subject:"Re\: Cryptocurrency\: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup"

FDIC Demands Signature Bank Buyers Stop All Crypto Business: Report

Authored by Helen Partz via CoinTelegraph.com,

The FDIC regulators have reportedly required any buyer of Signature to
agree to give up all cryptocurrency business at the bank...

The United States Federal Deposit Insurance Corporation (FDIC) has
reportedly asked potential rescuers of some failed U.S. banks not to
support any crypto services.

The FDIC regulators have asked banks interested in acquiring failed
U.S. lenders like Silicon Valley Bank (SVB) and Signature Bank to
submit bids by March 17, Reuters reported.

The authority will only accept bids from banks with an existing bank
charter, prioritizing traditional lenders over private equity firms,
the report notes, citing two sources familiar with the matter. The
FDIC aims to sell entire businesses of both SVB and Signature, while
offers for parts of the banks could be considered if the whole company
sales do not happen.

The FDIC has also required any buyer of Signature to agree to give up
all cryptocurrency business at the bank.

New York-based Signature is a major crypto-friendly bank in the United
States. The bank is known for many partnerships in the crypto
industry, servicing companies like Coinbase exchange, stablecoin
issuer Paxos Trust, crypto custodian BitGo, and bankrupt crypto lender
Celsius — among others.

The news comes amid U.S. Representative Tom Emmer sending a letter to
the FDIC, expressing concerns that the federal government is
“weaponizing” issues around the banking industry to go after crypto.

“These actions to weaponize recent instability in the banking sector,
catalyzed by catastrophic government spending and unprecedented
interest rate hikes, are deeply inappropriate and could lead to
broader financial instability,” Emmer said in the letter to FDIC
chairman Martin Gruenberg.

Today, I sent a letter to FDIC Chairman Gruenberg regarding
reports that the FDIC is weaponizing recent instability in the banking
sector to purge legal crypto activity from the U.S. 👇
pic.twitter.com/fDmaA0XGWv
— Tom Emmer (@GOPMajorityWhip) March 15, 2023

The New York State Department of Financial Services officially closed
down and took over Signature on March 12, appointing the FDIC as the
receiver. To protect depositors, the FDIC transferred all the deposits
and most of the assets of Signature Bank to Signature Bridge Bank, a
full-service bank that will be operated by the FDIC as it markets the
institution to potential bidders.

According to Barney Frank, a former member of the U.S. House of
Representatives, New York regulators closed Signature Bank despite no
insolvency.

Frank speculated that the action was to demonstrate force over the
crypto industry, being a “very strong anti-crypto message.” However,
the FDIC in January said that it didn’t prohibit or discourage banking
organizations from providing banking services to customers of “any
specific class or type, as permitted by law or regulation.”

Later reports suggested that Signature CEO Joseph DePaolo and chief
financial officer Stephen Wyremski allegedly committed fraud by
falsely claiming the bank was “financially strong” just three days
before it was shut down. The bank has also reportedly been
investigated for alleged money laundering.

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

https://internationalman.com/articles/unsound-banking-why-most-of-the-worlds-banks-are-headed-for-collapse/

Unsound Banking: Why Most Of The World's Banks Are Headed For Collapse

You’re likely thinking that a discussion of “sound banking” will be a
bit boring. Well, banking should be boring. And we’re sure officials
at central banks all over the world today—many of whom have trouble
sleeping—wish it were.

This brief article will explain why the world’s banking system is
unsound, and what differentiates a sound from an unsound bank. I
suspect not one person in 1,000 actually understands the difference.
As a result, the world’s economy is now based upon unsound banks
dealing in unsound currencies. Both have degenerated considerably from
their origins.

Modern banking emerged from the goldsmithing trade of the Middle Ages.
Being a goldsmith required a working inventory of precious metal, and
managing that inventory profitably required expertise in buying and
selling metal and storing it securely. Those capacities segued easily
into the business of lending and borrowing gold, which is to say the
business of lending and borrowing money.

Most people today are only dimly aware that until the early 1930s,
gold coins were used in everyday commerce by the general public. In
addition, gold backed most national currencies at a fixed rate of
convertibility. Banks were just another business—nothing special. They
were distinguished from other enterprises only by the fact they
stored, lent, and borrowed gold coins, not as a sideline but as a
primary business. Bankers had become goldsmiths without the hammers.

Bank deposits, until quite recently, fell strictly into two classes,
depending on the preference of the depositor and the terms offered by
banks: time deposits, and demand deposits. Although the distinction
between them has been lost in recent years, respecting the difference
is a critical element of sound banking practice.

Time Deposits. With a time deposit—a savings account, in essence—a
customer contracts to leave his money with the banker for a specified
period. In return, he receives a specified fee (interest) for his
risk, for his inconvenience, and as consideration for allowing the
banker the use of the depositor’s money. The banker, secure in knowing
he has a specific amount of gold for a specific amount of time, is
able to lend it; he’ll do so at an interest rate high enough to cover
expenses (including the interest promised to the depositor), fund a
loan-loss reserve, and if all goes according to plan, make a profit.

A time deposit entails a commitment by both parties. The depositor is
locked in until the due date. How could a sound banker promise to give
a time depositor his money back on demand and without penalty when
he’s planning to lend it out?

In the business of accepting time deposits, a banker is a dealer in
credit, acting as an intermediary between lenders and borrowers. To
avoid loss, bankers customarily preferred to lend on productive
assets, whose earnings offered assurance that the borrower could cover
the interest as it came due. And they were willing to lend only a
fraction of the value of a pledged asset, to ensure a margin of safety
for the principal. And only for a limited time—such as against the
harvest of a crop or the sale of an inventory. And finally, only to
people of known good character—the first line of defense against
fraud. Long-term loans were the province of bond syndicators.

That’s time deposits. Demand deposits were a completely different matter.

Demand Deposits. Demand deposits were so called because, unlike time
deposits, they were payable to the customer on demand. These are the
basis of checking accounts. The banker doesn’t pay interest on the
money, because he supposedly never has the use of it; to the contrary,
he necessarily charged the depositor a fee for:

Assuming the responsibility of keeping the money safe, available
for immediate withdrawal, and

Administering the transfer of the money if the depositor so
chooses by either writing a check or passing along a warehouse receipt
that represents the gold on deposit.

An honest banker should no more lend out demand deposit money than
Allied Van and Storage should lend out the furniture you’ve paid it to
store. The warehouse receipts for gold were called banknotes. When a
government issued them, they were called currency. Gold bullion, gold
coinage, banknotes, and currency together constituted the society’s
supply of transaction media. But its amount was strictly limited by
the amount of gold actually available to people.

Sound principles of banking are identical to sound principles of
warehousing any kind of merchandise, whether it’s autos, potatoes, or
books. Or money. There’s nothing mysterious about sound banking. But
banking all over the world has been fundamentally unsound since
government-sponsored central banks came to dominate the financial
system.

Central banks are a linchpin of today’s

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Get Woke, Go Broke? It's Time To Talk About SVB's Ties To The World
Economic Forum

https://alt-market.us/get-woke-go-broke-its-time-to-talk-about-svbs-ties-to-the-world-economic-forum/

https://www.svb.com/globalassets/library/uploadedfiles/wef-index.pdf
https://www.svb.com/globalassets/library/uploadedfiles/svb-environmental-social-governance-report-2022.pdf
https://www.forbes.com/sites/worldeconomicforum/2016/11/10/shopping-i-cant-really-remember-what-that-is-or-how-differently-well-live-in-2030/

After the implosion of the FTX crypto exchange run by Sam Bankman
Fried, questions of due diligence and competency immediately arose,
suggesting that perhaps the company mishandled assets “accidentally”
and that Fried was naive and “in over his head.” Numerous central bank
officials and globalist organizations jumped into the debate almost
immediately, arguing that FTX was a perfect example of why centralized
regulation of crypto and digital currencies was necessary. They
claimed that without oversight by banking elites, disaster was
inevitable.

Of course, what they did not mention was that FTX and Sam Fried
already had extensive connections with globalist groups including the
World Economic Forum. In fact, the very basis of Fried’s business
model was the WEF’s “Stakeholder Capitalism” theory, which he often
referred to as “Effective Altruism.”

Stakeholder Capitalism is essentially the opposite of free markets –
It is a socialist/globalist framework which uses corporations as a
kind of economic enforcement tool. Corporations are already highly
socialistic in their operations, and their existence is completely
dependent on their special relationship with government. Corporations
are created through government charter, enjoy special protections
under “corporate personhood” laws and avoid direct consequences for
criminal activities through limited liability.

Many corporations are not even allowed to fail because governments
backstop their operations. That’s socialism, not free markets.
However, “stakeholder capitalism” expands on this dynamic a
hundred-fold.

Where free markets assert that businesses must make profit their
primary objective for the overall economy to function, the WEF asserts
that companies including banking institutions have a social obligation
that goes beyond making money. To the typical leftist this probably
sounds like a Utopian vision filled with promise, but to anyone that
actually understands economics it sounds like a recipe for the
collapse of civilization.

The WEF paints stakeholder capitalism an effort to reign in the power
of the corporate system in favor of social causes. In reality, it’s a
way to give corporations ultimate power over everything, including
ultimate influence over public behavior.

We have seen extensive evidence of this through widespread corporate
ESG investment programs implemented in the past several years. It is
no coincidence that the invasion of woke ideology into the mainstream
happened at the exact same time that ESG-based lending accelerated.

The institutions lending to various companies were able to set social
rules for access to credit, and these rules required businesses to
adopt far-left politics in their marketing and policies as a result.
Stakeholder capitalism is about homogenizing all business into a
single ideological entity – Instead of competing with each other for
market share through innovation, companies have been abandoning merit
based competition and are colluding to saturate the mainstream with
social justice cultism, climate change propaganda and globalist
rhetoric.

By making corporate elites “responsible” for society, we give them the
power to engineer society.

However, the WEF’s model of false altruism is turning out to be a
disaster for corporate survival. I have to wonder now if this was the
intent all along – To create a kind of ESG fueled woke financial
bubble that was always intended to come crashing down, leaving the
western world in ruins.

Ever since the fall of FTX, the WEF has been quietly erasing all
traces of their involvement with the company and with Fried from their
website and YouTube channel. However, the WEF’s influence is widely
evident in the operations of FTX and Fried’s philosophy.

There were multiple reasons for FTX capital losses, from plunging
crypto prices to embezzlement. That said, the root cause was
stakeholder capitalism ideology and it’s reliance on cheap liquidity
to support ESG policies. And, we are seeing the exact same dynamic
within other institutions like Silicon Valley Bank.

Surprisingly, even the International Monetary Fund (like many of us in
the alternative economic media) warned about the potential frailty of
ESG related lending in an environment where central banks are
tightening liquidity and raising interest rates. The IMF stated in
2022:

“Financial stability risks include the different investor base
relative to more traditional investors and a potentially higher
sensitivity to g

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Watch: Yellen Stammers After Senator Corners Her On Bailouts,
Protecting CCP-Linked Deposits

Treasury Secretary Janet Yellen was caught flat-footed on Thursday
during testimony before the Senate Finance Committee, after Sen. James
Lankford (R-OK) grilled her over whether all deposits at Oklahoma
community banks would now be fully insured like those at Silicon
Valley Bank and Signature Bank.

"Will they get the same treatment that SVB just got, or Signature Bank
just got?" asked Lankford.

"I'm concerned you're...encouraging anyone who has a large deposit at
a community bank to say, 'we're not going to make you whole, but if
you go to one of our preferred banks, we will make you whole,"
Lankford said.

"That is certainty not something that we’re encouraging," Yellen replied.

"A bank only gets that treatment" under the systemic risk exception
rule, Yellen continued, explaining that it takes a 'supermajority'
vote to do so.

"I, in consultation with the president, determine that the failure
to protect uninsured depositors would create systemic risk and
significant economic and financial consequences," she said.

Chinese investors made whole?

Lankford then noted that it has been reported that many Chinese funds
and startups, including those with ties to the CCP, had invested with
SVB.

"Will my banks in Oklahoma pay a special assessment to be able to make
Chinese investors whole from Silicon Valley Bank?" Lankford asked, to
which Yellen replied, "I suppose that could include foreign
depositors."

"I don’t believe there’s any legal basis to discriminate among
uninsured," she continued.

Watch:

Here is the snippet: pic.twitter.com/85iBeXC0Wn
— Seidler (@SeidlerCorp) March 17, 2023

In a Wednesday letter to Yellen, Sen. Marco Rubio requested that the
US government must ensure that "hostile, foreign adversaries" must not
benefit from the collapse of SVB.

"I ask the department to ensure that foreign adversarial regimes, as
well as companies subject to their jurisdiction, are unable to exploit
this moment for their own material benefit," wrote Rubio.

"As the Department of Treasury, in tandem with the Federal Reserve and
the FDIC, continues its response, I request information from the
Department of Treasury regarding depositors from the PRC, including
Hong Kong and Macau, that can expect to receive federal reimbursements
from the Deposit Insurance Fund and other federal relief," the letter
continues.
A customer stands outside of a shuttered Silicon Valley Bank (SVB)
headquarters in Santa Clara, Calif., on March 10, 2023. (Justin
Sullivan/Getty Images)

SVB reportedly had an estimated $13.9 billion in uninsured or
uncovered foreign deposits.

In a March 11 statement, SPD Silicon Valley Bank—a joint venture
with the state-owned Shanghai Pudong Development Bank—confirmed that
its operations were “sound.”

“The bank has a standardized corporate governance structure and an
independent balance sheet,” the company said in a statement.

Andon Health, a medical devices manufacturer, confirmed in a
filing to the Shenzhen Stock Exchange that all of its deposits at SVB
“can be used in full and have not suffered any losses.” BeiGene, one
of the largest drug companies in China, announced that it had $175
million in uninsured cash deposits at SVB. Pharmaceutical firm Zai Lab
maintained $23 million in deposits.

Others, such as Everest Medicines and CStone Pharmaceutical,
assured investors that the SVB failure would not affect their overall
operations. -Epoch Times

How reassuring!

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Ted Cruz Blasts Biden For Bailouts Of Corrupt 'Bonnie And Clyde' Banks

Authored by Steve Watson via Summit News,

Senator Ted Cruz has slammed the Biden Administration for effectively
bailing out Silicon Valley Bank, labelling it a ‘corrupt Bonnie and
Clyde’ like operation.

On his “Verdict” podcast, Cruz stated that the failure of SVB has
“called into question a lot of the financing for venture capital, and
it has potentially imperiled a significant number of mid-sized banks.”

SVB was more focused on virtue signaling than protecting their investments.

More on the latest episode of #Verdict: Don't Call It A "Bailout",
But It's a Massive Big Tech & China Bailout

Full episode here:https://t.co/7GWJppnm9F pic.twitter.com/82qCnoNu49
— Ted Cruz (@tedcruz) March 16, 2023

“In response to this, the Biden administration rolled out a major
bailout, conveniently bailing out the politically connected friends of
the Biden White House in a way that will have lasting repercussions
for the economy, and will almost certainly incentivize future bad
conduct by other banks,” Cruz asserted.

The Senator continued, “They were gambling that the Fed would not
raise rates even though they’d been screaming from the mountaintops
that they were going to raise rates.”

“A bank that is being prudent can hedge its investments against
interest rates rising by investing also in counterbalancing
investments that will go up when interest rates go up. They didn’t do
that! They were focused on virtue signaling. They were focused on
showing just how woke they are,” Cruz added referring to the
revelation that SVB was obsessed with pushing ‘diversity and
inclusion’ policies:

Remember that time Signature Bank cut ties with President Trump
and called for his resignation? Or that time SVB and Signature started
going woke?

Well now the sayings are true…

Go Woke Go Broke…

Everything Woke Turns to Shit… pic.twitter.com/z3WcJ1lYLb
— Bryan McNally (@BryanDMcNally) March 13, 2023

“These bank officers were bad actors,” Cruz continued, adding “Let me
let me tell you two data points that have been vastly underreported.
Number one, hours before the bank was shut down Silicon Valley Bank
gave very substantial bonuses to all of its employees. They just began
writing checks to everyone hours before they were shut down. Data
point number two: in the two weeks prior to their being shut down, the
CEO and the CFO sold large amounts of stock. The CEO ended up making
over a $2 million profit from selling stock less than two weeks before
the bank was shut down. Both of those indicate corrupt intent.”

Cruz also noted that he “had a conference call in the last 48 hours
with all 100 Senators were invited to participate and Treasury and the
FDIC was on there and I asked I said, ‘Look, is it true that they gave
bonuses to their employees, number one? If so, I think it is
outrageous. And number two, has there been any investigation into
clawing back those bonuses?’”

“As far as I’m concerned, this is like Bonnie and Clyde,” Cruz
charged, urging that “They’re robbing the bank as they know their
customers’ deposits are about to get blown up. And much of the media
coverage has ignored the exceptionally bad conduct by the bank’s
officers.”

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

https://www.sovereignman.com/trends/the-federal-reserve-just-hijacked-american-democracy-146308/

The Fed Just Hijacked American Democracy

You know the old joke – “Predictions are hard… especially about the future.”

And it’s true, nobody has a crystal ball.

But it’s astonishing to see just how horribly wrong the people in
charge can be in their predictions, especially about the very near
future.

You probably remember Joe Biden famously insisted in the summer of
2021 that the Taliban was “highly unlikely” to take over Afghanistan.

Boy did he turn out to be wrong.

Only a few weeks later, the Taliban was in control of the entire
country… and the world watched in utter astonishment as US military
helicopters evacuated embassy personnel from Kabul in one of the most
shameful episodes in modern American history.

Not to be outdone, it appears that the Federal Reserve has just had
its own Afghanistan moment.

It was only Tuesday of last week that the Fed Chairman testified
before a committee of concerned senators who thought the Fed may be
tightening monetary policy (i.e. raising interest rates) too quickly.

This was a valid concern; rapid interest rate hikes DO create a LOT of
risks. And one of those risks is that asset prices– especially bond
prices– plummet in value.

This risk is particularly problematic for banks because they tend to
invest their customer deposits in bonds.

In fact, now that the Fed has tightened its monetary policy so
quickly, banks across the US have more than $600 billion in unrealized
losses on their bond portfolios. This is a pretty major problem…
because that $600 billion is ultimately YOUR money.

And it’s not like the Fed doesn’t have access to this information;
after all, the Fed supervises nearly EVERY bank in the US financial
system.

And yet last week the Fed Chairman completely rejected this risk,
telling worried senators flat out that “nothing about the data
suggests to me that we’ve tightened too much. . .”

In other words, he believed the Fed’s rapid interest rate hikes posed ZERO risk.

Talk about a terrible prediction; just THREE DAYS LATER, one of the
largest banks in the US imploded, multiple bank runs unfolded across
the country, the bond market fell into turmoil, and the Fed had to
essentially guarantee the entire US banking system in order to restore
confidence. (More on that in a moment.)

The mental image of bank runs in America, just days after the Chairman
dismissed any risk, is the Fed’s equivalent of the Afghanistan
debacle. It’s shameful.

But what’s REALLY concerning is the Fed’s response to this panic–
their de facto guarantee of the entire US banking system. Because
ultimately they just put YOU on the hook for the potential bond losses
of every bank in America. I’ll explain–

After Silicon Valley Bank went bust, the FDIC announced that they will
guarantee ALL deposits at the bank.

This is a departure from the FDIC’s normal pledge to guarantee
deposits of up to $250,000, and their decision drew a lot of ire from
pundits and politicians across the ideological spectrum. Many people
concluded that the FDIC’s pledge was tantamount to a “taxpayer-funded
bailout.”

But that assessment is wrong. Anyone who is intellectually honest and
well-informed will easily understand that the FDIC is not funded by
taxpayers. The FDIC is funded by charging fees to its member banks.

So when the FDIC decided to guarantee every depositor at Silicon
Valley Bank, including those with balances exceeding $250,000, it
means they’re bailing out SVB’s wealthy customers at the expense of
big Wall Street banks.

But most people seem to have missed the real story… because the ACTUAL
bailout is coming from the Fed, not the FDIC.

Despite the Chairman’s terrible prediction in front of the Senate
Banking Committee last week, the Fed now seems keenly aware of the
risks in the US banking system. They realize that there are LOTS of
other banks that are sitting on massive unrealized losses, just like
SVB.

So in order to prevent these banks from going under, the Fed invented
a new facility they’re calling the “Bank Term Funding Program”, or
BTFP.

But the BTFP is really just an extraordinary lie designed to make you
think that the banking system is safe. They might as well have called
it, “Believe This Fiction, People”, and I’ll show you why.

Whenever people borrow money from banks, we normally have to provide
some sort of collateral. Banks make home equity loans using real
estate as collateral. They make car loans where the car is collateral.
Manufacturing businesses borrow money using factory equipment as
collateral.

Well, banks do the same thing when they borrow money. And sometimes
banks will even borrow money from the Federal Reserve. This is
actually one of the reasons why the central bank exists– to act as a
“lender of last resort” if banks need an emergency loan.

And when banks borrow money from the Fed, they have to post collateral too.

Instead of automobiles and houses, thou

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

SVB's London Bankers Received Up To $36 Million In Bonuses Days After
BoE-Orchestrated Bailout

Bankers at the London branch of Silicon Valley Bank reportedly
received tens of millions of dollars in bonuses just days after the
Bank of England orchestrated a rescue package that led to Europe's
largest lender, HSBC, buying the failed bank's subsidary for just £1,
Sky News reports.

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Is Your Bank "Important" Enough To Save? Don't Count On It...

Authored by Mark Jeftovic via BombThrower.com,
The Elites are bailing out their own banks, not yours

The systemic banking and financial crisis I’ve been warning about for
years has arrived. (In fact, the report I put out in January seems to
be playing out in spades).

The printing of 37 trillion dollars out of thin air over the pandemic
widened the wealth inequality gap – and  they followed that up with
the most drastic and rapid interest rate hiking cycle in Fed history.

What did they think was going to happen?

Now the banks are failing – Silicon Valley Bank went from passing its
KPMG audit with flying colours and getting their debt rated “A” by
Moody’s  mere weeks ago, to the executives frantically paying
themselves bonuses and selling their shares in the hours and days
before the bank failed and was taken over by the FDIC.

98% of the deposits in SVB were uninsured, meaning that those deposits
wouldn’t shouldn’t have been covered by FDIC insurance. That means any
accounts with balances above $250K were facing the loss of their
funds.

But this is Silicon Valley Bank – this is where the elites place their
bets on Silicon Valley unicorns. So we can’t have that.

In a hastily convened meeting between the FDIC, the Fed and the US
Treasury, it was decided that all deposits would be covered, insured
or not.

Crisis averted, right?

Wrong. It turns out that only SVB and Signature banks would be
covered; if any other banks fail, like your bank, your community co-op
in your hometown or state, or any other bank in flyover America far
away from the Coastal elites – if they get into trouble (because
people are moving their money into “protected” banks), then that’s not
covered.

... That’s tough titties for you.

Here it is folks - from the mouth of the US Treasury Secretary herself:

Silicon Valley (mostly profitless unicorns incubated with printed
money) are anointed and protected.

But your community bank can go fuck itself, and so can you.

Eat cake pleb. pic.twitter.com/o6rBFGghFi
— Mark Jeftovic, The ₿itcoin Capitalist (@StuntPope) March 17, 2023

In a stunning admission, when asked point blank by Rep. James Lankford
(R-OK) whether a community bank in his home state of Oklahoma would
have uninsured depositors made whole the same way the Silicon Valley
Unicorns did, Yellen had to come clean:

“A bank only gets that treatment if a super-majority of the Fed
board, and I, in consultation with the President conclude that failure
to protect uninsured depositors would create systemic risk to the
banking system”

In short “not necessarily”.

While Yellen was bobbing and weaving around the question, Lankford
stated it clearly:

“If you’re a depositor with a Big Bank, preferred by the Fed,
you’re fully insured no matter what. If you’re a depositor with a
small bank, you aren’t”.

Once again, the government is picking winners and losers; just like
under lockdowns, when they shut down small businesses and forced
everybody into Costco and Wal-Mart.

“It’s called stakeholder capitalism”, I’ve mused, “and you’re not
a stakeholder”.

Well, this time they’ve blown up the banking system real good – and
this time they may not be able to kick the can down the road.

They may not even be able to save the “Too Big To Fail” banks by the
time this is all over.

This could be the early innings of the final breakdown of the
financial system I’ve been warning about for almost two years, when I
released The Crypto Capitalist Manifesto.

Since then, we’ve been in a crypto-winter, and starting a few months
ago I started to sense a thaw.

In fact, the way things are playing out right now are so closely
resembles what I put out in my most recent report, that it’s downright
eerie.

What to look for in the breakdown of the financial system

Why Bitcoin was poised to break out of its slumber (written before
it exploded 65% higher year-to-date and became the best performing
asset of 2023)

What the narrative would be from the establishment shills when it
all came unglued, and

Which stocks would be the leading sector in the next Bitcoin super-cycle

It was written in early January and when I compare it to what’s
happening now, I kinda scare myself…Read The Bitcoin Bottom Report
here.

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

'Occupy Wall Street' Redux

Authored by MN Gordon via EconomicPrism.com,

“The bank is something more than men, I tell you.  It’s the
monster.  Men made it, but they can’t control it.”

– John Steinbeck, The Grapes of Wrath

Negative Carry

Borrowing short and lending long works mostly well most of the time.
This is how modern banking works.  You may be a customer at a bank.
But you also supply the product.

In short, a bank will pay you a small percent for the deposits in your
checking and savings accounts, which you can withdraw at any time.
This is the borrowing short side of the operation.

The bank then takes your deposits and invests the money in some
longer-term assets, such as loans and bonds that aren’t paid back for
years.  Say the bank earns 2 percent on its money while paying
depositors a fraction of a percent.  The bank pockets the spread, the
net interest margin.  Easy money.

However, when the Federal Reserve intervenes in the market and presses
the federal funds rate to zero and holds it there for 2 years (March
2020 to March 2022), driving yields across the range of maturities to
5,000-year lows, something bad is bound to happen.

The experience for consumers over the last 24 months has been raging
consumer price inflation.  But that’s only a small part of the bad
stuff that can happen.

Because as the Fed jacked up the federal funds rate starting in March
2022, to contain the consumer price inflation of its own making, the
yield curve has inverted.  Short term yields are higher than long term
yields.  And banks, having borrowed short to lend long, have negative
carry.

Perhaps it would all works out for the banks if depositors stayed put.
But in a world where you can score nearly 5 percent from Treasury
Direct – with no brokerage fees – why keep excess deposits in the bank
when you only get a fraction of a percent?

It’s a good question…
Answering the Call

Customers at Silicon Valley Bank (SVB) recently answered this question
by pulling their deposits en masse.  On March 9, SVB customers
withdrew more than $1 million per second for 10 hours straight –
totaling $42 billion – before the Federal Deposit Insurance
Corporation (FDIC) seized the bank and declared it insolvent.

This, in essence, was an old fashion bank run with a twist.  The
digital age pushed the bank run into hyperdrive.

SVB isn’t the first bank to go bust borrowing short and lending long.
It certainly won’t be the last.  In fact, since SVB failed, Signature
Bank has also failed.  In addition, Credit Suisse is now getting a
bailout from the Swiss National Bank.  At this rate, any number of
other banks could soon be toast.

Quite frankly, we don’t’ care what banks go bust.  What we’re really
interested in is what happens after these banks go bust.  In the case
of SVB, a bailout – above and beyond FDIC deposits – is in the works,
through the creation of something called the Bank Term Funding Program
(BTFP).

What you need to know about BTFP is that it’s code for socializing
losses.  The regulators may say it isn’t a bailout.  The taxpayer
isn’t directly paying for it.  Nonetheless, if you – the taxpayer –
have a bank account, you will be picking up the tab via surcharges and
fees your bank imposes to bailout SVB depositors.  Is that fair?

Should you have to pick up the tab for California Governor Gavin
Newsom’s wineries, billionaire businessman Mark Cuban’s drug company,
or any of the other rich elites that failed to appropriately manage
their risk?

On top of that, what will ultimately happen to the remains of SVB or
other failed banks?  Will the FDIC sell them off to one of the big
banks like Washington Mutual (WaMu) was to JPMorgan Chase in 2008?

Government bailouts and the consolidation of the banking business does
not make banking safer.  Rather it spreads the risk across the whole
landscape like mustard seeds on a hillside.  This, in effect,
propagates a much larger banking crisis sometime in the future.

It also propagates civil disorder and social discontent.  And for what?

When banks merge and consolidate over and over again the implications
can be heinous.  To this point, for fun and for free, we’ll take a
look back at the quintessential bank failure of the 20th century.

Where to begin…
Epic Bank Failure

In 1820, Salomon Mayer von Rothschild (1774-1855) established his
business, S M von Rothschild, Vienna.  Vienna was the capital of the
Austrian Empire at the time.

When S M von Rothschild died in 1855, his son Anselm von Rothchild
(1803-1874) founded Credit-Anstalt as K. k. priv. Österreichische
Credit-Anstalt für Handel und Gewerbe.  This Rothchild bank became the
largest bank in Eastern Europe before World War II.

Credit-Anstalt held assets and took deposits from all over Europe.
Then, in 1931, it failed at the worst possible time.

The bank’s failure was a direct result of the United States’
Smoot-Hawley Tariff Act, which raised tariffs on over 20,000 imported
goods.  The act crippled Europe’s econ

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Wokies SocComs and LGBTs,
berating each other and imploding the USA...
Warren ♥ Dimon, hates Hayek Austrian Hazlitt etc


Liz Warren Makes War On Powell, And How 'Woke' SF Fed Chief Failed On SVB

Senator Elizabeth Warren (D-MA) says Federal Reserve Chair Jerome
Powell has racked up "an astonishing list of failures," which
contributed to the implosion of Silicon Valley Bank and Signature
Bank, Bloomberg reports.

"SVB and Signature accumulated risk and made dangerous decisions about
how to manage that risk," said Warren in a Wednesday letter to Powell.
"They did so in part because of greed and incompetence – but were
allowed to do so under faulty supervision and in a weakened regulatory
environment that you helped to create."

"You owe the public an explanation," Warren continued, demanding that
Powell respond to 11 questions by March 29.

This is the biggest disaster in recent Fed history. Four days ago,
Powell was saying he could hike 50bps.

Powell has to be fired immediately
— zerohedge (@zerohedge) March 12, 2023

Warren's letter outlines several efforts to weaken regulations that
were implemented following the 2008 financial crisis, which was
enabled by lax supervision by the Fed.

Warren also demanded that Powell recuse himself from an internal
investigation by the Fed into regulatory failures concerning SVB - the
results of which will be made public by Vice Chair Michael Barr by May
1. Instead, a bipartisan group of lawmakers wants an independent
investigation.

The Fed and other regulators announced emergency measures to help
contain the budding crisis, including a new loan program from the
central bank that will make is easier for banks to borrow to meet
deposit withdrawal demand.

In her letter, Warren also said Powell supported a 2018 law that
exempted mid-sized banks like SVB from the same stringent oversight
requirements faced by the biggest banks, a change that she and some
other progressives have said contributed to SVB’s demise. Testifying
about the bill at the time, Powell said the Fed would still have the
ability to regulate mid-size banks if warranted, and that gave them
“the tools that we need.” -Bloomberg

"Make no mistake: your decisions aided and abetted this bank failure,
and you bear your share of responsibility for it," wrote Warren.

Meanwhile, woke 'Frisco Fed' chief Mary Daly has also come under fire.
As Paul Sperry writes in the NY Post: "Wokeness has replaced
competence and merit across the banking sector, and San Francisco Fed
Chief Mary Daly is the poster child of this pernicious trend."

A protege of Treasury Secretary Janet Yellen and short-list
candidate for Federal Reserve vice chair, Daly was supposed to be
supervising Silicon Valley Bank but apparently was too busy playing
politics and pushing woke agendas to regulate rogue banks like SVB,
the second-biggest bank failure on record.

Daly had other priorities, including climate change, George Floyd
and Black Lives Matter, inequities between blacks and whites, LGBTQ+
rights and a host of other woke social-justice issues that had nothing
to do with banking and finance. -NY Post

According to Daly's bio, her commitments include "understanding the
economic and financial risks of climate change and inequities."

Sperry highlights a recent LinkedIn post from Daly, in which she
appears 'sidetracked' by racial justice, writing "What Black voices
have I lifted up? Equity & inclusion begins with me. #GeorgeFloyd."

And while Daly has been focused on everything but banking, she was
completely oblivious to the warning signs of inflation.

Two years ago, as inflation was spiraling out of control, she said: "I
am not thinking that we have unwanted inflation around the corner. I
don’t think that’s a risk."

Last year, she denied that the economy was suffering from horrific
inflation, saying "That's not what I see."

And in August, Daly - who makes $422,000 per year, said "I don’t feel
the pain of inflation anymore."

"I’m not immune to gas prices rising, food prices rising," she
continued, adding "But I don’t find myself in a space where I have to
make trade-offs, because I have enough, and many, many Americans have
enough."

From her policy papers, speeches and interviews, it’s clear that
Daly thinks the Fed’s core mission isn’t controlling inflation but
achieving full employment — and raising interest rates just hurts that
goal. Her agenda is more jobs and higher wages for minorities, so
sound money is not a priority for her — even though inflation is a
huge tax on the working class and especially minorities.

Until recently, Daly was opposed to the Fed’s hawkish shift to
tightening credit to fight inflation. Her bank examiners no doubt
shared her dovish mindset and didn’t anticipate rates increasing,
which may also explain why alarms weren’t raised at SVB. -NY Post

Sperry also notes that Daly has zero experience in banking or managing
risk. According to her, Treasury Secretary Janet Yellen has

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Fed Panics, Announces "Coordinated" Daily US Dollar Swap Lines To Ease
Banking Crisis

"The market stops panicking when central banks start panicking"

In January 2022, just around the time the Fed announced it was
launching its most aggressive tightening campaign since Volcker, we
warned "remember, every Fed tightening cycle ends in disaster and
then, much more Fed easing"

Remember, every Fed tightening cycle ends in disaster and then,
much more Fed easing pic.twitter.com/zX7Dur8nLG
— zerohedge (@zerohedge) January 5, 2022

Fast forward to just over a week ago, when the Fed tightening cycle
indeed ended in disaster when SIVB became the first (of many) banks to
fail, triggering a chain of dominoes that culminated with today's
collapse of Credit Suisse - a systematically important bank with
$600BN in assets.

And then, at 5pm, the easing officially began, because while a bunch
of laughable macrotourists were arguing on FinTwit whether last week's
record surge in the Fed's discount window was QE or wasn't QE
(answer: it didn't matter, because as we said, it assured what comes
next), the Fed finally capitulated, just as we warned over and over
and over that it would...

Every time FRAOIS has been here, the Fed capitulated
— zerohedge (@zerohedge) March 17, 2023

If the Fed does not contain the regional bank collapse, there will
be another great depression.

Small/medium banks account for 50% of US commercial and industrial
lending, 60% of residential real estate lending, 80% of commercial
real estate lending, and 45% of consumer lending
pic.twitter.com/wzTMHxSnXI
— zerohedge (@zerohedge) March 18, 2023

"Fed either pivots too early and turns dovish in to a high
inflation scenario which is fairly bearish the USD thus helping gold
or they pivot too late and cause a much bigger recession than is
priced in right now, resulting flight to safety helps gold." - Goldman
— zerohedge (@zerohedge) January 5, 2023

... and at exactly 5pm the Fed announced "coordinated central bank
action to enhance the provision of U.S. dollar liquidity" by opening
daily Dollar Swap lines with all major central banks, in a carbon copy
repeat of the Fed's panicked post-covid crisis policy response
playbook.

The Bank of Canada, the Bank of England, the Bank of Japan, the
European Central Bank, the Federal Reserve, and the Swiss National
Bank are today announcing a coordinated action to enhance the
provision of liquidity via the standing U.S. dollar liquidity swap
line arrangements.

To improve the swap lines' effectiveness in providing U.S. dollar
funding, the central banks currently offering U.S. dollar operations
have agreed to increase the frequency of 7-day maturity operations
from weekly to daily. These daily operations will commence on Monday,
March 20, 2023, and will continue at least through the end of April.

The network of swap lines among these central banks is a set of
available standing facilities and serve as an important liquidity
backstop to ease strains in global funding markets, thereby helping to
mitigate the effects of such strains on the supply of credit to
households and businesses.

And once the USD swap lines are reopened, the rest of the cavalry
follows: rate cuts, QE (the real stuff, not that Discount Window
nonsense), etc, etc. In fact, we have already seen a near record surge
in reserve injections:

The Fed may as well formalize it now and at least preserve some
confidence in the banking sector, even if it means destroying all
confidence left in the "inflation fighting" Fed, with all those whose
were in charge handing in their resignation for their catastrophic
handling of this bank crisis.

Powell/Yellen out. Just a matter of time now
— zerohedge (@zerohedge) March 19, 2023

Then again, maybe they should just wait until he Fed hikes its
inflation target to 3% or more - something else we predicted...

At some point Fed will concede it has no control over supply.
That's when we will start getting leaks of raising the inflation
target
— zerohedge (@zerohedge) June 21, 2022

... because now that we are back in liquidity injection mode, well,
say goodbye to hopes of seeing affordable eggs every again.

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Biden In Touch With Buffett On Bank Crisis

What do you call it when an 80-year-old seeks the advice of a 92-year-old?

Answer: the worst financial crisis since Lehman.TM

Realizing that Berkshire Hathaway had a near-record $128 billion in
cash at the start of the year, more than most countries...

... Joe Biden, who on Monday lied to the American people that the "our
banking system is safe"...

The bottom line is this: Americans can rest assured that our
banking system is safe, and your deposits are safe.
pic.twitter.com/hM36ZmZ22x
— Joe Biden (@JoeBiden) March 13, 2023

... appears to have changed his mind and is urgently hoping to
recreate the zeitgeist surrounding the infamous Oct 16 "Buy American"
NYT op-ed by Warren Buffett.

... which ended up being memorable but only after the biggest bailout
of US banks and capital markets in history and the start of the
neverending QR/ZIRP->bust->QE/ZIRP cycle.

According to Bloomberg, Berkshire’s Warren Buffett has been in touch
with senior officials in President Joe Biden’s administration in
recent days as the regional banking crisis goes from bad to worse to
Savings And Loan 2.0 (if only America had any savings left).

The buzz of private jet activity centering on Omaha was first reported
by Fuzzy Panda who noted that "a large number (>20) of Private Jets
landed in Omaha yesterday afternoon" with jets flying from HQs of
Regional Banks, Ski Resorts & DC, and prompting the question "Did
Buffett just fly all the regional bank CEOs into Omaha & offer a deal
to SAVE the banks?"

The Private Jets arrived in Omaha in multiple groups. Sometimes
landing at almost the same exact time.

Did Buffett schedule some meetings with different groups of CEOs every hour?

Number of Jets arriving:
5 ~10am (est)
3 ~2pm
5 ~3:30pm
5 ~5pm
6 ~6:15pm
3 ~7:30pm pic.twitter.com/68Ok6zl8cA
— FuzzyPanda 🇺🇦 (@FuzzyPandaShort) March 17, 2023

For now the answer is unclear, nor is it clear what role, if any, the
billionaire investor may play to contain the crisis after the
cascading failures of Silicon Valley Bank, Signature Bank and
Silvergate.

Buffett, who will be 100 years old in 2031, has a long history of
stepping in to aid banks in crisis, providing funding at daylight
robbery terms (10% prefs + warrants), and leveraging his cult
investing status to restore confidence in ailing firms. Bank of
America won a capital injection from Buffett in 2011 after its stock
plunged amid losses tied to subprime mortgages. Buffett also tossed a
$5 billion lifeline to Goldman in 2008 to shore up the bank following
the Lehman Brothers collapse.

Meanwhile, Biden’s team, wary of political blowback among
progressives, has sought to implement bailouts that are spun as
magically not being bailouts and which don’t require direct government
spending from taxpayers, including the Federal Reserve’s actions
(narrator: of course they require taxpayer backing). Alas, so far
Biden's plan has been a disaster: on Thursday, big US banks
voluntarily deposited $30 billion to stabilize First Republic Bank
this week, a move regulators described as “most welcome.” On Friday,
the stock collapsed another 50%.

Any investment or intervention from Buffett or other figures would
continue that playbook, looking to stem the crisis without direct
bailouts until of course direct bailouts, rate cuts and QE are
inevitable since a cascading wave of defaults among the regional banks
would lead to another great depression as small/medium banks account
for 50% of US commercial and industrial lending, 60% of residential
real estate lending, 80% of commercial real estate lending, and 45% of
consumer lending.

This is a serious risk
— Elon Musk (@elonmusk) March 18, 2023

But before we get there, and since we are now following the playbook
of the 2008 crisis, expect the SEC to "halt short selling of financial
stocks to protect investors and markets", just like it did 3 days
after Lehman collapse sparking the worst banking crisis... until now.

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

https://www.forbes.com/sites/digital-assets/2023/03/14/crypto-didnt-create-this-crisis/

Crypto up 85% thanks to all the free advertising :)

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

US Republicans might be understanding that crypto can help them
lower taxes and reduce the size of government... two of their consistent
talking points if not action points for decades.


https://twitter.com/GOPMajorityWhip/status/1636008298481680384
Tom Emmer @GOPMajorityWhip
Today, I sent a letter to FDIC Chairman Gruenberg regarding reports
that the FDIC is weaponizing recent instability in the banking sector
to purge legal crypto activity from the U.S. 👇

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

> Signature Bank was done by the corrupt Anti-Crypto
> GovBankPol's of the Deep State...

They corruptly shut down Silvergate too...

https://www.piratewires.com/p/crypto-choke-point

https://nymag.com/intelligencer/2023/03/barney-frank-says-more-shuttering-signature-bank.html

https://www.reuters.com/business/finance/us-regulator-taps-piper-sandler-new-bid-sell-silicon-valley-bank-sources-2023-03-15/

https://www.coindesk.com/policy/2023/03/15/silvergate-was-not-cut-off-from-fhlb-loans-bank-says/

“Any buyer of Signature must agree to give up all the crypto business
at the bank, the two sources added.” Wait WHAT, the government making
explicit decisions on who gets a bank account.

And confirmed. This was an effective operation to shut down the crypto
activities of the last remaining pro crypto bank
reuters.com/business/finance…

Let this settle any remaining doubt. The Signature closure was a
targeted takeover in the darkness of a Sunday night to kill off legal
activity from banking rails. Operation Chokepoint 2 is real.

C2.0 confirmed


nic carter 🌠
@nic__carter
6h
it's perfectly normal to seize a solvent $100b bank on a sunday
because you dont like their clientele
90
202
15
1,519
nic carter 🌠
@nic__carter
14h
Shocking interview with Barney Frank -- pushes back at DFS' assertion
that Signature wasn't closed due to an anti-crypto animus... whole
thing worth reading @jenwieczner 👏👏 nymag.com/intelligencer/2023…
Barney Frank Says More on Shuttering of Signature Bank

“I was sort of vindicated — they have not argued that we were
insolvent,” says the author of the Dodd-Frank Act.
nymag.com
52
319
52
1,118
nic carter 🌠
@nic__carter
13h
the whole thing is absolutely bananas. some extracts - if FDIC/Fed had
acted on Friday, the run wouldn't have taken place - Signature was
ready and able to open on Monday
4
28
1
209
nic carter 🌠
@nic__carter
13h
- NYDFS never admitted that Signature was insolvent (!!!) - instead,
they claimed that Signature didn't give them sufficient data - but
that's no reason to nationalize a bank - reiterates that DFS' main
intention was to send an anti-crypto message
7
50
4
303
nic carter 🌠
@nic__carter
13h
The government can apparently seize banks that are not insolvent just
because they do not like them.
15
74
7
443
nic carter 🌠
@nic__carter
13h
Frank alleges that the Signature scalping was a warning shot to any
other pro-crypto bank. Confirms Chokepoint 2.0 and says it's working
6
28
5
261
nic carter 🌠
@nic__carter
13h
- confirms that he's not saying this out of a pro-crypto bias (has
always been skeptical) - says there should be a way for banks to
support crypto, and it can be done responsibly - thinks it's wrong for
banks to be deputized as crypto regulators, should be left to SEC
3
10
2
186
nic carter 🌠
@nic__carter
13h
the whole thing is just astounding. nymag.com/intelligencer/2023…
Barney Frank Says More on Shuttering of Signature Bank

“I was sort of vindicated — they have not argued that we were
insolvent,” says the author of the Dodd-Frank Act.
nymag.com
4
23
2
258
nic carter 🌠
@nic__carter
13h
this wasn't some two-bit bank, this was a renowned NY institution with
a large practice outside of crypto. they had >$100b in assets, this
was the 3rd largest bank failure in US history. and they were
nationalized, while not insolvent. absolutely insane
17
82
5
569
nic carter 🌠
@nic__carter
12h
so the government is going to need to furnish some very good
explanations for why they zeroed out $7b of equity market cap ($22b at
peak) arbitrarily nationalising firms is something thuggish banana
republics do, not the USA
37
55
9
516
nic carter 🌠
@nic__carter
11h
ppl calling me a conspiracist for pointing out SI and SBNY shutdowns
were political & suspicious ppl called me a conspiracist when i broke
this news in early feb too. piratewires.com/p/crypto-cho…
Operation Choke Point 2.0 Is Underway, And Crypto Is In Its Crosshairs

detailing the Biden Admin's coordinated, ongoing effort across
virtually every US financial regulator to deny crypto firms access to
banking services
piratewires.com
17
27
1
322
nic carter 🌠
@nic__carter
10h
One last thing, to determine whether this theory has legs. If another
bank acquires SDNY and Signet is _not_ included in the package, it is
clear that DFS took them down to take Signet (critical crypto infra)
offline. Watch this part carefully.
18
20
5
311
nic carter 🌠
@nic__carter
7h
And confirmed. This was an effective operation to shut down the crypto
activities of the last remaining pro crypto bank
reuters.com/business/finance…
Exclusive: U.S. regulator taps Piper Sandler in new bid to sell
Silicon Valley Bank -sources

Regulators at the U.S. Federal Deposit Insurance Corp (FDIC) have
tapped investment bank Piper Sandler Companies to relaunch the auction
of failed lender Silicon Valley Bank, people familiar with the...
reuters.com
34
52
18
340
nic carter 🌠
@nic__carter
7h
Where were the people telling me this had absolutely nothing to do
with Signature’s crypto a

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Credit Suisse implodes after months of agony.



Signature Bank was done by the corrupt Anti-Crypto
GovBankPol's of the Deep State...

“Any buyer of Signature must agree to give up all the crypto business
at the bank”
https://www.reuters.com/business/finance/us-regulator-taps-piper-sandler-new-bid-sell-silicon-valley-bank-sources-2023-03-15/

https://apnews.com/article/signature-bank-fdic-barney-frank-silicon-valley-6ad86262d9945675a42d735b66ace4f2
A regulatory takeover of a New York-based bank was intended to send a
message to U.S. banks to stay away from the cryptocurrency business, a
former member of Congress who was on the bank’s board says.

"
Quite alarming. This is how revolutions begin.
...
The American government must be stopped at all costs.
...
The Biden administration gotta go. This is ridiculous!
"

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

"My conclusion is that politicians like Liz Warren together with
regulatory bodies fragilized crypto banks and encouraged runs against
them, then used withdrawals as a pretext to close them down. What was
meant to be a surgical operation became a massive banking crisis."

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

2023-03-15 Thread grarpamp

"BTC > SVB"
https://v.redd.it/3bemuc8iltna1 SVB: Orange Pilled FTW @CryptoGraffiti

"New York regulator says Signature Bank closure ‘nothing to do’ with
cryptocurrencies: Reuters"

The NYDFS said the lender had “a significant crisis of confidence
in the bank’s leadership” and the closure was “based on the current
status of the bank and its ability to do business in a safe and sound
manner,” according to the report.
The authority’s statement came after former congressman Barney
Frank, a Signature Bank board member, told CNBC that the closure was
related to “regulators wanted to send a very strong anti-crypto
message.”

"Safe and Sound = FED and SEC latest buzzphrase for Anti-Crypto, used
it to kill Custodia, Crypto ETF's, and many other solid Crypto services..."

"IMMEDIATE FOIA against NY Regulator re SBNY Anti-Crypto"

"This was not only a bailout, but a disguised attack on crypto
that will lay the groundwork for CBDCs"

"Choose Freedom. Choose Bitcoin #NoCBDC"

Route around GovBankPol's FUD Fraud Lies and Theft, go crypto.

https://techcrunch.com/2023/03/14/svb-crypto-regulation-decentralization/
Chaos in US banks could push crypto industry toward decentralization

U.S. Treasury Poised to Release View on How DeFi Used in Illicit Finance
"Illicit [adjective] - Anything that takes power back from Govt and Banks"

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

https://www.bloomberg.com/news/articles/2023-03-14/why-did-signature-bank-fail-inside-the-old-school-new-york-bank
“In five years a number of banks will not be around because of
blockchain technology. -- Joseph DiPaolo, Signature Bank CEO, 2018"

"BREAKING: the US banking system"

"Bitcoin has been waiting for 14 years to exist during a period of
bank collapses and financial crisis."

Anyone can "investigate" anything...
https://www.coindesk.com/policy/2023/03/15/us-doj-was-investigating-signature-banks-work-with-crypto-clients-bloomberg/
https://cointelegraph.com/news/signature-bank-investigated-for-money-laundering-prior-to-demise-report
https://www.bloomberg.com/news/articles/2023-03-15/signature-bank-faced-criminal-probe-ahead-of-firm-s-collapse

https://en.wikipedia.org/wiki/Croesus#War_against_Persia_and_defeat

https://v.redd.it/7dw6jdlw6ona1 Bitcoin FTW @pledditor

https://v.redd.it/nr8mmzlrwuna1 Satoshi

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

https://usdebtclock.org/
https://usdebtclock.com/
https://usdebtclock.day/
https://www.youtube.com/watch?v=Vk7gPypWP3Y Maxed Out 2006
Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders (2006)

And Then Something Broke...

https://schiffgold.com/exploring-finance/and-then-something-broke/
https://schiffgold.com/exploring-finance/calling-the-feds-bluff-they-are-holding-a-losing-hand/
https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

Peter Schiff via SchiffGold.com,

Over the past several months, Mike Maharrey and I have posted numerous
articles that conclude the same way… the Fed is bluffing and when
something breaks, they will fold. On every podcast, Mike has walked
through exactly why this is inevitable. Back in September, I laid out
the math that showed why the Fed would fold and laid out a series of
risks that may cause such an event. One of those risks was “What if
the financial markets freeze because there is a credit event
somewhere?”.

Well, that just happened. Silicon Valley Bank (SVB) and now Signature
Bank has collapsed. Sure enough, the Fed folded within 48 hours. They
stood with the Treasury and FDIC and explained how they are stepping
in to prevent systemic risks from spreading. They have established a
new Bank Term Funding Program (BTFB) to allow banks to borrow billions
and blah blah… Sure, okay. Everything is now fine, right?

Nope, sorry, it’s not. SVB is just the latest domino. The dominos have
been moving down the risk curve. It started in Crypto with Three
Arrows Capital and Luna. Then FTX was exposed for being a fraud. We
were told these issues were contained. And they were! SVB didn’t
collapse because of FTX contagion or anything related to Crypto. It
collapsed all on its own because it was the next step along the risk
curve. Let’s do a quick replay…

SVB gets tons of cash and capital all through 2021. They have so much
cash they don’t have anywhere to put it. They could go into Treasury
Bills, but that was yielding 0.25%, so they decide to take a bit more
risk. They buy longer-dated treasuries to get more yield. NOT Bitcoin,
NOT high-risk stocks. They bought some of the safest securities you
can buy… US Treasuries. The mistake they made was forgetting to hedge
their interest rate exposure… whoopsie.

Fast forward 12 months… yields have been pushed higher by the Fed, and
all those Treasuries have lost value. Forced to sell, SVB realizes
huge losses, and poof… they gone! Were they surprised? Was the Fed
surprised? Because anyone with a calculator wasn’t surprised. This was
going to happen; it was just about when. If it wasn’t SVB, it would be
someone else. This is what happens when the tide goes out, you see who
has been swimming naked.

I won’t link to every article on SchiffGold where this was discussed
because it’s essentially every article. I think Mike and I are pretty
good analysts, but we don’t have PhDs in Economics and our primary job
is not about trying to protect the economy from systemic risks. How
did we see this coming and the Fed, FDIC, and Treasury all missed it?
No doubt I was early, I thought this would have happened months ago…
but it was always going to happen!
What did the regulators just do?

The Fed has come out and said that anyone with “high quality” debt
like Treasuries can pledge it as collateral and get back par value for
up to a year. So, you bought a Treasury Note for $100 in 2021, it’s
now worth $95. Whatever you do… DO NOT SELL IT. Come to the Fed and
they will give you $100 for the debt. Treasuries don’t get dumped on
the market and everyone is made whole. BOOM, everyone wins and problem
solved, right?

Sure, for now. But let’s think through a couple of things:

First, SVB was not the first domino to fall, and it won’t be the
last. The Fed just set up a program for a very specific issue. The
next domino will likely be another issue. What then? Another emergency
measure? If it doesn’t pose systemic risks then maybe the domino will
be allowed to fall. Where does the Fed draw the line? What is
systemic?

Second, what if you are an unsecured bond holder or stock holder
in a smaller regional bank? Well, the government just said you are
getting zero if your bank collapses. So, do you really want to be a
stock or bond holder in a small regional bank? Probably not. What does
that mean?

Third, the FDIC just raised its insurance from $250k to basically
infinity… overnight! I mean, that’s like every insurance company
dropping premiums to zero and saying that all claims will be paid in
full without question. Sounds like a party at first, but the hangover
could be deadly. The moral hazard here is undeniable.

Fourth, the Fed just guaranteed all US Debt at 100% of par value.
What are the implications of this incredible Put in the market? If the
market decides to test the Fed, they may end up printing boat loads of
money.

What’s next?

The Fed, Treasury, and FDIC just stood together and backed the entire
US fina

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Yes, The Latest Bank Bailout Is Really A Bailout, And You Are Paying For It

https://mises.org/wire/yes-latest-bank-bailout-really-bailout-and-you-are-paying-it
Ryan McMaken, The Mises Institute

https://twitter.com/BillAckman/status/1634028534107602944
https:/twitter.com/BillAckman/status/1634564398919368704
https:/www.usbank.com/financialiq/improve-your-operations/investments-and-controls/protecting-cash-balances.html
https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm
http://www.fdic.gov/analysis/quarterly-banking-profile/qbp/2022dec/
https://www.federalreserve.gov/monetarypolicy/files/bank-term-funding-program-faqs.pdf
https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20230312a1.pdf
https://mises.org/wire/why-fed-bankrupt-and-why-means-more-inflation
https://mises.org/wire/dont-call-it-capitalism-feds-8-trillion-hoard-financial-assets
https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312b.htm
https://twitter.com/profstonge/status/1635272942660784133
https://www.barrons.com/articles/svb-fdic-news-what-to-know-10bd0471
https:/fred.stlouisfed.org/series/DPSACBW027SBOG
https://www.statista.com/chart/29478/share-of-fdic-protected-deposits-at-selected-banks/

Silicon Valley Bank (SVB) failed on Friday and was shut down by
regulators. It was the second-largest failure in US history and the
first since the global financial crisis. Almost immediately, the calls
for bailouts started to come in.

In fact, on March 9, even before SVB failed, billionaire investor Bill
Ackman took to Twitter to insist a federal “bailout should be
considered” if the private sector could not save the bank. Hours after
SVB officially failed, Ackman was still at it, and in a 646-word
panicky screed, he demanded that the federal government “guarantee SVB
deposits” and essentially backstop the entire banking industry to keep
failing, inefficient, and poorly managed banks afloat.

Now, many readers might be saying to themselves, “I thought bank
deposits were insured!” That, of course, is correct, but deposits are
only legislatively insured up to $250,000 by the Federal Deposit
Insurance Corporation (FDIC). Given that most normal people keep less
than this in their bank accounts, that means the majority of bank
users are not going to lose any of their money should their banks
fail. Moreover, it is extremely easy to acquire deposit insurance on
much more than $250,000 by simply keeping money at more than one bank.
That $250,000 limit applies to the deposits at each bank where a
depositor keeps funds. For customers with high liquidity needs, the
financial sector offers tools for dealing with the risk of exceeding
FDIC limits.

In an illustration of the laziness and arrogance that so characterizes
our modern financial class, however, many of the wealthiest depositors
at Silicon Valley Bank couldn’t be bothered with managing their
deposits, and they essentially ignored the deposit-insurance rules
that even a ten-year-old understands when opening his first bank
account.

As a result, many venture capitalists and other wealthy SVB customers
stand to lose a lot of money. At least, they stood to lose a lot of
money before Sunday evening, when the Federal Reserve announced its
new “Bank Term Funding Program” (BTFP), which promises to flood the
banking system with new money and shore up the personal finances of
wealthy depositors.

This is part of a two-pronged effort to both make banks appear more
financially sound, and to greatly expand FDIC payouts to depositors
who have their funds in these banks.

The official propaganda coming out of the administration, and from the
usual Fed fanboys, is that none of this is a bailout. That’s a lie.

The new steps being taken by the Fed and by the Treasury Department's
FDIC are indeed ultimately bailouts for billionaires and other wealthy
depositors. Moreover, this new program will require at least a partial
return of quantitative easing. There’s no way to guarantee such huge
sums of money without having to fall back on inflationary monetary
policy yet again. This also means price inflation won’t be going away.
Here is why.
Propping Up Asset Prices with New Money

The first prong of the bailout plan is to use extremely low-cost loans
to shovel more money at banks in order to make them look more
financially sound. The idea here is to head off depositor panics over
uninsured deposits before they start. The first indication that this
scheme is a bailout comes from the text of the press release on the
creation of the BTFP. It states that the new program will be

offering loans of up to one year in length to banks, savings
associations, credit unions, and other eligible depository
institutions pledging U.S. Treasuries, agency debt and mortgage-backed
securities [MBS], and other qualifying assets as collateral. These
assets will be valued at par. The BTFP will be an additional source of
liquidity against high-quality securities, eliminating an
ins

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

> Not your keys, Not your Money...

"The US Government is about to gaslight the failure of banks as a
failure of crypto. Dont be fooled - the bank failure has nothing to do
with crypto, and everything to do with banks buying treasuries/MBS and
regulatory failure"

"Just got off of a zoom meeting with Fed, Treasury, House, and Senate.
A Democrat Senator essentially asked whether there was a program in place
to censor information on social media that could lead to a run on the
banks. -- @RepThomasMassie"

https://youtu.be/833SRSJceqk

https://youtu.be/wcpRW4ySaG8

"Don't tell anyone 🤫 Next up - CBDCs are the way foward"

"Just a reminder we live in a fraudulent system"

"…and some people wonder “why bitcoin”…here is one answer"

"banks go to fucking zero, Bitcoin not."

"Documentary: 2023 Bank Run 🏦🏃| The Rise of #Bitcoin"

"Bitcoin rated as being the 12th most valuable asset in the world"

"Where we’re headed, we won’t need centralized intermediaries anymore
Once the #crypto ecosystem is complete there will be no need for
on/off-ramps back to traditional finance - Byron"

"Confirmed: Bull Market is in!"

"Bitcoin and Gold are on fire!"

"I wonder when the media will post about Bitcoin's increase today.."

"Trying to understand how the Fed makes decisions ? Consult the rule
book... Monopoly 👇😅"

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Inflation Smokescreens The Economic Dumpster Fire

Authored by Brandon Smith via Alt-Market.us,

The inevitable outcome was clear for a decade at least, but in the run
up to the Covid lockdowns there were many economists in the corporate
media that outright denied the reality of an inflationary or
stagflationary crisis. Joe Biden, Janet Yellen, Paul Krugman and a
host of journalists claimed that concerns about inflation were
“overblown” and that the Federal Reserve had everything under control.

Some might say they were ignorant.

Some might say they knew the danger and they were lying about it.

In any case, reality always wins in the long run and those who refuse
to take facts and evidence seriously will eventually be exposed. This
is exactly what happened from 2020 to 2023 as the stagflationary
spiral took hold. While some people might attribute this outcome to
the Covid pandemic, Covid stimulus or the war in Ukraine, though the
signs were evident well before either of those events.

During the build-up to this disaster, the Federal Reserve has been
tightening and hiking interest rates into economic weakness. It’s the
same thing they did in the early 1980s and the same thing they did at
the onset of the Great Depression (which made the crash a hundred
times worse).

In 2019 I outlined this conundrum in my article The Crash In U.S.
Economic Fundamentals Is Accelerating.

The U.S. economy was already on the verge of a major crash by 2020 on
top of an inflationary crisis. The $8 trillion Covid stimulus delayed
the economic depression for a couple of years.

However, as we can see from the explosion in prices, it was also the
straw that broke the camel’s back.

I noted in 2019 that there were a host of negative signals piling up
and predicted that the Fed would continue to hike interest rates
anyway:

For the past ten years, the Fed has refused to acknowledge that
there is no recovery. For the past two years, the Fed has been
tightening liquidity despite the lack of recovery. And, even in the
past four months with all the talk of the Fed “retreating” on QE and
going “dovish”, Fed bankers still claim in their public statements
that the US economy is enjoying a “solid” recovery.

The Fed will not be cutting interest rates anytime soon. In fact,
I continue to believe the Fed will hike rates again this year. Not
that it matters, because the Fed’s benchmark interest rate has been
climbing anyway, which may indicate the central bank is seeking to
tighten liquidity while pretending it is “remaining patient.”

In 2021, Joe Biden claimed that infrastructure spending would be a
solution to the inflation problem while ignoring the fact that
government spending was the primary cause of inflation in the first
place. In my article Infrastructure Bills Do Not Lead To Recovery,
Only Increased Federal Control, I noted that:

Production of fiat money is not the same as real production within
the economy… Trillions of dollars in public works programs might
create more jobs, but it will also inflate prices as the dollar goes
into decline. So, unless wages are adjusted constantly according to
price increases, people will have jobs, but still won’t be able to
afford a comfortable standard of living. This leads to stagflation, in
which prices continue to rise while wages and consumption stagnate.

Another Catch-22 to consider is that if inflation becomes rampant,
the Federal Reserve may be compelled (or claim they are compelled) to
raise interest rates significantly in a short span of time. This means
an immediate slowdown in the flow of overnight loans to major banks,
an immediate slowdown in loans to large and small businesses, an
immediate crash in credit options for consumers, and an overall crash
in consumer spending. You might recognize this as the recipe that
created the 1981-1982 recession, the third-worst in the 20th century.

In other words, the choice is stagflation, or deflationary depression.

Right now, the U.S. is entering the “end of the honeymoon” stage of stagflation.

The initial months of a mass stimulus program always creates
indicators of economic health. But the truth is, these indicators are
fleeting and the appearance of health is an illusion. The irony (or
perhaps the agenda) when dealing with inflation induced growth is that
the central bank often uses these signals to justify fiscal tightening
and higher interest rates until the economy breaks.

For example, mainstream economists noted a sharp increase of 3% in
retail sales in January, after two consecutive months of steep
declines. They interpreted this as a sign of recovery, but also as a
sign of an overheating economy. So, more rate hikes are now expected.

But did retail sales really increase? Or, are most goods and services
just becoming too expensive and this is being translated as higher
sales?

If people are buying more, then why do business inventories continue
to rise each month? Maybe because Americans are spending more b

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Save The Dollar Or The Financial System - Not Both

Via Greg Hunter’s USAWatchdog.com,

Precious metals expert and financial writer Bill Holter said last
summer that the Fed rate increases would tank the economy.  The
collapse of SVB (Silicon Valley Bank) is the latest sign the Fed is
breaking the financial system.  Will it continue to raise interest
rates as Fed Head Jay Powell said this past week?

Holter says that is the biggest question out there because it comes
down to picking what you want to save.  It’s the U.S. dollar or the
financial system.  Holter explains,

“They can save one thing or the other.  They can save the
financial system, or they can save the dollar.  If they save the
dollar, they will have to raise rates, and they will have to keep
tightening.  To save the financial system, they will have to loosen.
They have tightened so hard and so fast over the last year they have
raised rates and tightened faster than anytime before.  This is in the
face of the biggest over-levered situation in history no matter how
you look at it...

They can only do one or the other, and they already look like
fools.  The world is already laughing at the United States.  Think of
what Russia and China think when we are walking out some army general
wearing a skirt.  We are getting to the end game.”

Holter, who is also a precious metals broker from Miles Franklin, says
the bankruptcy of SVB is just the tip of the default iceberg.  Holter
says,

“The problem is a global bankruptcy.  In order to avoid the
bankruptcy, you don’t go from bank A to bank B or some sovereign
treasury.  You don’t go to paper because paper can bankrupt.  It’s
going to dawn on people all of a sudden that gold and silver are the
safe havens.  That’s going to create a ‘failure to deliver’ event, and
when you get failure to deliver, all confidence is gone.  This is all
about confidence.  Failure to deliver is coming soon because you are
talking about big, big money, and there is not big, big supply...

My phone has been blowing up all weekend.  People are wanting
wiring instructions so they can wire money Monday morning... This
failure to deliver event is right in front of us.”

You might think everything will be safe in the bank because of FDIC
deposit insurance.  That is not totally true because the government
basically turned depositors into creditors in 2012.  Holter says,

“In 2012 or 2013, the FDIC amended their rules and said there
would no longer be bailouts, but bail-ins.  People don’t understand
that when there is a bail-in and a bank goes down, it takes all or
part of the money they are holding on your behalf to make themselves
solvent.  It is no surprise that Janet Yellen (Treasury Secretary) is
saying there are not going to be bailouts because it’s been official
policy for ten years or more...

There are cockroaches everywhere.   The whole system is rotten to
the core.  The whole system is over-levered.  The whole system is
fraudulent.  The entire system is a Ponzi scheme...

The government of the reserve currency of the world has to borrow
a trillion dollars a year to stay solvent.  That’s ridiculous.”

Holter thinks big inflation is coming when the Fed has to cut rates to
save the system.  He says, “The government will inflate or die.”

There is a lot more in the 46-minute interview.

Join Greg Hunter as he goes One-on-One with financial writer and
precious metals expert Bill Holter for 3.12.23.

To Donate to USAWatchdog.com Click Here

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

> Biden claims "Funds are SAFU", meanwhile continuing
> to claim that outright stealing 50% of your income under
> threat of prison and death is "legitimate taxation", and that
> inflating your purchasing power away by printing money
> for GovPol power excess and pocketing at 35% every
> 10 years is OK... lol...

Bank bailouts ultimately come out of your ass not theirs,
plus the interest on that debt they made payable by your
families for generations to come...


Federal Reserve Launches "QE Extra Lite" To Bail Out Banks

Via SchiffGold.com,

In the wake of two bank failures, the Federal Reserve and the US
Treasury announced a bank bailout program that could be dubbed “QE
Extra Lite.”

Last week, Silicon Valley Bank was shuttered by federal authorities
after the bank suffered significant losses selling bonds in order to
raise capital. When that news hit, depositors rushed to pull funds
from the bank, making it functionally insolvent. Then over the
weekend, federal authorities shut down Signature Bank.

On Sunday, the FDIC created “bridge banks” to handle both insured and
uninsured customer deposits. Banking regulators assured depositors
that they would have full access to all of their funds.

Meanwhile, the Federal Reserve announced a loan program that will
allow other banks to easily access capital “to help assure banks have
the ability to meet the needs of all their depositors.”

The Bank Term Funding Program (BTFP) will offer loans of up to one
year in length to banks, savings associations, credit unions, and
other eligible depository institutions pledging US Treasuries, agency
debt and mortgage-backed securities, and other qualifying assets as
collateral. Banks will be able to borrow against their assets “at par”
(face value).

According to a Federal Reserve statement, “the BTFP will be an
additional source of liquidity against high-quality securities,
eliminating an institution’s need to quickly sell those securities in
times of stress.”

The US Treasury will provide $25 billion in credit protection to the
Fed from the Exchange Stabilization Fund.

This will ostensibly help banks avoid the situation that brought down
Silicon Valley Bank.
Backdrop

Last week, SVB sold a large portion of its bond portfolio at a $1.8
billion loss. SVB CEO Greg Becke said the bank made the sale “because
we expect continued higher interest rates, pressured public and
private markets, and elevated cash burn levels from our clients.”

The bank bought the bonds when interest rates were low. As a result,
the $21 billion available for sale (AVS) bond portfolio was not
yielding above cash burn. Meanwhile, rising interest rates caused the
value of the portfolio to fall significantly. The plan was to sell the
longer-term, lower-interest-rate bonds and reinvest the money into
shorter-duration bonds with a higher yield. Instead, the sale dented
the bank’s balance sheet and caused worried depositors to pull funds
out of the bank.

Many other US banks are likely in the same situation. As the Fed
jacked up interest rates to fight price inflation, it decimated the
bond market. (Bond prices and interest rates are inversely correlated.
As interest rates rise, bond prices fall.) With interest rates rising
so quickly, banks have not been able to adjust their bond holdings. As
a result, many banks have become undercapitalized on paper. The
banking sector was buried under some $250 billion in net unrealized
losses on bond portfolios as of Dec. 31.

The BTFP gives banks a way out, or at least the opportunity to kick
the can down the road for a year. Instead of selling bonds that have
dropped in value at a big loss, banks can go to the Fed and borrow
money at the bonds’ face value.
QE Extra Lite

You could categorize this plan as quantitative easing extra lite.

Understand, this is not exactly QE. The Fed is not buying Treasuries.
It will only hold them as collateral for the loans. Once the loans are
paid back, the Treasuries will go back on the bank’s books.

But it is like QE in the sense that the Fed will create money out of
thin air to make these loans. That is inflationary, just like
quantitative easing, although the inflation is ostensibly temporary.
When the bank pays back the loan, that money will drain out of the
system. Of course, that assumes the loans get paid back.

Also like QE, the Fed is putting its thumb on the bond market by
incentivizing banks and other institutions to hold Treasuries instead
of selling them into the market. In effect, it creates an artificial
limit on the supply of Treasuries, which will artificially keep prices
higher than they otherwise would be.

In effect, this Federal Reserve loan program will have some of the
same systemic impacts as QE, but on a much more limited basis – thus
the term “QE Extra Lite.”
Is This a Bailout?

The powers that be insist this is not a bailout. But it is absolutely a bailout.

The plan creates a mechanism for banks to acquire capital they
couldn’t otherwise access under normal

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Making Common, Golden Sense Of The Next Senseless Bank Crisis

Matthew Piepenburg via GoldSwitzerland.com,

The latest headlines, of course, are all pointing toward the ripple
effect of Silicon Valley Bank (SVB), and they should be.

This banking metaphor for the tech sector in particular and the
previously described disaster in California as a whole or the matter
of banking risk as a theme, require understanding and attention,
provided below.

Once we get past a forensic look at the data and forces which explain
SVB’s demise, we quickly discover that SVB is itself just a symbol of
a much larger financial (and banking) crisis which ties together
nearly all of the major macro forces we’ve been tracking since Powell
began his QE to QT quest to be Volcker-reborn.

That is, we confirm that everything comes back to the Fed and bond
market in general and the UST market in particular. But as I’ve argued
for years, and will say again now: The bond market is the thing.

By the end of this brief report, we also discover that SVB is just the
beginning; contagion inside and outside of the banking sector is about
to get worse. Or stated more bluntly: “We ain't seen nothing yet.”

But first, let’s look at the banks in Silicon Valley…
Two Failed Banks

The tech-friendly SVB story (i.e. FDIC shutdown) is actually preceded
by another failed bank, namely the crypto-friendly Silvergate Capital.
Corp, now heading into voluntary liquidation.

Because SVB was a much larger bank (>$170B in deposits) than
Silvergate (>$6B in deposits), it got and deserved more headlines as
the largest bank failure since well, the 2008 bank failures…

Unlike Lehman or Bear Stearns, the recent disasters at SVB and
Silvergate were not the result of concentrated and levered bets/loans
negligently packaged as investment-grade credits, but rather the
result of a good ol’ fashioned bank run. Bank runs happen when
depositors all want to get their money out of the banks at the same
time—a scenario of which I’ve warned for years and compared to a
burning theater with an exit door the size of a mouse-hole.

Banks, of course, use and lever depositor funds to lend and invest at
risk (which is why Henry Ford warned of revolution if folks actually
understood what banks actually do). Thus, if a mass of depositors
suddenly wants their money at the same time, it’s just not gonna be
there.

So, why were depositors in a panic to exit?

It boils down to crypto fears, tech stress and bad banking practices.
No Silver Lining at Silvergate

At Silvergate, they provided loans to crypto enterprises, which were
the belle of the speculation ball until Sam Bankman-Fried’s FTX
implosion made investors weary of crypto exchanges. Nervous depositors
withdrew billions of their crypto-linked deposits at the same time.

Silvergate, of course, didn’t have the billions needed to meet
depositor requests, because, well… banks by their operational
(fractional reserve) nature never have the money when needed at the
same time.

Thus, the bank had to quickly and desperately sell assets, which meant
selling billions worth of non-mature Treasuries whose prices had
tanked in the interim thanks to the Powell rate hikes.

(See how the Fed lurks, head down and silent, as the source behind
nearly every crisis?)

This was selling bank assets at the worst time imaginable and
immediately sent Silvergate into the red and toward the cold dark
ocean floor.

Once DOJ investigations end and the FDIC insurance runs out, we’ll
discover just how “whole” the bigger depositors at Silvergate will
be—but this will take time and end in some degree of pain for many of
them.
Death Valley for Silicon Valley Bank

As for the bigger disaster at SVB, they mostly serviced start-ups and
technology firms with a major focus on life sciences start-ups—i.e.,
yesterday’s unicorns and tomorrow’s donkeys.

These unicorns, of course, were not only under the cloud of the FTX
fears in particular and falling faith in tech miracles in general, but
equally under the pressure of Powell’s rate hikes, which made funding
(or debt-rollovers) harder and more expensive to obtain for tech
names.

In short, the keg party of easy money for questionable tech
enterprises was beginning to unwind.

SVB’s slow and then rapid demise came as depositors (at the advice of
their VC advisors) withdrew billions at the same time, which SVB (like
Silvergate) could not match after selling UST assets at a massive loss
to save the first withdrawals while burning the later movers.

In short, and like all Ponzi schemes, banks suffering a bank run can’t
and won’t make everyone whole—just the first money out—i.e., the
fastest runners in the burning theater.
Burn Victims, Recovery?

Banks, ironically, can’t technically go bank-rupt. Silvergate plans to
eventually make all depositors whole as they sift through their assets
in liquidation. Hmmm. Good luck with that.

SVB, however, waited too long for voluntary liquidation procedures and
was instead taken over by the

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Biden claims "Funds are SAFU", meanwhile continuing
to claim that outright stealing 50% of your income under
threat of prison and death is "legitimate taxation", and that
inflating your purchasing power away by printing money
for GovPol power excess and pocketing at 35% every
10 years is OK... lol...

Billion of activist via bitcoin, crypto, and gold fix this...


Biden Insists "The Banking System Is Safe"

US President Joe Biden attempted to calm the markets in a Monday
morning speech, where he insisted that "Americans can have confidence
that the banking system is safe," and that US bank regulators and
Treasury Secretary Janet Yellen took "immediate" action to stop
contagion among small and medium-sized banks following the Friday
collapse of Silicon Valley Bank.

"Americans can rest assured that our banking system is safe," he reiterated.

Biden made clear that investors in the failed banks will not be protected.

"They knowingly took a risk, and when the risk didn’t pay off,
investors lose their money," he said, adding that the people running
the troubled banks should be fired.

When asked by reporters if there would be a ripple effect, and whether
he could explain how and why this happened, Biden ignored the
questions.

Watch:

*  *  *

With bank stocks - most notably small/medium-sized banks - deeply in
the red, it appears at first glance that The Fed/TSY/FDIC cunning plan
to implicitly backstop every deposit is not stemming the contagion's
tide.

However, don't let that 'fact' get in the way of some good politics as
President Biden readies to deliver remarks that 'you have nothing to
fear but fear itself' as he explains how his admin will maintain a
resilient banking system.

"Tomorrow morning, I will deliver remarks on how we will maintain
a resilient banking system to protect our historic economic recovery,"
Biden was cited in the White House statement

Is he really going to maintain the narrative that the economy is
'strong as hell' amid a systemic financial crisis?

White House statements claimed Biden had directed US Treasury
Secretary Janet Yellen and National Economic Council Director to work
with banking regulators to address problems at Silicon Valley Bank and
Signature Bank.

“I’m pleased they reached a solution that protects workers, small
businesses, taxpayers, and our financial system,” he added.

He also assured action against “those responsible for the mess”.

“I’m firmly committed to holding those responsible for this mess
fully accountable and to continuing our efforts to strengthen
oversight and regulation of larger banks so that we are not in this
position again,” he tweeted.

The messaging will be clear:

1) This is not 2008 (correct, this is a good old-fashioned
traditional bank run at the speed of light with mobile banking)

2) This is not a bailout (except that it 100% bails out all the VC
and startup depositors everywhere all at once)

3) Someone will take the blame (Barney Frank already blamed
crypto, the 'woke' risk managers didn't hedge rate risk, and The Fed
was the main regulator and also caused the hole in SVB's balance sheet
via rate-hikes)

'Mission Accomplished'?

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

https://archive.org/details/TheCreatureFromJekyllIslandByG.EdwardGriffin
G Edward Griffin's 1993 movie and 1994 book, The Creature from Jekyll Island.
In it, he presents his argument that the central banking system of the
United States constitutes a banking cartel and an instrument of war
and totalitarianism.
The book was a business-topic bestseller, and influenced Ron Paul
when he wrote a chapter on money and the Federal Reserve in his
New York Times bestseller "The Revolution: A Manifesto -- Ron Paul".

Woke GovBankPol elite frauds investigate themselves, again, lol...

Fed Announces Probe Into Its Own Regulatory Failure At SVB

https://www.federalreserve.gov/newsevents/pressreleases/bcreg20230313a.htm
https://s201.q4cdn.com/589201576/files/doc_financials/2022/q4/4Q22-SIVB-Earnings-Release-Final.pdf
https://www.reuters.com/markets/us/silicon-valley-banks-demise-began-with-downgrade-threat-sources-2023-03-11/
https://www.visualcapitalist.com/timeline-shocking-collapse-of-silicon-valley-bank/
https://www.federalreserve.gov/newsevents/speech/barr20230309a.htm

The Federal Reserve Board on Monday announced that Vice Chair for
Supervision Michael S. Barr is leading a review of the supervision and
regulation of Silicon Valley Bank, in light of its failure.

"The events surrounding Silicon Valley Bank demand a thorough,
transparent, and swift review by the Federal Reserve," said Chair
Jerome H. Powell.

As a reminder, it was Moody's that initially brought up issues with SVB.

When SVB reported its fourth quarter results in early 2023, Moody’s
Investor Service, a credit rating agency took notice.

In early March, it said that SVB was at high risk for a downgrade due
to its significant unrealized losses.

In response, SVB looked to sell $2 billion of its investments at a
loss to help boost liquidity for its struggling balance sheet. Soon,
more hedge funds and venture investors realized SVB could be on thin
ice. Depositors withdrew funds in droves, spurring a liquidity squeeze
and prompting California regulators and the FDIC to step in and shut
down the bank.

Source

The Fed's review will be publicly released by May 1.

"We need to have humility, and conduct a careful and thorough
review of how we supervised and regulated this firm, and what we
should learn from this experience," said Vice Chair Barr.

Just a reminder, here's what Michael Barr said in a speech Thursday as
the run was in full swing:

"The banks we regulate, in contrast, are well protected from bank
runs through a robust array of supervisory requirements."

In case you wondered where we stand on this...

This is a regulatory failure of historic proportions by both the
Fed and Treasury.

Instead of preventing billions in losses, the Fed was worrying
about board diversity and Yellen was flying to Ukraine.

Everyone should be sacked immediately. https://t.co/XDd5LTI6hF
— zerohedge (@zerohedge) March 12, 2023

What are the chances anyone is found responsible in any way?

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

Why The Banking System Is Breaking Up

by Michael Hudson

The collapses of Silvergate and Silicon Valley Bank are like icebergs
calving off from the Antarctic glacier. The financial analogy to the
global warming causing this collapse of supporting shelving is the
rising temperature of interest rates, which spiked last Thursday and
Friday to close at 4.60 percent for the U.S. Treasury’s two-year
bonds. Bank depositors meanwhile were still being paid only 0.2
percent on their deposits. That has led to a steady withdrawal of
funds from banks – and a corresponding decline in commercial bank
balances with the Federal Reserve.

Most media reports reflect a prayer that the bank runs will be
localized, as if there is no context or environmental cause. There is
general embarrassment to explain how the breakup of banks that is now
gaining momentum is the result of the way that the Obama
Administration bailed out the banks in 2008 with fifteen years of
Quantitative Easing to re-inflate prices for packaged bank mortgages –
and with them, housing prices, along with stock and bond prices.

The Fed’s $9 trillion of QE (not counted as part of the budget
deficit) fueled an asset-price inflation that made trillions of
dollars for holders of financial assets – the One Percent with a
generous spillover effect for the remaining members of the top Ten
Percent. The cost of home ownership soared by capitalizing mortgages
at falling interest rates into more highly debt-leveraged property.
The U.S. economy experienced the largest bond-market boom in history
as interest rates fell below 1 percent. The economy polarized between
the creditor positive-net-worth class and the rest of the economy –
whose analogy to environmental pollution and global warming was debt
pollution.

But in serving the banks and the financial ownership class, the Fed
painted itself into a corner: What would happen if and when interest
rates finally rose?

In Killing the Host I wrote about what seemed obvious enough. Rising
interest rates cause the prices of bonds already issued to fall –
along with real estate and stock prices. That is what has been
happening under the Fed’s fight against “inflation,” its euphemism for
opposing rising employment and wage levels. Prices are plunging for
bonds, and also for the capitalized value of packaged mortgages and
other securities in which banks hold their assets on their balance
sheet to back their deposits.

The result threatens to push down bank assets below their deposit
liabilities, wiping out their net worth – their stockholder equity.
This is what was threatened in 2008. It is what occurred in a more
extreme way with S&Ls and savings banks in the 1980s, leading to their
demise. These “financial intermediaries” did not create credit as
commercial banks can do, but lent deposits out in the form of
long-term mortgages at fixed interest rates, often for 30 years. But
in the wake of the Volcker spike in interest rates that inaugurated
the 1980s, the overall level of interest rates remained higher than
the interest rates that S&Ls and savings banks were receiving.
Depositors began to withdraw their money to get higher returns
elsewhere, because S&Ls and savings banks could not pay higher their
depositors higher rates out of the revenue coming in from their
mortgages fixed at lower rates. So even without fraud Keating-style,
the mismatch between short-term liabilities and long-term interest
rates ended their business plan.

The S&Ls owed money to depositors short-term, but were locked into
long-term assets at falling prices. Of course, S&L mortgages were much
longer-term than was the case for commercial banks. But the effect of
rising interest rates has the same effect on bank assets that it has
on all financial assets. Just as the QE interest-rate decline aimed to
bolster the banks, its reversal today must have the opposite effect.
And if banks have made bad derivatives trades, they’re in trouble.

Any bank has a problem of keeping its asset valuations higher than its
deposit liabilities. When the Fed raises interest rates sharply enough
to crash bond prices, the banking system’s asset structure weakens.
That is the corner into which the Fed has painted the economy by QE.

The Fed recognizes this inherent problem, of course. That is why it
avoided raising interest rates for so long – until the wage-earning
bottom 99 Percent began to benefit by the recovery in employment. When
wages began to recover, the Fed could not resist fighting the usual
class war against labor. But in doing so, its policy has turned into a
war against the banking system as well.

Silvergate was the first to go, but it was a special case. It had
sought to ride the cryptocurrency wave by serving as a bank for
various currencies. After SBF’s vast fraud was exposed, there was a
run on cryptocurrencies. Investor/gamblers jumped ship. The
crypto-managers had to pay by drawing down the deposits they had at
Silvergate. It went under.

Silvergate’s failure

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

The Unraveling Can Happen In An Instant

If SVB is insolvent, so is everyone else

https://www.sovereignman.com/trends/if-svb-is-insolvent-so-is-everyone-else-146244/
https://www.sovereignman.com/podcast/based-on-a-true-story-144241/

On Sunday afternoon, September 14, 2008, hundreds of employees of the
financial giant Lehman Brothers walked into the bank’s headquarters at
745 Seventh Avenue in New York City to clear out their offices and
desks.

Lehman was hours away from declaring bankruptcy. And its collapse the
next day triggered the worst economic and financial devastation since
the Great Depression.

The S&P 500 fell by roughly 50%. Unemployment soared. And more than
100 other banks failed over the subsequent 12 months. It was a total
disaster.

These bank, it turned out, had been using their depositors’ money to
buy up special mortgage bonds. But these bonds were so risky that they
eventually became known as “toxic securities” or “toxic assets”.

These toxic assets were bundles of risky, no-money-down mortgages
given to sub-prime “NINJAs”, i.e. borrowers with No Income, No Job, no
Assets who had a history of NOT paying their bills.

When the economy was doing well in 2006 and 2007, banks earned record
profits from their toxic assets.

But when economic conditions started to worsen in 2008, those toxic
assets plunged in value… and dozens of banks got wiped out.

Now here we go again.

Fifteen years later… after countless investigations, hearings, “stress
test” rules, and new banking regulations to prevent another financial
meltdown, we have just witnessed two large banks collapse in the
United States of America– Signature Bank, and Silicon Valley Bank
(SVB).

Now, banks do fail from time to time. But these circumstances are
eerily similar to 2008… though the reality is much worse. I’ll
explain:
1) US government bonds are the new “toxic security”

Silicon Valley Bank was no Lehman Brothers. Whereas Lehman bet almost
ALL of its balance sheet on those risky mortgage bonds, SVB actually
had a surprisingly conservative balance sheet.

According to the bank’s annual financial statements from December 31
of last year, SVB had $173 billion in customer deposits, yet “only”
$74 billion in loans.

I know this sounds ridiculous, but banks typically loan out MOST of
their depositors’ money. Wells Fargo, for example, recently reported
$1.38 trillion in deposits. $955 billion of that is loaned out.

That means Wells Fargo has made loans with nearly 70% of its
customer’s money, while SVB had a more conservative “loan-to-deposit
ratio” of roughly 42%.

Point is, SVB did not fail because they were making a bunch of
high-risk NINJA loans. Far from it.

SVB failed because they parked the majority of their depositors’ money
($119.9 billion) in US GOVERNMENT BONDS.

This is the really extraordinary part of this drama.

US government bonds are supposed to be the safest, most ‘risk free’
asset in the world. But that’s totally untrue, because even government
bonds can lose value. And that’s exactly what happened.

Most of SVB’s portfolio was in long-term government bonds, like
10-year Treasury notes. And these have been extremely volatile.

In March 2020, for example, interest rates were so low that the
Treasury Department sold some 10-year Treasury notes at yields as low
as 0.08%.

But interest rates have increased so much since then; last week the
10-year Treasury yield was more than 4%. And this is an enormous
difference.

If you’re not terribly familiar with the bond market, one of the most
important things to understand is that bonds lose value as interest
rates rise. And this is what happened to Silicon Valley Bank.

SVB loaded up on long-term government bonds when interest rates were
much lower; the average weighted yield in their bond portfolio, in
fact, was just 1.78%.

But interest rates have been rising rapidly. The same bonds that SVB
bought 2-3 years ago at 1.78% now yield between 3.5% and 5%… meaning
that SVB was sitting on steep losses.

They didn’t hide this fact.

Their 2022 annual report, published on January 19th of this year,
showed about $15 billion in ‘unrealized losses’ on their government
bonds. (I’ll come back to this.)

By comparison, SVB only had about $16 billion in total capital… so $15
billion in unrealized losses was enough to essentially wipe them out.

Again– these losses didn’t come from some mountain of crazy NINJA
loans. SVB failed because they lost billions from US government bonds…
which are the new toxic securities.
2) If SVB is insolvent, so is everyone else… including the Fed.

This is where the real fun starts. Because if SVB failed due to losses
in its portfolio of government bonds, then pretty much every other
institution is at risk too.

Our old favorite Wells Fargo, for example, recently reported $50
billion in unrealized losses on its bond portfolio. That’s a HUGE
chunk of the bank’s capital, and it doesn’t include potential
derivative losses either.

Anyone who has purchased lo

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

"Barney Frank openly admits that Signature was arbitrarily shuttered
despite no insolvency because regulators wanted to kill off the last
major pro-crypto bank"

https://decrypt.co/123346/signature-bank-shut-down-anti-crypto-barney-frank
https://www.theblock.co/post/219391/barney-frank-regulators-shuttered-signature-bank-to-show-crypto-is-toxic
https://news.bitcoin.com/bank-board-member-and-dodd-frank-co-sponsor-barney-frank-suspects-anti-crypto-message-behind-signature-bank-failure/

Barney Frank, a director at Signature Bank which was shut down by the
government over the weekend has just said that the bank was shut down
to send a message to crypto, and not because they were facing any kind
of insolvency. These are shocking revelations as it appears that the
US government just killed a legal and solvent bank just because they
can, just because didn't approve of pro-crypto stance of the bank. In
the process, wiping out shareholders to zero.

https://www.dfs.ny.gov/reports_and_publications/press_releases/pr20230312
https://dfpi.ca.gov/2023/03/10/california-financial-regulator-takes-possession-of-silicon-valley-bank/

https://www.cnbc.com/2023/03/13/signature-bank-third-biggest-bank-failure-in-us-history.html

https://www.youtube.com/live/Qdl53t7AKBo FUD
https://markets.businessinsider.com/news/stocks/short-seller-who-predicted-ftx-silvergate-capital-collapses-and-shorted-svb-financial-has-new-banking-target-a-worldwide-money-laundering-story-1032160796
https://twitter.com/liron/status/1592039990871339008

These are quotes from Frank, who also drafted the Dodd-Frank Act:

“I think part of what happened was that regulators wanted to send
a very strong anti-crypto message,” said board member and former
congressman Barney Frank.

For his part, Frank, who helped draft the landmark Dodd-Frank Act
after the 2008 financial crisis, said there was “no real objective
reason” that Signature had to be seized.

“I think part of what happened was that regulators wanted to send
a very strong anti-crypto message,” Frank said. “We became the poster
boy because there was no insolvency based on the fundamentals.”


https://www.cnbc.com/2023/03/13/signature-bank-third-biggest-bank-failure-in-us-history.html

This confirms many people's beliefs that the bank was shut down just
because they had a pro-crypto stance, and were facilitating crypto
exchanges and stablecoin liquidity using their Signet network, which
allowed stablecoins like USDC to obtain banking system liquidity
throughout the weekend when other banks were closed. The government's
statement said there were "systemic issues" at Signature Bank, and was
entirely vague.

Compare the vague statement issued by NYDFS on closure of Signature
Bank (found here) versus the detailed order passed by California DFPI
taking over Silicon Valley Bank (found here). In Silicon Valley Bank's
case, California DFPI have specifically found that the bank is
insolvent and passed a fact finding order, whereas in Signature bank,
the NYDFS statement is totally value with no fact finding order.

There was no liquidity issue at Signature bank, but the government
used the window of opportunity that arose over the weekend from
Silicon Valley Bank's failure, to kill off another bank SBNY which was
pro-crypto.

As the saying goes, "Never let any crisis go to waste"

It now appears that the bank was killed just to shut down crypto
access to banking. Shareholders in SBNY have been wiped out to zero as
the FDIC took over the bank. The shares were trading at $70 per share
at close of trading on friday. Not only the shareholders, even
unsecured bond holders of the bank have been wiped out.

606 reasons...
(a) Has violated any law;
(b) Is conducting its business in an unauthorized or unsafe manner;
(c) Is in an unsound or unsafe condition to transact its business;
(d) Cannot with safety and expediency continue business;
(e) Has an impairment of its capital;  or, in the case of a mutual
savings and loan association or credit union, has assets insufficient
to pay its debts and the amount due members upon their shares;
(f) Has suspended payment of its obligations;  or, in the case of a
mutual savings and loan association, has failed for sixty days after a
withdrawal application has been filed with it by any shareholder to
pay such withdrawal application in full;
(g) Has neglected or refused to comply with the terms of a duly issued
order of the superintendent;
(h) Has refused, upon proper demand, to submit its records and affairs
for inspection to an examiner of the department;
(i) Has refused to be examined upon oath regarding its affairs.
(j) Has neglected, refused or failed to take or continue proceedings
for voluntary liquidation in accordance with any of the provisions of
this chapter.

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

"Signature Bank was illegally shutdown by the US Government
as part of its War On Crypto. -- Barney Frank"

CBDC's shilled as panacea.



As Banking Collapses Erode Trust, Bitcoin Fixes Moral Hazard

https://bitcoinmagazine.com/culture/bitcoin-fixes-failures-in-banks

As the underlying issues in our economy are exposed by recent banking
failures, Bitcoin stands as a trustless, alternative money...

Michael Bury nails it... pic.twitter.com/aZPp6hsnzj
— Radar🚨 (@RadarHits) March 13, 2023

As unrealized losses piled up, Silicon Valley Bank (SVB) gradually,
then suddenly became insolvent, followed by the collapse of Signature
Bank and people beginning to wake up to issues pervading our financial
system. Modern day bank runs, though digital, can force banks to sell
reserve assets at a loss, inevitably leading to insolvency.

Banks are failing because they bought Treasuries. Full stop. The
"safest asset in the world" is the riskiest asset in the world.
pic.twitter.com/MdmmsH4bKa
— Balaji (@balajis) March 13, 2023

As Balaji Srinivasan has pointed out, what was once considered the
gold standard for risk-free reserve assets is now on the precipice of
a potential new banking crisis. Is this the end of the U.S. treasury
as we know it?

If nothing else, the events over the weekend — from SVB’s failure to
issues with other financial institutions to alarming intervention by
the government — demonstrate just how fragile the system has become,
underscoring its dependence upon money printing even as it is being
undone by the low-yield, low-interest-rate environment that was caused
by the printing in the first place. The dichotomy is stark, but there
are lessons to be learned.
YOU CAN’T TAPER A PONZI: WHY THE LEGACY BANKING SYSTEM IS RIPE FOR FAILURE

The way the banking system works is, essentially, banks take your
deposits and lend them out at higher interest rates than they pay you.
They often keep reserves in U.S. treasury bonds, among other things,
and everything seems to work until it doesn’t.

Kiss your rate hikes goodbye pic.twitter.com/FbutSa87lR
— The_Real_Fly (@The_Real_Fly) March 12, 2023

With the Federal Reserve’s tightening cycle, raising interest rates
meant decreasing the price of bonds, devaluing banks' staple reserve
asset. When depositors come to redeem their deposits, banks are forced
to sell their assets at a loss, eventually becoming unable to stem the
bleeding.

Regional banks will bear the brunt of this hit, as demonstrated by the
recent collapse of SVB. Federal regulators are desperately trying to
prop up confidence in the system by backing 100% of depositors’ money,
but at what cost?

From a source in close contact w JPM:

“JPMorgan has been working all weekend in commercial customer
service and have opened 300 commercial accounts totalling over
$6.0billion.”
— Lisa Hough (@lisa_hough_) March 12, 2023

Depositors are surely already fleeing to the big boys, which will
result in a more concentrated and fragile system than before. I think
everyone knows deep down that they won’t be able to save every bank
customer. Just how much money printing will the public tolerate in the
name of financial stability?

The SVB crisis isn't bearish for banking

Tomorrow, ~$170B will be returned to depositors

Billions more will flow out of other unhealthy banks

Those depositors will immediately look for new banks to park those funds in

Healthy banks are licking their chops at this opportunity
— Genevieve Roch-Decter, CFA (@GRDecter) March 13, 2023

In terms of equity holders, why would anybody want to hold stock in a
small bank at this point? If banks fail and the Feds choose to make
depositors whole while everybody else suffers, all of the risk is
transferred onto everyone but the depositors, incentivizing stock sell
offs and eating away at struggling banks’ risk-absorbing capital. This
move could force smaller banks into much worse positions than they
were before.
SYSTEMIC TRUST VS. SYSTEMIC TRUSTLESSNESS

The scenario playing out before us is a stark illustration of what
happens when trust starts to break down in a system fundamentally
based on the idea of trusting, rather than verifying. In modern times,
people think they need to hold their money in banks, but they have to
trust the banks to maintain effective risk-management strategies in
order to secure their deposits.

Bitcoin is fundamentally different. You can eliminate reserve
requirements, duration and interest rate risks, counterparty risks and
the like. There is no trust in Bitcoin. There is only code. It is
backed one to one with itself, and as long as you hold your own keys
properly, you don’t need to worry about a bank run.

As companies struggle to make payroll this week, I think this might
just be a spark that lights a fire behind Bitcoin. Trustless money
might just be the thing that helps to stem the tide of catastrophe in
a system where trust appears to be crumbling.

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

>> A fifth bank collapses...
>
> "The Times 03/Jan/2009 Chancellor on brink of second bailout for
> banks.  -- The Genesis Block, by Satoshi Nakamoto"

Crypto rockets up 25% on the news...


Democrats never ever demand to cut spending, taxes, or money printing.


The Bank Crisis Has Democrats Scrambling Behind The Scenes To Find A Scapegoat

Democratic representatives are scrambling in the wake of the
potentially contagious Silicon Valley Bank implosion, looking for a
way to divert attention away from them should the crisis expand.

One avenue for scapegoating the event that has been suggested among
Dems and the media is to blame a 2018 law that eased Dodd-Frank
capital requirements for midsize and small banks.  Republicans led the
effort to pass the law, which President Donald Trump signed, but 33
House Democrats and 17 Senate Democrats also voted for it.

No mention, of course, of the cancerous exposure SVB had to numerous
woke investments through venture capital, including money losing ESG
related projects, climate change-based companies and World Economic
Forum stakeholder capitalism projects.

The Dems have found their narrative, which is an old narrative:  “The
conservatives did it.”

What Democrats do not seem to understand is that the easing of
Dodd-Frank capital requirements was in direct response to the Federal
Reserve's announced plan to tighten liquidity and raise interest rates
through 2018.  With more expensive credit and a shrinking Fed balance
sheet, reducing requirements for bank buffers was one of the few ways
to prevent the stimulus addicted lending sector from plummeting.  The
extra capital also allowed banks to continue lending to companies that
engage in stock buybacks, keeping stock markets afloat.

With a larger capital buffer even more liquidity dries up, revealing
the true economic weakness underneath that Dems have denied for the
past few years.  So, if Biden and the Dems get what they want (more
strict capital requirements for banks), then there will be an even
swifter collapse of markets and the overall economy due to lack of
liquidity.

By the end of 2018, markets began to plunge anyway under the strain of
higher interest rates, which led to the Fed reversing course, and this
seems to be what Democrats are really hoping for.  They have called
for endless liquidity measures and have consistently demanded lower
rates and looser monetary policy.  However, when Donald Trump's
Administration called for rate cuts during his term, Dems attacked.
Once again, when Republicans do it, it's wrong; when they do it, it's
good policy.

Another issue to consider is that each successive program by the Fed
to employ bailouts and QE accelerates the inflation crisis.  While
both sides of the aisle seem to want helicopter money when they are in
power so they can boast about rising stock markets and improved
employment, the Dems are now facing a systemic stagflationary event;
the same event they originally claimed did not exist.  This means that
any pursuit of new QE in the face of a credit crunch would lead to an
immediate spike in inflation once again, crushing the middle class.

Are Democrats willing to accept responsibility for something like
that?  Not a chance.

The Biden Administration has so far taken full credit for the slowdown
of consumer inflation as well as the shrinking deficit, but these
changes are only due to the tightening actions of the central bank
which sets policy independent of the White House.  Democrats can't
have it both ways – They can't take credit for reduced inflation when
the Fed tightens policy against their wishes, and then not take credit
for the consequences of higher inflation when they badger the Fed to
inject more stimulus.

The only recourse for the political left is to somehow lay the blame
on conservatives no matter which way the wind blows, inflation or
deflation.

Emergency congressional hearings have been organized to determine the
cause of the SVB crisis and the course of action needed.  Democrats
including Sen. Sharrod Brown and Rep. Maxine Waters were quick to
applaud the backstop initiated by the Fed and the Treasury Department,
attempting to calm market concerns and reassure investors and
depositors that all is well.  Maxine Waters stated that Republicans
and Democrats needed to “work together to protect the safety of the
financial system", which is likely a thinly veiled assertion that
Republicans must support raising the debt ceiling and commit to even
more spending.

Biden took a slightly different tone, vowing to hold the people who
caused the mess responsible, specifically referring to Republicans.
Of course, to legitimately hold the true culprits responsible would
require that Biden punish himself – As it was the Fed along with the
Obama/Biden Administration that launched the ongoing stimulus bonanza
in 2008/2009.  Obama and Biden doubled the national debt from $10
trillion to $20 trillion in the span of a mere eight years.  The
normalization o

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

> A fifth bank collapses...

"The Times 03/Jan/2009 Chancellor on brink of second bailout for
banks.  -- The Genesis Block, by Satoshi Nakamoto"



UK Tech Firms Face "Serious Risk" From Silicon Valley Bank Collapse,
Chancellor Warns

https://www.theepochtimes.com/uk-tech-firms-face-serious-risk-from-silicon-valley-bank-collapse-chancellor-warns_5117011.html

There is a “serious risk” to the UK’s technology and life sciences
sectors from the collapse of the UK branch of the California-based
Silicon Valley Bank, Chancellor Jeremy Hunt has warned.

U.S. federal banking regulators on March 10 assumed control of Silicon
Valley Bank (SVB), a top lender for American tech and life sciences
firms and start-ups.

The collapse of SVB, the 16th biggest bank in the United States, is
the largest bank failure since Washington Mutual in 2008, during the
last major bank crisis.

The Bank of England (BoE), the UK’s central bank, announced on March
11 that Silicon Valley Bank UK (SVBUK) is also set to enter
insolvency.

The company will stop making payments and accepting deposits, said the BoE.

Talking to Sky News on Sunday, Hunt said the collapse poses “no
systemic risk” to Britain’s financial system.

But he said, “There is a serious risk to our technology and life
sciences sectors, many of whom bank with this bank.”

Chancellor of the Exchequer Jeremy Hunt (right), with Energy Secretary
Grant Shapps, speaking at a meeting of senior leaders from across UK
green industries at Queen Elizabeth Olympic Park, east London, on Feb.
21, 2023. (Stefan Rousseau/PA Media)
‘Significant Impact’

In a statement on Sunday morning, the Treasury said it was treating
the issue “as a high priority.”

“The government and the Bank understand the level of concern that
this raises for customers of Silicon Valley Bank UK, and especially
how it may impact on cash flow positions in the short term,” the
statement said.

It added that the government recognises SVBUK’s failure “could have a
significant impact on the liquidity of the tech ecosystem.”

While Silicon Valley Bank has a limited presence in the UK and does
not perform functions critical to the financial system, the Coalition
for a Digital Economy (Coadec) warned that its collapse could have a
significant impact on tech start-ups.

Coadec executive director Dom Hallas said on Saturday:

“We know that there are a large number of start-ups and investors
in the ecosystem who have significant exposure to SVBUK and will be
very concerned.

“We have been engaging with the UK government, including Treasury
and Number 10, about the potential impact and I know that work has
been going on overnight on policy options.”

‘Everything We Can’

The chancellor said the government and the Bank of England will do
“everything we can” to protect the firms that stand to lose millions
from the collapse of SVBUK.

“The prime minister and I and the governor of the Bank of England
are absolutely determined to do everything we can to protect the
future of these very, very important companies,” he told Sky News.

“We will come forward with a solution that helps those very, very
important companies with things like payroll and their cash flow
requirements, but we also want to put in place a longer-term solution
so that their futures are secure.”

Asked if that could mean stepping in with taxpayers’ money, he said he
did not “want to go into what the solution is.”

Hunt also declined to say whether the government will guarantee all
the deposits of the companies in the collapsed bank.

He told the BBC:

“We want to find a way that minimises or, if we possibly can,
avoids all losses to those incredibly promising companies. What we
will do is bring forward very quickly a plan to make sure that they
can meet their operational cash flow requirements.”

Labour Calls for ‘Specific Plans’

The main opposition Labour Party has accused the Conservative
government of lacking “urgency” in its handling of the collapse of
SVBUK.

Labour’s shadow chancellor Rachel Reeves urged the government to offer
more than “warm words” to the affected companies.

She told Sky News on Sunday:

“I am slightly concerned about the urgency that you heard from the
chancellor there, because when markets open tomorrow morning, a lot of
businesses in the UK are not going to be clear about how they can pay
the wages of their staff and whether their deposits with Silicon
Valley Bank and their financing arrangements are still in place.

“So, I would urge the government to do more than offer warm words,
but come forward with specific plans.”

Talking to the BBC, Reeves said the British start-up industry must not
“pay the price” for the failure of the bank.

She said: “We need tomorrow morning to hear from the government how
they are going to protect them.”

“We cannot let the British start-up community pay the price for this
bank failure, because it will be the British economy then that
ultimately pays the price,” she added.

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

A fifth bank collapses...

11 hours remain until the USA implodes...

Crypto has surged up over 16% since Friday...


Fed Panics: Signature Bank Closed By Regulators; Fed, TSY, FDIC
Announce Another Banking System Bailout

https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm
https://home.treasury.gov/news/press-releases/jy1337

6:20pm ET Update: Panic is finally here.

On Friday, we said that the Fed will have to make an announcement
before the Monday open, and we didn't have to wait that long: in fact,
the Fed waited just 15 minutes after futures opened for trading to
announce the new bailout, alongside even more shocking news: the
Treasury announced that New York State regulators are shuttering
Signature Bank - a major New York bank - adding that all depositors
both at Signature Bank, and also the now insolvent Silicon Valley
Bank, will have access to their money on Monday.

And as we process the shock of yet another small bank failure (which
makes JPMorgan even bigger), the Fed just issued a statement saying
that "to support American businesses and households, the Federal
Reserve Board on Sunday announced it will make available additional
funding to eligible depository institutions  to help assure banks have
the ability to meet the needs of all their depositors.  This action
will bolster the capacity of the banking system to safeguard deposits
and ensure the ongoing provision of money and credit to the economy."

The Fed also said that it is prepared to address any liquidity
pressures that may arise, which in turn has just unveiled the first
bailout acronym of the new crisis: the Bank Term Funding Program, or
BTFP. Some more details:

The financing will be made available through the creation of a new
Bank Term Funding Program (BTFP), offering loans of up to one year in
length to banks, savings associations, credit unions, and other
eligible depository institutions pledging U.S. Treasuries, agency debt
and mortgage-backed securities, and other qualifying assets as
collateral.  These assets will be valued at par.  The BTFP will be an
additional source of liquidity against high-quality securities,
eliminating an institution’s need to quickly sell those securities in
times of stress.

The Fed explains that the Department of the Treasury will make
available "up to $25 billion from the Exchange Stabilization Fund as a
backstop for the BTFP." And while the Federal Reserve - which was
completely clueless about this banking crisis until Thursday  - does
not anticipate that it will be necessary to draw on these backstop
funds, we anticipate that the final number of needed backstop
liquidity be somewhere north of $2 trillion.

What is more notable is that the BTFP - or Buy The Fucking Pivot -
facility, will pledge collateral at par, not at market value, thus
giving banks credit for all those hundreds of billions in unrealized
net losses, and allowing banks to "unlock liquidity" based on losses
which the Fed and TSY now backstop!

More from the Fed statement:

After receiving a recommendation from the boards of the Federal
Deposit Insurance Corporation (FDIC) and the Federal Reserve, Treasury
Secretary Yellen, after consultation with the President, approved
actions to enable the FDIC to complete its resolution of Silicon
Valley Bank in a manner that fully protects all depositors, both
insured and uninsured.  These actions will reduce stress across the
financial system, support financial stability and minimize any impact
on businesses, households, taxpayers, and the broader economy.

The Board is carefully monitoring developments in financial
markets.  The capital and liquidity positions of the U.S. banking
system are strong and the U.S. financial system is resilient.

Depository institutions may obtain liquidity against a wide range
of collateral through the discount window, which remains open and
available.  In addition, the discount window will apply the same
margins used for the securities eligible for the BTFP, further
increasing lendable value at the window.

The Board is closely monitoring conditions across the financial
system and is prepared to use its full range of tools to support
households and businesses, and will take additional steps as
appropriate.

But wait, there's more: concurrently with the Fed's statement, the
Treasury also issued a joint statement with the Fed and FDIC in which
Powell, Yellen and Gruenberg all said that they are "taking decisive
actions to protect the U.S. economy by strengthening public confidence
in our banking system. This step will ensure that the U.S. banking
system continues to perform its vital roles of protecting deposits and
providing access to credit to households and businesses in a manner
that promotes strong and sustainable economic growth."

Additionally, the trio announced that all depositors at Silicon Valley
Bank will be bailed out, as will the depositors of New York's
Signature Bank, which has just failed as well, a

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

> Not your keys, Not your Money...

Silicon Valley Bank Followed Exactly What Regulation Recommended

Daniel Lacalle

The second largest collapse of a bank in recent history could have
been prevented. Now, the impact is too large, and the contagion risk
is difficult to measure.

The demise of the Silicon Valley Bank (SVB) is a classic bank run
driven by a liquidity event, but the important lesson for everyone is
that the enormity of the unrealized losses and financial hole in the
bank’s accounts would have not existed if it were not for ultra-loose
monetary policy.

Let us explain why.

As of December 31, 2022, Silicon Valley Bank had approximately $209.0
billion in total assets and about $175.4 billion in total deposits,
according to their public accounts. Their top shareholders are
Vanguard Group (11.3%), BlackRock (8.1%), StateStreet (5.2%) and the
Swedish pension fund Alecta (4.5%).

The incredible growth and success of SVB could not have happened
without negative rates, ultra-loose monetary policy, and the tech
bubble that burst in 2022. Furthermore, the bank’s liquidity event
could not have happened without the regulatory and monetary policy
incentives to accumulate sovereign debt and mortgage-backed
securities.

The asset base of Silicon SVB read like the clearest example of the
old mantra: “Don’t fight the Fed”.

SVB made one big mistake: Follow exactly the incentives created by
loose monetary policy and regulation.

What happened in 2021? Massive success that, unfortunately, was also
the first step to its demise. The bank’s deposits nearly doubled with
the tech boom. Everyone wanted a piece of the unstoppable new tech
paradigm. SVB’s assets also rose and almost doubled.

The bank’s assets rose in value. More than 40% were long-dated
Treasuries and mortgage-backed securities (MBS). The rest were
seemingly world-conquering new tech and venture capital investments.

Most of those “low risk” bonds and securities were held to maturity.
They were following the mainstream rulebook: Low-risk assets to
balance the risk in venture capital investments.

When the Federal Reserve raised interest rates, they must have been shocked.

The entire asset base of SVB was one single bet: Low rates and
quantitative easing for longer.

Tech valuations soared in the period of loose monetary policy and the
best way to hedge that risk was with Treasuries and MBS. Why would
they bet on anything else? This is what the Fed was buying in billions
every month, these were the lowest risk assets according to all
regulations and, according to the Fed and all mainstream economists,
inflation was purely “transitory”, a base-effect anecdote. What could
go wrong?

Inflation was not transitory and easy money was not endless.

Rate hikes happened. And they caught the bank suffering massive losses
everywhere. Goodbye bonds and MBS price. Goodbye tech “new paradigm”
valuations. And hello panic. A good old bank run, despite the strong
recovery of the SVB shares in January. Mark-to-market unrealized
losses of $15 billion were almost 100% of the market capitalization of
the bank. Wipe out.

As the famous episode of South Park said: “…And it’s gone”. SVB
showed how quickly the capital of a bank can dissolve in front of our
eyes.

The Federal Deposit Insurance Corporation (FDIC) will step in, but it
is not enough because only 3% of the deposits of SVB were less than
$250,000. According to Time Magazine, more than 85% of Silicon
Valley’s Bank’s deposits were not insured.

It is worse. One third of U.S. deposits are in small banks and around
half are uninsured, according to Bloomberg.

Depositors at SVB will likely lose most of their money and this will
also create significant uncertainty in other entities.

SVB was the poster boy of banking management by the book.

They followed a conservative policy of adding the safest assets
-long-dated Treasury bills- as deposits soared.

SVB did exactly what those that blamed the 2008 crisis on
“de-regulation” recommended.

SVB was a boring and conservative bank that invested the rising
deposits in sovereign bonds and mortgage-backed securities and
believed that inflation was transitory as everyone except us, the
crazy minority, repeated.

SVB did nothing but follow regulation and monetary policy incentives
and Keynesian economists’ recommendations point by point.

SVB was the epitome of mainstream economic thinking. And mainstream
killed the tech star.

Many will now blame greed, capitalism and lack of regulation but guess what?

More regulation would have done nothing because regulation and policy
incentivize adding these “low risk” assets. Furthermore, regulation
and monetary policy are directly responsible for the tech bubble. The
increasingly elevated valuations of non-profitable tech and the
allegedly unstoppable flow of capital to fund innovation and green
investments would never have happened without negative real rates, and
massive liquidity injections. In the case of SVB, its phenomenal
growt

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

> Not your keys, Not your Money...

Crypto +14% and rising...

Home Depot Founder Tells Americans To "Wake Up" After Silicon Valley
Bank Collapse

https://www.theepochtimes.com/home-depot-founder-asks-americans-to-wake-up-after-silicon-valley-bank-collapse_5116965.html
https://www.foxnews.com/media/home-depot-co-founder-torches-woke-silicon-valley-bank-collapse-warns-recession-here-already
https://www.theepochtimes.com/silicon-valley-bank-fails-fdic-steps-in-to-protect-depositors-from-losing-all-their-money_5114376.html
https://www.svb.com/news/company-news/silicon-valley-bank-commits-to-$5-billion-in-sustainable-finance-and-carbon-neutral-operations-to-support-a-healthier-planet
https://twitter.com/NikkiHaley/status/1634747902319906816
https://twitter.com/VivekGRamaswamy/status/1634672334656225281

Home Depot co-founder Bernie Marcus asked Americans to “wake up” to
the reality that the U.S. economy is in “tough times,” following the
collapse of Silicon Valley Bank (SVB).

“I can’t wait for [President Joe] Biden to get on the speech again
and talk about how great the economy is and how it’s moving forward
and getting stronger by the day. And this is an indication that
whatever he says is not true,” Marcus told Fox News on March 11.

Marcus added,

“And maybe the American people will finally wake up and understand
that we’re living in very tough times, that, in fact, that a recession
may have already started. Who knows? But it doesn’t look good.”

Silicon Valley Bank, the nation’s 16th largest bank with about $209
billion in total assets, collapsed on March 10, after depositors
rushed to withdraw money over concerns of the bank’s solvency. The
Federal Deposit Insurance Corporation (FDIC) has now assumed control
of the bank.

The collapse of the California bank was the second biggest bank
failure in U.S. history since Washington Mutual during the 2008
financial crisis.

On Saturday, a White House statement said Biden has spoken to
California Gov. Gavin Newsom on the bank’s failure. Newsom also issued
a statement saying he had been in touch with “the highest levels of
leadership at the White House and Treasury.”
‘Woke’

Marcus attributed the bank’s failure to its decisions to adopt “woke” policies.

“I feel bad for all of these people that lost all their money in
this woke bank. You know, it was more distressing to hear that the
bank officials sold off their stock before this happened. It’s
depressing to me,” Marcus said.

“Who knows whether the Justice Department would go after them?
They’re a woke company, so I guess not. And they’ll probably get away
with it.”

According to a filing with the Securities and Exchange Commission,
Greg Becker, CEO of Silicon Valley Bank, sold 12,451 shares of the
bank’s parent company SVB Financial Group on Feb. 27.

SVB announced in January 2022 that it was committed to providing at
least $5 billion in loans, investments, and other financings by 2027,
to support companies “that are working to decarbonize the energy and
infrastructure industries and hasten the transition to a sustainable,
net zero emissions economy.”

Marcus blamed the Biden administration for pushing banks and companies
into being “more concerned about global warming” than shareholder
returns.

“These banks are badly run because everybody is focused on
diversity and all of the woke issues and not concentrating on the one
thing they should, which is shareholder returns,” he said.

“Instead of protecting the shareholders and their employees, they
are more concerned about the social policies. And I think it’s
probably a badly run bank.

“They’ve been there for a lot of years. It’s pathetic that so many
people lost money that won’t get it back.”

Responses

Several California lawmakers have shared their concerns about the
bank’s failure on Twitter.

“If regulators do not act quickly, the Silicon Valley Bank
collapse will have widespread ramifications for small businesses,
start-ups, and nonprofits trying to make payroll–as well as on our
broader economy,” Sen. Alex Padilla (D-Calif.) wrote.

Padilla added that he had been in contact with officials from the
administration and the Treasury Department to ensure a quick
resolution.

“Deeply troubled by SVB’s collapse & uncertainty it’s caused. I’m
hearing from workers in my district concerned when they’ll be paid &
if they’ll be laid off,” Rep. Josh Harder (D-Calif.) wrote.
“Regulators must give urgent clarity to depositors to prevent panic.
Vigorous action is needed to protect account holders.”

Republican presidential hopefuls—Nikki Haley and Vivek Ramaswamy—both
said on Twitter that a bailout is not the resolution.

“Taxpayers should absolutely not bail out Silicon Valley Bank,” Haley wrote.

“Private investors can purchase the bank and its assets. It is not
the responsibility of the American taxpayer to step in.”

The former South Carolina governor added, “The era of big government
and corporate bailouts must end.”

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

> Not your keys, Not your Money...

The Collapse Of SVB Portends Real Dangers

Authored by Jeffrey Tucker via The Epoch Times,

https://www.theepochtimes.com/the-collapse-of-svb-portends-real-dangers_5115178.html

Thus far in this 3-year fiasco of mismanagement and corruption, we’ve
avoided a financial crisis. That’s for specific reasons. We just had
not traveled there in the trajectory of the inevitable. Are we there
yet? Maybe. In any case, the speed of change is accelerating. All that
awaits is to observe the extent of the contagion.

The failure of the Silicon Valley Bank (SVB), $212 billion in assets
until only recently, is a huge mess and a possible foreshadowing. Its
fixed-rate bond holdings declined rapidly in market valuation due to
changed market conditions. Its portfolio crashed further due to a
depositor run. And it all happened in less than a few days.

It’s all an extension of Fed policy to curb inflation, reversing a
13-year zero-rate policy. This of course pushed up rates in the middle
and right side of the yield curve, devaluing existing bond holdings
locked into older rate patterns. Investors noticed and then depositors
too. The high-flying institution that specialized in providing
liquidity in industries that have lost their luster suddenly found
itself very vulnerable.

In addition, the bank was exposed with a portfolio of collateralized
mortgage obligations and mortgage-backed securities. But with rates
rising, those are coming under stress too as high leverage in housing
and real estate become untenable amidst falling valuations. Borrowers
are finding themselves under water and that in turn adds to stress on
lenders.

And where did SVB, and the entire banking industry, get the funds to
bulk up their portfolios with such debt holdings? You guessed it:
stimulus payments. Billions flooded in and it had to be parked
somewhere making some return. At the time it seemed like a good deal,
until Fed policy changed.

A house of cards comes to mind. But perhaps a better metaphor is a
game of billiards in which every move introduces a cascade of new
issues. Lockdowns prompted immense government spending which produced
debt that was quickly monetized and eventually caused inflation,
prompting the Fed to reverse course with the largest/fastest rate
increases in history.

This destabilized (or restabilized) production structures away from
the right side of the yield curve toward the left, shifting capital in
search of return to the consumer-goods sector. Labor has begun to
follow, thus creating a surplus of resources in information tech and a
shortage in retails.

It was always naïve to think that this shift would take place without
touching the banking institutions that shoveled leverage in the
direction of industries that thrived during lockdowns but are cutting
back massively now.

These banks are exposed in speculative ventures from which capital is
fleeing. Their asset portfolios were tied, as usual, to a continuation
of the status quo that stopped continuing, so investors and depositors
are fleeing to safety.

Could the Fed have anticipated this? Probably. But what choice did it
have? Again, this entire mess traces first to lockdowns and second to
Ben Bernanke’s preposterous policies as Fed Chair in 2008. He imagined
that he would fix a financial crisis by abolishing a natural force
like interest rates on bonds. Then he pulled a fancy trick of keeping
his “quantitative easing” off the streets by having the Fed pay more
for deposits than the same money could earn in markets.

What was the problem? The problem was that capital is never still. It
is always on the hunt for return. It found it in Big Tech and internet
media, bolstered by seemingly infinite resources for advertising and
hiring. This further caused an absolute gutting of normal rates of
saving simply because there was no money in it. This situation
persisted for a good 13 years.

Jerome Powell took over the Fed with the determination to put an end
to the nonsense. He hoped for a soft landing. But then came the
pandemic lockdowns. He was called upon to provide funding for the
idiocy of a panicked Congress that spent many trillions as fast as
possible, which only perpetuated lockdowns.

Everything seemed fine for a while, as it always does, but by January
2021, the bill came due in the form of roaring price inflation. The
Fed had to reverse course dramatically. Starting at zero, it had to
get federal funds rates to equal or exceed price increases (the
terminal rate). It is not there yet so it has no choice but to barrel
ahead.

The rate increases of course drew capital out of the industries that
thrived over the lockdown period and back to retail and consumer
goods. But meanwhile, the yield curve responded, as it must. From 30
days to 30 years, every bond offering was repriced, causing
institutions holding old bonds to look like chumps. This is where SVB
found itself, with a suddenly declining market valuation.

The coup de grâce was d

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

> Not your keys, Not your Money...

Yellen Says Government Will Help SVB Depositors But "No Bailout" As
Fed, FDIC "Hope" Talk Of Special Vehicle Prevents More Bank Runs

https://www.bloomberg.com/news/articles/2023-03-12/us-discusses-fund-to-backstop-deposits-if-more-banks-fail

With just hours left until futures open for trading late on Sunday
afternoon, the situation remains extremely fluid and for now it
appears that regulators, central bankers and treasury officials (we
won't mention the White House where the most competent financial
advisor is Hunter Biden) still don't have a clear idea of how they
will coordinate or respond.

Take Janet Yellen, who said on Sunday morning that the US government
was working closely with banking regulators to help depositors at
Silicon Valley Bank but dismissed the idea of a bailout.

Speaking with CBS on Sunday, the treasury secretary sought to assure
US customers of the failed tech lender that policies were being
discussed to stem the fallout from the sudden collapse this week. The
Federal Deposit Insurance Corporate (FDIC) took control of the bank on
Friday morning.

“Let me be clear that during the financial crisis, there were
investors and owners of systemic large banks that were bailed out . .
. and the reforms that have been put in place means we are not going
to do that again,” Yellen said (oh but you will, you just don't know
it yet).

“But we are concerned about depositors, and we’re focused on trying to
meet their needs.”

It wasn't clear which depositors she meant: as we first pointed out on
Friday, out of SIVB’s $173 billion of customer deposits at the end of
2022, $152 billion were uninsured (i.e., over the $250,000 FDIC
insurance threshold) and only $4.8 billion were fully insured. As we
also noted last week, a further look at SIVB funding (pie charts)
shows unusually high reliance on corporate/VC funding; only the small
red private bank slice looks like traditional retail deposits to us.

As a result, as JPM's Michael Cembalest says "It’s fair to ask about
the underwriting discipline of VC firms that put most of their
liquidity in a single bank with this kind of risk profile. At the end
of 2022, SIVB only offered 0.60% more on deposits than its peers as
compensation for the risks illustrated below; in 2021 this premium was
0.04%".

Meanwhile, late last night, Bloomberg reported that the FDIC and the
Fed are "weighing creating a fund that would allow regulators to
backstop more deposits at banks that run into trouble following
Silicon Valley Bank’s collapse."

According to the report which cites people familiar with the matter,
"regulators discussed the new special vehicle in conversations with
banking executives." And here the punchline:

The hope is that setting up such a vehicle would reassure
depositors and help contain any panic, said the people. They asked not
to be identified because the talks weren’t public.

Well, needless to say, any time one mentions "hope" as a wise
macroprudential policy, alarms go off, because the entire banking
system suddenly becomes reduced to a game of chicken as follows:
Fed/regulators won't backstop deposits today and won't admit a bank
crisis is emerging, but if a bank crisis emerges and there is a flight
of deposits on Monday morning, they will move.

But then it will be far too late as once a bank run has started it is
virtually impossible to stop it under controlled circumstances and is
why the number one prerogative for regulators is to avoid just this
kind of outcome, which is catastrophic for a fractional reserve system
that is entirely based on confidence, and where available "demand
money" is merely a fraction of the $18 trillion in deposits, far more
than the $2.2 trillion in circulating currency.

Furthermore, a quick look at historical unsecured depositor impairment
numbers show that losses imposed on uninsured depositors range between
6% and 65%: huge numbers in today's context even assuming that banks
are mostly solvent (which they likely won't be once the commercial
real estate crisis hurricane hits).

Meanwhile, as Jason Calacanis writes, this is just the beginning.

ON MONDAY 100,000 AMERICANS WILL BE LINED UP AT THEIR REGIONAL
BANK DEMANDING THEIR MONEY — MOST WILL NOT GET IT

THIS WENT FROM SILICON VALLEY INSIDERS ON THURSDAY TO THE MIDDLE
CLASS ON SATURDAY — MAIN STREET FINDS OUT MONDAY
— @jason (@Jason) March 12, 2023

And while he may be conflicted - he certainly has some material losses
as a result of the SVB failure - one look at what is already taking
place at some smaller, vulnerable banks such as this First Republic
Branch in Brentwood should be sufficient to see what comes tomorrow if
the Fed makes the wrong decision today.

I’ve never seen a bank run in Brentwood Los Angeles in over 40
years — this is at first republic bank branch. People standing in rain
pic.twitter.com/k31PqqpyO3
— pjb.eth (@Dr_PhillipB) March 11, 2023

The flipside to all this is that the longer t

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

> Not your keys, Not your Money...

Crypto rockets up another 3% to +13%, Gold and Cmd 1.2%, Yields -5%...

SVB Latest Developments Live Blog: Fed Weighs "Easing Access" To
Discount Window To Avoid Bank Panic

https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/
https://www.reuters.com/business/finance/regulators-urged-find-silicon-valley-bank-buyer-industry-frets-about-fallout-2023-03-12/
https://twitter.com/CGasparino/status/1634960465607688200

As the countdown to the reopening of futures trading gets louder by
the second amid episodic observations of bank runs around the US, news
flow is starting to accelerate fast so this will be a placeholder post
with updates until we get major news.

4:30pm ET Update:  It's getting to the point where every new
"proposal" or "idea" being thrown about is worse than the previous one
(or maybe this is just how the clueless LGBTQ equity-focused Fed is
doing trial balloons on a Sunday afternoon. Shortly after the WaPo
reported that the Fed is "seriously considering safeguarding all
uninsured deposits at Silicon Valley Bank", BBG is out with a report
that the Federal Reserve is also "considering easing the terms of
banks’ access to its discount window, giving firms a way to turn
assets that have lost value into cash without the kind of losses that
toppled SVB Financial Group."

Such a move would increase the ability of banks to keep up with
demands from depositors to withdraw, without having to book losses by
selling bonds and other assets that have deteriorated in value amid
interest-rate increases — the dynamic that caused SVB to collapse on
Friday.

The report goes on to note that as many had expected, some banks began
drawing on the discount window Friday, seeking to shore up liquidity
after authorities seized SVB’s Silicon Valley Bank, which is precisely
why it is bizarre that this is even news: after all, the Discount
Window has always been opened, and the fact that banks hate to use it
has nothing to do with "ease of access" and all to do with the stigma
of being associated with the discount window. Just recall how banks
that were revealed to have used the discount window around Lehman's
failure saw accelerating bank runs.

Or maybe the Fed's thinking goes that while it would be too late to
save SIVB, other banks would somehow boost confidence of their
depositors by yelling from the rooftops: "Hey, look at us, we are well
capitalized: we just borrowed $X billion from the Fed's Discount
Window."

Needless to say, the mere rumor that regional bank XYZ has been forced
to access this "last ditch" funding facility will result in all its
depositors fleeing, which is why we once again ask: after "fixing"
Ukraine's Burisma, is that polymath genius Hunter Biden now in charge
of US bank bailout policy?

"Hey, let's stuff all the regional banks into the stigmatizing
facility that accelerated the global financial crisis" - Hunter Biden
https://t.co/HM2PBiztDG
— zerohedge (@zerohedge) March 12, 2023

3:00pm ET Update: In a reversal of what Janet Yellen said just hours
ago, WaPo reports that federal authorities are "seriously considering
safeguarding all uninsured deposits at Silicon Valley Bank" - and by
extension any other bank on the verge of failure - and are weighing an
extraordinary intervention to prevent what they fear would be a panic
in the U.S. financial system. Translation: bailout of all depositors,
not just those guaranteed by the the FDIC (<$250K).

Officials at the Treasury Department, Federal Reserve, and Federal
Deposit Insurance Corporation discussed the idea this weekend, the
people said, with only hours to go before financial markets opened in
Asia. White House officials have also studied the idea, per two
separate people familiar with those discussions. The plan would be
among the potential policy responses if the government is unable to
find a buyer for the failed bank.

While selling SVB to a healthy institution remains the preferred
solution - as most bank failures are resolved that way and enable
depositors to avoid losing any money - there have been several reports
that no big bank has stepped up as of yet, leaving the government/Fed
as the only option.

As reported earlier, the FDIC began an auction process for SVB on
Saturday and hoped to identify a winning bidder Sunday afternoon, with
final bids due at 2 p.m. ET.

Some more from the WaPo report:

Although the FDIC insures bank deposits up to $250,000, a
provision in federal banking law may give them the authority to
protect the uninsured deposits as well if they conclude that failing
to do so would pose a systemic risk to the broader financial system,
the people said. In that event, uninsured deposits could be
backstopped by an insurance fund, paid into regularly by U.S. banks.

Before that happens, the systemic risk verdict must be endorsed by
a two-thirds vote of the Fed's Board of Governors and the FDIC board
along with Treasury Secretary Jane

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

> Not your keys, Not your Money...

US small, regional, internet banks down ~20-30% / 52wkhi
US large banks and financials down ~15-20% / 52wkhi

"This Should Scare The Hell Out Of Bankers & Regulators Worldwide"

https://www.ft.com/content/b556badb-8e98-42fa-b88e-6e7e0ca758b8
https://twitter.com/biancoresearch/status/1634885127179325440
https://twitter.com/biancoresearch/status/1634329593124618240
https://twitter.com/biancoresearch/status/1634329594328391680

>From "everyday joes" to the corporate CFOs, men, women, and others,
are frantically battling a prisoner's dilemma about their banking
relationship this weekend: "I’m fine if they don’t draw their money,
and they’re fine if I don’t draw mine..."

But, given the lines outside banks and less than reassuring sentiment
from Washington, we suspect it is too late and the that dilemma is
over - now it's every man, woman, and child for themselves. As The FT
report on one CFOs decision-tree:

“I got a text from another friend - he was definitely moving his
money to JPMorgan. It was happening,” the finance chief said.

“The social contract that we might have collectively had was too
fragile. I called our CEO and we wired 97 per cent of our deposits to
HSBC by midday on Thursday.”

And as explained below, the new normal 'bank run' is instant, huge,
and devastating.

Given that there are many 'bad' (read: biased and/or uninformed) takes
on the situation at SVB, Bianco Research's founder and President, Jim
Bianco, tried to clarify in a brief Twitter thread:

This is not a solvency crisis like 2008.

Bad loans or poor investments were not made. Money was not lost. So,
everyone is going to get their money back. (And please no takes about
no interest rate hedging. Asset/liability mismatches are how banking
works.)

[We agree broadly but do worry, as we detailed on Thursday, about the
CRE/office exposure overhang on small banks and how higher rates will
actually translate to actual loan losses, not just HTM "temporary"
losses.]

Instead this is an old fashion 1930s liquidity crisis.

Too many depositors demanded cash at once (as in right now) and SVB
(and SI) could not convert loans and securities (and crypto) to cash
that quickly. So, everyone is getting their money back from SVB (and
SI), just not at 8AM Monday. And, yes this is a big problem as this is
working capital for a lot of companies. They have payrolls to meet and
vendors to pay next week. And if they don’t pay bills and employees,
they in turn don’t pay their bills and this can quickly cascade into a
major economic problem.

The important question is why so many demanded their money back at once.

And I’m not referring to the last two days. I’m asking about the
days/weeks leading up to this last two days forcing SVB to sell
securities and realize a $1.8B loss, necessitating a capital raise.
Why were depositors withdrawing in big enough amounts before
Thursday/Friday?

First, welcome to the world of mobile banking.

Gone are the frictions of standing in line with tellers instructed to
count money slowly. (Media images of lines Friday were largely
gawkers)

Question: How did $42 billion get withdrawn Friday alone without
thousands in line?

Answer: your phone!

This is not the Bailey Savings and Loan anymore.

This should scare the hell of bankers and regulators worldwide.

The entire $17 trillion deposit base is now on a hair trigger
expecting instant liquidity.

Add in social media and millions get a message, like Peter Thiel
telling Founders companies to pull out, or Senator Warren gloating
that SI went under, and pick up their phone open a Chase account and
Venmo-ed their life savings into it in 10 minutes.

[Once SI died, Warren's dancing on its grave started the dominos falling...]

Instant liquidity (not solvency) crisis with everyone still in bed.

Banking will never be the same.

The second, and I did a long thread on this on Friday... banks are
over-reserved, after 14 years of QE, and are still paying 0.50% on
accounts when T-bills are yielding 5.00%. They don’t need to compete
for deposits.

2/14

Over the past year, banks kept rates on checking/saving accounts
extremely low compared to MM funds. The avg yield on a MM (blue)
reached as high as 4.43% recently, while bank rates (orange) remained
at just 0.48%. The gap was almost 4% (red). pic.twitter.com/96PwaEpsrx
— Jim Bianco biancoresearch.eth (@biancoresearch) March 10, 2023

Initially as rates passed 2%, 3% and 4%, the public did not notice. So
bankers thought deposits were well anchored at their bank and not
moving regardless of the interest rate paid.

But at 5% the public finally noticed, and millions reached for the
phone at once and transferred to a money market account or Treasury
direct to buy T-bills. Banks were squeezed to convert loans and
securities to cash instantly so depositors could leave for better
rates.

Add in the bleed out from tech firms struggling, and Senator Warrens
tweeting with glee about SI going

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup

> Not your keys, Not your Money...

When, just like Biden Democrat appointees 1000's over the US nation,
your Democrat Banksters are Preoccupied with Gay Tranny Sex, and
other left-woke-socialist-politicial ideologies... quit them, hard, and run
to the safe sane and sound money of Crypto and Gold...
History proves such ideologies collapse into ruin time and again
throughout world...


Fatal Distraction? Senior SVB Risk Manager Oversaw Woke LGBT Programs

https://www.dailymail.co.uk/news/article-11848705/Woke-head-risk-assessment-Silicon-Valley-Bank-accused-prioritizing-diversity-issues.html
https://www.svb.com/globalassets/library/uploadedfiles/dei-at-svb-january-2022.pdf
https://www.svb.com/globalassets/library/uploadedfiles/diversity-equity-and-inclusion-at-svb_august-2022.pdf
https://nypost.com/2023/03/11/silicon-valley-bank-pushed-woke-programs-ahead-of-collapse/
https://www.foxnews.com/media/home-depot-co-founder-torches-woke-silicon-valley-bank-collapse-warns-recession-here-already

While Silicon Valley Bank careened toward its spectacular collapse,
the bank's head of risk management for Europe, Africa and the Middle
East devoted a chunk of her time to various LGBTQ+ programs.

Meanwhile, SVB went without a chief risk officer (CRO) from April 2022
to January 2023, the Daily Mail reports, as the bank apparently had
little urgency to replace Laura Izurieta before finally tapping Kim
Olson earlier this year.

On the other hand, a few months before that long CRO vacancy began,
SVB boasted, "We have a Chief Diversity, Equity and Inclusion Officer,
an executive-led DEI Steering Committee and Employee Resource Groups
with executive sponsors focused on these objectives."
An excerpt from a "Diversity, Equity and Inclusion" brochure SVB
published 14 months before it imploded

As SVB's CRO office stood vacant in Santa Clara, Jay Ersapah -- a
self-described "queer person of color from a working-class background"
-- was splitting her time between risk management and an assortment of
woke programs, as she co-chaired SVB's "European LGBTQIA+ Employee
Resource Group."

For example, at the same time she was responsible for managing risks
associated with SVB's European, African and Middle Eastern portfolios,
Ersapah oversaw a month-long Pride campaign.

According to her bio on a professional networking site, Ersapah also
"was instrumental in initiating the [SVB's] first ever global 'safe
space catch-up,' supporting employees in sharing their experiences of
coming out" as something other than heterosexual.

Ersapah, whose job history on LinkedIn lists roles at Citi, Barclays
and Deloitte, also devoted some of her SVB time to writing articles
promoting "Lesbian Visibility Day" and "Trans Awareness Week," the
Daily Mail reports.
Risk management executive Jay Ersapah ran an SVB program urging
non-straight employees to share their "coming out" experiences  (SVB
via Daily Mail)

"I feel privileged to help spread awareness of lived queer
experiences, partner with charitable organizations, and above all
create a sense of community for our LGBTQ+ employees and allies,"
Ersapah said in SVB materials.

Embracing a broader woke agenda that eschews underwriting purely based
on business fundamentals, a 16-page, January 2022 DEI brochure touted
an SVB program "focused on increasing representation and funding for
women, Black and Latinx founders, investors and professionals in the
innovation economy."

Surveying SVB's wreckage in a Saturday Fox Business News interview,
Home Depot co-founder Bernie Marcus decried DEI's destructive
influence:

"I think that the system, that the administration has pushed many
of these banks into [being] more concerned about global warming than
they do about shareholder return. And these banks are badly run
because everybody is focused on diversity and all of the woke issues
and not concentrating on the one thing they should, which is
shareholder returns."

"I feel bad for all of these people that lost all their money in
this woke bank. You know, it was more distressing to hear that the
bank officials sold off their stock before this happened. It's
depressing to me. Who knows whether the Justice Department would go
after them? They're a woke company, so I guess not. And they'll
probably get away with it."

"The phrase ‘you can’t be what you can’t see’ resonates with me," the
multi-tasking Ersapah said in another of SVB's multiple DEI brochures.
Unfortunately, devoting so much attention to leftist DEI programming
helped blind Ersapah and SVB to the bank's impending doom.

Re: Cryptocurrency: BANK RUN PANIC Spreads Around Globe, Crypto and Gold Demand Skyrockets, FDIC Coverup