Wednesday, March 15, 2023

Bill Bonner, "Heaven And Hell"

"Heaven And Hell"
by Bill Bonner
From banking crises to our chapel on
 the ranch, a look at solid foundations

San Martin, Argentina - "As predicted…when the fight gets tough, the Fed takes a dive. That is what we are watching now…in slow motion. After the crisis of ’08, the feds insisted that the banks hold more reserves. They were told to buy safe, government debt – T-bonds. The Treasuries were supposed to be financial ballast, designed to keep them safe in a market squall.

Oh, if only Mother Nature, in all her guises and disguises, would cooperate! A storm blew up last week. Now loaded up with Treasury debt, banks are much more solid – on paper – than they were in 2008. But what happened? The ballast sank. And two banks sank with it.

Foxes in the Henhouse: The California bank, Silicon Valley Bank, has a CEO, Greg Becker, who was also a director of the San Francisco Fed. The New York bank, Signature, has none other than Barney Frank, who, along with Elizabeth Warren, actually wrote key parts of the 2010 bank regulations.

But neither regulators nor regulations saved them. As interest rates rose, fixed-return assets, notably bonds, were not as valuable as they had been before. Two years ago, you could get only a 1.5% yield from your 10-year Treasury. Today, the yield is 3.7%. The income stream from the old bond is now worth only half as much as it was. Which means, the value of the banks’ reserves – their balance sheets – fell. As this continues, more banks can be expected to get into trouble. And the Fed will have to bail them out. Or give up its interest rate hikes altogether.

One big bank that people are watching is Credit Suisse. Naked Capitalism: "Silicon Valley Bank Fallout Nudges World’s Most Troubled Systemic Lender, Credit Suisse, Closer to Edge" ...despite losing over 95% of its market value since 2008, it is still too big to fail.

The shares of Credit Suisse Group AG, the world’s most troubled systemic lender, fell by as much as 15% on Monday (March 13) to another fresh record low, before recovering slightly in the latter hours of trading. They are down a further 4% so far today (12pm CET, March 14). This latest crisis of confidence in global banking has also fueled a fresh surge in the cost of insuring CS’s bonds against default. The five-year credit default swaps on CS’ debt surged to a new record of 453 basis points on Monday. It was the widest move of 125 European high-grade companies tracked by Bloomberg.

Will Credit Suisse be next? Will it push investors and the Fed into a panic? Will the Fed publicly reverse course and begin cutting rates? We don’t know…we’ll await events.
An Honest Day’s Work: Meanwhile, our 14-year-old grandson is visiting. The boy lives in the suburbs in the US with little opportunity to get out beyond the reach of Iphones, Ipads, Tik Toks, video games and whatever else it is that occupies the time and attention of American youth. His parents say he is bored by school and developing ‘a teenager attitude.’

We decided the best thing might be just to put him to work. Physical work. As long-time sufferers of our ‘blog’ know, we do not play golf…or hunt…or hang out with friends. We have no TV. And on weekends, we avoid opening our computer, if we can manage it. Instead, we find projects that require physical activity…and give us something to show for our time. Carpentry. Masonry. Painting. We do it all – badly.
(Chapel, rear view. Source: Bill)
A couple of years ago, down here at the farm, we began building a tiny family chapel. It is built of adobe blocks, just as all the churches in the area are, with a cross – illuminated by the sun – made of wine bottles.
(In vino veritas. Source: Bill)
A couple of years ago, down here at the farm, we began building a tiny family chapel. It is built of adobe blocks, just as all the churches in the area are, with a cross – illuminated by the sun – made of wine bottles.

The other odd thing about it is the roof. We began by making four arches of reinforced concrete, to form a square at the base. This is not at all traditional, but it guarantees the solidity of the structure.
Chapel, side view. Source: Bill)
“Good idea,” said a former owner, now neighbor. “The old house was largely destroyed by an earthquake in the 1920s.”

Adobe walls were laid up on all four sides, about a foot outside the concrete arches. Why the gap between the arches and the walls? We don’t remember. The plans were sketched out on a piece of paper…and then lost. Maybe the idea was just to give it, from the inside, a more complex and more interesting form.

A vaulted roof was fashioned out of barrel staves that we took from some long-abandoned oak wine barrels. The barrel wood, set on top of the concrete arches gave us the bones of the roof. The flesh of it was made from small cane, laid down on top of the barrel staves…and covered with mud. It rains very little here, so the same mud was used to make the adobe bricks as well as the roof itself.

A Solid Foundation: All in all, we were pleased with how it turned out. But when we left last year, it was still unfinished…so we returned this time with work still to do – the floor. There were some blocks of very hard wood – quebracho – left over from a floor in the house. The blocks are heavy and almost impossible to cut, but they make a nice surface when they are polished. There aren’t enough of them to do the entire floor, so we will use them to make a border around the edge of the chapel floor…and a cross in the center.

We began on Saturday, using our grandson as a ‘hod carrier’ and ‘mud boy.’ We showed him how to ‘screen’ the sand to remove the pebbles. Then, he learned how to mix it with lime in a wheelbarrow, add water, and end up with a creamy consistency. “Grandad, can I lay down the blocks?” “I don’t know…it takes some real skill. The blocks are not all the same size. You’ve got to make sure they come out flat on top.”

We showed him how to put down a bed of mortar…making ridges in it to give it some squishability. And then we tapped the block down with a hammer until the top of it lined up with the other blocks. “I can do it, Grandad.”

The first row of blocks we laid down weren’t the best. They had to be taken up and re-done. It was a mistake, we discovered, to try to line them up with the wall. The base of the wall was made out of stone, which keeps the mud bricks up off of the ground. But it is irregular. “How did you learn to do this, Grandad?” “Oh…I’m an autodidact.” “A what…?” “It means I learned on my own.”

“You mean by trial and error.” “Mostly error. But that’s the way you learn everything. Either your mistake or someone else’s. But the nice thing about life is that it corrects errors…whether you like it or not. ” “What’s the problem in school,” we asked. “Oh…it’s just boring. I want to drop out.” "What would you do instead?” “I don’t know. Nothing, I guess.” “That doesn’t sound very interesting. But if you want to drop out of school you could help me. We could do this kind of work every day.”

We were working inside, but on our knees. And the day was hot. After a while, the enthusiasm for manual labor began to wane. “How long are we going to do this, Grandad?” “Until they call us for dinner.” “But I’ve got to study my Spanish.” “We’ll, how about finishing this row, then you can go study.” “Okay…” The results were so-so. But they will give the old man cover for his own sloppy work. “Yeah…they’re a little uneven,” we’ll admit. “I let my grandson do it.”

"The Dominoes Are Starting To Fall Very Rapidly Now – Could These Banks Be Next?"

"The Dominoes Are Starting To Fall Very Rapidly Now –
 Could These Banks Be Next?"
by Michael Snyder

"Welcome to the great banking collapse of 2023. Please try to enjoy the ride. When FTX crumbled, I explained to my readers that it was not the first domino to fall and that it certainly would not be the last. Sadly, that prediction turned out to be completely accurate. Within the last week, we have witnessed the second and third largest bank collapses in the entire history of our country. But Silicon Valley Bank and Signature Bank are not unique cases. The Federal Reserve created a 620 billion dollar blackhole in our banking system by aggressively raising interest rates, and our quadrillion dollar derivatives pyramid scheme is starting to tremble violently. The Federal Reserve is desperately trying to fix things by recklessly spraying money around, but the truth is that Fed officials are ultimately going to need a much bigger hose.

The speed at which financial institutions can collapse in a digital economy is absolutely breathtaking. It is being reported that $42 billion dollars was withdrawn from Silicon Valley Bank in one day alone…"Customers withdrew $42 billion in a single day last week from Silicon Valley Bank, leaving the bank with $1 billion in negative cash balance, the company said in a regulatory filing. The staggering withdrawals unfolded at a speed enabled by digital banking and were likely fueled in part by viral panic spreading on social media platforms and, reportedly, in private chat groups."

Signature Bank was also hit by a withdrawal tsunami, and right now many other regional banks are also seeing huge outflows. So which banks will be the next to implode? Well, on Tuesday Moody’s Investors Service suddenly slashed its outlook for the entire U.S. banking sector…"In a harsh blow to an already-reeling sector, Moody’s Investors Service cut its view on the entire banking system to negative from stable.

The firm, part of the big three rating services, said Monday it was making the move in light of key bank failures that prompted regulators to step in Sunday with a dramatic rescue plan for depositors and other institutions impacted by the crisis."

But what was far more troubling was the fact that Moody’s identified six specific banks for potential downgrades…"Moody’s also warned it was reviewing the rates of First Republic Bank, Zions, Western Alliance, Comerica, UMB Financial, and Intrust Financial. It said it had cut the rating on Signature Bank, which was seized by bank regulators over the weekend, to junk." Needless to say, we will want to keep a very close eye on those six names.

Meanwhile, one of the most important banks in Europe has acknowledged “material weaknesses”…"Credit Suisse has acknowledged ‘material weaknesses’ in its internal controls as the Swiss bank released its annual report on Tuesday, in the latest blow to the scandal-hit bank. The annual report was delayed following queries from U.S. regulators regarding its books. The bank was supposed to publish its report last week but it postponed the release after a last-minute call from the U.S. Securities and Exchange Commission over revisions made to cash-flow statements for 2019 and 2020."

Shares of the bank just fell to an all-time low. Overall, Credit Suisse is now down a staggering 97 percent since 2007But we have known that Credit Suisse has been in trouble for years.

Sometimes these things just take time to fully play out. For example, insiders knew that Silicon Valley Bank was “technically insolvent for months” before it finally collapsed…"In fact, Silicon Valley Bank has been technically insolvent for months: the company had more assets than liabilities, but a huge chunk of those assets could not be liquidated without taking a major loss; everything would be ok, though, because those securities would mature in time, paying back their value in full. The big loser would be Silicon Valley Bank stock holders, who would forego all of the unrealized interest on the more attractive securities the bank could not buy in the meantime; small wonder the stock lost 66% of its value last year. 

Many other banks that are “technically insolvent” right now may be able to survive for a while, but their days are numbered. We are watching a slow-motion train wreck play out right in front of our eyes, and our leaders are not going to be able to stop it. But they could at least try to make good decisions.

It turns out that there were private buyers for Silicon Valley Bank that had emerged, and having a private buyer purchase the bank would have solved a lot of problems. Unfortunately, it is being reported that the Biden administration rejected those buyers, and if that is true than this is definitely “another Biden scandal”…"Kevin Hassett, former Chairman of the Council of Economic Advisers under Trump, told Fox Business that “there were buyers who were willing to step in & buy [SVB, but] the radicals at the @FDICgov basically weren’t going to allow that to happen. The Biden Admin had a whitelist of companies that were allowed to buy the failed bank & companies that weren’t.” “If this is true,” said Grabien founder Tom Elliott, “then this is another Biden scandal.“

Hopefully the truth will come out about this, because if the Biden administration purposely made this crisis worse for political purposes that should make all of us deeply angry. We have a major crisis on our hands, and now is not a time to be playing politics. All over the nation, economic activity is slowing down and large corporations are laying off workers.

In fact, Facebook just announced a second round of layoffs…"Another 10,000 employees of Meta, the parent company of Facebook and Instagram, will be laid off, after the tech giant announced further cuts on Tuesday. Meta CEO Mark Zuckerberg in a message to employees said he “made the difficult decision” to make the cuts, adding that recruiting employees were expected to be impacted by the layoffs this week."

We haven’t seen anything like this since 2008. Through the end of February, announced job cuts in the United States were running 427 percent higher than they were at the same time last year. A major economic meltdown is here, and eventually things will get a whole lot worse than they are right now. So I would encourage you to brace yourselves for the incredibly challenging times that are ahead of us, because they will truly shake our society to the core."

Tuesday, March 14, 2023

"Russia Takes Down US Warplane, NATO Retaliates; System Crashing; China Preps for WW3"

Full screen recommended.
Canadian Prepper 3/14/23:
"Russia Takes Down US Warplane, NATO Retaliates; 
System Crashing; China Preps for WW3"
Comments here:

Musical Interlude: Soothing Relaxation, "Dance of Life"

Full screen recommended.
Soothing Relaxation, "Dance of Life"
"Relaxing fantasy music, "Dance of Life" 
by Peder B. Helland, for relaxation and meditation."

"A Look to the Heavens"

“Is our Milky Way Galaxy this thin? Magnificent spiral galaxy NGC 4565 is viewed edge-on from planet Earth. Also known as the Needle Galaxy for its narrow profile, bright NGC 4565 is a stop on many telescopic tours of the northern sky, in the faint but well-groomed constellation Coma Berenices. This sharp, colorful image reveals the spiral galaxy's boxy, bulging central core cut by obscuring dust lanes that lace NGC 4565's thin galactic plane.
An assortment of other background galaxies is included in the pretty field of view. Thought similar in shape to our own Milky Way Galaxy, NGC 4565 lies about 40 million light-years distant and spans some 100,000 light-years. Easily spotted with small telescopes, sky enthusiasts consider NGC 4565 to be a prominent celestial masterpiece Messier missed.”

"Survival..."

 

"Even With Good People..."

"Cause even with good people, even with people that
you can kinda trust, if the truth is inconvenient,
and if the truth doesn't, like, fit, they don't believe it."
- Marie Adler

“In The Long Run… We Are All Alive”

“In The Long Run… We Are All Alive”
by MN Gordon

“In 1976, economist Herbert Stein, father of Ben Stein, the economics professor in Ferris Bueller’s Day Off, observed that U.S. government debt was on an unsustainable trajectory. He, thus, established Stein’s Law: “If something cannot go on forever, it will stop.” Stein may have been right in theory. Yet the unsustainable trend of U.S. government debt outlasted his life. Herbert Stein died in 1999, several decades before the crackup. Those reading this may not be so lucky.

Sometimes the end of the world comes and goes, while some of us are still here. We believe our present episode of debt, deficits, and state sponsored economic destruction, is one of these times.. We’ll have more on this in just a moment. But first, let’s peer back several hundred years. There we find context, edification, and instruction.

In 1696, William Whiston, a protégé of Isaac Newton, wrote a book. It had the grandiose title, “A New Theory of the Earth from its Original to the Consummation of All Things.” In it he proclaimed, among other things, that the global flood of Noah had been caused by a comet. Mr. Whiston took his book very serious. The good people of London took it very serious too. Perhaps it was Whiston’s conviction. Or his great fear of comets. But, for whatever reason, it never occurred to Londoners that he was a Category 5 quack.

Like Neil Ferguson, and his mathematical biology cohorts at Imperial College, London, Whiston’s research filled a void. Much like today’s epidemiological models, the science was bunk. Nonetheless, the results supplied prophecies of the apocalypse to meet a growing demand. It was just a matter of time before Whiston’s research would cause trouble…

Judgement Day: In 1736, William Whiston crunched some data and made some calculations. He projected these calculations out and saw the future. And what he witnessed scared him mad. He barked. He ranted. He foamed at the mouth to anyone who would listen. Pretty soon he’d stirred up his neighbors with a prophecy that the world would be destroyed on October 13th of that year when a comet would collide with the earth.

Jonathan Swift, in his work, “A True and Faithful Narrative of What Passed in London on a Rumour of the Day of Judgment,” quoted Whiston: “Friends and fellow-citizens, all speculative science is at an end: the period of all things is at hand; on Friday next this world shall be no more. Put not your confidence in me, brethren; for tomorrow morning, five minutes after five, the truth will be evident; in that instant the comet shall appear, of which I have heretofore warned you. As ye have heard, believe. Go hence, and prepare your wives, your families, and friends, for the universal change.”

Clergymen assembled to offer prayers. Churches filled to capacity. Rich and paupers alike feared their judgement. Lawyers worried about their fate. Judges were relieved they were no longer lawyers. Teetotalers got smashed. Drunks got sober. Bankers forgave their debtors. Criminals, to be executed, expressed joy.

The wealthy gave their money to beggars. Beggars gave it back to the wealthy. Several rich and powerful gave large donations to the church; no doubt, reserving first class tickets to heaven. Many ladies confessed to their husbands that one or more of their children were bastards. Husbands married their mistresses. And on and on…

The Archbishop of Canterbury, William Wake, had to officially deny this prediction to ease the public consternation. But it did little good. Crowds gathered at Islington, Hampstead, and the surrounding fields, to witness the destruction of London, which was deemed the “beginning of the end.” Then, just like Whiston said, a comet appeared. Prayers were made. Deathbed confessions were shared. And at the moment of maximum fear, something remarkable happened: the world didn’t end. The comet did not collide with earth. It was merely a near miss.

The experience of Whiston, and his pseudoscience prophecy, shows that predictions of the end of the world come and go while people still remain. Sometimes the fallout of these predictions, and the foolishness they provoke, is limited. Other times the foolishness they provoke leads to catastrophe. Here’s what we mean…

“In the long run we are all dead,” said 20th Century economist and Fabian socialist, John Maynard Keynes. This was Keynes rationale for why governments should borrow from the future to fund economic growth today. Of course, politicians love an academic theory that gives them cover to intervene in the economy. This is especially so when it justifies spending other people’s money to buy votes. Keynesian economics, and in particular, counter-cyclical stimulus, does just that.

U.S. politicians have attempted to borrow and spend the nation to prosperity for the last 80 years. Over the past decade, the Federal Reserve has aggressively printed money to fund Washington’s epic borrowing binge. The world as it was once known – where a dollar was as good as gold – has come and gone. Today, in life after the end of that world, we are witnessing the illusion of wealth, erected by four generations of borrowing and spending, crumble before our eyes. Moreover, contrary to Keynes, in the long run we are not all dead. In fact, in the long run we are all very much alive. And we are all living with the compounding consequences of shortsighted economic policies.”

"Breaking! The Great Collapse Continues as More Banks Warn of Failure"

Full screen recommended.
Redacted, 3/14/23:
"Breaking! The Great Collapse Continues
 as More Banks Warn of Failure"
"Credit Suisse is just the latest bank warning of structural collapse as the orchestrated financial slide continues. The Biden administration is saying it's not a bailout but what would you call it when the government steps in to pay off deposits? And why didn't the government save FTX depositors?"
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The Daily "Near You?"

Union, Kentucky, USA. Thanks for stopping by!

"Be Ready For Evictions As 50% Of American Workers Can’t Afford Rent Prices"

Full screen recommended.
"Be Ready For Evictions As 50% Of 
American Workers Can’t Afford Rent Prices"
By Epic Economist

"Nearly half of all American workers can’t afford rent prices in most U.S. cities, according to a new report. They are at risk of becoming homeless this year as a nightmarish scenario unfolds in the rental market, analysts say. Evictions are spiking again, and in some states, eviction fillings have already soared 40% above pre-pandemic levels. Conditions are tight, with less than 5% of rental units still vacant across the country. As competition amongst renters grows, prices continue rising much faster than incomes at a time job cuts are also increasing. The combination is painting a dire picture for housing affordability, and it is threatening to disrupt the lives of millions of Americans.

A new report from the National Low Income Housing Coalition showed that nearly half of Americans – or about 46% – do not earn enough to rent a one-bedroom apartment. Rents in the U.S. continued to rise in recent years as demand increased due to expensive home prices, and a worker now needs to earn about $21.40 an hour to afford a modest one-bedroom rental. The median wage in the US is about $21 an hour.

And this trend is not just happening in big cities. The report reveals that a two-bedroom rental – a reasonable size for a family – would stretch the budgets of renters in the vast majority of U.S. counties. In California, where the minimum wage is $14 an hour, the cost of housing is so high that the benefit of higher hourly pay is completely erased. Today, a person in California needs to earn $39.03 an hour to afford a two-bedroom apartment and $31.06 for a one-bedroom. That is to say, a minimum-wage worker in the state would have to put in 89 hours every week just to afford the one-bedroom and 112 hours to afford the two-bedroom.

Nationally, the average fair market rent is $1,718 a month for a one-bedroom and $1,956 a month for a two-bedroom, according to the report. In contrast, the average renter’s hourly wage is $18.78, an income that can absorb only $977 a month in rent without being housing cost-burdened. A household living on one minimum wage income can afford even less, $377 a month, the organization showed.

Meanwhile, a nightmarish scenario for evictions is unfolding in the U.S. rental market. A recent GOBankingRates survey found that roughly one-third of Americans, or 32.56%, are worried they won’t be able to pay for rent over the next three months as they face a job loss.

The ripple effects that mass evictions can have on our society are beyond scary. The human toll of losing one's home, community, and sense of security cannot be underestimated. As more and more people are pushed out of their homes and into homelessness, the fabric of our society will start to desintegrate.

In short, the housing crisis is a moral and political crisis, and we cannot afford to ignore the plight of those who are being left behind by our broken housing system. In the end, we must recognize that the problem of mass evictions and soaring rent prices is not a mere economic issue, but a human one. And our country's failure to act now will have dire consequences for generations to come."
Comments here:

Gerald Celente, "The Bankster Bust. As Warned: Crash Coming"

Full screen recommended.
Strong language alert!
Gerald Celente, 3/14/23:
"The Bankster Bust. As Warned: Crash Coming"
"The Trends Journal is a weekly magazine analyzing
 global current events forming future trends."
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"How It Really Is"

"One Giant Mess"

"One Giant Mess"
Another government crisis, another stupid government acronym...
by Bill Bonner and Joel Bowman

"Here’s another nice mess you’ve gotten us into."
~ Oliver Hardy

San Martin, Argentina - "We almost feel sorry for Jerome Powell. He got the whole world into another nice mess. And now, people turn their lonely, tired eyes to him. “Help us. Save us. Heal us.” But what can he do? Just another stupid thing…

We have family visiting, so we’ll be brief. But before we start, we would like to thank all the many readers who wrote to us recently with comments (most of them positive) about our service. Many of the comments left us humbled, wondering how we can possibly meet such high expectations. We doubt we are worthy of the high praise we received. All we can say is that we are grateful for your support and will do our best to earn it.

In the last few days we’ve had an illustration of how booms work. How busts work. And how the Fed works. We also see more evidence that the Fed will not be able to stop inflation.

Non-Transitory Inflation: First…the Fed created an outsized bubble – by holding interest rates too low for too long. People borrowed to take advantage of the low rates. Then, the Fed, effectively, “printed money” to meet the demand – particularly from the government, which was handing out trillions of dollars’ worth of ‘stimmie’ checks and PPP loans.

Anyone and everyone who could add 2 + 2 – except perhaps the Ph.Ds. who work for the Fed – knew that inflation wouldn’t be long in coming. And when it showed up, the Fed made another huge error. It judged the inflation “transitory.” No need for decisive action.

The next foolish move was to try to counter the inflation – which was running above 8% – with tiny rate hikes of only 50 or 75 basis points. Wall Street speculators can add, even if the Fed can’t. For an entire year, they could still borrow at 3% - 7% below inflation. Debt continued to increase. Consumer prices too.

The modus operandi of the Fed is to feed money to the rich (with ultra-low lending rates)…while trying to stop anything bad from happening by backstopping the markets. But then, as debt increases, something bad always does happen…and the Fed then makes it worse by making it easier to borrow even more money.

Here’s the good news. Last week, two banks that catered to venture capitalists and hedge funds in the tech and crypto sectors caved in. That is what you’d expect. They took big risks. They made big profits. And then their bets went bad.

All of this was obvious…and predictable. And no real biggie. It’s why we have corrections, tow trucks and funeral parlors. People make mistakes. Markets get ahead of themselves. Things need to be set straight…and put back into balance.

Another Crisis, Another Stupid Acronym: But along cometh the Fed with another big error. Typically, bank deposits are protected by the feds, up to $250,000. Bigger deposits are not. But now even the biggest, richest and most reckless speculators can look to the feds for back up finance. From The Wall Street Journal…"Meet the BTFP, the Fed’s 2023 Crisis Facility." "Among measures to counter fallout from the failure of Silicon Valley Bank, the Federal Reserve said it would create a new lending program for banks: the Bank Term Funding Program, or BTFP.

The facility will allow banks to take advances from the Fed for up to a year by pledging Treasurys, mortgage-backed bonds and other debt as collateral. By allowing banks to pledge their bonds, they can meet customer withdrawals without having to sell their bonds at a loss, which is what Silicon Valley Bank did last week, sparking a run on the bank.…the Fed won’t look to the market value of the collateral, which in many cases reflect big unrealized losses due to the jump in interest rates.

…The Treasury Department is providing $25 billion of credit protection to the Fed just in case. “The Federal Reserve does not anticipate that it will be necessary to draw on these backstop funds,” the Fed said in its announcement Sunday night."

It’s done it again! The Fed has made a bad situation worse, by protecting speculators from their own errors. The Washington Post comments: "The Fed’s fight against inflation just got downgraded. The crisis, which has already prompted a large response from the Fed and other regulators in the form of a new special lending facility and measures to make depositors of the failed banks whole, is raising questions about whether the central bank can continue hiking interest rates in the face of an increasingly fragile financial system.

The Fed says it will continue sparring with inflation. But as soon inflation lands a punch, the Fed will take a dive. It will bail out the banks (and their big customers)…and the little guys will pay higher prices for everything."

Joel’s Note: "Inflation is expected to have increased to an annual rate of 101.7% in February, according to median estimates in a Reuters poll released Monday. That equates to a 6.2% increase for the month of February alone, up slightly from the previous month. Goldman Sachs forecast a 101.3% rise in prices, year-over-year, as inflation rips through the economy and decimates the savings of…

Oh, wait… sorry, we were looking at the Argentine data. Whoops! We’ll shelve that copy for a future date. Meanwhile, back in Los Estados Unidos…Consumer prices increased 6% for the month of February, according to the Labor Department’s Consumer Price Index (CPI), out this morning. That’s down from 6.4% in January, though still a mile above the Fed’s 2% target rate. On a monthly basis, prices rose 0.4%, following a 0.5% increase in January. That was up from a slight decrease (to 0.1% from 0.2%) over the previous month.

Thus spake Fed Head, Jerome Hayden Powell, to the US Senate…“Although inflation has been moderating in recent months, the process of getting inflation back down to two percent has a long way to go and is likely to be bumpy.”

Core CPI (that is, the Fed’s preferred measure… this one that excludes prices that don’t readily cooperate, like food and energy) was up 0.5% from January and 5.5% on the year. (Energy was up 5.2%; food 9.5%. Not great news, if you need those things…) Continued Powell…“The historical record cautions strongly against prematurely loosening policy. We will stay the course until the job is done.”

Meanwhile, First Republic Bank and Charles Schwab tanked yesterday on fears of contagion in the banking sector (shares of the two mid-sized banks plummeted 77% and 20% respectively during the session). And yet, the rest of the market appears to be reading from a different playbook entirely, bidding up stocks on the assumption the collapse of SVB and Signature Bank will be enough for the Fed to finally pivot and begin hosing the joint down with free-flowing fiat once again.

What gives? As usual, Dan Denning was on the case from his frozen bolthole up in Laramie, Wyoming. Here’s a word of caution, from an email he fired off to the BPR team this morning… “Remember, history shows that recessions and stock market corrections usually begin AFTER the rate hiking cycle, when the Fed CUTS.” And here’s the chart he attached…
Explains Dan: “The blue line is the Wilshire 5,000 to broadest index of publicly traded stocks. The scale is on the left. The red line is the effective Fed Funds rate. Scale on the right. When rate cutting began in 2000 and 2008, falling stock prices and the recession were not far behind.”

And why was that, the inquisitive reader wonders? “Because, as usual, Fed policy was behind the curve,” explains Dan. “It hiked rates into the recession and stock market correction it had caused with easy rates. If history is any guide, Wall Street might get what it wishes for, The Pivot… and then NOT what it wishes for, the recession and the mean reversion in stocks to follow.”

"Tucker: Feds Using Bank Meltdown to Kill Off Regional/Local Banks, Consolidate Power"

"Tucker: Feds Using Bank Meltdown to Kill Off Regional/Local Banks, 
Consolidate Power… Warns of Digital Currency, That Bank Run Is Intentional"

"Fox News host Tucker Carlson questioned what the federal government would get in return for “backstopping” failed banks like Silicon Valley Bank Monday. “What we know is the Biden administration is backstopping these deposits, okay. But that’s not the end of the story, in some ways it’s the beginning,” Carlson, a co-founder of the Daily Caller News Foundation, said. “So here is where you pause and ask yourself a question that too few seem to be considering right now: They’re doing this, what are they going to get in return? Well, something for sure.”

Federal regulators shut down Silicon Valley Bank Friday after its stock price collapsed and customers began a bank run following the financial institution’s disclosure of a $1.8 billion loss on asset sales due to high interest rates, CNBC reported. Depositors who had accounts at Silicon Valley Bank and Signature Bank, which was shut down by regulators Sunday, will be able to fully recover their funds, the Federal Deposit Insurance Corporation announced in conjunction with the Treasury Department and the Federal Reserve Sunday."

via thegatewaypundit: "Tucker Carlson went there tonight - Tucker told his audience if people don’t start making lots of noise we’re going to see a government controlled digital currency. Tucker Carlson opened his show on Monday by discussing the banking crisis in the country today. On Monday morning trading was halted on 20 banks as the markets opened. The New York Stock Exchange halted trading at Charles Schwab."
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"Shopping Trip To Meijer! Great Deals!"

Full screen recommended.
Adventures With Danno,3/14/23:
"Shopping Trip To Meijer! Great Deals!"
"In today's vlog we are at Meijer, and although we are seeing more price increases on groceries, we are finding some great deals. It's getting rough out here as stores grocery prices continue to skyrocket."
Comments here:

"The Ripple Effect From the Bank Crisis"

Full screen recommended.
Dan, iAllegedly 3/14/23:
"The Ripple Effect From the Bank Crisis"
"The damage is just starting to be felt. Globally there are problems that are affecting so many different industries with the banking crisis. This is just the beginning of the ripple effect and the damage it’s going to cause."
Comments here:

Gregory Mannarino, "Alert! Too Big To Fail? Banking System Collapse? No! This Is A Deliberate Consolidation of Power!"

Gregory Mannarino, AM 3/14/23:
"Alert! Too Big To Fail? Banking System Collapse? 
No! This Is A Deliberate Consolidation of Power!"
Comments here:

"Economic Market Snapshot 3/14/23"

"Economic Market Snapshot 3/14/23"
Market Data Center, Live Updates:
Down the rabbit hole of psychopathic greed and insanity...
Only the consequences are real - to you!
"It's a Big Club, and you ain't in it. 
You and I are not in the Big Club."
- George Carlin
A comprehensive, essential daily read.
Financial Stress Index

"The OFR Financial Stress Index (OFR FSI) is a daily market-based snapshot of stress in global financial markets. It is constructed from 33 financial market variables, such as yield spreads, valuation measures, and interest rates. The OFR FSI is positive when stress levels are above average, and negative when stress levels are below average. The OFR FSI incorporates five categories of indicators: creditequity valuationfunding, safe assets and volatility. The FSI shows stress contributions by three regions: United Statesother advanced economies, and emerging markets."
Job cuts and much more.
Commentary, highly recommended:
"The more I see of the monied classes,
the better I understand the guillotine."
- George Bernard Shaw
Oh yeah... beyond words. Any I know anyway...
And now... The End Game...

Monday, March 13, 2023

"Bank Runs Have Begun! Wells Fargo Leaves Millions Of Americans In Lurch At Worst Possible Time"

Full screen recommended.
"Bank Runs Have Begun! Wells Fargo Leaves 
Millions Of Americans In Lurch At Worst Possible Time"
by Epic Economist

"When it rains, it pours. On the exact same day that we witnessed the second largest bank failure in U.S. history, Wells Fargo experienced an unprecedented nationwide computer glitch that caused countless numbers of account holders to have “incorrect balances” and “missing transactions”. This is yet another example that demonstrates why it is never wise to put all of your eggs into one basket. If you have all of your money in just one bank, you may wake up one day and find that you are suddenly not able to access any of it. For years I have been telling my readers to spread their assets around, because our banking system is far more vulnerable than most people realize.

In particular, I have never been a fan of Wells Fargo. A nationwide computer glitch at Wells Fargo left irate customers with incorrect balances and missing transactions Friday morning, sometimes dipping accounts into negative balances.

Others anticipated Chase Bank and Bank of America would see an influx of unhappy Wells Fargo customers. JPMorgan Chase is the nation’s largest bank by assets, at $3.2 trillion, and Charlotte-based Bank of America is its second largest with $2.4 trillion in assets. Another Wells Fargo customer tweeted about “definitely closing” their account, using a SpongeBob meme to show how they felt — like they were begging for money.

Wells Fargo is further proof to keep cash on hand for use. In the blink of an eye, a computer glitch or whatever, your funds are inaccessible. The number one thing that you should want from any bank is security."
Comments here:

"I Took My Money Out Of The Bank Today; Investors Panic Over Bank Bloodbath"

Jeremiah Babe, 3/13/23:
"I Took My Money Out Of The Bank Today; 
Investors Panic Over Bank Bloodbath"
Comments here:

Musical Interlude: Gnomusy (David Caballero), "Footprints On The Sea"

Gnomusy (David Caballero), "Footprints On The Sea"

"A Look to the Heavens"

"Do you see the bat? It haunts this cosmic close-up of the eastern Veil Nebula. The Veil Nebula itself is a large supernova remnant, the expanding debris cloud from the death explosion of a massive star. While the Veil is roughly circular in shape and covers nearly 3 degrees on the sky toward the constellation of the Swan (Cygnus), NGC 6995, known informally as the Bat Nebula, spans only 1/2 degree, about the apparent size of the Moon. That translates to 12 light-years at the Veil's estimated distance, a reassuring 1,400 light-years from planet Earth.
In the composite of image data recorded through narrow band filters, emission from hydrogen atoms in the remnant is shown in red with strong emission from oxygen atoms shown in hues of blue. Of course, in the western part of the Veil lies another seasonal apparition: the Witch's Broom Nebula."

"I Am That..."