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A Consistent Set Of Politics Based On The Ideology Of Home Ownership, Encouraging Us All To Buy As Strategic, Calculating Mini-Capitalists

A weekend topic starting with WBUR in Massachusetts. “The great unwinding of Silicon Valley Bank’s ambitions has a special sting in Boston, where the failed bank’s parent had vacuumed up two local institutions in recent years, part of its bid to build an empire serving the tech sector. On Friday, the bank’s parent, SVB Financial Group of Santa Clara, California, filed for Chapter 11 Bankruptcy protection, while it tries to sell off its parts.”

“Two other banks also failed last week, and a third, First Republic Bank, this week received an infusion of deposits from a group of the nation’s largest banks. The deal was meant to stop speculation that it too was vulnerable to a collapse. Cornelius Hurley, a former bank regulator who teaches financial services law at Boston University’s School of Law, says the Federal Reserve should have seen the trouble coming at SVB. In all these cases, the banks were receiving large infusions of cash from the Federal Home Loan Bank system, which should have been a clue to the trouble to come, Hurley said, adding, ‘It’s a mess.'”

The Washington Post. “Aaron Klein, a former top official at the Treasury Department, said the Fed and its regional bank in San Francisco should have spotted a number of ‘massive red flags.’ That included the ‘explosive growth’ at SVB, its high degree of uninsured deposits and its effort, months before it failed, to borrow money against its investment holdings — a move meant to create liquidity that it could return to depositors seeking withdrawals — from the Federal Home Loan Bank of San Francisco.”

“By the end of last year, SVB was the biggest borrower at what is seen as a lender of next-to-last resort. U.S. officials and Wall Street banks had to rescue the second-largest borrower there, First Republic Bank, on Thursday, with larger institutions placing $30 billion on deposit there to ease concerns.”

“Instead, Klein said there is no evidence that the Fed ever intervened in SVB’s case. ‘You have a lot of authority to slow the institution’s growth,’ Klein said. ‘How the Fed supervised them seems to be under greater lock and key than Area 51,’ the secretive U.S. military base some believe is where the government stores evidence of alien spacecraft.”

The Real Deal. “Signature Bank’s real estate lending didn’t lead to its failure, but its book of loans may be a cause for concern as the FDIC looks to sell the shuttered institution. Signature was one of the largest lenders to rent-stabilized buildings, which have seen their values drop since New York state lawmakers passed reforms in 2019 limiting rent increases. The legislation drastically reduced the amount of money that lenders could make from these loans — and increased the risk of delinquency.”

“‘Loans that were taken out through the end of 2018 were at peak valuations. Values are down 25 to 55 percent since then,’ said Michael Weiser, president of GFI Realty Services, a brokerage that represents many landlords who borrowed from Signature. ‘I’d venture to say there are a fair amount of problems there,’ he added.”

Curbed New York. “The crypto crash and a bank run might have been the straws that broke Signature’s back, but its reliance on predatory multifamily loans might have eventually pulled the bank down, speculated Will Spisak, a senior program associate at New Economy. ‘These models are unsustainable.’ What made the math even more unsustainable was the 2019 rent-stabilization reform — which made it harder for landlords to convert their rent-stabilized units to market-rate ones. These loans were also a problem for Signature in the long term because they almost guaranteed that landlords were putting less money into the building itself (a common tactic for getting existing tenants out, by not making repairs or improving the building), which potentially made it harder to sell later.”

“One landlord who banked with Signature, Sugar Hill Capital, has already gone into default earlier this month on 50 buildings, most of which are rent stabilized. ‘The finances still are not working,’ Spisak said.”

“Within 24 hours of the FDIC’s takeover, Barika Williams, executive director of the Association for Neighborhood and Housing Development, which led campaigns against these loan practices, put out a statement on behalf of the organization calling Signature’s collapse ‘no surprise.’ ‘Their multifamily lending was a huge problem and built on this very unstable house of cards and predatory practices,’ said Williams. ‘The things we were flagging are things the regulators could have more deeply scrutinized or required them to take more steps to fix.'”

The New York Post on California. “As San Francisco commercial occupancy reached an all-time low in the last couple years amid the pandemic, a new reality has set in for Silicon Valley. Major tech players are looking to sell their expansive corporate campuses in the area, or reconsidering new developments. Approximately 21% of SVB’s commercial loans were for office properties. Investors are still assessing the bank’s takeover by federal regulators, which left its $2.6 billion commercial loan portfolio in a brief limbo.”

“Luxury condo prices in the heart of downtown San Francisco have plummeted as well, as drug abuse and crime have spiraled out control — and as many techies continue to work remotely. The median sale price of a two-bedroom condo, for example, has fallen nearly 20% since 2021, while sale prices in surrounding areas have slipped only 7%.”

From Newsweek. “The collapse of Silicon Valley Bank (SVB) is likely to shake up one of the country’s most expensive housing markets, experts say—California. Sales in California have dropped significantly in the past year, having plunged 42.8 percent in January from January 2022. California has also seen some of the steepest home price drops in the country since mid-2022, when most experts announced that the U.S. housing market was moving towards a significant correction after over two years of boom.”

“In the Bay Area, Oscar Wei, deputy chief economist at the California Association of Realtors said that home prices have been dropping a little faster compared to other areas in Southern California or the Central Valley, ‘and that’s partly because of the tech stocks’ impact.’ In January, the median sale price in the Bay Area was $1 million, down 35 percent from the peak of $1.54 million in April 2022, according to the California Association of Realtors.”

The Globe and Mail. “With everyone on edge, one saving grace is that global banking watchdogs have forced systemically important banks to beef up their capital reserves – that is, cash and other liquid securities that serve as buffers when things go bad. Canada’s banking watchdog, the Office of the Superintendent of Financial Institutions, has been at the forefront of this effort, and Canada’s banks are praised globally for their stability and risk management.”

“But those buffers could now be tested. ‘We don’t know yet whether the consequences of easy money and regulatory changes will cascade throughout the US regional banking sector … with more seizures and shutdowns coming,’ BlackRock chief executive Larry Fink wrote Wednesday in his annual public letter. He described Silicon Valley Bank’s collapse as the ‘price we’re paying for decades of easy money.'”

Better Dwelling. “The world’s largest alternative asset manager looks a little strapped for cash. Blackstone made headlines over the past few years for its real estate shopping spree. Deploying what seemed like unlimited capital, it bought everything in sight. Heck, they probably even outbid you for grandma’s home. That’s come to an abrupt end, as it defaults on hundreds of millions of its commercial mortgage-backed securities (CMBS), sending over $1 billion in mortgage debt into special servicing.”

“After the GFC, the CMBS market was mostly stagnant. That changed in 2020, when the low rate boom hit. Everyone and their uncle wanted more real estate exposure, so a market was made. By 2021, CMBS issuance returned to the highest level since 2007. Don’t worry, it’s different this time. Until it isn’t, but moving on… in short, it’s a funding vehicle for real estate. Blackstone is a classic case of excess leverage meeting the end of stimmy. It consumed as much leverage as it could, as quickly as it could while assuming it would never end.”

The Guardian. “The most up-to-date indicators suggest house prices have dropped year-on-year by 6%, and the central bank De Nederlandsche Bank (DNB), Rabobank and the IMF predict falls to come, but not enough to correct the recent, extreme price rises. The Dutch economist Mathijs Bouman says that although the housing market has previously seen “hysterical” fluctuations, things got out of hand during the pandemic when mortgages dropped to about 1% as central banks lowered interest to stimulate the economy.”

“‘In the last 30 years, there has been a consistent set of politics based on the ideology of home ownership, encouraging us all to buy as strategic, calculating mini-capitalists,’ says Dr Cody Hochstenbach, an urban geographer at the University of Amsterdam. ‘People are encouraged, hounded even, to borrow as much as they can. The result is to drive up prices and increase the risks, locking people in homes if prices fall because they cannot sell without leaving a debt.'”

Radio New Zealand. “The Reserve Bank and the Minister of Finance have been attacked over monetary policy and inflation by the free market think tank, the New Zealand Initiative. In a report, Made by Government: New Zealand’s Monetary Policy Mess, senior research fellow Bryce Wilkinson has renewed criticism of the RBNZ’s handling of monetary policy before and during the pandemic, which left interest rates too low for too long resulting in inflation getting out of control, and stimulating the economy triggering the housing boom.”

“The paper said the RBNZ and many other central banks around the world were too confident about their policy frameworks, their economic models, did not pay close enough attention to keeping inflation in check, and then acted too late to correct their mistakes. ‘New Zealand’s recent monetary policy outcomes are worse than unsatisfactory,’ Wilkinson wrote. ‘They include whiplashing house price volatility, consumer price inflation far above the RBNZ’s 1-3 percent target range, and a $9 billion loss on the Reserve Bank’s large-scale asset purchase programme (bond buying).'”

“He said as a result the RBNZ had lost credibility as an inflation targeting institution, and had become partly politicised through the way it was being managed by the Minister. It made little difference that the RBNZ was in the same camp and had made the same mistakes as other central banks around the world. ‘The outcomes for New Zealanders count, and the inflation and fiscal cost outcomes were poor.'”

From Mises.org. “So, sales have fallen and, at least according to Redfin, prices are falling too. This is what we should expect to see in any environment where the real estate market is not being incessantly fueled by easy money from the central bank. After all, easy money for real estate markets had been the main story since 2009. In recent months, however, the Fed has allowed interest rates to rise while pausing efforts to add more mortgage-backed securities (MBS) to the Fed’s portfolio.”

“Without those key supports from policymakers, the real estate market simply lacks the market demand that is necessary to sustain rapid growth. Contrary to what countless mortgage brokers and real estate agents tell themselves and each other, there is precious little capitalism in real estate markets. It is a market that is thoroughly addicted to, and dependent on, continued stimulus and subsidization from the central bank.”

“It’s now been more than a decade since we had any idea what real estate prices actually would be without enormous amounts of stimulus from the Fed. The money-printing-for-mortgages scheme entered its first phase throughout 2009 and 2010, and then was almost non-stop from 2013 to 2022, topping out around $1.7 trillion in 2018. The Fed had begun to pull back on its MBS assets in 2018 and 2019, but of course reversed course in 2020 and engaged in a frenzy of new MBS buying. In that period the Fed purchased an additional $1.4 trillion in MBS.”

“For now, though, the investor class remains relatively optimistic. Marcus Millichap CEO Hessam Nadji was on Fox Business last week flogging the now well-worn narrative that we should expect a ‘small recession,” but Nadji did not even entertain the idea that there might be sizable layoffs. Instead, he suggested that there is now a mere temporary softening of demand, and that will reverse itself once the Fed reverses course and embraces easy money again. In other words, the Fed will time everything perfectly, and it will be a ‘soft landing.'”

“This well captures the attitude of the ‘capitalists’ heading the real estate industry right now. It’s all about the Fed. Without the Fed’s easy money, demand is down. Once the Fed pivots back to forcing down interest rates and buying up more MBS, well then happy times are here again. Gone is any discussion of worker productivity, savings, or other fundamentals that would drive demand in a areal capitalist market. All that matters now is a return to easy money. The real estate industry will get increasingly desperate for it. In 2023, it’s become the very foundation of their ‘market.'”  

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This Post Has 133 Comments

  2. ‘Klein said there is no evidence that the Fed ever intervened in SVB’s case. ‘You have a lot of authority to slow the institution’s growth,’ Klein said. ‘How the Fed supervised them seems to be under greater lock and key than Area 51’

    Is this a great country or what?

    1. They intervened the very weekend problems at SVB surfaced, while blithely ignoring year after year of early warning signs.

      1. The government caused these problems, with temporary low interest rates, subsidized lending, rent controls and covid measures, yet the government should have also prevented the outcomes of their actions.

        1. “…yet the government should have also prevented the outcomes of their actions.”

          Sharon Stone would likely concur.

  3. ‘In January, the median sale price in the Bay Area was $1 million, down 35 percent from the peak of $1.54 million in April 2022′

    ‘Loans that were taken out through the end of 2018 were at peak valuations. Values are down 25 to 55 percent since then,’ said Michael Weiser, president of GFI Realty Services, a brokerage that represents many landlords who borrowed from Signature. ‘I’d venture to say there are a fair amount of problems there’

    This seems to be a bigger problem than bank MBS a$$poundings. And what’s up with the FHLB borrowing?

    ‘In all these cases, the banks were receiving large infusions of cash from the Federal Home Loan Bank system’

    1. The Bank had a high concentration of advances and capital with certain institutions and their affiliates. Advances outstanding to the Bank’s top 10 borrowers and their affiliates increased by $53.2 billion to $63.9 billion, or 71% of total advances outstanding at December 31, 2022, from $10.7 billion, or 63% of total advances outstanding at December 31, 2021. (See “Item 8. Financial Statements and Supplementary Data – Note 5 – Advances – Concentration Risk” for further information.) Silicon Valley Bank is the Bank’s largest borrower and held $15.0 billion, or 17% of the Bank’s advances outstanding at December 31, 2022. Silicon Valley Bank had no advances outstanding at December 31, 2021.

      https://www.sec.gov/ix?doc=/Archives/edgar/data/1316944/000131694423000047/fhlbsf-20221231.htm

    1. But I’ll tell you

      [Chorus]
      So if you’re down on your luck
      And you can’t harmonize
      Find a girl with far away eyes
      And if you’re downright disgusted
      And life ain’t worth a dime
      Get a girl with far away eyes

      Far Away Eyes
      The Rolling Stones

    2. Highly doubt it. Globalists have infiltrated almost every government. Their New World Order agenda is almost complete. Why do you think Trump and Putin are so maligned?

  5. Russia Today — US the greatest threat to Western civilization – Trump (3/17/2023):

    “Former US President Donald Trump slammed “globalists” and the American neoconservative establishment in a video posted to his social media accounts on Thursday, declaring that the US and “some of the horrible, USA-hating people that represent us” are the “greatest threat to Western civilization today.”

    “These globalists want to squander all of America’s strength, blood and treasure, chasing monsters and phantoms overseas while keeping us distracted from the havoc they’re creating right here at home,” the 2024 presidential candidate explained.

    Trump warned that the Biden administration has brought the world closer to the brink of nuclear catastrophe than ever before by pouring money and weapons into Ukraine. “Every day this proxy battle continues, we risk global war,” he said, arguing that a “total cessation of hostilities” should be the “central issue” for the nation.

    He reassured his supporters that he is ready to dismantle “the entire globalist neocon establishment that is perpetually dragging us into endless wars pretending to fight for freedom and democracy abroad while they turn us into a third world country, and a third world dictatorship, here at home.”

    https://www.rt.com/news/573162-trump-neocons-globalists-danger-civilization/

        1. I’d like to hear how he would/could dismantle the Globalists. Just wondering.

          Whatever it is, we should all be working on it now.

          1. “we should all be working on it”

            Stop giving them money.

            DO NOT PAY INTEREST TO BANKS. Don’t borrow money, don’t participate in usury.

            Debt is slavery.

          3. Exposing them as the cannibalistic satanic pedophiles that they are?

            I hate to say it, but I think most people would just shrug.

          4. For those not familiar, I suggest researching the regional and historical significance of Ukraine.

    3. “He reassured his supporters that he is ready to dismantle “the entire globalist neocon establishment that is perpetually dragging us into endless wars pretending to fight for freedom and democracy abroad while they turn us into a third world country, and a third world dictatorship, here at home.”

      I’d like to believe this, but he promises one thing, and does exactly the opposite, e.g., “President Trump formally recognized Jerusalem as the capital of Israel and announced a plan to move the U.S. Embassy from Tel Aviv to the fiercely contested city.”

          1. I am scratching my head here. What does moving US Consulate to Jerusalem after recognizing Jerusalem as the capitol of Israel have to do with your statement and “drain the swamp”? As I recall Trump supported this action in his election campaign.
            Just wondering.

          2. What does moving US Consulate to Jerusalem after recognizing Jerusalem as the capitol of Israel have to do with your statement and “drain the swamp”?

            Based on his past comments: a particular religious group.

      2. A lamentable move by DJT to shore up the “Earth is 6,000 years old” voter base.

        This issue is bigger than, goes beyond, Orange Man Bad, and it’s something that will get sorted out in the coming national divorce.

        Iran can turn that desert sh*thole into a sheet of glass, it’s of zero national interest, and provides zero benefit to America.

  6. “…its effort, months before it failed, to borrow money against its investment holdings — a move meant to create liquidity that it could return to depositors seeking withdrawals — from the Federal Home Loan Bank of San Francisco.”

    Somehow this scheme brings to mind Alameda Research using crypto investments parked at FTX to finance high risk gambling activities. I’d be interested to learn more about SVB’s connection to the Federal Home Loan Bank of San Francisco. These recent bank failures have REAL ESTATE BUBBLE COLLAPSE written all over them.

    1. ftx fallout Mar. 16, 2023
      Sam Bankman-Fried Got $2 Billion in Loans From His Own Company
      By Matt Stieb, Intelligencer staff writer
      Photo: Stephanie Keith/Bloomberg via Getty Images

      In news big enough that it was announced close to midnight on Wednesday, liquidators at FTX, who are responsible for figuring out where the company’s money went, said that founder Sam Bankman-Fried had received $2.2 billion in “loans and payments” while he was allegedly running a massive fraud at the crypto exchange.

      According to FTX’s bankruptcy court filing, Bankman-Fried got more than $2 billion in loans — primarily through Alameda Research, the hedge fund he founded that lost big on bad investments, then misused customer deposits from FTX accounts in an attempt to cover those losses.
      …
      https://nymag.com/intelligencer/2023/03/sam-bankman-fried-gave-himself-usd2-billion-of-company-money.html

    1. “Got robbed. Again,” Lah wrote. “[CNN producer Jason Kravarik] & I were at city hall in San Francisco to do an interview for @CNN. We had security to watch our rental car + crew car. Thieves did this in under 4 seconds. Security stopped the jerks from stealing other bags. But seriously- this is ridiculous.”

      Even libtards are getting fed up with the lawlessness.

  9. This will turn out to be a good…

    Then I lost my job and the tennants stopped paying 2 years from now.

    Real estate experts offer possible solutions in tackling housing market obstacles

    Sooji Nam
    Mar 17, 2023

    “We have two kids now and two dogs, and it’s just a little too small,” Andrew Seifter, a home buyer, told WPBF 25 News.

    He then decided to meet up with Jeff Lichtenstein, of Echo Fine Properties, to come up with a solution.

    “Keep that as an investment property, and instead of buying their dream house, this 3,000-square-foot house, get a 2,000-square-foot house that’s much less money. And then when rates cool down, then maybe they sell their investment house, then they make their jump to another home,” the president and broker of Echo Fine Properties told WPBF 25 News.

    Seifter said he now plans to rent out his first home.

    “Maybe down the line when the real estate market cools off, then, we finally make that jump to the dream house we thought we were going to get,” he said.

    https://www.newsbreak.com/palm-beach-county-fl/2961323231874-real-estate-experts-offer-possible-solutions-in-tackling-housing-market-obstacles

    1. 4 people and 2 dogs in 3000 sq ft and its small. Entitlement to the max.
      How about 1500 sq ft 5 people a cat, but we had a nice yard and a full cellar to play in.

  10. Cornelius Hurley, a former bank regulator who teaches financial services law at Boston University’s School of Law, says the Federal Reserve should have seen the trouble coming at SVB.

    Is this guy a stand-up comedian?

  12. How many months has it been now since FTX collapsed? About four or so?

    The magnitude 8.0+ quake last week in the globally interconnected banking system and its aftershocks should help erase any remaining memory of what transpired last fall at FTX.

    1. Axios Homepage
      Updated 2 mins ago – Economy & Business
      Banks brace more drama with SVB, Credit Suisse up in the air
      Pete Gannon
      Illustration of a hand holding a bank building.
      Illustration: Gabriella Turrisi/Axios

      The banking sector is poised to head into a third week of existential questions and whipsaw volatility, despite official efforts to stabilize markets and reassure depositors.

      Meanwhile, the search for causes, lessons, and blame is already well underway.

      What we’re watching: The fate of Silicon Valley Bank, whose financial fault lines spurred the recent banking earthquake, is still up in the air.

      – Its former parent filed for bankruptcy protection Friday. The commercial bank — which was taken over by the U.S. government last week — is not included in that process.
      – A second effort to sell the now FDIC-owned bank is underway, after the regulator was unable to find a buyer last weekend.

      Separately, UBS is said to be exploring a deal for all or part of embattled rival Credit Suisse, under the urging of the Swiss National Bank and the country’s financial regulator, the FT reports.

      – A separate report by the publication said BlackRock was evaluating options for a rival bid, which the U.S. firm denied.
      – Credit Suisse failed to find a bottom for its shares Friday, two days after securing its own $50 billion lifeline from the Swiss National Bank. The stock fell another 8% Friday in Europe.

      And First Republic Bank investors are running…again. Shares were buoyed on Thursday by news of a $30 billion lifeline. But hours later it announced it was suspending its dividend. The stock cratered another 32% Friday.
      …
      https://www.axios.com/2023/03/17/svb-banking-drama-credit-suisse

    2. The crypto ‘contagion’ that helped bring down SVB
      The lender’s lightning collapse is testing the claim that traditional finance is perfectly insulated from volatile crypto markets.
      Silicon Valley Bank Shut Down By Regulators
      SVB had no direct link to FTX, but was not immune to the broader contagion | Justin Sullivan/Getty Images
      By Bjarke Smith-Meyer
      March 14, 2023 6:19 pm CET
      5 minutes read

      As U.S. banking regulators begin their post-mortem of Silicon Valley Bank, some pundits are pointing the finger at crypto markets, whose own collapse over the past year left the tech-focused lender hopelessly exposed.

      The conventional wisdom about crypto is that it’s “self-referential” — a separate universe to conventional finance — and that its inherent volatility can be contained. The emerging “contagion” theory is that there are enough linkages for extreme turmoil to spill over, much as a virus can sometimes jump from one species to another.

      That’s what happened here, according to Barney Frank, the former U.S. congressman who wrote sweeping new banking rules after the banking crisis in 2008, and joined the crypto-friendly Signature Bank as a board member in 2015.

      “I think, if it hadn’t been for FTX and the extreme nervousness about crypto, that this wouldn’t have happened,” Frank told POLITICO this week. “That wasn’t something that could have been anticipated by regulators.”
      …
      https://www.politico.eu/article/crypto-help-bring-down-svb-silicon-valley-bank-ftx/

      1. a separate universe…spill over, much as a virus can sometimes jump from one species to another.

        More like matter and antimatter. Spillover is not like catching a cold.

      2. Well he’s not wrong. It is not the job of a regulator to anticipate problems with something that they aren’t actually regulating. 🙂

    3. should help erase any remaining memory of what transpired last fall at FTX

      They’re gonna need a bigger memory hole.

    1. One third of Meta’e employees are being shown the door. Few have marketable skills, but many have lots and lots of debt.

      2. “Few have marketable skills”

        Perfect opportunity to name check Yoel Roth.

        Where are you, Yoel Roth? WHERE ARE YOU?

        See also: newest batch of Twitter files, linked above.

      3. I would like to know how many of them own AirBNB property. I would be willing to bet that it is a fairly significant number. They had to fill their time there doing something, why not run some AirBNBs? I have a feeling thousands of vacation homes are going to go into default between all the different tech layoffs. A trickle at first, then a flood.

  14. The Atlantic — You Can’t Define Woke (3/17/2023):

    “The word is not a viable descriptor for anyone who is critical of the many serious excesses of the left yet remains invested in reaching beyond their own echo chamber.

    Put simply, social-justice-movement insiders have different associations and uses for the word than do those outside these progressive circles. Before you can attempt to define what “wokeness” is, you should acknowledge this basic fact. Going further, you should acknowledge that as with cancel culture, critical race theory, and even structural racism, the contested nature of the term imposes a preemptive barrier to productive disagreement.”

    We don’t want a productive disagreement. We want a national divorce.

    “The word is more confusing than useful, and we should make good-faith efforts to avoid using it.

    I remain convinced that one should never rely on language one cannot hope to control or even fully explain.”

    ^This right here, “hope to control” = SHUT. IT. DOWN.

    “the critics of the social-justice ideologues the term denotes came to rely on their own esoteric jargon. Now they can barely communicate what, precisely, they find problematic about “wokeness” and wish to correct. Hence, they end up using this word as an epithet to refer—vaguely—to seemingly anything changing in the culture that they don’t like.”

    https://archive.is/3OTk6

    Can’t define woke? President Trump did in five words (0m33s):

    https://www.bitchute.com/video/hVqoWfI1r4ZS/

    1. I’m pretty sure the left starting calling themselves “woke” as a badge of honor, and now that it’s turned into an apt label for crazy people, they don’t like it anymore.

      1. As more “woke” banks collapse under the weight of their own hubris, ESG is going to be seen for what it is: a liability and a fatal flaw.

  15. A reader sent these in:

    Watch this: Senator from Oklahoma asks Yellen asks if deposits in his community banks are all insured – they are seeing outflows to big banks. Yellen basically says sorry – you ain’t part of the club!

    https://twitter.com/FedGuy12/status/1636524778755592193

    Reits have been absolutely smashed 🤝

    https://twitter.com/eliant_capital/status/1636754354458832896

    “QE or not QE?”
    The “dumb monkey” sees the Fed Balance Sheet UP +$300 billion, thinks it’s QE & goes uber-long
    The “smart monkey” thinks this ISN’T QE & goes uber-short
    Since there are 10x dumb monkeys per smart monkey, this causes a squeeze & then a puke
    All monkeys end up ded

    https://twitter.com/agnostoxxx/status/1636728959302811651

    The Commercial Real Estate exposure of smaller US banks collectively dwarfs that of the big banks
    This is pretty much a ticking time bomb, as CRE loans are looking quite vulnerable to defaults

    https://twitter.com/menlobear/status/1636751288129187840

    Some homebuyers returned to the market as daily mortgage rates fell from 7% to about 6.5% in the wake of Silicon Valley Bank’s collapse. But overall homebuying demand remains tepid despite home sale prices falling 1.8% year over year.

    https://twitter.com/Redfin/status/1636763071074172929

    Investors rolling up to the 2021 housing market

    https://twitter.com/NipseyHoussle/status/1636806881929773064

    Mortgage brokers telling FTHB they can just refinance in a few months

    https://twitter.com/NipseyHoussle/status/1636788208196538368

    love seeing a reno stopped halfway hit the market 😭

    https://twitter.com/T_Howard_/status/1636773408531791872

    Real estate exposure front and center for regional banks.

    https://twitter.com/RickPalaciosJr/status/1636767096553234433

    Mark Zuckerberg warns in $META layoffs announcement to prepare for a ‘new economic reality’ that could last ‘many years’

    https://twitter.com/unusual_whales/status/1636736898172420099

    In spring 2022, the median detached existing home in California was being listed for $900,170, which was 10.78 times the state’s median household income. That was as extreme as the 2005 bubble. Now they’re listing them for $735,480, which is 8.49 times median household income.

    https://twitter.com/JeffWeniger/status/1636493139417366531

    STR hosts when their city bans Airbnb

    https://twitter.com/NipseyHoussle/status/1636683468766871552

    If you’re an investor in 1-4 unit properties and quit claimed from your personal name into an LLC after getting debt on that property, I’d be pooping my pants right now.

    https://twitter.com/MarketReferee/status/1636373869874528256

    You guys think I’m negative. I am – on asset values. And if I’m right, that makes all the financial maneuvering a giant Ponzi scheme – and remember, not every one fails. Tell me why I’m wrong.

    https://twitter.com/ShlomoChopp/status/1636528615687847940

    Sold. Condemned building in nice western Boston suburb. But not a crazy nice suburb…. 🤷

    https://twitter.com/coolspacestv/status/1636529836163313664

    Hoomers when prices start going down YOY

    https://twitter.com/NipseyHoussle/status/1636521248862904320

    Prices are set at the margin, and you wonder how much of the Bay Area housing market was being driven by sweetheart mortgages that SVB/FRC were giving their rich tech clients.

    https://twitter.com/conorsen/status/1636814411066163205

    “More than half of 18-24-year-olds have taken on new or additional debt in the past 12 months or expect to do so in the next 12 months…
    They are about SEVEN TIMES more likely to do so than their grandparents’ generation” NOT GOOD Credit is EXPENSIVE

    https://twitter.com/texasrunnerDFW/status/1636768926473371674

    Deals on new Chevy pickup trucks are heating up. Lots of supply

    https://twitter.com/GuyDealership/status/1636803292582772756

    Don’t sleep on Chrysler, Jeep and Buick. They have the most NEW inventory available right now. If you’re flexible on brand and want a deal…Time to suck it the f*ck up and grab yourself a Pacifica.

    https://twitter.com/GuyDealership/status/1636508003875581952

    *UBS IN TALKS TO ACQUIRE ALL OR PART OF CREDIT SUISSE: FT

    https://twitter.com/ChrisWeston_PS/status/1636838202291150848

    The US 2Y treasury posted a 3-SIGMA MOVE, EACH DAY, SEVERAL TIMES IN A ROW. Statistical odds: Once every 50+ million years. This week’s volatility predates most dinosaurs (assuming they traded treasuries). And that’s not an exaggeration.

    https://twitter.com/DavidInglesTV/status/1636631336491585536

    Small and Medium-Sized Banks account for about 80% of total commercial real estate lending. This is alarming when you consider that 48% of the 2023 loans are on floating rates causing increased levels of stress to the borrower and the likelihood of default.

    https://twitter.com/AyeshaTariq/status/1636663378440515585

    This is a great table showing house price falls for Toronto and the surrounding areas. Outlying areas have got absolutely smashed with U.S GFC housing crash sized falls. One wonders if Aussie regional areas with some proximity to the capitals may face similar

    https://twitter.com/AvidCommentator/status/1636502122501120000

    1. “Mark Zuckerberg warns in $META layoffs announcement to prepare for a ‘new economic reality’ that could last ‘many years’”

      Sounds as though San Francisco may soon be able to achieve its long sought affordable housing goals.

        1. I dunno i use FB marketplace a lot to buy and sell stuff, go to tag garage sales very locally, Craigslist nyc is still good too I really slowed down my FB postings so many still with TDS, and wokiness,

          1. I’m sure FakeBook won’t entirely disappear, after all MySpace is still around. But it is becoming a shadow of its former self. You don’t layoff a third of your staff if things are hunky dory

    2. Deals on new Chevy pickup trucks are heating up. Lots of supply

      And still far too expensive.

  16. Does it seem like whenever a largish, poorly run bank collapses, money rains down from the Fed’s helicopters above?

    1. Global banking crisis: What just happened?
      By Mark Thompson, CNN
      Updated 6:05 PM EDT, Fri March 17, 2023

      London CNN —

      Last Friday, the biggest failure of a US bank since the global financial crisis was playing out in real time as a major lender to the tech industry succumbed to a classic bank run.

      Silicon Valley Bank’s customers were frantically pulling their money from the California-based lender before US regulators intervened to take control. But the collapse panicked markets, piling pain on weaker financial institutions already struggling with the unintended consequences of soaring interest rates and self-inflicted wounds.

      A week on, a second US regional bank — Signature Bank — has been shut down, a third — First Republic Bank (FRC) — has been propped up, and the first major threat since 2008 to a bank of global financial significance — Credit Suisse — has been averted, at least for now.

      But the relative calm has been restored only thanks to the provision of huge sums of emergency cash from lenders of last resort — central banks — and some of the industry’s strongest players.

      Markets remain on edge: Benchmark indexes of shares in US and European banks have lost 20% and 13% respectively since the close of trading last Wednesday. Wall Street opened lower Friday, and First Republic’s shares tumbled by about 16%.

      What just happened?

      Friday, March 10 — The US government’s Federal Deposit Insurance Corporation (FDIC) took control of SVB. It was the biggest banking collapse in America since Washington Mutual in 2008. The wheels started to come off 48 hours earlier when the bank took a multibillion-dollar loss cashing out US government bonds to raise money to pay depositors. It tried — unsuccessfully — to sell shares to shore up its finances. That triggered the panic that led to its downfall.

      Sunday, March 12 — The FDIC shut down Signature Bank after a run on its deposits by customers who were spooked by the implosion of SVB. Both banks had an unusually high ratio of uninsured deposits to fund their businesses.

      Wednesday, March 15 — After watching shares in Credit Suisse (CS) collapse by as much as 30%, Swiss authorities announced a backstop for the country’s second-biggest bank. It calmed the immediate market panic but the global player is not out of the woods yet. Investors and customers are worried that it doesn’t have a credible plan to reverse a long-term decline in its business.

      Thursday, March 16 — First Republic Bank was teetering on the brink as customers withdrew their deposits. In a meeting in Washington, US Treasury Secretary Janet Yellen and Jamie Dimon, the CEO of America’s biggest bank, drew up plans for a private sector rescue. The result was an agreement with a group of American lenders to deposit tens of billions of dollars of cash into First Republic to staunch the bleeding.

      How much has the rescue cost?

      Nearly $200 billion so far in direct central bank support.
      …
      https://www.cnn.com/2023/03/17/business/global-banking-crisis-explained/index.html

    2. The Financial Times
      Credit Suisse Group AG
      UBS and regulators rush to seal Credit Suisse takeover deal
      Daily deposit outflows at troubled Swiss bank topped Sfr10bn last week as fears for its health mounted
      Boards at the two banks are meeting this weekend in a bid to thrash out an agreement
      Laura Noonan, Stephen Morris, James Fontanella-Khan, Arash Massoudi and Owen Walker 22 minutes ago

      Credit Suisse, UBS and their key regulators are racing to thrash out a deal on the historic merger of Switzerland’s two biggest banks as soon as Saturday evening, people familiar with the situation told the Financial Times.

      The Swiss National Bank and regulator Finma have told international counterparts that they regard a deal with UBS as the only option to arrest a collapse in confidence in Credit Suisse. Two people said deposit outflows from the bank topped Sfr10bn ($10.8bn) a day late last week as fears for its health mounted.

      Boards at the two banks are meeting this weekend. Credit Suisse’s key regulators in the US, the UK and Switzerland are considering the legal structure of a deal and several concessions that UBS has sought.
      …

      1. “Two people said deposit outflows from the bank topped Sfr10bn ($10.8bn) a day late last week as fears for its health mounted.”

        As long as they don’t call it a bank run, there is no need to panic.

    3. Each time it happens there is less and less real push back on printing up more money. This is how hyperinflation arrives. Little by little then lots and lots.

      1. I got to see this first hand in Mexico in the 1970’s. Mexico back then was a one party state, it was ruled by the PRI. The PRI thought it would be a good idea to crank up the printing presses, as they were counting on oil export revenues to back up the Peso. It worked for a while, until it didn’t. At first it was single digit inflation and then it went out of control. The Peso went from 12.50 to a USD to about 100 in less than a year. Then it was 1000 to a USD and when the dust finally settled it was 9000 to a USD. That was wne the introduced the “New Peso”, where they lopped off three zeros.

        What concerns me the most right now is that we have become for all practical purposes a one party state: The Dems and the RINOs. Will they decide, behind closed doors, that we can live with double digit inflation?

        1. When they are first in line for the fresh cash it is a fairly easy choice to make. Unfortunately the pain of currency collapse is too far in the past for most people to appreciate.

  17. Joe Biden’s America.

    CNBC — America’s biggest companies say retail crime is an epidemic, but just how big of a problem is it? (3/18/2023):

    “America’s biggest retailers say organized retail crime has grown into a multibillion-dollar problem, but the effectiveness of their strategies to solve it and the validity of the data overall have come into question.

    Over the last several years, companies such as Home Depot, Lowe’s, Walmart, Best Buy, Walgreens and CVS have been sounding the alarm about organized bands of thieves who ransack their stores and resell the goods on online marketplaces.

    “I can tell you that in our world, we know that crime is increasing. We see it every day in our stores,” Scott Glenn, Home Depot’s vice president of asset protection, told CNBC. “Our internal information shows us that that’s on a year-over-year basis, growing at double-digit rates.”

    https://www.cnbc.com/2023/03/18/organized-retail-crime-debate.html

    Related articles, each of which references the state of California’s decriminalization of shoplifting $950 or less.

    After San Francisco shoplifting video goes viral, officials argue thefts aren’t rampant (7/14/2023):

    https://www.nbcnews.com/news/us-news/after-san-francisco-shoplifting-video-goes-viral-officials-argue-thefts-n1273848

    Why Shoplifting Is Now De Facto Legal In California (8/3/2021):

    https://www.hoover.org/research/why-shoplifting-now-de-facto-legal-california

    Mobs of looters are grabbing goods in California thanks to downgraded shoplifting laws (11/22/2021):

    https://nypost.com/2021/11/22/mobs-of-looters-are-grabbing-goods-in-california-thanks-to-downgraded-shoplifting-laws/

    “They’re not sending their best”

    1. I remember when WalMarts were mostly only found in smaller towns. That may soon be the case again.

  18. Personal Finance
    84% of recent first-time home sellers have regrets. Here are 4 mistakes to avoid
    Published Wed, Mar 15 2023 8:30 AM EDT
    Lorie Konish

    Key Points
    – A recent Zillow survey found 9 in 10 recent first-time home sellers feel they could have sold their homes for more money if they had done something different.
    – Experts say it is still a seller’s market.
    – As we head toward the best time of the year to list a home, these tips may help if you’re thinking of putting your home on the market.
    …
    https://www.cnbc.com/2023/03/15/84percent-of-recent-first-time-home-sellers-have-regrets-mistakes-to-avoid.html

    1. “Experts say it is still a seller’s market.”

      BwaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHaHa!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

      What a bunch of idiots.

    1. The corruption is off the scales and yet nothing happens. And why would it? Did anything happen to him when he was busted at the French Laundry during the California lockdown? Was he recalled? Of course not, and as we know from witnesses in this blog, ballots vanished into thin air.

      The only sane thing to do there is to leave the state, and do it before they implement their exit tax.

    1. 40 million AUD doesn’t sound like much in this day when large corporations lose billions, but no doubt most small businesses in Oz are in a similar predicament.

    1. The Financial Times
      The Big Read US banks
      How Silicon Valley learnt to love the government
      After Washington came to the rescue of the tech sector’s favourite bank, some fear it will lead to tougher regulation
      George Hammond in San Francisco and Elaine Moore in London yesterday

      Late last Saturday night, Jason Calacanis, a prominent internet entrepreneur and investor, hit the caps button on his keyboard and tweeted out a warning about the collapse of Silicon Valley Bank.

      “YOU SHOULD BE ABSOLUTELY TERRIFIED RIGHT NOW — THAT IS THE PROPER REACTION TO A BANK RUN AND CONTAGION,” he wrote. “THIS WILL SPIRAL INTO CHAOS”.

      The rapid fall of the tech sector’s regional bank has upended social mores in the Valley. Investors like Calacanis who typically upbraid regulators for stifling innovation turned to Washington in their hour of need.

      Most warned of severe repercussions if depositors lost permanent access to their money. Hedge fund manager Bill Ackman wrote on Twitter that the consequence of government failure to guarantee SVB deposits would be “vast and profound”. Y Combinator chief executive Garry Tan called the bank’s failure an extinction level event for start-ups — a few days before the tech accelerator laid off 20 per cent of its own staff in a non-SVB linked move.

      David Sacks, general partner of VC firm Craft Ventures, who like Calacanis is a close associate of Elon Musk and has a large following on Twitter, warned of further bank runs. “Place SVB with a Top 4 bank,” he tweeted. “Do this before Monday open or there will be contagion and the crisis will spread.”

      Their appeals worked. Two days after the Federal Deposit Insurance Corporation took control of the bank’s assets, the Treasury, Federal Reserve, and FDIC announced on Monday morning that depositors would have access to all of their money.
      …

    2. The Word of the Year is… “Bailout”!
      By Ben ZimmerJanuary 12, 2009

      Greetings, everyone! I’ve just come back from San Francisco, where I attended the American Dialect Society’s annual meeting (held in conjunction with the Linguistic Society of America). As is the custom, the linguists and lexicographers in attendance took a break from their scholarly presentations to have some fun selecting the Word of the Year for 2008. This time around, bailout emerged as a powerful frontrunner, and sure enough it ultimately proved to be the winner.
      …
      https://www.vocabulary.com/articles/wordroutes/the-word-of-the-year-is-bailout/

    3. Technology
      The White House is avoiding one word when it comes to Silicon Valley Bank: bailout
      Updated March 14, 2023 10:21 AM ET
      Heard on All Things Considered
      Bobby Allyn
      3-Minute Listen
      People line up outside of a Silicon Valley Bank office on Monday in Santa Clara, Calif. Days after Silicon Valley Bank collapsed, customers are lining up to try and retrieve their funds from the failed bank.
      Justin Sullivan/Getty Images

      After Silicon Valley Bank careened off a cliff last week, jittery venture capitalists and tech startup leaders pleaded with the Biden administration for help, but they made one point clear: “We are not asking for a bank bailout,” more than 5,000 tech CEOs and founders begged.

      On the same day the U.S. government announced extraordinary steps to prop up billions of dollars of the bank’s deposits, Treasury Secretary Janet Yellen and President Biden hammered the same talking point: Nobody is being bailed out.

      “This was not a bailout,” billionaire hedge-fund mogul Bill Ackman tweeted Sunday, after spending the weekend forecasting economic calamity if the government did not step in.

      Yet according to experts who specialize in government bank bailouts, the actions of the federal government this weekend to shore up Silicon Valley Bank’s depositors are nothing if not a bailout.

      “If your definition is government intervention to prevent private losses, then this is certainly a bailout,” said Neil Barofsky, who oversaw the Troubled Asset Relief Program, the far-reaching bailout that saved the banking industry during the 2008 financial crisis.
      …
      https://www.npr.org/2023/03/13/1163180140/silicon-valley-bank-is-it-a-bailout-barofsky

      1. BBC News
        Multi-billion dollar rescue deal for First Republic Bank
        Published 1 day ago
        Bigger banks are injecting funds into First Republic in a bid to shore up confidence in the banking system
        Image source, Getty Images
        By Natalie Sherman
        Business reporter, New York

        A group of big US banks has injected $30bn (£24.8bn) into a smaller regional bank, First Republic, which had been seen as at risk of failure.

        The move came as authorities in the US are trying to quell panic over the health of the banking system, after a series of bank collapses.

        Worries about the sector have spread globally, raising fears of a crisis.

        US regulators called the move “most welcome”, while the banks said their action reflected their “confidence”.

        They said the banking system had plenty of cash and made big profits.

        “Recent events did nothing to change this,” they said. “The actions of America’s largest banks reflect their confidence in the country’s banking system.”

        Reports of plans for the aid from the 11 banks, led by JP Morgan and Citigroup, helped lift financial markets and sent shares in First Republic surging more than 20% at one point, triggering trading halts.

        But a sell-off started again in after-hours trade in a sign that concerns remain.

        The San Francisco-based firm had seen its share price plunge nearly 70% over the last week, as investors worried it was the next bank at risk of a rush of customers withdrawing their deposits.

        “This show of support by a group of large banks is most welcome, and demonstrates the resilience of the banking system,” US financial officials said.

        ‘Risk of contagion’

        Problems in the banking sector surfaced in the US last week when Silicon Valley Bank (SVB), the country’s 16th-largest lender, collapsed in the biggest failure of a US bank since 2008.

        That was followed two days later by the failure of New York’s Signature Bank.

        Authorities stepped in to guarantee deposits beyond typical limits in an effort to head off further runs on bank deposits, but financial markets have remained jumpy.

        In a sign of strains in the system, the US central bank reported a surge in emergency lending to banks, with $318bn in outstanding loans as of Wednesday, up from $15bn a week earlier.

        That included roughly $12bn offered through a fund created after the SVB collapse.

        “The size of the spike in the Fed’s emergency lending underlines that this is a very serious crisis in the banking system that will have significant knock-on effects on the real economy,” Paul Ashworth, chief North America economist at Capital Economics said.

        In an appearance before politicians in Washington, US Treasury Secretary Janet Yellen said that depositors should have confidence in the system, while acknowledging the severity of the episode.

        “We felt that there was serious risk of contagion that could have brought down and triggered runs on many banks and that’s something, given that our judgement is that the banking system overall is safe and sound,” she said.

        Meanwhile, the vice president of the European Central Bank (ECB), Luis de Guindos, said the banking industry in Europe was “resilient” and firms there had “limited exposure to the institutions of the US”.

        He spoke as the ECB announced a further increase to interest rates from 2.5% to 3%, sticking to its plan for a rise despite concerns about how the move might affect the market turmoil.

        Help for banks

        Central banks around the world have sharply raised borrowing costs over the last year to try to curb the pace of overall price rises, or inflation.

        The moves have hurt the values of the large portfolios of bonds bought by banks when rates were lower, a change that contributed to the collapse of Silicon Valley Bank, and has raised questions about the situation at other firms.

        The Swiss National Bank on Wednesday said it was extending up to £44bn in emergency funds to troubled lending giant Credit Suisse, which was seen as vulnerable in the wake of the US bank failures.

        Its shares bounced back more than 15% after big falls a day earlier, while major indexes across Europe also gained.

        Sir John Gieve, former deputy governor at the Bank of England, told the BBC that central banks were sending a “message” that such problems would be contained locally.
        …
        https://www.bbc.com/news/business-64973321

    5. The Financial Times
      Opinion US economy
      Things are only getting harder for the Fed
      We should be thankful that the past two weeks of banking stress did not happen sooner
      The Marriner S. Eccles Federal Reserve building in Washington
      The Marriner S. Eccles Federal Reserve building in Washington. Even after inflation abates, central banks may need to keep the general level of interest rates higher over the next decade
      Kenneth Rogoff yesterday
      The writer is a professor of economics and public policy at Harvard university and former chief economist at the IMF

      The Fed’s expansive actions to prevent the Silicon Valley Bank collapse from becoming systemic, followed by the Suisse National Bank’s massive lifeline to troubled Credit Suisse, left little doubt this week that financial leaders are determined to act decisively when fear starts to set in. Let us leave moral hazard for another day.

      But even if risks of a 2023 financial Armageddon have been contained, not all the differences with 2008 are quite so reassuring. Back then, inflation was a non-issue and deflation — falling prices — quickly became one. Today, core inflation in the US and Europe is still running hot, and one really has to strain the definition of “transitory” to argue that it is not a problem. Global debt, both public and private, has also skyrocketed. This would not be such an issue if forward looking, long-term real interest rates were to take a deep dive, as they did in the secular stagnation years prior to 2022.
      …

      1. “Even after inflation abates, central banks may need to keep the general level of interest rates higher over the next decade.”

        Translation: The real estate CR8R is going to get a lot deeper before it stops CR8Ring.

    6. Yahoo
      Business Insider
      Techies on a plane celebrated after hearing a passenger whoop at the news SVB customers would get their money, VC says
      Britney Nguyen
      Fri, March 17, 2023 at 1:35 PM PDT·3 min read
      A delta plane in flight against a blue sky, a photo of Prashant Fonseka is in a circle frame above the cockpit
      Prashant Fonseka, a partner at Tuesday Capital, said that he and a few other people on his flight celebrated after seeing the news that federal regulators were stepping in to save Silicon Valley Bank depositors.Tuesday Capital, AaronP/Bauer-Griffin/GC Images/Getty Images

      – Prashant Fonseka was on a flight when he learned that the money he deposited with SVB was safe.

      – Fonseka told Insider he heard other people on the plane celebrating with relief at the news.

      – He’d spent the weekend talking to his portfolio companies about next steps after the bank collapsed.

      When Prashant Fonseka boarded his Sunday-morning flight from Austin to San Francisco, he turned off the WiFi on his phone; he wanted a break from reading about the collapse of Silicon Valley Bank.

      Just two days prior, US regulators had closed the bank, which had been a Silicon Valley staple popular with venture capitalists and startups. The bank’s failure was the largest in the US since Washington Mutual’s crash during the 2008 financial crisis.

      Fonseka, who is based in Austin, Texas, is a partner at the venture-capital firm Tuesday Capital. He told Insider that he spent Friday and Saturday trying to calm the founders of his portfolio companies. He heard that some executives in the industry were even beginning to discuss potential plans for layoffs if they couldn’t get access to their deposits.

      By Sunday, however, he had become more optimistic as he anticipated a response from regulators.

      Prior to boarding his flight, Fonseka was on the phone trying to confirm the amount of SVB’s advanced dividend, or how much money would be guaranteed to be made available to the bank’s customers — other people were hoping they might be able to get 50% of their deposits, he said.

      “Fifty percent for most companies would have been enough to cover payroll, which, on Friday, it was,” he told Insider in a phone conversation, saying that he thought, “we’re not gonna be able to make payroll next week, our banks are frozen, the world is ending.”

      Fonseka said that he heard two people across the aisle from him talking about SVB, so he started making small talk with them.

      “We’re kind of joking, ‘When this flight lands, we might be in a different universe — something could change,'” Fonseka said. “Everyone was kind of anticipating some kind of announcement.”

      Suddenly, he heard a whoop across the aisle. Fonseka asked the person across what happened.

      “Oh, there’s an announcement!” Fonseka said the passenger told him, so he turned his WiFi back on and read the news: federal regulators were stepping in to guarantee SVB customers’ deposits.

      Fonseka said that he celebrated with a fist bump with the person next to him.

      “There was enough of an energy wave that I think people were realizing something had happened,” he said, talking about the commotion he heard elsewhere in the plane — The New York Times first reported details of the celebration aboard Fonseka’s flight.

      Fonseka said that he felt “massive relief” when his flight landed, and he caught up with another VC he recognized on his flight, who told him that he was feeling “a lot happier.”
      …
      https://finance.yahoo.com/news/techies-plane-celebrated-hearing-passenger-141714813.html

    7. The Financial Times
      Silicon Valley Bank
      Silicon Valley Bank was warned by BlackRock that risk controls were weak
      Consultants said systems lagged behind peers more than a year before lender’s collapse fomented a banking crisis
      Customers wait outside a Silicon Valley Bank branch in Massachusetts
      Antoine Gara and Brooke Masters in New York 7 hours ago

      BlackRock’s consulting arm warned Silicon Valley Bank, the California-based lender whose failure helped spark a banking crisis, that its risk controls were “substantially below” its peers in early 2022, several people with direct knowledge of the assessment said.

      SVB hired BlackRock’s Financial Markets Advisory Group in October 2020 to analyse the potential impact of various risks on its securities portfolio. It later expanded the mandate to examine the risk systems, processes and people in its treasury department, which managed the investments.

      The January 2022 risk control report gave the bank a “gentleman’s C”, finding that SVB lagged behind similar banks on 11 of 11 factors considered and was “substantially below” them on 10 out of 11, the people said. The consultants found that SVB was unable to generate real time or even weekly updates about what was happening to its securities portfolio, the people said. SVB listened to the criticism but rebuffed offers from BlackRock to do follow up work, they added.
      …

    8. Economy & Business
      There Will Be No Soft Landing
      President Joe Biden delivers remarks on the economy at the IBEW Local 26 in Lanham, Md., February 15, 2023.
      (Evelyn Hockstein/Reuters)
      By Matthew Continetti
      March 18, 2023 6:30 AM
      The high price of years of low interest rates

      To recap: On March 8, Silicon Valley Bank of Santa Clara, Calif., announced that its balance sheet was weak. The bank held around $175 billion in deposits. They needed to raise capital, but its management had parked too much money in long-term government bonds. At the time of purchase, in a low-interest rate environment, those bonds had seemed safe. Then inflation arrived. Rates went up. Silicon Valley Bank was forced to sell the treasuries at a $1.8 billion loss.

      The next day, March 9, panic began to spread. Ratings agencies downgraded Silicon Valley Bank’s credit. Its stock plunged. A run on the bank — with depositors demanding their money back — took off. On March 10, Silicon Valley Bank collapsed.

      Silicon Valley Bank is the largest financial institution to go under since the Global Financial Crisis in 2008. Its sudden demise shocked investors into reexamining the financial sector. The largest banks may rest on firm capital cushions. What about regional banks? Fear of instability caused depositors to flee these midsized firms. Shareholders did too. Signature Bank of New York was caught in the whirlpool. It drowned.

      To stop the contagion from spreading further, on Sunday, March 12, Treasury Secretary Janet Yellen, Martin Gruenberg of the Federal Deposit Insurance Corporation, and Federal Reserve chairman Jerome Powell made the following announcement: The federal government would guarantee deposits at Signature and Silicon Valley Bank. Until last weekend, the FDIC insured deposits up to $250,000. No longer. The ceiling was blown away in a cyclone of panic.

      President Joe Biden was quick to assert that the backstop is different from the Troubled Assets Recovery Program, or TARP, the controversial bank bailout of 2008. The new Federal Reserve facility won’t support creditors or shareholders or executives, just depositors. And tax revenue won’t pay for the guarantee directly, an FDIC fee will — a fee levied on banks and passed on to consumers, who also happen to be taxpayers.

      Biden and Yellen won’t say it’s a bailout. Of course it’s a bailout. In some ways this bailout is worse than in 2008. After all, Congress passed TARP. Congress is a bystander here. And TARP set economy-wide rules and qualifications. Biden’s intervention is discretionary and selective. When she appeared before Congress on March 16, Yellen admitted that the unlimited deposit guarantee doesn’t apply to every bank. It applies to systemically important banks. Who decides which bank is systemically important? She does. As circumstances dictate.

      Yellen tried to soothe Congress. She tried to project strength. “I can reassure the members of the committee that our banking system is sound, and that Americans can feel confident that their deposits will be there when they need them,” she told Senate Finance. “This week’s actions demonstrate our resolute commitment to ensure that our financial system remains strong and depositors’ savings remain safe.”
      …
      https://www.nationalreview.com/2023/03/there-will-be-no-soft-landing/

  22. Gavin Newsom hails SVB bailout — without disclosing he’s a reported client

    By Ariel Zilber
    March 15, 2023

    Gavin Newsom hailed the Biden administration’s decision to federally insure all depositors of Silicon Valley Bank — without disclosing the fact that the failed lender counts the California governor as a client.

    Newsom, the Democrat governor, owns three Northern California wineries that are listed on the bank’s website as clients, according to The Intercept news site.

    A longtime former aide of Newsom told The Intercept that the governor also maintained a personal account with the Santa Clara-based bank, which was put into a receivership by the Federal Deposit Insurance Corporation.

    A spokesperson for the governor, Nathan Click, told The Intercept: “Governor Newsom’s business and financial holdings are held and managed by a blind trust, as they have been since he was first elected governor in 2018.”

    The Intercept cited bank records which list clients including CADE, Odette, and PlumpJack — all of which are owned by Newsom.

    In 2021, SVB also donated $100,000 to a charity founded by Newsom’s wife, actress Jennifer Siebel Newsom, according to the news site.

    https://nypost.com/2023/03/15/silicon-valley-bank-client-gavin-newsom-praised-bailout/

  24. “I gotta ask you, why all the hate for people who like free speech on Twitter? What’s going on with that? You called people who liked Elon Musk buying the site Twitter a bunch of ‘boot-lickers.’ This was on March 6. I’m looking at it right here. Seems kind of vitriolic,”

    Hawley asked.

    Townhall.com
    @townhallcom

    LOL: Senator @HawleyMO confronts left wing reporter who had an VERY public meltdown about @elonmusk.

    “You also said that you didn’t necessarily do any of this sober…I hope you do our interview sober!”

    https://twitter.com/townhallcom/status/1636725718762635271?s=20

  26. – Funny, there was no mention of SVB at Powell’s recent testimony to the Senate Banking Committee earlier this month.
    – In no way was SVB a woke bank that funded leftist favorites.
    – In no way was SVB mismanaging interest rate risk on their long bond portfolio.
    – In no way were any CA State, or .gov D politician funds tied to SVB.
    – In no way are some banks more equal than others.
    – In no way is there even a smidgen of wokeness or political favoritism at the Fed.
    – In no way was any of this predictable, based on 14 years of easy monetary policies from the Fed, or fast and loose fiscal policies from .gov, or woke agendas by same.
    – America is in the very best of hands.
    – In a sane world banksters would see jail time. See Iceland during the GFC. Unfortunately, we’re living in a clown world.

    https://unusualwhales.com/news/jerome-powell-the-chair-of-the-federal-reserve-blocked-phrases-regarding-regulatory-failure-by-the-federal-reserve-in-the-silicon-valley-bank-collapse?ref=unusual-whales

    Jerome Powell, the chair of the Federal Reserve, blocked phrases regarding regulatory failure by the Federal Reserve in the Silicon Valley Bank collapse
    Unusual Whales
    3/16/2023

    Jerome Powell, the chair of the Federal Reserve, blocked phrases regarding regulatory failure by the Federal Reserve in the Silicon Valley Bank collapse, per the NYT.

    Federal government officials wanted a joint statement to include a reference to regulatory shortcomings that they believe helped lead to the bank’s demise, per NYT.

    Their exact wording: “But Jerome H. Powell, the chair of the Federal Reserve, blocked efforts to include a phrase mentioning regulatory failures in the joint statement released early Sunday evening by the Fed, the Treasury Department and the Federal Deposit Insurance Corporation.”

    “Mr. Powell pushed to take the line on regulation out of the statement because he wanted to focus on the actions being taken to shore up the financial system,” per NYT.

    “The events surrounding Silicon Valley Bank demand a thorough, transparent and swift review by the Federal Reserve,” Mr. Powell said.

  27. Nobody has mentioned yet that DJT expects to be arrested in Manhattan on Tuesday (links available on multiple sources).

    A quote from a Gab post:

    “If they arrest Trump, who wants to see all the truckers stop delivering food and goods to New York City?”

    That would be a good start…

    2. “If they arrest Trump, who wants to see all the truckers stop delivering food and goods to New York City?”

      I saw the trailer for a 2016 movie called The 5th Wave. It is an alien invasion flick, where the invaders inflict 5 “waves” of destruction on humanity to destroy it.

      The first wave is a global electromagnetic pulse, sending the globe back to the stone age. It occured to me that would be all that was needed as food could no longer be delivered to cities and thus all hades would break loose. The second wave were 200 ft tall tidal waves, which destroyed all coastal cities. The third wave was an avian borne pestilence, etc.

      1. The 5th Wave

        It’s actually a pretty good book series, if you’re into dystopian teenage fiction 😉

    3. expects to be arrested

      I suggest you read the message he posted: NOW ILLEGAL LEAKS . . . INDICATE THAT . . . FORMER PRESIDENT OF THE UNITED STATES, WILL BE ARRESTED ON TUESDAY OF NEXT WEEK.

      IMO, as an attorney (🖕 46&2), he’s commenting on a rumor.

  28. HuffPaint — Election Conspiracy Movement Grinds On As 2024 Approaches (3/18/2023):

    “deep distrust about U.S. elections persists among Republicans, skepticism fueled by former President Donald Trump’s false claims and by allies who have been traveling the country meeting with community groups and holding forums like the one recently just outside Nashville, attended by some 250 people.

    As the nation barrels toward the next presidential election, the election conspiracy movement that mushroomed after the last one shows no signs of slowing down.

    Millions have been convinced that any election in which their preferred candidate loses has been somehow rigged against them, a belief that has fed efforts among conservatives to ditch voting machines and to halt or delay certification of election results.

    “Voters who know the truth about our elections have faith in them,” said Liz Iacobucci, election security program manager with the voter advocacy group Common Cause. “But the people who have been led into disbelief — those people can be led into other things, like Jan. 6.”

    Trump, running for the White House for the third time, has signaled that the 2020 election will remain an integral part of his 2024 presidential bid. In a recent call with reporters about a new book, Trump pointed to polls that show a sizable number of people believe the 2020 election was stolen, even though there is no such evidence.

    “I’m an election denier,” Trump said. “You’ve got a lot of election deniers in this country and they’re not happy about what’s happened.”

    https://www.huffpost.com/entry/us-election-conspiracy-theory-movement_n_64159f9fe4b0cfde25c5211a

    Joe Biden did not win the 2020 election.

    Trump won. The 2020 election was stolen.

  29. No doubt in my mind.

    Analysis: Anchor Baby Population Far Exceeds One Year of U.S. Births

    JOHN BINDER
    18 Mar 2023

    The total population of United States citizen children born to illegal aliens now far exceeds one year of American births, a March analysis shows.

    The Federation for American Immigration Reform (FAIR) analysis estimates that about 5.4 million “anchor babies,” the term used to describe the U.S.-born children of illegal aliens who are awarded birthright citizenship, reside across the nation.

    Annually, the Center for Immigration Studies has estimated that nearly 400,000 anchor babies are born to illegal aliens, foreign tourists, foreign visa workers, and foreign students.

    https://www.breitbart.com/politics/2023/03/18/analysis-anchor-baby-population-far-exceeds-one-year-u-s-births/

  31. Does it seem like a historic banking panic is underway?

    If so, wold now be a good time to buy the dip?

    1. Newsweek
      Politics
      Janet Yellen Addresses Tough Reality of Americans’ Money Amid Bank Panic
      By Nick Reynolds On 3/16/23 at 4:45 PM EDT

      Treasury Secretary Janet Yellen said Thursday some Americans’ uninsured deposits would not be protected by the federal government, after the collapse of several midsize banks with high levels of uninsured cash over the past week sent the financial industry spiraling into a panic.

      During a Senate Finance Committee hearing, Yellen was grilled by Oklahoma GOP Senator James Lankford over the Biden administration’s handling of the banking crisis, which saw the federal government offer a multibillion-dollar bailout to Silicon Valley Bank (SVB) after a bank run left it without enough cash to back up hundreds of millions of dollars of its clients’ deposits. Most of those deposits were not insured.

      To address the crisis, U.S. bank regulators announced a plan last weekend to fully insure all deposits at SVB as well as the crypto-friendly Signature Bank. This would cover all deposits above the Federal Deposit Insurance Corp.’s insured limit of $250,000. Federal officials said the plan would be paid for by a special fee levied on all FDIC institutions.

      While all banks would be required to pay for the plan, Yellen said under questioning Thursday that it would not apply to every bank. She said the federal government would extend the privilege only to troubled banks whose failure would have a profound impact on the U.S. financial system.

      Uninsured deposits, Yellen said, would be covered only if a “failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences,” which would be decided by a supermajority of the FDIC’s board members, Yellen, and the President.
      …
      https://www.newsweek.com/janet-yellen-addresses-tough-reality-americans-money-amid-bank-panic-1788353

      1. “She said the federal government would extend the privilege only to troubled banks whose failure would have a profound impact on the U.S. financial system.”

        So to qualify for bailouts, a troubled bank has to be too big to fail?

        Sounds reminiscent of bailout policy during the 2007-2009 financial crisis…

        1. ‘SVB’s meteoric rise and fall serves as a reminder that many of the guardrails erected after the last crisis have since been dismantled – at the behest of banks like SVB, and with the help of lawmakers from both parties.’
          Opinion
          Silicon Valley Bank said it was too small to need regulation. Now it’s ‘too big to fail’
          Rebecca Burns and Julia Rock
          Student debts and underwater mortgages are private burdens, but corporate losses are matters of urgent public interest
          Fri 17 Mar 2023 06.15 EDT
          Last modified on Sat 18 Mar 2023

          Silicon Valley Bank was supposedly the type of institution that would never need a government bailout – right until its backers spent three days on social media demanding one, and then promptly receiving it, after the bank’s spectacular collapse last week.

          Eight years ago, when the bank’s CEO, Greg Becker, personally pressed Congress to exempt SVB from post-2008 financial reform rules, he cited its “low risk profile” and role supporting “job-creating companies in the innovation economy”. Those companies include crypto outfits and venture capital firms typically opposed to the kind of government intervention they benefited from on Sunday, when regulators moved to guarantee SVB customers immediate access to their largely uninsured deposits.

          Fifteen years after the global financial crisis, the logic of “too big to fail” still prevails. The financial hardship of student debtors and underwater homeowners is a private problem – but losses sustained by titans of tech and finance are a matter of urgent public interest. Moral hazard for thee, but not for me.
          …
          https://www.theguardian.com/commentisfree/2023/mar/17/silicon-valley-bank-bailout-dodd-frank-regulation-opinion

    2. Focus
      Bitcoin and gold benefit from the spreading banking contagion as SVB Financial Group files for bankruptcy
      Jordan Finneseth
      Friday March 17, 2023 11:16

      (Kitco News) – SVB Financial Group, the parent company of Silicon Valley Bank (SVB), has filed for bankruptcy, a move that will help simplify the sale of its remaining assets after federal regulators seized SVB on Friday, which was the core of the Group’s business model.

      According to a report from the Wall Street Journal, SVB Financial Group, which filed for chapter 11 bankruptcy protection in a New York bankruptcy court on Friday, has now become the largest bankruptcy filing that was the result of a bank failure since the collapse of Washington Mutual in 2008.

      Silicon Valley Bank, which is now under the control of the Federal Deposit Insurance Corporation and operating as Silicon Valley Bridge Bank N.A., isn’t part of the chapter 11 filing.

      The other businesses under the SVB Financial Group umbrella that are included in the bankruptcy filing include SVB Capital, an investment manager that oversees $9.5 billion of funds on behalf of third-party investors, and SVB Securities, an investment bank.

      A statement released by the Group on Friday indicated that along with Silicon Valley Bank, SVB Private, a wealth management company previously owned by the parent company, is no longer affiliated with SVB Financial Group.

      SVB Financial Group’s publicly traded stock, SIVB, has been halted since March 9 and carries over $3 billion in bond debt and almost $4 billion in preferred stock, which has fallen to distressed levels since the bank entered receivership.

      The global banking industry has been in flux since last Friday when federal regulators seized SVB after more than $41 billion worth of funds were withdrawn from the institution in 24 hours, putting its balance sheet in the negative and threatening the livelihoods of numerous tech startups and venture capitalists.

      Over the weekend, the U.S. government announced emergency measures and promised that all depositors would be made whole in an effort to reassure the markets. But that hasn’t stopped many from shuffling their funds to larger, more financially sound banks like JPMorgan, or seeking out other stores of wealth, such as gold and Bitcoin (BTC).

      While the moves by the U.S. helped to calm matters somewhat on Monday, which led to a brief turnaround in stock prices, the banking contagion spread to European institutions, most notably Credit Suisse, which ultimately needed a $54 billion bail-out from the Swiss National Bank in order to shore up its books and prevent a collapse.

      In the U.S., a group of 11 of the largest banks – including JPMorgan, Bank of America, and BNY Mellon – joined forces to offer an unsecured lifeline of $30 billion to the struggling First Republic Bank in order to forestall its demise.

      Despite these efforts, the stock prices for both Credit Suisse (CS) and First Republic (FRC) continued to slide lower in trading on Friday as investors opted to take a safer route by pulling their funds due to suspicions that the threat has not been extinguished.

      [Citadel Securities, Credit Suisse and Deutsche Bank invest millions in crypto infrastructure projects]

      The struggles of the global banking system have caught many flatfooted, as those who trusted the system to function properly and secure their wealth are now scrambling to locate reliable stores of wealth.

      This has benefitted both gold and Bitcoin, which have regained their safe haven status in the eyes of many investors. Since March 8, the gold price has climbed 8.38% from $1,810 an ounce to its current price of $1,960, while Bitcoin has seen its price rally nearly 38% from a low of $19,700 on March 10 to a high of $27,185 in early trading on Friday.

      With the banking contagion showing no signs of slowing down as it spreads across Europe and the smaller banks in the U.S., there’s a good chance that both cryptos and precious metals could continue to see upside potential as global citizens slowly lose faith in the banking system.
      …
      https://www.kitco.com/news/2023-03-17/Bitcoin-and-gold-benefit-from-the-spreading-banking-contagion-as-SBV-Financial-Group-files-for-bankruptcy.html

    3. Now that the troubles at SVB and Signature Bank are fading bad memories, is all well once more in the banking sector?

      1. Nearly 200 banks at risk for same fate as SVB: study
        By Matthew Sedacca
        March 18, 2023 12:03pm Updated

        Nearly 200 more banks may be vulnerable to the same type of risk that took down Silicon Valley Bank: The value of the assets they hold.

        There are 186 banks across the country that could fail if half of their depositors quickly withdraw their funds, a new study published on the Social Science Research Network found. Even insured depositors — those with $250,000 or less in the bank — could have problems getting their cash if these institutions face the sort of run that Silicon Valley saw a week ago.

        The concern is that these banks hold a significant amount of their assets in interest-rate sensitive financial instruments like government bonds and mortgage backed securities. The value of those older, low-interest investments dropped sharply as the Federal Reserve hiked interest rates over the past year.

        In the case of SVB, the Santa Clara, California-based institution parked much of its cash in long-term government bonds, which are ultra-safe in terms of losing the initial investment, but were not worth as much as when SVB bought them, because interest rates have since gone higher. The bank had to sell off some of those bonds to meet customer demands for withdrawals at less than it paid for them, resulting in a nearly $2 billion loss.

        When SVB disclosed that loss, along with a plan to raise an additional $500,000 million from Wall Street, it sparked fears among its venture capital and tech start-up-heavy customer base that the bank was insolvent. In a social media-fueled panic, customers rushed to withdraw their money out of concern that the bank would run out of case — a classic bank run.

        The federal government stepped in to promise it would back all depositors, not only those with the FDIC-limit $250,000, in an effort to stop a wider panic where depositors started pulling money from other banks that are roughly the same size.

        Now, the study shows that a slew of those other banks could be vulnerable to the same developments if a high percentage of worried customers start trying to withdraw their deposits.

        “Our calculations suggest these banks are certainly at a potential risk of a run, absent other government intervention or recapitalization,” the economists wrote.

        The study looked at banks’ asset books nationwide, and found an estimated $2 trillion loss in their market value.
        …
        https://nypost.com/2023/03/18/nearly-200-banks-could-fail-the-same-way-svb-did-study/

        1. “The study looked at banks’ asset books nationwide, and found an estimated $2 trillion loss in their market value.”

          $2,000 billion ÷ 186 banks = $10.7 billion per bank at risk.

          Is that alot?

  32. Something actually interesting from Reddit:

    “As a fellow home owner I have to say that owning a home is great. Privacy, the ability to change anything on your property (within the guidelines of the rules of the municipality, utilities, and within reason of your neighbors of course…), but yes there are taxes, home upkeep and repairs. Is it a fair trade off? I dunno. There are SO many days I wish I could go back to renting just so I didn’t have to deal with the responsibilities and generally random expenses. My front yard has been dug up 5 different times in the last 2 years alone. First it was a water main break, then my sewer needed to be replaced ($10k right there, still paying on it…), then the gas line separated from the line going into the house and is pushing gas through the basement wall cracks, which means my foundation is going to need replacing soon (quoted already at $12k), the windows need to be replaced (electrical/gas bill is almost up to $300 a month now, due to rate hikes and just general costs for heating a less than 1k sq foot home.), the roof on my garage and home needs to be replaced soon (based on similar homes $15k), the insulation in the walls is deteriorating and not as efficient as it needs to be (hence $300 electrical/gas bills.) that’s another $10k estimate. This house was $80k when I bought it 10 years ago… so just with those couple of issues that’s about $50k so more than half the purchase price. Could I live without addressing these issues possibly, but in the long run it will catch up to me AND if I ever want to sell the house they will probably be must haves before it can be sold. If your a renter, you have the option to wait. It’s not your property. Let them deal with it. Yea the prices are exorbitant, but it’s seemingly the end of the problem not the root. Inflation and just plain greed pass down the cost from entity to entity until it his the actual renter or buyer. It’s a crap shoot really.”

    How is that “paid off” house working out for you?

  36. Porch piracy must be worse than I thought (Joe Biden’s America). I received an email from Amazon, offering me 10% off my purchases if I opt to pick up my order at one of their lockers.

  37. Hate to break this to ya, mid-sized banks, but the FDIC only has enough money to cover 1.26% of insured depositors – and now that Yellen the Felon has prioritized covering all the depositors of “woke” banks like SVB, that leaves even less for the hapless proles on Main Street – not that they matter. Remember: in a time of universal fraud, if you don’t hold it, you don’t own it.

    https://www.cnbc.com/2023/03/18/midsize-us-banks-reportedly-ask-the-fdic-to-insure-all-deposits-for-two-years.html

    1. ‘A coalition of midsize U.S. banks, Mid-Size Bank Coalition of America (MBCA), asked regulators to extend FDIC insurance to all deposits for the next two years, Bloomberg News reported on Saturday citing an MBCA letter to regulators.’

      ‘This is breaking news. Please check back for updates.’

      This is like the end of Animal House.

      1. “…extend FDIC insurance to all deposits for the next two years,…”

        Wouldn’t government-provided claims payments on nonexistent insurance constitute a bailout?

        It happens a lot in the agriculture sector, where farmers who don’t buy crop insurance nonetheless get bailout payments when agricultural disaster strikes.

      2. “asked regulators to extend FDIC insurance to all deposits for the next two years”

        Go Woke get bailed out.

    2. ‘…and now that Yellen the Felon has prioritized covering all the depositors of “woke” banks like SVB, that leaves even less for the hapless proles on Main Street – not that they matter.’

      Technically, couldn’t the Fed create electronic money out of thin air to cover any funding shortfall? Of course that might exacerbate high, non-transitory infation. But this is a crisis, so inflation risk no longer matters (just like in March 2020).

  38. “‘In the last 30 years, there has been a consistent set of politics based on the ideology of home ownership, encouraging us all to buy as strategic, calculating mini-capitalists,’ says Dr Cody Hochstenbach, an urban geographer at the University of Amsterdam. ‘People are encouraged, hounded even, to borrow as much as they can. The result is to drive up prices and increase the risks, locking people in homes if prices fall because they cannot sell without leaving a debt.’”

    I don’t trust government-sponsored schemes to make everyone rich. Eventually herding the sheople into the same trade predictably leads to a huge runup in price followed by bubble collapse.

    1. The Financial Times
      Credit Suisse Group AG
      Switzerland prepares emergency measures to deliver UBS takeover of Credit Suisse
      Daily deposit outflows at troubled Swiss bank topped Sfr10bn last week as fears for its health mounted
      Boards at the two banks are meeting this weekend in a bid to thrash out an agreement
      Laura Noonan, Stephen Morris, James Fontanella-Khan, Arash Massoudi and Owen Walker 3 hours ago

      Switzerland is preparing to use emergency measures to fast-track the takeover by UBS of Credit Suisse, according to three people familiar with the situation, as the banks and their regulators rush to seal a merger deal before markets open on Monday.

      Under Swiss rules, UBS would typically have to give shareholders six weeks to consult on the acquisition, which would combine Switzerland’s two biggest lenders.

      Three people briefed on the situation said UBS had indicated that emergency measures would be used so that it could skip the consultation period and pass the deal without a shareholder vote. The details are still being worked out, one of the people said.
      …

  40. RE: “a move meant to create liquidity that it could return to depositors seeking withdrawals”

    The classic definition of a Ponzi scheme . . .

  41. – Shot:

    https://twitter.com/RepThomasMassie/status/1634949873803075587?cxt=HHwWhoDR2e6PwbAtAAAA

    Thomas Massie
    @RepThomasMassie
    Let’s review the Federal Reserve Bank’s many roles, & how each of them enabled the SVB failure/malfeasance:

    (1) Santa Claus.
    By keeping interest rates artificially low, FED stimulated the economy, & nudged those with capital into the VC space creating demand for a bank like SVB.
    10:10 AM · Mar 12, 2023 · 1.9M Views

    (2) Arsonist.
    FED created $5 trillion out of thin air so Congress could inject this money into the economy. There weren’t 5 trillion dollars to borrow during COVID, and certainly not at the low rates imposed by FED. Inflation was off to the races thanks to dilution.

    (3) Firefighter.
    After setting the blaze, FED came to the rescue to fight inflation by rapidly increasing interest rates. As a result, net VC startup deposits into SVB slowed, while assets held by SVB (long-term low-interest government debt) became less valuable.

    (4) Trauma Doctor.
    Will the FED play a role in bailing out SVB depositors and other banks? Possibly by lowering rates, buying their holdings at above value, or creating more money for bailouts. None of these are free. But the FED becomes Santa Claus again and inflation rages on.

    We, the American people, would be better off if the Federal Reserve Bank, an instrument of the very wealthy and connected, did not exist to socialize the risks of insiders while distorting our economy, destroying jobs, and devaluing our currency.

    – Chaser:

    https://www.theblaze.com/op-ed/horowitz-with-the-impending-bank-bailout-and-stagflation-trap-its-time-to-clip-the-wings-of-the-federal-reserve

    Horowitz: With the impending bank bailout and stagflation trap, it’s time to clip the wings of the Federal Reserve
    Op-ed
    Daniel Horowitz
    March 13, 2023

    We have no free market and never will have one so long as the Federal Reserve exists in its current form. It is the unelected judge, jury, and executioner of the economy that can pick winners and losers by manipulating credit and monetary policy to artificially inflate certain investments and investors at the expense of others. Years of unnaturally low interest rates have enriched well-connected woke elites at the expense of consumers and savers. Now that their Ponzi scheme is coming due, with the collapse of one of the wokest banks and the vicious cycle of stagflation and reliance on loose money, it’s time for conservatives and GOP presidential candidates to revisit the idea of either abolishing or severely limiting the role of the Fed.

    In many respects, the Federal Reserve has more power than all three branches of government put together, yet the members never stand for reelection. For years, the Federal Reserve has created endless inflation and loose credit with near-zero interest rates and by buying up trillions of dollars of securities and treasuries. It distorted the market, allowed woke banks like Silicon Valley Bank to overextend themselves, and even become the primary lender for solar financing in America, based on Monopoly money.

    We have enough lawless, unelected branches of government. It’s time to stop creating asset bubbles and misallocation of resources and return to a true organic equities market that reflects the economic realities of America. That will not happen until the Fed is brought under the checks and balances of the republic. As Andrew Jackson warned of a central bank, “The bold effort the present (central) bank had made to control the government … [is] but premonitions of the fate that awaits the American people should they be deluded into a perpetuation of this institution or the establishment of another like it.”

  42. Why is it again that everyone wants to live in woke, broke San Francisco, the city where Gavin Newsom was mayor back a couple of decades ago?

    1. News
      U.S.
      ‘This Is Ridiculous’: CNN Crew in San Fran Targeted by Thieves while Doing Story on Rampant Crime
      Left: The rental car that was broken into. Right: San Francisco City Hall. (@KyungLahCNN/Twitter, elf0724/Getty Images)
      By Brittany Bernstein
      March 17, 2023 8:13 PM

      Members of a CNN crew had their bags stolen out of their rental car while on assignment at San Francisco’s city hall for a story about the city’s rampant crime.

      “Got robbed. Again,” CNN senior national correspondent Kyung Lah wrote in a tweet on Friday.

      While she and CNN producer Jason Kravarik were conducting an interview at city hall, thieves broke into their car and snatched their bags “in under 4 seconds” despite the crew having hired private security to keep watch.
      …
      https://www.nationalreview.com/news/this-is-ridiculous-cnn-crew-in-san-fran-targeted-by-thieves-while-doing-story-on-rampant-crime/

  43. With a raging banking crisis in full swing, is it a given that central banks will now pivot towards lower rates any day now?

    1. The Financial Times
      FT-IGM Survey US inflation
      Economists think Fed will keep raising rates despite bank turmoil
      Survey comes as trader’s scale back expectations of tightening amid worries about financial instability
      Trader at the New York Stock Exchange
      The Federal Reserve now has a banking crisis to fight at the same time it is trying to bring down inflation
      Colby Smith in Washington and Sam Learner in New York 2 hours ago

      The Federal Reserve will keep raising its benchmark policy rate, holding it above 5.5 per cent for the rest of the year, despite turmoil across the US banking sector, according to a majority of leading academic economists polled by the Financial Times.

      The latest survey, conducted in partnership with the Initiative on Global Markets at the University of Chicago’s Booth School of Business, suggests the US central bank still has work to do to stamp out stubbornly high inflation, even as it contends with a crisis among midsize lenders following the implosion of Silicon Valley Bank.

      Of the 43 economists surveyed between March 15 and 17 — just days after US regulators announced emergency measures to stem contagion and fortify the financial system — 49 per cent forecast the federal funds rate to peak between 5.5 per cent and 6 per cent this year.

      That is up from 18 per cent in the previous survey in December and compares to the rate’s current level of between 4.50 per cent and 4.75 per cent.

      Another 16 per cent estimated it would top out at 6 per cent or higher, while roughly a third thought the Fed would stop short of these levels and cap its so-called “terminal rate” below 5.5 per cent. Moreover, nearly 70 per cent of the respondents said they did not expect the Fed to deliver cuts before 2024.
      …

    2. Europe’s central bank backs big rate hike despite bank chaos
      By DAVID McHUGH
      March 16, 2023
      President of European Central Bank Christine Lagarde arrives for a press conference in Frankfurt, Germany, Thursday, March 16, 2023, after a meeting of the ECB’s governing council.
      (AP Photo/Michael Probst)

      FRANKFURT, Germany (AP) — The European Central Bank carried through with a large interest rate increase Thursday, brushing aside predictions it might dial back as U.S. bank collapses and troubles at Credit Suisse feed fears about the impact of higher rates on the global banking system.

      The ECB hiked rates by half a percentage point, underlining its determination to fight high inflation of 8.5%.

      While some foresaw a smaller increase because of the banking turmoil, President Christine Lagarde repeatedly called the banking sector in the 20 countries using the euro currency “resilient,” with strong financial reserves and plenty of ready cash.

      And if it became necessary, she said, the ECB is “fully equipped” to provide additional support to the banking system.

      “We are monitoring current market tensions closely and stand ready to respond as necessary to preserve price stability and financial stability,” Lagarde said.
      …
      https://apnews.com/article/ecb-bank-collapse-inflation-interest-rates-1b48e0456fa515c1378df197b061f572

    3. Reuters
      2 minute read
      March 16, 2023 12:59 PM PDTLast Updated 2 days ago
      Argentina hikes interest rate 300 basis points after inflation breaks 100% barrier
      By Jorge Otaola

      BUENOS AIRES, March 16 (Reuters) – Argentina’s central bank board said it agreed to hike the country’s benchmark interest rate by 300 basis points to 78% on Thursday after annual inflation hit 100% for the first time in over three decades.
      …

    4. The Wall Street Journal
      U.S. Economy
      Jerome Powell Says Fed Is Prepared to Speed Up Interest-Rate Rises
      Chair says U.S. central bank likely to lift rates higher than previously thought to fight inflation
      Federal Reserve Chair Jerome Powell told the Senate Banking Committee that getting inflation back to the 2% target has ‘a long way to go.’
      Photo: Al Drago/Bloomberg
      By Nick Timiraos
      Updated March 7, 2023 5:40 pm ET

      WASHINGTON—Chair Jerome Powell said the Federal Reserve would consider raising interest rates by a larger half percentage point this month and was likely to lift rates higher than previously expected this year to cool an economy that has shown surprising strength.

      Mr. Powell’s comments to lawmakers Tuesday laid the groundwork for a notable shift in tactics to reduce price pressures. He said hotter inflation and hiring could lead central bank officials to alter their recently adopted strategy of raising rates in smaller quarter-point increments.
      …

    5. Interest rates
      Central banks must keep interest rates high to combat inflation, says OECD
      Organisation also says UK will be only G20 economy apart from Russia to shrink this year
      Phillip Inman
      Fri 17 Mar 2023 09.16 EDT
      First published on Fri 17 Mar 2023 07.00 EDT

      Central banks should maintain the fight against inflation with high interest rates despite fears of a global banking crash, according to the OECD, which said the UK will be the only economy in the G20 apart from Russia to shrink this year.

      The Organisation for Economic Cooperation and Development said it was concerned that inflation remained stubbornly high in many of its 39 members countries and urged central banks to persist with interest rate increases when necessary.

      Álvaro Pereira, the Paris-based organisation’s interim chief economist, said services companies were continuing to push through strong price rises, even though wholesale energy and food prices were falling.

      “Services price growth has remained high, pushing up core inflation, which is why we believe central banks must remain vigilant,” he said.

      Some economists have said further interest rate rises by major central banks, including the Bank of England, will undermine the stability of the global financial system, which has become accustomed to ultra-low borrowing costs since the 2008 financial crash.

      The collapse of Silicon Valley Bank in the US, the sale of its UK offshoot to HSBC for £1 and the rescue of Credit Suisse after being thrown a $54bn lifeline by the Swiss central bank have spooked global markets.

      The European Central Bank president, Christine Lagarde, said on Thursday after she announced a 0.5 percentage point increase in the interest rate covering the 19-member euro bloc, that the fight against inflation remained a priority. She said the bank had the financial tools and necessary reserves should there be European banks in need of extra resources.

      US central bank policymakers and the Bank of England could follow suit when they meet on Wednesday and Thursday, respectively, though many economists have cut the odds on both unveiling a rise amid ongoing fears of a broader banking crisis.
      …
      https://www.theguardian.com/business/2023/mar/17/uk-will-be-only-g20-economy-apart-from-russia-to-shrink-this-year

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