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.

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.