Links 3/13/2023 | naked capitalism
Munching Moose Cool Forest Floors EOS
Investors slash Fed rate rise bets on fallout from Silicon Valley Bank collapse FT
Climate
Cash, Cars, Chemicals (and Corn) Phenomenal World
Banks
Be sure to read Yves’ post here.
* * * Joint Statement by Treasury, Federal Reserve, and FDIC Board of Governors of the Federal Reserve System. The correct timeline?
Kinda insane that this entire debacle was potentially caused by @ByrneHobart‘s newsletter. Here’s how the butterfly effect happened.
1) Byrne posts this article/Tweet calling out SVB’s risk.
2) Pretty much every VC I know reads this newsletter
3) They all start to pay very,… https://t.co/zUSKF1ZW4J— Evan Armstrong 📧 (@itsurboyevan) March 11, 2023
In abrupt reversal, regulators to cover Silicon Valley Bank, Signature uninsured deposits American Banker. Of course it’s a bailout:
I’m so old I remember when Dodd-Frank meant no more bailouts.
— Matt Stoller (@matthewstoller) March 12, 2023
First Republic Gets Additional Funding From Fed, JPMorgan WSJ
20 banks that are sitting on huge potential securities losses—as was SVB MarketWatch
* * * The Demise of Silicon Valley Bank Net Interest. About SBV’s problematic customer base:
The problem at Silicon Valley Bank is compounded by its relatively concentrated customer base. In its niche, its customers all know each other. And Silicon Valley Bank doesn’t have that many of them. As at the end of 2022, it had 37,466 deposit customers, each holding in excess of $250,000 per account. Great for referrals when business is booming, such concentration can magnify a feedback loop when conditions reverse.
IOW, an in-group. Clubby:
Why did so many tech companies keep their cash as deposits at SBV?
Was it financial naivety, or was their some sort of kicker incentive ((higher yields?)
— Chris Arnade 🐢🐱🚌 (@Chris_arnade) March 12, 2023
And a club you’re not in. One with a lot of symbolic capital when their economic capital was put at risk:
People were saying that social media acted as the accelerator of the depositor panic (“a new kind of bank run!)…
But the real accelerant was tech & finance bros figuring out that they should uniformly echo that anything less than FDIC 100% guarantee and they’d shoot the baby.
— Jesse Eisinger (@eisingerj) March 13, 2023
SIVB: Held-to-Mortem Governance Nongaap Investing. Risk? What risk?
So when I read the 2023 Proxy and see that the Risk Committee 1) met 18 times in 2022 vs. their typical 5-7 times per year, 2) appointed a new committee Chair, and 3) didn’t have a Chief Risk Officer in place for much of the year, that’s a pretty strong set of signals the company might have been aware they had a serious problem relative to what they were communicating
Silicon Valley Bank profit squeeze in tech downturn attracts short sellers Financial Times. Note the date: February 22. Burry? Burry? Burry? Burry—
SVB Collapse: “Big Short” Burry Accuses Regulators of Rewarding “Greed” TheStreet. That’s hardly fair. “Hubris” is mentioned, too. In fact, Burry mentions it first, before greed. Oddly, “Hubris is good” wasn’t Gordon Gecko’s catchphrase….
* * * Regulators Face Urgent Task to Stem Spread From Silicon Valley Bank WSJ
Barney Frank: Raise Insurance Limit on Business Deposits WSJ. Frank is on the board of Signature Bank.
SVB’s Lobby Groups Fought Proposal To Bolster Deposit Insurance The Lever
Michelle W Bowman: Design issues for central bank facilities in the future (PDF) Bank of International Settlements. “A key issue for central banks to consider is how to clearly distinguish asset purchases from the central bank’s monetary policy actions…. It is also important for central banks and other agencies to ensure that regulations and market oversight foster prudent financial institution behavior and resiliency in core financial markets.” March 3.
* * * Billions worth of crypto trades at risk as US bank shutdowns take toll Straits Times. That’s a damn shame.
Crypto’s On-Ramp Ran Right Into SVB’s Brick Wall WaPo
* * * Fragile Capitalists Rational Walk
Central banks’ digital currency plans face public backlash FT
#COVID19
How the Cochrane Review went wrong. Report questioning COVID masks blows up, prompts apology Toronto Star
Covid experts today: Eating out, masking less, even booking cruises WaPo. “They were careless people, Tom and Daisy….”
China?
Collapse of Silicon Valley Bank rocks China’s tech start-ups, venture capital industry Channel News Asia
As it happened: the takeaways from Chinese Premier Li Qiang’s ‘two sessions’ 2023 press conference South China Morning Post
Xi Jinping vows to make Chinese military ‘great wall of steel’ as tensions rise with west FT
India
In the Hunt for Fraud, the Red Flags Start With the Auditor Institutional Investor. Adani.
Modi Government Gave Adani Special Privileges to Boost Coal Business: Report The Wire
Seasonal viruses now attacking in packs, raising case severity: Kolkata doctors Times of India. Immune dysregulation?
Syraqistan
Saudi Arabia says deal with Iran does not mean all issues resolved Andalu Agency
European Disunion
Thousands take part in fresh Greek protest over deadly train crash France24
New York Times: Hungary-USA nuclear deal underway? What will Putin say? Daily News Hungary
Dear Old Blighty
HSBC buys Silicon Valley Bank’s UK unit for £1 in rescue deal FT
Why did 250,000 Britons die sooner than expected? The Econmist. Rule #2.
Gulnara Karimova: How Uzbek president’s daughter built a £200m property empire BBC (Re Silc). I’m shocked that money was laundered through London (real estate), but also certain that the malfeasance was limited to outliers in the ‘Stans.
U.K.’s murky entanglement in Papua independence conflict Globe_
New Not-So-Cold War
Zelenskyy has no choice but to ask his fighters to hold Bakhmut — for now Politico
Front Line Shifts in Russia’s and Ukraine’s Battle for Bakhmut, Analysts Say NYT
Ukraine Is Lying About Casualty Ratios To Justify Holding Of Bakhmut Moon of Alabama
Chris Hedges: Ukraine’s Death by Proxy Chris Hedges, Scheerpost
* * * ‘Little fissures’: The U.S.-Ukraine war unity is slowly cracking apart Politico
Russia will take Ukraine, Donald Trump (firmly) asserts. Then, explains ‘deal’ Hindustan Times
* * * Moldova says it thwarted Russia-linked plot ahead of anti-government protests Politico
Georgian PM tells Ukrainian politicians to go mind their own business Al Mayadeen
* * * ‘Rigorous’ Maidan massacre exposé suppressed by top academic journal Kit Klarenberg, The Grayzone. A 2021 Ivan Katchanovski paper linked to at NC 2/27/2023.
Biden Administration
Biden indefinitely blocks millions of acres of land, water from future oil drilling FOX. Distinct from Willow.
Tech
Thanks to generative AI, catching fraud science is going to be this much harder The Register
Supply Chain
Recent Changes To Greek Code Of Private Maritime Law Hellenic Shipping News
Healthcare
‘Orchestrated PR campaign’: how skinny jab drug firm sought to shape obesity debate Guardian. Commentary: “This is why we can’t have nice things, like upstream solutions to global problems. Because the money is all in downstream band-aids and our systems are corrupt. You’re being farmed for profit by big business in more ways than you can possibly imagine.” But innovation! Disruption! This Bandaid has an app!
Zeitgeist Watch
Influencer Parents and The Kids Who Had Their Childhood Made Into Content Teen Vogue
Imperial Collapse Watch
European arms imports climb, U.S. dominance in exports grows, think tank says Reuters (RK).
Class Warfare
Why Poverty Persists in America NYT. “The primary reason for our stalled progress on poverty reduction has to do with the fact that we have not confronted the unrelenting exploitation of the poor in the labor, housing and financial markets.” But travel broadens the mind:
Or, from some standpoint(s), very right?
The Issue of Curiosity Pedestrian Observations. Not-invented-here in US transportation investment, such as it is.
Antidote du jour (via WLDavies):
Bonus antidote:
The wildebeest migration is one of the greatest migrations left in the world involving millions of individuals. They are the shakers and movers of the Serengeti-Mara ecosystem.
By Asheeli Loishooki- Serengeti Ecologist
Visit Now, it’s happening in Serengeti. pic.twitter.com/7pwcq4fntj
— Tanzania National Parks (@tzparks) July 17, 2022
See yesterday’s Links and Antidote du Jour here.
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