falls, will it simply go plink or will it be much much louder?
Al wants everyone to forget how Trump presided over the biggest deficit increase we’ve seen (so far). Trump railed at the Fed for being too cautious about raising interest rates in 2015-2016. As soon as he was the guy responsible for stoking the economy, he started railing at the Fed for increasing interest rates too fast.
I can’t figure out why SVB didn’t see interest rate hikes as nearly inevitable 2 years ago. The economy was roaring back from the pandemic. I chalk it up to tech bro hubris & growing faster than they could manage the money. When you’ve convinced yourself you’re the smartest person in the room, you’re vulnerable.
Concentrating way too much of their clientele in one sector & the fact that all their biggest customers are literally on the same group chat was the immediate cause. Once a few started doubting SVB’s position, they sparked a run on their own bank & ensured its demise. Few banks look like SVB.
Would SVB have failed if they hadn’t hired a bunch of former Kevin McCarthy staffers to lobby against regulations? No one can answer for sure, but it certainly didn’t help.
I understand the bank executives gave themselves huge bonuses just before the collapse. I say, let them go ahead. And tax those bonuses at the rate of 120%.
Grandma Lea about 1 year ago
Idiot trying to keep up with trumps spending and banking deregulation
DC Swamp about 1 year ago
Add a domino for the half trillion in college loan forgiveness, i.e. The College Student Vote Buying Act.
brit-ed about 1 year ago
You already blamed the train wreck on Pete even through Tr*mp deregulated safety now your blaming Biden for Tr*mp’s deregulation of the banks!
aristoclesplato9 about 1 year ago
Now watch all the loons on the left try to deny what we all know is the truth. They simply want you to believe it’s all Trump’s fault.
walfishj about 1 year ago
Only fools like Goodwyn underestimate the president.
scote1379 Premium Member about 1 year ago
Banking Deregulation =Piracy + Financial Bank failure , happens just about every time pols deregulate financial
The Nodding Head about 1 year ago
Original Domino Theory: if Vietnam fell to Communism, eventually so would all of Asia.
Zebrastripes about 1 year ago
…on the other side, Nothing gets done, country falls apart, less policies and regulations, no gun restrictions, more orphans, richer politicians…mayhem ensues!
198.23.5.11 about 1 year ago
President Joseph Biden today signed an Executive Order stating that to decide the Republican Presidential Nomination;Donald Trump and Ron DeSantismust fight a duel “in the grand tradition of Aaron Burr and Alexander Hamilton”.
The duel will be declared over only when one or both of the participants are deceased.
President Biden state that this a far better example of culling the herd t han to attack innocent deer.
Jack7528 about 1 year ago
More spending cause it worked so good all those times before.
preacherman about 1 year ago
Well, now Al, this Biden scenario sure beats the Repub alternative of spending, inflation, tax hikes for the poor, tax breaks for the rich, and a million dead from the pandemic. And at least Biden’s buyout is to support the depositors, not the stockholders.
Jack Dawson about 1 year ago
Actually, it is exactly what the 1st A is about -the right to criticize the government without fear of reprisal. That is something the left has forgotten. If they do not agree with it, the piece gets labeled disinformation and is therefore dangerous (to their version of the story).
lawguy05 about 1 year ago
Our once great nation is in peril.
Stonehouses3 about 1 year ago
Most of you are missing the point of the cartoon. The first domino is spending, of which the Biden Admin and congress have control. That first domino causes the other dominos to fall. Spending increases inflation which causes rate hikes which caused the demise of the 2 banks listed which promotes bailouts …For all of you that are trying to pin the blame on Trump for deregulating the smaller banks; you’re mistaken. Yes, he did ease some regulations in order to make the mid-sized banks more competitive with the “to big to fail” banks because they were slowly marginalizing the local and mid size banks. What he did not ease or eliminate is the responsibility of the regulators to keep watch on banks under their jurisdiction. These banks failed because the regulators failed to do their jobs. BTW, just so you know, Barney Frank (of Dodd-Frank fame) is/was on the board for SVB. Not that that makes a difference but he wasn’t aware of what the bank was doing either.
Al Goodwyn creator about 1 year ago
It’s easily arguable that the risk from massive spending dramatically increased inflation under Biden. Take for example the $1.9T inappropriately named American Rescue Plan. [PLINK, there goes a domino] Larry Summers, the former Treasury Secretary and economic advisor to Clinton and Obama warned us at the time of the impact on inflation even going so far as saying “I think this is the least responsible macroeconomic policy we’ve had in the last 40 years.” His prediction comes true. [PLINK, another domino]
So, to combat the resulting inflation, the Fed starts raising interest rates. [PLINK]
Now, with excess investment money coming into banks like SVB, SVB begins securing that money with low rate, long term treasury bonds, which are normally safe. This is seemingly a cautious move by SVB, until you realize that rates are likely to rise because of rate hikes (go figure) thereby making those tens of billions in treasury bonds worth less since new bonds are carrying a higher rate. SVB may have overlooked this risk because of pro-woke priorities instead of risk assessment for the sake of earnings. [PLINK]
Since the printing presses have slowed, investors realize that they more need more cash, they go to SVD to retrieve their money. [PLINK]
Enough of these runs on SVB and the bank doesn’t have the available cash to cover the withdrawal without selling bonds for a loss. When withdrawals reach the brink for SVB, it’s bye-bye SVB. [PLINK]
Then bye-bye Signature Bank. [PLINK]
Next is the decision on bailouts. How far will they go? Remember too-big-to-fail?
The only remaining question is, when the last domino falls, will it simply go plink or will it be much much louder?
Uncle Joe Premium Member about 1 year ago
Al wants everyone to forget how Trump presided over the biggest deficit increase we’ve seen (so far). Trump railed at the Fed for being too cautious about raising interest rates in 2015-2016. As soon as he was the guy responsible for stoking the economy, he started railing at the Fed for increasing interest rates too fast.
I can’t figure out why SVB didn’t see interest rate hikes as nearly inevitable 2 years ago. The economy was roaring back from the pandemic. I chalk it up to tech bro hubris & growing faster than they could manage the money. When you’ve convinced yourself you’re the smartest person in the room, you’re vulnerable.
Concentrating way too much of their clientele in one sector & the fact that all their biggest customers are literally on the same group chat was the immediate cause. Once a few started doubting SVB’s position, they sparked a run on their own bank & ensured its demise. Few banks look like SVB.
Would SVB have failed if they hadn’t hired a bunch of former Kevin McCarthy staffers to lobby against regulations? No one can answer for sure, but it certainly didn’t help.
bjensen6 about 1 year ago
Simplistic explanation leaving out the fact Thrump removed the safety valves that allowed this to happen.
Rich Douglas about 1 year ago
If you want to cut spending, where? If you don’t, why not raise taxes?
Teto85 Premium Member about 1 year ago
With all the supply chain problems still aroud it’s good to see that Al is able to get his two bowls of stupid for breakfast everyday.
TCA1799 Premium Member about 1 year ago
I gather that you and Al advocate for the start of a depression for the 21st century.
LC64 about 1 year ago
I understand the bank executives gave themselves huge bonuses just before the collapse. I say, let them go ahead. And tax those bonuses at the rate of 120%.
apfelzra Premium Member about 1 year ago
Except that Signature Bank had invested heavily in cryptocurrency. Or does that not jibe with your economics lesson?