462 episodes

TEK2day Podcast: Technology, Capital Markets, Entrepreneurship, Leadership, Corporate Governance. Check out our content at TEK2day.com

TEK2day Podcast TEK2day

    • Technology
    • 5.0 • 7 Ratings

TEK2day Podcast: Technology, Capital Markets, Entrepreneurship, Leadership, Corporate Governance. Check out our content at TEK2day.com

    Ep. 446: A Full Bank Deposit Backstop Is Impossible

    Ep. 446: A Full Bank Deposit Backstop Is Impossible

    A Full Bank Deposit Backstop Is Impossible

    The Fed, Treasury and the FDIC are writing a check they can’t cash. Based on their rhetoric, the three Government organizations have implied that they will backstop all bank deposits. It would be impossible for this unholy triumvirate to do so given the tab could be north of $15 Trillion at the extreme.

    There were 563 U.S. bank failures from 2001 through 2023 (chart below). 465 of those banks failed between 2008-2012. Those 465 banks had combined assets of $689 Billion.

    2 U.S. banks have failed with combined assets of $319 Billion year-to-date (through March 14th). The asset destruction this time around will be far worse than the Great Financial Crisis of 2008, even if the Fed was to take rates to zero percent tomorrow.

    All FDIC banks had $19.2 Trillion of deposits (table below) with $12.0 Trillion of loans outstanding. This represents a loan-to-deposit ratio of 63% (as of 12/31/22). That is to say that at a minimum, 63% of deposits are not on hand. This obviously presents a problem should a majority of depositors wish to withdraw their money at the same time.

    However, the problem is even more serious. While 63% of all deposits were loaned out as of 12/31/22, that is not to say that the remaining 37% of deposits were on hand. No, that’s hardly the case. You can be certain that a significant portion of those deposits were deployed across various financial instruments, some of them long-term in nature.

    For example, Silicon Valley Bank (SVB), had a loan-to-deposit ratio of 43% at the time of its collapse as deposits not deployed as loans were deployed across other financial instruments (many of long duration). This duration mismatch created a liquidity crunch.
    If there was a full run on all FDIC banks, some number between $12.0 Trillion and $19.2 Trillion is deployed in the economy which would force the banks to generate liquidity by selling other assets. These actions would not cover the tab. Thus, the Fed, Treasury and the FDIC would be on the hook for more than half of U.S. GDP were it to provide a full deposit backstop. That’s not going to happen.

    Which banks are safe? The triumvirate could backstop J.P. Morgan, Bank of America, Wells Fargo and Citi, but not a full backstop if a bank run were to occur at all four banks simultaneously. To backstop 100% of deposits at all four banks simultaneously would be impossible as we are talking about $7.0 Trillion in deposits across the four banks (as of 12/31/2022), of which $3.8 Trillion have been extended as loans to say nothing of how the remaining $3.2 Trillion in deposits may be deployed.

    • 5 min
    Ep. 445: Running QT and QE Simultaneously

    Ep. 445: Running QT and QE Simultaneously

    The Fed's actions on Sunday night amounted to a Bail Out / QE as we stated in episode 444. The question is will the Fed slow or halt the pace of its QT program? If so, monetary policy will essentially be squarely back in a QE stance. No chance at getting CPI back down to 2% in the next several years if that were to happen.

    • 3 min
    Ep. 444: Bail Out

    Ep. 444: Bail Out

    Read our related TEK2day articles:

    1.) Bail Out: https://tek2day.com/2023/03/13/bail-out/

    2.) Powell’s Puzzle. Dimon A Winner. https://tek2day.com/2023/03/13/powells-puzzle-dimon-a-winner/

    3.) Venture Debt & SVB: https://tek2day.com/2023/03/11/venture-debt-svb/

    4.) Tough Month For Banks: https://tek2day.com/2023/03/10/tough-month-for-banks/

    5.) The Fed’s Balance Sheet Reduction (QT) Update: https://tek2day.com/2023/03/09/the-feds-balance-sheet-reduction-qt-update-22/

    • 5 min
    Ep. 443: The Looming U.S. Recession, Earnings & Stagflation

    Ep. 443: The Looming U.S. Recession, Earnings & Stagflation

    A general catch-up on the looming recession, Tech earnings, Stagflation and more. Buy a copy of our Amazon Kindle book here: https://www.amazon.com/Stagflation-Imminent-Jonathan-Maietta-ebook/dp/B091NB9V7M

    • 5 min
    Ep. 442: Fed, Fed, Fed Up

    Ep. 442: Fed, Fed, Fed Up

    A quick review of our recent TEK2day published written content. Learn more at TEK2day.com

    • 7 min
    Ep. 441: Insurers & Alternative Asset Investing with SS&C Technologies

    Ep. 441: Insurers & Alternative Asset Investing with SS&C Technologies

    Scott Kurland and Dan Pallone of SS&C Technologies (ticker: SSNC), joined the TEK2day Podcast to cover the insurance industry as it relates to insurance carriers investing in alternative asset classes in the pursuit of yield.

    We recently covered this topic in our TEK2day Spotlight report “THE EVOLVING INSURANCE INDUSTRY” which SS&C was kind enough to sponsor. SS&C recently published an e-book “10 CONSIDERATIONS THAT ‘LEND’ CREDIBILITY TO PRIVATE MARKET INVESTING”, that covers similar subject matter. Both the e-book and our spotlight report may be accessed below.

    Access the SS&C e-book here: https://www.ssctech.com/resources-insights/pdfs/10-considerations-private-market-investing

    Access the TEK2day Spotlight report here: https://tek2day.com/2021/07/29/tek2day-spotlight-the-evolving-insurance-industry/

    For more TEK2day content visit https://tek2day.com/
    For more on SS&C Technologies visit https://www.ssctech.com/

    The TEK2day Podcast is available across all popular podcast playing platforms including Apple and Spotify:

    Apple Podcasts: https://podcasts.apple.com/us/podcast/tek2day-podcast/id1270002408

    Spotify: https://open.spotify.com/show/3IybCrJs9ZPZTFPYlDg78b

    Check out our parent company – CEORater – where you may anonymously rate your company and CEO at CEORater.com

    Visit CEORater on LinkedIn: www.linkedin.com/company/ceorater

    • 19 min

Customer Reviews

5.0 out of 5
7 Ratings

7 Ratings

Bases loaded ,

Amazing coverage!

Really enjoy this podcast....a great selection of topics! Keep up the important and needed perspective!

jobhrai ,


Really great flow of interesting info. Fair perspective...

mermai ,

Highly Informative

I especially enjoyed the content related to Equifax and Uber. Especially the Board-related material which is not something I'm familiar with.

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