Can the coverage about possible contagion create the contagion?
Stories this week about Silicon Valley Bank and two others tread that fine line.
Watch the nonchalant role that the cable networks play in accelerating the very “worry” they report on regarding the stability of the banking industry. Does anyone in charge in the newsroom consider perhaps because that the banner across the screen harping on a $42 billion “bank run” that was caused primarily by SVB self-reporting of weak bond values could literally create another one, this time larger and more devastating?
The dismantling of Dodd-Frank rules in 2018 has allowed a return to risky behavior by some banks, with investments in digital currency and other speculation. Less discipline regarding assets-to-credit ratios are the usual culprit. That’s news and has to be reported.
Rarely though is the lead of the story reflecting that your accounts are likely just fine. It’s as if the national media is titillated with the notion that the country’s entire banking base might just come looking for its cash in a short period of time because it saw on TV that there’s a race to the branch’s front door, creating a self-fulfilling prophecy.
Washington has moved quickly in this current mini crisis, making all deposits whole, even above the $250,000 threshold. However, investors in the two banks, unlike in 2008, are out of luck. The gamble didn’t work out. It seems like the right approach.
A momentary silver lining may be that the Fed is now signaling an ease on banking operations, lessening or postponing the next interest rate increase. The stock market will like that. But with inflation barely slowing, a rocky road remains ahead of us.
A tempered news business would help.
Two types will pursue Cicilline’s seat
There are only two types of folks likely to make a run at the first congressional district seat being vacated by David Cicilline, who announced his pending resignation a few weeks ago to take the lead position with the Rhode Island Foundation.
First is the independently wealthy, such perhaps another campaign from former CVS executive Helen Foulkes, who fell short in a 2022 run for governor.
Second is the already elected community.
Any current officeholder who takes a shot really has nothing to lose. If you win, you leave your current gig and you move on to Washington. You lose, you stay where you are.
First to announce is Lt. Gov. Sabina Matos. She was informally paired with Gov. Dan McKee just months ago in the 2022 election, telling us she would be empowered to do big things with the office.
Now she says she can’t wait to get to congress.
We could soon hear from House Speaker Joe Shekarchi and Pawtucket Mayor Don Grebien.
They’re both very good at their current jobs, and should they fail to secure the congressional seat, they’ll go right back to doing them.
Pretty good racket, huh?
So, unless you have unlimited money or can take a free ride from your current taxpayer salaried position, you’re likely not going to be able to compete.
There’s no law against it.
But if more people expressed disgust over the scheme, maybe one of the candidates would at least find it the right and marketable thing to do at least forego or reduce their current compensation while running.
It’s bad enough that Cicilline jumped ship and will cost us plenty to run an expensive and ill-timed late 2023 special election with a narrow candidate field.
When it comes to current officeholders, we shouldn’t have to also fund their political flyers.
Dan Yorke is the PM Drive Host on 99.7/AM 630 WPRO, Dan Yorke State of Mind weekends on Fox Providence/WPRI 12 and owns communications/crisis consulting firm DYCOMM LLC.
Very mature……name calling. Are you people 12 years old?
Oh Derrick....just blame Trump like the Dems always due rather than looking inward. If you really think Yellen and the SF Fed weren't asleep at the wheel then you are lying or just an MSDNC parrot. So many Red Flags and basic principles were not followed. It wasn't if, but when.
What law should Ms Yellen have used?
Regulations are there for a reason. Everyone is quick to cry about them as ‘barriers to progress’. Instead, they are excuses to profiteer and always end with those who ‘don’t want big government’ being the first in line with their paws out. The good news is most of the cash is tied up in long term bonds, but we need to demand the feckless executives who destroyed their businesses with greed should have to return all bonuses and be held criminally responsible.
If Yellen would have woken up and done her job vs. trying to push her wacky woke agendas this might have been avoided (of course the bank messed up royally by ignoring basic principles). It's funny how the far left will also blame Trump for this.
Tell me, RedTrickle, which administration was it that rolled back the Dodd-Frank regulations applicable to regional banks and thus allowed SVB to engage in the behavior which led to its failure? While you're at it, could you define the "woke agenda" being "pushed" by the Treasury Department?
Wow, you listen to KJP so much you probably know the blame they put on Trump for the Dodd-Frank. Another left Trump blaming point from 5 years ago.
Google Yellen and it's easy to see what woke agendas she pushes (climate agenda is leading her funding. Beijing Biden watched silently as SVB gave 75 million to BLM as it was failing.
So even though Redwave is utterly incapable of defining his narrative, unsurprisingly he is perfectly capable with utilizing today's standard of conservative communication, Misinformation, rhetoric, projection, deflection, accusations without evidence, and a shocking lack of context that results in most of his comments amounting to some strange form of rambling, disjointed word salad.
Mr RedPuddle, we have regulations for a reason. Don’t blame Ms Yellen when you and Tucker know who really is at fault.
Yell and the San Fran Head of the Fed knew about SVB issues a year ago and did nothing. This is 100% Biden and Yellen fault
Issues are not prognostication, Mr Puddle. They initiated an investigation which is due out in May. We should regulate banks more to prevent theses issues in the future, as opposed to deregulation which relies on the company self policing. It never ends well.
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