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.

Why Poverty Persists In America

NYTimes  | A fair amount of government aid earmarked for the poor never reaches them. But this does not fully solve the puzzle of why poverty has been so stubbornly persistent, because many of the country’s largest social-welfare programs distribute funds directly to people. Roughly 85 percent of the Supplemental Nutrition Assistance Program budget is dedicated to funding food stamps themselves, and almost 93 percent of Medicaid dollars flow directly to beneficiaries.

There are, it would seem, deeper structural forces at play, ones that have to do with the way the American poor are routinely taken advantage of. 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.

As a theory of poverty, “exploitation” elicits a muddled response, causing us to think of course and but, no in the same instant. The word carries a moral charge, but social scientists have a fairly coolheaded way to measure exploitation: When we are underpaid relative to the value of what we produce, we experience labor exploitation; when we are overcharged relative to the value of something we purchase, we experience consumer exploitation. For example, if a family paid $1,000 a month to rent an apartment with a market value of $20,000, that family would experience a higher level of renter exploitation than a family who paid the same amount for an apartment with a market valuation of $100,000. When we don’t own property or can’t access credit, we become dependent on people who do and can, which in turn invites exploitation, because a bad deal for you is a good deal for me.

Our vulnerability to exploitation grows as our liberty shrinks. Because undocumented workers are not protected by labor laws, more than a third are paid below minimum wage, and nearly 85 percent are not paid overtime. Many of us who are U.S. citizens, or who crossed borders through official checkpoints, would not work for these wages. We don’t have to. If they migrate here as adults, those undocumented workers choose the terms of their arrangement. But just because desperate people accept and even seek out exploitative conditions doesn’t make those conditions any less exploitative. Sometimes exploitation is simply the best bad option.

Consider how many employers now get one over on American workers. The United States offers some of the lowest wages in the industrialized world. A larger share of workers in the United States make “low pay” — earning less than two-thirds of median wages — than in any other country belonging to the Organization for Economic Cooperation and Development. According to the group, nearly 23 percent of American workers labor in low-paying jobs, compared with roughly 17 percent in Britain, 11 percent in Japan and 5 percent in Italy. Poverty wages have swollen the ranks of the American working poor, most of whom are 35 or older.

One popular theory for the loss of good jobs is deindustrialization, which caused the shuttering of factories and the hollowing out of communities that had sprung up around them. Such a passive word, “deindustrialization” — leaving the impression that it just happened somehow, as if the country got deindustrialization the way a forest gets infested by bark beetles. But economic forces framed as inexorable, like deindustrialization and the acceleration of global trade, are often helped along by policy decisions like the 1994 North American Free Trade Agreement, which made it easier for companies to move their factories to Mexico and contributed to the loss of hundreds of thousands of American jobs. The world has changed, but it has changed for other economies as well. Yet Belgium and Canada and many other countries haven’t experienced the kind of wage stagnation and surge in income inequality that the United States has.

Those countries managed to keep their unions. We didn’t. Throughout the 1950s and 1960s, nearly a third of all U.S. workers carried union cards. These were the days of the United Automobile Workers, led by Walter Reuther, once savagely beaten by Ford’s brass-knuckle boys, and of the mighty American Federation of Labor and Congress of Industrial Organizations that together represented around 15 million workers, more than the population of California at the time.

In their heyday, unions put up a fight. In 1970 alone, 2.4 million union members participated in work stoppages, wildcat strikes and tense standoffs with company heads. The labor movement fought for better pay and safer working conditions and supported antipoverty policies. Their efforts paid off for both unionized and nonunionized workers, as companies like Eastman Kodak were compelled to provide generous compensation and benefits to their workers to prevent them from organizing. By one estimate, the wages of nonunionized men without a college degree would be 8 percent higher today if union strength remained what it was in the late 1970s, a time when worker pay climbed, chief-executive compensation was reined in and the country experienced the most economically equitable period in modern history.

It is important to note that Old Labor was often a white man’s refuge. In the 1930s, many unions outwardly discriminated against Black workers or segregated them into Jim Crow local chapters. In the 1960s, unions like the Brotherhood of Railway and Steamship Clerks and the United Brotherhood of Carpenters and Joiners of America enforced segregation within their ranks. Unions harmed themselves through their self-defeating racism and were further weakened by a changing economy. But organized labor was also attacked by political adversaries. As unions flagged, business interests sensed an opportunity. Corporate lobbyists made deep inroads in both political parties, beginning a public-relations campaign that pressured policymakers to roll back worker protections.

A national litmus test arrived in 1981, when 13,000 unionized air traffic controllers left their posts after contract negotiations with the Federal Aviation Administration broke down. When the workers refused to return, Reagan fired all of them. The public’s response was muted, and corporate America learned that it could crush unions with minimal blowback. And so it went, in one industry after another.

Today almost all private-sector employees (94 percent) are without a union, though roughly half of nonunion workers say they would organize if given the chance. They rarely are. Employers have at their disposal an arsenal of tactics designed to prevent collective bargaining, from hiring union-busting firms to telling employees that they could lose their jobs if they vote yes. Those strategies are legal, but companies also make illegal moves to block unions, like disciplining workers for trying to organize or threatening to close facilities. In 2016 and 2017, the National Labor Relations Board charged 42 percent of employers with violating federal law during union campaigns. In nearly a third of cases, this involved illegally firing workers for organizing.

Corn-Fed Redhead Bussin Dollar Tree Dinners...,

zerohedge  |  With rising inflation putting pressure on household finances, some low-income Americans have turned to "Dollar Tree Dinners" as their meal of choice.

Rebecca Chobat's TikTok videos have garnered the interest of budget-conscious shoppers, particularly as food inflation continues to persist at its highest level in four decades. Through her videos, which reach an audience of 742.5k followers, she explains how to make meals using products from the discount retailer with a weekly budget of $35.

Chobat has published numerous videos showcasing "unique recipes and cooking ideas from the Dollar Tree." Some of her video titles include "Dollar Tree Gumbo" and "Dollar Tree Beef Pot Pie." 

Although consumers can save money by consuming Dollar Store meals, there are some negative aspects to consider: 

The Institute for Local Self-Reliance recently published a report expressing worry about the absence of fresh produce in discount stores. Most food sold at Dollar Tree contains highly-caloric and heavily-processed items, which are not considered nutritious options.

However, due to negative real wage growth taking a toll on household finances, some individuals have no alternative but to turn to Dollar Stores for food. For some, even Walmart has become too expensive. 

Since the 2008 financial crisis, there's been an explosion of Dollar General, Dollar Tree, and Family Dollar stores nationwide as the vast majority of folks are getting poorer. All three discount retailers operate 34,000 stores nationwide and are set to open thousands more in the coming years. 

Chobat told Bussiness Insider these videos are having a real impact on people saving money in these challenging times. 

"I get those messages fairly frequently but that one really struck home for me," she said. 

Regularly consuming food from discount stores could lead to health issues in the future. Therefore, it is imperative to revitalize local economies and supermarkets to promote the availability of fresh food products.

 

Farming The Poor: The Homeless Industrial Complex

hotair |  This story is duplicated countless times and in countless ways and tells you everything you need to know about how corrupt our welfare state actually is. We often focus on the occasional incidences of welfare fraud committed by recipients, but those incidents pale in comparison to the amount of money that is simply skimmed off the top by the people who run the programs.

It’s not the poor people who are benefiting, but the people who are claiming to help them. Those people are getting rich, cushy government jobs with great pay and benefits, and in many cases kickbacks.

Here in Minnesota, we have an enormous scandal centered on an Ilhan Omar-associated group that stole hundreds of millions of pandemic relief money that was supposed to be spent on providing a substitute for the school lunch program during the school closures. A nonprofit that was essentially a Somali gang set up fake feeding centers that served almost nobody but collected hundreds of millions from the Minnesota government.

The government officials did almost nothing. It took the FBI to shut the scam down. Our Department of Education knew of the graft but was concerned with appearing racist and ticking off our Congresswoman.

This is how the government-to-nonprofit complex works. Politically connected people conspire to use the suffering of others as an excuse to fleece the taxpayers of what is collectively billions of dollars. It is estimated that total fraud from pandemic relief funds alone amounts to hundreds of billions to over a trillion dollars in just 3 years.

And that doesn’t include the billions in yearly payments to nonprofits that accomplish little to nothing.

I call this process “farming the poor,” where poor people are the soil used to grow the billions of dollars that pop out of the ground every time you appeal to people’s compassion or desire for a better quality of life.

Poverty is an industry, not run by or for the poor people themselves, but for the benefit of those whose job it is to solve the problems.

 

 

Not Big Lots!! EBT/SNAP Cuts Fitna Hurt One Of My Favorite Stores...,

businessinsider |  Discount chains like Dollar General and Big Lots are warning that cuts to food stamps and lower-than-usual tax refunds this year could start hurting sales. 

This month, 32 states ended the federal increase to food stamps, known as SNAP benefits, that began during the early weeks of the pandemic. At the same time, certain beefed-up tax credits are no longer available, which means many taxpayers are preparing for smaller tax refunds this year. 

Both changes are the result of a wind-down of pandemic-era policies, and it's the combination of factors that has retailers worried — they're coming at a time when inflation has kept prices for everyday goods unusually high, straining the budgets of lower-income consumers in particular. 

Now, the retailers that serve those consumers are preparing for a possible slowdown in spending. 

"In particular, we remain concerned about the lower-income customer, our core customer," Michael O'Sullivan, CEO of off-price department store Burlington, said during a call with investors this month. "In 2022, this customer group bore the brunt of the impact of inflation on real household incomes. We think the impact of inflation will moderate this year, but there are other factors that could hurt this customer, such as a rise in unemployment and the ending of expanded SNAP benefits." 

At value chain Big Lots, where nearly 80% of shoppers have a household income under $100,000, "customers are pinched," CEO Bruce Thorn said during a recent investor call.

"At this point, 30% of that lower household income customer, their expenses today are greater than their income coming in. And 70% of them have curbed spending as a result of that," he said. 

Thorn estimated that the tax refunds, though arriving earlier this year, are about 10% to 15% lower than last year, and when combined with the reduced SNAP benefits, it "further deteriorates lower household income spend." Those shoppers, he said, are "going through a tough time right now." 

 

The MINUTE Netanyahu Opened His Mouth For SVB Bank, The Jig Was Up!!!

Counterpunch |  facilitating the purchase of critical infrastructure— and housing is critical infrastructure, by Wall Street is predatory, short-sighted, and systemically de-stabilizing. Permitting unlicensed hotels (AIRBNB), unlicensed taxis (Uber), and the systematic refusal to collect state and local taxes for online purchases (Amazon), reflects a contrived and wholly nonsensical ‘individualist’ ethos of capitalism where individuals born into the bailed-out class effectively govern the US. This is the political context in which Joe Biden bailed out corrupt and / or incompetent bank managers and corporate depositors at SVB.

Political architecture where a small group of politicians, oligarchs, and corporate executives erase the lines between corporate and state interests to use state resources for their own benefit while treating the populace as rubes and marks deserving of being preyed upon 1) reasonably well describes the US at present and 2) fits the definition of Italian fascism as state corporatism. Add in unhinged militarism motivated by imperialist objectives and ‘liberal democracy’ looks and feels like fascism to those on its receiving end.

It is clear that this view of the architecture isn’t widely shared, with most Americans relying on the imagined choice that voting for duopoly party candidates provides. Missing from that view is the proletarianization of the US that has taken place over the last five decades, with the exception being the PMC (Professional-Managerial Class), which manages state and corporate affairs for the rich. The genesis of the PMC in service to power has it parroting the logic of the rich in exchange for privileges that the remaining 85% of the population doesn’t receive.

SVB, like SBF (Sam Bankman Fried) of crypto infamy before it, is a weathervane helpful for reading the direction of the prevailing winds, but not a whole lot more. The system that produced it is coming unglued, with mass Covid deaths far out of proportion to the size of the population, failing healthcare and banking systems, a proxy war underway that risks nuclear annihilation, and a government that sees its role as working with corporations to loot the world. Underestimate the risk of truly horrific outcomes at your own peril.

Last, on a personal note, I, and most of the people I know, are so angry about this state of affairs that I don’t see how existing political unions hold. The people running the country never cared much about us, but unity in ‘nation’ led to a sense of shared interests that disappeared with the neoliberal turn. As I’ve written before, revolutionaries don’t make revolutions, existing power does. While I’m not holding my breath, if the current political leadership doesn’t lead to a revolution, revolution isn’t possible.

Greater Liquidity Produces Instability

Lowering of boundaries between markets ranging from the large number of global macro hedge funds to the large number of retail currency speculators is destabilizing. I’ve found occasional supporting bits of empirical evidence on financial crises, which found that greater financial integration was correlated with crises - however - there is currently no mainstream theory which articulates this hypothesis.  Conventional economic wisdom would tell you arbitrage is always and ever good (it supposedly improves price formation which leads to better allocation of capital), and inefficiencies are bad. 

However, complex systems theory provides a very different perspective:

Perhaps a lesson to be learned here is that liquidity acts as an efficient conductor of risk. It doesn’t make risk go away, but moves it more quickly from one investment sector to another.

From a complex systems theory standpoint, this is exactly what you would do if you wanted to take a stable system and destabilize it.

One of the things that helps to enable non-linear behavior in a complex system is promiscuity of information (i.e., feedback loops but in a more generalized sense) across a wide scope of the system.

One way you can attempt to stabilize a complex system through suppressing its non-linear behavior is to divide it up into little boxes and use them to compartmentalize information so signals cannot easily propagate quickly across the entire system.

This principle has been recognized in the design of software systems for several decades now, and is also a design principle recognizable in many other systems both natural and artificial (e.g., biology, architecture) which are very robust with regard to exogenous shocks. Stable systems tend to be built from structural heirarchies which do not share much information across structural boundaries, either laterally or vertically. That is why you don’t die from a heart attack when you stub your toe, your house doesn’t collapse when you break a window, and if your computer crashes it doesn’t take down the entire Internet with it.

Glass-Steagall is a good example of this idea put into practice. If you use regulatory firewalls to define distinct investment sectors and impose significant transaction costs at their boundary that will help to reduce the speed and amplitude of signals which will propagate from one sector to another, so a collapse in one of them will be less likely to cause severe problems in the others.

THEY have torn down most of these barriers in the last few decades in the name of arbitrage, forgetting that the price we paid for them in inefficiency was a form of insurance against the risk of systemic collapse. This is exactly what I would do if I wanted to take a more or less stable, semi-complex system and drive it in the direction of greater non-linearity.

Is it a symptom of the decay and loss of trans-generational memories from our last great systemic shock in the 1930s?  Or is it the result of something more structured and intentional? I suspect that something like this is bound to happen every 3-4 generations as we unlearn the lessons our grandparents and great-grandparents learned to their cost.

What Did These Three Banks Have In Common? Uninsured High-Liquidity...,

NC  |  Three different banks with very different business strategies and asset mixes got in trouble at the same time.¹ Some like Barney Frank, on the board of Signature Bank, argue that the common element was a regulatory crackdown on banks too cozy with the crypto industry. But that’s not really the case with Silicon Valley Bank, which has been suffering for a while from declines in its deposits due to a falloff in new funding all across tech land, as well as more difficult business conditions leading to not much in the way of new customers and falling deposit balances at most existing customers.

What the three banks did have in common was a very high level of uninsured deposits which made them particularly vulnerable to runs and therefore should have led the banks’ managements to be very mindful of asset-liability mismatches and liquidity. And they should have focused on fees rather than the balance sheet to achieve better than ho-hum profits.

Silicon Valley Bank has attempted to wrap itself in the mantle of being a stalwart of those rent-extracting innovative tech companies. But Silicon Valley Bank is hiding behind the skirts of venture capital firms. They are the ones who provided and then kept organizing the influx of capital to these companies. The story of the life of a venture capital backed business is multiple rounds of equity funding. Borrowing is very rarely a significant source of capital. So the idea that Silicon Valley Bank was a lender to portfolio companies is greatly exaggerated.²

Both the press and several readers have confirmed that the reason for Silicon Valley Bank’s lock on the banking business of venture-capital-funded companies was that the VCs required that the companies keep their deposits there. And that’s because the VCs could keep much tighter tabs on their investee companies by having the bank monitor fund in and outflows on a more active basis than the VCs could via periodic management and financial reports.

Now what flows from that? One of the basic rules of business is that it is vastly cheaper to keep customers than find them. Silicon Valley Bank would be highly motivated to attract and retain both the fund and the personal business of its venture capital kingpins. Accordingly, the press has pointed out that loans to vineyards and venture capital honchos’ mortgages were important businesses. It’s not hard to think that these were done on preferential terms to members of a big VC firm’s “family” as a loyalty bonus of sorts.

On top of that, recall that Silicon Valley Bank bought Boston Private with over $10 billion in assets, in July 2021. The wealth management firm also had a very strong registered investment adviser platform and additional assets under management. That suggests Silicon Valley recognized increasingly that the care and feeding of its rich individual clients was core to its strategy.

It’s impossible to prove at this juncture, but I strongly suspect that the individual account withdrawals were at least as important to Silicon Valley Bank’s demise as any corporate pullouts. One tell was the demand for a backstop of all unsecured deposits, and not accounts that held payrolls. A search engine gander quickly shows that it’s recommended practice for companies to keep their payroll funds in a bank account separate from that of operating funds. One has to assume that the venture capital overlords would have their portfolio companies adhere to these practices.

The press also had anedcata about wealthy customers in Boston getting so rowdy when trying to get their money out that the bank called the police, as well as Peter Thiel (to the tune of $50 million), Oprah, and Harry & Meghan as serious depositors.

Similarly, there is evidence that the run at Signature Bank was that of rich people. Lambert presented this tidbit from the Wall Street Journal yesterday in Water Cooler:

A rush by New York City real-estate investors to yank money out of Signature Bank last week played a significant role in the bank’s collapse, according to building owners and state regulators. The withdrawals gained momentum as talk circulated about the exposure Signature had to cryptocurrency firms and that its fate might follow the same path as Silicon Valley Bank, which suffered a run on the bank last week before collapsing and forcing the government to step in. Word that landlords were withdrawing cash spread rapidly in the close-knit community of New York’s real-estate families, prompting others to follow suit. Regulators closed Signature Bank on Sunday in one of the biggest bank failures in U.S. history. Real-estate investor Marx Realty was among the many New York firms to cash out, withdrawing several million dollars early last week from Signature accounts tied to an office building, said chief executive Craig Deitelzweig.

This selection also illustrates a point that makes it hard to analyze these bank crashes well. The very wealthy regularly use corporate entities for personal investments, so looking at corporate versus purely individual account holdings is often misleading in terms of who is holding the strings. A business owned by a billionaire does not operate like a similar-sized company with a typical corporate governance structure.³

Ironically, First Republic Bank, which holds itself out as primarily a private bank, had the lowest level of uninsured deposits, 67% versus 86% at Silicon Valley Bank and 89% at Signature. But its balance sheet was heavy on long-term municipal bonds, which are not eligible collateral at the discount window or the Fed’s new Bank Term Funding Program facility. Hence the need for a private bailout.

Silicon Valley Bank Was Uniquely Vulnerable To Intentional Asymetric Attack...,

I still want to know who started the run? Not the Peter Thiel run on March 8-9 brought on by SVB’s liquidation of long-maturity Treasuries and MBS and failed equity offering. Why was SVB already having to raise so much cash before March 8-9?

SVB’s 12/31/22 SEC Form 10K (now locked from public view) disclosed a huge run-up in time deposits during 2022. Page 81 of SVB’s 10K showed a nearly 5-to-1 imbalance in “non-U.S. time deposits” exceeding the FDIC limit, most having a maturity of 3 months or less.

Who were these “non-U.S.” depositors? Were they responsible for SVB’s sudden 2023 need for liquidity?

Why was SVB’s management team unable to understand the risk profile of this sudden influx of foreign time deposits — rather than local “parked” VC investment — and match their own investments to them (simple incompetence and the absence of a risk officer likely explains this part of the puzzle)?

Were the “non-U.S.” depositors state actors aware of SVB’s reckless and corrupt exemption from the Basel rules? 

Was the pre-March 8-9 an asymmetrical introduction of financial contagion and crisis into the U.S. banking system by outside state actors aware of the hubristic lack of regulation and oversight in the U.S. financial system?

Portfolio companies were forced to keep their deposits at SVB by their VC investors (which is… unusual) or by the terms of any SVB lending that they drew (which would be perfectly reasonable). In either case, it makes the depositor more of a victim since, once they took the VC investment of SVB loan, they didn’t have any banking risk options other than SVB. We just don’t know what percentage of depositors were compelled either way but it doesn’t matter because the more important players in the failure are the funds themselves.

This is the real scandal at SVB: how its managers’ and fund clients’ greed drove it into the ground in the last eight years of the ZIRP and pandemic boom, having spent the first thirty years building a solid business lending primarily to real businesses (albeit VC-backed). It is the shift from industrial to financial capitalism personified and on fast forward.

In 2015 50% of its loans were to portfolio companies and 33% to funds and 66% of its high quality liquid assets were available-for-sale securities, i.e. marked to market. SVB doesn’t publish a breakdown of depositors, but it would be reasonable to assume the split broadly follows the loan book, given the relationship banking approach and the fact that a the bank only takes deposits to cultivate a borrower.

By 2022, only 23% of loans were to companies and 56% were to funds. This is the killer change, if the deposit base mix followed suit. Deposits from companies are comparatively sticky, given lending relationship and other services like card merchant services etc. Deposits from funds are not sticky: the general partner is borrowing cash today (to accelerate investment pace) against an agreed schedule of future capital injections by the fund’s limited partners and, given these relationships are contractual, the only practical security for the loan is that the capital calls are paid into a nominated SVB account from which the loan is satisfied (1).

Worse, by 2022, the high quality liquid assets were only 22% available-for-sale (I.e. marked to market), down from 66%. The rest were held at book value.

So the stage is set. The overall asset base has increased by 400% but high quality liquid assets available for sale have lagged and only increased by 50%. The majority of the loan book is now lent to funds as hot money advances on capital calls and these funds (or the funds plus their puppet portfolio companies) are the likely majority of the deposit base. Cue a rumor among the herd mentality funds and that deposit base flees overnight, as the general partners pull their money and order the portfolio companies to do likewise.

If SVB had kept to its 2015 ratios, this would not have happened. The AFS losses would have forced an earlier capital increase and the deposit base would have been stickier because the portfolio companies would have been taking their banking decisions. Similarly, by chasing the funds as the source of loan growth and relying on the fund relationship to drag portfolio companies in for deposit base growth, SVB put its deposit base in the hands of a tiny coterie of people who promptly crashed their own bank….

I still think we should not approach SVB with Schadenfreude just because VC in the last decade has been unsympathetically triumphalist and Hobbesian (Uber, Wework, Palantir etc). But, having reviewed the numbers, I have revised my impression of SVB “doing God’s work” as a banker to startups. It has instead been a greedy enabler of a clique of general partner assholes.

Unfortunately, the portfolio companies have been used as a human shield by the VCs and they have not gotten what they deserved (2).

(1) The money advanced can likely be moved without penalty – if there was any requirement to hold the loan advances with SVB, this cannot be a very hard requirement because the fund is borrowing precisely to invest the money rapidly. I wonder if the funds also promised SVB that their portfolio companies would keep the investment proceeds at SVB, hence the compulsion from the funds to the portfolio companies…?

(2) revenge is a dish best served cold. The funds that borrowed their future capital to bet it all on black in the 2020-2021 peak will have torched their entire fund’s investment returns for good, given the active investment period us typical four of the ten fund years and they borrowed money from all four of those years to spray it around in two. So they will get a comeuppance – but they will probably raise a new fund because there seem to be no penalties for failure at the top in public life any more….

The idea that the deposit mix followed or somewhat followed their loan mix had not occurred to me. That generally makes sense. But recall also they bought Boston Private Bank and got with that (and presumably also solicited) wealthy individuals.

Anosognosia: The Biggest Risk Is Not Knowing What You're Doing

NYTimes  |  On Saturday, an entrepreneur named Alexander Torrenegra, who was an S.B.V. depositor for two companies as well as his own personal accounts, explained what happened on Twitter. “Thursday, 9 AM: in one chat with 200+ tech founders (most in the Bay Area), questions about SVB start to show up.” he wrote. “10 AM: some suggest getting the money out of SVB for safety. Only upside. No downside.”

It’s easy to see how a whisper network of a few hundred C.E.O.s — all convinced they have exceptional vision, all working themselves into a panic — could spiral out of control. But what happened in that chat is an extension of the fundamental way that these venture capitalists operate, which is groupthink on a staggeringly consequential scale.

Top tier firms like Andreessen Horowitz, Sequoia Capital and Kleiner Perkins subject candidates to a rigorous screening process that ensures that only the strongest founders leading the most promising businesses proceed to the next level. Or that’s what I once believed, anyway. But the screening process places significant emphasis on “culture fit,” which is industry speak for whether a founder fits into the venture capital firm’s full portfolio of companies and conforms to their ideas about how a founder is supposed to look and behave. A founder’s ability to navigate this process is considered a good indicator of the company’s success. Unfortunately for women and people of color, culture fit often boils down to being a white male engineer with a degree from an elite university.

Some screening mechanisms are more subtle, like whether the V.C.s are already in your professional network, or one or two degrees removed. The industry line is that relationships will help founders attract capital, talent, and business partners. True, but the result is a largely homogeneous and even self-reinforcing community that’s difficult for outsiders to crack.

It’s this sort of insularity, emphasis on existing relationships, and reliance on intangible measures of competency that fueled last week’s bank run. The V.C.s expect the companies in their portfolio to use approved vendors. When it comes to legal counsel, that generally means tech-friendly law firms like Morrison & Foerster or Wilson Sonsini. When it comes to banks, it has meant S.V.B.

S.V.B., in turn, assessed its clients’ creditworthiness in part by who their funders were. As my colleagues and I saw, an investment from a top tier V.C. could be the ticket to a package of favored services, including things like home mortgages for the founders of these start-ups.

I opened my account at S.V.B. in 2017, when I had meetings lined up with some top tier V.C.s to raise money for a digital media company. Like everyone else who heads to Buck’s of Woodside (a favored venue for early-stage deal making) with a deck and a dream, I tried to anticipate the screening mechanisms and make sure I passed. And despite the fact that I was not a first-time founder, and having worked in tech and tech adjacent companies, was decently well networked, I suspected they might regard a 40-year-old woman without an engineering degree as not quite the culture fit of their dreams. I wasn’t contractually obligated to bank with S.V.B., but as with so many other unspoken norms, I was aware that I would be evaluated by my choices.

Disaster has now struck, but I don’t see any public introspection from the investment community participants who both helped create the dangerous conditions and triggered the avalanche by directing portfolio companies to withdraw en masse.

Janet Yellen: Treasury Secretary Struggles....,

 

Israeli Banks Pumped Billions Out Of SVB Before Last Friday

timesofisrael  |  Prime Minister Benjamin Netanyahu said Saturday he’d been in touch with senior Israeli tech figures vowing to assist affected companies.

“If necessary, out of responsibility to Israeli high-tech companies and employees, we will take steps to assist the Israeli companies, whose center of activity is in Israel, to weather the cash-flow crisis that has been created for them due to the turmoil,” Netanyahu said in a statement.

Finance Minister Bezalel Smotrich said he was forming a special team to look into the potential consequences for Israel from the collapse, which will include the director general of the Treasury and officials from the Bank of Israel, Securities Authority and Innovation Authority.

NextVision, a maker of micro stabilized cameras, said it managed on Thursday to withdraw almost all of the $2.7 million it held in its account at SVB, according to a regulatory filing to the Tel Aviv Stock Exchange.

Qualitau Ltd, a developer of test equipment for the semiconductor industry, said it held $16.8 million at SVB out of a total of about $22.3 million it has in and outside the US.

In a statement to the TASE, the company disclosed that it has “no information regarding the amounts it will be able to withdraw in the future from the balance of the funds deposited in SVB and in relation to the timing when it will be possible to withdraw these funds.”

“The company believes that despite the material impact of the event, taking into account the cash balance of the customers, the existing balance, and the backlog of orders (…) it is able to continue its activities during the normal course of business.”

Israel’s two largest banks, Bank Leumi and Bank Hapoalim, set up a situation room that has been operating around the clock to help firms transfer their money from SVB — before it was seized — to accounts in Israel. Over the past few days, teams at LeumiTech, the high-tech banking arm of Bank Leumi, have been able to help their Israeli clients transfer about $1 billion to Israel, the bank said.

LeumiTech said it will provide financing assistance and loans to startups and other tech firms that were left without access to credit lines and liquidity due to SVB’s collapse.

“I promise that we will continue to do everything to help and accompany the companies and startups to safely overcome the challenges and continue to support their growth,” said LeumiTech CEO Timor Arbel-Sadras.

To help tech companies in immediate distress, Poalim Hi-Tech opened a hotline offering bridge loans for the purpose of assisting companies in paying salaries in the coming month against their commitment to transfer deposit funds to their bank accounts in Israel.

Meanwhile, venture capital funds hoping that a fast solution will be found in the form of a buyer that will purchase SVB as a going concern or a federal bailout that will quickly get money to affected depositors.

Alan Feld, co-founder and managing partner of Israeli tech investment firm Vintage Investment Partners, called on “regulators globally to allow SVB to be acquired and recapitalized so that this wonderful bank can serve all of us for the next 20 years.”

“Silicon Valley Bank has been a wonderful partner to Vintage and its portfolio funds and companies since we started our firm 20 years ago,” Feld said in a LinkedIn post.