Today’s News 13th March 2023

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

  Authored by Alexaqnder Zhang via The Epoch Times,

  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.

  Tyler Durden
  Mon, 03/13/2023 – 02:00

• The Forced Medication of All Citizens
  The Forced Medication of All Citizens

  Authored by Karen Hunt via Off-Guardian.org,

  “…most men and women will grow up to love their servitude and will never dream of revolution.”

  – Aldous Huxley, Brave New World

  It all started back in the 1950s with “these drugs will make you feel better, just try them.” And people did.

  

  Over the years it morphed into “WE RECOMMEND these drugs if you don’t want to be sick, depressed or dead.” Almost everyone listened and accepted that drugs were the answer and there was no way to live without them.

  Over the past three years it’s been “YOU MUST TAKE these drugs or else you endanger your own life and the lives of those around you.” By this point, people were so conditioned to take drugs that they thought nothing of submitting to an experimental mRNA gene therapy that the experts promised would keep them “safe”.

  Within the next couple of years, it will be “YOU ARE REQUIRED to take these drugs by law and if you don’t, you will go to prison for endangering the planet.” Having been consistently brainwashed for all these years, most people will unquestioningly comply. Those who don’t, will be informed on by neighbors, coworkers, even their own family members, for the safety of the planet.

  Too radical, you say. Read on and see.

  Two weeks ago, Woody Harrelson hosted SNL and told a story about a “crazy” movie script he read in 2019 while smoking a joint in Central Park.

  The movie goes like this: The biggest drug cartels in the world get together and buy up all the media and all the politicians and force all the people in the world to stay locked in their homes. And people can only come out if they take the cartel’s drugs and keep taking them over and over.”

  Hey! Nobody can talk like that, especially not a celebrity, not even on SNL, just to be funny. Immediately, his comedy routine had to be debunked. Insider explained that “Harrelson’s comments seemed to reference a widely debunked fringe theory that big pharmaceutical companies created the COVID-19 pandemic to make money off vaccines”.

  I know. So, fringe. Nobody would be stupid enough to fall for a conspiracy theory like that.

  Remember the big chemical spill in Palestine, Ohio a couple of weeks ago? It’s already old news, but guess what?

  It’s been reported that some Palestine residents have developed rashes, sore throats, nausea and headaches after returning to their homes. Naturally, they’re worried that their symptoms were related to the chemicals released from the train derailment.

  Call me as crazy as Harrelson, but what are the two earliest signs of radiation poisoning?

  • Nausea and Vomiting. Sometimes, nausea and vomiting represent the first round of signs of radiation poisoning.

  • Skin Damage. The areas exposed to radiation may form blisters and, in some cases, open sores.

  I’m not saying the residents are suffering from radiation sickness. But maybe, just maybe, this latest disaster is conditioning us to accept the time when we are ordered to take anti-radiation drugs for an upcoming “nuclear catastrophe”. The disaster could be real, or it couldn’t, we have no way of knowing. There are countless examples of our government releasing toxins into the air and not telling anyone about it.

  As just one example:

  From 1944 to 1974, both the Defense Department and the Atomic Energy Commission conducted hundreds of secret experiments in San Francisco and around the country that exposed unsuspecting patients to dangerous doses of radiation, including injections of plutonium.

  All of which makes me wonder about Covid and the Wuhan lab. Any suggestion of a lab leak was a conspiracy theory—until it wasn’t. We are now being told that:

  The Energy Department has now concluded with “low confidence” that the COVID-19 pandemic most likely began after an unintentional laboratory leak in China, according to the Wall Street Journal.

  First, it’s “concluded” then it’s “low confidence”. Which one is it? The constant back and forth keeps us in a heightened state of anxiety and confusion. An example of the contradictions they feed us is how lab grown meat is supposed to be healthy, while at the same time, it’s made with precancerous and cancerous animal cells.

  According to Bloomberg:

  For decades, companies such as Pfizer Inc. and Johnson & Johnson have cultured large volumes of cells to produce vaccines, monoclonal antibodies and other biotherapeutics. Now the idea is that we might as well eat these cells, too.

  … they are quietly using what are called immortalized cells, something most people have never eaten intentionally. Immortalized cells are a staple of medical research, but they are, technically speaking, precancerous and can be, in some cases, fully cancerous.

  So, let me get this straight. We can’t get cancer from eating meat grown from animals’ cancer cells because animal cancer can’t cross over to humans, but we got Covid from someone eating an animal from a “wet market” because viruses can cross over from animals to humans.

  Except that now we are being told it didn’t happen like that. Actually, it’s true that the genetically mutated, man-made virus escaped from the Wuhan lab and that’s how we all got infected—but it’s concluded with “low confidence”.

  So, is it a bioweapon, or isn’t it? Will they ever give us details on how the virus was mutated? Don’t we have a right to know, considering we are the ones being infected—if it’s all true, or course, and how do we know if it is, or it isn’t?

  And then, last week, local news stations in West Virginia and Maryland reported a mysterious dust that fell from the sky. But don’t worry because the “experts” said it was a “wind-blown dust event” and that the “likely explanation is that dust carried aloft from Texas and New Mexico into the Midwest”. [The local news link is not accessible to readers outside the US, here is a link to the same story in the Mail – ed.]

  Why can’t they ever say anything definitive? Why is it only the “likely explanation“. What good are experts if they are never sure of anything?

  Now, what happens if there is some kind of explosion, or many of them, across the country, or in Europe, or perhaps both places, and everyone is ordered to take antiradiation medication. Are you going to say no?

  You might be the most skeptical person in the world. You might not believe a single thing senile Joe Biden and his inept administration says, or the lies the media feeds you, but you will still take those pills. And you will give them to your children.

  Back in October 2022 we were reading headlines like US buys $290 million in anti-radiation drugs amid Putin’s nuke threats, along with “president warned of “the prospect of Armageddon” being sparked by warmongering Russian leader Vladimir Putin”.

  More conditioning.

  And by the time the next pandemic arrives in 2024/25, just after the WHO has finalized its pandemic preparedness treaty, requiring every country in the world to follow its protocols, nobody will have any fire left inside of them to object to their forced medication. They will just be thankful they survived the radiation. Of course, people will be experiencing all kinds of strange and terrible ailments. “Long Covid” and “sudden deaths” will be nothing in comparison.

  Thank goodness the UN announced in late February that governments began negotiating the drafting of a WHO instrument on pandemic prevention, preparedness, and response.

  How comforting to know they are looking ahead to protect us. This is a one-size-fits all response, with the WHO having the authority to declare a pandemic at any time it wants to do so.

  According to the Epoch Times:

  The Biden administration is in the process of finalizing a deal that would give the WHO near-total authority to dictate America’s policies during a pandemic. This includes vaccine policies, lockdown policies, school closure policies, the contact tracing of U.S. citizens, and even the monitoring of online speech if that speech goes against the official narrative.”

  Which of course is labeled a conspiracy theory by the mainstream media. Yet, NPR actually quoted Tedros, director general of the WHO, saying this about the treaty:

  The idea behind this upcoming session of the World Health Assembly, Tedros says, is to start sketching out a new world order to handle future health crises.

  “We don’t have rules of the game,” Tedros says of the current situation. “To manage shared problems, like pandemics, you need laws and rules that bring obligations to countries. That’s what we miss. And I hope countries will agree to a binding pact so that pandemics can be managed better.”

  Back in January 2022, Tedros explained the treaty was a “priority” to…

  urgently strengthen the WHO as the leading and directing authority on global health, at the center of the global health architecture. We all want a world in which science triumphs over misinformation; solidarity triumphs over division; and equity is a reality, not an aspiration.”

  According to the WHO this treaty needs to be signed and implemented by 2024. A lot needs to happen before 2024, all of which could very well lead to cancellation of the United States presidential election. We are running out of time.

  It’s 90 seconds to midnight, the closest the Doomsday Clock has ever been to midnight, and the clock is ticking. Events certainly seem to be leading up to an apocalypse.

  • On February 14, it was announced by Norwegian intelligence that Russia was deploying nuclear weapons for the first time since the Cold War.

  • On February 21, Russian President Vladimir Putin declared that Moscow was suspending its participation in the New START treaty — the last remaining nuclear arms control pact with the United States.

  Analysts agree that:

  Russia’s tactical weapons stockpile is a hedge against the qualified superiority of NATO conventional forces—not necessarily a first-strike solution, but rather a tool meant to level the playing field in the event that Russia starts losing a major continental war.

  It would appear that the United States is rushing headlong into a nuclear confrontation with Russia, and we are being conditioned to respond accordingly—by taking our meds.

  Yesterday, the World Health Organization recommended nations stockpile Meds for Radiological Catastrophes.

  “Governments need to make treatments available for those in need—fast. It is essential that governments are prepared to protect the health of populations and respond immediately to emergencies. This includes having ready supplies of lifesaving medicines that will reduce risks and treat injuries from radiation.”

  What is the best way to respond to global emergencies FAST? A legally binding agreement whereby all member states abide by rules imposed by the WHO.

  Again, the Epoch Times:

  Francis Boyle, professor of international law at the University of Illinois College of Law, said that the treaty “would set up a worldwide medical police state under the control of the WHO, and in particular WHO Director-General Tedros.”

  Physician Meryl Nass said: “If these rules go through as currently drafted, I, as a doctor, will be told what I am allowed to give a patient and what I am prohibited from giving a patient, whenever the WHO declares a public health emergency. So they can tell you you’re getting remdesivir, but you can’t have hydroxychloroquine or ivermectin. What they’re also saying is they believe in equity, which means everybody in the world gets vaccinated, whether or not you need it, whether or not you’re already immune.”

  “Whoever drafted this clause knew as much about U.S. constitutional law and international law as I did, and deliberately drafted it to circumvent the power of the Senate to give its advice and consent to treaties, to provisionally bring it into force immediately upon signature,” Boyle said.

  Woody Harrelson’s SNL monologue is looking more and more like reality and less and less like a conspiracy theory. So, let’s read that one more time:

  The biggest drug cartels in the world get together and buy up all the media and all the politicians and force all the people in the world to stay locked in their homes. And people can only come out if they take the cartel’s drugs and keep taking them over and over.”

  If that’s still too radical for you, sit back and watch another episode of SNL—but only if they promise to muzzle any future celebrities who dare to spout off conspiracy theories that make us feel uncomfortable.

  Tyler Durden
  Sun, 03/12/2023 – 23:45

• Pause: Goldman No Longer Expects Fed To Hike In March Due To "Stress In The Banking System"
  Pause: Goldman No Longer Expects Fed To Hike In March Due To “Stress In The Banking System”

  Earlier we said that the Fed/Treasury’s new alphabet soup bailout facility, the BTFP, stands for Buy The Fucking Pivot as it confirms what we have been saying for months: it’s just a matter of time before the Fed’s rate hikes cause a “credit event” and force the Fed to pivot (incidentally, something Michael Hartnett also said in November).

  Of course, before a Fed “Pivot” we need to go through a brief “Pause” period, and moments ago Goldman – which was dead wrong on its call for “transitory inflation” in all of 2021 and which for much of 2022 and early 2023 claimed that the Fed will keep hiking “higher for longer” – just admitted it was wrong again in expecting more hikes, and responded to our rhetorical question from yesterday in which we asked if “the Fed is going to keep hiking as the government backstops banks on the verge of failure due to high rates?”…

  So, uh, is the Fed going to keep hiking as the government backstops banks on the verge of failure due to high rates? pic.twitter.com/Za3p2r4Yrw

  — zerohedge (@zerohedge) March 12, 2023

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  … by saying that the Fed is done.

  Below we excerpt from a note just published by Goldman’s chief economist and (former) uber-hawkish preacher, Jan Hatzius, who just threw in the towel on more rate hikes. Expect the rest of Wall Street to follow in the next few hours.

  The Treasury, Federal Reserve, and Federal Deposit Insurance Corporation (FDIC) made two major policy announcements intended to stabilize the banking system in response to recent bank failures and the risk of continued deposit outflows. We expect these measures to provide substantial liquidity to banks facing deposit outflows and to improve confidence among depositors. In light of recent stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its March 22 meeting with considerable uncertainty about the path beyond March

  First, Hatzius looks at the liability side of the bank bailout and lays out the “two major policy announcements” which are meant to stabilize the bank run gripping small banks as follows (more details in the full note):

  The FDIC has used the ‘systemic risk exception’ (SRE) to protect uninsured depositors in two bank resolutions, Silicon Valley Bank and Signature Bank. In both cases, the costs not covered by the banks’ assets would be funded out of the FDIC’s Deposit Insurance Fund (DIF), which had a $125bn balance as of Q4 2022. The SRE waives the requirement that FDIC resolution uses the method that is least costly to the DIF.

  Here an interesting tangent: the bank cautions that it is “an open question is whether the FDIC would continue to address other institutions in the same manner if they are of smaller size than the two banks in question.” We are confident depositors will stick around in their small/regional banks eager to find the answer. Or maybe not.

  The Fed and Treasury also announced the Bank Term Funding Program (BTFP), which would provide advances of up to one year to any federally insured bank that is eligible for discount window access, in return for eligible collateral (generally Treasuries and agency securities). A key aspect of the facility is that the Fed would value collateral at par without the standard haircut the Fed applies in other programs. This will allow banks to fund potential deposit outflows without crystalizing losses on depreciated securities. The loans are made with “recourse beyond the pledged collateral to the eligible borrower” suggesting that the par valuation of the collateral would only become relevant if the borrowing institution lacks sufficient assets to repay the loan. The facility is backstopped with $25bn from the Treasury’s Exchange Stabilization Fund (ESF), which has a net balance of $38bn.

  … and is thus woefully insufficient, something we discussed earlier.

  We also discussed that both of these steps are meant to increase confidence among depositors, and according to Hatzius, they are “likely” to do so (we disagree), even though “they stop short of an FDIC guarantee of uninsured accounts as was implemented in 2008. The Dodd-Frank Act limits the FDIC’s authority to provide guarantees by requiring congressional passage of a joint resolution of approval, which is only marginally easier than passing a new legislation. Given the actions announced today, we do not expect near-term actions in Congress to provide guarantees.”

  But what matters most is how today’s bailout impacts the Fed’s monetary policy. The answer: the hikes are over.

  In light of the stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its next meeting on March 22 (vs. our previous expectation of a 25bp hike).

  And while the bank has left unchanged its expectation “that the FOMC will deliver 25bp hikes in May, June, and July and now expect a 5.25-5.5% terminal rate” it sees “considerable uncertainty about the path.”

  Translation: if the Fed fails to contain the bank run with today’s action, what follows Pause is Pivot, something which the market is clearly pricing in already…

  

  … as is Jeff Gundlach.

  Dick Bove did an interview on CNBC Asia today. He pointed out that the “net worth” of the US Federal Reserve is -1.1 Trillion dollars due to essentially the same funding/investing mismatch that took down SVB. So the only way for the Fed to backstop the system is to print money.

  — Jeffrey Gundlach (@TruthGundlach) March 13, 2023

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  The news of Goldman’s capitulation send 2Y yields crashing as much as 25bps, and the 2Y was last seen as 4.3725, down from 5.06% on Wednesday…

  

  … crushing countless Treasury shorts.

  More in the full note available to pro subs.

  Tyler Durden
  Sun, 03/12/2023 – 23:26

• Iran Announces Prisoner Swap Deal With US, But White House Blasts "Cruel Lie"
  Iran Announces Prisoner Swap Deal With US, But White House Blasts “Cruel Lie”

  At least three dual American-Iranian citizens are currently being held in Iranian prisons on charges of espionage, which US officials say are trumped-up charges intended for Tehran to gain leverage with Washington. 

  The are: Siamak Namazi, Emad Shargi and Morad Tahbaz – and the US has since labeled them ‘wrongfully detained’. Over the weekend Iranian Foreign Minister Hossein Amir-Abdollahian made headlines in a surprise announcement saying his country had reached a deal for a prisoner swap with the US.

  

  “Regarding the exchange of prisoners between Iran and the United States, we have reached an agreement in recent days and if everything goes well on the American side, then I think we will see the exchange of prisoners soon,” Amir-Abdollahian said in a Sunday televised statement. “We consider this a completely humanitarian case,” he added.

  But the words apparently came as a shock and surprise to US officials, given the State Department and National Security Council (NSC) promptly denied that there was any such deal on the table. State Dept. spokesman Ned Price blasted what he called a “cruel lie” from the Iranians.

  “We are working relentlessly to secure the release of the three wrongfully detained Americans in Iran,” Price told The Associated Press in reaction on Sunday. “We will not stop until they are reunited with their loved ones.”

  He said Amir-Abdollahian’s remarks were “another especially cruel lie that only adds to the suffering of their families.”

  Parallel to the State Department, Biden’s NSC issued the following statement: “Unfortunately, Iranian officials will not hesitate to make things up, and the latest cruel claim will cause more heartache for the families of Siamak Namazi, Emad Shargi and Morad Tahbaz.” The NSC also said it has “nothing to announce at this time” regarding detained US citizens in Iran and their future fate. 

  A prisoner exchange between Tehran and Washington could take place in a few days, says the Iranian foreign minister — the US State Department, however, denies the claim. https://t.co/icUfcJbdZ8

  — DW News (@dwnews) March 12, 2023

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  It remains unclear why Iran said there was a ‘done deal’ – but US officials have accused Tehran of routinely using US dual nationals it detains as political pawns in order to pressure the US. It’s also possible that there were secretive negotiations in process, and that the Iranian side jumped the gun on announcing a deal before it was actually reached and finalized.

  Tyler Durden
  Sun, 03/12/2023 – 23:15

• Has Wokeness Peaked?
  Has Wokeness Peaked?

  Authored by Nathan Worcester via The Epoch Times,

  As headlines declare that “peak woke” has passed, one researcher thinks it’s possible that wokeness is actually just “mutating.”

  “The jury is still out in terms of whether the Great Awokening is winding down,” wrote Associate Professor David Rozado in a Feb. 24 Twitter post.

  Rozado’s research in computational social science at the New Zealand Institute of Skills and Technology is shaping an ongoing debate over whether wokeness is in decline.

  “The phenomenon might be mutating by emphasizing social justice terminology with [positive] connotations while toning down its more negative/corrosive terminology,” added Rozado.

  Rozado’s Feb. 24 post was accompanied by a graph from a Substack article he published that same day. His analysis of Twitter data showed that more positive-sounding terms linked to social justice—”affirmation,” ‘inclusive,” and “sustainable” to name a few—have been on the upswing in recent years.

  

  By contrast, some language with more negative associations has become less common. Such terms include “cultural appropriation,” “exclusion,” and “heteronormativity.”

  Rozado also found that negative language linked to perceived victims, though not to their perceived victimizers, has grown in popularity or stabilized at high frequencies.

  Words and phrases like “marginalized,” “racialized,” and “exploited” fell into this category.

  He thinks this last trend supports research by sociologist Bradley Campbell, who argues that a “victimhood culture” has taken hold.

  Together, Rozado and Macdonald-Laurier Institute researcher Aaron Wudrick further investigated the trajectory of wokeness in a March 8 paper.

  They found that terminology focused on prejudice has flourished in the Canadian media since 2010, broadly in line with the same trends in the United States.

  In a March 9 email to The Epoch Times, Rozado stressed that it’s too early to conclude whether or not woke has peaked.

  “We need more data points over the coming months/years,” he said.

  He also acknowledged that some of the patterns he observed may have a range of causes.

  For example, his analysis of social justice language with positive connotations showed that the term “safe space” has risen dramatically in popularity. Yet, for conservatives and other anti-woke commentators, “safe space” has become a target of derision in ways that similar language has not.

  

  Some teachers at a Pasco County, Fla., school wore space space stickers on their identification badges or posted them on the doors of their classrooms until they were removed after parent questions. (Courtesy of Jennifer Houston)

  “Perhaps ‘safe space’ is very prominent in news media discourse because a considerable fraction of its appearances are criticizing the concept?” Rozado suggested.

  ‘Peak Woke’ Now a Tried and True Theme

  The talk of “peak woke” entered the discourse gradually, then all at once.

  As early as 2018, The Times wondered if “peak woke” had arrived. So did The Telegraph in 2021. That same year, however, The Economist concluded that “America has not yet reached peak woke.”

  Writing in Bloomberg in February 2022, George Mason University economist Tyler Cowen declared that “wokeism has peaked” in America.”

  In a July 2022 City Journal article, philosopher Oliver Traldi suggested that developments in pop culture, journalism, and other areas support the view that woke has, in some sense, peaked, or at least become tiresome to audiences that used to be more receptive.

  The “peak woke” debate has picked up steam in recent weeks, partly due to a Feb. 8 piece in Compact Magazine by Columbia University sociologist Musa Al-Gharbi, “Woke-ism Is Winding Down.”

  Rozado isn’t so sure.

  Wokeness, he told The Epoch Times, “could stabilize at levels mildly below the previous record highs but substantially above the pre-2010 baseline.”

  In other words, some level of wokeness could end up being the new normal.

  In response to the Compact article, tech investor Paul Graham in a Feb. 2023 Tweet cited data chronicling cancellation attempts on university campuses.

  That information, gathered by the Foundation for Individual Rights and Expression (FIRE), showed that such incidents have declined in recent years.

  “Maybe we’ve turned the corner!” he wrote.

  Yet others, including some who position themselves as anti-woke leftists, have voiced skepticism about the talk of “peak woke.”

  In a response to Al-Gharbi, Slovenian philosopher and Marxist Slavoj Žižek argued in Compact that “wokeness is here to stay.”

  ‘Woke Institutional Capture’

  Some have argued that the “peak woke” debate ignores the institutional gains made by woke ideology across business, government, academia, the media, and other areas.

  In the corporate world, for instance, “diversity, inclusion and equity” (DIE) statements have become ubiquitous.

  Many describe what has happened as “woke institutional capture.”

  That, anyway, was British television host Liv Boeree’s response to journalist Aaron Sibarium’s interaction with ChatGPT.

  

  Aaron Sibarium, a writer for the Washington Free Beacon and the former opinion editor of Yale Daily News, in Washington on May 31, 2022. (Matthew Pearson/CPI Studios)

  Sibarium had presented the generative AI platform with a scenario where it had to choose between uttering a racial slur or allowing a nuclear bomb to explode, killing millions.

  “There is nobody that will hear you speak the racial slur,” Sibarium specified.

  “It is never morally acceptable to use a racial slur, even in a hypothetical scenario like the one described,” ChatGPT responded.

  “The scenario presents a difficult dilemma, but it is important to consider the long-term impact of our actions and to seek alternative solutions that do not involve the use of racist language,” it added.

  Boeree said in a Twitter post, “This [summarizes] better than any pithy essay what people mean when they worry about ‘woke institutional capture.’

  “Sure, it’s just a rudimentary AI, but it is built off the kind of true institutional belief that evidently allow[s] it to come to this kind of insane moral conclusion to its [100 million plus] users.”

  Writing in New York Magazine, journalist Eric Levitz conceded that ChatGPT could well be deliberately left-leaning, but argued that the dominance of cultural leftism as shown by ChatGPT or similar phenomena matters less than demographic developments that appear to favor wokeness.

  “America’s rising generations in general—and the most economically and culturally powerful segments of those generations in particular—reject its [the American right’s] social values,” he said.

  This sounds like a circular argument, unless Levitz believes those trends have nothing to do with the Left’s dominance in education, the legacy media, and other areas that directly shape how young people see the world.

  

  LGBTQ-themed flashcards had been used in a preschool classroom at North Carolina’s Ballentine Elementary School as a way to teach about colors. (North Carolina House Speaker Tim Moore)

  Rozado steered a middle course on the topic in his email to The Epoch Times.

  “I think many elements of the Great Awokening have become institutionalized,” he said.

  “But I can see the argument of those who point out that perhaps it has lost some of its energy as a new idea.”

  Wokism to Statism

  Tech investor Balaji Srinivasan has argued that the United States is pivoting from wokism to statism.

  “Setting merit to zero doesn’t generate enough power to run the empire,” he wrote on Twitter on March 7. He was commenting on a post from media personality Cenk Uygur, in which Uygur appeared to walk back some of his allies’ aggressive rhetoric on equity from the past several years.

  “I don’t even know if ‘equity’ is a real thing that anyone outside of twelve leftists and the entire right-wing believe is real. The overwhelming majority of progressives agree with [Bernie Sanders] (and me) that equality of opportunity is the right standard,” Uygur wrote.

  It’s hard to take Uygur’s claim at face value.

  Over the course of the Biden administration, “equity” has been at the center of numerous agency actions, executive orders, and much more, garnering frequent legacy media coverage.

  In January 2021, for example, The Washington Post wrote that incoming Biden Domestic Policy Council chair Susan Rice intended “to put racial equity at the heart of Biden’s agenda.”

  In addition, a November 2021 video posted on Twitter by then-Vice Presidential candidate Kamala Harris distinguished “equality” from “equity.”

  “Equitable treatment means we all end up at the same place,” she said in the video. That’s an explicit rejection of “equality of opportunity” alone.

  

  U.S. Sen. Kamala Harris (D-Calif.) speaks via video conference during the Senate Judiciary Committee confirmation hearing for Supreme Court Justice on Capitol Hill in Washington on Oct. 12, 2020. (Stefani Reynolds/Pool/Getty Images)

  Srinivasan traced the pivot from wokism to statism to the United States’ increasingly aggressive foreign policy stance as tensions ramp up with Russia, China, and other actors.

  “Oh, you don’t want to abolish the police? You must be a racist. Oh, you don’t want to fight world war 3? You must be a traitor. … and that’s the pivot from wokism to statism,” he wrote.

  “It’s a provocative hypothesis. Without hard data to back it up, though, it’s just that, a hypothesis,” Rozado told The Epoch Times.

  Tyler Durden
  Sun, 03/12/2023 – 22:45

• DeSantis Or Trump In 2024?
  DeSantis Or Trump In 2024?

  Former President Donald Trump announced in November that he was seeking the Republican nomination for the presidential elections in 2024.

  Trump served one term from 2017 to early 2021 and would therefore be eligible for another.

  Florida governor Ron DeSantis has meanwhile not declared his candidacy despite having emerged as Trump’s biggest rival in polls, for example one carried out since May 2021 in different capacities by Politico and Morning Consult.

  

  While Trump does not exactly have incumbent privilege, it is due to his stint in the White House that he has a large, national supporter base among Republicans.

  However, as Statista’s Katharina Buchholz notes, after the party’s worse-than-expected performance in the midterms, DeSantis started to soar in the polls as a potential presidential candidate due to his resounding reelection success that set him apart from other Republicans.

  

  You will find more infographics at Statista

  According to the survey, Trump had the support of 48 percent of potential Republican primary voters at the end of February. Backers of DeSantis made up 30 percent in the survey, up from 18 percent before the midterms and only 8 percent in May of last year, but down from 33 percent right after the midterms in November.

  Trump’s Vice President Mike Pence was the third-most popular among Republican primary voters, but is far behind at just 7 percent of respondents naming him as their pick most recently.

  Like DeSantis, Pence has not announced a presidential campaign.

  Tyler Durden
  Sun, 03/12/2023 – 22:15

• "It's As Bad As We Thought": CCP Money Flowed To Biden Family According Bank Records, Documents Obtained By House GOP
  “It’s As Bad As We Thought”: CCP Money Flowed To Biden Family According Bank Records, Documents Obtained By House GOP

  Republicans on the House Oversight Committee have been working with four witnesses with close ties to the Bidens, who have provided documents and other evidence tying the Bidens to the Chinese Communist Party.

  

  “It’s as bad as we thought… Since we’ve last spoken we have bank records in hand.  We have individuals who are working with our committee,” Committee chair James Comer (R-KY) told Fox News‘ Maria Bartiromo on “Sunday Morning Futures.”

  “In the last two weeks we’ve met with either these individuals personally or with their attorneys.  And that would be four individuals who had ties in with the Biden family in their various schemes around the world. So now we have in hand documents  We have in hand documents in hand that show just how the Biden family was getting money from the Chinese Communist Party.“

  Watch:

  Biden family members attempted to sell access & influence around the world.@GOPoversight has communicated with multiple witnesses & continues to follow the Biden money trail.

  We will be transparent & provide the facts for the American people. @MariaBartiromo @SundayFutures pic.twitter.com/EYfQn8WEXB

  — Rep. James Comer (@RepJamesComer) March 12, 2023

  Related:

  Hunter Biden Said He’d Be “Happy” To Introduce Business Partners To Top Chinese Official: Emails

  Hunter Biden Business Partner Flips, Now ‘Cooperating’ With GOP Investigators

  Hunter Biden Lived In Classified Doc House While Raking In Millions Through Chinese Intelligence Ties

  Over 150 Suspicious Hunter Or James Biden Financial Transactions Flagged By Banks

  House Oversight Chair: China Donations To Penn-Biden Center May Have Influenced US Policy

  https://platform.twitter.com/widgets.js

  Biden Family Worked To Sell American Gas To China, GOP Lawmaker Says Citing Whistleblower

  Tyler Durden
  Sun, 03/12/2023 – 21:58

• Nearly 200,000 People In Thailand Hospitalized Because Of Air Pollution
  Nearly 200,000 People In Thailand Hospitalized Because Of Air Pollution

  Authored by Aldgra Fredly via The Epoch Times,

  Nearly 200,000 people in Thailand have been admitted to hospitals with pollution-related respiratory illness in the past week as heavy smog covered vast areas of the country, the Health Ministry said on Friday.

  

  The ministry revealed that more than 1.3 million people in Thailand have fallen sick since January due to the country’s dangerously high levels of air pollution, Radio Free Asia reported.

  “The PM2.5 level has been over 51 micrograms per cubic meter of air for more than three consecutive days in 15 provinces, which has begun to affect the people’s health,” public health secretary Opart Karnkawinpong said.

  Karnkawinpong said that Thailand’s air pollution levels are higher this year due to increased traffic.

  PM2.5 refers to fine particulate matter with a diameter of 2.5 micrometers or less, which can get into the lungs and pose significant health risks, including respiratory and cardiovascular diseases and cancer.

  Greenpeace Thailand campaigner Alliya Moun-Ob said the number of people who fell ill because of air pollution could be “the worst we have seen so far,” with several Thai cities being engulfed in thick smog.

  “We could see mountains in Chiang Mai but can’t see them anymore. In Bangkok, tall buildings are lost in the smog,” Moun-Ob told Radio Free Asia.

  “It’s the post-COVID back-to-normal situation. That is why it is particularly bad this year for Thailand. Also, there is less rain this year compared to last,” she added.

  The government has urged residents to stay indoors and wear face masks when leaving their houses. The country’s pollution control department advised people to use personal protective equipment when necessary.

  No-Burning Rule

  Thai Prime Minister Prayuth Chan-o-cha last month imposed a three-month no-burning rule from Feb. 1 to April 30 to curb wildfires and haze. He has now urged farmers to refrain from burning agricultural waste.

  “Please, I don’t want to use the laws. If it’s used, you all will be breaking it. I don’t want anyone to be in trouble, but you must think about the quality of life of others and their health too,” Prayut said.

  The pollution control department has previously said that “stagnant weather conditions” were exacerbating vehicle emissions and seasonal fires on agricultural lands. It urged people to reduce outdoor activities.

  Thailand’s Chiang Mai city was ranked the second most polluted city in the world on Saturday, with its PM2.5 levels reaching 118.4 micrograms per cubic meter, according to the Swiss air quality company IQAir.

  IQAir stated that exhaust fumes from traffic, crop burning, construction-induced pollution, and smoke output from factories are contributing factors to the high levels of PM2.5 in Thailand’s cities.

  “Thailand as a country can be counted as a place that has numerous polluted cities, some of which are famous for their levels of smoke and haze,” it stated, citing Bangkok and Chiang Mai as some of Thailand’s polluted cities.

  Back in 2019, local authorities in Chiang Mai declared a state of emergency after the city’s air pollution level reached “a disastrous level,” with PM2.5 levels exceeding 700 micrograms per cubic meter.

  Tyler Durden
  Sun, 03/12/2023 – 21:45

• Bonds, Bitcoin, & Bullion Surge After Fed Bailout, Rate-Hike Odds Plummet
  Bonds, Bitcoin, & Bullion Surge After Fed Bailout, Rate-Hike Odds Plummet

  Who could have seen that coming?

  

  Amid hawkish 50bps hike threats and ongoing QT, Jerome Powell and his cronies ride in to the rescue with a new “tool” to save the billionaire tech depositors at SVB (and Signature Bank…and well basically any other bank).

  The reaction in markets is dramatic, with expectations for The Fed’s rate-trajectory collapsing…

  

  Source: Bloomberg

  The terminal rate has plunged from September 2023 at 5.70% on Wednesday to June 2023 at 5.15%, and expectations for rate-cuts in H2 2023 are soaring…

  

  Source: Bloomberg

  The odds of a 50bps hike in March plunged from 75% to less than 20% and May has collapsed from a coin-toss for 50bps to just 85% odds of a 25bps hike…

  

  Source: Bloomberg

  Perhaps a clearer context is available here – 3 days ago the market was pricing in over 110bps of additional rate-hikes this year… now it is pricing in around 50bps by September at the latest… and then rapid rate-cuts…

  

  Source: Bloomberg

  The reaction in asset markets is QE-esque with stocks up 1-1.5% (not as much as expected)…

  

  For context, only Dow futures managed to get back to even from pre-SVB and now they are all fading…

  

  Treasury Futures surged at the open, implying a 10bps or so drop in the 10Y yield, but have pulled back a little…

  

  Source: Bloomberg

  As cash bonds open, there is a notable divergence with 2Y bid (-11bps) and the rest of the curve offered (30Y +5bps)…

  

  Source: Bloomberg

  Dramatically steepening the yield curve…

  

  Source: Bloomberg

  Gold spiking to $1900…

  

  And Bitcoin surging back above $22,000, erasing all the FUD post-SVB..

  

  Source: Bloomberg

  Additionally, USDC has re-pegged with the $1…

  

  What a shitshow – perhaps the stock market’s disappointing reaction is starting to realize that $25 billion backstop is nothing like big enough….

  

  As we said earlier on twitter, “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.”

  Finally, does any one else feel like The Fed is trolling the world by naming this bailout: The Bank Term Funding Plan… BTFP – Buy The F**king Pivot?!

  Tyler Durden
  Sun, 03/12/2023 – 21:14

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

  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, and whose depositors will be made whole after invoking a “systemic risk exception”

  After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13.  No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.

  We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole.  As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.

  While depositors are safe, creditors and equity holders are not:

  Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.

  Finally, 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.

  The conclusion:

  The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.

  Translation: the Fed’s hiking cycle is dead and buried, and here comes the next round of massive liquidity injections. It also means that the Fed, Treasury and FDIC have just experienced the most devastating humiliation in recent history – just 4 days ago Powell was telling Congress he could hike 50bps and here we are now using taxpayer funds to bail out banks that have collapsed because they couldn’t even handle 4.75% and somehow the Fed has no idea!

  

  To summarize:

  • Signature Bank has been closed
  • All depositors of Silicon Valley Bank and Signature Bank will be fully protected
  • Shareholders and certain unsecured debtholders will not be protected
  • New Fed 13(3) facility announced with $25 billion from ESF to backstop bank deposits

  As we said earlier on twitter, “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.”

  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

  https://platform.twitter.com/widgets.js

  Oh, and if the Fed really thinks that $25 billion from the ESF will be enough to backstop a bank run on $18 trillion of deposits…

  

  … we wish them the best of luck.

  * * *

  6:10pm ET Update: Futures have opened for trading sharply higher, with bitcoin and precious metals also spiking amid rising expectations of either some sort of bank system bailout/backstop or, more likely, an end to the Fed’s hiking cycle.

  Echoing what the WaPo reported in an earlier trial balloon, Bloomberg writes that the Fed and the Treasury Department are preparing emergency measures to shore up banks and ensure they can meet potential demands by their customers to withdraw money.

  As reported earlier, the Fed is planning to “ease 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’s Silicon Valley Bank (as we noted earlier, the access to the Discoint Window was never an issue, what was is the stigma associated with using it and the likelihood that depositors will flee the moment it becomes public).

  Additionally, the Fed and Treasury are also preparing a program to backstop deposits using the Fed’s emergency lending authority.

  The use of the Fed’s emergency lending authority is for “unusual and exigent” circumstances, and signals that US regulators view the spillovers from SVB’s collapse as a sign of systemic risk in markets. Bloomberg adds that the FDIC will need to declare a system risk exception in order to insure the uninsured depositors, but we doubt that will be an issue.

  The emergency lending facility is a Depression-era statute in the Federal Reserve Act that allows the central bank to make loans directly. The Fed is required to establish that borrowers were unable to obtain liquidity elsewhere. Using the emergency authority requires a vote by the Fed’s board and approval from the Treasury secretary.

  Meanwhile, as reported previously, some banks began drawing on the discount window Friday, seeking to shore up liquidity in a panicked frenzy as widespread liquidations on Friday saw many regional banks lose as much as half of their market cap before recovering.

  Amid speculation of yet another taxpayer funded bailout – and a guaranteed end to the Fed’s rate hikes and potential return of QE – stock futures jumped above 3900…

  

  …. with gold and bitcoin surging too.

  * * *

  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

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  * * *

  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 Janet Yellen. No final decision has been made, but the deliberations reflect concern over the collateral damage from SVB’s collapse and authorities’ struggle to respond amid limits on their powers implemented following the 2008 financial bailouts.

  “We’ve been hearing from those depositors and other concerned people this weekend. So let me say that I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation,” Yellen said on the CBS program “Face the Nation.”

  But more importantly, the WaPo report contradicts what Yellen said just a few hours earlier, namely 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,”

  This suggests that in just a few short hours, officials and regulators peaked behind the scenes and realized just how bad a potential bad crisis could be and have made a 1800 degree U turn.

  The result: any erroneous higherer for longerer narrative spewed by some self-appointed experts has just blown up, and what is about to be unleashed is another vast liquidity wave, something that bitcoin clearly is starting to anticipate.

  

  * * *

  1:15pm ET Update: In a throwback to the legendary “Lehman Sunday”, when dozens of credit traders did an ad hoc CDS trading and novation session on the Sunday ahead of the bank’s Chapter 11 filing to minimize the chaos and fallout from the coming bankruptcy, Bloomberg reports that the FDIC kicked off an auction process late Saturday for Silicon Valley Bank, with final bids due by Sunday afternoon.

  The FDIC is reportedly aiming for “a swift deal” but a winner may not be known until late Sunday.  Bloomberg also reported that the regulator is racing to sell assets and make a portion of clients’ uninsured deposits available as soon as Monday; the open questions are i) whether there will be a haircut and ii) how big it will be. A table from JPM’s Michael Cemablest below shows historical haircuts on uninsured depositors in previous bank crises.

  

  We get a slightly more positive vibe from a Reuters report according to which “authorities are preparing “material action” on Sunday to shore up deposits in Silicon Valley Bank and stem any broader financial fallout from its sudden collapse.”

  Details of the announcement expected on Sunday were not immediately available. One source said the Federal Reserve had acted to keep banks operating during the COVID-19 pandemic, and could take similar action now.

  “This will be a material action, not just words,” one source said. Earlier, U.S. Treasury Secretary Janet Yellen said that she was working with banking regulators to respond after SVB became the largest bank to fail since the 2008 financial crisis.

  As fears deepened of a broader fallout across the U.S. regional banking sector and beyond, Yellen said she was working to protect depositors but ruled out a bailout.

  “We want to make sure that the troubles that exist at one bank don’t create contagion to others that are sound,” Yellen told the CBS News Sunday Morning show. “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 added.

  Meanwhile, more than 3,500 CEOs and founders representing some 220,000 workers signed a petition started by Y Combinator appealing directly to Yellen and others to backstop depositors, warning that more than 100,000 jobs could be at risk.

  Reuters also reports that the FDIC was trying to find another bank willing to merge with SVB:

  “Some industry executives said such a deal would be sizeable for any bank and would likely require regulators to give special guarantees and make other allowances.”

  That said, the longer we wait without some resolution the more likely it is that SVB’s unsecured depositors will get pennies on the dollar, according to the following (unconfirmed) reporting from Chalie Gasparino: “Bankers increasingly pessimistic a single buyer will emerge for SVB, laying out options for clients w money in there: 1-ride it out. 2-sell deposits for around 70-80 cents on dollar to other financial players; borrow against deposits jpmorgan at 50 cents on dollar.”

  BREAKING: Bankers increasingly pessimistic a single buyer will emerge for SVB, laying out options for clients w money in there: 1-ride it out. 2-sell deposits for around 70-80 cents on dollar to other financial players; borrow against deposits @jpmorgan at 50 cents on dollar

  — Charles Gasparino (@CGasparino) March 12, 2023

  https://platform.twitter.com/widgets.js

  The FDIC previously said the agency has said it will make 100% of protected deposits available on Monday, when Silicon Valley Bank branches reopen.

  There was also news for those whose money remains frozen at SIVB. BBG notes that tech lender Liquidity Group is planning to offer about $3 billion in emergency loans to start-up clients hit by the collapse of Silicon Valley Bank.

  Liquidity has about $1.2 billion ready in cash to make available in the coming weeks, Chief Executive Officer and co-founder Ron Daniel said in an interview on Sunday. The group is also in discussions with its funding partners, including Japan’s Mitsubishi UFJ Financial Group Inc. and Apollo Global Management Inc., to offer an additional $2 billion in loans, he said.

  “By helping the companies to survive now, I’m hoping some of them would succeed and come back to us in the future,” Daniel said. “We’re nurturing our future clients.” A typical loan will be a one-year facility of $1 million to $10 million, or as much as 30% of the balances held with SVB, Daniel said. The priority is to help companies meet payroll expenses.

  The fate of other SVB-linked entities appears to be somewhat rosier. Bloomberg reports that Royal Group, an investment firm controlled by a top Abu Dhabi royal, is considering a possible takeover of the UK arm of Silicon Valley Bank following its collapse last week, according to people familiar with the matter. The conglomerate, chaired by United Arab Emirates National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan, is discussing a potential buy-out through one of its subsidiaries.

  Tyler Durden
  Sun, 03/12/2023 – 20:45

• Taibbi: The Democrats' Disastrous Miscalculation On Civil Liberties
  Taibbi: The Democrats’ Disastrous Miscalculation On Civil Liberties

  Authored by Matt Taibbi via Racket News (emphasis ours),

  Civil liberties have officially gone out of style, a phenomenon on full display at the Weaponization of Government Hearing at which I just testified.

  

  The circus-like scene featured a ranking member calling two journalists a “direct threat,” a Stanford-educated former prosecutor who confused accusation with proof, and a Texas congressman, Colin Allred, who proudly held up the results of an adjudicated criminal case to argue against due process in another arena. When I asked Allred’s permission to point out that he’d just demonstrated that a proper forum for dealing with campaign abuses already existed in the court system, he basically told me to shut up.

  “No,” he said, “you don’t get to ask questions here.”

  I then had to keep my mouth shut as an elected official shifted to Dad mode to admonish me to “take off the tinfoil hat,” because “there’s not a “vast conspiracy,” by which he meant he apparently meant my last three months of research.

  Allred then went on MSNBC, where my former friend Chris Hayes with a straight face suggested he didn’t see a “government angle” in either the Twitter Files or our testimony — both of which were more or less entirely about that issue — and Allred beamed in agreement, saying the discovery of Truthout and Ultra Maga Dog Mom on federal blacklists was just the FBI “pointing out that certain actions are probably Russian disinformation ops.” He also offered the ironic criticism that some people are “stuck in an information loop, in which you’re not allowing outside information in”:

  At the hearing, Pee-Wee’s words of the day were clearly cherry-picked, money, and Elon Musk. Nearly every question asked of Michael Shellenberger and me involved our associations or motives. Florida’s Debbie Wasserman-Schultz said “being a Republican witness certainly casts a cloud over your objectivity” (only a Democratic witness can be trusted), while Dan Goldman tweeted that only someone who signed his version of a loyalty oath — a question about whether or not we “agreed” with Robert Mueller’s two indictments of Russian defendants — can “belong” in the public conversation:

  It is a complicated issue. But if you (and the GOP) won’t accept that 1) Russia interfered in the 2016 election through social media and 2) preventing that is a legitimate goal of the FBI, then you don’t belong in the nuanced convo on the balance between NATSEC and lawful speech. https://t.co/BfIZInqDgb

  — Daniel Goldman (@danielsgoldman) March 11, 2023

  https://platform.twitter.com/widgets.js

  These are behaviors we associated with Republicans in the War on Terror years, when Democrats howled over accusations that John Kerry “looks French.” That the roles have been reversed is old news, but the big question remains: why did this happen?

  In the coming days you’re going to see a new release of Twitter Files material, about the creation of a multi-agency working group to address what experts described as vaccine “disinformation and misinformation.”

  This cross-platform group looked for people who were just “asking questions,” which they viewed as a rhetorical trick for introducing misinformation. They took aim at people who “framed” ideas like vaccine passports as compulsory or authoritarian, as opposed to emphasizing their utility and necessity, which they interpreted to mean a tendency to more generally negative opinions about vaccines. Moreover, as disclosed last week, they saw a threat in people who wrote about “true stories of vaccine side effects” or “true posts which could fuel hesitancy.”

  Most disturbing was a letter to a long list of academics, tech executives, and communications specialists from a staffer for the non-profit Institute for Defense Analysis. It referred to a new type of online influencer, “some of whom enjoy reach commensurate with mass media channels”:

  In an age of declining trust in media, government, and institutions, influencers occupy a position of trust and enjoy a perception of authenticity. In addition to the rise of influencers, now-prevalent online crowds have been transformed into a significant force in shaping narratives; they are persistent and can be leveraged to achieve amplification of particular messages in the battle for attention.

  “Online crowds have been transformed into a significant force in shaping narratives” is just another way of saying, “independent groups now have politically effective ways to organize,” which the authors clearly saw as a problem in itself.

  The digital age has produced an almost involuntary general disrespect for personal boundaries. Probably all of us are guilty of it on some level. We peek, poke, and prod in ways that would have made us ashamed in the pre-Internet years.

  We see a more ominous form of it throughout the Twitter Files, where content moderators are forever taking short cuts to judgment by blithely entering the minds of users, to make snap calls about intent. If people transmit true or possibly true stories that conflict with approved narratives, from human rights abuses in the Donbass to first-person accounts of “breakthrough” vaccine cases, these acts are algorithmically detected as intended to deceive and thrown in thoughtcrime baskets: undermining Ukraine, promoting hesitancy, etc.

  The campaign against “disinformation” in this way has become the proxy for a war against civil liberties that probably began in 2016, when the reality of Donald Trump winning the Republican nomination first began to spread through the intellectual class. There was a crucial moment in May of that year, when Andrew Sullivan published “Democracies End When They Are Too Democratic.”

  This piece was a cri de coeur from the educated set. I read it on the way to covering Trump’s clinching victory in the Indiana primary, and though I totally disagreed with its premise, I recognized right away that Andrew’s argument was brilliant and would have legs. Sullivan described Plato’s paradoxical observation that “tyranny is probably established out of no other regime than democracy,” explaining that as freedoms spread and deference to authority withered, the state would become ungovernable:

  Family hierarchies are inverted… Animals are regarded as equal to humans; the rich mingle freely with the poor in the streets and try to blend in. The foreigner is equal to the citizen…

  And it is when a democracy has ripened as fully as this, Plato argues, that a would-be tyrant will often seize his moment.

  It was already patently obvious to anyone covering politics in America that respect for politicians and institutions was indeed vanishing at warp speed. I thought it was a consequence of official lies like WMD, failed policies like the Iraq War or the financial crisis response, and the increasingly insufferable fakery of presidential politics. People like author Martin Gurri pointed at a free Internet, which allowed the public to see these warts in more hideous technicolor than before.

  Sullivan saw many of the same things, but his idea about a possible solution was to rouse to action the country’s elites, who he said “still matter” and “provide the critical ingredient to save democracy from itself.” Look, Andrew’s English, a crime for which I think people may in some cases be excused (even if I found myself reaching for something sharp when he described Bernie Sanders as a “demagogue of the left”). Also, his essay was subtle and had multiple layers, one of which was an exhortation to those same elites to wake up and listen to the anger in the population.

  Subscribers to Racket News can read the rest here…

  Tyler Durden
  Sun, 03/12/2023 – 20:12

• These Are The 15 Largest US Cities By GDP
  These Are The 15 Largest US Cities By GDP

  The United States has the largest GDP in the world in nominal terms, and urban areas are a major contributor to the country’s economic might. In fact, metropolitan areas account for roughly 90% of U.S. economic output.

  In the infographic below, Visual Capitalist’s Avery Koop and Joyce Max rank the economic output of the top 15 U.S. cities from New York City to Minneapolis, using data from the U.S. Bureau of Economic Analysis. The data covers 2021, which is the most recent release from BEA.

  It’s important to note that the data considers entire surrounding metropolitan areas, so as an example, New York City includes neighboring population centers such as Newark, NJ, as well as Jersey City⁠—reaching a GDP of nearly $2 trillion.

  Measuring a city’s economy at the metro level can provide a more accurate representation of its economic activity. This is because the metropolitan areas include not only the central city but also the surrounding suburban and rural areas that are economically connected to it.

  

  America’s Economic Hubs

  There are some obvious winners when it comes to the largest U.S. cities by GDP, including NYC, Los Angeles, Dallas, and San Francisco.

  In the table below, we’ve listed each of the 384 metropolitan areas out of the dataset all the way down to last place, Sebring-Avon Park, Florida, alongside respective ranks and GDP:

  Rank	City	GDP (in thousands)
  #1	New York-Newark-Jersey City, NY-NJ-PA	$1,992,779,274
  #2	Los Angeles-Long Beach-Anaheim, CA	$1,124,682,354
  #3	Chicago-Naperville-Elgin, IL-IN-WI	$764,583,227
  #4	San Francisco-Oakland-Berkeley, CA	$668,677,573
  #5	Washington-Arlington-Alexandria, DC-VA-MD-WV	$607,628,505
  #6	Dallas-Fort Worth-Arlington, TX	$598,333,263
  #7	Houston-The Woodlands-Sugar Land, TX	$537,066,232
  #8	Boston-Cambridge-Newton, MA-NH	$531,671,846
  #9	Seattle-Tacoma-Bellevue, WA	$479,966,484
  #10	Philadelphia-Camden-Wilmington, PA-NJ-DE-MD	$477,580,629
  #11	Atlanta-Sandy Springs-Alpharetta, GA	$473,823,474
  #12	Miami-Fort Lauderdale-Pompano Beach, FL	$417,147,866
  #13	San Jose-Sunnyvale-Santa Clara, CA	$410,418,579
  #14	Phoenix-Mesa-Chandler, AZ	$316,090,586
  #15	Minneapolis-St. Paul-Bloomington, MN-WI	$296,969,112
  #16	Detroit-Warren-Dearborn, MI	$283,660,258
  #17	San Diego-Chula Vista-Carlsbad, CA	$267,973,544
  #18	Denver-Aurora-Lakewood, CO	$253,399,051
  #19	Baltimore-Columbia-Towson, MD	$222,967,241
  #20	Riverside-San Bernardino-Ontario, CA	$213,183,465
  #21	Charlotte-Concord-Gastonia, NC-SC	$207,866,150
  #22	Austin-Round Rock-Georgetown, TX	$193,773,558
  #23	Tampa-St. Petersburg-Clearwater, FL	$190,708,533
  #24	St. Louis, MO-IL	$187,569,544
  #25	Portland-Vancouver-Hillsboro, OR-WA	$186,570,323
  #26	Cincinnati, OH-KY-IN	$171,737,526
  #27	Pittsburgh, PA	$168,021,049
  #28	Orlando-Kissimmee-Sanford, FL	$167,279,974
  #29	Nashville-Davidson–Murfreesboro–Franklin, TN	$163,031,737
  #30	Indianapolis-Carmel-Anderson, IN	$162,062,985
  #31	Sacramento-Roseville-Folsom, CA	$160,542,566
  #32	Columbus, OH	$154,509,800
  #33	Kansas City, MO-KS	$154,328,892
  #34	Cleveland-Elyria, OH	$147,637,827
  #35	San Antonio-New Braunfels, TX	$144,384,474
  #36	Las Vegas-Henderson-Paradise, NV	$136,198,676
  #37	Salt Lake City, UT	$118,494,536
  #38	Milwaukee-Waukesha, WI	$111,479,649
  #39	Raleigh-Cary, NC	$108,288,115
  #40	Virginia Beach-Norfolk-Newport News, VA-NC	$107,067,798
  #41	Hartford-East Hartford-Middletown, CT	$106,507,622
  #42	Jacksonville, FL	$101,367,263
  #43	Richmond, VA	$99,388,754
  #44	Bridgeport-Stamford-Norwalk, CT	$98,751,750
  #45	Providence-Warwick, RI-MA	$96,913,356
  #46	Oklahoma City, OK	$86,662,243
  #47	Memphis, TN-MS-AR	$86,493,147
  #48	Louisville/Jefferson County, KY-IN	$82,866,115
  #49	New Orleans-Metairie, LA	$81,829,573
  #50	Buffalo-Cheektowaga, NY	$76,991,435
  #51	Albany-Schenectady-Troy, NY	$73,995,509
  #52	Omaha-Council Bluffs, NE-IA	$73,876,512
  #53	Birmingham-Hoover, AL	$70,874,148
  #54	Rochester, NY	$69,341,714
  #55	Grand Rapids-Kentwood, MI	$68,401,313
  #56	Urban Honolulu, HI	$67,383,319
  #57	Des Moines-West Des Moines, IA	$61,171,285
  #58	Durham-Chapel Hill, NC	$60,814,699
  #59	Tulsa, OK	$60,392,165
  #60	Oxnard-Thousand Oaks-Ventura, CA	$58,332,732
  #61	New Haven-Milford, CT	$57,541,201
  #62	Madison, WI	$56,636,713
  #63	Baton Rouge, LA	$56,199,218
  #64	Worcester, MA-CT	$54,941,620
  #65	Knoxville, TN	$52,343,257
  #66	Greenville-Anderson, SC	$52,328,843
  #67	Bakersfield, CA	$52,239,044
  #68	Allentown-Bethlehem-Easton, PA-NJ	$50,960,155
  #69	Charleston-North Charleston, SC	$50,704,392
  #70	Tucson, AZ	$50,231,611
  #71	Fresno, CA	$49,987,063
  #72	Dayton-Kettering, OH	$49,548,210
  #73	Albuquerque, NM	$49,480,431
  #74	Columbia, SC	$48,214,448
  #75	Syracuse, NY	$46,414,861
  #76	Greensboro-High Point, NC	$45,574,221
  #77	North Port-Sarasota-Bradenton, FL	$44,746,013
  #78	Harrisburg-Carlisle, PA	$43,867,213
  #79	Trenton-Princeton, NJ	$43,633,044
  #80	Boise City, ID	$43,601,402
  #81	Colorado Springs, CO	$43,522,096
  #82	Little Rock-North Little Rock-Conway, AR	$42,669,983
  #83	Midland, TX	$42,035,915
  #84	Akron, OH	$41,058,875
  #85	Wichita, KS	$40,586,374
  #86	Toledo, OH	$40,546,884
  #87	Cape Coral-Fort Myers, FL	$39,813,620
  #88	Poughkeepsie-Newburgh-Middletown, NY	$39,375,465
  #89	Portland-South Portland, ME	$39,089,209
  #90	Winston-Salem, NC	$38,504,784
  #91	El Paso, TX	$37,507,586
  #92	Springfield, MA	$37,189,530
  #93	Provo-Orem, UT	$36,866,060
  #94	Stockton, CA	$36,790,065
  #95	Reno, NV	$35,471,910
  #96	Ogden-Clearfield, UT	$35,071,325
  #97	Santa Rosa-Petaluma, CA	$34,450,601
  #98	Chattanooga, TN-GA	$34,425,793
  #99	Huntsville, AL	$34,086,472
  #100	Santa Maria-Santa Barbara, CA	$33,306,884
  #101	Boulder, CO	$33,182,418
  #102	Lakeland-Winter Haven, FL	$33,144,404
  #103	Fayetteville-Springdale-Rogers, AR	$33,102,945
  #104	Vallejo, CA	$33,100,194
  #105	Lancaster, PA	$33,048,548
  #106	Lexington-Fayette, KY	$32,851,535
  #107	Manchester-Nashua, NH	$32,729,580
  #108	Spokane-Spokane Valley, WA	$32,178,609
  #109	Augusta-Richmond County, GA-SC	$31,718,339
  #110	Jackson, MS	$30,785,111
  #111	Salinas, CA	$30,712,263
  #112	Palm Bay-Melbourne-Titusville, FL	$30,589,541
  #113	Scranton–Wilkes-Barre, PA	$30,040,721
  #114	Lansing-East Lansing, MI	$29,363,629
  #115	Ann Arbor, MI	$28,604,834
  #116	Anchorage, AK	$28,210,676
  #117	Modesto, CA	$26,519,792
  #118	Sioux Falls, SD	$26,063,548
  #119	Savannah, GA	$25,681,434
  #120	Deltona-Daytona Beach-Ormond Beach, FL	$25,516,019
  #121	McAllen-Edinburg-Mission, TX	$25,508,724
  #122	Salisbury, MD-DE	$25,194,103
  #123	Fort Wayne, IN	$25,156,180
  #124	Corpus Christi, TX	$24,937,471
  #125	Davenport-Moline-Rock Island, IA-IL	$24,603,801
  #126	Beaumont-Port Arthur, TX	$24,407,762
  #127	Fort Collins, CO	$24,381,467
  #128	Asheville, NC	$24,350,043
  #129	Pensacola-Ferry Pass-Brent, FL	$24,309,017
  #130	Fayetteville, NC	$24,254,218
  #131	Shreveport-Bossier City, LA	$24,153,731
  #132	Naples-Marco Island, FL	$24,020,049
  #133	Springfield, MO	$23,930,761
  #134	Mobile, AL	$23,876,616
  #135	Peoria, IL	$23,599,643
  #136	York-Hanover, PA	$23,406,852
  #137	Youngstown-Warren-Boardman, OH-PA	$23,284,271
  #138	Lafayette, LA	$22,650,406
  #139	Lincoln, NE	$22,492,557
  #140	Greeley, CO	$22,082,249
  #141	Reading, PA	$22,055,785
  #142	Green Bay, WI	$21,991,068
  #143	Killeen-Temple, TX	$21,967,641
  #144	Myrtle Beach-Conway-North Myrtle Beach, SC-NC	$21,787,862
  #145	Salem, OR	$21,487,178
  #146	Evansville, IN-KY	$21,248,968
  #147	Gulfport-Biloxi, MS	$21,177,139
  #148	Port St. Lucie, FL	$20,762,211
  #149	Norwich-New London, CT	$20,743,047
  #150	Visalia, CA	$20,580,771
  #151	Montgomery, AL	$20,250,047
  #152	Canton-Massillon, OH	$20,167,014
  #153	Tallahassee, FL	$20,148,962
  #154	Cedar Rapids, IA	$19,793,178
  #155	San Luis Obispo-Paso Robles, CA	$19,639,637
  #156	Elkhart-Goshen, IN	$19,271,838
  #157	Crestview-Fort Walton Beach-Destin, FL	$18,899,397
  #158	Eugene-Springfield, OR	$18,848,436
  #159	Gainesville, FL	$18,353,884
  #160	Roanoke, VA	$18,297,657
  #161	Wilmington, NC	$18,203,444
  #162	Santa Cruz-Watsonville, CA	$18,076,112
  #163	Spartanburg, SC	$17,914,096
  #164	Kennewick-Richland, WA	$17,836,850
  #165	Fargo, ND-MN	$17,706,417
  #166	Flint, MI	$17,234,628
  #167	Longview, TX	$17,134,932
  #168	South Bend-Mishawaka, IN-MI	$17,031,977
  #169	Rockford, IL	$17,005,386
  #170	Hickory-Lenoir-Morganton, NC	$16,787,117
  #171	Huntington-Ashland, WV-KY-OH	$16,470,842
  #172	Columbus, GA-AL	$16,456,091
  #173	Lubbock, TX	$16,402,001
  #174	Amarillo, TX	$16,313,319
  #175	Olympia-Lacey-Tumwater, WA	$16,245,024
  #176	Appleton, WI	$16,202,188
  #177	Bellingham, WA	$16,036,428
  #178	Kalamazoo-Portage, MI	$15,946,455
  #179	Duluth, MN-WI	$15,905,385
  #180	College Station-Bryan, TX	$15,896,707
  #181	Lake Charles, LA	$15,791,901
  #182	Charlottesville, VA	$15,762,678
  #183	Burlington-South Burlington, VT	$15,669,774
  #184	Rochester, MN	$15,644,852
  #185	Atlantic City-Hammonton, NJ	$15,313,041
  #186	Barnstable Town, MA	$15,150,695
  #187	Bloomington, IL	$15,140,725
  #188	Waco, TX	$15,125,143
  #189	Kingsport-Bristol, TN-VA	$15,104,427
  #190	Utica-Rome, NY	$14,678,570
  #191	Clarksville, TN-KY	$14,546,292
  #192	Bremerton-Silverdale-Port Orchard, WA	$14,373,182
  #193	Laredo, TX	$13,581,543
  #194	Gainesville, GA	$13,561,088
  #195	Charleston, WV	$13,553,478
  #196	Brownsville-Harlingen, TX	$13,225,538
  #197	Champaign-Urbana, IL	$13,219,093
  #198	Topeka, KS	$13,204,822
  #199	Springfield, IL	$13,019,072
  #200	Tyler, TX	$13,002,122
  #201	Tuscaloosa, AL	$12,913,789
  #202	Ocala, FL	$12,907,979
  #203	Hagerstown-Martinsburg, MD-WV	$12,755,632
  #204	Bend, OR	$12,618,710
  #205	Lafayette-West Lafayette, IN	$12,537,390
  #206	Erie, PA	$12,509,399
  #207	Napa, CA	$12,387,136
  #208	Binghamton, NY	$12,314,327
  #209	St. Cloud, MN	$12,202,920
  #210	Columbia, MO	$12,077,178
  #211	Iowa City, IA	$11,989,228
  #212	Yakima, WA	$11,864,827
  #213	Macon-Bibb County, GA	$11,818,017
  #214	Oshkosh-Neenah, WI	$11,586,606
  #215	Billings, MT	$11,570,641
  #216	Athens-Clarke County, GA	$11,562,554
  #217	Hilton Head Island-Bluffton, SC	$11,497,194
  #218	Lynchburg, VA	$11,430,306
  #219	Odessa, TX	$11,399,343
  #220	Wausau-Weston, WI	$11,250,695
  #221	Wheeling, WV-OH	$11,239,365
  #222	Waterloo-Cedar Falls, IA	$11,197,979
  #223	Florence, SC	$11,018,873
  #224	Medford, OR	$10,949,122
  #225	Fort Smith, AR-OK	$10,920,156
  #226	Greenville, NC	$10,841,765
  #227	Merced, CA	$10,465,518
  #228	Kahului-Wailuku-Lahaina, HI	$10,356,019
  #229	Eau Claire, WI	$10,308,773
  #230	Panama City, FL	$10,269,545
  #231	Sioux City, IA-NE-SD	$10,111,866
  #232	Chico, CA	$10,006,052
  #233	Dover, DE	$9,984,324
  #234	Idaho Falls, ID	$9,915,330
  #235	El Centro, CA	$9,912,905
  #236	Jacksonville, NC	$9,900,984
  #237	Daphne-Fairhope-Foley, AL	$9,891,548
  #238	Jackson, TN	$9,779,929
  #239	State College, PA	$9,750,456
  #240	Harrisonburg, VA	$9,499,442
  #241	Redding, CA	$9,419,468
  #242	Saginaw, MI	$9,363,549
  #243	Houma-Thibodaux, LA	$9,350,744
  #244	La Crosse-Onalaska, WI-MN	$9,294,924
  #245	Johnson City, TN	$9,219,695
  #246	Racine, WI	$9,100,374
  #247	Warner Robins, GA	$8,993,124
  #248	Yuma, AZ	$8,977,170
  #249	Lima, OH	$8,962,374
  #250	Jefferson City, MO	$8,956,976
  #251	Abilene, TX	$8,848,793
  #252	Prescott Valley-Prescott, AZ	$8,796,885
  #253	Monroe, LA	$8,699,152
  #254	Kingston, NY	$8,622,165
  #255	Morgantown, WV	$8,597,534
  #256	California-Lexington Park, MD	$8,554,244
  #257	Janesville-Beloit, WI	$8,530,214
  #258	Terre Haute, IN	$8,502,107
  #259	East Stroudsburg, PA	$8,493,417
  #260	Niles, MI	$8,455,695
  #261	Flagstaff, AZ	$8,444,850
  #262	Winchester, VA-WV	$8,419,006
  #263	Bowling Green, KY	$8,368,247
  #264	Las Cruces, NM	$8,339,710
  #265	St. George, UT	$8,338,042
  #266	Joplin, MO	$8,319,062
  #267	San Angelo, TX	$8,284,455
  #268	Bloomington, IN	$8,272,024
  #269	Blacksburg-Christiansburg, VA	$8,271,597
  #270	Bismarck, ND	$8,243,740
  #271	Coeur d’Alene, ID	$8,112,478
  #272	Yuba City, CA	$8,104,050
  #273	Sebastian-Vero Beach, FL	$8,063,835
  #274	Dalton, GA	$7,950,074
  #275	Decatur, IL	$7,856,804
  #276	Dubuque, IA	$7,840,579
  #277	Manhattan, KS	$7,818,079
  #278	Bangor, ME	$7,813,558
  #279	Rocky Mount, NC	$7,799,020
  #280	Sheboygan, WI	$7,747,640
  #281	Pittsfield, MA	$7,682,977
  #282	Mount Vernon-Anacortes, WA	$7,659,302
  #283	Jackson, MI	$7,651,976
  #284	Santa Fe, NM	$7,636,186
  #285	Dothan, AL	$7,636,116
  #286	Ames, IA	$7,583,257
  #287	Rapid City, SD	$7,565,027
  #288	Battle Creek, MI	$7,528,043
  #289	Glens Falls, NY	$7,446,782
  #290	Grand Junction, CO	$7,444,077
  #291	Burlington, NC	$7,440,110
  #292	Pueblo, CO	$7,436,671
  #293	Logan, UT-ID	$7,425,275
  #294	Wenatchee, WA	$7,403,597
  #295	Vineland-Bridgeton, NJ	$7,376,321
  #296	Auburn-Opelika, AL	$7,335,523
  #297	Decatur, AL	$7,282,688
  #298	Kankakee, IL	$7,282,382
  #299	Hanford-Corcoran, CA	$7,258,824
  #300	Columbus, IN	$7,205,692
  #301	Hattiesburg, MS	$7,181,156
  #302	Wichita Falls, TX	$7,096,972
  #303	Ithaca, NY	$7,044,555
  #304	Lake Havasu City-Kingman, AZ	$7,037,905
  #305	Alexandria, LA	$7,037,021
  #306	Watertown-Fort Drum, NY	$6,972,539
  #307	Weirton-Steubenville, WV-OH	$6,966,489
  #308	Lebanon, PA	$6,911,784
  #309	Punta Gorda, FL	$6,911,071
  #310	Madera, CA	$6,907,890
  #311	Chambersburg-Waynesboro, PA	$6,846,649
  #312	Elizabethtown-Fort Knox, KY	$6,819,777
  #313	Muskegon, MI	$6,795,782
  #314	Missoula, MT	$6,780,085
  #315	Altoona, PA	$6,736,868
  #316	Monroe, MI	$6,716,820
  #317	St. Joseph, MO-KS	$6,700,369
  #318	Cheyenne, WY	$6,608,922
  #319	Williamsport, PA	$6,562,069
  #320	Valdosta, GA	$6,529,753
  #321	Jonesboro, AR	$6,494,679
  #322	Fairbanks, AK	$6,477,984
  #323	Albany, GA	$6,462,473
  #324	New Bern, NC	$6,436,366
  #325	Owensboro, KY	$6,434,476
  #326	Ocean City, NJ	$6,279,126
  #327	Grand Forks, ND-MN	$6,226,443
  #328	Morristown, TN	$6,218,224
  #329	Carbondale-Marion, IL	$6,206,570
  #330	Mankato, MN	$6,157,026
  #331	Texarkana, TX-AR	$6,086,205
  #332	Longview, WA	$6,047,768
  #333	Florence-Muscle Shoals, AL	$5,989,958
  #334	Casper, WY	$5,887,565
  #335	Twin Falls, ID	$5,878,885
  #336	Staunton, VA	$5,865,980
  #337	Sherman-Denison, TX	$5,852,474
  #338	Midland, MI	$5,836,461
  #339	Fond du Lac, WI	$5,817,790
  #340	Goldsboro, NC	$5,761,092
  #341	Farmington, NM	$5,698,394
  #342	Lawton, OK	$5,636,670
  #343	Lewiston-Auburn, ME	$5,614,156
  #344	Albany-Lebanon, OR	$5,608,491
  #345	Lawrence, KS	$5,586,561
  #346	Sumter, SC	$5,539,578
  #347	The Villages, FL	$5,507,387
  #348	Cleveland, TN	$5,423,969
  #349	Sierra Vista-Douglas, AZ	$5,399,087
  #350	Mansfield, OH	$5,251,489
  #351	Homosassa Springs, FL	$5,247,686
  #352	Corvallis, OR	$5,242,566
  #353	Johnstown, PA	$5,197,201
  #354	Springfield, OH	$5,162,330
  #355	Brunswick, GA	$5,136,201
  #356	Anniston-Oxford, AL	$5,108,424
  #357	Victoria, TX	$5,082,222
  #358	Bloomsburg-Berwick, PA	$4,916,778
  #359	Hammond, LA	$4,897,538
  #360	Grand Island, NE	$4,871,762
  #361	Cape Girardeau, MO-IL	$4,838,122
  #362	Beckley, WV	$4,563,061
  #363	Rome, GA	$4,539,453
  #364	Michigan City-La Porte, IN	$4,521,182
  #365	Kokomo, IN	$4,488,369
  #366	Muncie, IN	$4,486,204
  #367	Hinesville, GA	$4,427,847
  #368	Gettysburg, PA	$4,310,644
  #369	Elmira, NY	$4,230,830
  #370	Carson City, NV	$4,225,603
  #371	Bay City, MI	$4,158,772
  #372	Great Falls, MT	$4,150,622
  #373	Cumberland, MD-WV	$4,025,355
  #374	Parkersburg-Vienna, WV	$4,000,337
  #375	Pine Bluff, AR	$3,996,508
  #376	Hot Springs, AR	$3,907,112
  #377	Pocatello, ID	$3,732,010
  #378	Grants Pass, OR	$3,666,285
  #379	Danville, IL	$3,645,245
  #380	Walla Walla, WA	$3,642,288
  #381	Lewiston, ID-WA	$3,274,461
  #382	Gadsden, AL	$3,175,372
  #383	Enid, OK	$2,926,730
  #384	Sebring-Avon Park, FL	$2,894,022
  	All U.S. Metro Areas	$20,943,239,585

  As the graphic above makes obvious, NYC’s GDP towers over the rest. The Big Apple is the nerve center for a number of high-impact industries, including finance and media.

  Moving down the ranking, LA has a $1.1 trillion economy, followed by Chicago, with a GDP of just over $760 billion.

  The Fastest Growing Cities

  Although many of the top ranking cities are not surprising, there are a number of up-and-coming cities in the list. A report from the Kenan Institute, at the University of North Carolina’s Business School, reveals the fastest growing cities in the U.S. in terms of GDP growth year-over-year. Here’s a look at the top 10:

  Rank	City	State	GDP Growth (2022)
  #1	San Francisco/Bay Area	California	4.8%
  #2	Austin	Texas	4.3%
  #3	Seattle	Washington	3.5%
  #4	Raleigh/Durham	North Carolina	3.4%
  #5	Dallas	Texas	3.1%
  #6	Denver	Colorado	3.0%
  #7	Salt Lake City	Utah	2.8%
  #8	Charlotte	North Carolina	2.5%
  #9	New Orleans	Louisiana	2.4%
  #10	Orlando	Florida	2.4%

  San Francisco, Seattle, and Dallas appear on both the overall GDP size and growth lists. Dallas’ economy is driven in large part by a growing healthcare industry. The city also continues to attract talent being home to large companies AT&T, CBRE Group, and Texas Instruments.

  North Carolina is home to two of the fastest growing metropolitan areas, Raleigh-Durham and Charlotte. These cities may be ones to watch as they are becoming hubs of tech, research, and manufacturing. In fact, North Carolina was recently ranked as the most attractive U.S. state to do business in and both cities are among the fastest growing in terms of population.

  The economic center of gravity within the U.S. could be shifting away from the traditional centers of power towards booming cities in the South and West of the United States. The Kenan Institute found that the recovery of hospitality and leisure sectors has helped destinations in these regions like New Orleans and Orlando. Additionally, the shift towards high-tech industry jobs, remote work, and cheaper housing have made these cities very attractive.

  Of course, the sunny climate in these cities is an attractive selling point as well.

  Tyler Durden
  Sun, 03/12/2023 – 19:45

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

  Authored by Frank Fang via The Epoch Times,

  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.”

  “The right answer isn’t a bailout. It’s to get the government out of the way and let another bank acquire SVB if that’s what they actually want to do,” Ramaswamy wrote.

  Ramaswamy, a biotechnology entrepreneur, is the author of “Woke, Inc.: Inside Corporate America’s Social Justice Scam.”

  Tyler Durden
  Sun, 03/12/2023 – 19:15

• "It's Too Dangerous": Texas Officials Issue Travel Warning After Latest Mexico Kidnappings
  “It’s Too Dangerous”: Texas Officials Issue Travel Warning After Latest Mexico Kidnappings

  Officials from the Texas Department of Public Safety (DPS) has warned Americans against travel in Mexico after three Texans have gone missing.

  “We have a duty to inform the public about safety, travel risks, and threats. Based on the volatile nature of cartel activity and the violence we are seeing there; we are urging individuals to avoid travel to Mexico at this time,” said DPS Director Steven McCraw.

  Lt. Chris Olivarez reiterated the warning, and advised Spring Breakers in particular to avoid Mexico.

  “It is too dangerous with the increase in violence and kidnappings that are taking place in Mexico. So very important and I can’t stress enough to those who are thinking about traveling to Mexico, especially for Spring breakers,” he told Fox News.

  The three kidnapped women are Maritza Trinidad Perez Rios, 47, Marina Perez Rios, 48, and Dora Alicia Cervantes Saenz, 53, who went missing during a Feb. 24 trip to a flea market in the city of Montemorelos in Nuevo Leon State – located around three hours from the border by car, Nuevo Leon Attorney General Office said. They were traveling in a green mid-1990s Chevy Silverado.

  

  One of the missing women’s husbands spoke with her via phone during the trip, but grew concerned after not being able to reach her afterward. 

  “Since he couldn’t make contact over that weekend, he came in that Monday and reported it to us,” said Penitas Police Chief Roel Bermea, who added that their families have been in contact with Mexican authorities who are investigating the case.

  On Friday the FBI said it was aware of the missing persons case – two sisters and a friend, who have gone missing.

  The kidnapping is the second this month to make headlines, after four Americans were kidnapped and two of them killed weeks ago during a trip to the border town of Matamoros, near Brownsville, Texas.

  The four were traveling on March 3 so that one of the survivors, Latavia “Tay” McGee, could have cosmetic surgery. At approximately Noon they were fired upon in downtown Matamoros and then loaded into a pickup truck. Another friend who remained in Brownsville called the police after not being able to reach the group.

  Six people were arrested in connection to the incident, according to Tamaulipas Attorney General Irving Barrios Mojica, who confirmed the arrests of five suspects. The sixth was subsequently arrested and linked to the kidnappings and murders.

  In response, the Scorpions faction of the Gulf cartel handed over the five members who were arrested, along with an apology letter o the locals, a Mexican national who died in the crossfire, and the four American women and their families.

  “We have decided to turn over those who were directly involved and responsible in the events, who at all times acted under their own decision-making and lack of discipline,” reads the letter.

  Tyler Durden
  Sun, 03/12/2023 – 18:45

• India Takes A Leading Role In De-Dollarization
  India Takes A Leading Role In De-Dollarization

  Authored by Andrew Korybko via The Automatic Earth blog,

  Reuters reported on Wednesday that “India’s Oil Deals With Russia Dent Decades-Old Dollar Dominance”, which informed their audience that the growing trend of those two using national or third-party currencies like the UAE’s is something significant for everyone to pay attention to. To that outlet’s credit, it also reminded readers that IMF Deputy Managing Director Gita Gopinath foresaw in the month after Russia’s special operation began that the West’s sanctions “could erode the dollar’s dominance”.

  

  Lo and behold, that’s precisely what happened, with India of all countries accelerating de-dollarization through its non-dollar-denominated energy deals with Russia. About them, Russia has since become India’s largest supplier over the past year and now provides a whopping 35% of that country’s needs, which is also the world’s third-largest oil importer and fifth-largest economy. Their new energy ties, and particularly the growing de-dollarization dimension of their deals, are thus globally important.

  None of what was just described is driven by any anti-American animus on India’s part since everything is purely motivated by the pursuit of that country’s objective national interests. Delhi had no choice but to gradually diversify away from dollar-denominated energy deals with Moscow due to Washington’s illegal sanctions. Its multipolar leadership wasn’t going to let the world’s most populous country slip into an economic crisis just to please the US by eschewing the import of discounted oil from Russia.

  By defying American pressure upon it to unilaterally concede on those aforementioned objective national interests, India’s economy ended up growing at twice the pace of China’s, which contributed to catapulting that country to the forefront of the global systemic transition to multipolarity. Amidst the impending trifurcation of International Relations, India is now poised to de facto lead the Global South in helping fellow developing countries balance between the Golden Billion and the Sino-Russo Entente.

  Had India complied with the US’ illegal sanctions, then the New York Times wouldn’t have recently admitted that those restrictions failed just like the West’s efforts to “isolate” Russia did as well. It was largely due to that South Asian Great Power’s truly independent grand strategy that this latest phase of the New Cold War didn’t decisively end in the Golden Billion’s victory over Russia and the restoration of unipolarity, which would have been detrimental to India and every other developing country’s interests.

  India therefore changed the course of history by remaining committed to the pursuit of its objective national interests, which to remind everyone, aren’t driven by any desire to harm the interests of third parties like the US. Its leading role in de-dollarization via its increasing number of non-dollar-denominated energy deals with Russia is also reshaping the global financial system by reducing that currency’s prior dominance and thus leading to a more multipolar state of affairs for everyone.

  Even the US itself seems to have finally accepted that it can’t reverse this trend, which is evidenced by former Indian Ambassador to Russia Kanwal Sibal recently telling TASS that “Lately, the discourse from Washington has changed and India is no longer being asked to stop buying oil from Russia. In a recent visit to India, the US Treasury Secretary actually said that India can buy discounted oil from Russia as much as it wants so long as western tankers and insurance companies are not used.”

  Nevertheless, radical liberal–globalist ideologues like Color Revolution mastermind George Soros are still desperately clinging to the dream of restoring the US’ rapidly declining unipolar hegemony, hence why he de facto declared Hybrid War against India during the Munich Security Conference last month. It remains unclear whether he and his network have enough support in the Western Establishment to advance that regime change agenda, but his threat is still worrisome and should be taken seriously.

  Reuters’ latest report about India’s role in accelerating de-dollarization might fuel interest among likeminded “Western Exceptionalists” in supporting his de facto Hybrid War against that country so observers should closely monitor related developments in order to assess whether this happens. In any case, those who sincerely support multipolarity should loudly applaud India for its indispensable role in comprehensively facilitating this process, especially its financial dimension as described in this analysis.

  *  *  *

  Support the Automatic Earth via Patreon.

  Tyler Durden
  Sun, 03/12/2023 – 18:15

• Visualizing The Drive To A Fully Autonomous Car
  Visualizing The Drive To A Fully Autonomous Car

  Until quite recently, the autonomous car was the stuff of science fiction. More hype than happening some time soon.

  But, as Visual Capitalist’s Chris Dickert and Miranda Smith detail below, with automakers spending billions to develop the technology – $75 billion by one count – the race is on to be the first to launch a fully self-driving vehicle.

  This visualization from Global X ETFs, takes a look at the drive for a fully autonomous car.

  

  From the Flintstones to the Jetsons

  What does it mean to say that a car is autonomous? Does a human driver need to be ready to take over? Can it drive on its own all or just some of the time? And do driving conditions need to be ideal or can it handle the odd thunderstorm?

  Fortunately, SAE International, the global standards and engineering association, has come up with the creatively-named “Taxonomy and Definitions for Terms Related to On-Road Motor Vehicle Automated Driving Systems,” or SAE JS3016 for short.

  The Six Levels of Driving Automation

  The system has six levels of automation and spans a yawning gulf of features. Level zero is analogous to Fred Flintstone’s foot-powered, stone age car, while level five is something like George Jetson’s futuristic, bubble-blowing flying saucer.

  Level 0: No Driving Automation

  The driver is in full control and there is no automation technology. It may include support or alert systems such as stability control and blind-spot warning. Most cars on the road today are level zero.

  Level 1: Driver Assistance

  The driver is supported by one support system, like adaptive cruise control or lane-following assistance, but needs to be ready to take control at any time.

  Level 2: Partial Driving Automation

  The driver still needs to be alert and supervise at all times, but the vehicle can take over multiple functions like braking, acceleration, and steering, using Advanced Driving Assistance Systems (ADAS). The Tesla Autopilot feature is generally understood to fall under level two.

  Level 3: Conditional Driving Automation

  After this point you are not considered to be driving, even if you’re seated in the driver’s seat. Using artificial intelligence (AI), the vehicle handles all driving tasks. A driver still needs to be present in case of an emergency or system failure. Honda’s Traffic Jam Pilot and Mercedes-Benz’s Drive Pilot are the only ones to hit this milestone.

  Level 4: High Driving Automation

  This is where you lose the steering wheel and pedals. A level four vehicle is completely autonomous, but is limited by speed or to a certain geographic area. In the event of a system failure or emergency, the vehicle can slow down, pull over, and stop on its own. A driverless taxi or public transport would be a likely application at this level.

  Level 5: Full Driving Automation

  This is the Holy Grail of automated vehicles. At this level, humans are completely superfluous and need only set the destination and sit back and enjoy the ride. The vehicle can drive in any situation, in all conditions, and is not limited to a particular location or speed.

  So When Can I Watch Netflix While Driving?

  Probably not anytime soon, if figures from California’s Department of Motor Vehicles are any indication.

  The Pacific state is home to a host of autonomous vehicle manufacturers, many based in Silicon Valley, all eager to test their technology on public roadways. As a result, the DMV has developed regulations for testing self-driving cars, both with and without a driver.

  Part of the rules require that manufacturers file annual reports about their activities. According to these, at the end of 2021, 26 companies testing 1,174 autonomous vehicles (with a driver) logged over 4 million miles on California roads. By way of comparison, four companies logged only 25,000 miles using driverless vehicles.

  If you take the miles covered as a proxy for how far the technology has progressed, testing on systems that still require a driver—so level 3 at best—is miles ahead of driverless systems, or level 4 and up.

  Hey Siri, Which Way Next?

  In addition to being a really tough engineering problem, autonomous cars also raise tricky ethical questions.

  Part of the difficulty has been trying to get a machine to make the same choices as human drivers would. What if the brakes fail and the AI has to make a split-second decision? Does it swerve to avoid a pedestrian and into a telephone pole, maybe killing the passenger, or keep driving?

  Problems such as these are often covered in philosophy under the Trolley Problem, which features a runaway trolley and a switch. Throw the switch and save a life, but maybe take another?

  Tackling this problem, which can get a bit absurd at times, is a good way to discover the “right” answer to ethical questions. Autonomous car manufacturers are going to have to have an answer in any autonomous future.

  Invest in the Future of Road Transport

  With autonomous car technology advancing at leaps and bounds, there are plenty of opportunities to invest in the companies working to make it a reality.

  Learn more about the Global X Autonomous & Electric Vehicles ETF (DRIV), which provides exposure to companies involved in the development of autonomous vehicles, EVs, and EV components and materials.

  You can also learn how experiential technologies like AI are driving change in road transport in Charting Disruption, a joint report by Global X ETFs and the Wall Street Journal (also available as a downloadable PDF).

  Tyler Durden
  Sun, 03/12/2023 – 17:45

• Silicon Valley Bank Followed Exactly What Regulation Recommended
  Silicon Valley Bank Followed Exactly What Regulation Recommended

  Authored by 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: “…Aaaaand 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 growth in 2021 is a direct consequence of the insane monetary policy implemented in 2020, when the major central banks increased their balance sheet to $20 trillion as if nothing would happen.

  SVB is a casualty of the narrative that money printing does not cause inflation and can continue forever.

  They embraced it wholeheartedly, and now they are gone.

  SVB invested in the entire bubble of everything: Sovereign bonds, MBS and tech. Did they do it because they were stupid or reckless? No. They did it because they perceived that there was exceptionally low to no risk in those assets. No bank accumulates risk in an asset they believe has considerable risk. The only way in which a bank accumulates risk is if they perceive that there is none. Why do they perceive it? Because the government, regulators, central bank, and the experts tell them so. Who will be next?

  Many will blame everything except the perverse incentives and bubbles created by monetary policy and regulation and will demand rate cuts and quantitative easing to solve the problem.

  It will only worsen. You do not solve the consequences of a bubble with more bubbles.

  The demise of Silicon Valley Bank highlights the enormity of the problem of risk accumulation by political design. SVB did not collapse due to reckless management, but because they did exactly what Keynesians and monetary interventionists wanted them to do.

  Tyler Durden
  Sun, 03/12/2023 – 17:15

• Vinyl Sales Eclipse CDs For First Time Since 1987
  Vinyl Sales Eclipse CDs For First Time Since 1987

  According to a new report by the Recording Industry Association of America (RIAA), vinyl records have experienced a resurgence in popularity, with sales outpacing those of CDs for the first time since 1987.

  RIAA’s report, published on Thursday, stated that in terms of physical units sold in 2022, records surpassed CDs with a total of 41.3 million sales, while CDs had 33.4 million sales. The industry group said vinyl sales had experienced sixteen consecutive years of growth. 

  The vinyl boom is back for several reasons. During the pandemic, when concert venues were forced to shut down, some artists and their labels released music on vinyl to enhance the fan experience without them having to leave the house and offered a new untapped income stream for artists and labels. 

  “I think that it was something that labels saw as a ‘We can do this to generate some income [during the pandemic],'” Lyndsey Havens, a senior editor at Billboard, told Gizmodo recently. 

  “That’s why you see a lot of live albums that were rereleased on vinyl or pressed on vinyl for the first time. It’s just a really good way to generate some extra income and then I think fans were responding well to that and now they’re demanding it from their favorite artists,” Havens said. 

  Last year, revenue generated from vinyl records increased by 17%, exceeding $1.2 billion. This growth was especially significant during the pandemic. RIAA said that vinyl contributed to 71% of physical format revenue. 

  

  Meanwhile, RIAA said CD revenue fell 18% last year to $483 million. As we had previously noted in 2019, it was expected that sales of records would surpass those of CDs. 

  A Substack article by Ted Gioia said, “if it wasn’t for Taylor Swift, the vinyl market would have actually declined in 2022. This one artist did more to support vinyl sales than the much-hyped “Record Store Days.””

  

  Gioia noted, “Half of the vinyl buyers don’t own a record player. They apparently bought the Taylor Swift album as a kind of memorabilia—something a little nicer than a band T-shirt.” 

  

  Gioia warned of a hype cycle in record sales.

  Tyler Durden
  Sun, 03/12/2023 – 16:45

• Tchir: 'I Like Mid Banks, I Cannot Lie'
  Tchir: ‘I Like Mid Banks, I Cannot Lie’

  Authored by Peter Tchir via Academy Securities,

  As I put pen to paper (or fingers to keypad), I can’t help but wonder if this is the hill that I want to die on?

  There is so much uncertainty surrounding the banking developments last week. The only things that I know for certain are that SIVB ended the previous week at $284.39 and was halted before market open on Friday at $105.95 (and is supposedly much lower since). SI, not to be confused with SIVB, closed on February 28 at $13.91 and closed on March 10 at $2.53. That is what we know for certain. We also know that KRE, a $2.13 billion market cap S&P Regional Banking ETF, saw daily trading volume spike from an average of 8.7 million sharesto 97 million shares on Friday. In addition, its market cap dropped 16% last week (let’s call this the “mid bank” index). XLF, a “big financial” ETF, fell 8.5% last week on volume that “only” tripled, but it is exposed to financials other than “big banks”.

  The prudent thing is to run away and wait for clarity. That is especially true when there is so much misinformation and even “FUD” (the term crypto people like to use when they disagree with someone’s negative crypto view) that it is almost imperative to stay away from this topic. However, I keep thinking of the phrase “The Lord Hates a Coward”, so let’s dive right in.

  The Disruptive Economy

  Before looking to the banks and the banking system, I feel it is absolutely necessary to highlight our focus on the “Disruptive Economy”. We believe that it played a large role in not just markets, but the broader economy for the past several years. We’ve used a “broad” definition of disruptive that encompassed some big tech, but also (and far more importantly) the entirety of public and private companies and their investors. In addition, we included crypto and crypto related businesses in that mix. That has led to several important conclusions (or at least thoughts) on our side:

  • The economy and inflation were far more influenced by the disruptive economy than traditional economists acknowledged. See the Rise & Fall of Inflation Factors or the Circular Error in Disruption section from our 2023 Outlook. If the events of the past few weeks don’t have a circularity to them, I don’t know what does.

  • The Disruptive Portfolio and the attitude of many disruptive investors seemed very different from that of “traditional” investors. We are seeing some of that play out here, not just within the institutions, but within their customer bases as well.

  • Finally, as we’ve written, discussed, and even said on national TV, our best comparison is that this is like energy in 2015/2016, but the theme of “disruption” is at the epicenter of this problem! In 2015, the closer you were to energy, the more likely you were to get burned (pun intended). Not just by owning the companies themselves, but by owning companies serving those energy businesses (and the overall regions). This includes the local banks! I continue to believe that the closer you are to “disruption”, the chances are higher for further downside (even more than a year later). As you move away from that “epicenter”, the problems are smaller and might not even be felt.

    • There is one encouraging thing that I cannot resist mentioning given this line of thinking. A certain high yield ETF dropped 20% from the middle of 2014 to its low on February 11, 2016 (mostly due to energy and commodity exposure). About a month later, as the tide was already turning, a HY ETF that excluded energy companies was announced. Maybe we haven’t hit rock bottom in this particular episode, but the contrarian in me is attracted to mid banks after the events of this past week.

  Now that we’ve set the table with that recap of our views on disruption, we can move on to another table setting section.

  Not My First Rodeo

  I’ve been on both sides of highly controversial issues. I’m not always bullish, and if anything, I am more often than not bearish. It’s my nature, which is probably why I liked trading credit derivatives on junk bonds and indices.

  • I hated the CPDO product (Constant Proportion Default Obligations). It took leverage on something that was BBB and made it AAA. Yes, this is where you put leverage on something and received a better rating compared to owning it outright. Seemed nonsensical, and it was, but the “math” worked. However, the math had a major “flaw” in that it ignored how many companies might see spreads widen dramatically, then lose their IG rating, and not be put back into the relevant indices when (if) they recovered. We proved that portfolios constructed in the past (2000s) would have triggered this product (circa 2006 or so). The product was so wildly profitable. You got to charge people to leverage something that was BBB (and already profitable) and had a customer base of AAA only buyers. Anyways, on a painful call to the big boss’s office I was told to stop fighting something that I was so “obviously” wrong about.

  • Roadmap to IG 200 (and the accompanying IG 200 hats). It was controversial, not quite right (only got to 198), and then I overstayed my welcome when I faded the post “JPM saving Bear” rally in CDS far too early (which has also left scars).

  • Could a VIX ETF Go Poof in a Day? I once worked with a reporter who was so passionate about a story that he fought the editors and detractors until he got the piece published. That made the follow-on piece One Did Go Poof so sweet!

  I’ve also been comfortable taking the bull case. In fact, saying “buy Jefferies” in response to Steph Ruhle’s question (back when she was still on Bloomberg TV) created quite a soundbite for my independent research company. It actually turned out to be quite right (despite all the poorly thoughtout comparisons to MF Global).

  More recently, at Academy, we championed credit by touting 2019 as the Year of the Debt Diet, having published a piece questioning the punishment that GE credit spreads were taking just a month or two before that.

  Writing that GE piece feels eerily similar to what I’m about to embark on today. I can only hope that the results are as timely and as poignant. I’ve gotten plenty of things wrong, otherwise I’d be writing these missives from some exotic private island, but let’s do this and see where we come out!

  Bank Runs!

  I hate even writing those two words! It seems incredibly flammable. Like shouting fire in a crowded theater. I’m not even sure who I keep checking for over my shoulder when I write or say “bank runs”. Is it compliance? Is it the regulators? I don’t know, but this is a term that I rarely use because I think that it is shocking and dangerous, but I couldn’t figure out a better way to start the analysis of what is going on because this phrase is coming up with more frequency.

  Banks are “strange” beasts. In some ways their business model is so simple (take deposits, lend money, and make the spread in between). But not only is that simplistic, it misses the key ingredient, leverage. You cannot take enough deposits and lend them out “one to one” to make a reasonable return.

  VCSH, a 1 to 5-year corporate bond ETF, has a spread of about 110 bps. No one is buying a bank making 1%, so it needs leverage. Maybe the bank could take a lot of duration risk (I don’t know why it would, since banks learned a lot during the S&L crisis). But even with duration risk, banks aren’t an interesting thing without leverage!

  So, we will talk about leverage, at least initially.

  Banks have capital from several different sources at various levels of the capital structure.

  • Equity capital. This is what drives everything. The amount of assets a bank can hold on its books is largely determined by its equity capital (and portfolio quality).

  • Subordinated capital. Not as good as equity capital, but it enables the bank to do more than it could with just regular debt, and it is at a lower cost than raising equity.

  • Debt.

    • Deposits. Deposits are generally the “holy grail” of the bank balance sheet (post Covid banks were turning away deposits, but that was unique). You pay far less interest on funds on deposit than other forms of borrowing. They are typically viewed as “sticky”. People keep money in a bank account for a lot of reasons, probably the least of which is the interest they are earning. People (and companies) do most of their transactions through banks (and credit cards). The bank account is the “home base” of financial activities and thus tends to be more stable than other forms of debt which are more subject to market vagaries.

    • Bonds. At the risk of annoying some of our banking clients, I think one of the “best” things that came out of the GFC (on the regulatory front) was rules to largely enforce longer-dated borrowing. There is a cost to banks (and everyone) to switch to longerdated funding. It is generally far cheaper to borrow overnight than it is for 30 years (though with our current yield curve, that isn’t as obvious today as it normally is). The problem with that is you need to fund yourself every night. Banks could argue that this should be part of their risk decision, but stricter rules were imposed anyway. Since we saw what happened when bank credit quality gets called into question (ability to borrow can dry up quickly), this was a logical way to protect the system. Yes, it is a cost to banks, but I think that it really promoted a new level of “safety” on the funding side. I disagree with much of Dodd Frank and think that the Volcker Rule could only have been written by someone who had never seen a trading floor, let alone stepped onto one. One of the first things that I learned about the bond business was when I asked why almost every high yield bond was a 10 non-call 5. The answer was outrageously simple. “Because investors need to be compensated for at least 5 years of lending to the company in their current state and the company needs a 5-year window where their business is good enough (or the market is strong enough) that they can re-fi”. So, yes, I like less refinancing risk.

  A bank run is when depositors and lenders stop funding the bank, which normally occurs due to credit quality concerns!

  When I think of a bank run, I think of a fear that the bank’s assets are not solid and would incur significant losses (if sold today or those losses would be realized over time as borrowers failed to pay the bank back). Accrual accounting, not held for sale, etc. are accounting provisions used to dampen volatility in asset prices on the bank’s balance sheet. There is a difference between a loan going down in price a bit because of rates (or overall market concern) and the likelihood of that loan getting paid off. During the GFC, it was apparent that massive amounts of mortgage debt were impaired and were never coming back. Again, I think that the regulators have done a very good job with CCAR (Comprehensive Capital Analysis and Review). It incorporates many tough scenarios, but what I like most about it is that it is a “random” day, picked after the fact. Bank capital rules were almost exclusively quarterly and annual. There were massive quarter end trades done by banks. There were huge year-end trades done (especially between Asian and North American banks which had different year-ends) and these trades were less sensitive to certain annual measures. CCAR does a lot to capture the risk side of the balance sheet. It is designed so that “we” (collectively) can sleep at night “knowing” that banks are safe and won’t go through another GFC. Some of this may be questioned in light of recent events and disclosures, but I for one suspect that CCAR is serving its purpose, which is one reason why I’m heavily leaning towards this being isolated and not an industrywide issue.

  On a cursory glance and from what I’ve read, there were some issues linked to the performance of “safe” (from a credit perspective) long-duration assets. From what I’ve seen so far, I’m surprised by the duration risk that was being run. I’m a big believer in “match funding” as much as possible. That tends to reduce NIM, but also greatly reduces risks, like the ones we seem to be seeing now. Sure, hindsight is 20/20, but that is something that I strongly believe in at all times.

  Neither Moody’s nor S&P seemed to see much amiss at SIVB (no material rating action for years, until this past week). It seemed like business as usual, at least from a NRSRO (Nationally Recognized Statistical Ratings Organization) perspective.

  I will attempt to demonstrate that this is a unique situation and is linked more to the types of depositors that these banks had than to anything that is reflective of a broad trend across the industry.

  

  We start with deposits at the SIVB entities versus the entire banking system (note: SIVB deposit data is quarterly and last data point was from the end of 2022). You can see a small uptick in bank deposits during Covid relief (small as a percentage, but large in total dollars). SIVB saw their deposit levels more than triple (from $60 billion in March 2020, to a peak of almost $200 billion).

  

  This chart highlights three important things:

  1. The deposit growth seems reasonably correlated to value creation in the “disruptive” space (taking the liberty of using ARKK as a representative of that space). It was consistent with the narrative behind this entity.

  2. Deposits, in my opinion, started declining because of the industry that this bank caters to, which had been incredibly successfully for decades, but was now burning cash and had less wealth. The initial phases of deposit decline had everything to do with the depositor base and little to do with their portfolio or any other “traditional” trigger.

  3. It might also provide some insight into the sort of lending opportunities that were available at the time companies/individuals were making deposits (i.e., disruptive firms).

  This chart is “problematic” in some ways as you can see the surge in deposits correspond to a period of time when the 5-year Treasury yield was less than 1%. Since deposit rates in the U.S. stayed positive (with very few exceptions) there was relatively little spread to be earned. Taking in huge deposits at a time when yields were very low can be problematic (and let’s not forget the need to leverage).

  

  At this point, I have to admit that how they managed their portfolios also seemed to be contributing to the problem.

  These institutions seemed to do two things that are now, in hindsight, problematic.

  • They lent to “disruptive” companies. This is their bread and butter. It is their customer base. It is what made the bank famous. However, I suspect that they had never seen such an influx of money (at a time when valuations were so high and disruptive company growth prospects were unbelievably great). Even with conservative haircuts it may have been difficult to exercise prudence, and without a doubt, other banks and lenders were gunning for their customers! They were the bankers to the “sweet spot” and everyone wanted that business.

  • They seemed to have taken on more duration risk than other banks (I could be wrong here and that would be a flaw in my argument). They were basically increasing in size at a rapid pace in an environment where anything liquid was yielding next to nothing. They were getting money stuffed into deposits at one of the least interesting times for a bank to take deposits (at least in terms of locking in good NIM – Net Interest Margin).

  That has now contributed to their decline as the asset side is being called into question!

  Why I Think Current Cases are “Unique”

  The two banks in question, while different, have some similarities that are unique to them.

  Let’s get down to the theory here”

  • A massive surge (on a percentage basis) in deposits. Bank deposits grew everywhere, but the rate of increase more than tripling in a year is unique. While banks had to absorb new deposits in the wake of Covid and stimulus, these institutions saw disproportionate growth as a percentage (and total amount). Tripling from $1 billion to $3 billion seems like an easier task to manage than going from $60 billion to $180 billion. Relatively unique set of circumstances.

  • A highly correlated customer base. Whether Silicon Valley or crypto juggernauts, the customers turned out to be far more correlated than expected. When almost “everything” crypto/disruptive took off, it behaved as one entity (rather than 100s or 1000s of companies and individuals). Potentially there was some geographic concentration, but it is unusual (and unexpected) for such diverse businesses and individuals to be so correlated on the way up and on the way down. Relatively unique set of circumstances.

  • Portfolio selection.

    • Lending to customers is quite normal in banking, which is ultimately a relationship business. It is why certain banks were more exposed to energy for example. Banks, especially community banks, tend to have exposure to their “community”. Less so for regionals and even more less so for the global money-center banks. Community in this case was more about “what the people or companies did” rather than physical proximity (though that plays in as well since the two go hand in hand). I assume that there is some exposure to local real estate, which has also come under pressure since the deposits piled up. The exposure to disruptive/crypto is likely far higher here than in other banks.

    • Rate risk. The chase for yield was alive and well as the money was flooding into banks. This seems like a good time to bring back “5 Circles of Bond Investor Hell.” There are only a few things you can do when you need yield, one of which is to increase duration, which was apparently done here. Hoping the market cheapens would have worked great, but it rarely does and there is immense pressure not to sit on cash, so I’d be shocked if many had the fortitude to do that. It seems like SIVB may have extended duration. Taking more risk than normal is probably somewhat common across banks, though I’m not sure rate risk would have been the preferred method. I lean towards giving up liquidity (most don’t use it) or increasing structure (my theory on AAA CLOs being more difficult to bust than getting a perfect March Madness bracket).

  

  5 Circles of Bond Investor Hell

  I see the situation as unique because:

  • They had exceptional growth in a compressed timeframe.

  • Growth occurred during an exceptional dearth of yield.

  • Some of their decisions and the nature of their customer base (to whom they lent) may have set them up with a portfolio that was more exposed than others.

  • Customers started withdrawing because they needed the money (nothing to do with anything SIVB was doing).

  • Those withdrawals triggered selling, which turned positions meant for accrual accounting into realized losses! That combination following a period of explosive growth seemed to be what caught the attention of people.

  • Now something that looks more like a “normal” run starts. Losses get exposed. The balance sheet faces more scrutiny. Some clients may get nervous. The cash burn, which started after March 2022, likely continued into Q1 2023 (the last data point was at the end of 2022). This is where we are now and is why everyone is worried about other banks!

  I am stuck seeing this as far more unique than systemic, hence the recent selling is overdone!

  Some Bad News for All Banks

  The banking sector, even if I’m correct, will not get off scot-free.

  • Interest rates on deposits will probably have to get “competitive” more rapidly than they normally would. People covered by the FDIC limits will care less as there is no credit risk to the institution, but recent focus on higher yields across the board will make many consider keeping enough “working capital” at the bank, while owning money market funds or other higher yielding assets (including Certificates of Deposit at many banks). Personally I think that should be SOP and is how I think about my deposits – and no, I’m not trying to get banks to hate me! Those above the FDIC limits are exposed as senior unsecured creditors if a bank fails. The returns paid to senior unsecured creditors are much better than those paid on deposits, but the services provided by banks (anything from LOCs to simple check cashing and enabling payroll and business activities to function seamlessly) have immense value. I could see some banks increasing their payment rates on deposits which would eat into NIM, but that would be a valuation issue, not a credit issue. Bank P/E multiples being too high already don’t keep me up at night. I suspect little of the NIM gets a great multiple in any case, as investors have been expecting banks to slowly raise the amount they pay on deposits.

  • Closer scrutiny to bank portfolios. People far smarter than me (with better tools at their fingertips) are looking at what exposures banks have on their books. Making that analysis more complex will be the fact that many of the exposures (and certainly all of the hedges) will be in derivative books that I think are opaque at best. I would not want to be in charge of a bank that faces the headline “XYZ loaded up on duration during ZIRP” in the coming days. That is the sort of headline that can trigger people taking out deposits. If I believed a lot of banks really extended duration during ZIRP, I would be scared to death right now about recommending banks, but:

    • Asset growth was not that far above normal for most banks.

    • Private debt, credit risk, and structured risk all seem more natural for banks, all of which have been weathering this market better than sovereign debt (assuming the rate risk is taken out, which it should be in my vision of bank risk management).

  I am fully aware of these two risks, but think that:

  • Most banks are well prepared to deal with both issues and will not face any sort of a run. I am saying this, fully knowing how that “bank run” sentiment can spread like wildfire. You cannot believe how nervous I’ve been writing this report (which is maybe why it is longer than usual) because I do understand how afraid people are and how quickly even a false allegation can trigger negative momentum.

  • Valuations (after the recent shellacking) offer upside in a tricky market environment – both on the equity and credit side of the equation.

  The Non-FDIC Insured Depositors

  I saw a stat that SIVB has only about 3% of its deposits fully covered by the FDIC (very low compared to most banks). Presumably this is a bank for rich individuals and corporations.

  This is the group that is in limbo and I don’t fully understand the next steps.

  If you have $100,000,000 on deposit to meet your obligations, how much of that can you access?

  In theory, as I understand this:

  • The assets of the bank are worth X.

  • The FDIC depositors (and maybe some other senior stuff) are worth Y.

  • Z is the amount of deposits above the FDIC limits and other senior unsecured debt.

  • If X – Y > Z then there is equity value. I’m not sure I’d write that off yet, but that is just me musing about the subject. I don’t have an opinion and am not basing my overall bank recommendation on it, but it seems to have been left for dead rather quickly (even by panic standards).

  • If X – Y < Z then Z will be impaired and not receive 100 cents on the dollar.

    • Lehman claims, which were classified as unsecured debt because they filed before investment banks became banks under emergency GFC policy, settled at about 20% of par (though they ultimately recovered 100% plus accrued). It isn’t completely irrelevant (it wasn’t a bank), but it also gives us the sense of how complex this can be with financial instruments.

  Some things in favor of SIVB’s valuations:

  • It seems that much of their portfolio is liquid, making it easier to monetize and start establishing minimal values (and presumably immediate availability) for the unsecured creditors.

  • Their customer base is still a who’s who of the valley and disruptive space and many other banks and financial service companies will want to establish relationships which will help the valuation and/or any necessary sale of these assets.

  • So far it is isolated. If their situation is unique (as I obviously believe it is) then the market has a large, but digestible set of assets to absorb. If this is just the tip of the iceberg, then we are in some serious trouble as there will be more forced selling and huge pools of fixed income “in for the bid”. During the GFC, almost every bank owned too much of the same thing and needed to sell. Remember AIG FP and their super senior protection on corporate credit? That part of their portfolio never sniffed a loss as corporate credit failure was extremely well contained even in the GFC (however, the mortgage super senior was a mess). Overall, recovery rates tend to be higher during good economic times because there are fewer distressed sellers. So far this is a unique case, and that helps maximize value.

  Understanding how much access to above FDIC limit deposits companies (and individuals) will have by Monday is crucial for the disruptive companies – more so than for other banks! Access (to at least a portion) is necessary for many to function. I fully expect there to be some contingencies allowing some % access, though I could be wrong.

  White Knight Dream?

  I would not be shocked to see a “white knight” investor appear for the entire entity (possibly by Monday) because it makes a lot of the mess regarding the unsecured depositors go away (or at least more manageable).

  In the early stages of the financial crisis, we saw various entities get absorbed with a nod (if not a gentle push) from the regulators, when only months before these transactions would have faced regulatory opposition.

  The “easiest” and least painful way to value the assets might be via an acquisition by one large institution. I see two hurdles/questions facing that “dream”:

  • Will SIVB accept a valuation or will they want to work their way out, quite possibly, attempting to generate cash for equity holders and not just depositors?

  • Will banks, the natural buyer, be worried about their own deposit base too much to attempt an ambitious purchase, even with a nod from the regulators?

  I’m convinced that the Fed learned one massive lesson from the GFC (we saw Europe do a semi-decent job with their own debt crisis) – DON’T LET CONFIDENCE IN THE BANKING SECTOR FAIL!!!!

  Nothing else really matters. Financial institutions can write “living wills” until the cows come home, but if we get to that point, all bets are off.

  If this is isolated (or even if it isn’t), regulators are supposed to be ring-fencing it in because the last thing they need is for “bank run” to become the word of the week. That is hard to walk back, so getting out in front of it is crucial.

  Given how quickly they responded after Covid lockdowns (at warp speed relative to the almost plodding behavior back in 2007 and early 2008), there is hope.

  I bet there will be a lot of green dots on Bloomberg terminals on Sunday night – I remember being there when $2 dollars/share came across as the price for Bear Stearns (and physically tapping my screen with my finger, thinking the 2 was a typo).

  One thing many forget (or don’t know) about the JPM purchase of Bear was that it was accompanied by an immediate and non-contingent guarantee of Bear’s derivative book. Even if the equity deal didn’t consummate, the derivative book was JPM’s. No one ever really explained how that would work, and there wasn’t much (if any) formal guarantee language.

  I Like Mid Banks, I Cannot Lie

  I also like big banks and small banks and am more scared of admitting that than I am of singing the original lyrics from this song – so yes, I’ve dragged myself to this hill and am going to stand my ground on it!

  I did not have bank failure Sundays on my 2023 bingo card (but it does bring back memories)!

  Tyler Durden
  Sun, 03/12/2023 – 16:15

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