Jeremiah Babe, 3/16/23
"Bank Bailouts Are An Ominous Warning,
Big Banks Rescued, You Pay"
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So, we rise from the rubble...
Thursday, March 16, 2023
"A Look to the Heavens With Chet Raymo"
“Like Rubies Ringed With Gold”
by Chet Raymo
“Here’s a Hubble Space Telescope composite photograph of two colliding galaxies in the constellation Corvus.
Each of the three books of Dante’s “Divine Comedy” ends with the same words: “the stars.” The Inferno concludes with distant stars glimpsed through the narrow exit of hell. “We emerged,” says the poet, “and saw the stars.” The poet’s journey through Purgatory ends on Earth’s highest mountain, with the heavens seemingly not so far away. He is “ready to ascend to the stars.” Finally, Dante looks down upon the stars from above, from the luminous realm of Paradise. He has experienced “the Love that moves the sun and the other stars.” The beauty of that final destination, the Empyrean Sphere that encloses the created universe in divine brilliance, taxes the poet’s powers of description:
“I saw light in the shape of a river
Flashing golden between two banks
Tinted in colors of marvelous spring.
Out of the stream came living sparks
Which settled on the flowers on every side
Like rubies ringed with gold…”
Nothing in Dante’s experience could have prepared him for the splendors of the heavens as revealed by the Hubble. The photograph of colliding galaxies in Corvus is a work of genius in the tradition of the “Divine Comedy” – imagination in service to humankind’s loftiest aspirations and longings.
In Dante’s time, astronomy was one of the seven liberal arts – with grammar, rhetoric, logic, arithmetic, geometry, and music – required of every student who aspired to a university degree. Of all the secular sciences, astronomy was deemed most likely to lead one to the contemplation of things divine. Yesterday’s Hubble pic made the hair stand up on the back of my neck, which is about as close to the divine as I ever get. Dante’s “Divine Comedy” is based on the medieval astronomical conception of the world – a system of concentric spheres centered on the Earth and bounded just up there by the Empyrean.
In the Hubble photograph of colliding galaxies we see something akin to Dante’s paradisal vision, but it is not a cosmos centered on the Earth. Here are other Suns and other Earths being born, in prodigious numbers, massive stars destined to die soon as supernovas, and other less massive stars that will live long lives, perhaps evolving life or consciousness on their planets. We see in the Hubble photograph a universe of a fullness and dimension that makes Dante’s human-centered cosmos of concentric spheres seem like a dust mote in an immense cathedral.
Astronomy is no longer a required course of study in our universities, and it’s something of a shame. Who can look at the photograph of colliding galaxies and not be moved to rapture? An understanding of the size, age, and prodigality of the universe should be part of every liberal arts graduate’s intellectual furniture.”
Chet Raymo, “When The Morning Stars Sing Together”
“When The Morning Stars Sing Together”
by Chet Raymo
“A Chinese proverb: A bird does not sing because it has an answer. It sings because it has a song. Which might be an acceptable epigraph for this blog. I can’t imagine anyone coming here looking for answers. Certainly, providing answers is the last thing on my mind. I would like to think you come for song.
We are, I think, by and large, a community who distrusts answers, at least answers that are vehemently held. We are made uncomfortable by stridency. By dogma. By the desire to proselytize. We wear our truths lightly, gaily, as a song bird wears its feathers. We are grateful to those who push back the clouds of ignorance and hold the reins of passion. With Blake, we sing their praises, a song we have spent a lifetime learning. We sing to celebrate. We sing because we have a song.”
Gerald Celente, "Death Of The Dollar On The Doorstep"
Strong language alert!
Gerald Celente, 3/16/23
"Death Of The Dollar On The Doorstep"
"The Trends Journal is a weekly magazine analyzing global current events forming future trends. Our mission is to present Facts and Truth over fear and propaganda to help subscribers prepare for What’s Next in these increasingly turbulent times."
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"Multiple Trillions Of Dollars To Prop Up And Consolidate The Banking System"
Gregory Mannarino, PM 3/16/23
"Multiple Trillions Of Dollars To Prop Up
And Consolidate The Banking System"
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"To Hell With Ukraine"
"To Hell With Ukraine"
By Fred Reed
"Great. Just ever-lovin’pea-pickin’ great. In LA some sixty thousand people–who really knows?–sleep on the sidewalks, in tents, cardboard boxes, sleeping bags, or not much of anything. Others live in their cars. The same in San Fran, Seattle, St. Louis. There being no bathrooms,they defecate as the urge hits, and where. What choice do they have? Some are junkies, others crazy, many just with no jobs or jobs that don’t pay enough for a room.
Meanwhile Biden sends billions to Ukraine, lots of billions, our billions, while America crumbles within. A corrupt, senescent, second-rate lawyer mysteriously empowered to bankrupt his own country to benefit a corrupt, dirtball country of no importance to America. How is this possible? Why do Americans tolerate it? Because they have no choice. Americans have no influence over their government except in things that do not matter to that government.
Recently my stepdaughter Natalia, Mexican, went to Austin to visit friends. She returned and pronounced America a truly weird country. All the houses were the same, so how could you find your way home at night? And there were lots of people, she said, living under bridges and on the sidewalks. This she thought strange. She had never seen such a thing in Mexico. In twenty years, neither have I.
Meanwhile Biden sends fortunes to Ukraine. How is this? Couldn’t we have an American President? Just once? Someone who cares about people in his own country? No prospect of this is in sight.
In America there are people, lots of them, who don´t have enough to eat, or barely do. Appalachia, the Rust Belt, the rural Deep South. I wonder whether Biden has enough to eat. I wonder whether he cares that many of his citizens do not. No, come to think of it, I don’t wonder. But he cares, cares deeply, about Ukraine.
America crumbles, but Biden is going to rebuild Ukraine. Our trains look like something out of Turner Classic Movies. The passenger versions, across the continent, are nice, slow but appealing as period pieces. Chattanooga Choochoo, all that. They are also primitive and badly maintained. We have had four freight derailments in a month or so.
No, make that five. This morning we read of another, in Arizona. This is Third World, pushing Fourth. But Biden is going to do what it takes, for as long as it takes. For Ukraine.
I sometimes wonder whether Biden knows his own country, or anybody’s country. There is no evidence that he does. He wasn’t in the military, didn’t spend time hitchhiking through West Virginia, doesn’t know the blast of big rig wind standing beside the highways of the Far West. He has never worked for a living, probably doesn’t know anyone who has. A political hack and second-rate lawyer , finishing seventy-sixth in a class of eighty-five in a mediocre law school after bing caught cheating. But he will send as much of our money as it takes to Ukraine. Are you grateful yet?
The water is undrinkable in Flint, Michigan and Jackson, Mississippi and, I am told by my daughter who lives there, in New Orleans. What the hell kind of country allows this? Answer: A bushworld country, or one whose government is more interested in Ukraine than in its own people.
But, if I may, another word on trains. My wife and I were in China several years back, and rode their high-speed trains (180 miles per hour). They are startling, smooth, quiet, gorgeous. China has 24,000 miles of them. Their high-temperature superconducting maglev version, with carbon- composite body, at 360 miles per hour, is in late-stage development. America has not a nanometer, not an angstrom, of either. Coming back from Chengdu was like returning from a scifi movie.
But Biden sends billions to Ukraine, a little, little man eating prime rib in the White House while a couple of hundred thousand die for him in Ukraine. Anything for Ukraine. Anything at all.
Americans do not go to doctors because they cannot pay the bills. Unlike countries of the First World, America does not have decent national medical care. Do you suppose that Biden lacks medical care while he sends money, desperately needed by America, to Ukraine?
China – if I may again say that horrid word – has a for-profit economy. China spends its money on China. America spends its money on Ukraine. Go look at China. You will see highways going in, four-lane tunnels running twelve miles under mountains, brightly lighted. Airports, astonishing bridges. Phenomenal high-tension electrical lines. If you are interested in such things, China has a massive Five G installed base and, now, from Huawei, Five five G.
Biden has just signed an $886 billion military bill. Add the VA, black programs of god-knows what size, and DOE, and you get well over a trillion. Most Americans, I read over and over, live maxed out on credit cards, don’t have five hundred dollars for an emergency. Biden, a draft-dodger during Vietnam and now a warrior President, probably is not maxed out on Visa. He probably has five hundred dollars, as his people do not. But he is not ignoring them. He is buying them aircraft carriers at thirteen billion per, and sending their money to Ukraine. Which do you need more, affordable dental care or an aircraft carrier?
Crime in America is at appalling levels. Tourists from normal countries must view visits as trips to a zoo. Education is abysmal and getting worse fast under Biden. Potholes come, bridges age, infrastructure rots. But Ukraine gets lots and lots of stuff free.
And now the banks collapse because of, well, backbreaking military giveaways to Lockheed-Martin, backbreaking national debt, backbreaking trade deficits, and unending wars. Now Ukraine demands fighter planes.
So let us thank the gods that we live in a democracy where the will of the people rules. Don’t ride the trains, drink the water, or need a doctor, and keep a comfortable pad handy because sidewalks are hard and get cold in winter. But we can be sure that Biden will send as much of our money to Ukraine as that dismal, trivial country wants. Are you grateful?"
The Poet: Rudyard Kipling, "The Gods of the Copybook Headings"
"The Gods of the
Copybook Headings"
by Rudyard Kipling
"As I pass through my incarnations in every age and race,
I make my proper prostrations to the Gods of the Market Place.
Peering through reverent fingers I watch them flourish and fall,
And the Gods of the Copybook Headings, I notice, outlast them all.
We were living in trees when they met us. They showed us each in turn
That Water would certainly wet us, as Fire would certainly burn:
But we found them lacking in Uplift, Vision and Breadth of Mind,
So we left them to teach the Gorillas while
we followed the March of Mankind.
We moved as the Spirit listed. They never altered their pace,
Being neither cloud nor wind-borne like the Gods of the Market Place,
But they always caught up with our progress,
and presently word would come
That a tribe had been wiped off its icefield,
or the lights had gone out in Rome.
With the Hopes that our World is built on they were utterly out of touch,
They denied that the Moon was Stilton; they denied she was even Dutch;
They denied that Wishes were Horses; they denied that a Pig had Wings;
So we worshipped the Gods of the Market
Who promised these beautiful things.
When the Cambrian measures were forming,
They promised perpetual peace.
They swore, if we gave them our weapons,
that the wars of the tribes would cease.
But when we disarmed They sold us and delivered us bound to our foe,
And the Gods of the Copybook Headings said:
"Stick to the Devil you know."
On the first Feminian Sandstones we were promised the Fuller Life
(Which started by loving our neighbor and ended by loving his wife)
Till our women had no more children and the men lost reason and faith,
And the Gods of the Copybook Headings said:
"The Wages of Sin is Death."
In the Carboniferous Epoch we were promised abundance for all,
By robbing selected Peter to pay for collective Paul;
But, though we had plenty of money,
there was nothing our money could buy,
And the Gods of the Copybook Headings said:
"If you don't work you die."
Then the Gods of the Market tumbled,
and their smooth-tongued wizards withdrew
And the hearts of the meanest were humbled
and began to believe it was true,
That All is not Gold that Glitters, and Two and Two make Four
And the Gods of the Copybook Headings
limped up to explain it once more.
As it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;
And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!"
"If You Look..."
"We have got some very big problems confronting us and let us not make any mistake about it, human history in the future is fraught with tragedy. It's only through people making a stand against that tragedy and being doggedly optimistic that we are going to win through. If you look at the plight of the human race it could well tip you into despair, so you have to be very strong."
- Robert James Brown
"The Fed's Magic Elixir"
"The Fed's Magic Elixir"
How more of the same "medicine" is likely to poison the patient.
by Bill Bonner
“The banks we regulate, in contrast, are well protected from
bank runs through a robust array of supervisory requirements.”
~ Michael Barr, top bank regulator for the Fed, last Thursday
San Martin, Argentina - "The 2nd largest…and 3rd largest…bank failures in US history continue to dominate the financial headlines. CNN Business: "Dow falls 500 points as banking fears spread." From our point of view, the failures were expected. We were waiting for things to break…now, they’re breaking. And now, somehow, somewhere, sometime, by someone…the losses must be reckoned with. Who will pay them? That is our subject for today.
Bag Holders: “No losses will be borne by the taxpayers” said Joe Biden on Monday. Where were the “fact checkers”…the truth seekers, on the alert for misinformation and lies? They must have been taking the day off. For if there were one thing you could count on it is this: ultimately, the taxpayers will have to bear the losses, probably in the form of inflation. As more banks break, the Fed will have to bail them out…and eventually, it will abandon its rate increases. Consumer prices will rise; households will pay.
Who else would cover the losses? Who always pays? The 1980 S&L crisis – in which members of Congress, the Keating Five, played a leading role – cost taxpayers $124 billion.
The 2008 bank bailout, TARP, cost $500 billion. Investigative reporter, Jim Bovard, says that over 4,000 financial institution employees got $1 million+ bonuses as a result.
The ‘zero rate’ fantasy of the Fed, after 2008, cost US household savers $4 trillion.
And thanks to the reform measures of Barney Frank and Elizabeth Warren, in 2010, which were intended to prevent another banking crisis, banks are now saddled with $600 billion in unrealized losses on their portfolios of government or government-backed securities. That is not just a ‘paper’ loss. That is a real loss. Someone will have to pay.
Magic Elixir: Usually, you have to pay to borrow money…which forces you to think carefully about what you’re going to do with it. If the interest rate (after inflation) is 4% (the ‘hurdle rate’)...you need to find an investment that will give you more than 4% interest. Otherwise, you will stumble on the hurdle, lose money…and drop in the esteem of your friends, family and rivals.
Normally, too, there aren’t a lot of investments that will pay off for you…for the very obvious reason that when there are a lot of good investments, people borrow to make them, and the hurdle rate rises. The system is normally self-regulating, preventing too much speculation and too much debt. But along comes the Fed with its magic elixir – interest rates below inflation. Suddenly, the ‘hurdle’ disappears. Almost any gamble – cryptos, NFTs, new tech, Treasury bonds! – could pay off.
And so, it came to pass, between 2009 and 2022, that people borrowed wantonly. They invested recklessly. And they lost prodigiously. All fine and good. But what now? Will the deciders decide that they – the ones most responsible for the borrowing bacchanalia – will pay the losses? Barney Frank, Elizabeth Warren, Joe Biden, Janet Yellen? No, in their wisdom, they will decide that someone else will pay.
But this is the nature of the regulation-rich, responsibility-poor, judgment-free world. No one should have to bear the costs of his own ill-health, bad judgment, incompetence, job loss or bank failures. The ‘unhoused’ person – who was evicted for not paying the rent – believes someone should provide a decent home for him. The ‘unwed’ mother expects the government to provide her with childcare. Whatever the need…the misfortune…or the misconduct, someone else should pay for it. The insurance company…the government…the rich…someone should bail you out!
Whence Cometh The Capital? In the case at hand, the feds now say the bank’s wealthy shareholders will lose, but not the wealthy depositors. Currently, deposits are insured by the FDIC up to $250,000. But 97% of Signature’s deposits were for more than that amount. They were accounts used by hedge funds, corporations, and speculators, not by Mom and Pop savers.
The bank itself no longer has the money to make those depositors whole. So, where will the money come from? The deciders who were supposed to make the banks safe? Or the Wall Street hustlers who used the Fed’s cheap money to make billions – trillions – over the last 12 years? Or, the Fed governors, whose ultra-low interest rates created the bubble that is now losing air?
Joe Biden says the taxpayers won’t pay a cent. Whoopee! The losses have vanished. What will happen next? Ray Dalio describes a scenario. Markets Insider: "In his newsletter Tuesday, the Bridgewater Associates founder called the bank turmoil a "very classic event in the very classic bubble-bursting part of the short-term debt cycle." The cycle lasts roughly seven years, Dalio explained. In the current phase, inflation and curtailed credit growth catalyze a debt contraction, according to Dalio, and that causes contagion until the Federal Reserve returns to a policy of easy money.
Most likely, a few more bank failures…and the feds will take another giant step forward towards a risk-free world. They will take over the entire banking system…including $9 trillion in uninsured deposits. But remember. The feds cannot make the losses go away. They can only move them around…from the people who deserve them, to the people who don’t.
Stay tuned..."
o
Joel’s Note: "There are sharks in the canals, people! Such are the unintended consequences of government intervention into otherwise self-correcting markets. Since the 2008 credit crisis (also caused by the Fed’s “magic elixir,” in the form of ultra-low rates), risk in the system has been concentrated into fewer and fewer hands. And now, as larger institutions – like Goldman Sachs in the US and HSBC in the UK – swoop in to pick up the pieces of recently busted banks, like Silicon Valley Bank, the number of players left in the game dwindles… as the risk of an epic, systemwide crisis approaches near certainty.
“They blew up a gigantic speculative bubble,” wrote Tom Dyson to BPR members in yesterday’s market note, “the biggest of all time in all things, and now that bubble is bursting. So I’m not surprised by any of the events over the last week. I expect to see many more defaults, bank runs, corporate bankruptcies, layoffs and write downs before this is over. I also expect to see more politically-connected bailouts, money printing and currency debasement.”
So, where does the Fed’s marvelous medicine leave us now? “Currency debasement and falling prices are the two ways this situation gets resolved,” continued Tom.
Falling prices is the visible way wealth claims get incinerated… you might say, it’s the “honest” way. I’m referring to defaults, write downs, bank collapses, business closures etc. […] Currency debasement is the sneaky – or dishonest – way of digesting losses, using the currency to absorb the losses, creating a collective or socialized loss. We sometimes call this ‘soft default’. The bailout of U.S. bank depositors over the weekend is a good example of this."
"The Bank Meltdown Just Got Worse, Entire System Downgraded To Negative"
Full screen recommended.
Redacted, 3/16/23
"The Bank Meltdown Just Got Worse,
Entire System Downgraded To Negative"
"Are all U.S. banks in trouble because some of them are? That is what Moody’s thinks. Moody’s Investors Service announced that it cut its outlook on the entire U.S. banking system from “stable” to “negative.” Yikes. This is a rare admission that the U.S. banking system is fundamentally intertwined. Moody’s says that even banks that have not failed still have “unrealized losses” and “uninsured depositors” that may be at risk."
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"The Panic is Out There"
Full screen recommended.
Dan, iAllegedly 3/16/23
"The Panic is Out There"
"The hits just keep on coming. The fall out of Silicon Valley Bank is carrying over to other industries. Now we are hearing that the FDIC may come up with new insurance to protect depositors in addition to its regular insurance. People are trying not to panic."
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"A Musical How It Really Is"
Full screen recommended.
The Temptations, "Ball of Confusion" (1970)
Prophetic...
"Massive Price Increases At Kroger! How Can We Afford This?"
Full screen recommended.
Adventures With Danny, 3/16/23
"Massive Price Increases At Kroger! How Can We Afford This?"
"In today's vlog we are at Kroger, and are noticing massive price increases! This is not good as we are also seeing empty shelves everywhere! It's getting rough out here as stores seem to be struggling with getting products, and then charging extremely high prices!"
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o
"Alert! FED To Pump 2 Trillion Dollars Into The Banking System! Regional Banks For Sale!"
Gregory Mannarino, 3/16/23
"Alert! FED To Pump 2 Trillion Dollars Into The Banking System!
Regional Banks For Sale!"
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"Ukraine's Death By Proxy" (Excerpt)
"Ukraine's Death By Proxy"
by Chris Hedges
Excerpt: "Proxy wars devour the countries they purport to defend. There will come a time when the Ukrainians will become expendable to the U.S. They will disappear, as many others before them, from U.S. national discourse and popular consciousness...
There are many ways for a state to project power and weaken adversaries, but proxy wars are one of the most cynical. Proxy wars devour the countries they purport to defend. They entice nations or insurgents to fight for geopolitical goals that are ultimately not in their interest.
The war in Ukraine has little to do with Ukrainian freedom and a lot to do with degrading the Russian military and weakening Russian President Vladimir Putin’s grip on power. And when Ukraine looks headed for defeat, or the war reaches a stalemate, Ukraine will be sacrificed like many other states, in what one of the founding members of the C.I.A., Miles Copeland Jr., referred to as the “Game of Nations” and “the amorality of power politics.”
I covered proxy wars in my two decades as a foreign correspondent, including in Central America where the U.S. armed the military regimes in El Salvador and Guatemala and Contra insurgents attempting to overthrow the Sandinista government in Nicaragua. I reported on the insurgency in the Punjab, a proxy war fomented by Pakistan.
I covered the Kurds in northern Iraq, backed and then betrayed more than once by Iran and Washington. During my time in the Middle East, Iraq provided weapons and support to the Mujahedeen-e-Khalq (MEK) to destabilize Iran. Belgrade, when I was in the former Yugoslavia, thought by arming Bosnian and Croatian Serbs, it could absorb Bosnia and parts of Croatia into a greater Serbia.
Proxy wars are notoriously hard to control, especially when the aspirations of those doing the fighting and those sending the weapons diverge. They also have a bad habit of luring sponsors of proxy wars, as happened to the U.S. in Vietnam and Israel in Lebanon, directly into the conflict."
Full article is here:
"Major Insider Warning! Plan-B For NATO-Russia WW3; 400,000 Troops; Financial Collapse Happening Now"
Full screen recommended.
Canadian Prepper, 3/15/23
"Major Insider Warning! Plan-B For NATO-Russia WW3;
400,000 Troops; Financial Collapse Happening Now"
Comments here:
"Silcon Valley Bank? You’re Soaking In It"
"Silcon Valley Bank? You’re Soaking In It"
By John Wilder
"On March 15, 44 B.C., Julius Caesar was walking to work, since Rome was declared by Gretanius Thunbergium to be a “walkable city” because she was concerned about the sweat of galley slaves and horses making the oceans too salty, thus enraging Neptune, the god of the sea. This particular day was a good one in Rome, and the bright warm Sun shone down on Caesar as he made it to the Senate. Caesar loved the Senate, since all of the Senators were really cool and he loved hanging out with them to watch the gladiator games every Sunday.
Then, on arriving at the Senate? Caesar was stabbed in the back by raising interest rates, and, with his last, dying words, he said, “Please, take this salad dressing, and remember me by it. Oh, and name a way that babies are born after me. And Kaiser and Czar might be cool titles for kings in the future.”
Okay, that might not be exactly what happened. But you can’t prove it wasn’t, because it’s not on YouTube®. But interest rates have been a thing since long before even Julius Caesar crossed the Rubicon, took the throne, and then became a human pincushion. And they’ve been gumming up society both before then, and also since then.
Last Friday, on March 10, a curious thing happened – the 19th largest bank, Silicon Valley Bank, went tango uniform. To paraphrase Python, Monty: “It’s a stiff. Bereft of life. It rests in peace. If you hadn’t backfilled the coffers with Federal Reserve® notes, it would be pushing up daisies. Its metabolic processes are now history. It’s off the twig. It’s kicked the bucket. It’s shuffled off the mortal coil, run down the curtain and joined the bleeding choir invisible. THIS IS AN EX-BANK.”
How, exactly, does a Norwegian blue parrot bank die so quickly? The truth is, it has been dead for a bit. I’ll explain. You can get explanations of this elsewhere, but none of them will be as funny, since that’s what my job is.
When banks take in money, they have several options of what they can do with it. They can bury it in Mason® jars in the back 40, they can loan it to other people, or they can park it in an investment. Back in 2008, the big financial crisis was that the loans were to people that could never have paid the money back. I was offered a guaranteed approval home loan on a house (with zero down!) that was ten times my income. “Why would you offer me that? I could never pay that back?” was my response. The loan lady sighed audibly over the phone. “I know, but I’m required to tell you that.”
So, part of the problem in 2008 was that the loans were junk because some folks said, “I could use a pool surrounded by marble columns with a champagne fountain built out of PEZ™. I’m in!” even though they only made $32 dollars a month. They even had a name for these loans – NINJA – “No Income, No Job”. These banks also gambled with the cash of the average depositor, investing in champagne PEZ© fountain manufacturers. Hey, how could they lose?
Oh, yeah. Things don’t go up forever. So when they end? It gets ugly. The response to that by the Fed® was to use a cash cannon and barrage the banks. The idea was this, the banks would soak up the cash to paper over the bad debts, and if they had extra cash, they’d park it at the Fed™. Essentially, the Fed™, working with the banks, made sure that the bankers could keep getting big bonuses, not face criminal charges like the average small-town banker might if he stole the cash from the deposits to pay for his 4.5 out of 10 mistress and trips to Vegas.
Nope. They got to keep their penthouses, private jets, and bimbos. In order to keep this nonsense so it wouldn’t implode, the one thing the Fed™ had to do was keep interest rates low. If the Fed© had tried this in 1975, or 1985, or 1995, the world would have punished it by driving the value of the dollar down (faster), cratering purchasing power and the economy.
But after 2008, there was no other big power. Japan was a basketcase, Europe was still the Jekyll and Hyde level continent, with Western Europe mainly concerned about how many “Syrians” they could import, and Eastern Europe mainly working out how to make more potatoes so they could make more vodka. Roads? Why?
That left the United States as, amazingly, still the only kid with a currency anyone trusted, even though we were spending like a sixteen-year-old with dad’s credit card.Not now. The COVID world created the Trump/Biden policy of “How can we spend more money today?” Contrast that with China’s “No body count is too high” policy, and, oddly, the world began to trust the United States less. Add in Biden’s incoherent policy of a.) letting wars start and b.) pushing away allies like the Saudis, and now we live in a world driven by chaos. And we’ve lost the trust of the world.
So, the banks still do the same three things with the cash deposited in their banks: Mason™ jars in the backyard, loan it, or invest it. Last time, the banks invested in whatever crap floated in the window. That was silly. The banks thought they had cracked the code: this time, they invested in U.S. Treasury Bonds. Yay! That’s what a sober person would do, right?
Well, maybe. But when a bank buys a 10-year bond that has an attached interest rate of 0.08%, and the stated inflation rate is 6%, the value of that 10-year bond craters. Interest rates go up? Bond values go down. It turns out Silicon Valley Bank™ had some of these bonds. How many? Enough to wipe out all of the shareholder and bondholder (yeah, they bought and sold bonds) value. And it’s not limited to them. Here’s the take on the unrealized losses of the biggest banks in America:
Click image for larger size.
Losers in 1901, Losers in 1921, Losers in 1929, Losers in 1937, Losers in 1945, Losers in 1948, Losers in 1953, Losers in 1957, Losers in 1950, Losers in 1960, Losers in 1969, Losers in 1973, Losers in 1980, Losers in 1981, Losers in 1990, Losers in 2001, Losers in 2007 . . . Oh, wait, the banks didn’t lose anything, it was just regular people.
The FDIC insures deposits to $250,000. Except when (reportedly) Oprah had half a billion in that particular bank. Turns out that the United States blinked: “You get all your money, and you get all your money, and you get all your money,” because Oprah is more important than you and I.
Two other banks have failed already. You can see that some of their CEOs were serious people only worried about the welfare of their depositors. This will not result in an immediate run. The Fed® and the Treasury will continue to backstop the banks because to do otherwise would collapse the system. They even say so. Valuing assets “at par” means at what the banks paid for them. I own a car from 2003. In Fedspeak® that asset would be valued at the initial purchase price, despite the fact that it has one light-second worth of miles (kilopascals) on it. Here’s proof:
Click image for larger size.
The Fed™ is screwed. They want to keep Biden in office, which requires low interest rates and a booming economy and no inflation. But to lower inflation, they have to jack up the interest rates far above the rate of inflation. Biden cannot be re-elected. Period, unless there’s a global war.
Ooops. I’d say sorry, but this is already in the playbook. Me? My bet is this can keeps rattling around causing damage for several months. Six or seven? Maybe. Eventually, the Fed® is going to figure out that they can’t paper over this mess. In the meantime, the cash for businesses will dry up, and the only people that can borrow money will be those that don’t need it. New projects? They’ll be cancelled unless the company has the cash or it will ruin them if they don’t stop. New housing? Forget it. The housing market will collapse, (it already is) and the costs of new stuff to make new are so high that no one can afford it, forget the interest rate.
People will stop eating dinner in a restaurant. We already have. No, the Ides of March won’t be the end. But you can see it from here. While you can, enjoy the nice walk on a sunny day. And Neptune? He’s always been a whiney bitch. Ignore Neptune."
"Pedestrian Rants"
"Pedestrian Rants"
by Addison Wiggin
“The tree of liberty must be refreshed from time
to time with the blood of patriots and tyrants.”
- Thomas Jefferson
“You are gambling with people’s lives!” Warren rips into Powell over job-killing rate hikes. Roughly two million people in the U.S. would be out of a job if the Fed’s projected unemployment number of 4.6% by the end of the year turns out to be accurate. “What would you say to them?” Warren asked. “How would you explain your view that they need to lose their jobs?”
Rarely (if ever?) do we side with the ultra left. Facts are facts though, and these ones curdle like an open wound. We asked our viewers on YouTube what they’d do if they were in Jay Powell’s position:
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The results were divisive but a clear winner emerged… “We should NOT pivot however that’s what the Fed will do,” explains voter Moon Over Miami. “It will bail out all these banks and accounts with our tax money. All for nothing since this unsustainable system is doomed to crash anyway.”
Original Main St Mama concurs, writing, “At this rate, the FED & CBs may well go up in smoke. Paulson’s 2008 sidekick N. Kashkari is now Minneapolis’ Fed Prez. If he was being groomed to replace Powell, he may have to reverse course & return to engineering in Space Race… Maybe Musk could use him.”
“We have the testicles of this corrupt government firmly in our grip,” another reader writes in more aggresively. “And all we have to do is collectively squeeze. I think it's time to drop by your bank, don’t you?”
“If you don't spot the fish in the first half hour you're the fish!” reader James M chimes in.
Fighting words, fighting words, but the words of the people no less. What do you have to say? You can write to me here with your opinion.
Follow your own bliss,"
o
Wednesday, March 15, 2023
"Grocery Prices Reaching Catastrophic Levels!"
"Adventures With Danny," 3/15/23
"Grocery Prices Reaching Catastrophic Levels!"
"Grocery prices have gotten out of control. They have gotten so expensive that it is getting harder, and harder to even put food on the table."
Comments here:
"A Look to the Heavens"
"A gorgeous spiral galaxy some 100 million light-years distant, NGC 1309 lies on the banks of the constellation of the River (Eridanus). NGC 1309 spans about 30,000 light-years, making it about one third the size of our larger Milky Way galaxy. Bluish clusters of young stars and dust lanes are seen to trace out NGC 1309's spiral arms as they wind around an older yellowish star population at its core.
Not just another pretty face-on spiral galaxy, observations of NGC 1309's recent supernova and Cepheid variable stars contribute to the calibration of the expansion of the Universe. Still, after you get over this beautiful galaxy's grand design, check out the array of more distant background galaxies also recorded in this sharp, reprocessed, Hubble Space Telescope view.”
"The Car Market Collapse Nobody Thinks Possible Is Already Upon Us And It Is Worse Than You Think"
Full screen recommended.
"The Car Market Collapse Nobody Thinks Possible
Is Already Upon Us And It Is Worse Than You Think"
by Epic Economist
"The U.S. car market is collapsing before our very eyes, and used car prices just faced the biggest month-over-month drop on record as supplies went up while demand vanished. Auto sales are plunging so deep that some famous carmakers are already slashing prices by over $10,000! Meanwhile, lenders are in panic as millions of buyers see themselves underwater on their auto loans. The situation is chaotic and the outlook is alarming.
The average used car price in America currently costs $29,533, down from the record high of $31,095 reached in April 2022, but still 45% higher than the 2019 average. Between 2020 and 2022, used car prices surged by almost 70%, and despite some sharp losses seen since December, there’s more downside ahead.
Just as used car prices have spiked in an unprecedented manner, Americans should get ready for used car prices to drop by 50% to 60% from where they are today. The price crash is going to be significant – and quite painful for some motorists – but still, we may never come back to “normal” levels, experts say.
In a recent analysis, they forecasted that by the end of the car market crash, roughly $1 trillion worth of both new and used cars could be wiped out from the system. Like any financial bubble, what goes up, must come down. The used car price bubble burst means that millions of car owners will owe more than what their car is worth. In other words, all people overpaying for used cars right now may see themselves underwater on their auto loans soon.
The latest reading of the Manheim Used Vehicle Value Index showed that wholesale auto prices dropped a whopping 15% month-over-month, the largest annualized price decline ever in the 26-year history of the index. On the supply side, it could take years for a healthy balance to be achieved again. A recent study conducted by the car insurance comparison site Jerry found that the U.S. auto market won’t recover in the foreseeable future.
In fact, car sales had a terrible start to a year in 2023, going down by 8%, the lowest total since 2011 when the economy was trying to reignite after the Great Recession. Automakers sold 13.9 million cars, trucks, SUVs, and vans, compared to a historic average of 17 million. Analysts are now expecting sales to decline by roughly 1 million in the coming months, and we’re already witnessing the harsh effects plummeting demand can have on the market.
Red flags are emerging everywhere. Amid an ongoing bank collapse, Wells Fargo just reported higher-than-expected losses from auto loans. Meanwhile, Fifth Third Bancorp (FITB) is reducing loan originations, likely seeing the threats on the horizon. No wonder why Elon Musk is saying that this can set off the “biggest financial crisis in history.” The liabilities are far greater than lenders would like to admit. And now that banks started to collapse, we have a ton of system risk stemming from the car price bubble. A 2008-style crash with automaker bankruptcies and widespread bank failures is starting to unfold, and the result will be disastrous."
Comments here:
"Bank Collapse Are Accelerating, Markets Ignore Danger. Banks Are Gambling With Your Money"
Jeremiah Babe, 3/15/23
"Bank Collapse Are Accelerating, Markets Ignore Danger.
Banks Are Gambling With Your Money"
Comments here:
"Why Not Despair? "
"Why Not Despair? "
"To view our times as decadent and dangerous, to mistrust the government, to imagine that those in power as not concerned with our best interests is not paranoid but perceptive; to be depressed, angry or confused about such things is not delusional but a sign of consciousness. Yet our culture suggests otherwise. But if all this is true, then why not despair? The simple answer is this: despair is the suicide of imagination. Whatever reality presses upon us, there still remains the possibility of imagining something better, and in this dream remains the frontier of our humanity and its possibilities To despair is to voluntarily close a door that has not yet shut. The task is to bear knowledge without it destroying ourselves, to challenge the wrong without ending up on its casualty list. You don't have to change the world, the writer Colman McCarthy has argued. Just keep the world from changing you.
Oddly, those who instinctively understand this best are often those who seem to have the least reason to do so, survivors of abuse, oppression, and isolation who somehow discover not so much how to beat the odds, but how to wriggle around them. They have, without formal instruction, learned two of the most fundamental lessons of psychiatry, philosophy, and religion:
You are not responsible for that into which you were born..
You are responsible for doing something about it.
These individuals move through life like a skilled mariner in a storm rather than as a victim at a sacrifice. Relatively unburdened by pointless and debilitating guilt about the past, uninterested in the endless regurgitation of the unalterable, they free themselves to concentrate upon the present and the future. They face the gale as a sturdy combatant rather than as cowering supplicant. "
- Sam Smith
“Life has no victims. There are no victims in this life. No one has the right to point fingers at his/her past and blame it for what he/she is today. We do not have the right to point our finger at someone else and blame that person for how we treat others, today. Don’t hide in the corner, pointing fingers at your past. Don’t sit under the table, talking about someone who has hurt you. Instead, stand up and face your past! Face your fears! Face your pain! And stomach it all! You may have to do so kicking and screaming and throwing fits and crying – but by all means – face it! This life makes no room for cowards.”
- C. Joybell C.
"In A Word...
“In a word, there are many thorns, but the roses are there too.”
- Pyotr Ilyich Tchaikovsky
"Banks Get a Bad Grade"
Full screen recommended.
Dan, iAllegedly, 3/15/23
"Banks Get a Bad Grade"
"Moodys came out and gave the banking industry a terrible rating. This is the beginning of the collapse that is going to happen right in front of us."
Comments here:
"Price Increases At Target! This Is Crazy! What's Next!?"
Full screen recommended.
Adventures With Danny, 3/15/23
"Price Increases At Target! This Is Crazy! What's Next!?"
"In today's vlog we are at Target and are noticing massive price increases! We are finding a lot of skyrocketing prices, and some empty shelves! It's getting rough out here as stores seem to be struggling with getting products!"
Comments here:
"Brace For More Fallout"
Dan, iAllegedly 3/15/23
"Brace For More Fallout"
"Today we discuss everything from banking, metals, stocks, natural gas with the one and only Bob Kudla. It's time for more fallout."
Comments here:
"Banking Crisis Goes Global! The Federal Reserve Begins A New Banking System Bailout!"
Gregory Mannarino, AM 3/15/23
"Banking Crisis Goes Global! The Federal Reserve
Begins A New Banking System Bailout!"
Comments here:
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.”
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