NYTimes Sugarcoats And Soft-Peddles "Pro-Democracy" Protests In Jerusalem

If bringing a Palestinian flag to an Israeli “pro-democracy” protest leads to you getting attacked and your flag torn away, it isn’t a “pro-democracy” protest. https://t.co/67VBWoMTHb

— James Ray ☭ (@GoodVibePolitik) March 27, 2023

NYTimes  | What prompted such large-scale chaos? In short, the extreme change that many Israelis feared the proposed judicial overhaul would bring. Like its American counterpart, Israel’s Supreme Court is very powerful. But with the overhaul, Israel’s Parliament could override the court’s decisions with a simple majority, giving the government sweeping power to enact its preferred policies.

Netanyahu and his allies argue that the overhaul is needed to limit the courts’ power. They believe the courts have become increasingly aggressive and have undermined voters’ choices over the past three decades. One example: The Supreme Court’s blocking of some settlements in the West Bank.

The opposition argues that the overhaul would significantly weaken one of the few checks, besides elections, on Parliament. Israelis in the opposition tend to hold a more secular, pluralistic vision for the country, and see the courts as important to preserving that view. The opposition also says that Netanyahu is pushing for the changes to protect himself because he is standing trial on corruption charges. Netanyahu denies that claim as well as the charges.

That opposition has gained momentum because it unites influential parts of Israeli society: universities, unions and the reservists who play a key role in the military. The backing of such organizations is often the difference between successful and failed protest movements, as my colleague Amanda Taub has explained. “Support from those institutions can be a way for protests to gain leverage over leaders, often by splitting up elite coalitions,” Amanda said.

That kind of split is already visible in Netanyahu’s cabinet. Over the weekend, the defense minister, Yoav Gallant, spoke out against the proposed overhaul, citing opposition from members of the military. “I see how the source of our strength is being eroded,” Gallant said.

Importantly, opposition from within the military goes beyond ideology. Soldiers and reservists argue that if the courts are too weak to provide a check on the military, officials may be more likely to give illegal orders and potentially expose soldiers to prosecution in international courts. “Those concrete concerns about self-interest may be far more difficult for the government to defuse than if the protests were just motivated by ideology and political solidarity,” Amanda wrote.

Netanyahu fired Gallant on Sunday. The dismissal prompted the latest protests in the country, which in turn compelled Netanyahu to pause his plans.

What’s next

Netanyahu’s proposed judicial overhaul was made possible by a rightward shift in Israeli politics, as this newsletter has explained. His backtracking in the face of heavy opposition suggests that perhaps Israel’s population hasn’t moved as far to the right as he believes.

The overhaul’s delay has calmed the situation for now. But it could also lead to more political chaos: Netanyahu’s coalition holds a slim majority in Parliament, and it could collapse if his right-wing allies believe he is going back on his word. That could force another election, which would be Israel’s sixth since 2019.

At the same time, reviving the overhaul would probably revitalize the protests and potentially splinter Netanyahu’s government again. Either option could cost Netanyahu his power.

Secular Jews Sick Of Ultraorthodox Extremism Putting Jewish Bidnis Out In These Streets

FT  |  Many say the crisis was triggered by Netanyahu’s decision to form an electoral alliance with extreme ultranationalists previously on the fringes of politics. 

The divisive veteran premier, who is on trial for corruption, returned to power in December by manufacturing a coalition dependent on ultraorthodox parties and ideologically driven religious Zionist leaders. 

These include Itamar Ben-Gvir, who in 2007 was convicted of inciting for racism and is now Netanyahu’s national security minister, and finance minister Bezalel Smotrich, a self-declared homophobe whose Religious Zionist party is one of the main drivers behind the legal reform. 

Both men live in settlements in the occupied West Bank that most of the international community consider illegal. They represent the religious nationalist settler movement and support the annexation of Palestinian territory. Ultraorthodox leaders hold other key posts, including the interior and religious affairs ministries. 

After last year’s election — the fifth in less than four years — the coalition’s 64 seats in the 120-member Knesset are split between Likud, with 32, and the ultraorthodox and religious Zionist parties.

🇮🇱 ALERTE - Israël s’enfonce dans le chaos en raison d’un projet de réforme visant à accroître le pouvoir des élus sur les magistrats. Le plus gros syndicat de travailleurs va appeler à la #grèvegénérale. Les universités se mettent en grève. Manifestations massives à #TelAviv. pic.twitter.com/jSKPB9pFX9

— Mediavenir (@Mediavenir) March 26, 2023

In coalition agreements with the parties, Netanyahu committed to a number of policies that would have a far-reaching impact on Israeli society, including expanding the powers of Rabbinical courts and tightening rules around religious conversions and immigration. He also pledged to annex the West Bank “while choosing the timing and considering the national and international interests of the state of Israel”. 

Since winning the election last year, the coalition has drafted legislation on a number of fronts, ranging from the legal reforms to changes that allow people convicted of crimes, but spared jail time, to serve as ministers. It has also legalised nine Jewish settler outposts deep in the West Bank, which even Israel had deemed to be built illegally. 

Simcha Rothman, a MP with Smotrich’s Religious Zionist party, who heads the Knesset’s justice committee and is an architect of the planned judicial changes, considers the moment a “great opportunity” for “the believers”.

“What brings together the ultraorthodox, a religious Zionist like me [and] a secular like Netanyahu . . . is the deep belief that Israel is and should always be the homeland of the Jewish people,” he says. Rothman says the legal reforms are needed to rein in the “unchecked and unbalanced” powers of judges. He blames the Supreme Court for having a “big part in radicalising” Palestinians of Israeli citizenship, and argues that in its current form it can block parents’ autonomy over how they educate their children, and even economic policies. 

He complains that Jewish aspects of the state have been eroded, with “progressive elites” staging a “power grab in culture and academia”. He says an Israeli child can spend a year in school without opening a Bible and condemns a 2020 Supreme Court ruling that it was OK for people to bring non-kosher food into hospitals during Passover. 

In his mind, “Israel was helpless against trends that would make Israel lose its Jewish identity”. “I think it’s time for the public in Israel to decide if they want to be a country ruled by its people or by its judges,” Rothman says. “A constitutional moment is always some kind of a crisis, but it’s very important.” The government’s goal, he adds, is to “bring Israel back to normality”.

Musty Medieval Ultra-Orthodox Tryna Take Control Of The Jewish State

tikkunolam  |  As over 600,000 Israelis marched in scores of cities throughout the country and in major world capitals, cracks began to form in the governing coalition.  Facing near munity in the ranks of the IDF, defense minister Yoav Gallant called on Bibi Netanyahu to put a halt to the legislative steamroller being rammed through the Knesset. He did so in a dramatic national TV address, which was clearly intended as a shot across the prime minister’s bow.

Already, the ruling coalition passed a law legalizing five settlements Israel had promised George Bush would not be populated.  It also passed a law removing the attorney general’s right to disqualify a prime minister convicted of a criminal offense.  This will protect Netanyahu if he is convicted on any of the corruption charges he confronts in his current trial.  As Opposition leader Benny Gantz said in a TV interview, there are dozens more pieces of legislation that will follow if the government continues this onslaught.

Regardless of Gallant’s political opinions about this agenda, as a former army general, he understands that Israel must have a cohesive fighting force.  When there is munity within, the country cannot protect its citizens.  Not to mention, that the IDF is most significant unifying institution in the country.  It defines Israeli identity and most citizens serve in it.  For many Israelis the army and the state are indistinguishable.  For that reason, Gallant defines his allegiance to the state via the army.  If the army is not with the government, then the latter cannot or should not function.

To clarify, I am defining Israeli reality as most Israelis see it, in the above paragraph, and not offering my own opinion, which is highly critical, as readers will know.

Two senior Likud MKs followed suit announcing support for Gallant.  On the other side, a number of Netanyahu stalwarts denounced Gallant.  Fascist firebrand, Itamar Ben Gvir, called for the PM to immediately fire him.  I wouldn’t be surprised if tomorrow he calls for erecting a scaffold in Tel Aviv’s Kaplan Street and hanging Gallant by the neck till he is dead, as judges used to say in the old Hollywood westerns.

Netanyahu has two choices: he can accede to Gallant and declare a ceasefire.  That would involve members of the governing coalition and opposition negotiating a compromise legislative agenda that would ensable some of the proposed “reforms,” while eliminating the most objectional ones.  Even if he agreed to this option, these negotiations would have no guarantee of success, since the sides are so far apart.

Or Netanyahu can reject Gallant’s call and go full steam ahead, throwing in his lot with the radical elements of his coalition, the anti-democracy coup plotters, Yariv Levin and Simcha Rotman. As I wrote in a recent post, this will bring a confrontaton between the legisltiave and judicial branches of Israeli government.  Until now, the Supreme Court has exerted limited powers compared to high courts in most democratic countries.  But at least it could review legislation and declare it in violation of Israel’s quasi constitutional Basic Laws.

In that sense, the Court would take up the laws passed by the far-right governing coalition and likely strike down most, if not all of them.  The legislative body really has very little recourse at that point.  It cannot force the Court to arrive a different conclusion short of taking the justices out in the courtyard and offering them a choice between life or death.  The Knesset has no enforcement provision that would enable it to override the Court.  Thus, its edict will prevail.

It remains to be seen how the coup plotters will react.  Perhaps after reading the decisions, they will water down or rephrase new proposed bills in the hope the justices will be willing to approve them.  Since the Court is a right-wing institution, it remains possible that they will approve some of the current legislation; and improve even more if it is modified or recast.

 

 

 

Any Man Who Must Say "I Am The King" Is No True King...,

caityjohnstone  |  The illusory truth effect is a cognitive bias which causes people to mistake something they have heard many times for an established fact, because the way the human brain receives and interprets information tends to draw little or no distinction between repetition and truth. Propagandists and empire managers often take advantage of this glitch in our wetware, which is what’s happening when you see them repeating key phrases over and over again that they want people to believe.

John Kirby really wants everyone to know that America is in charge of the world. This is from one single press conference. pic.twitter.com/HeE9uGEwrW

— Caitlin Johnstone (@caitoz) March 21, 2023

We saw another repetition of this line recently at an online conference hosted by the US Chamber of Commerce, in which the US ambassador to China asserted that Beijing must accept the US as the “leader” of the region China happens to occupy.

US empire managers are of course getting very assertive about the narrative that they are the world’s “leader” because that self-appointed “leadership” is being challenged by China, and the nations which support it with increasing openness like Russia. Most of the major international news stories of our day are either directly or indirectly related to this dynamic, wherein the US is struggling to secure unipolar planetary domination by thwarting China’s rise and undermining its partners.

The message they’re putting out is, “This is our world. We’re in charge. Anyone who claims otherwise is freakish and abnormal, and must be opposed.”

"They claim ownership over the entire planet while pretending that they do not seek confrontation with the nations they try to subjugate, and interpret any refusal to be subjugated as an unprovoked act of aggression."https://t.co/J7H09Q8PsD

— Caitlin Johnstone (@caitoz) March 2, 2023

Why do they say the US is the “leader” of the world instead of its “ruler”, anyway? I’m unclear on the difference as practically applied. Is it meant to give us the impression that the US rules the world by democratic vote? That this is something the rest of the world consented to? Because I sure as hell don’t remember voting for it, and we’ve all seen what happens to governments which don’t comply with US “leadership”.

I’m not one of those who believe a multipolar world will be a wonderful thing, I just recognize that it beats the hell out of the alternative, that being increasingly reckless nuclear brinkmanship to maintain global control. The US has been in charge long enough to make it clear that the world order it dominates can only be maintained by nonstop violence and aggression, with more and more of that violence and aggression being directed toward major nuclear-armed powers. The facts are in and the case is closed: US unipolar hegemony is unsustainable.

The problem is that the US empire itself does not know this. This horrifying trajectory we’re on toward an Atomic Age world war is the result of the empire’s doctrine that it must maintain unipolar control at all costs crashing into the rise of a multipolar world order.

 

Steal A Name Make A King: The Trump Campaign's Collusion With Israel

thenation  |  “Roger, hello from Jerusalem,” read the message from the Israeli secret agent. Dated August 12, 2016, it was addressed to Roger Stone—at the time a key player in Donald Trump’s presidential election campaign. “Any progress? He is going to be defeated unless we intervene. We have critical intel. The key is in your hands! Back in the US next week.” Later, the agent promised, “October Surprise coming!”

This report has been adapted from portions of James Bamford's book Spyfail: Foreign Spies, Moles, Saboteurs, and the Collapse of America's Counterintelligence, published by Twelve Books.

While the American media and political system fixated on Russian President Vladimir Putin and his armies of cyber warriors, trolls, and bots, what was completely missed in the Russiagate investigation of 2016 was the Israeli connection. No details of it were ever revealed in the heavily redacted Mueller Report. Nor was there any mention of an Israeli plot in the similarly redacted Senate Intelligence Committee Report on collusion charges in the 2016 election, or in any of the indictments or trials stemming from the Russia charges. Nor did any mention of Israeli involvement ever leak into the press. Yet I can reveal here the details of an elaborate covert operation personally directed by Prime Minister Benjamin Netanyahu that aimed to use secret intelligence to clandestinely intervene at the highest levels in the presidential election on behalf of Trump.

Shadowy hints of the plot only became visible with the little-noticed release in 2020 of a heavily redacted May 2018 FBI search warrant and its accompanying affidavit. As part of the Mueller investigation, the bureau had conducted an extensive search for any foreign interference in the 2016 election, and the warrant was directed at securing the Google accounts of a mysterious Israeli agent acting under the direction of someone identified as “PM.” The FBI agent who wrote the affidavit noted, “I believe ‘PM’ refers to the ‘Prime Minister.’”

In the spring of 2016, no issue was more important to Benjamin Netanyahu than Donald Trump winning the White House. The GOP presidential candidate was key to everything he was after, from ending the Iran nuclear agreement, to recognizing Jerusalem—rather than Tel Aviv—as Israel’s capital, to continuing the occupation of Palestine. But November was months away, and there was no guarantee Trump would win. In the meantime, Netanyahu was under mounting pressure from President Barack Obama to finally resolve the issues surrounding Palestine. Leading the charge on behalf of Obama was Secretary of State John Kerry, who was equally determined to find a solution after many years of trying.

Kerry was not alone. The Middle East Quartet, a group formed to mediate the Palestine-Israel peace process that included representatives from the United Nations, the European Union, the United States, and Russia, was also seeking a solution to the issues surrounding the occupation—and it was about to release a report that was expected to be highly critical of Israel. With so much on the line, Netanyahu appears to have made a drastic decision. He would dispatch a discreet, highly trusted aide, armed with critical intelligence, to covertly “intervene” in the US election to help put his man Trump in the White House. Based on the FBI documents, the intelligence appears to have consisted of advance knowledge of Russia’s hacking of the Democratic National Committee (DNC) and Hillary Clinton’s presidential campaign, and it may have included confidential details from the stolen e-mails. It was likely obtained by Israeli eavesdropping operations that were targeting secret Russian communications, as well as those of WikiLeaks.

Although the affidavit did not specify any individual defendants, the numerous potential criminal charges laid out in the FBI documents spoke to the seriousness of the Israeli plot. They included violation of the foreign contributions ban, which prohibits foreigners from contributing money or something of value to federal, state, or local elections. Other charges included aiding and abetting, conspiracy, wire fraud, and attempted conspiracy to commit wire fraud. Still another charge, “unauthorized access to a protected computer,” indicates Israel may have conducted illegal hacking operations. Based on the e-mails and text messages contained in the documents, the conspiracy began in the late spring of 2016, when it was beginning to appear that Trump had a good chance of winning the Republican nomination.

This was also when the FBI and the media began focusing heavily on possible Russian collusion with the Trump campaign, as a result of Moscow’s hacking of the DNC and the Clinton campaign. But while the Mueller investigation was never able to conclusively demonstrate any collusion with Russia, the FBI did uncover hard evidence of extensive collusion between close Trump associates and the highest levels of the Israeli government.

Debt Parasitism And The Collapse Of Antiquity

michael-hudson  |  The Collapse of Antiquity, the sequel to Michael Hudson’s “…and forgive them their debts,” is the latest in his trilogy on the history of debt. It describes how the dynamics of interest-bearing debt led to the rise of rentier oligarchies in classical Greece and Rome. This caused economic polarization, widespread austerity, revolts, wars and ultimately the collapse of Rome into serfdom and feudalism. That collapse bequeathed to the subsequent Western civilization a pro-creditor legal philosophy that has led to today’s creditor oligarchies.

In telling this story, The Collapse of Antiquity reveals the eerie parallels between the collapsing Roman world and today’s debt-burdened Western economies. 

Endorsements

“In this monumental work, Michael Hudson overturns what most of us were taught about Athens and Sparta, Greece and Rome, Caesar and Cicero, indeed about kings and republics. He exposes the roots of modern debt peonage and crises in the greed and violence of antiquity’s oligarch-creditors, embedded in their laws, which in the end destroyed the civilizations of classical antiquity.”
James K. Galbraith, author of Welcome to the Poisoned Chalice: The Destruction of Greece and the Future of Europe.

“In this fascinating book, Hudson explores the rise of the predatory rentier oligarchies of classical Greece and Rome. He makes a fascinating and persuasive case that the trap of debt led to the destruction of the peasantry, the states and ultimately even these civilizations.”
Martin Wolf, Chief Economics Commentator, Financial Times.

“Michael Hudson is an old school, 19th-century classical economist who puts fact before theory. To read his new book, The Collapse of Antiquity, is to learn why and how it has come to pass that we live in a world in which the money owns the people, not the people who own the money. The clarity of Hudson’s thought is like water in a desert, his history lesson therefore a sad story that is a joy to read.”
Lewis Lapham, editor of Lapham’s Quarterly.

Scope

The Collapse of Antiquity is vast in its sweep, covering:
• the transmission of interest-bearing debt from the Ancient Near East to the Mediterranean world, but without the “safety valve” of periodic royal Clean Slate debt cancellations to restore economic balance and prevent the emergence of creditor oligarchies;
• the rise of creditor and landholding oligarchies in classical Greece and Rome;
• classical antiquity’s debt crises and revolts, and the suppression, assassination and ultimate failure of reformers;
• the role played by greed, money-lust (wealth-addiction) and hubris, as analysed by Socrates, Plato, Aristotle and other ancient writers;
• Rome’s “End Time” collapse into serfdom and pro-creditor oligarchic legacy that continues to shape the West;
• the transformation of Christianity as it became Rome’s state religion, supporting the oligarchy, dropping the revolutionary early Christian calls for debt cancellation and changing the meaning of the Lord’s Prayer and “sin,” from a focus on the economic sphere to the personal sphere of individual egotism;
• how pro-creditor ideology distorts recent economic interpretations of antiquity, showing increasing sympathy with Rome’s oligarchic policies.

Backcover

Rome’s collapse was the forerunner of the debt crises, economic polarization and austerity caused by subsequent Western oligarchies. The West’s pro-creditor laws and ideology inherited from Rome make inevitable repeated debt crises, transferring control of property and government to financial oligarchies.

Classical antiquity’s great transition to the modern world lay in replacing kingship not with democracies but with oligarchies having a pro-creditor legal philosophy. That philosophy permits creditors to draw wealth, and thereby political power, into their own hands, without regard for restoring economic balance and long-term viability as occurred in the Ancient Near East through Clean Slates.

Rome’s legacy to subsequent Western civilization is thus the structure of creditor oligarchies, not democracy in the sense of social structures and policies promoting widespread prosperity.

 

1966 British Children Perfectly Describe The Dystopian Now

indianexpress  |  It is interesting to hear historical perspectives of what people imagined the future would be like. One imagines that children in the 1960s imagined that there would be flying cars in the future. However, a video from the 1960s that was aired on the BBC shows how pragmatic children were when they were asked to imagine what life would be like in the year 2000.

A young boy said, “People will be regarded more as statistics than as actual people”. A girl then offered her opinion and said, “I don’t think it’s going to be so nice. I think, sort of, all machines everywhere, everyone doing everything for you. You know, you’ll get all bored and I don’t think it will be so nice.”

Another girl said, “First of all, these computers are taking over now. Computers and automation and in the year 2000, there won’t be enough jobs to go around and the only jobs there will be, it will be for people with high IQ and those who work computers and such things.”

Netizens were left amazed by how accurate and realistic the children sounded. Their answers proved true as almost 50 years later, the world is run by tech and almost all jobs depend on it.

“1960s children imagine life in the year 2000,” says the caption of the video that was posted on Twitter by the handle Historic Vids.

“How are they so deductive and well spoken at such a young age. They’re like young adults. Maybe influenced by the conversations that were being had at the dinner table,” commented a user. “Crazy how the average kid in their age range today cannot speak nearly as eloquently or intelligently about a sophisticated topic. Ask a kid this today and you likely won’t get as thoughtful and insightful of an answer. Technology is killing us,” said another.

The clip is from the year 1966 and a longer version of the video was posted by the BBC Archive on YouTube in December 2021.

 

 

CBDC Will Enable Bankster Transformation To Permanent Endoparasitism

ineteconomics  |  Fast forward to the period of low inflation and low growth after 2001. The real estate boom set in, and that’s when you really had the financialization of everything. Up to then, the practice had normally been that banks would make mortgage loans and either keep them on their own books or, even if they sold them, they would sell the whole mortgage to Freddie Mac, Fannie Mae, or to the private sector. Then someone came up with the idea that if you carve the loans into tranches and sell the tranches separately, you might receive more money than if you sold the whole thing.

It worked out for a while that way and that’s why everyone did it. That opened the door to the financialization of everything.

LP: What does this concept, the “financialization of everything,” entail?

WT: That’s when you start treating everything like it could be a bank liability — auto loans, credit card loans, and the like. You treat them the same way as the new mortgage credit – carving them up into tranches with different levels of credit risk and interest rates attached and selling them off as chunks instead of altogether as one block.

A New York securities lawyer friend and I used to speculate that we could even securitize and sell air rights in New York. That way you would be selling the blue sky itself! Obviously an absurd concept, but I assure you that people likely gave serious thought to it.

LP: How is the current banking crisis an outcome of the process of financialization?

WT: In several ways. Going back to the ‘70s and ‘80s, Walter Wriston at Citibank introduced the concept of “brokered deposits,” certificates of deposit that could be negotiated in the secondary market and resold. Nobody ever thought of doing that before. Traditionally, you took out a deposit in the bank, a CD account, and you kept it. That was that. You could borrow against it at the bank, but you didn’t go try to sell that to somebody else.

Thanks to that process of creating brokered deposits, the liability side of the bank’s balance sheet became financialized. The FDIC eventually put limits on the percentage of deposits that one bank could have that were brokered deposits because they were viewed as non-core deposits, quick-to-flee money, money that won’t be there in time of need, etc. That’s very much like what we’re seeing today.

On the asset side, banks like Silicon Valley and Signature were loaded up with things like mortgage-backed securities and also long-term Treasuries. They were doing that just to have the appearance of liquidity, the appearance of risk-free assets while ignoring so-called duration risks, that is, exposure to interest rate problems the longer the term of the bond or other obligation that you’re holding. By ignoring these issues, banks like Silicon Valley, First Republic, and Signature painted themselves into a corner. They have brokered deposits chasing the highest yield funding assets that have embedded risk that is not recognized in the kind of accounting they wanted to see.

Are These Banksters Ecto Or Endo Parasites To You Peasant Hosts?

newindianexpress  | The UBS acquisition of Credit Suisse requires the Swiss National Bank to assume certain risks. It will provide a Swiss Franc 100 billion ($108 billion) liquidity line backed by an enigmatically titled government default guarantee, presumably in addition to the earlier credit support. The Swiss government is also providing a loss guarantee on certain assets of up to Swiss Franc 9 billion ($9.7 billion), which operates after UBS bears the first Swiss Franc 5 billion ($5.4 billion) of losses.

The state can underwrite bank liabilities including all deposits as some countries did after 2008. As US Treasury Secretary Yellen reluctantly admitted to Congress, the extension of FDIC coverage was contingent on US officials and regulators determining systemic risk as happened with SVB and Signature. Another alternative is to recapitalise banks with public money as was done after 2008 or finance the removal of distressed or toxic assets from bank books.

Socialisation of losses is politically and financially expensive.

Despite protestations to the contrary, the dismal truth is that in a major financial crisis, lenders to and owners of systemic large banks will be bailed out to some extent.

European supervisors have been critical of the US decision to break with its own standard of guaranteeing only the first $250,000 of deposits by invoking a systemic risk exception while excluding SVB as too small to be required to comply with the higher standards applicable to larger banks. There now exist voluminous manuals on handling bank collapses such as imposing losses on owners, bondholders and other unsecured creditors, including depositors with funds exceeding guarantee limit, as well as resolution plans designed to minimise the fallout from failures. Prepared by expensive consultants, they serve the essential function of satisfying regulatory checklists. Theoretically sound reforms are not consistently followed in practice. Under fire in trenches, regulators concentrate on more practical priorities.

The debate about bank regulation misses a central point. Since the 1980s, the economic system has become addicted to borrowing-funded consumption and investment. Bank credit is central to this process. Some recommendations propose a drastic reduction in bank leverage from the current 10-to-1 to a mere 3-to1. The resulting contraction would have serious implications for economic activity and asset values.

In Annie Hall, Woody Allen cannot have his brother, who thinks he is a chicken, treated by a psychiatrist because the family needs the eggs. Banking regulation flounders on the same logic.

As in all crises, commentators have reached for the 150-year-old dictum of Walter Bagehot in Lombard Street that a central bank's job is "to lend in a panic on every kind of current security, or every sort on which money is ordinarily and usually lent."

Central bankers are certainly lending, although advancing funds based on the face value of securities with much lower market values would not seem to be what the former editor of The Economist had in mind. It also ignores the final part of the statement that such actions "may not save the bank; but if it do not, nothing will save it."

Banks everywhere remain exposed. US regional banks, especially those with a high proportion of uninsured deposits, remain under pressure.

European banks, in Germany, Italy and smaller Euro-zone economies, may be susceptible because of poor profitability, lack of essential scale, questionable loan quality and the residual scar tissue from the 2011 debt crisis.

Emerging market banks' loan books face the test of an economic slowdown. There are specific sectoral concerns such as the exposure of Chinese banks to the property sector which has necessitated significant ($460 billion) state support.

Contagion may spread across a hyper-connected financial system from country to country and from smaller to larger more systematically important banks. Declining share prices and credit ratings downgrades combined with a slowdown in inter-bank transactions, as credit risk managers become increasingly cautious, will transmit stress across global markets.

For the moment, whether the third banking crisis in two decades remains contained is a matter of faith and belief. Financial markets will test policymakers' resolve in the coming days and weeks.

Mobile Money And Social Media Made The Bank Runs Unmanageable

bloomberg  |  Citigroup Inc. Chief Executive Officer Jane Fraser said mobile apps and consumers’ ability to move millions of dollars with a few clicks of a button mark a sea change for how bankers manage and regulators respond to the risk of bank runs. 

Fraser said the fast demise of Silicon Valley Bank also made it difficult for banks to assess and prepare bids for its assets. Speaking just two weeks after the California-based lender collapsed under the weight of tens of billions of withdrawals by its venture capital clients, Fraser said her firm hopes a buyer will emerge in the coming days.

“It’s a complete game changer from what we’ve seen before,” Fraser said Wednesday in an interview with Carlyle Group Inc. co-founder David Rubenstein at an Economic Club of Washington event. “There were a couple of Tweets and then this thing went down much faster than has happened in history. And frankly I think the regulators did a good job in responding very quickly because normally you have longer to respond to this.”

In the space of just 11 days this month, four banks collapsed, including three regional US lenders and the Swiss financial giant Credit Suisse Group AG. A fifth firm — First Republic Bank — is teetering. Amid the turmoil in global financial markets, stocks have careened wildly and investors have lost billions of dollars.

Citigroup was among 11 banks that joined to provide $30 billion in deposits last week to First Republic, in an effort to shore up the San Francisco-based lender beset by client withdrawals and credit-rating downgrades. Wall Street leaders and US officials are searching for a rescue plan, and are exploring the possibility of government backing to make the firm more attractive to investors or a buyer.

Citigroup isn’t interested in making a bid for First Republic, Fraser said. She declined to comment on the lender’s current state, though she said the company is “actively working through the challenges that they’re facing right now.”

Fraser stressed that the string of bank failures was isolated, noting the biggest US banks remain well capitalized. 

The Banking Crisis Of The Rich

bizjournals  |  UMB Financial Corp. CEO Mariner Kemper said the reason the Mid-Size Bank Coalition of America asked the FDIC to insure all bank deposits for the next two years was to immediately restore confidence in the entire banking system, not just “too big to fail” banks. 

“That’s the request from midsized banks, so that there is no reason for people to see a perceived risk and move their money to somewhere where there is less perceived risk right now,” he said. “I think that ultimately has been the goal of the government, if you go back to the 2008 crisis, to not have a too-big-to-fail outcome.”

Kemper said a temporary unconditional guarantee from the FDIC would create calm and buy time for everyone to talk about what longer-term changes might be necessary.

“Facts and cooler heads need to prevail here,” he said. “We don’t have a fundamental crisis in the banking industry right now. There is no monster under the bed. You can be afraid of your shadow, but it’s still a shadow.”

UMB has a 65% loan-to-deposit ratio, which means the bank has plenty of money for customers if a crisis emerges, Kemper said. UMB knows its clients, and those clients know the bank. Kemper said he has made innumerable calls to clients to answer any questions they may have.

“Half of them are saying thanks for calling, but you didn’t need to,” Kemper said. “The other half are saying thanks for calling, I feel better. Some are telling me they bought stock or put more money into the bank as a show of support. That’s what our community is doing. So I guess what I’d say is it’s not a crisis, so don’t make it one. As the British say, stay calm, and carry on. If everyone just takes a beat and focuses on running their business and paying their bills, getting in their car and going where they need to go just for a few days and takes a deep breath, this thing will all be in the rearview mirror.”

 

The American Political World Revolves Around Banksters And Their Money

realclearwire  |  One thing is clear. At $319 billion and counting, the failures of Silicon Valley Bank and Signature Bank alone in the last two weeks are already on par with the entire 2008 financial crisis, which saw 25 banks failing, with $373 billion in combined assets. And with $620 billion of unrealized losses that triggered this crisis still pending, we may be just getting started.

What path policymakers will choose this time around is unclear. The country has never been more evenly split politically. Meanwhile, the regulatory system has attempted to stem the tide without the involvement of Congress or the White House. A political reconciliation, in other words, has been deferred.

Political issues come and go, but financial panics create political movements because they hit Americans directly, in their bank accounts. Voters pay attention.

The movement that results from this panic will depend ultimately on whom voters blame for it. That scapegoat, whether real or imagined, will determine where on the political spectrum the movement leans.

Many Americans continue to identify government itself as the top non-economic issue they face. Inflation, a problem created by government, is their top economic problem. Most Americans believe the federal government is too big and doing too much. In places like real-life Indiana, Pennsylvania or fictional Beaver Falls, it is abundantly clear that Americans have lost faith in their leading institutions.

“You sit around here and you spin your little webs and you think the whole world revolves around you and your money,” George Bailey tells his antagonist in “It’s a Wonderful Life.”

Bailey was referring to the machinations of a powerful banker, but his words are fitting in an unintended sense, too: in American politics, realignments begin because the world revolves around voters and their money.

The U.S. Business Model Is Collapsing

dailyreckoning  |  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 U.S. 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.

The practice in situations such as this (say, as in 2008-09) is for the governing authorities — who supposedly rule over the banking world like gods — to rush to rescue these outfits with “liquidity,” money (or representations of it) as required to re-balance things or maybe provide the impression of re-balancing until something else can be figured out.

The Jupiter and Minerva of American banking, Jay Powell and Janet Yellen, were faced with just that sort of call for divine intervention over the weekend as fear seeped into every nook and crevice of the money world that wealth was flaring away in the long-feared-of conflagration out of the dumpster banking had become.

Sunday morning, Ms. Yellen told CBS News “bailouts, no way” but by the afternoon Mr. Powell cried “bailouts, way,” and they had to get their story straight. They offered up $25 billion to bail out depositors for a smoldering system that will arguably require a trillion dollars or more of liquidity to quench the spreading fires.

One thing looks for sure: The interest rate hikes that Mr. Powell spoke of so confidently only days ago just got stashed into his folder labeled “Fuggeddabowdit.” So the campaign to control inflation must now yield to the urgent need to create a whole lot of money to spray over those fires.

You may have noticed that the value of your money has been slip-sliding away the past year or so. Peanut butter at five bucks a jar, and all. The situation at hand kind of guarantees that we’ll be seeing a whole lot more of that.

And then the gods of money will have lost control of the interest rate console altogether.

No more tweaking the broken knobs. More inflation will prompt U.S. Treasury paper holders to dump what they can while there’s still some value to retrieve. But the U.S. has to issue more debt for all the bailouts and theoretical buyers of new debt will perforce bid up the rates to keep up with inflation… and yet the U.S. can’t possibly bear the burden of paying higher interest on its debt.

Looks like the business model for running the USA is breaking down before our eyes.

Luckily, Cap’n “Joe Biden” is at the helm of this steaming garbage barge. His conference room full of geniuses is ready with the solution to our predicament: the long-mythologized central bank digital currency — a dream-come-true for would be tyrants… the Godzilla of unicorns whinnying atop the biggest rainbow of all: the promise of endless magic money for everybody, forever.

All you have to do to get it is: Surrender your decision-making power over your own life. The government will amalgamate your few remaining assets in a CBDC account, tell you exactly what to spend it on and shut off your little card if you show any contrary impulses.

Well, they can try it. I doubt it will work. Instead, the government will melt down in its own rancid puddle of insolvency, the meta-grift will grind to an end and it will be everyone for his/her/they self in the broke-down Palace of Chaos for a while… until things emergently reconstruct.

But I get a little ahead of myself. It’s not even ten o’clock on Monday morning. Oh, and then there’s Ukraine…

Wokeness: Linguistic, Symbolic, Emotional Correctness Enforced Via Mutual Surveillance

freddiedeboer  |  “Woke” or “wokeness” refers to a school of social and cultural liberalism that has become the dominant discourse in left-of-center spaces in American intellectual life. It reflects trends and fashions that emerged over time from left activist and academic spaces and became mainstream, indeed hegemonic, among American progressives in the 2010s. “Wokeness” centers “the personal is political” at the heart of all politics and treats political action as inherently a matter of personal moral hygiene - woke isn’t something you do, it’s something you are. Correspondingly all of politics can be decomposed down to the right thoughts and right utterances of enlightened people. Persuasion and compromise are contrary to this vision of moral hygiene and thus are deprecated. Correct thoughts are enforced through a system of mutual surveillance, one which takes advantage of the affordances of internet technology to surveil and then punish. Since politics is not a matter of arriving at the least-bad alternative through an adversarial process but rather a matter of understanding and inhabiting an elevated moral station, there are no crises of conscience or necessary evils.

Woke is defined by several consistent attributes. Woke is

Academic - the terminology of woke politics is an academic terminology, which is unsurprising given its origins in humanities departments of elite universities. Central to woke discourse is the substitution of older and less complicated versions of socially liberal perspectives with more willfully complex academic versions. So civil rights are out, “anti-racism” is in. Community is out, intersectionality is in. Equality is out, equity is in. Homelessness is out, unhousedness is in. Sexism is out, misogyny is in. Advantage is out, privilege is in. Whenever there’s an opportunity to introduce an alternative concept that’s been wrung through academia’s weird machinery, that opportunity is taken. This has the advantage of making political engagement available only to a priestly caste that has enjoyed the benefits of elite university education; like all political movements, the woke political movement is captured by the urge to occupy elevated status within it.

Immaterial - woke politics are overwhelmingly concerned with the linguistic, the symbolic, and the emotional to the detriment of the material, the economic, and the real. Woke politics are famously obsessive about language, developing literal language policies that are endlessly long and exacting. Utterances are mined for potential offense with pitiless focus, such that statements that were entirely anodyne a few years ago become unspeakable today. Being politically pure is seen as a matter of speaking correctly rather than of acting morally. The woke fixation on language and symbol makes sense when you realize that the developers of the ideology are almost entirely people whose profession involves the immaterial and the symbolic - professors, writers, reporters, artists, pundits. They retreat to the linguistic because they feel that words are their only source of power. Consider two recent events: the Academy Awards giving Oscars to many people of color and Michigan repealing its right-to-work law. The latter will have vastly greater positive consequences for actually-existing American people of color than the former, and yet the former has been vastly better publicized. This is a direct consequence of the incentive structure of woke politics.

Structural in analysis, individual in action - the woke perspective is one that tends to see the world’s problems as structural in nature rather than the product of individual actors or actions. Sometimes the problems are misdiagnosed or exaggerated, but the structural focus is beneficial. Curiously, though, the woke approach to solutions to politics is relentlessly individualistic. Rather than calling for true mass movements (which you cannot create without the moderation and compromise the social justice set tends to abhor), woke politics typically treats all political struggle as a matter of the individual mastering themselves and behaving correctly. The fundamental unit of politics is not the masses but the enlightened person, in the social justice mindset, and the enlightened person is one who has attained a state of moral cleanliness, particularly as expressed in language. The structural problems (such as racism) are represented as fundamentally combated with individual moral correctness (such as articulated in White Fragility by Robin DiAngelo, which argues that racism is combated by white people interrogating their souls rather than with policy). The only real political project is the struggle against the self; the only real political victory is the mastery of one’s thoughts. The distinction between the effective political actor and the morally hygienic thinker is collapsed. You combat homophobia by being gay-affirming. You combat misogyny by respecting women. You combat all social ills by relentlessly fixating on your own position in society and feeling bad about it. Nothing political can escape the gravity of personal psychodrama and no solutions exist but cleansing the self.

Emotionalist - “emotionalist” rather than emotional, meaning not necessarily inappropriately emotional but concerned fundamentally with emotions as the currency of politics. In woke circles, political problems are regularly diagnosed as a matter of the wrong emotions being inspired in someone. Someone feeling “invalid” is no longer an irrelevant matter of personal psychology best left to a therapist but instead a political problem to be solved, and anyone who provoked that feeling is someone who has committed a political crime no matter what the context or pretext.

Americanism Failed When America Failed To Integrate Its Public Schools

theconversation  |   Rep. Marjorie Taylor Greene, a Republican from Georgia, wants a “national divorce.” In her view, another Civil War is inevitable unless red and blue states form separate countries.

She has plenty of company on the right, where a host of others – 52% of Trump voters, Donald Trump himself and prominent Texas Republicans – have endorsed various forms of secession in recent years. Roughly 40% of Biden voters have fantasized about a national divorce as well. Some on the left urge a domestic breakup so that a new egalitarian nation might be, as Lincoln said at Gettysburg, “brought forth on this continent.”

The American Civil War was a national trauma precipitated by the secession of 11 Southern states over slavery. It is, therefore, understandable that many pundits and commentators would weigh in about the legality, feasibility and wisdom of secessionwhen others clamor for divorce.

But all this secession talk misses a key point that every troubled couple knows. Just as there are ways to withdraw from a marriage before any formal divorce, there are also ways to exit a nation before officially seceding.

I have studied secession for 20 years, and I think that it is not just a “what if?” scenario anymore. In “We Are Not One People: Secession and Separatism in American Politics Since 1776,” my co-author and I go beyond narrow discussions of secession and the Civil War to frame secession as an extreme end point on a scale that includes various acts of exit that have already taken place across the U.S.

Separatist ideas come from the Left, too.

“Cal-exit,” a plan for California to leave the union after 2016, was the most acute recent attempt at secession.

And separatist acts have reshaped life and law in many states. Since 2012, 21 states have legalized marijuana, which is federally illegal. Sanctuary cities and states have emerged since 2016 to combat aggressive federal immigration laws and policies. Some prosecutors and judges refuse to prosecute women and medical providers for newly illegal abortions in some states.

Estimates vary, but some Americans are increasingly opting out of hypermodern, hyperpolarized life entirely. “Intentional communities,” rural, sustainable, cooperative communes like East Wind in the Ozarks, are, as The New York Times reported in 2020, proliferating “across the country.”

In many ways, America is already broken apart. When secession is portrayed in its strictest sense, as a group of people declaring independence and taking a portion of a nation as they depart, the discussion is myopic, and current acts of exit hide in plain sight. When it comes to secession, the question is not just “What if?” but “What now?”

 

Understanding The Needless $300 Billion Gift Of Peasant $$ To Already Rich Oligarchs

geopoliticaleconomy  |  Many media reports have presented Silicon Valley Bank as a financial lifeline for start-up companies, but this portrayal is misleading.

Venture capitalist and private equity firms were SVB’s main customers, making up 56% of its loan portfolio at the end of 2022. Only around 20% of the bank’s loans went directly to start-ups and tech companies.

SVB’s “chief business was making loans through fund subscription lines to venture capital firms“, MarketWatch reported.

“The same venture capital investors that the bank had supported for years ended up killing it”, the website summarized.

Forbes cited an analyst who explained, “SVB is also not your average regional bank… They are a niche bank catering to the venture capitalist crowd and are not a traditional everyday consumer bank”.

Like SVB, Signature Bank worked closely with venture capital and private equity firms. Another important customer base consisted of cryptocurrency companies, which made up around 20% of total deposits.

The financial website Wall Street on Parade explained that Silicon Valley bank “was a financial institution deployed to facilitate the goals of powerful venture capital and private equity operators, by financing tech and pharmaceutical startups until they could raise millions or billions of dollars in a Wall Street Initial Public Offering (IPO)”.

Wall Street on Parade analysts Pam Martens and Russ Martens went even further, documenting how SVB was in essence bailed out by the US government throughout 2022, before it crashed.

They wrote (emphasis added):

To put it bluntly, this was a Wall Street IPO machine that enriched the investment banks on Wall Street by keeping the IPO pipeline moving; padded the bank accounts of the venture capital and private equity middlemen; and minted startup millionaires for ideas that often flamed out after the companies went public. These are the functions and risks taken by investment banks. Silicon Valley Bank – with this business model — should never have been allowed to hold a federally-insured banking charter and be backstopped by the U.S. taxpayer, who was on the hook for its incompetent bank management.

We say incompetent based on this fact alone (although there were clearly lots of other problem areas): $150 billion of its $175 billion in deposits were uninsured. The bank was clearly playing a dangerous gambit with its depositors’ money.

Adding further insult to U.S. taxpayers, the Federal Home Loan Bank of San Francisco was quietly bailing out SVB throughout much of last year [2022]. Federal Home Loan Banks are also not supposed to be in the business of bailing out venture capitalists or private equity titans. Their job is to provide loans to banks to promote mortgages to individuals and loans to promote affordable housing and community development.

According to SEC filings by the Federal Home Loan Bank of San Francisco, its loan advances to SVB went from zero at the end of 2021 to a whopping $15 billion on December 31, 2022. The SEC filing provides a graph showing that SVB was its largest borrower at year end, with outstanding advances representing 17 percent of all loans made by the FHLB of San Francisco.

Silicon Valley oligarchs use cynical populist rhetoric to defend the Fed bailout

Despite the fact that SVB was linked with a virtual economic umbilical cord to Wall Street, some Silicon Valley oligarchs like David O. Sacks have cynically tried to portray the US government bailout as a blow to the big banks.

Sacks is a member of the infamous PayPal Mafia, which The Telegraph newspaper described as “the richest group of men in Silicon Valley“.

In a soft-ball interview on the Jimmy Dore Show, Sacks claimed the Fed bailout was needed to save a “vibrant regional banking system” from the big four banks that the government has deemed “systemically important” (JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo).

Sacks did not mention that he has made many investments in Silicon Valley companies that stand to benefit from the Fed bailout.