SNB's $54Bn – Dull & Duller - Lockdown Saga – BBC Impartial? - Bailout? – Boiling Pots - Woke & Broke – Higher for Longer – 3 Years On – 10 Rules – Hail Caesar! - Letter from Great Britain -[03-18-23]

“Any fool can spend money. But to earn it and save it and defer gratification – you learn to value it differently.” [Malcolm Gladwell]. This week has been all about Woke Banks, Bailouts, and Budgets!

ERRATA: I mentioned last week that it wasn't worth voting in elections.  An alert reader, Rick Larson pointed out my important omission: "voting is actually endorsing an imaginary system called 'democracy' when in fact it is a 'kleptocracy' at best."

STOP PRESS:  Credit Suisse Bailout – SNB rescues with $54 billion!  We are crossing the threshold into an irredeemable catastrophe from which western civilisation might self-annihilate.  "Woke Rule" has transformed every institution into a cabal of incompetent Woke cultists who have no clue what they are doing in government, finance, medicine, science, education, media, geopolitics and more.  The evidence has now become visible in banking and finance.

NEWS FLASH: OMG!  Here's "Jeremy from Accounts?" As an accountant myself I am ever-conscious of bean-counters "knowing the cost of everything and the value of nothing."  This was a dull, dull Budget as Nigel Farage said: "Underwhelming"!

The Spring Budget was revealing, not for what he said, but for what he did not say; here's a quick assessment:  Energy Cap to remain at £2,500 until June with little else but austerity for the average Joe and cigarettes up to £1.75/pk. The OBR came out with their 'uplifting' annual 5-year forecast for the death of inflation at year-end after a no-growth period BUT this year's living standards to drop by 6%!

I know the ONS hasn't got anything right –ever – so it's just optics for our pathetic politicians.  And Hunt is battling to justify his pensions giveaway to the 1%  after 'The Institute for Fiscal Studies' and the 'Resolution Foundation' both said it was doubtful the £1bn tax break would retain more senior doctors and will allow wealthy individuals to avoid tax liabilities.

LOCKDOWN FILES: Lord Sumption took aim at the Conservative Party on GB News this week, saying there hadn't been such a talentless cabinet in nearly 100 years; thus confirming what the majority of Brits have known for a long time!  Retired UK Supreme Court Justice Lord Jonathan Sumption said the Lockdown Files prove a "failure of government." The highly respected Judge blasted the Tory cabinet and MPs who served former PM Boris Johnson as “utterly devoid of talent”.  He described the present Cabinet as “a cabinet of mediocrity”.

HMG originally made the lockdown decision against the advice of SAGE then they moved into propaganda mode to frighten people and enforce compliance, after getting the message from WHO & WEF.  Although Lord Sumption did say that Sunak and Gove, who took opposite views on the lockdowns, were talented individuals, the cabinet was chosen primarily for its unconditional loyalty to Boris Johnson.    

Following on: Jeremy Hunt said the UK had “a lot to learn” from Sweden’s response to the Covid pandemic in an exclusive GB News interview: https://www.gbnews.com/news/jeremy-hunt-says-uk-has-lots-to-learn-from-sweden-covid-response-pandemic

FUN TIDBIT:  GB News broadcasted 'Alternative Match of the Day' amid BBC Gary Lineker shambles fallout:  https://www.gbnews.com/news/gb-news-hosts-alternative-match-of-the-day-after-bbc-gary-lineker-fallout   Hilarious, and former BBC Executive claims chairman should resign following the impartiality row - 'He can't do his job!'  https://www.gbnews.com/news/bbc-chairman-quit-gary-lineker-impartiality-row-migrant

THOUGHT FOR THE WEEK: Were the actions this week actually NOT a 'Bailout' as claimed by the Fed? After a rollicking eight days of liquidity crisis in smaller banks; if it looks like a bailout, walks like a bailout, and talks like a bailout, so it’s probably a bailout.

Nobody wants to call the Fed's actions a bailout because nobody wants to admit the term 'bailout' is toxic in daily usage these days and institutions want to distance themselves from this sort damaging language – damaging, that is, to the perception of 'confidence and trust' upon which the stability of the global financial system rests.  But according to Investopedia it most certainly was a classic 'bailout'.

And as Peter Schiff pointed out, by making everyone whole, especially very rich investors and corporations, this bailout effectively raised FDIC protection from $250,000 to infinity.  They just set a precedent and haven’t codified it into law.  The Fed created a new “Bank Term Funding Program” (BTFP) that 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, mortgage-backed securities, and other qualifying assets as collateral. Banks will be able to borrow against their assets “at par” (face value) even if they are underwater in the market.

The new steps being taken by the Fed and 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 to quantitative easing (Stealth QE). There’s no way to guarantee such huge sums of money without falling back into inflationary monetary policy yet again. I believe this means inflation will be higher for longer.

But the liquidity crisis is also in the sick-man of the 'To-Big-to-Fail' banks, like Credit Suisse, which rolls on despite SNB's $54 billion bailout this week. Credit Suisse shares are fading and their CDS remain massively elevated. There's more to come as the credit risk of the European banking sector soars on the back of the ECB 0.5% interest hike this week; ZeroHedge has this week's charts.

The ECB is also rightly concerned, telling ministers:  "Some EU Banks May Be Vulnerable - No Room for complacency" they cautioned, warning that a lack of confidence could trigger contagion.

BREAKING NEWS: THE POT IS BOILING -Bubble, Bubble - Toil and Trouble.  There's trouble everywhere as Britain's struggles with multiple crises boiling over with more hidden under the rug in a redux of 2008.  The good news is that the BoE have managed to 'sell' for £1 (or rather 'give away') what's left of  the SVB UK subsidiary to HSBC, thus guaranteeing the depositors and making all of them whole - insured and uninsured - in line with the Fed bailout policy in America.

The acute phase of this banking crisis seemed to be over when last Sunday the Fed revealed its Bank Term Funding Program - a facility designed to avoid banks that are facing deposit outflows from being forced to sell their bond holdings at a loss, and which as JPMorgan concluded, is a stealth form of QE which can be $2 trillion or more and will serve to backstop small bank impaired assets for the foreseeable future.

Even more 'good news' came on Thursday when the Big Banks' "deposit consortium" plan was unveiled as part of a coordinated rescue of 'First Republic Bank', which envisions big banks like JPM, Citi, and BofA injecting tens of billions (newly received from SVB et al) deposits into the troubled banks and which are meant to replenish the lost deposits (which ended up fleeing to the same big banks which are now recycling them in the form of a bailout). Musical chairs come to mind.

This has created a blueprint of how to back-stop the liability side of small banks. Simply put, any deposit that JPM et al received from regional/small banks, will be promptly recycled as a new deposit back into regional/small banks to keep them liquid.  I was taught that this is akin to 'robbing Peter to pay Paul!

"GET WOKE - GO BROKE" has now become a truism which is killing long-standing business models and is especially visible in the recent banking crisis. Prof. David Rozado  wrote: “The jury is still out in terms of whether the 'Great Awokening' is winding down.” Clearly this was lost on Silicon Valley Bank last week.  The problem of course is Social Media, GloboCap, and Big Tech in general now being so far away from their intended purpose that their "Effective Altruism" is killing their business models per toxic ESG.

Venture Capitalists should have encouraged their portfolio companies to support the 40 year-old SVB, instead they did the opposite, encouraging the CEOs to pull all their assets out of the bank and causing an instantaneous bank-run!  This doesn't make sense to me, clearly there's another agenda afoot, and so I followed the money.

When Silicon Valley Bank  (SVB) went bust last week ZeroHedge tells us they were the poster-child for 'Woke Makes Broke'. There's not a white male to be found anywhere in SVB except for their senior leadership page, which is the kind of do-as-I-say-not-as-I-do hypocrisy rampant in fake modern American corporations these days.

While SVB 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.  SVB was without a Chief Risk Officer (CRO) from April 2022 to January 2023 whilst the bank apparently allowed Jay Ersapah,( a self-described "queer person of colour from a working-class background") spending little of her time on risk management but most of it on assorted woke programs before SVB finally appointed Kim Olson as their new risk manager but too late to repair the damage.

It only takes a moment on the SVB website to be swamped with a sea of stock photographs displaying every gender, race, height, weight, and hairstyle imaginable as the soon-to-be-bankrupt corporation declared its commitment to 'living its values'. These include integrity, empathy, embracing diversity (of course), perspective, and "We take responsibility."  But there is next to nothing to read about actual BANKING!  Their executive team spent millions of dollars to produce music videos & TV shows about themselves. Try not to cringe as you watch this!

Have I missed something?  Should I take a refresher course in accountancy and banking?  Is this new zeitgeist of financial management endemic in SVB a reflection of corporate culture in general?  SVB is not alone it seems

However if these senior execs really believed their own Woke propaganda above why did they do this?

• Gregory Becker, CEO of SVB, sold $3.6 million (11%) shares on Feb 27

• Daniel Beck, the CFO, sold 32% (around $600,000) of his holdings.

• CMO Michelle Draper sold 28% of her holdings

Notice that none of them had sold anything of a size for a year or so before this most recent (pre-collapse) sale.  And the Bank paid annual bonuses last Friday to 'eligible' U.S. executives (aka 'hush money'), just hours before the bank was seized by FDIC!  So there's nothing to see here then?  The backstory behind all this mayhem is hiding in plain sight at the World Economic Forum (WEF). I agree with Brandon Smith in his excellent analysis.  Here's my summary:

"Digging even deeper we then find that SVB’s leadership was highly involved in the WEF and their Stakeholder Capitalism Metrics (SCM), along with corporate governance. SVB was not only implementing all WEF policies they were also reporting back to the WEF on the results.

SVB’s capital exposure was heavily tied up in securities, but also venture capital for woke-tech start-ups, climate change-related projects and leftist activist groups which qualified for 'Environmental, Social & Governance' (ESG) loans; they included everything from BLM to Buzzfeed.

In other words, they were investing aggressively into money-pit projects that devoured cash and gave nothing back. The real question is: how many US corporations are involved in ESG and WEF operations at the same level as SVB? I guess thousands have taken up this crazy policy for disaster.

The Federal Reserve’s rate hikes have made ESG liquidity untenable.  It is too expensive now for banks to lend (or borrow) to finance losing ventures such as woke-tech companies and climate change non-profits.  It is acknowledged that all “too big to fail banks” are involved but have they sufficient capital and protection to stay afloat despite central bank support?  Clearly, mid-tier banks like SVB are highly vulnerable.

This woke invasion within the Western business world is starting to die now anyway. You can already see the shift back to a search for profits and an abandonment of social justice virtue signalling.  Peak woke happened over the course of the Covid lockdowns, and now it’s fading. It was never going to have staying power because it is far too unhinged and cultish to be widely accepted.

Beyond that, the WEF’s “Great Reset” concept will require a substantial economic crisis in order to be achieved. There’s no way they will ever get Americans to embrace ‘stakeholder capitalism’ or the “I own nothing and I’m happy” cohort in a sharing economy under normal economic conditions. So, they need a crisis event to create desperation within the populace.

In order for globalists to get the total corporate governance they want, they might be using woke ESG to destroy the existing system, thus they can replace it with an even more pervasive woke structure simultaneously blaming free market capitalism as the fall-guy.

It’s a similar idea to the globalist strategy of blaming “nationalism” for the very geopolitical crisis events that globalism is triggering.  Given the sheer scale of woke saturation in our global economy, I wonder if the entire economy will be unable to survive the onslaught of ESG and WEF infiltration of corporate and government woke actors before a general collapse of many of our long-established institutions. https://www.zerohedge.com/political/home-depot-founder-tells-americans-wake-after-silicon-valley-bank-collapse

INFLATION WATCH: The trend is "Higher for Longer."  US investors expect the Fed to accept that inflation may continue higher than its target and far more entrenched in the economy making financial stability a concern.  It's Catch 22 for the trapped Fed; raising interest rates an QT to control inflation causes bond values to fall (yields rise) with the banks falling into reserve ratio problems especially the smaller ones.  But lowering interest rates & QE causes bond prices to rise (yields fall) and inflation to rip through main street. We are returning to the realities of finance about which the global financial system has been in denial since 2008.

Silicon Valley Bank and its failure/takeover is a great example of what happens when there is a mismatch between your short and long interests; you go bust! To me, the Silvergate unwind, Silicon Valley Bank, and Signature Bank bailouts last week are a microcosm of what’s wrong with society; it could suffer a similar fate to these banks. There’s too much focus on the short term without any real thought as to the ramifications of decisions over the long run.  The case of FTX is one we’ve seen many times over.  In an instant communication world money moves fast. If managements' interest is focused too much on the short term or unbalanced in the long term then they will be 'caught short' when sudden changes happen, QED.

FOLLOWING last weekend's bank failures, and the first signs of financial instability in three years of non-stop crisis, Britain continues to slide quietly into oblivion.  The error was putting Chancellor Hunt on TV to promise Brits that the banking system was sound and inflation will be 2.5% by year end!

Politicians believe they retain a degree of credibility but Covid changed all that in 2020.  Your life may well depend on finding and knowing the truth – the social contract is broken. 

SURVIVAL MONITOR:  Last Sunday marked the third anniversary of the World Health Organization (WHO) declaring Covid-19 a ‘pandemic’ which came from bats!  Yeah, right – we know different now that 60% of US adults think COVID likely came from a lab in China according to the latest survey carried out by 'The Economist' and 'YouGov'.

Well, they got it part-way right because we know the true story of it coming from the US DoD, which  Sasha Latypova so adroitly proved, confirming the exact origin of the 'virus' despite conflicting theories and the efforts to censor any thought other than the official line.

No doubt the US Intelligence cabal will continue to distract and focus on China which itself might have been implicated in some inscrutable way. BUT the Malaysian Prime Minister knew the truth in 2015!   Part of personal survival is about being alert to, not only obvious dangers like the Vaxx, but hidden and subtle obfuscations at which governments and their corrupt institutions are past-masters. The key is DO NOT COMPLY.

THE NARRATIVE BATTLE: Lord Arthur Ponsonby (1871–1946) was a British diplomat and politician who pinpointed  10 rules of propaganda and is what we now recognise as 'NewSpeak' or what I call 'Weasel Words'.

Politicians sparred over the meaning of the release of the Twitter Files.  Democrats in particular seemed adamant that they would not even discuss the actual contents of the files or their implications; they attacked the messengers.

There might not have been many new revelations coming from the subcommittee, but what the public did learn was that the political left was extremely hostile to facts, evidence and the truth.  If you didn't already know that by now, the hearing with Matt Taibbi made it abundantly clear. 

Leftist members of the committee proceeded into a tirade when Matt Taibbi and Michael Shellenberger were called to testify on their participation in the publishing of the files, attacking everything from their credentials to their intentions, and even demanding they reveal information on their private sources.  This is the real information the Dems did not want to talk about: 

A summary of the transcript makes for enlightened reading for those with an inquiring mind: https://consentfactory.org/2023/03/10/the-censorship-industrial-complex/

FINALLY   On March 15 in 44 BCE, Roman emperor Julius Caesar was launching political and social reforms when he was assassinated on the Ides of March. The group of nobles responsible included Cassius and Brutus. A timely warning to you-know-who perhaps?

UNTIL NEXT WEEK:

For more, read: “The Financial Jigsaw”: Scroll:   https://www.researchgate.net/publication/358117070_THE_FINANCIAL_JIGSAW_-_PART_1_-_4th_Edition_2020   including regular updates.  For a  free PDF copy e-Books, Parts 1 & 2,  email; peter@underco.co.uk

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