https://kunstler.com/clusterfuck-nation/svb-ftx-sbf-wtf/
SVB + FTX + SBF = WTF?
“Deny, deflect, minimise & mock your enemies questions. Don’t engage them in good faith, they’re attacking you with a view to undermining you. Don’t fall for it. Don’t give them an inch.”
The net effect of all the lying propaganda laid on the public by the people running things lo these many recent years is a peculiar inertia that makes us seemingly impervious to gross political shocks. Momentous things happen and almost instantly get swallowed up by time, as by some voracious cosmic amoeba that thrives on human malignancy. Case in point: the multiple suicide of several giant banks just days ago that prompted “Joe Biden” to nationalize the US banking system.
As if all the operations around finance in this land were not already unsound and degenerate enough, the alleged president just cancelled moral hazard altogether. It’s now official: from here forward there will be no consequences for banking fraud, poor decision-making, fiduciary recklessness, self-dealing, or any of the other risks attendant to the handling of other people’s money. Bailing out the Silicon Valley Bank and Barney Frank’s deluxe Signature Bank means that the government will now have to bail out every bank every time something goes wrong.
The trouble, of course, is that the government doesn’t have the means to bail out every bank. Its only resort is to ask the Federal Reserve to summon new money from a magic ether where the illusion of wealth is conjured to paper-over ever greater fissures in the splintering matrix of racketeering that America has become. That will quickly translate into US dollars losing value, that is, accelerating inflation, which is how nature punishes you when your government lies and pretends that it has a bad situation well-in-hand.
Be advised: the situation is not in-hand and is going to get a whole lot worse as new and subsidiary shocks thunder through the weeks and months ahead, until the whole wicked business blows. Likewise, the reactions of our government will only get more tragi-comically pathetic. The harder this gang of feckless, wannabe control freaks pretends to control events, the faster events spin out of control.
Money dies when it loses its direct connection to the generation of wealth from the real things of this earth: fuels, crops, metals, materials, labor, and the value-added products made from them. Since that divorce has already happened, the need arises for something else that can function as money (a store of wealth, an index of value, and a medium of exchange). The government will pretend that a Central Bank Digital Currency is that something else. Since banking is now nationalized by the Federal Reserve backstopping everything and everybody, then theoretically all the wealth of the nation is under its command. That would be another illusion.
This CBDC would not be “money” representing wealth because America’s wealth is going, going, gone, pissed away, falling apart, de-laminating, oxidizing, rusting in the rain, going up in a vapor. Think of all those mortgaged cars on the road racking up the mileage until they’re worthless and all those mortgaged suburban houses built out of particle-board and vinyl smeared all over the landscape, decomposing into their constituent chemicals — over time, a dead loss. And that’s what’s left of our American Dream: coldcocked by entropy and, by extension, the laws of the universe. The CBDC would just be a computerized tracking apparatus for zombies lurching pointlessly around that dead zone… a final insult. The CBDC is already DOA, only the CB doesn’t know it.
One big mistake so many commentators and observers are making takes us back to the matter of cancelled moral hazard, and of consequence in general: it is the failure to appreciate how much disorder will manifest from the farrago of mindfuckery and misconduct we’ve been subjected to. By which I mean things stop working, including the elemental things like your ability to get food, fix whatever breaks, and keep the lights on.
The potential disorder is why our government will probably not be able to fix itself. The disorder may go on for quite a while, but eventually the survivors will synergetically fix their circumstances themselves working in-step with the emergent mandates of reality. Having lived through a reality-optional period of history, it will come as an ecstatic shock to learn that the world requires us to pay attention to what is really happening and to act accordingly. We’ll find ways to get food, make some things work, and shine some lights in the darkness, if perhaps not by means we’re familiar with now.
In the meantime, expect more disordering tragi-comedy from the “Joe Biden” led psychotic regime ruling over us with its drag queen commissars, lawless Lawfare vandals, race hustlers, agents provocateurs, informers, censors, prosecutors, inquisitors, jailers, and propagandists — the worst collection of imbeciles, grifters, and villains ever assembled into political party.
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https://www.paulcraigroberts.org/2023/03/19/the-us-has-the-world-setup-for-a-worse-financial-crisis-than-in-2008/
The US Has the World Setup for a Worse Financial Crisis than in 2008
There are two main avenues to a potential US financial crisis. Such a crisis, because of US financial dominance and because of the interconnections of globalism, which was a huge mistake for humanity, would be international.
One avenue to crisis is the Federal Reserve’s current policy of raising interest rates. This policy follows many years of nearly zero interest rates in nominal terms, and negative interest rates in real terms. During these many years the financial assets banks accumulated on their balance sheets, such as bonds, pay a low rate of interest. When the central bank (Federal Reserve) raises interest rates, the values of the lower interest rate financial instruments fall, thus shrinking the asset side of banks’ balance sheets but not the liabilities side. Thus the central bank’s policy is pushing banks toward insolvency. When depositors realize that their deposits could be frozen for some time or lost if over $250,000 in size, as many corporation payrolls and some individual accounts are, they withdraw their deposits. The banks cannot meet the withdrawals because their assets have shrunk in value relative to deposits and because as they sell the depreciated assets to meet the withdrawals the prices of the troubled assets fall further. Silicon Valley Bank had assets heavily weighted with low interest rate US Treasury bonds, the value of which was driven down by the Federal Reserve raising interest rates. The other two banks were victims of crypto-currency which is too volatile for a bank’s balance sheet.
To prevent the failure of the three US banks from causing a general panic, it was announced that the central bank would provide all banks with sufficient cash to meet withdrawals and that all deposits were insured even if they were higher than the insured amount. This should prevent panic.
However, if the central bank continues to raise interest rates, the higher rates will push more banks into insolvency. Central banks make mistakes just like everyone else. In Europe Credit Suisse, a large international bank, is in trouble, yet the European Central Bank just announced a rise in interest rates.
The second avenue to crisis is the trillions of dollars in derivatives held by the five large US banks, which are international in their transactions. According to published reports, the five largest banks have $188 trillion in derivative exposure. This sum is vastly greater than the banks’ capital base. No one knows what the risk is in these derivatives. But the dollar amount is much higher than in 2008, so the potential for a worse crisis exists. A crisis only takes one mistake by one bond trader at a large institution to ignite a crisis.
The derivative crisis that occurred in 2008 (slowly building during 2006 and 2007) resulted from the repeal in 1999 of the Glass-Steagall Act which had prevented financial crisis for 66 years since its passage in 1933. Advocates of repeal claimed that “financial markets are self-regulating and do not need regulators setting rules.” They were wrong as became clear 9 years later.
The Glass-Steagall Act separated commercial from investment banking. Commercial banks that take in deposits and lend on that basis were not permitted to undertake more risky and speculative ventures as investment banks that at that time were capitalized by the personal fortunes of their partners. This prevented commercial banks from speculating with depositors’ money. The repeal of Glass-Steagall let commercial banks use depositors’ deposits, not the banks’ own money, to behave like investment banks. This is how the large commercial “banks too big to fail” acquired massive derivative exposure. The derivative risks were not understood either by the banks, the rating agencies, or the regulators and exploded into the 2008 crisis resulting in taxpayer bailouts of banks and a decade of low interest rate policy in order to rebuild the asset side of banks’ balance sheets.
The public was annoyed by the bailout. The result was the Dodd-Frank Act which was misrepresented by politicians, economists, and financial media as a fix of the problem caused by the repeal of Glass-Steagall. But it was not a fix. Dodd-Frank created a new problem. What the Dodd-Frank Act “fixed” was to prevent taxpayer bailouts. Instead, there would be “bail-ins.” What this means is that banks in trouble would bail themselves out by being permitted to seize depositors’ money. In other words, the Dodd-Frank Act created a powerful incentive for runs on troubled banks. A troubled bank doesn’t necessarily mean, or result in, the bank’s failure. But because of the Dodd-Frank Act the depositors cannot take the risk, so they withdraw their funds and cause the bank to fail.
To summarize, smaller conservative and prudent banks that invested in “safe” assets such as US Treasury bonds face bank runs. Larger banks with massive derivative risks are one bond trader’s mistake away from exploding the financial system. The 2008 crisis and the potential for more crises rests entirely on the repeal of Glass-Steagall and the enactment of Frank-Dodd. We are looking at the total, complete failure of intelligence on the part of the US government and economists. Their handiwork has the capability of collapsing the existing financial system of the world. It was the work of total idiots.
There is, of course, the question: Is this real stupidity or is a plot unfolding to collapse the financial system as we have known it in order to “save” us with the introduction of central bank digital currency? Are we passing from the remnants of democracy and self-government into total tyranny?
A study finds that 200 US banks face the same risk as those that destroyed Silicon Valley Bank. The Federal Reserve’s higher interest rates are destroying the banks’ solvency. Yet the Federal Reserve has not backed off its disastrous policy, and with Credit Suisse’s failure looming, the EU central bank raised interest rates! Yes, people are stupid. But are they this stupid? Could this be intentional with a secret agenda in mind such as digital currency? https://www.rt.com/business/573181-us-banks-risk-svb-collapse/
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https://brownstone.org/articles/censorship-masquerades-and-disinformation-control/
Censorship Masquerades and Disinformation Control
Twitter Files #19 have dropped. I am happy to have assisted Matt Taibbi and team to put that release together, along with release #18.
The Files show widespread censorship masquerading as “anti-disinformation” and intense collusion between government agencies, NGOs, academia, Big Tech, media, philanthropy, the intelligence community, and more.
Tinfoil hat stuff? The Twitter Files show it is real.
They uncover a level of corruption that is hard to grasp, much of it among the ‘anti-disinformation’ and digital rights fields where I have worked for almost 20 years.
To say this is disappointing would be an incredible understatement. A 180 on what I understood to be our values.
Twitter Files #18 and #19 focus on the Virality Project, an “anti-vaccine misinformation” effort led by Stanford and bringing together elite academia, NGOs, government, and experts in AI and social media monitoring, with six of the biggest social media companies on the planet. They went far beyond their “misinformation” remit. Twitter Files show the Virality Project pushed platforms to censor “stories of true vaccine side effects.”
Partnered in the effort were Facebook/Instagram, Google/YouTube, TikTok, Pinterest, Medium, and Twitter.
Reporting side effects of the now-pulled Johnson & Johnson vaccine would have been labelled “misinformation” under Virality Project decrees. Had Kerryn Phelps (the first female president of the Australian Medical Association) taken to Twitter to describe her and her wife’s vaccine injuries, these too would have been labelled misinformation. German Health Minister Karl Lauterbach would have also been censored last week for admitting that as a result of the vaccines “there are severe disabilities, and some of them will be permanent.” (Video)
Rather than listening out for safety signals to protect the public, leaders in the “anti-disinformation” field ran cover to protect Big Pharma, smearing and censoring critics. The moral depravity is astounding and quite possibly criminal.
The Virality Project however is just part of a broader cultural shift that reverses long standing liberal/left commitments to free expression and allows censorship in the name of protection and safety. However in suppressing “stories of true vaccine side effects” the Virality Project put people in danger. Rather than keeping people safe they exposed us to the depredations of Big Pharma.
The centrality of censorship ideology to the digital rights field is illustrated in former New Zealand Prime Minister Jacinda Ardern opening RightsCon 2022, the sector’s biggest civil society event. EngageMedia co-organised RightsCon in 2015 when I was Executive Director. Ardern claims that “weapons of war” and “disinformation” are one and the same.
RightsCon 2022 also heavily promoted US Secretary of State Anthony Blinken. Blinken oversees the State Department’s Global Engagement Center, one of the most egregious US government promoters of “anti-disinformation” as censorship. (See Twitter Files #17)
Western leaders who advocate for censorship in the name of “disinformation” severely undermine those fighting authoritarian regimes around the world. Those regimes frequently evoke the threat of “fake news” to justify their crackdowns.
Is disinformation an actual problem? Yes, though it is overstated and the “anti-disinformation” field is making it worse, not better. It is also contributing to increasing polarisation.
I encourage you to read both releases in full and hold what you have been told about Elon Musk just for a moment. Musk is neither hero nor demon. The Twitter Files however are a critical catalyst to challenge the new censorship regime we now live under and reinvigorate the movement for free expression.
(Note that I am a paid consultant for Matt Taibbi and have no relation whatsoever to Musk).
If you can walk and chew gum you’ll know that uncovering liberal/left corruption doesn’t imply support for the reactionary right.
Free speech and expression protect us from the most powerful actors on the planet; corporations, the State, and a growing plethora of international bodies. Ultimately we need radically decentralised social media that is more immune to their capture. Our safety depends on it.
Many have come before me, however far too few have been willing to challenge this ethical fall from grace. The good news is that it’s not too late.
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