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A Disconnect Between Finance And The Real World Lies At The Heart Of All Great Bubbles

A weekend topic starting with the Real Deal. “For years, venture capitalists and tech firms from California descended on South Florida. But the industry’s foothold on the market began to falter last year. And now, in the aftermath of the collapses of banks with large tech lending arms, South Florida’s future as a tech mecca is on even shakier ground. South Florida ‘wanted California investors,’ said Peter Zalewski, a longtime local real estate market analyst. ‘Well, you got them. But you also got Silicon Valley Bank exposure.… So you live by the sword, you die by the sword.'”

“Others expect trouble in residential real estate to be longer lasting. As tech firms leased South Florida offices, executives scooped up condos and single-family homes here. ‘I would also expect there might be some residential foreclosures, related to mortgages provided for recent transplants who may not be able to make their payments, given the issues that are transpiring,’ said Josh Migdal, a Miami-based attorney.”

Yahoo Finance. “Last week, Silicon Valley Bank shuttered, prompting alarm nationwide. Reality TV star and business mogul Kevin O’Leary blames the bank’s management for the crisis. ‘Basically, they took 90% of the depositors’ money and bet it long on 10-year Treasuries right when the Fed was raising rates. Yes, only an idiot banker would do that. But that’s what they did, massive risk,’ said O’Leary. O’Leary also argued that the intervention could set a bad precedent going forward. ‘I can be running a bank and just spend all of my day worrying about the stock price because I don’t have to worry about the deposits anymore…. I can swing for the fences,’ O’Leary said. ‘I have to stay within the rules of banking, but I can take inordinate risk to move that stock price and never worry about what I do with the depositors’ money. Does that sound like a good idea to you?'”

From Mises.org. “How should Congress assess the Federal Reserve’s track record as an investor in residential mortgage-backed securities (MBS)? Regardless of Fed spin, it merits a failing grade. From 1913 until 2008, the Fed owned precisely zero mortgage-backed securities. In a radical ‘temporary’ policy response to the 2008 financial crisis, the Fed began intervening directly in the mortgage market. Through a series of MBS purchases, the Fed’s MBS portfolio ballooned from $0 to $1.77 trillion by August 2017. The Fed subsequently altered policy and slowly reduced its MBS holdings. By March 2020, it held about $1.4 trillion in MBS.”

“When the COVID crisis hit in March 2020, the Fed decided to reinstate its 2008 financial crisis rescue plan. It resumed purchasing MBS as well as Treasury notes and bonds. By the time it stopped its purchases in the spring of 2022, it owned $2.7 trillion in MBS. The Fed had become the largest investor in MBS in the world. By spring 2022, it owned nearly 22 percent of all 1-to-4 family residential mortgages in the U.S. By Sept. 30, the date of the last available quarterly Fed consolidated financial statement, the Fed had lost $438 billion on its MBS investments.”

“Government statistics report that, from January 2018 to this January, the median new home price in the United States rose from $331,800 to $467,700—an increase of 41 percent. Interestingly, from January 2018 through March 2020, before the Fed renewed its MBS purchases, the median price of a new house actually declined to $322,600. From April onwards, the national median house price rose steadily, reaching a peak of $468,700 by the end of June 2022.”

“In 2018, purchasing a new median-price home with 20 percent down and the then prevailing average 30-year mortgage rate of 3.95 percent required $1,259 in monthly principal and interest payments. In January, purchasing the $467,700 median-priced new home with 20 percent down required monthly payments of $2,360 given the 6.48 percent rate on a 30-year mortgage. In only 5 years, because of house price inflation and higher mortgage interest rates, the monthly principal and interest payment needed to purchase a median-priced new house increased by 87 percent!”

The Globe and Mail. “February’s housing report from the Canadian Real Estate Association cemented this as the steepest house price correction at the national level in decades. According to CREA data, the typical home in Canada has fallen by $132,000, or 15.7 per cent since February, 2022. As bad as that sounds, the drop is actually worse once the corrosive effect of high inflation on purchasing power is factored in. In real, or inflation-adjusted terms, national house prices have fallen nearly $168,000, a more-than-19-per-cent decline.”

“Even though real prices are now just 5.5 per cent higher than in April, 2017, bigger mortgages and higher interest rates mean ownership costs eat up 60 per cent of average household incomes now, compared with 44 per cent then, according to RBC Economics.”

The New York Times. “Over the past week, an observation by Matt Klein, a financial journalist, has gotten passed around quite a bit. ‘This was more a case of a ‘bank-run by idiots’ rather than a ‘bank run by idiots, he wrote, referring to the collapse of Silicon Valley Bank. I don’t think all these people – many of whom performed quite well before in crises and amid uncertainty – are, or suddenly became, idiots. Here’s a more generous interpretation: change makes fools of us all, and we are living through an era of change. Three changes, in particular, are worth thinking about right now.”

“In his 2020 letter to investors, Seth Klarman, the CEO of the Baupost Group, a hedge fund, wrote, ‘The idea of persistent low rates has wormed its way into everything: investor thinking, market forecasts, inflation expectations, valuation models, leverage ratios, debt ratings, affordability metrics, housing prices and corporate behavior.’ He went on to say that ‘by truncating downside volatility, forestalling business failures and postponing the day of reckoning, such policies have persuaded investors that risk has gone into hibernation or simply vanished.'”

“Point for Klarman. Silicon Valley Bank’s collapse is inseparable from the long era of low interest rates. Silicon Valley specialised in providing banking to startups that had little or no revenue but were nevertheless flush with cash – much of it coming, indirectly, from the Fed’s huge increase in the money supply. In April 2021, Richard Clarida, who was then the vice chair of the Federal Reserve, said the conditions keeping rates low were ‘a global phenomenon that is widely expected by forecasters and financial markets to persist for years to come.'”

“Less than a year later, the Fed would embark on one of its fastest rate-hiking campaigns in history. As it did, all manner of assets that had levitated toward eye-popping valuations in recent years – stocks, cryptocurrencies, NFTs, Swiss watches – began to tumble. As Edward Chancellor writes in ‘The Price of Time,’ ‘A disconnect between finance and the real world lies at the heart of all great bubbles.'”

From Market Watch. “The failure of Silicon Valley Bank (SVB) is a failure of federal supervision as well as regulation. The two terms are used interchangeably, but are different concepts: regulation is about creating rules, supervision enforces them. Initial reactions to SVB’s failure focused on debating whether the Trump-era deregulation caused the failure, but this ignores the fundamental question of whether the rules that existed were being properly enforced. The answer is that they weren’t, and the Federal Reserve failed as a bank supervisor.”

“The Fed supervised SVB from head to toe, with the San Francisco Federal Reserve Bank in charge of both the bank and its larger parent holding company, SVB Financial Group. SVB was the largest bank the SF Fed supervised. SVB’s CEO even sat on the SF Fed’s Board of Directors up until the day the bank failed. As SVB needed cash, it used the arcane Federal Home Loan Bank system to borrow heavily — becoming the San Francisco FHLB’s top borrower at $20 billion.”

“To understand how significant this is, know that the FHLB is called the lender of next-to-last-resort. When a bank fails, the FHLB is the only entity that gets paid out ahead of the FDIC. The more indebted a bank is to the FHLB, the greater the losses born by the taxpayer if the bank fails. An oft-forgotten fact is that Senator Christopher Dodd’s original proposal, in the law that became Dodd-Frank, envisioned taking supervision of banks like SVB away from the Fed. That idea was voted down 91-9. Dodd-Frank ultimately expanded the Fed’s authority and power over the nation’s banking system. In SVB’s case, that has been a failure.”

From Richard A. Werner. “Central bank decision-makers led by the Fed were largely responsible for the Great Inflation of the 1970s. They adopted “easy money” policies in order to finance massive national budget deficits. Yet this inflationary behaviour went unnoticed by most observers. Most worryingly, despite these failings, the world’s central banks were able to continue unchecked on a path towards the unprecedented powers they now hold. Indeed, the painful 1970s and subsequent financial crises have been repeatedly used as arguments for even greater independence, and less oversight, of the world’s central banking activities.”

“All the while, central bank leaders have repeated the mantra that their ‘number one job’ is to achieve price stability by keeping inflation low and stable. Unfortunately, as we continue to experience both punishing inflation rates and high interest rates, the evidence is all around us that they have failed in this job.”

“To understand the real roots of our current inflation crisis, we must instead address another widely-held misconception: how money is created. This perceptive insight by the American economist J.K. Galbraith in 1975 was supported some 35 years later when, along with my Goethe University students, I conducted a survey of more than 1,000 passers-by in central Frankfurt. We found that more than 80% of those interviewed believed that most of the world’s money is created and allocated by either governments or central banks. An understandable view, but wrong.”

“In fact, my empirical studies of our global monetary system have demonstrated that it is high-street or retail banks that produce the vast majority – around 97% – of the world’s money supply. Every time a bank grants a loan, it is creating new money that is added to the economy’s overall money supply. In contrast, governments don’t create any money these days. The last time the US government issued money was in 1963, until President John F Kennedy’s assassination that year. The UK government stopped issuing money in 1927 and Germany even earlier, around 1910. Central banks, meanwhile, only create around 3% of the world’s money supply.”

“For growth to occur, more transactions need to take place this year than last. This can only happen if the supply of money available for these transactions increases – in other words, if retail banks issue more loans. If used correctly, it can be a powerful tool for increasing growth and productivity. This was the basis of my proposal to help Japan’s flatlining economy in the 1990s, which would later become widely known as “quantitative easing”, or QE.”

“However, QE’s subsequent depiction as a form of “magic money tree” is misplaced. In my 1997 paper and subsequent book, I stressed the difference between newly-created money when it is used for productive purposes – in other words, for business investment that creates new goods and services or increases productivity – and when it is used for unproductive purposes such as financial asset and real estate transactions. These merely transfer ownership from one party to another without adding to the nation’s income.”

“Unfortunately, in the UK and many other countries – especially those with only a few, very large retail banks – there has been a significant shift of bank credit away from lending for productive business investment to lending for asset purchases. As big banks want to do big deals, bank lending for asset purchases now accounts for the vast majority of lending (75% or more, according to my analysis of Bank of England data).”

“In contrast, just before the first world war, when there were many more small banks in the UK, more than 80% of bank lending was for productive business investment. This decline in bank lending for business investment has had many consequences, including falling economic growth and lower productivity in the UK. Nonetheless, over the two decades since, QE has become a monetary policy beloved of central banks across the world as they have sought to keep their economies looking strong in the face of serious economic challenges.”

“In May 2020, as I conducted my latest monthly analysis of the quantity of credit creation across 40 countries, I was startled to find that something extraordinary had been happening since March that year. The major central banks across the globe were boosting the money supply dramatically through a coordinated programme of QE.”

“Apparently agreeing with my critique that pure fiscal policy does not result in economic growth unless it is backed by credit creation, Blackrock had argued at Jackson Hole that the “next downturn” would require central banks to create new money and find ‘ways to get central bank money directly in the hands of public and private sector spenders’ – what they called ‘going direct,’ bypassing the retail banks. The Fed knew this would create inflation, as Blackrock later confirmed in a paper which stated that ‘the Fed is now committing to push inflation above target for some time.'”

“Many banking and economic experts thought the Fed’s and other central banks’ similarly aggressive credit creation policy in 2020 would not be inflationary, again. However, this time the economic conditions were very different – there had been no recent slump in the supply of money via retail bank loans. Also, the policy differed in a crucial aspect: by ‘going direct’ the Fed was itself now massively expanding credit creation, the money supply and new spending.”

“Meanwhile the COVID measures imposed by governments also focused on bank credit creation. In parallel with unprecedented societal and business lockdowns, retail banks were instructed to increase lending to businesses with governments guaranteeing these loans. Stimulus checks were paid out to furloughed workers, and both central banks and retail banks also stepped up purchases of government bonds. So both central and commercial banks added to the supply of money, with much of it being used for general consumption rather than productive purposes (loans to businesses).”

“As a result, the money supply ballooned by record amounts. The US’s “broad” money supply metric, M3, increased by 19.1% in 2020, the highest annual rise on record. In the eurozone, money supply M1 grew by 15.6% in December 2020. It was a perfect recipe for inflation – and significant consumer price inflation duly followed around 18 months later, in late 2021 and 2022. While it was certainly exacerbated by the COVID restrictions, it had nothing to do with Russian military actions or sanctions on Russian energy – and a lot to do with the central banks’ misuse of QE.”

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  1. ‘I can be running a bank and just spend all of my day worrying about the stock price because I don’t have to worry about the deposits anymore…. I can swing for the fences,’ O’Leary said. ‘I have to stay within the rules of banking, but I can take inordinate risk to move that stock price and never worry about what I do with the depositors’ money. Does that sound like a good idea to you?’

    A grade school class could understand this.

  2. 𝗥𝗮𝗹𝗲𝗶𝗴𝗵, 𝗡𝗖 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗣𝗿𝗶𝗰𝗲𝘀 𝗖𝗿𝗮𝘁𝗲𝗿 𝟮𝟭% 𝗬𝗢𝗬 𝗔𝘀 𝗡𝗼𝗿𝘁𝗵 𝗖𝗮𝗿𝗼𝗹𝗶𝗻𝗮 𝗛𝗼𝘂𝘀𝗶𝗻𝗴 𝗗𝗲𝗺𝗮𝗻𝗱 𝗣𝗹𝘂𝗺𝗺𝗲𝘁𝘀 𝗧𝗼 𝗥𝗲𝗰𝗼𝗿𝗱 𝗟𝗼𝘄

    https://www.movoto.com/nc/27601/market-trends/

    𝘈𝘴 𝘰𝘯𝘦 𝘯𝘢𝘵𝘪𝘰𝘯𝘢𝘭 𝘣𝘳𝘰𝘬𝘦𝘳 𝘦𝘹𝘱𝘭𝘢𝘪𝘯𝘦𝘥, “𝘖𝘶𝘳 𝘧𝘰𝘳𝘦𝘤𝘢𝘴𝘵 𝘱𝘳𝘰𝘫𝘦𝘤𝘵𝘴 𝘱𝘳𝘪𝘤𝘦 𝘥𝘦𝘤𝘭𝘪𝘯𝘦𝘴 𝘰𝘧 40% 𝘵𝘰 60% 𝘥𝘦𝘱𝘦𝘯𝘥𝘪𝘯𝘨 𝘰𝘯 𝘭𝘰𝘤𝘢𝘵𝘪𝘰𝘯. 𝘙𝘦𝘮𝘦𝘮𝘣𝘦𝘳… 𝘭𝘰𝘤𝘢𝘵𝘪𝘰𝘯, 𝘭𝘰𝘤𝘢𝘵𝘪𝘰𝘯, 𝘭𝘰𝘤𝘢𝘵𝘪𝘰𝘯!”

  3. ‘In only 5 years, because of house price inflation and higher mortgage interest rates, the monthly principal and interest payment needed to purchase a median-priced new house increased by 87 percent!’

    These sh$tholes with 50-75% CCP virus ‘appreciation’ are sitting on big air pockets. We got nothing good out of it.

    1. ‘These merely transfer ownership from one party to another without adding to the nation’s income’

    3. The spin doctors are saying that she had an pre-existing cardiac condition. I’m sure the jab didn’t do anything to make it worse.

      Imagine having a bad ticker to begin with AND you get the jab. As the saying goes, you can’t fix stupid.

      1. No jab, no job. She might’ve been coerced into getting the clot shot, though most Real Journalists are zealots when it comes to pushing globalist agendas.

      2. at most that lady is (well was) 40 years old. She’s skinny and not obviously obese. Before 2021/22 how many 40 year olds of any size you know that collapse on air?????

        um pretty sure that number for just about everyone is zero.

        Yep, it’s the vaxx.

        F’em, they made their choice.

        1. Before 2021/22 how many 40 year olds of any size you know that collapse on air?????

          Especially considering they work in a climate controlled studio and she was probably at her desk putting her presentation together before she collapsed on air.

  5. Bank crisis will tip U.S. into hard landing after all, says Apollo’s chief economist: ‘I changed my view’
    BY Vildana Hajric, Michael P. Regan and Bloomberg
    March 18, 2023 at 2:14 PM PDT
    Torsten Slok sees a hard landing ahead after crisis with SVB and other banks.

    If you asked Torsten Slok a week ago how the economy was going to fare this year, he would have told you he was expecting a no-landing scenario, whereby the Federal Reserve would tame inflation without triggering a downturn.

    But all has changed following the collapse of three US banks over a matter of days. The chief economist of Apollo Global Management now says he’s bracing for a hard landing. He joined the What Goes Up podcast to discuss his changing views.

    Here are some highlights of the conversation, which have been condensed and edited for clarity. Click here to listen to the full podcast on the Terminal, or subscribe below on Apple Podcasts, Spotify or wherever you listen.

    Q: You changed your view of seeing a no-landing scenario to a hard-landing one — tell us about this.

    A: The debate up until recently was that, well, why is the economy not slowing down when the Fed is raising rates? Why is it that the consumer is still doing so well? And a very important answer to that was that, well, there was still a lot of savings left across the income distribution, that households still had plenty of savings left after the pandemic. And up until recently, the debate was why is this economy not slowing down? And call that what you want, but that’s what we have called the no landing. And that was the reason why inflation continued to be in the range of 5%, 6%, 7%. That’s why the Fed had to raise rates.

    What happened, of course, here with Silicon Valley Bank was that suddenly out of the blue, at least for financial markets, really nobody — and I think that’s safe to say at this point — had seen this coming.
    …
    https://fortune.com/2023/03/18/bank-crisis-will-tip-economy-into-hard-landing-apollo-chief-economist-torsten-slok/

  6. Joe Biden’s America.

    New York Times — As homelessness overwhelms downtown Phoenix, a small business wonders how long it can hang on (3/19/2023):

    “He looked out the window toward Madison Street, which had become the center of one of the largest homeless encampments in the country, with as many as 1,100 people sleeping outdoors. On this February morning, he could see a half-dozen men pressed around a roaring fire. A young woman was lying in the middle of the street, wrapped beneath a canvas advertising banner. A man was weaving down the sidewalk in the direction of Joe’s restaurant with a saw, muttering to himself and then stopping to urinate a dozen feet from Joe’s outdoor tables.

    “It’s the usual chaos and suffering,” he told Debbie. “But the restaurant’s still standing.”

    That had seemed to them like an open question each morning for the last three years, as an epidemic of unsheltered homelessness began to overwhelm Phoenix and many other major American downtowns. Cities across the West had been transformed by a housing crisis, a mental health crisis and an opioid epidemic, all of which landed at the doorsteps of small businesses already reaching a breaking point because of the pandemic.

    The city’s average rent rose by more than 80 percent during the pandemic. A wave of evictions drove more people from their homes, until for the first time ever more than half of Phoenix’s homeless population was finding refuge not in traditional places, like shelters or temporary apartments, but in cars or tents.

    Soon there were hundreds of people sleeping within a few blocks of Old Station, most of them suffering from mental illness or substance abuse as they lived out their private lives within public view of the restaurant. They slept on Joe and Debbie’s outdoor tables, defecated behind their back porch, smoked methamphetamine in their parking lot, washed clothes in their bathroom sink, pilfered bread and gallon jars of pickles from their delivery trucks, had sex on their patio, masturbated within view of their employees and lit fires for warmth that burned down palm trees and scared away customers. Finally, Joe and Debbie could think of nothing else to do but to start calling their city councilman, the city manager, the mayor, the governor and the police.

    “We’ve got a guy outside who’s naked, trespassing and needs some serious help,” Joe reported in a call to the police in the fall of 2021.

    “They’re throwing rocks from across the street at our windows,” he said in another call a few months later.

    “Breaking and entering. Vandalism. Harassment. I’m probably leaving some stuff out.”

    “She’s swinging a pipe at people. Would you consider that normal?”

    “It’s a fire the size of my house. My customers are trying to eat, and they can’t even breathe.”

    “Gunshots. Shouting. It goes on all day.”

    Within a half-mile of their restaurant, the police had been called to an average of eight incidents a day in 2022. There were at least 1,097 calls for emergency medical help, 573 fights or assaults, 236 incidents of trespassing, 185 fires, 140 thefts, 125 armed robberies, 13 sexual assaults and four homicides. The remains of a 20-to-24-week-old fetus were burned and left next to a dumpster in November. Two people were stabbed to death in their tents. Sixteen others were found dead from overdoses, suicides, hypothermia or excessive heat.”

    https://archive.is/5n4GU

      1. “by plan”

        Criminals have more rights than small business owners? See also: Seattle, Portland, San Francisco, Los Angeles, Austin, and yes, Denver.

        The election to replace term-limited Denver Mayor Michael Hancock is on April 4th. Nothing will change. Nothing will ever get better. In the City / County of Denver, property taxes pay to get you ZERO SERVICES from law enforcement / public safety.

        1. Nothing will ever get better.

          IIRC, Colorado is planning to close all fossil fuel power plants by 2030. They really believe that they can go 100% wind and solar. Of course, what will actually happen is that we will end up buying (and paying through the nose) for power from neighboring states, like Wyoming, Kansas, the Dakotas, etc. to make up for shortfalls. Of course when it gets very hot our good neighbors won’t be able to meet our needs and there will be rolling blackouts. And voters will keep voting for D’s.

          I have been pondering on moving the Cheyenne, but that will only buy time, as Denverites will move en masse to Wyoming once the SHTF. It won’t take many newcomer “missionaries” to turn Wyoming blue, as its current population is 500K.

          1. The “blue” aren’t leaving Colorado (or Kali or OR or wash) the Red are and making red states even more red.

          2. The “blue” aren’t leaving Colorado (or Kali or OR or wash)

            Are you sure? Colorado went from red to blue in just a couple of decades

    2. As homelessness overwhelms downtown Phoenix, a small business wonders how long it can hang on

      I don’t think I’ve ever seen a single news article that talks about the homelessness epidemic having anything to do with the housing bubble and soaring rents and house prices, but that appears to finally be changing. It was always just cast off as some random event where all of a sudden there’s all of these homeless people.

      1. It was always just cast off as some random event where all of a sudden there’s all of these homeless people.

        No one could have seen it coming.

  7. “This sucker could go down” — George W. Bush

    CNBC — Midsize U.S. banks reportedly ask the FDIC to insure all deposits for two years (3/18/2023):

    “A coalition of midsize U.S. banks, Mid-Size Bank Coalition of America (MBCA), has 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.”

    TWO YEARS?

    “The letter argued that extending insurance will immediately stop the exodus of deposits from smaller banks, which in turn will stabilize the banking sector and restore confidence in banking system, the report said.”

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

    Two years, is that enough time to implement Central Bank Digital Currency? Because that is where this is all going.

    1. Two years, is that enough time to implement Central Bank Digital Currency? Because that is where this is all going.

      The more crises they cause, the more power they amass. They are incentivized to blow it all up. “They” being central planners, politicians and unelected bureaucrats.

  8. Does the current banking turmoil make you want to stampede your investments into safe haven assets?

    1. Financial Times
      Opinion Lex
      US money market funds: cash is king amid banking turmoil
      These funds have ballooned as investors seek a safer shelter for their cash.
      Money-market funds are generally seen as an ultra-safe cash substitute
      33 minutes ago

      Cash is no longer trash. Assets invested in US money market funds hit a record $5tn last week. Investors rattled by the collapse of three US banks and a crisis of confidence in smaller regional lenders scrambled for safe, liquid alternatives to park their assets.

      About $120bn flooded into US money market funds in the week to March 15, according to the Investment Company Institute. That is the biggest weekly inflow since April 2020.

      A money market fund is a mutual fund that invests in short-term debt. While they are not federally-insured, they are generally seen as an ultra-safe cash substitute.

      But what goes in quickly, can come out just as fast. The importance of these instruments in the financial plumbing system has prompted the Federal Reserve to step in twice in the past 15 years. New rules — aimed at disorderly runs during periods of market stress — should be unveiled in April.

      The worst panic since the Great Financial Crisis is wracking western banking. That makes outcomes hugely unpredictable. But optimists believe current inflows into money market funds carry less risk than in the past.

      Past bouts of instability were centred on “prime” money market funds. These invest in commercial paper (short term company debt), a key source of short-term financing for many US companies. Sudden mass withdrawals contributed to stress in the short-term funding markets.

      But exposure to prime funds has been in decline. More than 82 per cent of money fund assets are now in government funds, which invest only in Treasuries or government bonds. Investors have poured nearly $145bn into government money market funds and took out $18bn from prime funds.

      Another reason that should discourage investors from rushing for the exit: the relatively high returns available on money market funds. These have steadily increased since the Fed started raising interest rates last year. An index of the 100 largest money market funds run by Crane Data, which tracks the industry, shows yields have climbed on average to 4.4 per cent from 0.02 per cent at the start of 2022.

      That is still running behind the pace of US inflation, which clocked in at 6 per cent in February. But these funds, absent an unreasoning stampede out of them, should still offer a decent shelter for nervous capital.
      …

      1. If I were an executive at SVB who sold my shares early I wouldn’t stop there. I would turn right around and short SVB with those proceeds. This is how the game is played, i.e., kick ’em while they’re down!

        1. Probably not a wise idea with the DOJ and SEC conducting separate investigations into SVB’s collapse.

      2. “A money market fund is a mutual fund that invests in short-term debt. While they are not federally-insured, they are generally seen as an ultra-safe cash substitute.”

        It seems like they broke the buck at some point during the 2007-2009 episode. It also seems they were on the receiving end of bailouts. Like SVB and the US housing market, they were determined to be too big to fail.

        My recollection is foggy on details of the episode…

        1. Banking Money Market Account
          Money Market Mayhem: The Reserve Fund Meltdown
          By James McWhinney
          Updated October 31, 2021
          Reviewed by Khadija Khartit

          On Sept. 16, 2008, the Reserve Primary Fund broke the buck when its net asset value (NAV) fell to $0.97 cents per share. It was one of the first times in the history of investing that a retail money market fund had failed to maintain a $1 per share NAV. The implications sent shockwaves through the industry.

          Key Takeaways
          – The Lehman Brothers’ bankruptcy helped force the Reserve Primary Fund to break the buck in 2008.
          – This marked one of the earliest examples in the history of a retail money market fund trading with a NAV of less than $1.
          – The Reserve Primary Fund only held 1.5% of its assets in Lehman commercial paper, yet, investors expressed fears of the fund’s other holdings.
          – The fund was unable to meet redemption requests and was forced to suspend operations and liquidate.
          – The collapse of the fund meant investors began to doubt the safety of money market funds as a safe, liquid place to invest.
          …
          https://www.investopedia.com/articles/economics/09/money-market-reserve-fund-meltdown.asp

        2. No, you’re right. Money Market funds aren’t “insured” by FDIC either and they have broken the buck in the past. And more than a couple got sent money by their parent companies to not break the buck in 08/09. No reason they wouldn’t now either. It’s not safer in a MM than it is in a bank. Might pay better interest rates (it’s supposed to) but it comes with higher risks.

        3. While they are not federally-insured, they are generally seen as an ultra-safe cash substitute.”
          While maybe technically not Federally insured..
          From Barron’s 3/19/2023. (same thing happened last crash)
          The Fed Said It Will Backstop Prime Money-Market Funds. What That Means and Why It’s Important.

  9. Will the last taxpayer leaving San Francisco please turn out the lights?

    NPR — San Francisco will discuss reparation proposals — but even supporters are split (3/18/2023):

    “In a unanimous vote on Tuesday, the 11 members accepted a draft plan of more than 100 reparations recommendations for the city’s eligible Black residents. Those proposals include a whopping one-time payment of $5 million to each adult and a complete clearing of personal debt — including credit cards, taxes and student loans. Black residents would also be able to collect an annual income of at least $97,000 for 250 years and buy homes within the city limits for $1.”

    https://www.npr.org/2023/03/18/1164126348/san-francisco-reparations-proposal-activists

    Want to know what will happen when all the white people leave, and take the water and electricity with them?

    ‘Widespread violence’: South Africa braces for day of chaos as Marxist party demands ‘national shutdown’ (3/18/2023):

    “South Africans are nervously awaiting a controversial “national shutdown” on Monday organised by the radical Marxist party, which is accused of threatening violence and “looting” for those who refuse to take part.

    Amid ongoing rolling blackouts — and the looming threat of a total collapse of the power grid — skyrocketing crime and unemployment and deteriorating services, the far-left Economic Freedom Fighters (EFF) has announced a nationwide shutdown on March 20 to protest the ruling African National Congress (ANC) government.

    But the country’s main opposition party has warned of “widespread violence” if the day is allowed to go ahead.

    The EFF, which has been accused of inciting violence against white farmers through its use of the “Kill the Boer” song at its rallies, has warned businesses and shop owners to stay closed on Monday.”

    https://www.news.com.au/finance/economy/world-economy/widespread-violence-south-africa-braces-for-day-of-chaos-as-marxist-party-demands-national-shutdown/news-story/1f24a7bdf26c27186144d57409b0b100

    Kill all the white farmers, because they did in Zimbabwe and look how well that’s worked out for them.

    “They’re not sending their best”

    1. Kill all the white farmers, because they did in Zimbabwe and look how well that’s worked out for them.

      Yet Robert Mugabe was celebrated as a world hero after destroying Zimbabwe. Now it’s South Africa’s turn to go under the waves and the globalists continue to approve what the ANC is doing.

    2. “Black residents would also be able to collect an annual income of at least $97,000 for 250 years and buy homes within the city limits for $1.”

      Pretty good deal if the color of your skin qualifies you to be on the receiving end…

      1. Can someone who self-identifies as a Yemeni lesbian get a cut of this action? Asking for a friend.

      2. And voters are going to agree to this shakedown; what are they going to do to fund this giveaway, lein property owners?

    3. Kill all the white farmers, because they did in Zimbabwe and look how well that’s worked out for them.

      Yet look at that entire SF Board of Supervisors – predominantly white liberals. They are fomenting hatred against their own kind. White liberals are the enemy of the United States.

  10. Joe Biden’s America.

    Shiny new NYC subway already defiled by vagrants, druggies, scofflaws (3/18/2023):

    “Vagrants, junkies, smokers, drinkers and other scofflaws are already defiling the subway system’s newest, $27 million train, less than a week after it debuted on the A line.

    The Post witnessed the boorish behavior last week on the R211, which began running on March 10 and is the first batch of 1,175 futuristic cars the MTA is buying over the next two years for $3.2 billion.

    On Tuesday afternoon, three homeless men and a junkie were found in varying states of consciousness across four of the 10 swanky cars.

    One man was zonked out and muttering to himself, and others stretched out on benches to nap during rush hour.

    “It’s been four days and someone is trying to make it their home already,” one straphanger lamented.

    Two other passengers complained that their maiden voyages on the tricked-out train literally stunk.

    “It still smells bad, and there’s still somebody laying down on the seat,” said Isa, 35. “I was definitely hoping for better.”

    After the new subway train currently in service successfully completes a 30-day trial period, more trains will eventually be put into service, including those with the open-gangway model.

    Things then could get a lot worse—and smellier — straphangers fear.

    “I’m not looking forward to the open gangway because one person is gonna stink up the entire train,” said Edwin Martinez-Vazquez, 22.

    “It still looks clean, but I wonder how long it’s gonna stay that way.”

    https://nypost.com/2023/03/18/new-nyc-subway-already-defiled-by-homeless-rowdy-riders/

  11. Some people can still afford homes in CA

    “Ventura County Sheriff Jim Fryhoff draws $512K in combined pension, salary”

  12. The Financial Times
    Opinion Banks
    Global banking is now inside Schrödinger’s box
    Investors must trust in the system but confidence is wobbling and there may be more toxicity to come
    An artist’s impression of the Schrödinger’s cat thought experiment. Or, if using the FT Edit app, a photograph of a cat in a box
    The Schrödinger’s cat thought experiment has parallels to the state of banking today — we cannot know whether or not the past week signals the start of a 2008-style crisis
    Megan Greene 48 minutes ago
    The writer is an FT contributing editor

    The famous quantum mechanics thought experiment posits that if a cat is sealed in a box with a deadly substance, you can’t know whether it is still alive until you open said box. In the meantime, it is simultaneously alive and dead. And so it is with banking today: we can’t know if the past week was a series of idiosyncratic, containable issues or the start of a 2008-style banking crisis. At the moment it is both.

    Investors and depositors must not only believe that banks have good capital ratios, ample access to liquidity and behave responsibly, but also that the supervisory and regulatory architecture put in place after 2008 to save the system works. In the short term, there can be gradations of confidence in all of this. But when we finally look in the box, investors must either trust all of these things or none. It is a binary outcome: the cat can’t be a little bit dead.
    …

    1. “…we cannot know whether or not the past week signals the start of a 2008-style crisis…”

      We’ve seen this movie before.

    2. “…the supervisory and regulatory architecture put in place after 2008 to save the system works.”

      Better yet, does it work without worsening inflation?

    1. ‘When I look at all of the facts alleged in the four-page memo, it looks potentially unethical. But it’s difficult to match it up with any illegality or crime,’ said Goodman.

      Had it been President Trump there would have been Black Hawks over Mar-a-Lago with the FBI SWAT team rappelling down ropes and knocking down doors a long long time ago.

      1. The J6 witch-hunt is now the biggest investigation in US history, while the really big criminals are free to loot, plunder, and defraud with impunity.

    3. Yet nothing will happen. All of the corruption and fraud is out in the open, but the entire justice department is corrupt as well.

    1. Just got back from a quick run to the grocery store. Ir was painfully obvious that most items are about 50% more expensive than 2 years ago.

  15. ‘I can be running a bank and just spend all of my day worrying about the stock price because I don’t have to worry about the deposits anymore…. I can swing for the fences,’ O’Leary said.

    “Shareholder value” is destroying American companies and the middle class, by design. Heckova job, Yellen the Felon, BlackRock Jay, and captured policymakers.

    1. ‘I can be running a bank and just spend all of my day worrying about the stock price because I don’t have to worry about the deposits anymore…. I can swing for the fences,’ O’Leary said.

      The funniest thing about this quote is that it’s from O’Leary – the guy who was squealing like a pig to get a government bailout on his FTX losses.

      1. The funniest thing about this quote is that it’s from O’Leary – the guy who was squealing like a pig to get a government bailout on his FTX losses.
        Well said! Maybe if he’d some some due diligence on FTX he would not have been in that “pickle.”

  16. The government’s fabricated case against the Proud Boys was suspended until next week after the defense attorneys were accidentally given information from DOJ lawyers that shows the US government was deleting evidence, hiding documents and spying on the prisoners while they were speaking with their attorneys. (Forward, Soviet!)

    https://www.thegatewaypundit.com/2023/03/proud-boy-dominic-pezzola-calls-gateway-pundit-with-explosive-developments-from-proud-boys-trial-fbi-lied-and-guess-who-ignited-the-violence-on-j6-audio/

    1. 53.4 million views as of now.

      “If you don’t like the terms of use on Twitter, go build your own Twitter” — some recently laid off Bay Area useful idiot.

      Elon: buys Twitter. Mic drop.

      1. buys Twitter

        It wasn’t quite that simple. Elon got in a pi$$ing contest with Parag over text messages, signed a seller friendly agreement, then spent months and millions of dollars trying to get out of the deal where the Delaware Court of Chancery was going to demand specific performance. Elon paid $44B based on drug reference for a company not worth more than $6B.

          2. Tesla holdings

            The Twitter acquisition also allowed him to dump $TSLA as the company faces increased competition.

        2. “lon paid $44B based on drug reference for a company not worth more than $6B.”

          Genius! Then again idiots are pumping his Te$la stocks…
          Overall, I suppose twitter is better after he took over. May be that’s something.

          1. better after he took over

            He saddled the company with $13B in debt and destroyed its revenues.

  19. Are shotgun weddings the solution to quell the banking panic without rewarding those whose high risk gambling activities set the stage for it?

    1. The Financial Times
      Opinion Lex
      UBS/Credit Suisse: shotgun wedding aims to forestall contagion
      This is a messy, ugly transaction that nobody really wants — but it’s also necessary
      The terms are humiliating to a Credit Suisse management team still talking a couple of days ago about its turnround plan
      4 hours ago

      Credit Suisse may shortly be a historic footnote. Its capital buffers meant nothing to many depositors. They went on pulling funds even after the Swiss National Bank put up SFr50bn in extra liquidity. UBS is preparing to take the time bomb for the Swiss team. Pray the countdown will stop, stalling this bank run and any others incipient across Europe.

      The terms are humiliating to a Credit Suisse management team still talking a couple of days ago about its turnround plan. In its current form, this all-share takeover would be worth a paltry SFr0.50 or so a share, roughly $2bn in total. Credit Suisse shares closed at SFr1.86 on Friday after weeks of steep declines.

      Assuming the deal comes off, no one can complain about banks privatising gains and socialising losses. The Swiss authorities are intent on railroading this transaction through. Shareholders might be robbed of the chance to vote on the transaction. Almost all of the Credit Suisse equity would be wiped out, though its senior creditors would feel comforted.
      …

      1. “Pray the countdown will stop, stalling this bank run and any others incipient across Europe.”

        Go ahead and accuse me of FUD* if you wish, but I am personally skeptical that prayer will suffice to remedy the banking sector’s underwater balance sheet problem on either side of the Pond. Too many bankers acted on faith that low interest rates were here to stay, and larded the asset side of their balance sheets with unhedged investments in longterm bonds that predictably CR8Red when rising rates blew up the bond market last year. Depositors are naturally a bit skitish, given that there may not be enough central banking support available to save everyone without inadvertently increasing inflationary pressure.

        Time will tell if hope and prayer can fix this.

        * FUD = fear, uncertainty and doubt

        1. Bad bonds risk bringing down banks, warns ‘Dr. Doom’
          Nouriel Roubini, a perennial prophet of financial doom, issues a fresh warning over bond portfolios as interest rates rise.
          The 2022 Concordia Annual Summit – Day 3
          Dr. Nouriel Roubini, Professor at New York University has zeroed in on the heart of SVB’s problem | John Lamparski/Getty Images for Concordia Summit
          By Izabella Kaminska
          March 16, 2023 7:27 pm CET
          4 minutes read

          The man who predicted the 2008 banking crisis has a new blip on his sonar screen: “underwater” bonds that he says make up a dangerously large chunk of the sector’s assets.

          Nouriel Roubini, professor emeritus at the Stern School of Business of New York University — a.k.a. Dr. Doom — warned this fatal flaw in bondholdings, which lay at the heart of the sudden downfall of Silicon Valley Bank last week, could could cause any instability in the U.S. or European banking sectors to quickly spiral into a rout. Pension funds, asset managers and other large investors are also at risk, he warned.

          Markets are jittery after SVB collapsed last Friday, in the biggest bank failure since 2008. U.S. agencies scrambled to contain the damage, but banks’ share prices on both side of the Atlantic took a beating, with long-troubled Credit Suisse finding a new record low on Wednesday, prompting a lifeline intervention from the Swiss National Bank.

          Roubini zeroed in on the heart of the problem. SVB had built up a big bond portfolio while interest rates were near zero, but the value of those bonds plunged when rates rose and newly issued debt became far more attractive to investors. The old bonds started to represent “unrealized losses.”

          When troubles in the tech sector pushed SVB’s depositors to start making large withdrawals, the bank was forced to sell its bond portfolio in an unfavorable market. Those “unrealized losses” were realized, and SVB suffered a $1.8 billion loss, leading to the bank’s eventual collapse.

          Any other shock could have a similar domino effect, Roubini warned. “Official data of the FDIC [U.S. Federal Deposit Insurance Corporation] said there are $620 billion of unrealized losses on securities and the capital of banks in the U.S. is $2.2 trillion, so the average U.S. bank has about a third of its tier one capital at risk,” he told POLITICO, referring to a metric that indicates how easily a bank can absorb losses on its financials.

          Over in Europe, unrealized losses on bond portfolios could be much graver, Roubini said. Europe, and specifically Switzerland, were among the first places in the world to push ahead with negative interest rates, meaning the sensitivity of local bond portfolios to rising interest rates was likely to be much larger. Bank profitability on the continent has also been much lower, putting further strain on capital buffers and, by extension, the value of bank shares.

          An extraordinary exposure?

          An unrealized loss is a sort of limbo state for a financial asset, where it can be worth either exactly what you paid for it plus interest, or much less if you are forced to sell it before its maturity date.

          Imagine you took out a loan to start a business, using your house as collateral. If the property market falls by half, that’s OK: you can still make the repayments and you still have your house. But now imagine that the business cycle turns against you and you have to sell the house. All of a sudden, it’s not enough to cover your liabilities and you go bankrupt.
          …
          https://www.politico.eu/article/bad-bonds-risk-bringing-down-banks-warns-dr-doom-nouriel-roubini-svb/

          1. “Nouriel Roubini, a perennial prophet of financial doom, issues a fresh warning over bond portfolios as interest rates rise.”

            Notice how rather than objectively condider the merits of Roubini’s argument in its own right, the real financial journalist started off by discounting Roubini’s validity.

            If he were making the bull case, he would be referenced as an expert and would not have to bother with presenting any evidence to support the opinions he shared.

          2. “…where it can be worth either exactly what you paid for it plus interest, or much less if you are forced to sell it before its maturity date.”

            I’ve never been a big fan of book value. Why are fantasy valuations that have nothing to do with the resale (market) value of an investment whatsoever relevant? Seems like a convenient accounting gimmick to hide unrealized losses…

        2. 17 hours ago – Economy & Business
          Midsize banks plead for unlimited FDIC backstop for two years
          Nathan Bomey, author of Axios Closer
          A large round government logo on the ground in front of a stately building

          A coalition of midsize U.S. banks is calling on the government to insure all deposits for the next two years, in the wake of Silicon Valley Bank’s emergency rescue that insured all of the firm’s deposits regardless of size.

          Driving the news: The Mid-Size Bank Coalition of America sent a letter to regulators arguing that a temporary suspension of the FDIC’s deposit insurance limit is necessary to ensure that smaller banks can navigate the current banking crisis, Bloomberg reported.

          – “Doing so will immediately halt the exodus of deposits from smaller banks, stabilize the banking sector and greatly reduce chances of more bank failures,” the letter said, according to Bloomberg.

          – Tesla CEO Elon Musk also endorsed the idea in a Twitter post early Saturday, saying the move was needed to “stop bank runs.”

          Why it matters: After the sudden collapse of Silicon Valley Bank and New York’s Signature Bank, the spotlight is on banks that may also be vulnerable to a sudden outflow of deposits.

          – The FDIC currently insures deposits up to $250,000, though the agency’s decision to protect SVB and Signature depositors suggests a broader willingness to back customer funds.

          – Separately, Bloomberg also reported that billionaire investor Warren Buffett was in contact with the White House, heightening speculation that he could provide financial support to regional banks.
          …
          https://www.axios.com/2023/03/19/svb-fdic-signature-bank-midsize-banks

          1. “The Mid-Size Bank Coalition of America sent a letter to regulators arguing that a temporary suspension of the FDIC’s deposit insurance limit is necessary to ensure that smaller banks can navigate the current banking crisis, Bloomberg reported.”

            Did you hear about the guy who, upon getting a terminal diagnosis from his doctor, asked his insurance company to increase his small amount of life insurance coverage to $1 million dollars? Once word got out that the insurance company agreed to this coverage increase, because failing to do so would jeopardize the future financial wellbeing of the insured’s surviving family members, all the other life insurer’s terminally ill customers requested the same coverage increase for the same reasons.

            What do you think the insurance company did in response to this request to suddenly load up the liability side of their balance sheet with a huuge increase in coverage, with no commensurate increase in assets?

            [You can answer however you please, because this is a made up allegory.]

          2. The Financial Times
            US banks
            White House pressed to expand deposit guarantee to steady banks
            Regulators’ intervention in crisis has so far failed to calm nerves
            A pedestrian walks by a First Republic Bank ATM in Los Angeles,
            Measures taken to protect US banks such as First Republic have failed to reassure investors
            James Politi in Washington and Joshua Franklin in New York an hour ago

            The Biden administration is under mounting pressure to call for an expansion of the federal guarantee on bank deposits to shore up confidence in the financial system and prevent further distress among US regional banks.

            The Federal Deposit Insurance Corporation, which is funded by banks, guarantees deposits up to $250,000. But a growing chorus of influential bipartisan lawmakers and banking industry lobbyists have been pushing for that limit to be increased or suspended.

            “I think that lifting the . . . cap is a good move,” Elizabeth Warren, the Democratic senator from Massachusetts, told CBS on Sunday. “Is it $2mn? Is it $5mn? Is it $10mn? Small businesses need to be able to count on getting their money to make payroll, to pay the utility bills. Non-profits need to be able to do that,” she added.

            The Biden administration is being forced to consider additional measures to protect the banks after the actions it took last week — including guaranteeing all deposits at Silicon Valley Bank and Signature Bank, and a the Wall Street-led deposit infusion into First Republic Bank — failed to reassure investors on Friday.

            Biden administration officials have not ruled out the possibility of calling for a broadening of the FDIC-insured deposit limit, which would require congressional approval, nor have they taken a position on it. The White House and Treasury declined to comment on Sunday.

            Any move to expand the FDIC deposit guarantee would have to be weighed against concerns that it might encourage risky behaviour by banks, as well as the cost to banks and consumers, since it would probably be accompanied by higher fees. Rather than a short-term fix, it may be part of longer-term reforms debated following this week’s turmoil.

            “All options should be on the table, and that’s how I’m approaching it. But if we do this, we have to understand their trade-offs. It is not a pure play of allowing a larger set of insurance coverage. It costs the financial system significantly — and especially community banks. We need to look very carefully at this,” Patrick McHenry, the Republican chair of the House Financial Services Committee, told CBS.

            At the end of last year, the amount of insured deposits in all FDIC insured institutions nationwide was just over $10trn, or about half the total deposits nationwide.
            …

          3. “At the end of last year, the amount of insured deposits in all FDIC insured institutions nationwide was just over $10trn, or about half the total deposits nationwide.”

            Is $10trn alot?

          4. Who are the people who have been paying the premiums for deposit insurance on accounts up to $250,000? They must feel like suckers, upon realizing that all deposits were insured, regardless of whether any premiums were paid for the coverage.

            This is a massive risk subsidy to reward those who gambled recklessly on uninsured deposits and lost. It turns out they won, by being too big to fail.

          5. – “Doing so will immediately halt the exodus of deposits from smaller banks, stabilize the banking sector and greatly reduce chances of more bank failures,” Plus we wont have to pay competitive interest rates to those pesky depositors.

          6. I wonder if creating $10 trn in new bank deposit insurance coverage with no corresponding increase in assets might have unintended macroeconomic consequences? A private insurer could never get away with something like this. But if the federal government does it, I guess it is legal.

            And something tells me it won’t show up anywhere on the books as a sudden increase in the national debt to reflect $10 trn in new bank deposit insurance liability.

          7. “Plus we wont have to pay competitive interest rates to those pesky depositors.”

            Do you mean the depositors who are implicitly charged for the cost of the FDIC insuring up to $250,000 of their bank balances?

  20. Does Trump still get his secret service in jail? Never has a President been arrested , over a beyond Statue misdemeanor , being trumped up to a felony, over a hard to prove alledged crime.

    Trump said ,” Take the Nation back.”
    Joe Biden said ” The US should lead in the One World Order.”No media questions to Biden about US leading in a One World Order, and what the hell that means.
    .How much more evidence do people need that some kind of force of anti-humanity evil fraudster mafia mentality psychopathic take over to enslave human race..
    So, Trump came out recently .. and said if elected he would crush the One World as
    to Order and Deep S
    e. e. Its helpful to name the enemies US Constitutional Republic has and they have already exposed their their World Dictorshi

    1. Joe Biden said ” The US should lead in the One World Order.”No media questions to Biden about US leading in a One World Order, and what the hell that means.

      Is there any need to ask what it means? Small wonder the Global South is growing, because they know very well what it means.

      When nations decide that aligning with the Russians and the ChiComs is the better bargain, then any doubt that we are “the baddies” is removed. Everyone knows we destroyed the Nordstream pipelines .Heck, even the Saudis and the Iranians are making nice, because they know they now have a common enemy.

      Meanwhile the USAF sent a B-52 to Hungary and had it circle a Hungarian city for hours. I think the message for Orban is clear: the US is running out of patience with Hungary. Hungary gets its NatGas from Russia. It would be a shame if something bad happened to those pipelines.

      This is how we treat “allies”.

    2. Don’t let yourself get triggered by fake news. Trump is not going to jail on Tuesday, or ever.

      1. Seriously PB, why do you think Trump won’t get arrested? It’s all over the news. Trump has announced it himself.

      2. Don’t let yourself get triggered by fake news. Trump is not going to jail on Tuesday, or ever.

        Right, because if ever he did, Pedo Joe knows he’d be going straight to the hoosegow himself. No US President, sitting or past, will ever be going to jail. They are above the law.

        1. Won’t arrest him?
          10 years ago nobody would have ever thought a President would be impeached multiple times on made up grounds. This is now the time for imagining “new paradigms “ in both politics and economics

  21. Are they just trying to piss off everybody and get a revolution going where they get humans to fight against each other, so they can enact a police state, or a military state to combat the innsurrection, when they are the evil innsurrection .
    Just saying

    1. Observations like that can earn you a spot on a boxcar, once the Democrat-Bolsheviks succeed in disarming the Bitter Clingers.

      1. “This is just a temporary pod. We’re taking you to a better pod after this one, just try to be patient” — Yuval Harari, WEF

      1. And if I understand correctly, the fuse was Macron raising the retirement age on their version of social security, from 62 to 64. Of course there are plenty of other reasons for the French to be upset, but for some reason this was the straw that broke the camel’s back.

  22. SVB’s London Bankers Received Up To $36 Million In Bonuses Days After BoE-Orchestrated Bailout

    BY TYLER DURDEN
    SATURDAY, MAR 18, 2023 – 03:30 PM

    Bankers at the London branch of Silicon Valley Bank reportedly received tens of millions of dollars in bonuses just days after the Bank of England orchestrated a rescue package that led to Europe’s largest lender, HSBC, buying the failed bank’s subsidary for just £1, Sky News reports.

    https://www.zerohedge.com/political/svbs-london-bankers-received-36-million-bonuses-days-after-boe-orchestrated-bailout

  23. Report: Nearly Half of ‘Climate Change’ Companies in U.S. Banked with Failed SVB

    JOEL B. POLLAK
    19 Mar 2023

    Nearly half of the country’s bio- and climate-technology companies, many of them headquartered in the Bay Area, banked with Silicon Valley Bank. Last year, SVB committed to investing at least $5 billion in the clean tech industry.

    But even as the FDIC quickly stepped in to guarantee deposits, following the bank’s collapse, many companies have been scrambling to find new banks, open accounts and reorganize payroll systems.

    To his point, SVB was widely known for incubating ambitious climate and biotech startups, and was a valuable resource for new companies looking for a bank willing to invest in innovative and somewhat risky ventures.

    https://www.breitbart.com/economy/2023/03/19/report-nearly-half-of-climate-change-companies-in-u-s-banked-with-failed-svb/

    1. How much savings do they have to withdraw? Isn’t half the country unable to come up with $500 for an emergency?

      1. I’m pretty sure the little people, with less than $250,000 on deposit, are bearing proportionately more of the FDIC insurance premiums relative to money on deposit.

  28. For her efforts to report injuries to the Vaccine Adverse Events Reporting System (VAERS) and to educate others in her hospital system on doing the same, Physician Assistant Deborah Conrad said she was labeled an anti-vaxxer and fired from her job.

    Today, the New York-based Conrad tells her story at medical freedom conferences throughout the country, the most recent being one in Mississippi where physicians, scientists, and the vaccine injured warned state lawmakers to pull the COVID-19 vaccines from the market.

    Conrad told The Epoch Times she began to see early danger signals in 2021 upon the vaccine rollout, and with that, resistance among her colleagues to report on them.

    “After the vaccines came out, there was this uptick in unusual symptoms, some of which I had never seen in my 20-year career,” Conrad said. “In every case, it was in somebody who had received the COVID-19 vaccine.”

    Conrad said she had never admitted an adult patient with RSV (respiratory syncytial virus) until the COVID-19 vaccines.

    “And every patient who came in with RSV was vaccinated for COVID,” Conrad said. “It wasn’t normal.”

    Then, there were the adolescents with no previous medical conditions who had gotten the COVID-19 vaccine a week prior and, suddenly, they were struck with pneumonia and not able to function, she said.

    “They weren’t able to walk or eat, and they were completely and totally fatigued,” Conrad said.

    This was in 2021 before myocarditis was being discussed, so many of those early cases that were probably myocarditis were diagnosed as pneumonia, she said.

    “A lot of these myocarditis cases came in with fevers because of this massive inflammatory response that was taking place in the body, so they would be labeled as septic, treated as if we were treating pneumonia or fevers of unknown origin,” Conrad said. “We’d treat them with antibiotics and all sorts of other things, not realizing that they were having heart failure.”

    Conrad began reporting to VAERS, which she said was an overwhelming task not made easy by its multiple user-interface complications.

    “My entire life had been taken over by doing these VAERS reports by myself,” she said.

    In meetings with leadership, she would propose implementing a reporting system and hiring someone to manage the reports, she said.

    “They kept telling me we’re looking into it and we’ll get back to you,” Conrad said. “Around April 2021, leadership came back and said no one else is reporting injuries—implying that I was crazy and there was nothing really going on with the vaccines.”

    Leadership then audited her reports, she said and concluded that she was overreporting.

    “I was then told that by doing VAERS reports and even discussing VAERS that it was an admission that the vaccines were unsafe, so it’s contributing to vaccine hesitancy,” Conrad said.

    From there, it became a “very hostile environment” that compelled her to seek legal counsel, who wrote letters to the Department of Health, the CDC, and the FDA.

    “No one cared,” Conrad said. “Finally, I had had it. It was so unethical; I couldn’t take it anymore. These VAERS reports are critical to assuring these vaccines are safe for us all. I could no longer be a part of a system that is lying to the American people.”

    Conrad decided to become a whistleblower, telling her story on Del Bigtree’s The Highwire, knowing, she said, that it would cost her job.

    “I couldn’t remain silent, even if it meant losing my career and everything I worked for,” she said. “I was fired a few weeks later and walked out like a criminal in front of all my peers.”

    The initiative and education she had brought forth to report to VAERS were squashed that day, she said.

    According to Barbara Loe Fisher, co-founder and president of the National Vaccine Information Center (NVIC), under the National Vaccine Injury Act of 1986, it’s a federal requirement for health care workers to report vaccine-related adverse events to VAERS.

    Fisher, whose son was harmed by the DTP vaccine in 1980, worked with other parents of vaccine-injured children in establishing the NVIC in 1982.

    “The 1986 Act was driven by parents of DPT vaccine injured children asking the government to pass legislation to secure vaccine safety informing, recording, reporting, and research provisions in the vaccination system to make it safer, and to create a federal compensation system alternative to a lawsuit against manufacturers of vaccines that injure or kill children,” Fisher told The Epoch Times.

    In addition to NVIC arguing that physicians and vaccine manufacturers should be giving informed consent and report injuries, the organization maintained they should also continue to be held accountable in a civil court to serve as an incentive for physicians to administer vaccines responsibly, for manufacturers to produce safer vaccines, and for adequate federal compensation to vaccine-injured children.

    “The vaccine manufacturers responded to our call for federal legislation reforming the vaccination system by threatening to leave the US without childhood vaccines unless the government gave them a blanket liability shield for harm caused by vaccines, arguing that if the FDA licensed a childhood vaccine as ‘safe,’ and the CDC recommended the vaccine for universal use by all children, and the states mandated the vaccine for daycare and school entry, then the vaccine manufacturer should not be held liable for harm caused by the product,” Fisher said.

    When the Act passed, physicians were still liable for medical malpractice claims and pharmaceutical companies remained liable for product design defect claims in civil court, Fisher said.

    “Unfortunately, the 1986 Act looks nothing today like when it was passed in 1986,” Fisher said. “In 1987, Congress passed an amendment to give a liability shield to doctors and vaccine providers. Over the next decades, amendments were added that weakened or eliminated safety provisions and the ability of children to receive federal compensation.”

    In 1990, VAERS was launched; however, Fisher said, there are no legal consequences for a doctor’s failure to file a report.

    “That’s because Congress made it a federal requirement in the 1986 Act to report but did not include legal penalties when vaccine companies or vaccine providers fail to report,” Fisher wrote.

    In 2011, amid hundreds of lawsuits linking autism to vaccine injuries, Fisher said the U.S. Supreme Court ignored the legislative language and reasons for the 1986 Act when it shielded vaccine manufacturers from all civil liability for vaccine injuries and deaths.

    The federal government had sided with Big Pharma, Fisher said.

    “At this point, those of us who worked on the 1986 Act with Congress know that our trust was betrayed by politicians who made backroom deals with drug companies, medical trade organizations, and federal agencies to gut the Act after it was passed and give the pharmaceutical industry what it wanted in 1986 and could not get: a complete liability shield for vaccine injuries and deaths,” Fisher said.

    The 2011 case—Bruesewitz v. Wyeth—centered around the parents of Hanna Bruesewitz, who alleged their daughter’s neurological problems were caused by a vaccine made by Wyeth, which was a Pennsylvania pharmaceutical company before it consolidated with Pfizer.

    The 1986 Act established a vaccine court to confirm vaccine injuries and award damages. After losing in the vaccine court, the Bruesewitz family brought the case to the highest court.

    Marcia Coyle with The National Law Journal told PBS NewsHour in 2011 that there were only eight Justices presiding over the case because Justice Elena Kagan had recused herself due to her involvement as Solicitor General of the United States representing the federal government on the case.

    “The Obama administration is supporting Wyeth laboratories saying that this lawsuit is barred,” Coyle said. “So, there are eight Justices. There could have been seven. The Chief Justice [John Roberts] had recused himself in the initial stages because he owns stock in Wyeth and he sold the stock in order to participate now.”

    The pharmaceutical companies’ entanglement with federal officials wasn’t what Fisher said she would call an example of public health.

    In a 2011 commentary on the ruling, she said, “This is exploitation of a captive people by a pharmaceutical industry seeking unlimited profits and by doctors and physicians of authority who have never seen a vaccine they did not want to mandate. It is a drug company stockholder’s dream, a health care consumer’s worst nightmare, and prescription for tyranny.”

    In the wake of the decision, the 1986 Act seemed to lose its relevance, and the importance of reporting to VAERS became downplayed. Allegations that vaccines caused autism were ridiculed in pop culture’s media campaigns such as magicians Penn and Teller widely shared video promoting the vaccines and shutting down those who questioned their safety while ignoring what groups like NVIC were initially calling for: not the eradication of vaccines but safer vaccines with no mandates.

    In retrospect, Fisher said, “Had the Supreme Court upheld the spirit and intent of the Act as originally passed in 1986, we may have been able to hold mRNA COVID vaccine manufacturers liable for design defect in a civil court of law today.”

    The COVID-19 vaccines were issued under emergency use authorization, which grants the manufacturers immunity from liability.

    Conrad herself said in her education as a physician’s assistant she never trained to even acknowledge VAERS or adverse events.

    “When it came to learning about the vaccines, we learned the basic immunology associated with the vaccines and the adult and childhood schedule, but there’s no discussion on their side effects,” Conrad said. “We go into practice with the idea that vaccines are safe and effective. I never considered otherwise until COVID-19 happened.”

    Among the insights the pandemic delivered has been that the unethical relationship between federal officials and the pharmaceutical-industrial complex has been going on much longer than many realize, Conrad said.

    “This whole system is corrupt,” Conrad said. “The light in this whole experience for me is that now I’m aware of how deep the lies and corruption really are.”

    https://www.theepochtimes.com/physician-assistant-fired-for-reporting-covid-vaccine-adverse-events-to-vaers_5130783.html

    1. The Financial Times
      Central banks
      Central banks announce new liquidity measures to ease banking crisis
      Monetary authorities launch daily operations to access funding via standing swap lines
      The Fed said the world’s monetary authorities were taking co-ordinated action to calm markets
      Colby Smith in Washington 18 minutes

      The Federal Reserve and other global central banks have announced fresh measures to improve US dollar liquidity as global financial markets reel from the turmoil hitting the banking sector.

      In a joint statement released on Sunday, the world’s leading central banks said that they will launch daily operations to make funding available via standing swap lines. Previously, those operations were conducted on a weekly basis.

      The Fed, European Central Bank, the Bank of England and the Swiss National Bank are among those involved in what was described as a “co-ordinated action”. They were joined by the Bank of Canada and the Bank of Japan.

      “The network of swap lines among these central banks is a set of available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses,” the central banks said in a statement.

      The move came hours after the SNB announced that its two largest banks, UBS and Credit Suisse, would merge after a frantic weekend of negotiations brokered by Swiss regulators to safeguard its banking system and attempt to prevent a crisis spreading across global financial markets.
      …

  32. The moral of the “Age of Easy Money | Frontline” is easy money was bad, but let’s NOT stop the easy money just yet.

    1. “Lord, give me chastity and continence, but not yet!” – Attributed to St. Augustine of Hippo.

  33. The comments section is made up of two kinds of people, those who inhale the MSM propoganda and those who don’t.

    Alissa Carlson, a Los Angeles-based meteorologist, fainted during a live TV broadcast this weekend — and there’s still no word on her condition after the terrifying moment was caught on camera.

    Mar 18, 2023

    https://youtu.be/nLy_sJW8e-o

    1. What happened to Credit Suisse and why are banks needing bailouts again?
      Could isolated failures herald another global banking crisis?
      Thomas Kingsley, Alastair Jamieson
      6 hours ago

      Fears of another 2008-style banking crisis resurfaced this week after banking giant UBS swept in to buy its crisis-hit rival Credit Suisse and US authorities stepped in to broker a £24.7bn rescue package for First Republic.

      Stock markets have been jittery amid worries that isolated failures could widen to affect the global banking system, reviving bad memories of the financial crisis that plunged many Western economies into recession in 2008-09.

      The news comes after the collapse last week of Silicon Valley Bank, the second-biggest bank failure in US history.

      Shares in San Francisco-based First Republic plummeted on Thursday as customers began withdrawing their money fearing it could be the next to fail, but stocks recovered as reports of the rescue package surfaced.
      …
      https://www.independent.co.uk/news/business/credit-suisse-ubs-bailout-banks-latest-b2304015.html

    2. Opinion
      Review & Outlook
      And Now, a Credit Suisse Bailout
      The weekend shotgun marriage with UBS shows how post-2008 regulation failed again.
      By The Editorial Board
      March 19, 2023 5:10 pm ET
      WSJ Opinion: The SVB Bailout Isn’t Just About Money
      Journal Editorial Report: Political consequences of the bank failures are inevitable.
      Images: Reuters/Getty Images Composite: Mark Kelly

      So much for 13 years of banking regulation. Swiss authorities on Sunday organized the shotgun wedding of UBS and Credit Suisse to avert a failure of the latter—exactly the panicky too-big-to-fail rescue we were told new rules post-2008 would prevent.

      Switzerland’s second-largest bank (after its new owner) has been plagued for years by poor management. Depositors lost faith over the past year, withdrawing some 160 billion Swiss francs ($173 billion) in 2022 and up to 10 billion Swiss francs a day last week, according to media reports. After Silicon Valley Bank’s failure in the U.S., attention quickly turned to Credit Suisse as the weakest link in Europe, and its share price fell while the cost of insuring against a default spiked.
      …
      https://www.wsj.com/articles/and-now-a-credit-suisse-bailout-ubs-switzerland-regulators-svb-shareholders-bankruptcy-europe-management-default-2bdf3aa

    3. Hear what weakened First Republic Bank and triggered $30B bailout
      First Republic Bank, facing a crisis of confidence from investors and customers, is set to receive a $30 billion lifeline from a group of America’s largest banks. The bank’s problems underscored continued worries about the banking system in the aftermath of the collapse of Silicon Valley Bank and Signature Bank. CNN’s Christine Romans explains how the cash infusion is meant to head off a domino effect of more bank failures and demonstrate the industry still has a solid foundation.
      Source: CNN
      …
      https://www.cnn.com/videos/business-money/2023/03/17/first-republic-bank-30-billion-dollar-bailout-christine-romans-cnntm-ldn-vpx.cnn

    4. Ideas
      What People Still Don’t Get About Bailouts
      Good financial-crisis management is about doing what it takes to stop the contagion.
      By Michael Grunwald
      Henry Paulson, Ben Bernanke, and Christopher Cox sit before the Senate banking committee in September 2008
      Chip Somodevilla / Getty
      March 18, 2023, 7:30 AM ET

      It doesn’t seem fair, does it? Just 15 years after our financial overlords went on a bailout binge, showering bankers with trillions of taxpayer dollars, they’re once again riding to the rescue of the rich while the public watches in horror. Did they learn none of the lessons from the 2008 meltdown?

      Actually, yes, they did. The government’s financial-crisis managers clearly studied the lessons of 2008, which is one reason the collapse of Silicon Valley Bank a week ago doesn’t seem to have created another cataclysm, at least so far. It’s the public that’s never understood those lessons, which is one reason the public is likely to draw the wrong conclusions about the SVB mess too. And the most important lesson is the hardest to understand: Good financial-crisis management isn’t supposed to seem fair.
      …
      https://www.theatlantic.com/ideas/archive/2023/03/silicon-valley-bank-collapse-2008-recession-bailout/673431/

    5. Adam Tooze: The Non-Bailout Bailout
      Bad management and bad luck prompted the collapse of Silicon Valley Bank. What about other banks?
      By Cameron Abadi, a deputy editor at Foreign Policy.
      A Silicon Valley Bank logo is seen in Tempe, Arizona, on March 14. REBECCA NOBLE/AFP via Getty Images
      March 17, 2023, 12:09 PM

      The U.S. federal government only insures bank deposits up to the amount of $250,000—under normal circumstances. But the failure of Silicon Valley Bank (SVB) last week triggered an extraordinary intervention, with Washington guaranteeing all deposits in full. It was an acknowledgment of the possibility that SVB’s failure might have produced a cascade of bank runs across the financial system—and also a reflection of the special status of the bank’s community of depositors, centered on California’s tech economy.

      What role did the tech economy play in SVB’s failure? How could the bailouts affect the fight against inflation? And does the U.S. government simply make up the rules of financial bailouts as it goes along? Those are a few of the questions that came up in my recent conversation with FP economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity.
      …
      https://foreignpolicy.com/2023/03/17/adam-tooze-svb-bailout-fed-interest-rates/

    6. A trader sitting at his desk while behind him a large screen shows the recent fall in the Dax index

      The Observer
      Bank runs, bailouts, rescues: are the ghosts of 2008 rising again?
      The travails of Credit Suisse and others have stirred up bad memories for a public still scarred by the financial crisis
      Anna Isaac and Kalyeena Makortoff
      Sat 18 Mar 2023 12.00 EDT

      No one in the Treasury had expected March to be easy. Last Monday’s economics-heavy review of defence and foreign policy, and last Wednesday’s budget, meant that a tough week for its mandarins was already priced in. But none of them had expected to have to sell a bank for £1.

      That happened in the early hours of Monday, when Treasury and central bank officials eventually brokered a deal for HSBC to buy the UK arm of Silicon Valley Bank (SVB UK) for a nominal fee – following the collapse of SVB’s California parent when a disastrous investment strategy unravelled.

      After a frantic weekend spent trying to salvage the bank, on which much of Britain’s tech sector depended for cashflow, they then had to finish Jeremy Hunt’s maiden budget.

      However, the rescue turned out to just be the “warmup act in some ways”, according to a senior Whitehall official. What followed was days of near-constant communication with the Bank of England in order to avoid a re-run of the 2008 banking crisis, as confidence faltered in Switzerland’s second-largest lender, Credit Suisse.

      “There was much more concern about Credit Suisse and the aftermath of Silicon Valley Bank’s collapse this week than the budget,” the official said. “There have been a couple of discreet naps between calls at 1am and 3am in the conference rooms. Life, rightly, got cancelled.”

      Monday’s deal only provided a respite before a week from hell began to unfold. Europe’s Stoxx bank index, which measures the movements in major banking stocks on the continent, fell 5% at the start of trading on Monday, and London’s blue-chip index also fell into the red.
      …
      https://www.theguardian.com/business/2023/mar/18/bank-runs-bailouts-rescues-are-the-ghosts-of-2008-rising-again

    7. From Bear Stearns to Credit Suisse: Crises, Mergers and Bailouts
      Thyagaraju Adinarayan
      Sun, March 19, 2023 at 12:39 PM PDT·3 min read
      In this article:
      From Bear Stearns to Credit Suisse: Crises, Mergers and Bailouts

      (Bloomberg) — From as much as $96 billion to around $3 billion: Credit Suisse Group AG is poised to join the historic ranks of finance giants sold at fire-sale prices in the grip of a market crisis.

      Most Read from Bloomberg

      UBS to Buy Credit Suisse in $3.3 Billion Deal to End Crisis

      Credit Suisse’s $17 Billion of Risky Bonds Are Now Worthless

      Warren Buffett in Contact With Biden Team on Banking Crisis

      Credit Suisse Said to Push Back Against UBS’s $1 Billion Offer

      Fed and Global Central Banks Move to Boost Dollar Funding

      As UBS Group AG looks all set to snap up the once-storied Swiss institution, the emergency government-brokered deal over the weekend bears soft echoes of the 2008 banking crash as Wall Street preps for fresh volatility on Monday.

      A reminder: During the Global Financial Crisis, JPMorgan Chase & Co. paid about $240 million for Bear Stearns — an investment bank that once commanded a stock market value of $140 billion. More takeovers and bailouts followed as the credit downturn grew increasingly dire.

      Now in the US, regulators are seeking to sell off parts of Silicon Valley Bank, whose failure sent the market values of other regional banks plunging. In Europe on Sunday, UBS agreed to take over Credit Suisse in an all-stock deal that’s a steep discount to the 7.4 billion francs ($8 billion) it was worth at the close of business Friday.

      With the fallout from rising interest rates threatening fresh turmoil, here’s a reminder of past bailouts and distressed mergers and acquisitions in the financial world.
      …
      https://finance.yahoo.com/news/bear-stearns-credit-suisse-crises-193925569.html

    8. Did you ever notice how the financial crash that follows bailouts is never as bad as the one that would otherwise have occurred had bailouts not been implemented?

      1. Yahoo Finance
        Bailouts get a bad rap
        Rick Newman
        Thu, March 16, 2023 at 1:31 PM PDT·5 min read

        Fact one: Of course it’s a bailout!

        Fact two: Any president, of any party, would have done the same thing.

        You might be feeling miffed about the government rescue of the two lenders that blew up recently, Silicon Valley Bank and Signature Bank. Agencies including the Federal Reserve and the Federal Deposit Insurance Corp. (FDIC) covered all deposits at the two busted banks, even though FDIC insurance only applies to the first $250,000 in an account.

        Some businesses and 1 percenters had way more than the insurable maximum parked at the banks, and in theory they should have borne the pain of bankruptcy by getting in line to recover whatever was left of their money along with all other creditors. By making them whole, the government short-circuited a central feature of capitalism: the risk of failure that is supposed to make people careful about how they deploy their money.

        American capitalism, however, exists inside an opportunistic political system that almost always favors what is expedient over what might be prudent. Republicans are howling about President Biden’s claim that taxpayers won’t fund the bailout, but a Republican president would have saved the depositors, too. In fact, Republican President George W. Bush did just that in 2008, because the alternative would have been an immediate crisis even worse than the financial crash that unfolded.
        …
        https://finance.yahoo.com/news/bailouts-get-a-bad-rap-203124459.html

  37. – Europeans weigh in.
    —
    https://twitter.com/f_wintersberger/status/1636694483029950467?cxt=HHwWhoC8rb692rYtAAAA

    Fabian Wintersberger | @f_wintersberger

    Suppose the Fed creates a problem by keeping rates artificially low and injecting loads of liquidity into the system. How can anybody think that the Fed can solve the problem by stopping rate hikes or cutting and injecting more liquidity into the system?

    5:42 AM · Mar 17, 2023 · 2,257 Views
    —
    “Suppose you were an idiot, and suppose you were a member of Congress [or the Federal Reserve] ; but I repeat myself.” – Mark Twain
    —
    https://twitter.com/AndreasSteno/status/1637569261643128838?cxt=HHwWjICz9aak6LktAAAA

    AndreasStenoLarsen | @AndreasSteno
    Image [This is fine]
    3:38 PM · Mar 19, 2023 · 31K Views
    —
    https://twitter.com/dlacalle_IA/status/1636801947406663681?cxt=HHwWgoC8rd6si7ctAAAA

    Daniel Lacalle | @dlacalle_IA

    No amount of regulation can prevent a financial crisis when it is the regulator who incentivises accumulation of risk, states sovereign bonds have no risk and the supervisor prints trillions and disguises risk with negative rates.

    12:49 PM · Mar 17, 2023 · 16.4K Views
    —
    Breakingviews
    February 13, 20193:52 AMUpdated 4 years ago
    Breakingviews – Chancellor: A 300-year lesson in bubble inflation
    By Edward Chancellor | 7 Min Read

    LONDON (Reuters Breakingviews) – Just over 300 years ago, in early December 1718, a Parisian bank was nationalised by the French state. This marked the beginning of the Mississippi Bubble, which captivated France over the following couple of years.

    France boomed, unemployment disappeared and the sovereign debt crisis was forgotten. Such was the magical effect of paper money. Or was this prosperity, as some contemporaries suspected, merely a chimera?

    Once the bank money seeped out of the financial world and into the real economy, however, asset price inflation was replaced by the consumer variety. By the end of 1719, food prices had doubled. This left Law in a tricky position. He could either tighten monetary policy, or he could stand pat and let inflation rip. In the summer of 1720, Law chose the deflation option. The bubble burst and the Scotsman was forced to leave the country in disgrace, his scheme in ruins.

    The parallels between the Mississippi saga and the monetary experiments following the 2008 crisis are ubiquitous. Both episodes start with a financial and economic crisis and the threat of deflation. Both are followed by a miracle monetary cure, which inflated bubbles across various asset classes.

    Yet Law’s failure is crucial to the story. It shows that it’s all very well for central bankers to lower interest rates, inflate asset prices and dispel unemployment by conjuring up limitless quantities of money, but it’s no easy matter to return to normalcy.

  38. Ok, so San Francisco voting to give 5 million and other benefits to every black, charging 600 thousand to every non black.
    First, I read that only 16 % of US Black population are descendants of the slaves from the prior to Civil War period.
    – A huge population of black immigrants came to US post Civil War.
    — A huge population of white poor immigrants came to US post Civil War who were exploited by cheap slave labor, who never had a slave, or ancestors that did.
    –The Great Depression wiped out black and non black alike.
    –Slavery was a byproduct of Big Plantation, that were mostly owned by the
    Rich, not your average struggling folks.
    —-165 years have passed , and its way passed Statue of Limitations to charge current population who were never owners of slaves , to people who have never
    been slaves .
    —How many non-Blacks amassed 5 million extra as a result of slavery? The bulk of US population is heavy in debt living ck to paycheck..The looting systems of the One .% has gutted US jobs , and wealth..
    ..-Trillions have been handed out by welfare state last 60 years that only produced sub cultures e adverse
    to majority culture values, merit systems and competition. . . .What is claimed to be racism is the different races being attached to how one was raised.
    But the real truth is One World Order wants to created division ,plan to enslave every race.
    How they computed the 5 million was just made up, and California was never a slave State anyway. Do you think your average non black citizen wants to be charged 600 thousand in taxes, to pay 5 million to inhabitants of a City , who aren’t even vetted that they were descendents of slaved.? How are Mexican people who migrated here, who were never involved with slavery going to like paying on average 600 k in taxes?
    . Just saying
    ..

  39. Now that the Credit Suisse / UBS shotgun marriage has been consumated, is it safe to conclude contagion risk is contained and the banking panic is over?

    1. The Financial Times
      Markets Briefing Asia-Pacific equities
      Asian bank debt and shares fall after $17bn Credit Suisse bond writedown
      Swiss regulators brokered UBS takeover in bid to stop crisis from spreading across global financial system
      A montage of a globe and a chart
      UBS agreed to buy Credit Suisse for $3.25bn after a frantic weekend of negotiations
      William Langley and Cheng Leng in Hong Kong, Leo Lewis in Tokyo and Thomas Hale in Shanghai 11 minutes ago

      Asian bank debt and shares fell on Monday after the wipeout of $17bn of Credit Suisse bonds in a takeover by UBS, sparking concern about similar debt and heralding further turmoil in European markets.

      HSBC shares dropped 7.1 per cent in Hong Kong, while Standard Chartered slid 7.7 per cent and Bank of East Asia fell 4 per cent. Some bank bonds designed to absorb losses in the event of a banking failure suffered steep declines.

      Swiss regulator Finma demanded on Sunday that SFr16bn ($17bn) of Credit Suisse’s additional tier one (AT1) bonds, a type of bank debt designed to take losses during a crisis, be written down to zero as part of the rescue deal with UBS.

      Finma’s decision, taken as part of a frantic weekend of negotiations to broker a deal for Credit Suisse and prevent a spreading crisis, meant the bank’s AT1 debtholders lost more than its shareholders and cast doubt on the hierarchy of claims in the event of a banking failure. It was the biggest writedown so far of AT1 debt.

      “It is a wake-up call to investors that AT1 bonds carry real risks of being written off in extreme scenarios, which is also the purpose of having such bonds,” said Gary Ng, senior economist at Natixis in Hong Kong. “The move will likely trigger some sell-offs and risk rebalancing from bond investors and wealth management product holders in Asia.”
      …

      1. The Financial Times
        Credit Suisse Group AG
        Holders of $17bn of Credit Suisse bonds wiped out under UBS takeover
        Value of risky additional tier one debt written down to zero in move expected to jolt markets
        The Zurich head offices of Credit Suisse and UBS
        Owen Walker, Katie Martin, Robert Smith and Stephen Morris in London yesterday

        Holders of $17bn of Credit Suisse bonds will have their investment wiped out following the bank’s takeover by UBS, in a surprise move that is expected to cause ructions in European debt markets when they open on Monday.

        As part of the historic deal between the banks, Swiss financial regulator Finma ordered that SFr16bn of Credit Suisse’s additional tier one (AT1) bonds, a relatively risky class of bank debt, will be written down to zero.

        Credit Suisse said it was informed of the decision by the regulator as it thrashed out the final details of its SFr3bn takeover by UBS, which was announced on Sunday evening after several days of intense negotiations.
        …

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