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Links 3/13/2023

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Munching Moose Cool Forest Floors EOS

Investors slash Fed rate rise bets on fallout from Silicon Valley Bank collapse FT

Climate

Cash, Cars, Chemicals (and Corn) Phenomenal World

Banks

Be sure to read Yves’ post here.

* * *

Joint Statement by Treasury, Federal Reserve, and FDIC Board of Governors of the Federal Reserve System. The correct timeline?

In abrupt reversal, regulators to cover Silicon Valley Bank, Signature uninsured deposits American Banker. Of course it’s a bailout:

As anyone can see::

First Republic Gets Additional Funding From Fed, JPMorgan WSJ

20 banks that are sitting on huge potential securities losses—as was SVB MarketWatch

* * *

The Demise of Silicon Valley Bank Net Interest. About SBV’s problematic customer base:

The problem at Silicon Valley Bank is compounded by its relatively concentrated customer base. In its niche, its customers all know each other. And Silicon Valley Bank doesn’t have that many of them. As at the end of 2022, it had 37,466 deposit customers, each holding in excess of $250,000 per account. Great for referrals when business is booming, such concentration can magnify a feedback loop when conditions reverse.

IOW, an in-group. Clubby:

And a club you’re not in. One with a lot of symbolic capital when their economic capital was put at risk:

SIVB: Held-to-Mortem Governance Nongaap Investing. Risk? What risk?

So when I read the 2023 Proxy and see that the Risk Committee 1) met 18 times in 2022 vs. their typical 5-7 times per year, 2) appointed a new committee Chair, and 3) didn’t have a Chief Risk Officer in place for much of the year, that’s a pretty strong set of signals the company might have been aware they had a serious problem relative to what they were communicating

Silicon Valley Bank profit squeeze in tech downturn attracts short sellers Financial Times. Note the date: February 22. Burry? Burry? Burry? Burry—

SVB Collapse: “Big Short” Burry Accuses Regulators of Rewarding “Greed” TheStreet. That’s hardly fair. “Hubris” is mentioned, too. In fact, Burry mentions it first, before greed. Oddly, “Hubris is good” wasn’t Gordon Gecko’s catchphrase….

* * *

Regulators Face Urgent Task to Stem Spread From Silicon Valley Bank WSJ

Barney Frank: Raise Insurance Limit on Business Deposits WSJ. Frank is on the board of Signature Bank.

SVB’s Lobby Groups Fought Proposal To Bolster Deposit Insurance The Lever

Michelle W Bowman: Design issues for central bank facilities in the future (PDF) Bank of International Settlements. “A key issue for central banks to consider is how to clearly distinguish asset purchases from the central bank’s monetary policy actions…. It is also important for central banks and other agencies to ensure that regulations and market oversight foster prudent financial institution behavior and resiliency in core financial markets.” March 3.

* * *

Billions worth of crypto trades at risk as US bank shutdowns take toll Straits Times. That’s a damn shame.

Crypto’s On-Ramp Ran Right Into SVB’s Brick Wall WaPo

* * *

Fragile Capitalists Rational Walk

Central banks’ digital currency plans face public backlash FT

#COVID19

How the Cochrane Review went wrong. Report questioning COVID masks blows up, prompts apology Toronto Star

Covid experts today: Eating out, masking less, even booking cruises WaPo. “They were careless people, Tom and Daisy….”

China?

Collapse of Silicon Valley Bank rocks China’s tech start-ups, venture capital industry Channel News Asia

As it happened: the takeaways from Chinese Premier Li Qiang’s ‘two sessions’ 2023 press conference South China Morning Post

Xi Jinping vows to make Chinese military ‘great wall of steel’ as tensions rise with west FT

India

In the Hunt for Fraud, the Red Flags Start With the Auditor Institutional Investor. Adani.

Modi Government Gave Adani Special Privileges to Boost Coal Business: Report The Wire

Seasonal viruses now attacking in packs, raising case severity: Kolkata doctors Times of India. Immune dysregulation?

Syraqistan

Saudi Arabia says deal with Iran does not mean all issues resolved Andalu Agency

European Disunion

Thousands take part in fresh Greek protest over deadly train crash France24

New York Times: Hungary-USA nuclear deal underway? What will Putin say? Daily News Hungary

Dear Old Blighty

HSBC buys Silicon Valley Bank’s UK unit for £1 in rescue deal FT

Why did 250,000 Britons die sooner than expected? The Econmist. Rule #2.

Gulnara Karimova: How Uzbek president’s daughter built a £200m property empire BBC (Re Silc). I’m shocked that money was laundered through London (real estate), but also certain that the malfeasance was limited to outliers in the ‘Stans.

U.K.’s murky entanglement in Papua independence conflict Globe_

New Not-So-Cold War

Zelenskyy has no choice but to ask his fighters to hold Bakhmut — for now Politico

Front Line Shifts in Russia’s and Ukraine’s Battle for Bakhmut, Analysts Say NYT

Ukraine Is Lying About Casualty Ratios To Justify Holding Of Bakhmut Moon of Alabama

Chris Hedges: Ukraine’s Death by Proxy Chris Hedges, Scheerpost

* * *

‘Little fissures’: The U.S.-Ukraine war unity is slowly cracking apart Politico

Russia will take Ukraine, Donald Trump (firmly) asserts. Then, explains ‘deal’ Hindustan Times

* * *

Moldova says it thwarted Russia-linked plot ahead of anti-government protests Politico

Georgian PM tells Ukrainian politicians to go mind their own business Al Mayadeen

* * *

‘Rigorous’ Maidan massacre exposé suppressed by top academic journal Kit Klarenberg, The Grayzone. A 2021 Ivan Katchanovski paper linked to at NC 2/27/2023.

Biden Administration

Biden indefinitely blocks millions of acres of land, water from future oil drilling FOX. Distinct from Willow.

Tech

Thanks to generative AI, catching fraud science is going to be this much harder The Register

Supply Chain

Recent Changes To Greek Code Of Private Maritime Law Hellenic Shipping News

Healthcare

‘Orchestrated PR campaign’: how skinny jab drug firm sought to shape obesity debate Guardian. Commentary: “This is why we can’t have nice things, like upstream solutions to global problems. Because the money is all in downstream band-aids and our systems are corrupt. You’re being farmed for profit by big business in more ways than you can possibly imagine.” But innovation! Disruption! This Bandaid has an app!

A top antibiotic expert almost died after a gardening cut caused a life-threatening, drug-resistant bacterial infection Insider

Zeitgeist Watch

Influencer Parents and The Kids Who Had Their Childhood Made Into Content Teen Vogue

Imperial Collapse Watch

European arms imports climb, U.S. dominance in exports grows, think tank says Reuters (RK).

Class Warfare

Why Poverty Persists in America NYT. “The primary reason for our stalled progress on poverty reduction has to do with the fact that we have not confronted the unrelenting exploitation of the poor in the labor, housing and financial markets.” But travel broadens the mind:

Or, from some standpoint(s), very right?

The Issue of Curiosity Pedestrian Observations. Not-invented-here in US transportation investment, such as it is.

Antidote du jour (via WLDavies):

Bonus antidote:

See yesterday’s Links and Antidote du Jour here.

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About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism (“Because markets”). I don’t much care about the “ism” that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don’t much care, as long as the benefits are delivered. To me, the key issue — and this is why Medicare for All is always first with me — is the tens of thousands of excess “deaths from despair,” as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics — even the worthy fight to help the refugees Bush, Obama, and Clinton’s wars created — bright shiny objects by comparison. Hence my frustration with the news flow — currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press — a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let’s call such voices “the left.” Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn’t allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I’ve been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

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147 comments

  1. Antifa

    SVB WEEKEND
    (melody borrowed from Blinding Lights by The Weeknd)

    I’ve been tryna call
    Sorry if I’m sounding kinda gruff
    I can’t get my money fast enough, lady
    Don’t put me back on hold
    I don’t need no verbal fisticuffs
    I don’t need to hear that times are tough, lady

    (I look around and)
    This Valley’s cold and empty oh
    It’s like some lightning struck me oh
    My lawyer says the money’s gone

    I said oooooh, they failed at SVB
    They fell behind and couldn’t make the crunch
    What’s to do? We’re drowning in the sea
    Our struggling startup took a knockout punch

    Hey! Hey! Hey!

    The FDIC says
    ‘We’ll do our best to get you back your fund
    You’ve got to know you aren’t the only one, you see’ ohhhh

    Can’t even use my Visa oh
    Can’t order Lyft or pizza oh
    No vulture fund to string along

    I said oooooh, they failed at SVB
    They fell behind and couldn’t make the crunch
    What’s to do? We’re drowning in the sea
    Our struggling startup took a knockout punch

    My bank account is empty as my soul (empty as my soul)
    Can’t pay the rent can’t make payroll (can’t make payroll)
    I wish there was some code to write (ooh)

    I said oooooh, they failed at SVB
    They fell behind and couldn’t make the crunch

    Hey! Hey! Hey!

    Hey! Hey! Hey!

    I said oooooh, they failed at SVB
    They fell behind and couldn’t make the crunch

    1. Wukchumni

      (I want my, I want my money from SVB)
      (I want my, I want my money from SVB)
      (I want my, I want my money from SVB)
      (I want my, I want my money from SVB)

      Now look at them yo-yos, that’s the way you do it
      You play the Feds on SVB
      That ain’t workin’, that’s the way you do it
      Money for nothin’ forget the FDIC

      Now that ain’t workin’, that’s the way you do it
      Lemme tell ya, them guys ain’t dumb
      Maybe get a blister on your little finger
      Maybe get a blister on your thumb

      We got to install new rules, custom money deliveries
      We got to move mountains, we got to do chicanery chivalry

      See the little high tech wreck with $100 million
      Yeah, buddy, that’s his own account
      That little high tech wreck got his own jet airplane
      That little high tech wreck, he’s a Illionaire

      I shoulda learned to play the market
      I shoulda learned to play them cryptos
      Look at that Bitcoin Bro, he got it buying faux dough
      We could have some funds

      And up there, what’s that?
      Silicon Valley voices?
      Bangin’ on the QWERTY like a chimpanzee
      That ain’t workin’, that’s the way you do it
      Get your money back despite FDIC regs, with a few clicks you see

      Money For Nothing, by Dire Straits

      https://www.youtube.com/watch?v=ZC1Pdsppch4

      2. fresno dan

        With apologies to Merle Haggard and an acknowledgement to Merle Hazard, as my songwriting hasn’t kept up with the times – I’m no Beyonce.
        The FDIC led a bank, down the hallway of vanishing equity to its doom.
        And I stood up, to get my deposit like all the rest. And I heard the bank tell the regulator just before he reached the cell, let my bailout providing lobbyist make my request for billions. Let him bail me back, to excess profits with a scam I used to do. Let my old grifts work again.
        Take me away and turn back the years to zero interest rates. Sing me back to profitability before I go bankrupt.
        I recall last Sunday, a free market choir from cross capitalism street, came to sing an old free market gospel song. And I heard him tell the singers, theres a song Larry Kudlow used to sing, could I hear it once before you move along?
        Bail me out, make my old scams come alive with a grift I used to do. Bail me out before I go bankrupt…

    2. griffen

      It is a two fer this morning and it is not even a Tuesday!! Well done, and high salutations to both efforts. Worth while entries for what should be a growing compilation of lyrics put to verse.

      1. John Zelnicker

        The first volume of The Naked Capitalism Songbook is almost ready for publication.

        Watch this space (and Water Cooler) for more info.

        1. hunkerdown

          I second Merle Hazard as the nom de plume of the fictitious editor of the anthology, credit to commenter poopinator. “No one could steer me right, but Mama Bear tried.”

        2. Wukchumni

          JZ,

          Really appreciate the effort you put in by doing this, now if we could only find somebody to belt em’ out?

  2. VT Digger

    So hold up, does this mean the FDIC program officially has no upper limit?? If so what even is a bank in that case???

    1. Mikel

      I was reading this bailout program in only in effect thru some time in 2024.

      The real bezzle could be that this is a way for these helicopter parents’ specual snowflakes to get their cash first before some kind of other mess hits the fan.

      I trust nothing about this situation or the people in charge.

      So I don’t think they have guaranteed all deposits. No way. They have guaranteed some people ‘s deposits.

      SVB may have been looking after its customers with an early implosion.

    2. Louis Fyne

      only as long as the “emergency” exists.

      IIRC, both a presidential Truman-era and 9/11 emergency are still! in effect.

      so conveniently, don’tbe surprised ifthis emergency lasts until at least Election Day

    3. Katniss Everdeen

      According to the talking heads on cnbc this morning, that’s exactly what it means–that ALL deposits at ALL banks everywhere are now guaranteed, regardless of amount. All $18 trillion of ’em. andrew ross sorkin even kept opining that it was a de facto “nationalization” of the banking system. He worried that such a sweeping guarantee would “incentivize” even more risky behavior by bank executives. Gee, ya think?

      The stated purpose was so that people didn’t start withdrawing all their funds from smaller banks and opening accounts at the too big to fails for safety, causing the smaller banks to go under.

      And one of the reasons for concern was that you can just close accounts with a click on your phone from “a thousand miles away”. More “benefits” of technology. No more standing in line in the rain in Bedford Falls to get your $246 out of the Bailey Bros. Building and Loan. Technologized bank runs.

      An interesting point was made about the choice of this form of crisis resolution compared to 2008. Back then, the preference was to sell the failing bank to private buyers at a very deep discount, with the taxpayers guaranteeing against any losses. The white house apparently had zero appetite for this course since the ’08 bailouts were so politically unpopular. Without the taxpayer’s guarantee, no buyers stepped up.

      1. Jason Boxman

        Recently when closing my account at Wells Fargo or US Bank, I forget, they actually had to my astonishment a (I think this was WF), a link to close the account directly in the web portal. Never seen this. Previously I always had to call the bank in question to close out.

  3. The Rev Kev

    ‘Chris Arnade 🐢🐱🚌
    @Chris_arnade
    Why did so many tech companies keep their cash as deposits at SBV?
    Was it financial naivety, or was their some sort of kicker incentive ((higher yields?)’

    Perhaps it was a case that those VCs that were lending those new companies money were demanding that they set up their bank accounts with SBV along with the accounts for that company to do stuff like make payrolls. On the surface it may be that those VCs felt that they had some pull with SVB but it might also be a case where those VCs were also getting kickbacks in the form of low interest rates and the like. Sort of like a finder’s fee. An examination by the feds of SVB’s books would quickly tell the story but I doubt that that will ever happen.

    1. flora

      “An examination by the feds of SVB’s books…”

      But that would mean regulating the big banks as closely and as strictly as small banks are regulated. gasp! Can’t have that.

      1. Revenant

        No kickback for this no-name VC.

        SVB provided:
        – corporate banking services to SME sized companies
        – venture debt offers based on future fundraising ability rather than purely on available security or financial covenants.
        – managers who understood early-stage VC-backed business (loss making but fast growth and international and, at times, cash rich) and who could actually be called and emailed.
        – “access” to SVB’s network of other VCs and founders, industry events etc.

        What they offered was a lot more compelling than the inflexible / unsuitable SME banking options from the major UK banks, designed for plumbers and antique shops, with no human contact other than Indian call centres.

        There may be some scandal / bad business decisions or incentives around the SVB asset side (lax controls on personal loans to founders for real estate or funds as advances on capital calls) but I would be surprised if there was any impropriety on the deposit side. The problem is they choose to ouck up pennies in front of a steamroller, buying long dated and thus highly rate-sensitive bonds with exquisite bad timing at the end of ZIRP, creating massive fair value loss exposure for a tiny increase in yield.

      2. Mikel

        Litmus Jest
        @JestLitmus
        ·
        Mar 12
        Replying to
        @Chris_arnade
        In the contracts of the loans, you had to keep your cash there as well. A horrible idea.

        Just saw this in the Adande tweet and thought about your questions the other day about why all the money in one place with some of these people and companies.

        SF Area cost of living inflation, in particular, corresponds.

        1. JBird4049

          The inflation does not correspond with increasing wages for the bottom 90% and hasn’t for decades. I could make an argument that this process has been happening since the 1970s.

          All the money flows to the investor class with all the costs including stress rains on everyone else. This bailout is just more of it. Too bad that all the people living in their vehicles around here can’t be made whole as well. Then there are all people deemed, to be brutally honest here, human waste living on the streets.

      1. The Rev Kev

        Would that mean that if you sent a warning to your friends and family that their bank was about to go belly up, that you might find yourself not only with a deleted account but that maybe down the track that you might be charged with a chargeable offense? Then again, maybe not as that is exactly what Peter Thiel did in the run up to the collapse of SVB and nobody is talking about going after him.

      2. JBird4049

        I grew up after the Free Speech Movement of the West 1960s, which started across the Bay from my family at UC Berkeley along with the New Left. This means for my entire life, both liberals and leftists were just assumed to be free speech supporters. Yes, sometimes this was an act, but it was hidden well if so. Most Republicans at least said they supported free speech if said anything about it.

        It has taken me some time to accept the growing censorship, not just by the government, which is to expected, but having academics, politicians, and other public figures openly state without embarrassment that they support censorship just blows my mind. But since a growing number of Americans just do not have any knowledge of their past including what the previous generations went through, maybe I should not be blown.

  4. LadyXoc

    Is it possible that Thiel et al. saw a way to control the Fed? I.e., trigger a bank run in order to prevent interest rate rises (stock depreciation)? Putting my tinfoil hat firmly on today.

    1. Objective Ace

      I really like this theory. If so — good for him. It’s crazy to me that as soon as the Fed saw a little bit of pain they totally reversed course–even dusting out an updated version of QE. What did the Fed think was going to happen? They wanted unemployment to rise by over a full percent–a million plus more people out of work. This is what that looks like!

      1. dftbs

        They wanted unemployment to rise by over a full percent–a million plus more people out of work. This is what that looks like!

        They didn’t want those people unemployed.

      2. Questa Nota

        Think of Thiel et al as extracurricular or free-lance Paladins policy advisors. He did a variation on what George Soros did to the £ in the 1990s, to force some action that wasn’t part of the bureaucrat’s solution set. If he can, who else will step, either an individual, corp or nation state?

    2. Katniss Everdeen

      I’d say it’s a distinct possibility. Nothing is as it seems these days, and wall street appears to believe that it’s got powell on the ropes now. No tin foil necessary.

  5. Linda Elkins

    We don’t have health care here in America, we have a health scam!!!! When you put profit ahead of life itself, something is very very wrong with the system you are using!!!

    1. flora

      There was a very interesting comment from a doctor on another site saying the takeover of Medicine by finance began in earnest around 25 years ago, when MBAs and MBA thinking took over med schools and hospitals. The doctor’s point was there is something very wrong with US medicine and healthcare today, and that something began when the MBA’s took over as the managers of medicine.

      To my mind, the takeover of hospitals and doctors practices and dentists practices by private equity continues the logical progression of money and profits being the sole value (no pun intended) for the medical business run by MBA’s.

        1. antidlc

          Birth of the HMO under Nixon:

          https://www.youtube.com/watch?v=3qpLVTbVHnU

          In 1971, Edgar Kaiser, the son of the founder of Kaiser Permanente, one of the first big HMOs, went to see John Ehrlichman, a top aide to President Nixon, to lobby the Nixon White House to pass legislation that would expand the market for health maintenance organizations (HMOs). Ehrlichman reported this conversation to Nixon on February 17, 1971. The discussion, which was taped, went like this: Ehrlichman: I had Edgar Kaiser come in…talk to me about this and I went into it in some depth. All the incentives are toward less medical care, because the less care they give them, the more money they make. President Nixon: Fine. The next day, Nixon publicly announced he would be pushing legislation that would provide Americans “the finest health care in the world.”

          From Michael Moore’s “Sicko”.

          I had hoped at the time that Moore’s movie would be the impetus for change.

          It has only gotten worse since this movie was made.

          1. some guy

            Well . . . didn’t Michael Moore’s movie come out sometime before the Obama Administration conspired to bail out Big Insura under cover of “Obamacare”? If my timeline memory is correct, ” Sicko” did provide an impetus and the Obama-Baucus Administration worked very hard to frustrate, delay and then deny that impetus.

            Mission Accomplished, and part of what Obama is being so lucratively rewarded for up until this moment, such that he can afford to live on the Rich ( White ) side of Martha’s Vineyard.

  6. The Rev Kev

    ‘Chris Arnade 🐢🐱🚌
    @Chris_arnade
    The contrast between what you see in NYC, a very wealthy town in a very wealthy country, versus what you see in Taipei, or Hanoi, or Istanbul, is damning to the US. We are doing something very wrong.’

    I sometimes wonder if this was one of the reasons for the popularity of “The Purge” franchise. People saw that film and thought to themselves yeah, that could totally work that. Imagine it. One night and then the next day all the homeless people would be gone as well as those encampments. And I am sure that you could find enough elite that would be able to justify this happening as necessary for the health – and prosperity – for society-

    https://www.youtube.com/watch?v=K0LLaybEuzA (2:28 mins)

    1. fresno dan

      RC
      ain’t The Purge already legal??? – I mean, for the 1%. Sure, occasionally there is a suicide to make it look like bad people like Epstein get theirs, but of course that was fake…

  7. Chris

    Wait a minute, so the feds finally tell us the truth that they’re funding this bailout with freshly printed public money, that it has nothing to do with “taxpayers,” and they’re merely going to buy up sour financial contracts and raise fees on other banks, and now we’ve got to promote no name rubes on Twitter trying to gin up a “American taxpayer” canard victim complex. Honestly, we already know congress won’t increase taxes, there is no necessary or sufficient “funding”, citizens are not “on the hook”, and there is no one coming to break kneecaps over the deficit. The whole “taxpayer” superiority complex is just the way the richest people (who pay very little tax,) try to convince middle class people (who pay an unfair amount of taxes,) that they’re a more important citizens than those people under them (that pay even less taxes.)

    1. Boomheist

      Actually the richest people – the top 10 percent of people in the US – pay nearly 75 percent of all income taxes, according to this study here https://www.ntu.org/foundation/tax-page/who-pays-income-taxes . I think you might have meant to say the richest people pay the fewest taxes as a percentage of all the money they get, or another way of saying this might be that the top 5 percent or top 1 percent could and should pay even more taxes because they make so much money, but as a matter of actual fact the richest people pay most of the taxes.

      1. Bosko

        To repeat the obvious. When you say “richest people,” you are referring to the top 10% of EARNERS, who are those earning above 152k in the chart you linked to. The top 5% of EARNERS make above 220k, which is a nice income, but not exactly Epstein black book level wealth; the NYT told us a couple of years ago that 450k was still “middle class.”

        When most people think of the “richest people” in the US, they are thinking wealth, not income; they are thinking Buffet, Gates, Musk, Bloomberg, etc.

        1. Boomheist

          I get that, and recognize that the really richest people get unearned income, which is taxed at a rate far lower than earned income. But I will stand by my point, with is that the bulk of all tax revenues coming into the US government comes from the most affluent among us. This is sort of like Romney’s election-ending statement in 2012 that 47 percent of all Americans pay no tax at all, which is not far from the truth. It is a fact that most of the taxes come from the richest among us. That fact does not in any way however, or should not, reflect on how tax payments should be allocated. In my personal view any income above 250,000 a year should be taxed at 50 percent and anything above say 1 million, from any and all causes, at 75 to 90 percent. But that is just me.

          1. Objective Ace

            I get that, and recognize that the really richest people get unearned income, which is taxed at a rate far lower than earned income.

            It doesnt get taxed at all. You can get into semantics all you want — what does it mean if the .01 percent pay more then the 90 percent but less than the .001 percent — but your missing the bigger picture:

            In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.

            Michael Bloomberg managed to do the same in recent years. Billionaire investor Carl Icahn did it twice. George Soros paid no federal income tax three years in a row.

            Source: https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax

          2. But What Do I Know?

            Many people at the lower end of the earnings scale do not pay income tax but do pay payroll taxes. (Just between us, those go to the same place as the other taxes).

            Saying that 47% of Americans don’t pay income taxes ignores this and is completely disingenuous.

            3. Procopius

              Yeah, the lowest-earning 47% of Americans pay payroll taxes, sales taxes, property taxes, fines, court fees, $10 phone calls in prisons, etc.

          3. Old Jake

            And your point is? Do you think they should pay less? It seems to me you are playing the role of Conan the Grammarian, pointing out a fact that is in fact irrelevant. There is a larger issue than this, which is that there is a significant (financially) part of the population that is not carrying their load, is rather dumping a greater and greater load on a part of the population that cannot bear it.

            Or am I missing something? Maybe you’d have to explain it like I’m five?

      2. jhallc

        Since tax receipts never cover our national spending, the increasing national debt is in theory born by all taxpayers. With AMT we can kick that can down the road as long as we can sell treasuries. However, the debt will be used as an excuse to cut many of the government programs that help the bottom 90%.

        1. Jason Boxman

          But taxes don’t “fund” anything at the federal level. As an issuer of the currency, the US government doesn’t need to collect dollars from anywhere to spend. It just does. We don’t have public goods in this country because the elite don’t want public goods. It’s a resource allocation choice.

        2. John k

          Afaik, all treasuries that don’t sell are bought by fed with their freshly created money (keystroke). Income from treasuries are used to cover fed expenses with balance donated to treasury. No need to borrow.
          Treasury could mint coins per existing fed law* and deposit coins’ face value to fed, using amount credited to buy back treasuries, thus ending all fed held gov debt. (Not clear to me the consequences of buying treasuries held by public, or if treasury stops selling treasuries to public.)
          *The Platinum Coin. Imo this operation does not create inflation, that was previously created when treasury deficit borrowed the money from those that didn’t want to spend and paid it to those that do.}

      3. cgregory

        My annual cost of living (single, no children) in my state is about $19,000. I make $25,000 a year more than that and live quite comfortably. If I were making only $12,000 a year more than that, I’d still be living quite comfortably.

        We should have a tax system that provides everybody with $25,000 more than they need to live annually. If they need a jet plane, they can have that, but they still only wind up with $25,000 more than they need.

        Anybody familiar with the sociological messages coming out of Jackson Hole needs to be aware that those Holeians who feel threatened feel that way because they have too much money. Bring them down to the level of the merely comfortable, and they’ll shed their paranoia.

  8. zagonostra

    >French Senate approves Macron’s pension plan amid new protests

    The French Senate has approved President Emmanuel Macron’s unpopular pension reform plan as hundreds of thousands of protesters rallied in cities across the country to oppose the changes.

    I was disheartened by the small turn-out for the “March Against The War Machine” in D.C. recently but seeing how the French were out in the streets protesting the lengthening retirement age for 62 to 65 I have to conclude that no matter how many people turn up to protest the ruling elites will have their way. When putative liberals like AOC and Obama tell the population to “make them do the right thing” by turning up the heat with on-the-street-movements, reality belies the truth – fundamental and systemic policy changes that benefits the majority over the well-placed elites will fail.

    https://www.aljazeera.com/news/2023/3/12/french-senate-approves-macrons-pension-plan-amid-new-protests

    1. CarlH

      The same thing happened with the protests leading up to the Iraq War. Many people, including myself, concluded that protests no longer work, as they are ignored by the media and the PTB.

    2. some guy

      Perhaps Obama and AOC and etc. are running a psy op on those people who still think ” movements in the street” change things. When things don’t change, they will blame the millions of protestors for ” not protesting hard enough”.

      “Protest harder!”

      Perhaps people will have to think of something else . . . as long as it is technically non-violent and technically non-illegal. Perhaps the only real purpose that open air protests can serve anymore is as open air meetups where people who come out to protest about something can share their get-in-touch information for organizing various non-protest activities in between protests.

  9. Steve H.

    A side note: recently Google search has become… weird, as in nonhuman? More like a T’ca matrix than an answer to a question. Some think it’d be good to pull implicitly biased human algorithms out of the framework. But it did not seem to like me searching up ‘information is a virus’.

    Well, now that I think of it, of course.

  10. The Rev Kev

    “Xi Jinping vows to make Chinese military ‘great wall of steel’ as tensions rise with west”

    Sounds like China has finally decided that they are in a position to do something about the 200-odd US bases surrounding China itself. I think that it should be noted that they refer to a great wall of steel which they are comparing to the stone Great Wall of China and not forward bases. I really cannot see China trying to invade countries like Japan, Vietnam, South Korea, etc. but now that the US has declared their intent to go after China before China gets too powerful for them by next decade, they are left with two choices – establish an Anti-Access/Area Denial in their own neighbourhood or else submit to becoming a vassal of the west. There are no other choices.

    1. jsn

      And to reject those options is pure, unbridled imperialism!

      Refusal to surrender is bald faced aggression!

  11. zagonostra

    >Death of a Myth – The American Conservative

    Not a bad summary from TAC

    …we are sleepwalking into World War III. Americans should ignore the state-sponsored propaganda (eerily similar to that which led up to WWI), wake up, look at what their leaders have wrought, and do all they can to end support for this cruel war before we face a Great War–like conflagration or worse.

    1. Lupana

      Thank you for posting this. My husband is sending the link to the article to a bunch of people who will probably ignore it because … Russia…. Communists … Putin…. China … But it’s worth a try.

  12. Wukchumni

    Porterville will be in the news tomorrow or the next day, and it was named after a Mr. Porter, and a pity his name wasn’t Mr. Tweaker, as Porterville has a big meth problem, and how.

    But try and light a meth pipe when a wall of water is approaching-not easy.

    Lake Success below Springville (where the survivors in Lucifer’s Hammer hang out well above the town) is chock a block full and they are releasing water through the spillway and despite probably what are Herculean efforts at jettisoning H20, late tonight another atmospheric river-March Mango Madness if you will-comes calling with 3 inches of water in the foothills and more like 5-6 inches in the higher climes thanks to orographic lift. the storm the other day was pushing 40,000 cfs down the Tule, and this is a very similar storm coming.

    Johnstown, er Porterville is below the dam and should the misnomer of a dam (hardly a success, it was found seismically suspect in 1999 and had been kept @ 35% full since 2006) be compromised, SVB will be old news and all you’ll hear about is the disaster that comes with it’s own CCR tune.

    Porterville, by Creedence Clearwater Revival

    https://www.youtube.com/watch?v=ys2x4p2yp2o

    1. Carolinian

      Guess I should have paid more attention to these places when I once sped through them in my jalopy.

      Here in SC we get annoyed when the local creek overflows its banks and washes out our hiking trail (built in the only available land for a hiking trail–a flood plain). It’s the same problem writ small. You do have our sympathies.

    3. airgap51

      Success Dam brings up bad memories of our family ranch. The land was originally purchased by my great grandfather from the railroad back in the 1800s. He passed it onto my grand father who ran cattle and raised alfalfa as feed. During his tenure the US Government used imminent domain to seize many acres of beautiful pasture land to form part of the Lake Success Dam project. I still recall riding horses with my grand father to an part of the ranch that had a fig tree straddling a small stream. It was laden with the sweetest figs I’d ever eaten. It was that part of the ranch that the gov seized and paid a pittance for. My grand father filed suit and fought the gov for years demanding a fair price. As I recall it took more than a decade before the gov finally paid up a fair price. Success Dam was not a good topic to bring up with my grand father.

      1. JP

        When I was a wee lad a friend of my father’s walked me up to the window at the restaurant in the little town of Success and said to me, take a look, it will all be under water in a year.

    4. JP

      Although this flood was maybe slightly bigger then the high waters 25 years ago, it was maybe just a warning. 25 years ago a warm march rain melted all the snow. Not so this time. The major snow pack on the headwaters of the Tule north fork are still intact. However projected temperatures are still fairly cold so we my dodge the bullet this time.

      I started to make a report on the situation in my neighborhood yesterday but after the first paragraph it was too much. The damage to the water ways and the roads is enormous. Many people are stranded but being the site of the Lucifer’s Hammer story we are more resilient and resourceful then the people stranded in the San Bernadino mountains. Well, at least no one has died yet but a lot of bridges out and driveways demolished up and down the river. The road above us is beyond fixing. It will have to be rebuilt with retaining walls where there were never any before. At the top of our place there is a massive bolder blocking half the road. I hope it is too big to move and they will have to blast it. If they just push it off the edge it will roll across my place and take out anything in front of it all the way to the river. A new kind of deforestation.

      Our phone rang off the hook for two days mostly with local friends touching bases but also people we hadn’t heard from in years. Have yet to see a county road crew. All the work so far has been provided by local property owners with their equipment.

      Springville is a mess but I am happy to be above the dam. Sorry Phil

      1. Wukchumni

        How high is the snowline over there for you?

        Somebody on the South Fork said that the snowline for Dennison Peak is around 8k, while its much lower elsewhere in Sequoia NP.

        I think what happened was the South Fork of the Kaweah and Moses Mountain on your side had huge meltoffs that weren’t anticipated by the dam masters.

        Lake Kaweah is at 145k acre feet, and to give you an idea, it was at 58k last Thursday, so it gained 87k since!

        Max is 185k and we’ll blow through that with the first AR storm and there’s another 4-5 days of rain after a brief respite.

        Stay tuned!

        1. JP

          I can look right up at Moses. the peak is 11000 ft. Dennison point is at 7000 and the ridge behind it runs to about 10000 connecting to the sierra backbone at Summit meadows. So Moses and Dennison are on the front rank and exposed to warmer rising currents. It has rained on the snow (my guess) up to 9000 ft but there is a lot of snow still stuck clear down to 6000 as of today.

          1. Wukchumni

            A joint statement from the County of Tulare, City of Porterville, and City of Visalia:

            Spillway Activity at Lake Success and Lake Kaweah

            Our local reservoirs, Success Lake and Kaweah Lake, are nearing capacity due to the recent rainfall in Tulare County and officials expect both dam spillways to be operational with more rainfall forecasted.

            Currently, the spillway at Lake Success is operational. The spillway at Lake Kaweah may become operational with the incoming storm. As engineered, the spillways are designed to release control flows to manage water levels of both lakes and control local flooding risks.
            Officials are closely monitoring the incoming water runoff, reservoir capacities, and conditions of each dam structure.

            BOTH DAM STRUCTURES AT LAKE SUCCESS AND LAKE KAWEAH ARE STABLE, IN GOOD WORKING CONDITION, AND OPERATING AS DESIGNED.

            Residents can expect to see water activity over the spillways at each Dam, and this is normal.

            A spillway is a structure used to provide releases of water from the Dam. These Spillways are designed and operate to ensure the vast flows of incoming water do not damage the Dam structure.

            It is important to know that water activity and releases over a spillway ARE NOT A DAM FAILURE AND INDICATE INTENDED OPERATIONS.

            County and City Emergency Operation Centers are activated and closely monitoring potential for flood impacts. If you live near a waterway, Officials urge you to be prepared to for more potential flooding.

            1. JP

              Interesting the the statement didn’t come from the army corps. That’s who runs the dam. But I know that water is not released from the spillway. It just spills to preserve the dam.

  13. .human

    Cash, Cars, Chemicals (and Corn) Phenomenal World

    NOT ONE WORD of reducing overall energy dependence.

  14. Wukchumni

    How much snow is there in the Sierra Nevada?

    Here in the Southern Sierra we are at 264% of average and the winter of record in 1968-69 was 268%, with another 10 feet to come tomorrow. There’s probably a 100 foot tall snowpack on top of Mt. Whitney, taking the ‘summit’ up to 14,600 feet.

    2023 will be the most in around 150 years, no slouch!

    Indigestion comes later when that tremendous snowpack has to go away and how does it come a cropper down to the fruited plain?

    A string of 100 degree days in April, gradual dispersal or a crazy high rain on snow event or whatnot?

    In the book The King Of California: J.G. Boswell and the Making of A Secret American Empire JG Boswell and another scion of Corcoran, Ca. come up with a scheme to stop the 1969 snowpack from flooding their town, and buy up junker cars for $50 each and construct a car dam that saves the day!

    The difference now with floods is in a word: subsidence!

    There were relatively few fruit & nut trees in the Central Valley back in 1969 compared to now, and groundwater usage has so compacted the soil and aquifer that there are no pores for water to seep into, and with subsidence and water seeking the easiest way, there could be an awful lot of orchards wiped out, as trees can take flooding when they are dormant-but not in season.

    1. JP

      The biggest owner of the old lake bottom is Boswell where the cotton is grown. The orchards are mostly on higher ground including the bigger corporate growers on the west side and Teneco et all down towards Bakersfield.

      We know at least one small walnut grower south of Exeter who went out of business after a better funded grower on the other side of the road drilled a 2000 ft well and simply drained them.

      Springville area is in pretty bad shape but the news is Three Rivers is worse. I imagine all the ash and debris from last summer’s fire is on top of the town.

      1. Questa Nota

        Dueling wells, another part of western water wars.

        I know someone whose powerful pump turns on and the neighboring sprinklers spray out less water.

        Water rights, mineral rights and statistics.

      2. Wukchumni

        I’ve heard and seen all sorts of damage here to roads and buildings, but don’t really know the scope firsthand as i’m stuck behind a river which very nicely told me ‘You aint’ going nowhere.’

        The one thing i’m hearing from a number of locals is lots of land slips, the ground can take no more water.

        Are you seeing that in your neck of the woods, too?

        1. JP

          Absolutely, Our power just came back on, sorry for the slow response.

          I could share a lot of photos. Major sluffs have destroyed the roads. They all seem to be failures of the culverts to carry the run off. Some of that is clearly because the county has not maintained the culverts but others maybe just overwhelmed. Neighbors had a wedding planned so went down the hill to see if the bridge was going to hold but couldn’t return home because of a mud slide. Called me and I went to pick them up (this was on friday and it was pouring). I looked up to see where the mud was coming from and saw the stripped hillside and the underside of a slab holding up a structure.

          Took photos of cracks in the road and the shoulder where I expect more slides. The ground is absolutely saturated. I take it you are on the north side of the river?

          We are working together here. Cleared the road and set barricades we repurposed from the county. It is interesting and gives me hope. As disparate as the politics are around here we all come together for this kind of event. It was the same when the fire was on us. It turned into kind of a block party.

  15. The Rev Kev

    “Zelenskyy has no choice but to ask his fighters to hold Bakhmut — for now”

    ‘US generals say the Ukrainian president is right not to disengage from the meat-grinder of a battle.’

    Those Ukrainian forces in Bakhmut can’t pull out. They’re cut off. The Russians have shut down the roads leaving only the fields to move over. But they are so muddy at the moment that you need a tracked vehicle to try to go over it. The Ukrainians should have pulled out a month or more ago but it is far too late for them now. There may be that quote from Napoleon about the cost of retreat but he may have been thinking of his Moscow experience here. A good army knows how and when to retreat and the Russians have demon stated twice now how to do so. In both cases they had minimal casualties while they inflicted major loses on the Ukrainians trying to pursue them. Retreating is a tactic that is vital sometimes. Like when the US 8th Army had to retreat from Chosin Reservoir during the Korean war which allowed them to come back. Another example is William Slim in the Burma campaign with his 14th Army where he used a combination of fighting and retreating. He once said that if he stopped to tie his shoelaces, that the Japanese would have caught up with him and defeated him. In the end it was Slim who went on to take out the Japanese forces in Burma and win. As for the cost being higher for the Russians in Bakhmut, well, let me know how that idea works out for the Ukrainians.

    1. Carolinian

      But but Politico says the Russians are on the ropes due to reporting from their on the scene war correspondent. Oh wait.

      Some day the truth of all of this will be known. Meanwhile not holding my breath.

      1. jrkrideau

        In the “Little fissures” report Politico refers to The sabotage of a natural gas pipeline on the floor of the Atlantic Ocean. Has any one heard of this?

        Or is Liz Truss the new Politico geographical consultant?

      2. ChrisFromGA

        it is amazing how much Politico seems to know about the war, thousands of miles from the front, safe in their comfy Maryland or home offices.

    2. Polar Socialist

      I’ve been lately thinking about how many men Wagner Group actually has in Bakhmut are.

      About a year ago, the western estimate was that the whole organization had about 8,000 men in 30 countries. Then apparently some returned to Donbass, since Wagner Group became a “household name” during the battle of Popasna in April-May 2022.

      In the autumn the western estimates said it had swollen into 40,000 men, but considering that each one is paid something like $2,600/month, not even Prigozhin can afford a private army of that size for 9 months ($105 million per month). All this while Wagner group still likely has contractual commitments in those 30 countries.

      I’m not saying it’s impossible there are actually tens of thousands of Wagnerites swarming in Bakhmut, but I find it much more plausible that there are less than 10k. Having 2-3:1 ratio for Ukrainians in Bakhmut area would easily explain the slow rate of advance we’ve seen. And maybe even the intermittent complains by Prigozhin/Wagnerites about not getting enough ammunition – from the holistic Russian point of view Bakhmut is “small potatoes” with a minimal contribution from the army proper.

      It’s not like there aren’t battles going on also in Kupyansk, Kreminna-Lyman, Avdiivka, Marinka and Ugledar. While the western MSM has focused solely on Bakhmut, I doubt the Stavka spends much time pondering it.

      1. some guy

        I have read/ heard that the Wagner group offered a freedom-for-fighting deal to mass quantities of prisoners from the Russian prison system. The deal is basically . . . . join Wagner, go to the front, if you survive after 6 months which is unlikely ( they are openly warned of that likelihood), you are freed from your sentence and free to go.
        https://www.newsweek.com/wagner-group-recruiting-schools-kremlin-rift-prigozhin-1787258

        Was that fake news all along? Or was it real? Because if it was real, then that would explain where Wagner got ” all those men” from.

        1. Yves Smith

          Yes, Wagner offered that deal but Wagner is still composed primarily of former Russian solders. They wouldn’t be effective in house to house fighting if they didn’t have a lot of seasoned men.

          Russian TV had videos of Wagnerites ex-cons going home.

        2. Polar Socialist

          These claims are based on claims made based on the drop in the Russian prison population during last year. Which was 23,000. Men and women. For example Meduza (known for it’s links to UK intelligence) said it’s the biggest drop in history, while even cursory look at the statistics shows that Russian prison population has diminished at the rate of ~40,000/year since 2014.

          So last year the drop was less than expected, make what you will out of that. It is possible that a long time trend ended last year, and as many people entered prisons as were released and all that extra went to Wagner. I don’t think so.

    3. Lex

      I’m no military expert but I would argue that the only time it is not better to retreat and save men and equipment for a better day is when there is nowhere to retreat to anymore. So a “not a step back” at Stalingrad made sense since once across the Volga there was nothing to stop the Wehrmacht. An active defense and retreat from Bakhmut 8 weeks ago made sense, to develop and man new lines and to stretch the Russian force chasing it, making it potentially vulnerable to a counterattack.

      It’s now pretty clear that NATO felt Bakhmut should have been at least mostly abandoned weeks and weeks ago too. Must be tense meetings these days when the forces NATO wanted prep for a drive towards the Sea of Azov are being spent at Bakhmut instead. What’s perhaps interesting in all of this is that Bakhmut is Syrskyi’s baby. His previous claim to fame was the encirclement at Debaltsevo that initiated Minsk to save the Ukrainian Army from destruction. I dunno, maybe dude’s a Russian double agent.

    4. paddy

      yes, leaving bakhmut may have been sensible to save soldiers and equipment, and to shorten lines of communication.

      and lengthen russian federation lines of communication.

      it seems to the handlers holding land is more important than bodies, equipment and enticing russian federation into over extension.

      although russian federation may not have taken the bait.

      russian federation is fighting at the end of a long and very costly usa supply line!

  17. Wukchumni

    Now look here Joe, quit acting like its war sport
    Stop being that old brazen sort
    Don’t you go sellin’ this country’s ammo short
    No, no Joe

    Just because you think you’ve found
    The Ukraine procurement system that we know ain’t sound
    Don’t you go throwin’ your weight around
    No, no Joe

    ‘Cause Hiroshima tried it and Nagasaki tried it too
    Now the nukes are sittin’ around waiting to fire and did you know something?
    They’re wondering what you’ll do

    Now Joe we get it clear
    You can push folks around with fear
    ‘Cause we scare easy over here
    No, no Joe

    What makes you do the things you do?
    You gettin’ folks mad at you
    Don’t bite off more ‘n you & Hunter can chew
    No, no Joe

    ‘Cause you want a scrap that you can’t win
    You don’t know what you’re gettin’ in
    Don’t go around leadin’ with your chin
    No, no Joe

    Now you’re giving tanks, some fair size tanks
    But you’re acting like a clown
    ‘Cause man Putin’s got tanks, a mess of tanks
    And you might get caught with your tanks breaking down

    Don’t go throwin’ out your chest
    You’ll pop the buttons off your vest
    You’re playing with a hornets’ nest
    No, no Joe

    You know, we think you’re somebody we should dread
    Just because you’re seein’ the MIC well-fed
    You better get that foolishness out of your head
    No, no Joe

    And you might be itchin’ for a fight
    Quit braggin’ about how your vaunted military can bite
    ‘Cause you’re sitting on a keg of nuclear dynamite
    No, no Joe

    No, No Joe, by Hank Williams

    https://www.youtube.com/watch?v=V_m3GVys3s4

  20. Wukchumni

    While you couldn’t claim the wheels have come off of the economy, most of the lug nuts are looser than a compromised slot machine.

    I wouldn’t be concerned whatsoever with returns on investments, but the preservation of worth in buying power.

    1. some guy

      Since almost all the “money” is digital and notional in one way or another, and very little of it, relatively speaking, is in the form of paper and metal currency; could the digital majority of it lose value or even its existence while the paper and metal vestiges of it retain shared-consensus value in the various cash-only black markets and neighborhood flea markets which will exist?

  21. The Rev Kev

    “Georgian PM tells Ukrainian politicians to go mind their own business’

    The Georgians aren’t stupid. They can see what is happening. They saw Zelensky talking direct to those mobs. And they certainly noted all those Ukrainian and EU flags held aloft by those mobs. It’s just another colour revolution but here it is more dangerous. Almost certainly certain groups want to use Georgia to open up another front against Russia. They don’t care at the possible catastrophic damage that will happen to Georgia nor will they care how many Georgians get killed in any military actions. For the neocons, they will be just another sacrificial pawn to be used against Russia in the hope that it might, might help their position in the Ukraine. And if the country gets destroyed, these very same groups will simply walk away from Georgia – after looting it first.

    1. digi_owl

      Never mind that Georgia tried that once already, and got schooled. It was likely when Putin started to second guess his attempts to play nice with NATO.

  22. Mikel

    “Collapse of Silicon Valley Bank rocks China’s tech start-ups, venture capital industry” Channel News Asia

    “The SVB failure raised concerns among venture capitalists and start-ups in China, which viewed the bank as an opportunity to access US capital…”

    “The collapse of Silicon Valley Bank (SVB) has created a sense of panic within China’s tech start-up and venture capital (VC) sector, as the lender served as a bridge between US capital and Chinese tech entrepreneurs…”

    That’s some food for thought.

  23. Glenn May

    I love NC and Yves on s o many topics, but sadly this ecosystem does not get it on the root cause of global banking woes.
    You cannot print trillions of dollars out of thin air and expect it to lead to anything but a Frankenfinance world of chosen winners and losers, distortions and sudden craterings of the kind we are now seeing AGAIN.
    Of all the posts today, the closest we get to a hint of truth is Jeet Heer’s about the “missed opportunity” of years of cheap capital going not to pressing needs, but to grifter wet dreams.
    What DID YOU THINK would happen?
    When you make money cheap, it does not go to real needs. It goes to scams, wishful thinking and mad plans to throw trillions of mud against the wall to see what sticks.
    This is the essence of Rubin/Greenspan/Bernanke/Yellen “thinking.”
    How many times does it have to blow up in our faces before NC gets it that cheap money is the CAUSE of our boom-and-bust economy, not its solution?

    1. notabanker

      Being a long time reader of this blog, going back to 2007, there has been voluminous coverage of the lack of appropriate resource allocation, the perils of QE, the corruption of the PE industry. the rent extracting “innovation” from SV, the exponential growth of derivatives (probably now in the quadrillions), MMT etc…..

      I think it is somewhat disingenuous to expect a deep dive into the multiple sources of failure over the last 15 years every time a crisis event happens, when NC focus coverage of this, like many other events, has been to unwind what is really happening vs what is being spewed by the MSM.

      These are extremely complex issues and none of them can be boiled down to a single blog post, let alone a tweet. There has to be some expectation that the reader is / has been educating themselves on how the system works and the root causes of core issues. And while your point regarding QE is valid, one could also go back to repeal of G-S, NAFTA,TARP, failure of Dodd Frank to implement meaningful reforms in lieu of sending people to jail, on and on…….. as core underlying causes.

      If there is a better place to learn and understand what all of that means, I have yet to find it, do tell.

    2. ambrit

      What you miss is the distinction of who the “printed money” is ‘cheap’ for.
      If I go to a bank and inquire about a small loan, I get sent to a “public” loan officer who quotes me all sorts of interest rates, above the Federal rate. If I run a big company, I get to ‘do lunch’ with an executive of the bank and work out the most favourable rate for my endeavour, such being much closer to the federal rate than anything my “small” self could ever imagine.
      So, allow me to argue that the “cheapness” of the ‘money’ is not the issue. The paramount issue is, as you hinted at, the management of where this ‘money’ is spent.
      Regulations are generally enacted for very good reasons, often triggered by crises and disasters. Once the institutional memory of those crises and disasters is lost, the regulations are weakened and eliminated. Until similar crises and disasters happen again.
      Never forget, the ultimate price for mismanagement and peculation is not jail time, but, in extremis, death by mob action.
      Every “Revolution” has, almost by definition, a period of “Terror.”
      Stay safe. Hull down.

    3. Mikel

      This situation shows the VCs and others big players’ psychotic entitlement and attachment to cheap money.
      So an opportunity was jumped on to get back to the cheap money so they can tell us what “geniuses” they are.

      But I’m also sensing it may be firesale time.
      A start to a big wave of buying up companies on the cheap is approaching? Maybe? Cheap money would be needed for that.

    4. Antifa

      If you please, your post makes it sound like a mistake is being made by printing excess and interest-free money. This is not a mistake, it’s the plan.

      The people our Federal government cares about will end up owning all the land, housing, buildings, factories, farms — and ditto for a whole lot of stuff in all those non-exceptional countries. Only the printing of excess amounts of the world’s (current) reserve currency could make this possible. There’s no mistake.

      There is no gravy train waiting for the unwashed multitudes, no socialist utopia where the robots do the work, college is free, and we all live to a ripe old age on our UBC.

    5. skippy

      The quantity of money does not reflect on its social productivity – that – distinction is a ***political matter***[.] On that note the type of productivity which supported middle/lower classes diverged in the mid 70s and with it their political rights. So distribution is more of a factor than an notion of quantity of money. Too that the entire system political and financial is the framework which all outcomes are beholden – see GDP has no distribution vectors et al.

      Its not like the same sort of things happened under various other monetary systems going back to the 1800s – too keep it simple. In this view the issue becomes one of a nations elites more than notions about currency/monies, much like Greece as explained on NC. Hence you’re not going to fix an elite problem by fiddling with monies/currency aka attempting a A political solution to a political problem when elites have always front run any of it.

      The only thing that has curbed non socially productive enterprise is laws and regulations against it, something dominate economics since it went Newtonian in the late 1800, save the short Keynesian period, is completely ideologically against. YS book Econned delves into this aspect of unenlightened self interest which proceeds all other out comes …. also commonly known as Survival of the Fittest ….

      So basically before anything happens with monies state or private its informed by the currant economics of the day. An old NC poster wrote a book on that – https://en.wikipedia.org/wiki/The_Reformation_in_Economics

      So I would argue that the dominate ideological agenda proceeds everything else as it informs the political and via that the monies question.

  24. fresno dan

    Russia will take Ukraine, Donald Trump (firmly) asserts. Then, explains ‘deal’ Hindustan Times

    Former US president Donald Trump said that if he was in power, he would have “made a deal” to allow Russia to take over parts of Ukrainian territory in case it would help in ending the war which started last year in February. Although, Donald Trump said that it would have been the “worst” scenario. Russian president Vladimir Putin would not have launched the invasion if he had been in power, Donald Trump said.
    “Don’t forget, under Bush they take over Georgia, under Obama they took over Crimea. And, under Biden, they are taking over everything. It looks like they are going to take over everything, the whole thing, they are going to go for the whole enchilada, they are going for everything, that’s what it looks like to me,” Donald Trump said in Sean Hannity’s radio show.
    ==========================================================
    Interesting from the standpoint that a former President, speaking about a US defacto war, can’t get MSM press coverage (on the other hand, plenty of the walls are closing in). And I think very soon Ukraine will go down the memory hole. Now, is Trump smarter than all our politicos, state department, and intelligence officials? Or is it that he just accepts obvious truths?
    But what is really odd to me is how is it that this country (i.e., the USA) can so get itself aligned with countries that cannot possibly succeed in the proxy wars that we support? Are we trying to lose???

    1. paddy

      trump is aware, more than the neocon mob, that the us military was specified and designed to fight a defensive war in central europe, it seemed to be able to ‘afford’ an immense logistics tail because it had a legacy of lines of communication from von mansteins long retreat from kursk.

      today those weapons are 50 years old, sure they are updated but harder to sustain, and now the neocons wish to fight 2000 km from where the usa can support a fight!

      trump has not consumed the neocon mic koolaid!

      some day the idea that the trillions in unaccounted spending on the pentagon was not so well spent.

      whether the pentagon passes an audit or never do!

    2. John k

      Trump is not a smart guy and doesn’t know anything the elites dont know. But he’s willing to say some quiet bits out loud that he thinks will gain some votes , as he did do in 2016 when he said the Iraq war was a disaster.
      Plus imo he thinks wars are unnecessary risks to be avoided.
      Granted he was persuaded/forced to poke the bear when president, didn’t stop state from funding Ukraine as they readied themself to take back the Donbas, not clear how he could have continued his tough guy persona and then ‘given’ Ukraine bits to Russia. Otoh, Russia never demanded them, just wanted Minsk enforced, so maybe there would have been a solution. Probably depends whether he learned how to avoid appointing neocons in his first term. Maybe we’ll find out in 2024.

  25. Carolinian

    Turley today on the Taibbi hearings

    https://jonathanturley.org/2023/03/13/post-decency-politics-house-democrats-used-a-hearing-to-attack-both-free-speech-and-a-free-press/

    Yesterday in his column Stoller somewhat deceptively said the hearings were about the FTC and the talk about mostly conservatives having their speech rights violated was a nothingburger. Seems this may be the Dem (Stoller very much one of them) counterattack and all that talk about “sources” part of a potential case that Musk and the reporters are violating a pre Biden Twitter/FTC agreement. Turley

    Plaskett even attempted to defend the Federal Trade Commission demanding that Twitter turn over the names of journalists who have communicated with the social media company. Other Democrats have similarly shrugged off this outrageous demand by the FTC, headed by Chairwoman Lina Khan, a former Democratic staffer with the Judiciary Committee.

    And here’s Turley’s link to the WSJ account that he finds outrageous

    https://www.wsj.com/articles/twitter-investigation-ftc-musk-documents-db6b179e

    Of course shadow banning and blocking users due to content of their conversations might also be considered a violation of their privacy rights or perhaps the entire social media business model is a violation of privacy rights of people who are, after all, speaking out and deciding not to be private. It’s not email after all. But shame on Stoller for attempting to defend the Dem McCarthyism.

    1. Nikkikat

      I do not read anything by Stoller. The dude is bought. I saw the hearings. Twitter was the democratic parties narrative control. Hunter Biden’s lap top, Covid, Russiagate, Ukraine, Jan.6 et.al
      They were censoring TRUE statements as well as so called disinformation. Most government agencies were involved as well as their favorite media outlets. As Matt Taibbi said, on an industrial basis. There is no defense for this issue. None. Stoller pretends that these issues he reports on outrage him and he is defending the people. He is in neck deep with the Democrats, just like Bernie he spouts off about this or that, but you’ll never find him any where but in the loving arms of the political elite.

      1. Jeremy Grimm

        I still read Stoller from time to time but like you I am starting to wonder about him.

      2. Lex

        Stoller’s original crusade against monopoly was righteous, but he came from the political industrial complex so there was always a little reason to question his motives. His time in the PIC means that his solutions almost always come off as inside baseball level technocratic lever pulling from inside the system. I may be wrong, but it seems like he still believes in the Wizard of Oz.

        2. Jason Boxman

          Yet this inside baseball is having a real impact of late on concentration and monopoly. No one is more of a pessimist than I am, but I nonetheless consider these developments a positive, even under a Biden administration I expected nothing from, even with the risk of WW3 and mass infection policy. This is still something laudible. And whatever else Stoller might be, on this beat he has useful information and plays a generally positive role.

      1. some guy

        “DemoCarthyism” might be easier to say. Or imagine saying. Little things like that “might” make a difference or might not.

        Or maybe “ClintoCarthyism” , to lay some blame at some personal feet. Or ” ObamaCarthyism” since this is Obama’s party too.

    3. Katniss Everdeen

      I hope everyone remembers this come the next election, when “voters” are exhorted to choose the “lesser of two evils,” and told that they’ll get a $2000 check if they pick the democrat. Vote blue no matter who.

      It didn’t have to be this way, and plenty of people knew it.

    4. flora

      Taibbi’s newest substack, mostly paywalled, but the public paras give a good flavor.

      The Democrats’ Disastrous Miscalculation on Civil Liberties

      Americans have been told a dangerous and uncertain world requires stronger managers and less freedom, but the decline of civil liberties is what started this mess

      https://www.racket.news/p/the-democrats-disastrous-miscalculation

      “stronger managers and less freedom” That idea is something the PMCs must love.

    5. fresno dan

      Carolinian
      It is very hard for me to do so, but at some point I have to admit to myself that the dems may be worse than the repubs. There is no way you can say they are better. The very best that can be said is that maybe they are merely as bad….

      1. some guy

        It is becoming a very crucial question to get right . . . which Party would crash and burn America faster than the other one if it had the power? Both Accelerationists and Deccelerationists will want to make the best possible analysis in order to vote their wishes for the future.

        ( As a Deccelerationist, I am getting apprehensive that ” crash and burn” is now a joint bi-partisan agenda jointly not admitted to in public.)

  29. Eclair

    RE: All the SVB depositors being ‘not bailed out,’ and the taxpayers (hardworking, natch) not being on the hook for the tab.

    My simple mind has glommed onto what I think are the basic MMT concepts:

    1) A sovereign government creates money, basically an unlimited amount, with a simple keystroke on the computer.

    1a) Therefore, taxation is not necessary to fund the running of such a government.
    1b) Taxation (preferably progressive) is used to prevent:

    i) all the wealth from accumulating in the hands (or pockets) of a small group, i.e., economic inequality, and
    ii) inflationary tendencies in a situation where there is more money than stuff, e.g., during WW 2.

    2) Money creation should be constrained by the resources available; resources being natural resources (fossil fuels, agricultural land) and healthy, educated people and working infrastructure producing useful stuff.

    The question that gnaws at me is this. The government is creating money (by their own admission: we hardworking taxpayers are not paying) to pay overinflated prices for bank assets, so tech start-up companies will walk off with their millions of dollars in uninsured deposits. Companies like, Shopify, Pinterest, Fitbit, Roku. Is the government creating money to pay people to produce, well ….. crap? Stuff that is not necessary or healthy or substantial? That could evaporate tomorrow and all that would remain would be bits of plastic and a sense of relief that, “Thank God, my electronic bracelet is not nagging me to walk 10,000 steps today!” But, there’s still all that cash floating about. Misallocated. Not going where it needs to be: building houses for the homeless, fixing our byzantine health-hell system, constructing a robust educational system, cleaning up and then preventing the creation of more sacrifice zones, like Flint and East Palestine.

    And, there’s the moral hazard. But only for the little people.

    Somebody tell me I’m wrong. Please.

      1. Eclair

        Money is not a commodity. It does not exist, except in the hive minds of its owners. But, like fairies, it ceases to exist at the moment the hive mind stops believing it is there. Where ever ‘there’ is. Hence, bank runs.
        And, post-it notes are too sticky to float.

        1. Wukchumni

          Was SVB a new kind of bank run, done virtually for the most part, combined with an old school bank run?

    2. jefemt

      Wish I could, but this seems correct. It is a matter of political will. And we have seen the political will of the power elite in and out of DC, working hand in glove with Wall Street.

      And this is not Exceptionally American.

      The political will is not at all by, of, and for the people. There is little money to be made in ‘doing the right thing’. We are also missing out on the unrealized potential of feeling good / self-actualization about the end goal of efforts into the ‘right path’.
      We cannot agree on what the right thing is, and a tremendous effort persists in keeping us divided and getting at the legitimate needs and desires of humanity.

      Jackpot? End of times? Lemming Conga Line to the Brink? Long slow developing caught ski tip in powder inexorable fall, for the yardsale debris trail and snow don the neck and back?

      Film at 11

    3. Lex

      I was reading some academic, communist political-economic history recently about “primitive accumulation”. Not being an economist I can’t speak to the technical details but my takeaway was that perhaps Capitalism cannot function without primitive accumulation. Theoretically it turns into a perpetual motion machine once up and running. This work was specific to early English laws on the commons and similar, but in reading I could only see that slavery was primitive accumulation, that colonialism was primitive accumulation and that it didn’t really end but morphed its appearance.

      Eastern Europe and Russia in the 90’s looks like primitive accumulation to serve the financial markets (i.e. finance capitalism) of London and NY, and the IMF/WB programs look an awful lot like primitive accumulation continuing in the global south. One might be able to make the argument that economic policy in the US over the last 40+ years is a form of primitive accumulation from the majority of the population to the centers of finance capitalism.

      I’m still not ready to be a Marxist because he was bad at predictions and means through his singular focus on the specifics of mid-19th Century Europe. But I will note that it was a communist who defined fascism as “The political expression of finance capitalism.” And I can’t argue with that. I suppose that for those of us in the modern west, fascism (soft or hard) will be the means to continue the process of primitive accumulation rather than using capital to solve the problems we all face collectively.

    4. LifelongLib

      My sketchy understanding of MMT is that (monetarily sovereign) government spending creates money and taxation destroys it. Where the money ends up is a complex mix of what the government chooses to spend money on, where the money goes after that, and what the government chooses to tax.

    5. JustTheFacts

      It’s definitely hard to find useful startups, but they do exist. Biobot Analytics works with the CDC to measure COVID 19 in municipal wastewater, something that the Water Cooler often reports on. It also helps measure the quantity of opioids in wastewater. Iterative health detects colon cancer. Presuming it works, that’s useful. So I guess the question is whether you focus on the startups you perceive as producing crap, or those you perceive as making a useful contribution.

    6. Eclair

      My little recurring nightmare is this:

      What happens if (when) the plug is pulled? If (when) there is no power to spin the hamster wheels? When the stocks and bonds and currency (and even the good apps) that have no material existence, blink and go dark. When the drive for primitive accumulation, that privatized and financialized and converted the oil and coal and gas and virgin forests and fertile prairies and rain forests and teeming oceans, into columns of numbers on electronic spread sheets, runs out of stuff to accumulate? When we are left standing on a ruined and blasted planet, up to our necks in flood waters, or stranded in a rocky arroyo under a blazing noonday sun.

      Ack, I will quit the Cassandra act now.

  30. Jon Cloke

    Re “‘Little fissures’: The U.S.-Ukraine war unity is slowly cracking apart”

    McCaul says: ““The administration doesn’t have a clear policy objective and a clear goal.”

    Exactly like Afghanistan, then? I don’t think this one will last 17 years, though…

  32. Ann

    Pepe Escobar – Interview with Sergey Glazyev:

    https://thecradle.co/article-view/22457/sergey-glazyev-the-road-to-financial-multipolarity-will-be-long-and-rocky

    “What seems to be crystal clear is that the path toward a new financial system designed essentially by Russia-China, and adopted by vast swathes of the Global South, will remain long, rocky, and extremely challenging. The discussions inside the EAEU and with the Chinese may extrapolate to the SCO and even towards BRICS+. But all will depend on political will and political capital jointly deployed by the Russia-China strategic partnership.”

    1. John k

      Necessity is the mother of invention.
      A reserve currency facilitates trade, and China Russia need trade. But the dollar is demonstrably not a safe store of value, so if a country even temporarily run a trade surplus that store of value can be confiscated with keystrokes.
      But it seems to me this is a two-edged sword. Russia, and especially China, have been running trade surpluses with the us, allowing the us to enjoy a higher standard of living beyond its own production. If the surplus nations choose, they could tax exports (using the tax to subsidize their own workers, say with healthcare and/or ss) until the taxed exports equals their imports. This would substantially shrink us consumption of both raw materials and manufactured goods.

  33. JustTheFacts

    Perhaps of interest to others. Stanford has made LLaMA available online (the 7B model) and fine tuned it a bit. It’s called Stanford Alpaca.

    I asked it “How do I flatten my chain saw bar?”

    It responded “Flattening a chain saw bar is a simple process. Begin by loosening the bolt that holds the bar in place”. So far, so good.

    Then “Once the bolt is removed, use a hammer and a chisel to carefully remove the old welds that hold the bar in place.”. No such welds exists. If you tried to follow that, the closest thing you could do is splitting the chain bar lengthwise, thereby breaking it.

    Then it says “After the welds are removed, file down the bar until it is flat. Finally, re-weld the bar in place using new welds”. Complete confabulation. If you filed the bar down, you wouldn’t have much of a chain saw bar left. If you welded it to the chain saw, good luck.

    It looks it is mixing two sets of similar instructions for different tasks.

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