Coming from a crazy guy with no $ and a suma cum laude degree in Econ just FYI!

This SVB banking calamity, low grade "bank run" or whatever you want to call it, may effectively be one of the first "false flags" we've seen in the modern news era in the finance world. Whether or not this was truly an organic event is unknowable of course at this point and of no consequence.

What DOES matter is what the event is being used as cover to effect and change regarding the rules and regulations within our banking system. Never let a crisis go to waste, as they say - manufactured or otherwise.

Glenn Greenwald on his new Rumble show System Update has given EXCELLENT coverage of this issue.

Tonight's interview was with David Sacks, who potentially had a role (potentially) in igniting the crisis due to his discussion of the bank on a podcast and subsequent posts on Twitter. More importantly however, is that Sacks was one of the FIRST and LOUDEST voices calling for government intervention and could be called for simplicity "PRO BAILOUT"

I'll use his interview to springboard and describe what the BLACK HAT motivations might be for setting a controlled burn off to SVB.

• Worthless paper: as the weekend auction proved out rather disturbingly, SVB paper is worth as much to the market as a roll of CHARMIN.

• WTF did YOU IDIOTS DO!?!?: Well, nothing so daredevil or special, actually! Most, or ALL of this, was just a happy coincidence of TERRIBLE timing. SVB is a regional level small to mid-size bank, mostly focused on commercial side banking. During COVID they participated in the IMMENSE UPWARD WEALTH TRANSFERS like most institutions did. They decided to put their 'extra' money in Long Treasuries which has always been considered very safe, in fact they are THE PREEMINENT SAFE INVESTMENT according to Wall Street tradition.

• So WHY DID IT GO BAD!? Immensely quick moves in inflation, straight up 100% Washington's creation. Not JUST the Biden cohort and the zombie Dems who serve as their yes men. Republican bad actors too. So the extremely fast rise of inflation caused by the Fed and federal spending is what caused these assets to lose value, NOT because they were inherently risky or unsafe.

• WAIT, I KNOW A LITTLE ABOUT BONDS. SO THE INTEREST RATES WENT UP A TAD... SO WHAT!? WHY NOT JUST HOLD THEM TO MATURITY? DONT YOU GET YOUR PRINCIPAL BACK ANYWAY THAT WAY?

Yes completely correct they had nothing exactly PRESSING on them to sell the bonds and thus REALIZE their losses and they ABSOLUTELY COULD HAVE HELD ON either to maturity or even more simple, and shorter term - just WAIT IT OUT until inflation and interest rates fall back down, potentially occurring in a shorter term length of time than on the bond itself! Surely, they DID NOT BELIEVE inflation was totally 'transitory' per the Fed - although we might ask, 'does the Fed have SOME culpability for misinforming us all about this?' 🤣

• ALL RIGHT CLEARLY THERE WERE OTHER WAYS TO DEAL WITH THIS AND AS SACKS SAID WE JUST DONT KNOW HOW SOLVENT OR INSOLVENT SVB WAS. Why did it all happen like this?

Because this firm, packed to the gills with highly intelligent financial professionals, decided to pull down their pants and paint a BIG RED BULLSEYE right over their ASS!? Instead of choosing numerous alternatives to refinance and pull in capital, which they ONLY NEEDED (supposedly) for their depositors pulling out amounts needed to fulfill PAYROLL (which would be a small overall percent of their total capitalization) these IDJEETS decided to GO RIGHT TO THE STREET FOR THE MONEY THEY WERE SHORT.

• This meant they TRIED TO SELL STOCK AND GO THROUGH THE SHARE CREATION AND SALE PROCESS. Effectively they took a problem no one knew about and YELLED "HEY YALL LOOK AT THIS! I GOT SOME BAD CANCER! Now who wants to give me some money, and bet I'm gonna make it through MY CHEMO! Just bein' honest!"

• Remember in Mortal Kombat 2? That one character who had SWORD HANDS, and you could do that move where he just sat still and swooped his arms back and forth? Yeah. What SVB did effectively was just RUN FULL SPEED AHEAD into BARAKA by doing this.

• There were other ways of solving this problem, YET they chose to try it the least likely, most DEADLY method. Why? Are you guys crazy? Goldman advised you!?! What the....

Oh. Wait. AHA! That's the light bulb coming on. As you heard from David Sacks, this needed action because it spread to other banks with similar problems in the same moment - and OF COURSE gave the Administration a NICE LITTLE CONTROLLED CRISIS to avoid and/or solve.

The knowledge of their financial situation was WELL KNOWN to the insiders, and just by spreading the knowledge to the public they got a small, totally walled in FIRE going. It wouldn't spread, because MOST BANKS are not dealing with this level of depositors nor do they need to pull out capital for any reason, nor did they even POSSESS the same 185:1 overleveraged status and were looking over the face of a cliff at such losses.

So Monday some other financial stocks with very basic similarities in metrics went a little WOO WOO and they had to halt trading. No real threat systemically at all! BUT enough to create some SCARY SHADOW PUPPETS!

And thats exactly what we needed, to bring in the FDIC discussion and terms like "bank run" and simple rules that people know: like above or below 250K, that little rule. That's what THEY NEEDED YOU TO BITE YOUR NAILS ABOUT.

Truth is, in past bank failures, the SAVINGS and LOAN crisis etc. ALL DEPOSITS were covered and no matter how big or small you were in for, you NEVER LOST YOUR ASS simply for PUTTING YOUR MONEY IN A BANK to hold. Such a concept is ridiculous and would not happen in the last two centuries!

But, the mythos and storytime power of Mr. Farmer Goodman putting his last $100 in the town bank, and coming back Saturday to see the bank man nailing a wooden 'CLOSED' sign on the door and losing his money is a POWERFUL and LASTING type of Aesop's fable.

So, armed with that POWERFUL MAGIC of the old timeless tale in their pocket, they "SOLVE" the problem: the word goes out now, ALL DEPOSITS WILL BE COVERED IN ALL BANKS! Don't worry people! We are from the government AND WE ARE HERE TO HELP 😵

People don't realize the FDIC, which is TAXPAYER FUNDED via bank fees for accounts etc. is: A) THEIR OWN MONEY B) NOW PURPORTING TO BE ABLE TO COVER A POTENTIAL 9 TRILLION $$ IN DEPOSITS C) HAS NO WHERE CLOSE TO THAT ACTUAL AMOUNT IN FUNDS RESERVED FOR PAYOUTS IN A CRISIS D) AFTER THIS ANNOUNCEMENT IS EFFECTIVELY RENDERED INTO ANOTHER FEDERAL SLUSH FUND E) POST ANNOUNCEMENT EFFECTIVELY MEANS THE BANKING SYSTEM IS NOW NATIONALIZED

• NATIONALIZED!?!? HOW!? They are just making SURE we get what we are PROMISED and backing it with the ™️Full Faith and Credit of the USA Gov't🇺🇸™️

How could that be bad, i think you're the bad one! Yeah, you're bad!

Its the SAME THING as a bailout. Moral hazard ^ 100. Times a hundred to the hundredth power.

The Federal government- Reserve- complex has just offered, for the next 12 months, ANY BANK that needs (or wants!) to trade back its T-Bill assets, of ANY maturity length (which has SIGNIFICANT MEANING in the commercial paper & overnight lending realms) for the $ value it would have been worth BEFORE the inflation/interest knocked down its book value, to do so. The Fed is effectively saying it will BUYBACK its OWN DEBT from ANY BANK, NOT JUST ONES EXPERIENCING A RUN. Not only that but it will PAY MORE than the current asset price, it will CUT OUT the inflation effect to make that 100$ bond into 90$ and PAY THE BANK the EXTRA 10$ its not currently worth.

Why??? Why oh whyyy? Ostensibly,

"to ensure full and vigorous capitalized financial institutions continue to remain strong and liquid in the inflationary climate and act as FULL PROTECTION for the consumers and depositors in accordance with the Federal Reserve's stated mission to re-balance and regulate our monetary system."

::patriotic trumpet plays::

I JUST MADE THAT UP BUT HEY DIDN'T IT SOUND GOOD!? SALUTE!

And they just made it up too. What I, playing the role of "them" failed to tell you is the MEANS TO THE END. Obviously if I am buying back ANY AND ALL devalued bonds the banks want to sell me in order to keep them from realizing those losses, I am then taking the loss.

Lets say -10 from our example.

But wait you guys! I know a little stuff about Money and Banking.... the Fed CAN'T hold losses on its balance sheet!? Oh but it CAN, post-2008. But in theory you're right. They have to be at 0 since they are the CREATORS AND DESTROYERS OF OUR WHOLE MONEY SUPPLY.

Thus, the Fed will PRINT AND PUT INTO CIRCULATION a 10$ bill to OFFSET the inflation reduced Bond it bought back in the exchange with our bank. But wouldn't that....

Inflate MORE? Cause a moral hazard where BANKS could GET OUT of loser BONDS and get RISKY by going to the Fed and reclaiming the capital, to buy SEXY STUFF that has BIG EARNINGS POTENTIAL?

While the Fed inflates its own balance sheet in a debt buyback that it must increase the Currency in Circulation to cover, further deflating dollar values and causing more of the same consequences we have had already from rises in Aggregate Demand coupled with artificial interest rates pegged too high in a slow growth economic steady state?

Aye, my young economist boy. Aye!

And so we have effectively nationalized our own banking system now with this move. The banks and moneylenders LITERALLY CAN'T LOSE. This is the BIGGEST BAILOUT combined with the biggest QE of ALL TIME. Just with a different name so the public will agree and say Okay and not go apeshit.

We have put our banks into a bouncy castle where the worst behavior won't ever hurt them (or us). Now if they are so inclined they can just trade out those ol' "toxic" T bills making nothing and use the free uninvested capital returned to them via the Fed, reallocate into assets that promise better returns and shorter timeframes!

And hey if THAT FUCKS UP TOO, OH WELL! MY BABY FED DADDY WILL MAKE MORE PAPER IN HIS MACHINE SO NOBODY GETS HURT! I NEVER LOSE!

Its hard to explain to non economic minded folks, I'm sorry. I am bad as a concepts explaining type. But for those who have followed along, nodding as they read, I want to offer a brief view of the next steps: and no, not CBDC payouts because that is a CERTAINTY.

The fact that this move, if it goes through and is the effective new "law of the jungle" without or with Supreme Courts or Executive Orders weighing in (I am glib when it comes to how law might intersect here) will save the various pension funds and the like in the U.S. that we are seeing begin to collapse in Europe, and particularly the U.K. as was earlier in the year!

This may be a sneaky way of them temporarily dealing with the pension and retirement fund issue, as we saw since 2008 they have had trouble keeping up with payouts relative to their investments, and thus needed more and more RISKY instruments to dive into to produce returns on balance with what pensioners, retirees and so on were due from their fund managers.

Now these groups can sell their boring and safe stuff and make some nice CASINO BETS that will not only satisfy the woman in ACCOUNTS PAYABLE but ALSO GET ME A DOWNPAYMENT on my daughters Camaro and keep my bonus stable enough for the hookers and blow NEEDED to DO THIS NERVE WRACKING CRAZY JOB! EVERYONE WINS!

Anyhow folks this is just one example I see of the "why" part of them intentionally creating a mock-crisis like the SVB debacle and what their insanity "solution" might be ACTUALLY helping. Because applying a "no small guy loses ever" tag to a crisis involving a financier that HAS NO DEPOSITS UNDER 250K isn't very rational, even for "them" now is it? And it isn't their 'style' of irrational either.

Like LIBOR to SOFR this is ANOTHER way in which we are cutting the cord from the global financial system in a desperate attempt to BEEELEEEAAAVEEE in New Monetary Theory and all its endless benefits, even as the walls collapse around us. It also pushes past the horrible pain and STING from realizing that 10 Year TBills are a "toxic asset" on a balance sheet under the current unanimous consent of the stock market.... owch! Moody's came out and DOWNGRADED THE WHOLE FINANCE SECTOR on Monday.... are the U.S. bonds still AAA though I wonder? 🤣

The sad reality is that the market is telling us what we don't want to hear as a people with an insane and asinine Federal Government in tow: our U.S. paper is GOING TO SHIT and FAR ALONG to being WORTHLESS under the critical evaluation of Wall Street. The market doesn't lie. And it got SPOOKED by a Hipster Bank that said it bought U.S. Treasuries en masse - they want to SAY that is a bank level problem, but come on, isn't it OBVIOUS its a GOVERNMENT DEBT problem?

With the unsure status of the USD as world reserve currency NUMERO UNO, the Saudi's defiant and reeling from the corpse of Biden the crypt keeper after he implored them to keep us as favored currency to OPEC & energy transactions at large, SWIFT softening and melting as Russian rubles and the Yuan are FORTIFIED even in conflict, and the GDP:Sovereign debt ratio spiking up over 100% to fund Democrat waste fraud and abuse....

Is it any small miracle our Gov't backed paper has more VERACITY than that of, lets say, Greece, right now? Look: its not a matter of patriotism, the finance guys take the train too! But lets keep it real about valuation: its getting scary how fucking wild they will go with Yellen in the pilot seat. The market tells all, and THAT is the bigger quandary and scarier part of the runoff - just how BADLY the view was to cause a MAJOR PULLOUT because of too much of an asset that was the safest paper on EARTH 5 years ago: 10 year notes, U.S.

You might think our financial system is MEGA FUCKED when you see things developing like that. I don't know if you'd be wrong.

Then, best of all and like a poison maraschino cherry on top, their SOLUTION to this PROBLEM is effectively the same as the 'policy outlook' that CAUSED it in the first place! Step 1: Buyback our own debt to keep liquidity and stop PANIC. Step 2: How? Step 3: Put it on the taxpayer increase their balance sheet/ amount owed. Print money to cover bond losses. Step 4: AOC GREEN DEAL 50SEPTILLION! MONEY NEVER STOP! WE PRINT FOREVER!

There's a reason Trump said this shit looked like a child wrote it when he looked at the bill AOC sponsored. They think money comes out of the ground and we never run out, as long as we are in a WAR and ALWAYS ALMOST HAVE WON IT. Their economic understanding is crude to the point of broken crayons.

And now they run the system. Its like if Wikipedia was only updated by Aztec scribes. What's all this about the BLOOD GOD? 🤣