MARCH 13/2023//THE FED/TREASURY AND FDIC MOVES TO SAVE DEPOSITORS AND THUS FORGOING A BANKING CRISIS: GOLD CLOSED UP $48.84 TO $1911.15//SILVER CLOSED UP $1.15 TO $21.82//PLATINUM CLOSED UP $43.40 TO $1003.70//PALLADIUM CLOSED UP $116.10 TO $1489.15//CHRONOLOGICAL EVENTS RE SILICON VALLEY BANK LEADING TO A 3 BANK BAILOUT//IMPORTANT COMMENTARIES FOR TODAY: MATHEW PIEPENBURG AND TOM LUONGO//CREDIT DEFAULT SWAPS RISE IN VALUE INDICATING HUGE RISK TO THE SOLVENCY OF THE BANK//HSBC TAKES OVER UK ASSETS FOR SILICON VALLEY BANK//RUSSIA VS UKRAINE UPDATES//COVID UPDATES//DR PANDA/DR PAUL ALEXANDER//VACCINE IMPACT//SLAY NEWS//SWAMP STORIES FOR YOU TONIGHT//
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GOLD: NUMBER OF NOTICES FILED FOR MAR/2023. CONTRACT: 9 NOTICES FOR 900 OZ or 0.02799 TONNES
total notices so far: 3021 contracts for 302100 oz (9.3965 tonnes)
SILVER NOTICES: 21 NOTICE(S) FILED FOR 105,000 OZ/
total number of notices filed so far this month : 2968 for 14,840,000 oz
END
GLD
WITH GOLD UP $48.85
INVESTORS SWITCHING TO SPROTT PHYSICAL (PHYS) INSTEAD OF THE FRAUDULENT GLD
/HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.73 TONNES FROM THE GLD//////(VERY STRANGE)
INVENTORY RESTS AT 901.42TONNES
Silver//SLV
WITH NO SILVER AROUND AND SILVER UP $1.35
AT THE SLV// NO CHANGES IN SILVER INVENTORY AT THE SLV: INVESTORS ARE SWITCHING SLV TO SPROTT’S PSLV
CLOSING INVENTORY: 478.879. MILLION OZ
Let us have a look at the data for today
SILVER//OUTLINE
SILVER COMEX OI ROSE BY A STRONG SIZED 558 CONTRACTS TO 128.972 AND CLOSER TO THE RECORD HIGH OI OF 244,710, SET FEB 25/2020 AND THE STRONG SIZED GAIN IN COMEX OI WAS ACCOMPLISHED WITH OUR STRONG $0.36 GAIN IN SILVER PRICING AT THE COMEX ON FRIDAY. OUR NEW LOW COMEX OI SILVER WAS SET AT 121,299 MARCH 3/2023. OUR BANKERS WERE UNSUCCESSFUL IN KNOCKING THE PRICE OF SILVER DOWN (IT ROSE BY $0.36). AND WERE UNSUCCESSFUL IN KNOCKING ANY SPEC LONGS, AS WE HAD A HUMONGOUS GAIN ON OUR TWO EXCHANGES 1571 CONTRACTS. WE HAD 0 CRIMINAL NOTICES FILED IN THE CATEGORY OF EXCHANGE FOR RISK TRANSFER ( THE TOTAL ISSUED IN THIS CATEGORY SO FAR THIS MONTH TOTAL 1 MILLION OZ.) WE HAVE FINISHED WITH OUR SPECS BEING SHORT AS THEY COVERED WITH THE RISE IN PRICE IN JANUARY . WE HAVE NOW RETURNED TO OUR USUAL AND CUSTOMARY SCENARIO: BANKERS SHORT AND SPECS LONG.
WE MUST HAVE HAD: A STRONG ISSUANCE OF EXCHANGE FOR PHYSICALS( 850 CONTRACTS) iiii) AN INITIAL SILVER STANDING FOR COMEX SILVER MEASURING AT 15.58 MILLION OZ(FIRST DAY NOTICE) FOLLOWED BY TODAY’S QUEUE JUMP OF NIL OZ//NEW STANDING: 15.120 MILLION OZ + THE 1.0 MILLION OZ OF EXCHANGE FOR RISK//THUS TOTAL NEW STANDING 16.120 MILLION OZ/ //// V) STRONG SIZED COMEX OI GAIN/ STRONG SIZED EFP ISSUANCE/
I AM NOW RECORDING THE DIFFERENTIAL IN OI FROM PRELIMINARY TO FINAL –162 CONTRACTS
HISTORICAL ACCUMULATION OF EXCHANGE FOR PHYSICALS MAR. ACCUMULATION FOR EFP’S SILVER/JPMORGAN’S HOUSE OF BRIBES/STARTING FROM FIRST DAY/MONTH OF MAR:
TOTAL CONTRACTS for 9 days, total 4987 contracts: OR 24.935 MILLION OZ . (554 CONTRACTS PER DAY)
TOTAL EFP’S FOR THE MONTH SO FAR: 24.935 MILLION OZ
.
LAST 23 MONTHS TOTAL EFP CONTRACTS ISSUED IN MILLIONS OF OZ:
MAY 137.83 MILLION
JUNE 149.91 MILLION OZ
JULY 129.445 MILLION OZ
AUGUST: MILLION OZ 140.120
SEPT. 28.230 MILLION OZ//
OCT: 94.595 MILLION OZ
NOV: 131.925 MILLION OZ
DEC: 100.615 MILLION OZ
JAN 2022// 90.460 MILLION OZ
FEB 2022: 72.39 MILLION OZ//
MARCH: 207.430 MILLION OZ//A NEW RECORD FOR EFP ISSUANCE
APRIL: 114.52 MILLION OZ FINAL//LOW ISSUANCE
MAY: 105.635 MILLION OZ//
JUNE: 94.470 MILLION OZ
JULY : 87.110 MILLION OZ
AUGUST: 65.025 MILLION OZ
SEPT. 74.025 MILLION OZ///FINAL
OCT. 29.017 MILLION OZ FINAL
NOV: 134.290 MILLION OZ//FINAL
DEC, 61.395 MILLION OZ FINAL
JAN 2023/// 53.070 MILLION OZ //FINAL
FEB: 2023: 100.105/ MILLION OZ/FINAL//MUCH STRONGER ISSUANCE VS THE LATTER TWO MONTHS.
MARCH 2023: 24.935 MILLION OZ//INITIAL
RESULT: WE HAD A STRONG SIZED INCREASE IN COMEX OI SILVER COMEX CONTRACTS OF 559 WITH OUR $0.36 GAIN IN SILVER PRICING AT THE COMEX//FRIDAY.,. THE CME NOTIFIED US THAT WE HAD A STRONG SIZED EFP ISSUANCE CONTRACTS: 850 CONTRACTS ISSUED FOR MAY AND 0 CONTRACTS ISSUED FOR ALL OTHER MONTHS) WHICH EXITED OUT OF THE SILVER COMEX TO LONDON AS FORWARDS./ WE HAVE A GOOD INITIAL SILVER OZ STANDING FOR MAR OF 15.58 MILLION OZ//FIRST DAY NOTICE// FOLLOWED BY TODAY’S NIL OZ QUEUE JUMP (WHICH INCREASES THE AMOUNT OF SILVER STANDING) + 1.0 MILLION OF EXCHANGE FOR RISK ISSUED EARLY IN MARCH (INCREASES THE AMOUNT OF SILVER STANDING) //NEW STANDING 16.120 MILLION OZ .. WE HAVE A HUMONGOUS SIZED GAIN OF 1409 OI CONTRACTS ON THE TWO EXCHANGES
WE HAD 21 NOTICE(S) FILED TODAY FOR 105,000 OZ
THE SILVER COMEX IS NOW BEING ATTACKED FOR METAL BY LONDONERS ET AL.
GOLD//OUTLINE
IN GOLD, THE COMEX OPEN INTEREST ROSE BY A HUGE SIZED 15,542 CONTRACTS TO 469,801 AND CLOSER TO THE RECORD (SET JAN 24/2020) AT 799,541 AND PREVIOUS TO THAT: (SET JAN 6/2020) AT 797,110.
THE DIFFERENTIAL FROM PRELIMINARY OI TO FINAL OI IN GOLD TODAY: REMOVED 441 CONTRACTS.
.
WE HAD A HUMONGOUS SIZED INCREASE IN COMEX OI ( 15,002 CONTRACTS) WITH OUR $31.60 GAIN IN PRICE. WE ALSO HAD A SMALL INITIAL STANDING IN GOLD TONNAGE FOR MAR. AT 4.9953 TONNES ON FIRST DAY NOTICE FOLLOWED BY TODAY’S QUEUE JUMP OF 22,100 OZ (0.6874 TONNES) //(QUEUE JUMPING = EXERCISING LONDON BASED EFP’S ) (EFP is the transfer of contracts immediately to London for potential gold deliveries originating from London).
YET ALL OF..THIS HAPPENED WITH OUR $31.60 GAIN IN PRICEWITH RESPECT TO FRIDAY’S TRADING
WE HAD A HUMONGOUS SIZED GAIN OF 22,367 OI CONTRACTS (69.570 PAPER TONNES) ON OUR TWO EXCHANGES
E.F.P. ISSUANCE
THE CME RELEASED THE DATA FOR EFP ISSUANCE AND IT TOTALED A STRONG SIZED 7366 CONTRACTS:
The NEW COMEX OI FOR THE GOLD COMPLEX RESTS AT 469,801
IN ESSENCE WE HAVE A HUMONGOUS INCREASE IN TOTAL CONTRACTS ON THE TWO EXCHANGES OF 22,367 CONTRACTS WITH 15,001CONTRACTS INCREASED AT THE COMEX AND 7366 EFP OI CONTRACTS WHICH NAVIGATED OVER TO LONDON. THUS TOTAL OI GAIN ON THE TWO EXCHANGES OF 22,367 CONTRACTS OR 6.790 TONNES.
CALCULATIONS ON GAIN/LOSS ON OUR TWO EXCHANGES
WE HAD A STRONG SIZED ISSUANCE IN EXCHANGE FOR PHYSICALS (7366 CONTRACTS) ACCOMPANYING THE HUGE SIZED GAIN IN COMEX OI (15,001) TOTAL GAIN IN THE TWO EXCHANGES 22,367 CONTRACTS. WE HAVE ( 1) NOW RETURNED TO OUR NORMAL FORMAT OF BANKERS GOING SHORT AND SPECULATORS GOING LONG ,2.) FAIR INITIAL STANDING AT THE GOLD COMEX FOR MAR. AT 4.9953 TONNES FOLLOWED BY TODAY’S 22,100 OZ QUEUE JUMP//NEW STANDING 10.258 TONNES // ///3) ZERO LONG LIQUIDATION //4) HUGE SIZED COMEX OPEN INTEREST GAIN// 5) STRONG ISSUANCE OF EXCHANGE FOR PHYSICAL PAPER/
HISTORICAL ACCUMULATION OF EXCHANGE FOR PHYSICALS IN 2023 INCLUDING TODAY
MAR
ACCUMULATION OF EFP’S GOLD AT J.P. MORGAN’S HOUSE OF BRIBES: (EXCHANGE FOR PHYSICAL) FOR THE MONTH OF MAR :
TOTAL EFP CONTRACTS ISSUED: 33,448 CONTRACTS OR 3,344,800 OZ OR 104.037 TONNES IN 9 TRADING DAY(S) AND THUS AVERAGING: 3716 EFP CONTRACTS PER TRADING DAY
TO GIVE YOU AN IDEA AS TO THE SIZE OF THESE EFP TRANSFERS : THIS MONTH IN 9 TRADING DAY(S) IN TONNES 104.037 TONNES
TOTAL ANNUAL GOLD PRODUCTION, 2022, THROUGHOUT THE WORLD EX CHINA EX RUSSIA: 3555 TONNES
THUS EFP TRANSFERS REPRESENTS 104.037/3550 x 100% TONNES 2.92% OF GLOBAL ANNUAL PRODUCTION
SEPT 142.12 TONNES FINAL ISSUANCE ( LOW ISSUANCE)_
OCT: 141.13 TONNES FINAL ISSUANCE (LOW ISSUANCE)
NOV: 312.46 TONNES FINAL ISSUANCE//NEW RECORD!! (INCREASING DRAMATICALLY)//SIGN OF REAL STRESS//SURPASSING THE MARCH 2021 RECORD OF 276.50 TONNES OF EFP
DEC. 175.62 TONNES//FINAL ISSUANCE//
JAN:2022 247.25 TONNES //FINAL
FEB: 196.04 TONNES//FINAL
MARCH: 409.30 TONNES INITIAL( THIS IS NOW A RECORD EFP ISSUANCE FOR MARCH AND FOR ANY MONTH.
APRIL: 169.55 TONNES (FINAL VERY LOW ISSUANCE MONTH)
MAY: 247,44 TONNES FINAL//
JUNE: 238.13 TONNES FINAL
JULY: 378.43 TONNES FINAL
AUGUST: 180.81 TONNES FINAL
SEPT. 193.16 TONNES FINAL
OCT: 177.57 TONNES FINAL ( MUCH SMALLER THAN LAST MONTH)
NOV. 223.98 TONNES//FINAL ( MUCH LARGER THAN PREVIOUS MONTHS//comex running out of physical)
DEC: 185.59 tonnes // FINAL
JAN 2023: 228.49 TONNES FINAL//HUGE AMOUNT OF EFP’S ISSUED THIS MONTH!!
FEB: 151.61 TONNES/FINAL
MARCH: 104.037 TONNES/INITIAL (ANOTHER STRONG MONTH FOR EFP ISSUANCE)
SPREADING OPERATIONS
(/NOW SWITCHING TO GOLD) FOR NEWCOMERS, HERE ARE THE DETAILS
SPREADING LIQUIDATION HAS NOW COMMENCED AS WE HEAD TOWARDS THE NEW ACTIVE FRONT MONTH OF APRIL. WE ARE NOW INTO THE SPREADING OPERATION OF GOLD
HERE IS A BRIEF SYNOPSIS OF HOW THE CROOKS FLEECE UNSUSPECTING LONGS IN THE SPREADING ENDEAVOUR ;MODUS OPERANDI OF THE CORRUPT BANKERS AS TO HOW THEY HANDLE THEIR SPREAD OPEN INTERESTS:HERE IS HOW THE CROOKS USED SPREADING AS WE ARE NOW INTO THE NON ACTIVE DELIVERY MONTH OF MAR HEADING TOWARDS THE ACTIVE DELIVERY MONTH OF APRIL., FOR BOTH GOLD:
YOU WILL ALSO NOTICE THAT THE COMEX OPEN INTEREST STARTS TO RISE BUT SO IS THE OPEN INTEREST OF SPREADERS. THE OPEN INTEREST IN WILL CONTINUE TO RISE UNTIL ONE WEEK BEFORE FIRST DAY NOTICE OF AN UPCOMING ACTIVE DELIVERY MONTH (NOV), AND THAT IS WHEN THE CROOKS SELL THEIR SPREAD POSITIONS BUT NOT AT THE SAME TIME OF THE DAY. THEY WILL USE THE SELL SIDE OF THE EQUATION TO CREATE THE CASCADE (ALONG WITH THEIR COLLUSIVE FRIENDS) AND THEN COVER ON THE BUY SIDE OF THE SPREAD SITUATION AT THE END OF THE DAY. THEY DO THIS TO AVOID POSITION LIMIT DETECTION. THE LIQUIDATION OF THE SPREADING FORMATION CONTINUES FOR EXACTLY ONE WEEK AND ENDS ON FIRST DAY NOTICE.”
WHAT IS ALARMING TO ME, ACCORDING TO OUR LONDON EXPERT ANDREW MAGUIRE IS THAT THESE EFP’S ARE BEING TRANSFERRED TO WHAT ARE CALLED SERIAL FORWARD CONTRACT OBLIGATIONS AND THESE CONTRACTS ARE LESS THAN 14 DAYS. ANYTHING GREATER THAN 14 DAYS, THESE MUST BE RECORDED AND SENT TO THE COMPTROLLER, GREAT BRITAIN TO MONITOR RISK TO THE BANKING SYSTEM. IF THIS IS INDEED TRUE, THEN THIS IS A MASSIVE CONSPIRACY TO DEFRAUD AS WE NOW WITNESS A MONSTROUS TOTAL EFP’S ISSUANCE AS IT HEADS INTO THE STRATOSPHERE.
First, here is an outline of what will be discussed tonight:
1.Today, we had the open interest at the comex, in SILVER ROSE BY A STRONG SIZED 559 CONTRACTS OI TO 128,972 AND CLOSER TO OUR COMEX HIGH RECORD //244,710(SET FEB 25/2020). THE LAST RECORDS WERE SET IN AUG.2018 AT 244,196 WITH A SILVER PRICE OF $14.78/(AUGUST 22/2018)..THE PREVIOUS RECORD TO THAT WAS SET ON APRIL 9/2018 AT 243,411 OPEN INTEREST CONTRACTS WITH THE SILVER PRICE AT THAT DAY: $16.53). AND PREVIOUS TO THAT, THE RECORD WAS ESTABLISHED AT: 234,787 CONTRACTS, SET ON APRIL 21.2017 OVER 5 YEARS AGO. HOWEVER WE HAVE SET A RECORD LOW OF 121,299 CONTRACTS MARCH 3/2023.
EFP ISSUANCE 850 CONTRACTS
OUR CUSTOMARY MIGRATION OF COMEX LONGS CONTINUE TO MORPH INTO LONDON FORWARDS AS OUR BANKERS USED THEIR EMERGENCY PROCEDURE TO ISSUE:
MAY 850 and ALL OTHER MONTHS: ZERO. TOTAL EFP ISSUANCE: 850 CONTRACTS. EFP’S GIVE OUR COMEX LONGS A FIAT BONUS PLUS A DELIVERABLE PRODUCT OVER IN LONDON. IF WE TAKE THE COMEX OI GAIN OF 559CONTRACTS AND ADD TO THE 850 OI TRANSFERRED TO LONDON THROUGH EFP’S,
WE OBTAIN A HUGE GAIN OF 1409 OPEN INTEREST CONTRACTS FROM OUR TWO EXCHANGES.
THUS IN OUNCES, THE GAIN ON THE TWO EXCHANGES //7.045 MILLION OZ
OCCURRED WITH OUR $0.36 GAIN IN PRICE ….. OUR SPEC SHORTS HAVE NOWHERE TO HIDE!
4. Chris Powell of GATA provides to us very important physical commentaries
end
5. Other gold/silver commentaries
6. Commodity commentaries//
7/CRYPTOCURRENCIES/BITCOIN ETC
3. ASIAN AFFAIRS
i)MONDAY MORNING//SUNDAY NIGHT
SHANGHAI CLOSED UP 38.62 PTS OR 1.20% //Hang Seng CLOSED UP 376.05 PTS OR % 1.95 /The Nikkei closed DOWN 311.01% PTS OR 1.11% //Australia’s all ordinaries CLOSED DOWN 0.51% /Chinese yuan (ONSHORE) closed UP 6.8724//OFFSHORE CHINESE YUAN UP TO 6.8928// /Oil DOWN TO 75.31 dollars per barrel for WTI and BRENT AT 80.98 / Stocks in Europe OPENED ALL RED// ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST US DOLLAR/OFFSHORE STRONGER
a)NORTH KOREA/SOUTH KOREA
outline
b) REPORT ON JAPAN/
OUTLINE
3 C CHINA
OUTLINE
4/EUROPEAN AFFAIRS
OUTLINE
5. RUSSIAN AND MIDDLE EASTERN AFFAIRS
OUTLINE
6.Global Issues//COVID ISSUES/VACCINE ISSUES
OUTLINE
7. OIL ISSUES
OUTLINE
8 EMERGING MARKET ISSUES
COMEX DATA//AMOUNTS STANDING//VOLUME OF TRADING/INVENTORY MOVEMENTS
GOLD
LET US BEGIN:
THE TOTAL COMEX GOLD OPEN INTEREST ROSE BY A HUGE SIZED 15,001 CONTRACTS UP TO 469,268 WITH OUR STRONG GAIN IN PRICE OF $31.60 ON FRIDAY
EXCHANGE FOR PHYSICAL ISSUANCE
WE ARE NOW IN THE NON ACTIVE DELIVERY MONTH OF MAR… THE CME REPORTS THAT THE BANKERS ISSUED A VERY STRONG SIZED TRANSFER THROUGH THE EFP ROUTE AS THESE LONGS RECEIVED A DELIVERABLE LONDON FORWARD TOGETHER WITH A FIAT BONUS.,
THAT IS 7366 EFP CONTRACTS WERE ISSUED: : APRIL 7366 & ZERO FOR ALL OTHER MONTHS:
TOTAL EFP ISSUANCE: 7366 CONTRACTS
WHEN WE HAVE BACKWARDATION, EFP ISSUANCE IS VERY COSTLY BUT THE REAL PROBLEM IS THE SCARCITY OF METAL AND IT IS FAR BETTER FOR OUR BANKERS TO PAY OFF INDIVIDUALS THAN RISK INVESTORS ESPECIALLY FROM LONDON STANDING FOR DELIVERY. THE LOWER PRICES IN THE FUTURES MARKET IS A MAGNET FOR OUR LONDONERS SEEKING PHYSICAL METAL. BACKWARDATION ALWAYS EQUAL SCARCITY OF METAL!
ON A NET BASIS IN OPEN INTEREST WE GAINED THE FOLLOWING TODAY ON OUR TWO EXCHANGES: A HUMONGOUS SIZED TOTAL OF 22,367 CONTRACTS IN THAT 7366LONGS WERE TRANSFERRED AS FORWARDS TO LONDON AND WE HAD A GIGANTIC SIZED COMEX OI GAIN OF 15,001 CONTRACTS..AND THIS HUMONGOUS SIZED GAIN ON OUR TWO EXCHANGES HAPPENED WITH OUR VERY STRONG GAIN IN PRICE OF $31.60. WE ARE NOW WITNESSING THE BANKERS GOING NET SHORT AND THE SPECS GOING NET LONG.
// WE HAVE A STRONG AMOUNT OF GOLD TONNAGE STANDING: MAR (10.258) (NON ACTIVE MONTH)
TONNES),
HERE ARE THE AMOUNTS THAT STOOD FOR DELIVERY IN THE PRECEDING 12 MONTHS OF 2021-2022:
DEC 2021: 112.217 TONNES
NOV. 8.074 TONNES
OCT. 57.707 TONNES
SEPT: 11.9160 TONNES
AUGUST: 80.489 TONNES
JULY: 7.2814 TONNES
JUNE: 72.289 TONNES
MAY 5.77 TONNES
APRIL 95.331 TONNES
MARCH 30.205 TONNES
FEB ’21. 113.424 TONNES
JAN ’21: 6.500 TONNES.
TOTAL YEAR 2021 (JAN- DEC): 601.213 TONNES
YEAR 2022:
JANUARY 2022 17.79 TONNES
FEB 2022: 59.023 TONNES
MARCH: 36.678 TONNES
APRIL: 85.340 TONNES FINAL.
MAY: 20.11 TONNES FINAL
JUNE: 74.933 TONNES FINAL
JULY 29.987 TONNES FINAL
AUGUST:104.979 TONNES//FINAL
SEPT. 38.1158 TONNES
OCT: 77.390 TONNES/ FINAL
NOV 27.110 TONNES/FINAL
Dec. 64.541 tonnes (TOTAL YEAR 656.076 TONNES)
2003:
JAN/2023: 20.559 tonnes
FEB 2023: 47.744 tonnes
MAR: 10.258 TONNES
THE SPECS/HFT WERE UNSUCCESSFUL IN LOWERING GOLD’S PRICE( IT ROSE $31.60) //// AND WERE SUCCESSFUL IN KNOCKING ANY SPECULATOR LONGS AS WE HAD OUR HUMONGOUS SIZED GAIN OF 22,367 CONTRACTS ON OUR TWO EXCHANGES
WE HAVE GAINED A TOTAL OI OF 69.570 PAPER TONNES OF TOTAL OI FROM OUR TWO EXCHANGES, ACCOMPANYING OUR INITIAL GOLD TONNAGE STANDING FOR MAR. (4.9953 TONNES) FOLLOWED BY TODAY’S HUGE QUEUE JUMP OF 22.100 OZ (0.6874 TONNES)… ALL OF THIS WAS ACCOMPLISHED DESPITE OUR STRONG GAIN IN PRICE TO THE TUNE OF $31.60
WE HAD -441 CONTRACTS REMOVED FROM COMEX TRADES TO OPEN INTEREST AFTER TRADING ENDED LAST NIGHT
NET GAIN ON THE TWO EXCHANGES 22,367 CONTRACTS OR 2,236,700 OZ OR 69.570
TONNES
Estimated gold comex today 526,678// //huge
final gold volumes/yesterday 413,538///extremely good +
Total monthly oz gold served (contracts) so far this month
3021 notices 302,100 9.3965 TONNES
Total accumulative withdrawals of gold from the Dealers inventory this month
NIL oz
Total accumulative withdrawal of gold from the Customer inventory this month
x
i)Dealer deposits: 0
total dealer deposit: nil oz
No dealer withdrawals
Customer deposits: 0
total deposits: nil oz
customer withdrawals: 0
total withdrawals: NIL oz
in tonnes: 0 tonnes
Adjustments; 0
CALCULATIONS FOR THE AMOUNT OF GOLD STANDING FOR MAR.
For the front month of MARCH we have an oi of 286 contracts having LOST 104 contracts. We had 325 notices filed on FRIDAY so we
gained another 221 contracts or an additional 22,100 oz will stand for metal at the comex
April lost 11,808 contracts down to 253,737 contracts
May GAINED 9 contracts to stand at 166
We had 9 notice(s) filed today for 900 oz
Today, 0 notice(s) were issued from J.P.Morgan dealer account and 0 notices were issued from their client or customer account. The total of all issuance by all participants equate to 9 contract(s) of which 0 notices were stopped (received) by j.P. Morgan dealer and 0 notice(s) was (were) stopped received by J.P.Morgan//customer account and 0 notice(s) received (stopped) by the squid (Goldman Sachs)
To calculate the INITIAL total number of gold ounces standing for the MAR. /2023. contract month,
we take the total number of notices filed so far for the month (3021 x 100 oz ), to which we add the difference between the open interest for the front month of (MAR. 286 CONTRACTS) minus the number of notices served upon today 9 x 100 oz per contract equals 329,800 OZ OR 10.258 TONNES the number of TONNES standing in this active month of MARCH.
thus the INITIAL standings for gold for the MAR contract month:
No of notices filed so far (3021 x 100 oz+ 286 OI for the front month minus the number of notices served upon today (9)x 100 oz} which equals 329,800 oz standing OR 10.258 TONNES in this active delivery month of MARCH..
To calculate the number of silver ounces that will stand for delivery in MARCH. we take the total number of notices filed for the month so far at 2968 x 5,000 oz = 14,840,000 oz
to which we add the difference between the open interest for the front month of MAR(77) and the number of notices served upon today 21 x (5000 oz) equals the number of ounces standing.
Thus the standings for silver for the MAR./2023 contract month: 2968 (notices served so far) x 5000 oz + OI for the front month of MAR (77) – number of notices served upon today (21) x 500 oz of silver standing for the MAR. contract month equates 15.120 million oz +the 1.0 million oz of exchange for risk//new total standing 16.120 million oz
the record level of silver open interest is 234,787 contracts set on April 21./2017 with the price on that day at $18.42. The previous record was 224,540 contracts with the price at that time of $20.44
END
GLD AND SLV INVENTORY LEVELS
MARCH 13/WITH GOLD UP $48.85 TODAY: VERY STRANGE HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 1.73 TONNES OF GOLD FROM THE GLD///INVENTORY REST AT 901.42 TONNES
MARCH 10//WITH GOLD UP $31.60 TODAY: HUGE CHANGES IN GOLD INVENTORY AT THE GLD; A WITHDRAWAL OF 3.47 TONNES OF GOLD FROM THE GLD//INVENTORY RESTS AT 903.15 TONNES
MARCH 9/WITH GOLD UP $16.50 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 906.62 TONNES
MARCH 8/WITH GOLD DOWN $1.15 TODAY: HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A MASSIVE WITHDRAWAL OF 5.5 TONNES FROM THE GLD////INVENTORY RESTS AT 906.62 TONNES
MARCH 7/WITH GOLD DOWN $33.20 TODAY:NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 912.12 TONNES
MARCH 6/WITH GOLD UP $0.55 TODAY: SMALL CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF .57 TONNES FROM THE GLD///INVENTORY RESTS AT 912.12 TONNES
MARCH 3/WITH GOLD UP $14,10 TODAY; NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 912.69 TONNES
MARCH 2/WITH GOLD DOWN $4.00 TODAY; HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.61 TONNES OF GOLD FROM THE GLD////INVENTORY RESTS AT 912.69 TONNES
MARCH 1/WITH GOLD UP $18.90 TODAY: HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.31 TONNES OF GOLD FROM THE GLD///INVENTORY RESTS AT 915.30 TONNES
FEB 28/WITH GOLD UP $12.10 TODAY: SMALL CHANGES IN GOLD INVENTORY AT THE GLD:A DEPOSIT OF .29 TONNES OF GOLD INTO THE GLD//INVENTORY RESTS AT 917.61 TONNES
FEB 27/WITH GOLD UP $6.95 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 917.32 TONNES
FEB 24/WITH GOLD DOWN $9.10 TODAY:HUGE CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF 2.6 TONNES OF GOLD FROM THE GLD///INVENTORY RESTS AT 917.32 TONNES
FEB 23/WITH GOLD DOWN $13.05 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY REST AT 919.92 TONNES
FEB 22/WITH GOLD DOWN 22 CENTS TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 919.92 TONNES
FEB 21/WITH GOLD DOWN $7.45 TODAY: HUGE CHANGES IN GOLD INVENTORY AT THE GLD A WITHDRAWAL OF 1.16 TONNES OF GOLD FROM THE GLD///INVENTORY RESTS AT 919.92 TONNES
FEB 17/WITH GOLD DOWN $1.35 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 921.08 TONNES
FEB 16/WITH GOLD UP $6.80 TODAY; SMALL CHANGES IN GOLD INVENTORY AT THE GLD: A DEPOSITOF .29 TONNES OF GOLD INTO THE GLD///INVENTORY RESTS AT 921.08 TONNES
FEB 15/WITH GOLD DOWN $19.65 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 920.79 TONNES
FEB 14/WITH GOLD UP $1.40 TODAY: NO CHANGES IN GOLD INVENTORY AT THE GLD//INVENTORY RESTS AT 920.79 TONNES
FEB 13/WITH GOLD DOWN $9.90 TODAY: SMALL CHANGES IN GOLD INVENTORY AT THE GLD: A WITHDRAWAL OF .31 TONNES FORM THE GLD///INVENTORY RESTS AT 920.79 TONNES
FEB 10/WITH GOLD DOWN $4.05 TODAY: SMALL CHANGES IN GOLD INVENTORY AT THE GLD//A WITHDRAWAL OF .0.38 TONNES/INVENTORY RESTS AT 920.79 TONNES
FEB 9/WITH GOLD DOWN $10.90 TODAY:SMALL CHANGES IN GOLD INVENTORY AT THE GLD A DEPOSIT OF .38 TONNES OF GOLD INTO THE GLD./INVENTORY RESTS AT 921.10 TONNES
GLD INVENTORY: 901,42 TONNES
Now the SLV Inventory/( vehicle is a fraud as there is no physical metal behind them
MARCH 13/WITH SILVER UP $1.35 : NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 478.879 MILLION OZ//
MARCH 10.WITH SILVER UP 36 CENTS TODAY; NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 478.879 MILLION OZ…
MARCH 9/WITH SILVER UP 2 CENTS TODAY: HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.195 MILLION OZ INTO THE SLV///INVENTORY RESTS AT 478.979 MILLION OZ
MARCH 8/WITH SILVER DOWN 6 CENTS TODAY; HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWALOF 459,000 OZ FROM THE SLV///INVENTORY RESTS AT 477.684 MILLION OZ
MARCH 7/WITH SILVER DOWN 88 CENTS TODAY;HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 920,000 OZ FROM THE SLV/////INVENTORY RESTS AT 478.143 MILLION OZ
MARCH 6/WITH SILVER DOWN 13 CENTS TODAY; NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 479.063 MILLION OZ//
MARCH 3/WITH SILVER UP 67 CENTS TODAY:HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.369 MILLION OZ INTO THE SLV////INVENTORY RESTS AT 479.063 MILLION OZ//
MARCH 2/WITH SILVER DOWN $.16 TODAY: HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 920,00 OZ OF SILVER FROM THE SLV////INVENTORY RESTS AT 477.694 MILLION OZ
MARCH 1/WITH SILVER UP 4 CENTS TODAY; HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 2.574 MILLION OZ OF SILVER FROM THE SLV////INVENTORY RESTS AT 478.614 MILLION OZ.
FEB 28/WITH SILVER UP 26 CENTS TODAY; HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.241 MILLION OZ FROM THE SLV////INVENTORY RESTS AT 481.188
FEB 27/WITH SILVER DOWN 15 CENTS TODAY; HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 1.471 MILLION OZ FROM THE SLV///INVENTORY RESTS AT 482.429 MILLION OZ
FEB 24/WITH SILVER DOWN 46 CENTS TODAY; HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 3.172 MILLION OZ FROM THE SLV////INVENTORY RESTS AT 483.900 MILLION OZ//
FEB 23/WITH SILVER DOWN 32 CENTS TODAY: HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.379 MILLION OZ INTO THE SLV////INVENTORY RESTS AT 487.072 MILLION OZ//
FEB 22/WITH SILVER DOWN 22 CENTS TODAY:SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A WITHDRAWAL OF 689,000 OZ FROM THE SLV////INVENTORY RESTS AT 485.693 MILLION OZ
FEB 21/WITH SILVER UP 14 CENTS TODAY: HUGE CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 1.5363 MILLION OZ INTO THE SLV////INVENTORY RESTS AT 486.382 MILLION OZ//
FEB 17/WITH SILVER UP 2 CENTS TODAY: SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 827,000 OZ INTO THE SLV////INVENTORY RESTS AT 484.819 MILLION OZ/
FEB 16/WITH SILVER UP 8 CENTS TODAY: SMALL CHANGES IN SILVER INVENTORY AT THE SLV: A DEPOSIT OF 690,000 OZ OF SILVER INTO THE SLV////INVENTORY RESTS AT 483.992 MILLION OZ//
FEB 15/WITH SILVER DOWN $0.26 TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV//INVENTORY RESTS AT 483.302 MILLION OZ//
FEB 14/WITH SILVER DOWN 1 CENT TODAY: SMALL CHANGES IN SILVER INVENTORY AT THE SLV” A WITHDRAWAL OF 460,000 OZ FROM THE SLV////INVENTORY RESTS AT 483.302 MILLION OZ//
FEB 13 WITH SILVER DOWN 17 CENTS TODAY; NO CHANGES IN SILVER INVENTORY AT THE SLV// INVENTORY RESTS AT 483.762 MILLION OZ//
FEB 10/WITH SILVER DOWN 8 CENTS: NO CHANGES IN SILVER INVENTORY AT THE SLV: //INVENTORY RESTS AT 483.762 MILLION OZ
FEB 9/WITH SILVER DOWN 14 CENTS TODAY: NO CHANGES IN SILVER INVENTORY AT THE SLV: INVENTORY RESTS AT 483.76 MILLION OZ (CORRECTED).//
CLOSING INVENTORY 478.879 MILLION OZ//
PHYSICAL GOLD/SILVER STORIES
1:Peter Schiff
END
2 Lawrie Williams//Pam and Russ Martens/Jim Rickards/Mathew Piepenburg/Von Greyerz//Rickards:
Making Common, Golden Sense of the Next Senseless Bank Crisis
Matthew Piepenburg March 13, 2023
The latest headlines, of course, are all pointing toward the ripple effect of Silicon Valley Bank (SVB), and they should be.
This banking metaphor for the tech sector in particular and the previously described disaster in California as a whole or the matter of banking risk as a theme, require understanding and attention, provided below.
Once we get past a forensic look at the data and forces which explain SVB’s demise, we quickly discover that SVB is itself just a symbol of a much larger financial (and banking) crisis which ties together nearly all of the major macro forces we’ve been tracking since Powell began his QE to QT quest to be Volcker-reborn.
That is, we confirm that everything comes back to the Fed and bond market in general and the UST market in particular. But as I’ve argued for years, and will say again now: The bond market is the thing.
By the end of this brief report, we also discover that SVB is just the beginning; contagion inside and outside of the banking sector is about to get worse. Or stated more bluntly: “We aint seen nothing yet.”
But first, let’s look at the banks in Silicon Valley…
Two Failed Banks
The tech-friendly SVB story (i.e. FDIC shutdown) is actually preceded by another failed bank, namely the crypto-friendly Silvergate Capital. Corp, now heading into voluntary liquidation.
Because SVB was a much larger bank (>$170B in deposits) than Silvergate (>$6B in deposits), it got and deserved more headlines as the largest bank failure since well, the 2008 bank failures…
Unlike Lehman or Bear Stearns, the recent disasters at SVB and Silvergate were not the result of concentrated and levered bets/loans negligently packaged as investment-grade credits, but rather the result of a good ol’ fashioned bank run. Bank runs happen when depositors all want to get their money out of the banks at the same time—a scenario of which I’ve warned for years and compared to a burning theater with an exit door the size of a mouse-hole.
Banks, of course, use and lever depositor funds to lend and invest at risk (which is why Henry Ford warned of revolution if folks actually understood what banks actually do). Thus, if a mass of depositors suddenly wants their money at the same time, it’s just not gonna be there.
So, why were depositors in a panic to exit?
It boils down to crypto fears, tech stress and bad banking practices.
No Silver Lining at Silvergate
At Silvergate, they provided loans to crypto enterprises, which were the belle of the speculation ball until Sam Bankman-Fried’s FTX implosion made investors weary of crypto exchanges. Nervous depositors withdrew billions of their crypto-linked deposits at the same time.
Silvergate, of course, didn’t have the billions needed to meet depositor requests, because, well… banks by their operational (fractional reserve) nature never have the money when needed at the same time.
Thus, the bank had to quickly and desperately sell assets, which meant selling billions worth of non-mature Treasuries whose prices had tanked in the interim thanks to the Powell rate hikes.
(See how the Fed lurks, head down and silent, as the source behind nearly every crisis?)
This was selling bank assets at the worst time imaginable and immediately sent Silvergate into the red and toward the cold dark ocean floor.
Once DOJ investigations end and the FDIC insurance runs out, we’ll discover just how “whole” the bigger depositors at Silvergate will be—but this will take time and end in some degree of pain for many of them.
Death Valley for Silicon Valley Bank
As for the bigger disaster at SVB, they mostly serviced start-ups and technology firms with a major focus on life sciences start-ups—i.e., yesterday’s unicorns and tomorrow’s donkeys.
These unicorns, of course, were not only under the cloud of the FTX fears in particular and falling faith in tech miracles in general, but equally under the pressure of Powell’s rate hikes, which made funding (or debt-rollovers) harder and more expensive to obtain for tech names.
In short, the keg party of easy money for questionable tech enterprises was beginning to unwind.
SVB’s slow and then rapid demise came as depositors (at the advice of their VC advisors) withdrew billions at the same time, which SVB (like Silvergate) could not match after selling UST assets at a massive loss to save the first withdrawals while burning the later movers.
In short, and like all Ponzi schemes, banks suffering a bank run can’t and won’t make everyone whole—just the first money out—i.e., the fastest runners in the burning theater.
Burn Victims, Recovery?
Banks, ironically, can’t technically go bank-rupt. Silvergate plans to eventually make all depositors whole as they sift through their assets in liquidation. Hmmm. Good luck with that.
SVB, however, waited too long for voluntary liquidation procedures and was instead taken over by the FDIC as a receiver to manage the sale of assets to return investor deposits as a dividend over time.
Furthermore, the FDIC “insures” investor deposits up to $250K, but that won’t help the vast majority of SVB deposits (95.5%) not covered by this so-called insurance.
The Contagion Effect?
Notwithstanding the pain felt by depositors at Silvergate and SVB, the fear there has spread to the broader banking sector (big bank to regional), which saw expected sell-offs at the end of last week and has prompted the inevitable question, namely: Is this another Lehman moment?
For now, we are talking about bank runs rather than banks failing ala 2008 due to massive derivative exposures and bad loans. In short, this is not (yet at least) a 2008-like banking crisis.
That said, and as we’ve reported countless times, post-2008 banks are still massively over-levered and over-exposed to that toxic waste dump otherwise known as the COMEX and derivatives market.
Each day, the headlines change.
Signature Bank, this time in New York, was just shuttered by New York regulators.
The Fed then announced over the weekend that they will make depositors whole, which is tantamount to confessing yet another Fed bailout of bad banks under the new name of the $25B “Bank Term Funding Program”—or BTFP, an acronym which spurs reminders of the 2009 TARP days…
Such a bailout policy makes the odds of further Fed rate hikes in 2023 a bit less likely, and already the traders on Wall Street are renaming BTFP as “Buy The F***ing Pivot.”
As I’ve written for months (and show below), Powell’s QT plan would last until something inevitably broke, and it would seem that day has come, as expected.
Many are suggesting that the BTFB will need to be funded to at least $2T, not $25B, to backstop further banking risk.
Easy Prognosis
Based on context and current data, however, we can begin to make certain objective and early conclusions.
Cash flow from VC into tech is about to get a lot tighter, as we’ve been warning for the last 2 years.
SVB depositors may eventually get some or much of their money back over time once the bank’s assets (Treasuries, loans etc.) are sold off by the FDIC. Despite my very, very low opinion of bank regulators, at least SVB, unlike FTX, was regulated.
As to a full-on crisis across all banks, it’s a bit early to say that the foregoing regional cancers will spread across all banks of all flavors, though our blunt reports on banking risk in the past suggest that banks as a whole are anything but safe.
Cryptos, already under the cloud of FTX and now SVB, saw more pain, as the sell-offs in this space last week confirm. However, as banking fears prompt a more dovish Fed in Q2, many cryptos could rise.
The Bigger, Scarry Picture
In the still evolving nature of the current banking crisis, we see reasons to be concerned, very concerned, about systemic risk in the banking sector.
Banks, and banking practices, are complex little beasts. Just across town at that gasping entity known as Credit Suisse, for example, they have been too afraid to publicly report their cash-flow statements as the bank’s stock fell yet another 60%. So, yeah, things are complex…
But returning to the US in particular and banks in general, one can still derive the simple from the complex, which is simply scarry.
Keep It Simple
At the most basic level, banks fail when the cost of funding their operations rises dramatically above the returns or yields on their performing/earning assets.
It is our view that such a set-up for further pain across the banking sector is real, a set-up made all the worse by—you guessed it—that entirely un-natural destroyer of natural markets forces, free price-discovery and honest capitalism otherwise known as the U.S. Federal Reserve.
Central Bankers and Broken Bonds
As I’ve written and spoken, everything is connected, and everything eventually takes it signals from the bond market, which was long ago hijacked by the Fed.
Powell’s rate hikes, for example, don’t just occur in a vacuum to fight his bogus war on an inflation nightmare which he once promised was only “transitory.”
Fed QT and QE, for example, are more than just words, experiments or theories, they are un-natural, artificial and powerful toxins which can’t be contained to just making central bank balance sheets thinner or fatter and bogus CPI data higher or lower.
Instead, the Fed’s little tweaks, tricks and madness impact just about everything, and always end up screwing everything up.
Why? Because markets were designed to be managed by natural forces of supply and demand not artificial forces of fake money from central bankers.
By raising the Fed Funds Rates toward 5% and above at rapid pace, for example, Powell has done more than just make a tiny $300B dent in the Fed’s nearly $9T balance sheet. He has engineered a dis-inflationary recession and sent combined nominal returns in stocks AND bonds to levels not seen since 1871.
But when it comes to banking risk, Powell has also gut-punched that sector with criminal negligence.
How so?
Even the Banks Can’t Fight the Fed?
When the Fed began raising rates, it sent bonds to the floor and hence yields to the moon (yields and bond price are inversely related).
This impacts bank balance sheets because banks make a living by paying depositors at rate X while earning X+; but now those banks are in a deadly corner of the Fed’s own mis-design.
That is, the Fed has sent bond yields higher than the rates/yields which commercial banks offer depositors, which is why many depositors are questioning the advantage of being, well…depositors.
This mis-match, of course, will likely require banks to raise depositor rates to compete with rising UST yields, a costly tactic which cuts their profits and reddens their balance sheets.
Alternatively, banks could offer/issue more bank shares to increase their capital, but this dilutes existing share counts and value, which is how bankers are paid.
To add insult to injury, banks (and bankers) are also facing the real risk of rising or at least persistent inflation, which means that the real return on even “enhanced” depositor rates is ultimately a negative return when adjusted for the invisible tax of inflation.
All Conversations Return to Gold
So, no, we hardly think the commercial banking system, the massive and compounding risks of which we have reported for years, is anything remotely healthy, safe or credible.
All frowns and inevitable (yet increasingly empty) gold-bug critiques notwithstanding, we think holding a physical bar of segregated, allocated and non-levered gold in one’s own name in the world’s safest private vaults and jurisdictions makes a lot more sense than trusting your increasingly worthless paper or digital money to the world’s increasingly fractured banks, be they SVB, Credit Suisse or JP Morgan.
Just saying…
end
CHRIS POWELL//GATA AND OTHER IMPORTANT GOLD COMMENTARIES
BIS gold swaps reflect U.S. move to knock the price and protect dollar, Maguire says
Submitted by admin on Fri, 2023-03-10 21:31Section: Daily Dispatches
9:24p ET Friday, March 10, 2023
Dear Friend of GATA and Gold:
London metals trader Andrew Maguire tells this week’s “Live from the Vault” program from Kinesis Money that the recent 100-tonne increase in gold swaps undertaken by the Bank for International Settlements was a dumping of gold by the United States to protect the dollar.
But Maguire adds that such dumps are being aggressively used by central banks to add to their gold reserves. Metal is leaving the preserve of the London Bullion Market Association for safekeeping away from the clutches of the price suppressors, Maguire says.
He expects a big change in the gold and currency markets in April.
The program is 42 minutes long and can be seen at YouTube here:
CHRIS POWELL, Secretary/Treasurer Gold Anti-Trust Action Committee Inc. CPowell@GATA.org
END
Jay Newman: Why the U.S. dollar has become an at-risk currency
Submitted by admin on Sat, 2023-03-11 23:10Section: Daily Dispatches
By Jay Newman New York Post Saturday, March 11, 2023
Everywhere you turn there’s chatter about the ongoing US economic sanctions against Russia. The Russian Central Bank, Russian banks, Russian companies, Russian oligarchs — and anyone caught helping them — have seen their fortunes entangled since Moscow invaded Ukraine just over a year ago.
From Davos to Aspen, American Treasury officials tout the unprecedented scale and scope of this powerful economic weapon.
And why not? The effort has been impressive. The US government task forces have beached scores of yachts, grounded planes, blocked hundreds of millions of dollars of central bank assets and cut Russian financial institutions off from the global SWIFT financial system.
Sanctions are an ancient game: in 432 B.C. Athens crushed its rival — Megara — by banning their traders from Athenian marketplaces.
For the U.S. government in the 21st century, economic sanctions aren’t merely second nature, they’ve become a central tool of foreign policy. More than 10,000 people and dozens of countries are subject to sanctions worldwide.
But more than 100 countries haven’t signed on to those efforts. Which is why oil from the Urals still flows to Asia,Turkey and most of Africa, while grain stolen from Ukraine is winding up across the Black Sea in Russia.
Meanwhile, the profits of this illicit trade is finding its way to places like Dubai, now chockablock with “sanctioned” Russians looking for real estate.
This isn’t to say that we shouldn’t support Ukraine: we should — and we must. But while it makes sense to financially cripple our avowed enemies — Russia, China, Iran, North Korea — coalitions are forming around ways to avoid existing sanctions and to protect against the risk of future sanctions.
Much of the action involves creating alternatives to the dollar as the world’s default currency. If you can keep your reserves in another currency or park them in physical assets like gold or commodities, the thinking goes, you’re halfway to safety.
Take China, for whom supplanting and discrediting the dollar is a key component of its “winning without fighting” campaign known a detailed in the book Unrestricted Warfare. The sanctions push, however necessary, has accelerated China’s quest to defeat the dollar, and many other nations are taking note.
While a chorus of experts still insists that there’s no alternative to the dollar, this is untrue. The dollar will dominate as long as it serves the interest of those who use it. Once the dollar begins placing assets at risk, alternative tools of commerce are certain to emerge. And they already are.
Make no mistake: a shift away from the dollar would be a huge blow to America’s international standing. The days of being able to print limitless amounts of currency could end, along with our ability to buy foreign goods cheaply.
Stark proof that a new game is afoot filtered out of Davos last month. Saudi Arabia’s Finance Minister, Mohammed Al-Jadaan, made the stunning announcement that–for the first time in 48 years — the world’s biggest oil producer was open to trading in currencies other than the U.S. dollar.
That’s a far cry from the deal Richard Nixon cut with King Faisal decades ago to solely accept dollars as payment for oil. (In exchange, Nixon agreed to protect the Kingdom from Soviet, Iranian and Iraqi aggression.) That pact laid the groundwork for a strong dollar as oil money began to flow through the Federal Reserve.
Today, China imports 1.4 million barrels of oil a day from Saudi Arabia (up 39% over the past year), making it the Kingdom’s largest customer. Which is why both sides are seeking cheaper alternatives to using dollars for every transaction. With Aramco investing in a massive new refinery in China, the relationship will only deepen.
The Saudi shift is only the latest data point. At the 2022 BRICS summit in Beijing, Vladimir Putin announced plans to expand the Shanghai Cooperation Organization (SCO) and develop an alternative for international payments using a currency basket of Chinese RMB yuan, Russian rubles, Indian rupees, Brazilian reals, and South African rand. For reference, the SCO is the world’s largest regional organization, representing 40% of the world’s population and 30% of global GDP.
A new currency is only part of the picture. China is pioneering new exchanges to shift commodity trading from Western institutions like the troubled London Metal Exchange and the New York Mercantile Exchange.
Even the Europeans have gotten into the act, by creating a special-purpose vehicle — INSTEX — to facilitate non-dollar, non-SWIFT humanitarian transactions with Iran to sidestep U.S. sanctions. Russia, predictably, expressed interest in participating and the first transaction was completed in March 2020 to facilitate a medical equipment sale to Iran to combat COVID.
Russia and Iran are also developing a gold-backed stablecoin, oil traders are already using the UAE’s dirham to settle oil trades and the Indian rupee is finally being positioned as an international currency.
The beat goes on: China’s Cross-Border Interbank Payment System (CIPS) processes only 15,000 transactions a day — Western-favored CHIPS moves 250,000 daily — but it’s growing. Russia offers its own System for Transfer of Financial Messages to allow users to bypass SWIFT.
Even the Swiss-based Bank for International Settlements — Hitler’s banker — is getting into the act, creating a renminbi liquidity line to support contributing central banks in times of crisis. So far, the central banks of Chile, Hong Kong, Indonesia, Malaysia, and Singapore have subscribed.
In the 21st century, a currency’s value — including the dollar — will become increasingly competitive. If there is less demand for dollars, the value of the dollar will decline. Everything will become more expensive. Not all at once, but over time — making deficit spending more costly or, unthinkably, impossible.
It’s not farfetched to imagine the U.S. experiencing a debt crisis because no one shows up to buy its bonds. The U.S. dollar will become just one more currency, among many. And ultimately, if the dollar loses its shine, so will the ability of the U.S. to project power.
To stem this tide, hard choices must be made: like strategically reducing our enemy count even as we continue to support allies like Ukraine. Perhaps most difficult, the U.S. must get its economic house in order by — once and for all — finally figuring out how to live within its means.
—–
Jay Newman was a senior portfolio manager at Elliott Management and is the author of “Undermoney,” a thriller about the illicit money that courses through the global economy.
END
U.S. bails out Silicon Valley and Signature Bank and their uninsured depositors
Submitted by admin on Sun, 2023-03-12 19:17Section: Daily Dispatches
Who was worried about bail-ins?
* * *
SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis
By Nick Timiraos The Wall Street Journal Sunday, March 11, 2023
U.S. regulators took control of a second bank on Sunday and raced to roll out emergency measures to stem potential spillovers from Friday’s swift collapse of Silicon Valley Bank, backstopping uninsured depositors and making more funding available to the banking system.
Regulators announced that Signature Bank, one of the main banks for cryptocurrency companies, was closed Sunday. The New York bank’s depositors will be made whole, officials said.
Officials took the extraordinary step of designating SVB and Signature Bank as a systemic risk to the financial system, which gives regulators flexibility to backstop uninsured deposits.
The Federal Reserve and the Treasury Department also used emergency lending authorities to establish a new facility to backstop bank deposits.
Regulators announced the moves in a joint statement from Treasury Secretary Janet Yellen, Fed Chair Jerome Powell, and Federal Deposit Insurance Corp. Chair Martin Gruenberg. The group said that depositors at SVB and Signature would have access to all of their money on Monday. …
Pam and Russ Martens: Silicon Valley Bank was a Wall Street IPO pipeline in drag as a U.S.-insured bank
Submitted by admin on Mon, 2023-03-13 11:12Section: Daily Dispatches
By Pam and Russ Martens Wall Street on Parade Monday, March 13, 2023
If you want to genuinely understand why Silicon Valley Bank (SVB) failed and why Jerome Powell’s Fed led the effort yesterday to make sure $150 billion of the bank’s uninsured depositors’ money would be treated as FDIC insured and available today, you need to take a look at how the bank defined itself right up until it blew up on Friday.
This was a financial institution deployed to facilitate the goals of powerful venture capital and private equity operators, by financing tech and pharmaceutical startups until they could raise millions or billions of dollars in a Wall Street Initial Public Offering (IPO). The bank was also involved in managing the wealth of those startup millionaires or billionaires once they struck it big in an IPO.
Many of the former startup companies also continued to keep their operating money at the bank – in many cases in the millions of dollars, ignoring the fact that just $250,000 of that was insured by the Federal Deposit Insurance Corporation (FDIC). Last Friday, dozens of publicly-traded companies made filings with the Securities and Exchange Commission indicating that they had large sums of uninsured deposits now frozen at Silicon Valley Bank. Several indicated that the amounts represented 23 to 26 percent of the company’s cash and/or cash equivalents.
Roku, Inc., the publicly-traded manufacturer of digital media players for video streaming, reported the following to the SEC: “The Company has total cash and cash equivalents of approximately $1.9 billion as of March 10, 2023. Approximately $487 million is held at SVB, which represents approximately 26% of the Company’s cash and cash equivalents balance as of March 10, 2023.”
Publicly-traded Oncorus, Inc., a biopharmaceutical company focused on developing RNA-based medicine for cancer patients, reported the following to the SEC: “The Company informs its investors that it has deposit accounts with SVB with an aggregate balance of approximately $10 million, which is approximately 23% of the Company’s total current cash, cash equivalents and short-term investments. In addition, the Company has a standby letter of credit in place with SVB of approximately $3.4 million securing obligations under its lease agreement with IQHQ-4 Corporate Drive, LLC.”
In big, bold type on its website, Silicon Valley Bank bragged that “44% of U.S. venture-backed technology and healthcare IPOs YTD [year-to-date] bank with SVB.”
To put it bluntly, this was a Wall Street IPO machine that enriched the investment banks on Wall Street by keeping the IPO pipeline moving; padded the bank accounts of the venture capital and private equity middlemen; and minted startup millionaires for ideas that often flamed out after the companies went public. These are the functions and risks taken by investment banks. Silicon Valley Bank – with this business model — should never have been allowed to hold a federally-insured banking charter and be backstopped by the U.S. taxpayer, who was on the hook for its incompetent bank management.
We say incompetent based on this fact alone (although there were clearly lots of other problem areas): $150 billion of its $175 billion in deposits were uninsured. The bank was clearly playing a dangerous gambit with its depositors’ money. …
Richard Beale, the owner and managing director of Roma Numismatics, a London-based auction house that dealt in ancient coins, was arrested in New York in January on multiple charges relating to the sale of a multimillion-dollar coin, according to arrest warrants and a report by U.S. Homeland Security Investigations obtained by ARTnews.
1. YOUR EARLY CURRENCY/GOLD AND SILVER PRICING/ASIAN AND EUROPEAN BOURSE MOVEMENTS/AND INTEREST RATE SETTINGS//MONDAY MORNING.7:30 AM
ONSHORE YUAN: CLOSED UP TO 6.8724
OFFSHORE YUAN: 6.8928
SHANGHAI CLOSED UP 38.62 PTS OR 1.20%
HANG SENG CLOSED UP 376.05 PTS OR 1.95 %
2. Nikkei closed DOWN 311.01 PTS OR 1.11%
3. Europe stocks SO FAR: ALL RED
USA dollar INDEX DOWN TO 103.84 Euro RISES TO 1.0662 UP 32 BASIS PTS
3b Japan 10 YR bond yield: FALLS TO. +.202!!(Japan buying 100% of bond issuance)/Japanese YEN vs USA cross now at 133.24/JAPANESE YEN FALLING AS WELL AS LONG TERM 10 YR. YIELDS RISING //EVENTUALLY THIS WILL BREAK THE JAPANESE CENTRAL BANK.
3c Nikkei now ABOVE 17,000
3d USA/Yen rate now well ABOVE the important 120 barrier this morning
3e Gold UP /JAPANESE Yen UP CHINESE YUAN: UP-// OFF- SHORE: UP
3f Japan is to buy INFINITE TRILLION YEN’S worth of BONDS. Japan’s GDP equals 5 trillion usa
Japan to buy 100% of all new Japanese debt and NOW they will have OVER 50% of all Japanese debt.
3g Oil UP for WTI and UP FOR Brent this morning
3h European bond buying continues to push yields lower on all fronts in the EMU. German 10yr bund DOWN TO +2.224%***/Italian 10 Yr bond yield FALLS to 4.135%*** /SPAIN 10 YR BOND YIELD FALLS TO 3.312…** DANGEROUS//
3i Greek 10 year bond yield FALLS TO 4.205//(ITALY WORSE THAN GREECE?)
3j Gold at $1887.80//silver at: 21.07 7 am est) SILVER NEXT RESISTANCE LEVEL AT $30.00
3k USA vs Russian rouble;// Russian rouble UP 0 AND 91/100 roubles/dollar; ROUBLE AT 75.18//
3m oil into the 75 dollar handle for WTI and 80 handle for Brent/
3n Higher foreign deposits out of China sees huge risk of outflows and a currency depreciation. This can spell financial disaster for the rest of the world/
JAPAN ON JAN 29.2016 CONTINUES NIRP. THIS MORNING RAISES AMOUNT OF BONDS THAT THEY WILL PURCHASE UP TO .5% ON THE 10 YR BOND///YEN TRADES TO 133.24/10 YEAR YIELD AFTER BREAKING .54%, LOWERS TO .202% STILL ON CENTRAL BANK (JAPAN) INTERVENTION
30 SNB (Swiss National Bank) still intervening again in the markets driving down the FRANC. It is not working: USA/SF this 0.9147–as the Swiss Franc is still rising against most currencies. Euro vs SF 0.9785well above the floor set by the Swiss Finance Minister. Thomas Jordan, chief of the Swiss National Bank continues to purchase euros trying to lower value of the Swiss Franc.
USA 10 YR BOND YIELD: 3.507% DOWN 19 BASIS PTS…GETTING DANGEROUS//
USA 30 YR BOND YIELD: 3.674 DOWN 5 BASIS PTS//INVERTED TO THE 10 YEAR!!
USA 2 YR BOND YIELD: 4.1738 DOWN 41 BASIS PTS
USA DOLLAR VS TURKISH LIRA: 18,97…
GREAT BRITAIN/10 YEAR YIELD: 3.458% DOWN 18 BASIS PTS
end
i.b Overnight: Newsquawk and Zero hedge:
FIRST, ZEROHEDGE (PRE USA OPENING// MORNING
The following is your most important commentary today: the bailout of 3 USA banks and its consequences courtesy of zerohedge. He explains the credit event on Friday and how the Treasury is freaking out. In a nutshell, the FDIC is gone and the Fed is guaranteeing all USA deposits. The three banks, Silvergate, Silicon Valley and Signature bank witnesses their shareholders and debt holders wiped out. The derivatives orchestrated by these banks are not bailed out. No doubt that the Fed will not raise rates an inch anymore. QE will also no doubt commence shortly. The dollar will collapse and gold will be its beneficiary. All of the losses on the books of these banks and future banks will be absorbed by the Fed at over 620 billion dollars so far!!
Please read…
(zerohedge)
THE BAILOUT OF THREE USA BANKS AND ITS CONSEQUENCES:
What Bank Bailout Does, And Why US Treasury Is Freaking Out
Here’s What The Latest Bank Bailout Does, And Why The Treasury Is Quietly Freaking Out
by Tyler Durden
Sunday, Mar 12, 2023 – 09:13 PM
And so, we got our “credit event” and the Fed panicked, as did the Treasury, and the FDIC…
While we reported the big picture of the latest bank bailouts by the Big Three regulators, what is most notable is today’s latest entry to the Fed’s alphabet soup of bailout facilities, the BTFP lending program which, in theory, “will make loans on high quality collateral” (by which the Treasury simply means collateral that has already incurred mark-to-market losses of over $600 billion; more below).
The BTFP – or as we call it, the Buy The F-ing Pivot – is basically another bank bailout facility because no matter what you may read elsewhere (as the propaganda media now scrambles to avoid using words such as “bailout” in favor of the far less Democrat snowflake-triggering “backstop”), one which gives banks full credit for unrealized losses on their Held to Maturity Books, losses which as we showed last week amount to nearly a quarter trillion dollars at just the big 4 banks.
As the WSJ’s Ben Eisen recaps, “the facility will allow banks to take advances from the Fed for up to a year by pledging Treasury’s, mortgage-backed bonds and other debt as collateral.” And by allowing banks to pledge their bonds – not just at current market price but at cost (or at par) – banks can meet customer withdrawals without having to sell their bonds at a loss, which is what Silicon Valley Bank did last week, sparking a run on the bank.
Indeed, as Eisen underscores, the biggest draw of this facility is that “banks can borrow funds equal to the par value of the collateral they pledge, according to the Fed’s announcement. This means that the Fed won’t look to the market value of the collateral, which in many cases reflect big unrealized losses due to the jump in interest rates.”
That is a huge gift for the banks which are sitting on some $620 billion in unrealized losses on all securities (both Available for Sale and Held to Maturity) at the end of last year, according to the Federal Deposit Insurance Corp. It also means that just the Big 4 banks – as shown in the chart above – are getting a $210 billion bailout.
But wait, there’s more: the Fed also won’t demand that banks pledge collateral in excess of the advances they are taking, which is typically the case when banks borrow from, say, the Federal Home Loan Bank system.
And if banks can’t repay all the advances in a year’s time? The Treasury Department is providing $25 billion of credit protection to the Fed just in case. “The Federal Reserve does not anticipate that it will be necessary to draw on these backstop funds,” the Fed said in its announcement Sunday night.
That, in a nutshell, is how the TSY/Fed/FDIC hope to mitigate stress on the bank asset side.
At the same time, on the liability side (where the deposits are), the regulatory trio hopes that by making whole all depositors – including uninsured corporate depositors (those with more than $250,000 in deposits – at banks like the now defunct Silicon Valley Bank and Signature Bank, they will stem and contain the real epicenter of the current bank crisis: the bank run that is spreading from just SIVB as of Friday, to other banks (and the sudden and unexpected collapse of Signature Bank).
An artist’s impression of what the new FDIC sticker that graces the window of every bank teller is shown below.
And while we applaud the Fed’s desperate attempt to undo decades of errors by the Fed (because the reason why small banks are collapse left and right now is precisely because of the Fed’s aggressive hiking campaign which is a consequence of the Fed’s aggressive easing campaign preceding it, and so on), some – such as the ultra-liberal and socialist mouthpiece of the deep state, WaPo – can’t help but wonder if what just happened is even legal or in the Fed’s charter (since the Fed is taking on outright losses by valuing BTFP collateral at par and not at a “market” set by the Fed itself).
In fact, here is WaPo reporter Jeff Stein asking if “all uninsured deposits *nationally* are now implicitly backstopped by the FDIC?” Spoiler: yes, they are, but if the Treasury were to admit that, Monday would see historic howls of outrage from the left which will not be happy to learn that taxpayers are now backstopping major corporations.
I asked Treasury this question on a call with reporters this evening. This was their response pic.twitter.com/LeM9clLzmT — Jeff Stein (@JStein_WaPo) March 12, 2023
Legality of the latest Biden admin’s actions aside, will what was unveiled tonight be enough to restore public trust in small banks – the same ones we profiled in “Here Are The Banks Facing The Highest Deposit-Run Risk”? We’ll find out very soon when all the wire transfer requests from the weekend hit and banks suddenly find themselves scrambling to reallocate capital.
One thing we do know is that as of Q3, the FDIC’s Deposit Insurance Fund had some $125BN in it. Which means it has the firepower to plug $125BN in bank runs. Is that enough?
Well, the US has $18 trillion in deposits, and recall that $42BN in SVB deposits were pulled in hours, not days, not weeks… hours. So, you’d have to forgive us if we are just a little skeptical that the Treasury’s $25BN mini backstop bazooka and the FDIC’s $125BN in bank run buffer will do anything to prevent a far bigger bank crisis now that the horses have fled the barn.
But it’s not just us who are skeptical: according to Bloomberg is at least one senior US Treasury official who said that “there are some institutions with issues similar to Silicon Valley Bank”, while highlighting that moves by regulators Sunday are aimed at assuring deposits are safe. Well of course they are, the question is are the moves enough!
“There are some institutions that look like they have some similarities to SVB and perhaps to Signature”, the Treasury Department official told reporters on a call on Sunday, speaking on condition of anonymity, adding that “it could be that there are concerns about depositors at those institutions.”
It’s almost as if the official is hoping to accelerate the bank run on Monday.
There was more: the official highlighted the Federal Reserve’s new Bank Term Funding Program, which will make loans on “high quality collateral”, so high quality that they are carrying $600MM in unrealized losses at this moment. The official says that this “should” provide some assurance that depositors do not need to move to other institutions.
So… the Treasury’s entire plan is that the BTFP bailout facility – which is really backstopped by just $25BN in TSY funding – will be enough to reverse a small bank sector bank run, one which we saw on Friday drained $42 billion, or almost double the existing backstop facility, in hours!
Well, good luck with that.
The official concluded by saying – or rather hoping – that “this situation is not 2008, as there are a lot of reforms that have been put in place.” Yes, so many reforms that two bank with $300 Billion in assets – half of what Lehman had – just collapsed in the span of 2 trading days.
One can’t possibly imagine why depositors would feel nervous after this, and seek to pull any money they have at the first possible opportunity. And for those who believe depositors may in fact – get a little nervous, we urge you to reread our post “Here Are The Banks Facing The Highest Deposit-Run Risk.”
end
Futures Tumble, Yields Crater, Banks Plunge As Market Realizes Latest Bailout Is Insufficient
MONDAY, MAR 13, 2023 – 08:18 AM
Yesterday, when describing the nuances of the latest bank bailout (and big bank subsidy) we explained why the “Treasury is quietly freaking out” and asked rhetorically “ETA until market realizes $25BN is nowhere near enough and futs react appropriately?”
Turns out the answer was about 12 hours, because after initially spiking, and rising just shy of 4,000 amid widespread acceptance that the Fed’s tightening cycle is finally over, fears have shifted back to the growing bank crisis and depositor run, and futures were back down to 3,900, up just 0.2%, and wiping out most of their overnight gains…
… as bank stocks have resumed their plunge led by small US banks such as First Republic, which is down 60% this morning as the market realizes the bank run is only starting…
… but it’s not just the regional US banks which we warned were about to be wiped out: big international banks are also getting crushed with Italian bank giant UniCredit shares halted, while Credit Suisse shares are not only 10% lower to new all time lows, but its Credit Default Swaps just hit a record wide.
Here are some notable premarket movers:
Most US banking stocks cede early gains to trade around flat or in the red, as initial optimism fueled by US authorities’ decisive action on SVB fades and fears mount for the health of the broader financial system. JPMorgan (JPM US) -2%; Bank of America (BAC US) -6.3%, Wells Fargo (WFC US) -3.5%, Citigroup (C US) -2.7%, Charles Schwab (SCHW US) -18%, Western Alliance Bancorp (WAL US) -25%, PacWest Bancorp (PACW US) -36%
First Republic Bank (FRC US) shares fell 63% after the US lender moved to try and quell concern about its liquidity following the failure of Silicon Valley Bank. The declines came after the bank said late Sunday it had more than $70 billion in unused liquidity from agreements that included the Federal Reserve and JPMorgan.
US-listed Chinese stocks rise in premarket trading, on track to halt five days of declines, as China’s new premier Li Qiang called for better cooperation between the two countries and signaled support to the private sector. Alibaba (BABA US) +0.8%, Baidu (BIDU US) +1.4%, PDD Holdings (PDD US) +1.2%, NetEase (NTES US) +1.9%, Trip.com (TCOM US) +1.2%, Li Auto (LI US) +2.8%
Cryptocurrency-exposed stocks rose after Bitcoin jumped on US agencies’ pledge to fully protect all Silicon Valley Bank depositors following the lender’s collapse. Marathon Digital (MARA US) +7.3%, Riot Platforms (RIOT US) +2.8%, Hut 8 Mining (HUT US) +5.6%, Coinbase (COIN US) +4%
Provention Bio (PRVB US) shares rise as much as 264% to $24.40 in US premarket trading after Sanofi agreed to buy the biotech for $25/share in cash, in a $2.9 billion deal intended to bolster the French drugmaker’s portfolio of diabetes medicines with a new therapy recently approved in the US.
Gold miners could be active on Monday as gold kept rising, with investors flocking to havens following the collapse of SVB. Watch shares including Barrick (GOLD US), Agnico Eagle (AEM US), Kinross (KGC US).
Meanwhile, with Goldman joining ZH in calling a Pause in the Fed’s hiking cycle, 2Y yields have plummeted an insane 50bps…
… suffering the biggest 2-day drop since Black Monday in October 1987! So much for all those macrotourists preaching “higherer for longerer”(but please buy their newsletter, they need the money to fund their own bailout).
And here is how the Fed’s rate hike narrative died a gruesome death in just 3 trading days.
While not nearly as pronounced as the collapse in the short end, the 10-year yield fell to a one-month low and the dollar extended a decline against major peers. The yield on two-year German debt plunged 38 basis points to 2.72%, putting them on course for the steepest two-day fall on record.
The turmoil following SBV’s demise has caused a rapid repricing in markets for where the Federal Reserve will take policy. Swaps traders now only roughly even odds the central bank will raise rates at its meeting next week, especially after Goldman economists said they expect no change in the policy rate following the collapse of SVB. Expectations had built for a hike of as much as 50 basis points after Chair Jerome Powell addressed lawmakers Tuesday.
“The failure of SVB puts the Fed’s focus on financial stability,” said Marija Veitmane, senior multi-asset strategist at State Street Global Markets. “This is a difficult position Fed is in, on the one hand it needs to keep hiking to arrest inflation, but also it needs to protect the financial system. Feels like a lose-lose situation for the Fed and the market” which of course is a paraphrase of what we said last Thursday.
While US futures faded fast, Europe was a mess from the start as shares of European banks and insurers slumped on Monday, while yields on European bonds fell on anticipation that the Silicon Valley Bank collapse could force central banks to slow the pace of interest rate hikes. The pan-European bank stocks index was down by the most in a year, while real estate stocks also slipped but outperformed the broader index as the sector typically benefits from dovish monetary policy shifts. Banking stocks index is down 5.7%, worst performing European sector, while the broader market loses about 2.8% Commerzbank -12%, Banco de Sabadell -9.4% and ING -9% are top losers; and of course, as noted above Credit Suisse shares down 13% to new record low.
Earlier in the session, Asian stocks erased earlier declines as bond yields slid after Goldman Sachs Group Inc. said the Federal Reserve will stand pat next week. Equities in China and Hong Kong rallied the most. The MSCI Asia Pacific Index advanced as much as 0.6%, reversing a loss of up to 0.9%. Chinese shares led the charge higher as traders bet on policy continuity after the nation retained several familiar faces in its economic leadership team, including the central bank governor. Tech shares in the region also got a boost from falling US Treasury yields as Goldman Sachs economists said the recent stress in America’s banking system may prompt the Fed to pause its monetary tightening cycle next week. It also flagged uncertainty about the rate path in the months ahead. READ: Rate Bets Unwind Is Savage Enough to Evoke Black Monday Meanwhile, Japanese benchmarks were weighed down by financial shares as investors assessed the fallout of Silicon Valley Bank’s collapse. Asia’s benchmark stock gauge is trying to recover from last week’s 2% drop as SVB’s downfall highlighted the impact of higher interest rates on the US economy and financial system. “Although we do not think there is any material fundamental impact on Asian stocks, equity investor sentiment will likely remain fragile for now,” Nomura strategists including Chetan Seth wrote in a note. Market focus will likely remain on factors such as whether there are deposit outflows from other relatively smaller regional banks, they added.
Japanese stocks fell for a second day as investors continued to assess whether Silicon Valley Bank’s failure poses risks for the broader financial markets. The Topix Index fell 1.5% to 2,000.99 as of market close Tokyo time, while the Nikkei declined 1.1% to 27,832.96. The Topix’s gauge for banks and insurers was among the biggest sector losers. Mitsubishi UFJ Financial Group Inc. contributed the most to the Topix Index decline, decreasing 3.5%. Out of 2,160 stocks in the index, 202 rose and 1,906 fell, while 52 were unchanged. “SVB’s bankruptcy news and yen’s appreciation both dragged Japanese equities lower,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities. “On the other hand, as the pace of US monetary tightening is expected to slow down given the situation, there might be some positive impacts as well.”
In FX, a gauge of the dollar fell for a third session as US government measures to ease concern over the collapse of Silicon Valley Bank curbed demand for havens. There’s expectation that the US emergency measures will limit the shock from SVB’s failure, including contagion risks, according to Teppei Ino, head of global markets research at MUFG Bank Ltd. “Dollar-yen was bought back to a certain extent as traders and investors welcomed measures including protection of depositors and securing of liquidity”.
In rates, treasury futures just off highs of the day after gapping up, as investors remained in risk-off mode as the collapse of Silicon Valley Bank reverberates through financial markets. Yields richer by more than 25bp across front-end of the curve with 2s10s, 5s30s spreads steeper by 15bp-16bp on the day; 10- year yields lower by around 12bp at 3.58% with bunds outperforming by 8bp in the sector. Curve is aggressively steepening as Fed-dated OIS swaps gap lower and rate-hike premium erodes from front-end of the curve; the 2s10s has moved from -110bps last week to 67% today after Goldman Sachs economists said they no longer expect the Fed to deliver a rate increase next week. Fed-dated OIS pricing in around 15bp of rate hikes for the March policy meeting with Fed peak gapping lower to around 4.90% for the June decision, implying around 35bp of additional hikes for this cycle.
Commodities have, ex-spot gold, come under marked pressure as risk sentiment deteriorates throughout the European morning. Specifically, WTI and Brent front months have suddenly tumbled, accelerating an earlier loss, as the market prices in a recession.
Base metals are well off best levels, given the risk tone, but are somewhat cushioned by the USD continuing to slip. Action which is assisting spot gold, alongside traditional haven allure, with the yellow metal up to USD 1893/oz at best.
Lluckily, there is nothing scheduled on todays’ econ calendar; instead we will be focusing mostly on the worsening bank crisis.
Market Snapshot
S&P 500 futures down 0.6% to 3,876.5
STOXX Europe 600 down 1.1% to 448.71
MXAP up 0.2% to 158.26
MXAPJ up 1.0% to 508.50
Nikkei down 1.1% to 27,832.96
Topix down 1.5% to 2,000.99
Hang Seng Index up 1.9% to 19,695.97
Shanghai Composite up 1.2% to 3,268.70
Sensex down 1.2% to 58,442.44
Australia S&P/ASX 200 down 0.5% to 7,108
Brent Futures down 0.2% to $82.65/bbl
Gold spot up 0.5% to $1,878.19
U.S. Dollar Index down 0.56% to 103.99
German 10Y yield little changed at 2.38%
Euro up 0.6% to $1.0710
Top Overnight News
US authorities took extraordinary measures to shore up confidence in the financial system after the collapse of Silicon Valley Bank, introducing a new backstop for banks that Federal Reserve officials said was big enough to protect the entire nation’s deposits.
The turmoil following the collapse of Silicon Valley Bank continued to spread Monday, with First Republic Bank shares falling about 60% in pre-market trading despite efforts by the US regional lender to reassure investors on its liquidity.
HSBC Holdings Plc is buying the UK arm of Silicon Valley Bank, the culmination of a frantic weekend where ministers and bankers explored various ways to avert the SVB unit’s collapse.
A more detailed look at global markets courtesy of Newsquawk
Asia-Pac stocks traded mixed with financials hit amid the fallout from the SVB collapse and subsequent failure of Signature Bank, although US equity futures were supported and there was also a gradual improvement in Asia following efforts to stabilise the financial system with bank deposits guaranteed and the Fed announced to make additional funding available to eligible depository institutions to assure that banks have the ability to meet the needs of their depositors. ASX 200 was lower with weakness seen across most industries including the top-weighted financials sector although closed off its lows owing to the resilience in commodity-related stocks and with money market rates pricing in over 75% probability of a pause at next month’s RBA meeting. Nikkei 225 retreated to beneath the 28,000 level with financial stocks dominating the list of worst performers. Hang Seng and Shanghai Comp. were positive with Hong Kong boosted by gains in tech after President Xi advocated strengthening science and technology at the closing remarks of the NPC and with Bilibili boosted following the inclusion of its Z shares to the Stock Connect, while the mainland was also kept afloat after China reported stronger-than-expected loans/financing data and surprisingly retained PBoC Governor Yi Gang as the head of the central bank.
Top Asian News
China’s parliament officially approved senior government positions with Li Qiang as Premier, while Yi Gang will remain PBoC Governor and Liu Kun will remain Finance Minister, according to Xinhua.
Chinese President Xi said China should implement a strategy of rejuvenating the country through science and education, while he added that they should work to achieve greater self-reliance, strength in science and technology, as well as promote industrial transformation and upgrading, according to Reuters.
Chinese Premier Li said China needs to further enhance scientific and technological innovation capabilities, speed up construction of a modern market system and focus on high-quality development. Li said that China will unswervingly deepen reform and opening up, while he noted there are many favourable factors supporting China’s economy but also said that China faces many difficulties this year and that it is not easy to achieve the 2023 growth target of around 5%.
China’s NBS head Kang Yi said China’s economy still contains deep structural contradictions and problems.
China reportedly privately suggested that the US consider a simultaneous visit by US VP Harris to China if House Speaker McCarthy decides to go to Taiwan, according to US sources cited by SCMP.
China’s city of Xi’an in the Shaanxi province revealed an emergency response plan last week that would enable it to shut schools, businesses and “other crowded places” in the event of a severe flu epidemic, according to CNN.
European bourses are under substantial pressure, Euro Stoxx 50 -2.8%, with banking names leading the downside as contagion concern continues, SX7P -5.5%. Action which comes despite US and UK regulators stepping in over the weekend/Monday morning (details above) as concern remains over regional banks such as First Republic and Western Alliance Bank., -62% and -22% in the pre-market respectively. Stateside, futures have been faring comparably better given the backstop measures and strength in large-cap banking names; however, this has since eroded as broader sentiment deteriorated further, ES +0.1%, RTY -0.4%. Specifically, large-cap banking names in the US are now negative; JPM -2.5%, WFC -3.3% & BAC -5.0% in the pre-market.
Top European News
Germany’s Verdi trade union called for a strike of security personnel at Berlin airport on Monday due to disputes regarding remuneration for working nights, weekends and bank holidays, according to Reuters.
Riksbank is to begin selling gov’t bonds on 4th April, to take place every calendar month except for July and August.
FX
Buck loses safe-haven mantle to the Yen, Franc and Gold.
Dollar also down vs other majors irrespective of marked risk aversion, albeit off lows
EUR/USD back below 1.0700, Cable sub-1.2100, AUD/USD under 0.6650 and NZD/USD beneath 0.6200.
PBoC set USD/CNY mid-point at 6.9375 vs exp. 6.9380 (prev. 6.9655)
Fixed Income
Benchmarks are firmer across the board amid a significant dovish adjustment to expected Central Bank activity.
Specifically, USTs are firmer by in excess of a full point, though off an earlier 114.29+ peak, with Reuters pricing now having a roughly equal chance of an unchanged announcement in March or a 25bp hike from the Fed.
Within Europe, Bunds are similarly firmer by over 200 ticks though again off best levels with the associated 10yr yield down to circa. 2.25% vs 2.55% on Friday; pricing for the ECB meeting on Thursday has seen a marked dovish move to a circa. 30% chance of 25bp compared to Lagarde’s guidance for 50bp.
Commodities
Commodities have, ex-spot gold, come under marked pressure as risk sentiment deteriorates throughout the European morning.
Specifically, WTI and Brent front months are lower by over USD 1.50/bbl and below/at USD 75/bbl and USD 81/bbl respectively.
Base metals are well off best levels, given the risk tone, but are somewhat cushioned by the USD continuing to slip. Action which is assisting spot gold, alongside traditional haven allure, with the yellow metal up to USD 1893/oz at best.
Saudi Aramco achieved a record USD 161bln profit last year and its CEO Nasser said areas of interest for potential acquisitions include China and India. Aramco’s CEO noted they are looking at major expansions and are looking at the global LNG market for potential opportunities, while he anticipates a healthy demand pick-up in China and India.
Iran said its oil exports reached the highest level since the reimposition of US sanctions and that they exported 83mln bbls of oil more since 21st March 2022 compared with the same period the prior year, according to Tasnim.
MMG (MMG AT) announced that transportation of concentrate recommenced on March 11th after the removal of roadblocks and site operations are returning to full capacity at the Las Bambas copper mine in Peru, according to Reuters.
Indian mining minister says Jammu and Kashmir governments to auction lithium blocks in the states.
Geopolitics
Ukrainian President Zelensky said Russian forces suffered more than 1,100 dead in less than a week of fighting in Bakhmut, eastern Ukraine, according to Reuters.
Russian Foreign Ministry said Russia’s position on the grain deal remains unchanged and that Russian representatives have not participated in any talks yet regarding extending the grain deal, according to Reuters.
Iranian Foreign Minister said an initial agreement was reached with the US regarding exchanging prisoners, although a White House official said that Iranian claims of a US-Iran prisoner swap deal are false, according to Reuters.
South Korea said that North Korea fired missiles from a submarine on Sunday morning and it was also reported that North Korean leader Kim convened a meeting with military leaders about practical war deterrence measures, according to Reuters and KCNA.
Chinese President Xi is reportedly planning a visit to Moscow as soon as next week, according to Reuters sources.
Russia’s Kremlin says no comment on possible Moscow visit by Chinese President Xi next week, President Putin’s participation cannot be ruled out.
Crypto
Crypto markets have waned off weekend highs with Bitcoin (BTC) dipping back towards USD 22k as global risk sentiment sources.
Crypto exchange Okcoin says USD-deposit by wire and ACH have been paused; all funds safe; order-book trading not affected; USD-withdrawal not affected.
US Event Calendar
Nothing scheduled
DB’s Jim Reid concludes the overnight wrap
To start, it has been a frantic evening of action as the authorities fought to ensure no market meltdown as Asia opened. They have succeeded on this front so far. The latest news is that overnight the Federal Reserve and Treasury announced emergency measures in order to protect the US banking system. The Fed is making it easier for banks to access the Fed’s discount window in order to turn assets that have quickly depreciated due to rising rates into cash without having to take the large losses the Silicon Valley Bank suffered last week. Essentially this would allow banks to obtain liquidity over the next year without selling assets. There are also reportedly discussions to enact extraordinary measures if there is further outflows of uninsured deposits from lenders. The crisis forced the FDIC, Federal Reserve, and Treasury Department to jointly announce that SVB depositors “will have access to all of their money starting Monday”, while signaling that they would act as lender of last resort without bailing out institutions.
Additionally, Signature Bank was shut down by NY state regulators yesterday following large deposit outflows on Friday, and the FDIC announced that they would be marketing Signature Bank to potential bidders. The Treasury Department announced that the bank’s customers will have full access to their deposits on Monday. The bank had total assets of $110.4bn versus $88.6bn of deposits at the end of 2022, making it the third largest bank failure by assets. The company, similar to Silvergate, had measurable exposure to crypto companies.
Overnight in Asia, equities are higher following the interventions. As I type, the Chinese equities are outperforming with the Hang Seng (+2.26%) leading gains followed by the CSI (+0.85%) and the Shanghai Composite. Elsewhere, the KOSPI (+0.27%) is gaining ground while the Nikkei (-1.36%) is bucking the regional positive trend as the yen continues to strengthen against the dollar.
Outside of Asia, US futures tied to the S&P 500 (+1.66%) and NASDAQ 100 (+1.75%) are sharply higher, while yields on the 10yr USTs are fairy stable although 2yr yields are -16bps at 4.43% as we go to print. Terminal has come down another -20bps to 5.07%. So a big steepening with investors reassessing how far the Fed will now go given the news. So a fascinating set up ahead of CPI tomorrow. Elsewhere, the global crypto market has managed to recover with the Bitcoin (+4.33%) trading at $22,422 in Asia trading hours.
A few big picture observations on the whole SVB story now. The first thing to say is that this is why inverted yield curves pretty much always signal bad news ahead. They tend to always signal an eventual unwind of carry trades somewhere in the financial system or economy that were done in previous quarters or years. In my opinion, the yield curve works more through what it does for behaviour of economic agents/investors rather than what it tells you about what the market thinks of the economic environment. Many think that QE had distorted the signal of the yield curve and therefore an inverted yield curve is more sanguine in this cycle. I couldn’t disagree more with this view as I don’t care why the curve inverts, I just care that it does. The rest is a risk aversion / animal spirits trade.
Anyway, last week in fact saw two US financial institutions fail, and now three with Signature overnight. There was a slight shrug of the shoulders over Silvergate folding on Wednesday, given its crypto association, but an almighty storm when Silicon Valley Bank (SVB), the 16th largest US bank by consolidated assets, did the same on Friday. US deposit-taking bank defaults are not that rare but most of these are small institutions. For those under the FDIC, there have been 562 failures since 2001 (490 between 2008-2013, 31 since 2015) but this is the first for three years – the longest gap over this period. Since 2009 only 5% of US bank failures imposed losses on uninsured depositors. However, the average deposit level of these were $0.4bn and maximum $1.5bn, with most FDIC insured. SVB had around $175bn deposits at YE ’22 with the vast majority not qualifying for FDIC insurance (<$250k). In terms of deposit-taking banks this is the second biggest bank failure in history behind Washington Mutual in 2008.
For those not following the story, the simplest explanation of SVB’s demise is that they were super exposed to tech venture capital depositors who had been seeing cash burn as the tech bubble burst, whilst previously having loaded up their balance sheet with positive carry trades into bonds when deposits soared during the tech boom and ultra low rate environment circa 2021. Something always, always breaks when the Fed hikes, and with a deeply inverted curve now, the carry trade came unstuck once there was more demand from depositors to withdraw their cash for 3 reasons. 1) cash burn of tech companies, 2) higher deposit rates elsewhere as rates rose, and 3) the final fears, after the huge security sale mid-week, that the bank was in trouble. So ultimately we saw an irreversible bank run.
To us this is a symptom of a perfect storm of all but one of the problems we’ve felt would eventually hurt markets this year. SVB’s woes are a combination of one of the largest hiking cycles in history, one of the most inverted curves in history, one of the biggest bubbles in tech in history bursting, and the runaway growth of private capital. The one missing ingredient not involved here is a US recession. One can only imagine the contagion this story would bring if we also had a US recession at the same time. We don’t for now. However, it would be hard to say that this boom-bust cycle is deviating too far from the likely script at the moment. That being… too much stimulus -> very high inflation and an asset bubble -> aggressive central bank hikes -> inverted curves -> tighter lending standards/accidents -> recession.
Overnight we have published an update on what SVB means for Private Capital, which follows our bearish 2023 outlook for the sector back in November (see here). The new piece from Luke Templeman (here) suggests the Silicon Valley Bank failure crystallises the serious risks in the private capital industry and shows how a tech-driven contagion can affect broader markets. Within the chartbook, we put the SVB collapse in context of how its key drivers directly impact the private capital and broader technology market. We also show how the large gaps in private fundraising increase the risk for everyone in the vertical (banks, VCs, portfolio companies), how heavily private markets are exposed to the TMT sector, and how dry powder may not truly provide a buffer. Investors in private capital may soon have hard choices to make.
If last week’s excitement wasn’t enough for you, unless you’ve been living on Mars, you’ll be aware that tomorrow sees a pivotal US CPI print (full preview below). Also important will be the ECB meeting on Thursday. In terms of other data, US retail sales (Wednesday), China’s monthly data dump (tomorrow) and various US housing market releases through the week are the highlights. Don’t expect any commentary from the Fed as they are on their pre-FOMC blackout ahead of next Wednesday’s rate decision. It’s fair to say that the US CPI report tomorrow is not only hotly anticipated but will likely be a swing factor in terms of 25 or 50bps from the Fed next week, alongside the fall-out from SVB.
Our economists have issued a preview note here. In brief they think the headline CPI (+0.37% forecast vs. +0.52% previously) and core CPI (+0.36% vs. +0.42%) will both round to 0.4% mom which is where the consensus is. This will translate to headline dropping 0.4pp to 6% YoY and core down a tenth to 5.5% YoY. They discuss how at the component level, there will be much focus on core goods, as recent disinflationary pressures from used cars and trucks wane.
Retails sales and PPI (both Wednesday) will also factor into the Fed’s 25/50bp decision. For retail sales, after a bumper January, February’s data should see some reversal, according to our economists. A dip in unit motor vehicle sales will push headline sales (-1.2% vs. +3.0%) lower, while the expected payback from food services and drinking places as well as nonstore retailers should weigh on sales excluding automobiles (-1.1% vs. +2.3%) and retail control (-0.3% vs. +1.7%). For PPI, headline (+0.5% vs. +0.7% mom) will slightly outpace core (+0.4% vs. +0.5%). Rounding out the main US data, investors will also get an array of housing market indicators including the NAHB housing market index (Wednesday) and housing starts and building permits (Thursday).
Another key event will be the ECB decision on Thursday. The meeting follows upside surprises from recent inflation readings across the bloc as well as generally stronger-than-expected economic performance. Our European economists (full preview here) expect a third consecutive +50bps hike, taking the deposit facility rate to 3.00%, as well as messaging supporting for another +50bps move in May. After that, they see a downshift in June to +25bps, taking the terminal deposit rate to 3.75%. However, they emphasise upside risks to the landing zone of 3.50%-4.00% and do not rule out a terminal above 4%.
Over in the UK, markets will be awaiting the labour market data released tomorrow and the Budget unveiled the next day. For the latter, see a preview from our UK economist here. He expects no large surprises together with a focus on fiscal prudence, with the cost-of-living crisis and public sector services likely the main themes for spending.
In Asia, China’s retail sales and industrial production data tomorrow will be at the forefront of investors’ attention. Current median estimates on Bloomberg are pointing to a strong rebound, with retail sales seen growing 3.5% YTD YoY (vs -0.2% in January) and industrial production forecasted to expand by +2.6% (vs 3.6% in January).
See the day-by-day week ahead at the end for more of the week’s highlights.
Looking back on a monumental last week, on Friday, markets were already roiling from the growing concerns about SVB and its implications, before the US jobs report for February then accelerated the rally in sovereign bonds. The report showed nonfarm payrolls coming in above expectations at 311k (vs. 225k expected), but since average hourly earnings grew by their weakest pace in a year at +0.2% (vs. +0.3% expected), the report wasn’t taken to be as hawkish as the headlines might have suggested at first. In addition, labour force participation rose a tenth to 62.5% (vs. 62.4% expected), a fresh indication that labour supply has been improving, and the unemployment rate ticked up two tenths to 3.6% (vs. 3.4% expected).
On the back of all that, markets March Fed contracts fell -5.6bps to an expected 33bps hike and thus nearer to 25bps again having been around 45bps earlier in the week. Terminal ended the week at 5.285% for the June meeting after being as high as 5.691% for the September meeting on Wednesday after Chair Powell appeared in front of both chambers of Congress and before the SVB news broke. On the week, the terminal rate was down -15.9bps (-23bps Friday), whilst futures are now pricing in -40bps of rate cuts by year-end from the highs.
Off the back of this, 10yr Treasury yields saw their largest move lower since last November, as they fell back -20.5bps on Friday to their lowest level since mid-February at 3.699%. Overall 10yr Treasury yields were down -25.3bps last week. The 2yr yield posted a similar move, coming down -27.0bps last week (-28.4bps on Friday) to their lowest level since early February. Across the pond, 10yr bund yields fell back -20.7bps (-13.5ps on Friday) last week to 2.508%, its lowest point since the first week of the new year. 2yr bunds fell -18.0bps on Friday in its most significant daily down move since July but “only” down -11.7bps on the week.
The S&P 500 was down -4.55% on the week (-1.45% Friday), and is now only just better than unchanged for 2023 (+0.58% YTD). Given the shock to the US banking sector, the KBW bank index was down -16.09% on the week (-4.74% on Friday), which was the worst weekly performance since February 2020. The pain from SVB spread through the sector with BofA down -11.39% (-0.88% Friday), JPM down -6.97% (+2.54% Friday), and Citi down -7.66% (-0.53% Friday) over the course of the week. Europe was caught in the downdraft, leaving the STOXX 600 down -2.26% week-on-week (-1.35% on Friday), whilst the CAC and DAX fell -1.73% (-1.30% on Friday) and -0.97% (-1.31% on Friday) respectively.
With risk markets selling off, credit spreads widened significantly on the week. The Euro Crossover HY CDS index was +29.3bps wider (+29.6bps wider Friday) and EUR IG CDS +6.4bps wider on the week. EUR HY CDS is still -48bps tighter YTD, with EUR IG having tightened -8bps since the start of the year. US credit significantly underperformed as the US HY CDS index spiked +65.5bps wider (+19.7bps Friday) with IG +12.2bps wider (+4.2bps Friday). The weekly widening has left USD HY CDS +14bps wider YTD, while US IG CDS is now +1bps wider YTD.
Cash indices in the US also significantly widened with $HY cash spreads widening +33bps Friday to finish the week +53bps wider at 450bps, while $IG cash spreads were +16bps wider on the week (+9bps Friday) to finish at 136bps. That was the largest widening in $IG cash spreads since the depths of the Covid sell-off in March 2020, while $HY cash spreads widened the most since June 2022.
Silicon Valley Bank bonds sold off sharply on Friday As an example, the price on the 2033 SIVB bonds fell from $88.37 on Wednesday to $42.92 by the close on Friday, having hit a low of $37.40 intraday. The bonds started the week rated BBB by S&P, and were initially downgraded to BBB- on Thursday before the rating was withdrawn on Friday after the regulators stepped in.
Lastly, oil was firmly in the red last week as Brent crude fell back -3.55% (+1.46% on Friday) and WTI by -3.77% (+1.27% on Friday). Gold outperformed on Friday, posting gains of +2.03%, up +0.63% on a week-on-week basis. European natural gas futures were a clear outperformer, rising +21.23% on Friday, its largest move higher since last June, and +17.51% week-on-week as a late winter chill hit parts of Europe and the UK.
AND NOW NEWSQUAWK (EUROPE/REPORT)
Risk sentiment deteriorates as contagion concerns continue around the banking sector – Newsquawk US Market Open
MONDAY, MAR 13, 2023 – 06:48 AM
Fed said it is to provide liquidity to US depository institutions in which each Federal Reserve bank would make advances to eligible borrowers.
European bourses are under substantial pressure, with banking names leading the downside as contagion concern continues, SX7P -5.5%.
Stateside, futures have been faring comparably better given backstop measures; though, they are well off best with ES U/C while large & small banking names are heavily afflicted.
HSBC purchased SVB UK; BoE says the UK banking system remains well capitalised. ECB reportedly does not see a direct impact on EZ banks, via RTRS.
Fixed income is firmer across the board amid a significant dovish adj. to expected Central Bank activity; GS no longer expects a Fed hike at the March meeting.
Amidst this, the USD has been under pressure while CHF and JPY outperforming on haven allure with commodities lower given risk but USD perhaps cushioning slightly.
Looking ahead, highlights include US NY Fed Consumer Expectations Survey, BoE’s Dhingra.
Or why not try Newsquawk’s squawk box free for 7 days?
SVB/BANKS
US/CANADA
Goldman Sachs said it no longer expects the Fed to hike rates at the March meeting in light of recent stress in the banking system and sees US measures will provide substantial liquidity to banks facing deposit outflows and improve depositor confidence, while it still expects the Fed to hike 25bps in May, June and July with its terminal rate view now at 5.25%-5.50%.
Fed announced that it is taking decisive actions to protect the US economy by strengthening public confidence in the bank system and approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank (SIVB). Fed said it is to provide liquidity to US depository institutions in which each Federal Reserve bank would make advances to eligible borrowers, taking as collateral certain types of securities. Fed said none of the losses by SVB will be borne by the taxpayer and it also declared a similar systemic risk exception for Signature Bank (SBNY) which was closed by its state chartering authority, while it was announced that all depositors will be made whole and will have access to all their money on Monday but shareholders and certain unsecured debt holders will not be protected.
Fed said the core goal of the new program is to ensure bank depositors that their money is safe and there is no topline number on what will be available in the facility, while the aim is to meet demand from banks for liquidity as needed. Furthermore, it stated that the program will dramatically reduce any incentive for depositors to withdraw but owners of the two failed banks will lose their investments.
US President Biden said the Treasury Secretary and National Economic Director reached a solution with banking regulators and the solution avoids putting taxpayer dollars at risk, while he added that American people and businesses can have confidence their bank deposits will be there when they need them, according to Reuters.
US Treasury senior official said the steps on SVB (SIVB) were taken to stabilise the financial system and protect depositors, while they will work with Congress and financial regulators to further strengthen the financial system.
Pershing Square’s Ackman said more banks will likely fail despite the intervention, but we now have a clear roadmap on how the government will manage them.
Canada’s Superintendent of Financial Institutions took temporary control of Silicon Valley Bank’s Canadian branch, according to a statement.
Regional banks are most likely to prevail in the SVB sale process and large lenders such as JPMorgan Chase and Bank of America are likely to not be in the running to absorb SVB, while an ideal bidder would likely be a regional bank like PNC Financial, US Bank, Truist or Capital Bank, according to The Information. Furthermore, PNC Financial Group and Royal Bank of Canada were early suitors for Silicon Valley Bank but their interest has cooled, while it was also reported that the chances of Silicon Valley Bank or Signature Bank being acquired by a rival bank was unlikely as all potential buyers have so far walked away, according to people with direct knowledge of the matter cited by FT.
UK/OTHER
HSBC (HSBA LN) has acquired Silicon Valley Bank UK Limited for GBP 1; assets and liabilities of the parent companies are excluded from the transaction. Deposits will be protected, with no taxpayer support. Customers will be able to access their deposits and banking services as normal from today.
BoE says the wider UK banking system remains safe, sound and well capitalised. Confirms all depositors money with SVB UK is safe and secure as a result of the transaction. Adding, today’s announcement supersedes the Bank’s 10 March statement.
Prior to this, on Friday the BoE said that it is to apply to the court to place Silicon Valley Bank UK Limited into a bank insolvency procedure and that SVB UK’s other assets and liabilities will be managed in the insolvency by the bank liquidators. BoE noted that SVB UK has a limited presence in the UK and no critical functions supporting the financial system, while the firm will stop making payments or accepting deposits in the interim, according to Reuters.
For context: SVB UK had nearly GBP 7bln in deposits when the BoE deemed it insolvent on Friday and the government seeks to tap Middle East money to buy out the Silicon Valley Bank unit, according to FT. it was also reported that Bank of London submitted a formal proposal for the UK arm of Silicon Valley Bank, while a separate report noted that HSBC (5 HK) emerged as a potential bidder as the government races to secure an 11th-hour rescue of Silicon Valley Bank UK, according to Reuters and Sky News.
German bank regulator orders a temporary suspension of operations on SVB Germany branch; says German branch has no system relevance.
ECB does not plan an emergency meeting of its supervisory board, according to Reuters sources; supervisor does not see a direct impact of the SVB collapse on Eurozone banks.
EUROPEAN TRADE
EQUITIES
European bourses are under substantial pressure, Euro Stoxx 50 -2.8%, with banking names leading the downside as contagion concern continues, SX7P -5.5%.
Action which comes despite US and UK regulators stepping in over the weekend/Monday morning (details above) as concern remains over regional banks such as First Republic and Western Alliance Bank., -62% and -22% in the pre-market respectively.
Stateside, futures have been faring comparably better given the backstop measures and strength in large-cap banking names; however, this has since eroded as broader sentiment deteriorated further, ES +0.1%, RTY -0.4%.
Specifically, large-cap banking names in the US are now negative; JPM -2.5%, WFC -3.3% & BAC -5.0% in the pre-market.
Benchmarks are firmer across the board amid a significant dovish adjustment to expected Central Bank activity.
Specifically, USTs are firmer by in excess of a full point, though off an earlier 114.29+ peak, with Reuters pricing now having a roughly equal chance of an unchanged announcement in March or a 25bp hike from the Fed.
Within Europe, Bunds are similarly firmer by over 200 ticks though again off best levels with the associated 10yr yield down to circa. 2.25% vs 2.55% on Friday; pricing for the ECB meeting on Thursday has seen a marked dovish move to a circa. 30% chance of 25bp compared to Lagarde’s guidance for 50bp.
Commodities have, ex-spot gold, come under marked pressure as risk sentiment deteriorates throughout the European morning.
Specifically, WTI and Brent front months are lower by over USD 1.50/bbl and below/at USD 75/bbl and USD 81/bbl respectively.
Base metals are well off best levels, given the risk tone, but are somewhat cushioned by the USD continuing to slip. Action which is assisting spot gold, alongside traditional haven allure, with the yellow metal up to USD 1893/oz at best.
Saudi Aramco achieved a record USD 161bln profit last year and its CEO Nasser said areas of interest for potential acquisitions include China and India. Aramco’s CEO noted they are looking at major expansions and are looking at the global LNG market for potential opportunities, while he anticipates a healthy demand pick-up in China and India.
Iran said its oil exports reached the highest level since the reimposition of US sanctions and that they exported 83mln bbls of oil more since 21st March 2022 compared with the same period the prior year, according to Tasnim.
MMG (MMG AT) announced that transportation of concentrate recommenced on March 11th after the removal of roadblocks and site operations are returning to full capacity at the Las Bambas copper mine in Peru, according to Reuters.
Indian mining minister says Jammu and Kashmir governments to auction lithium blocks in the states.
Germany’s Verdi trade union called for a strike of security personnel at Berlin airport on Monday due to disputes regarding remuneration for working nights, weekends and bank holidays, according to Reuters.
Riksbank is to begin selling gov’t bonds on 4th April, to take place every calendar month except for July and August.
NOTABLE US HEADLINES
Fed is to hold a closed-door meeting under expedited procedures at 11:30EDT/15:30GMT on Monday with the meeting primarily for the review and determination by the Board of Governors of the advance and discount rates to be charged by the Federal Reserve Banks.
Goldman Sachs said it no longer expects the Fed to hike rates at the March meeting in light of recent stress in the banking system and sees US measures will provide substantial liquidity to banks facing deposit outflows and improve depositor confidence, while it still expects the Fed to hike 25bps in May, June and July with its terminal rate view now at 5.25%-5.50%.
Ukrainian President Zelensky said Russian forces suffered more than 1,100 dead in less than a week of fighting in Bakhmut, eastern Ukraine, according to Reuters.
Russian Foreign Ministry said Russia’s position on the grain deal remains unchanged and that Russian representatives have not participated in any talks yet regarding extending the grain deal, according to Reuters.
Iranian Foreign Minister said an initial agreement was reached with the US regarding exchanging prisoners, although a White House official said that Iranian claims of a US-Iran prisoner swap deal are false, according to Reuters.
South Korea said that North Korea fired missiles from a submarine on Sunday morning and it was also reported that North Korean leader Kim convened a meeting with military leaders about practical war deterrence measures, according to Reuters and KCNA.
Chinese President Xi is reportedly planning a visit to Moscow as soon as next week, according to Reuters sources.
Russia’s Kremlin says no comment on possible Moscow visit by Chinese President Xi next week, President Putin’s participation cannot be ruled out.
CRYPTO
Crypto markets have waned off weekend highs with Bitcoin (BTC) dipping back towards USD 22k as global risk sentiment sources.
Crypto exchange Okcoin says USD-deposit by wire and ACH have been paused; all funds safe; order-book trading not affected; USD-withdrawal not affected.
APAC TRADE
APAC stocks traded mixed with financials hit amid the fallout from the SVB collapse and subsequent failure of Signature Bank, although US equity futures were supported and there was also a gradual improvement in Asia following efforts to stabilise the financial system with bank deposits guaranteed and the Fed announced to make additional funding available to eligible depository institutions to assure that banks have the ability to meet the needs of their depositors.
ASX 200 was lower with weakness seen across most industries including the top-weighted financials sector although closed off its lows owing to the resilience in commodity-related stocks and with money market rates pricing in over 75% probability of a pause at next month’s RBA meeting.
Nikkei 225 retreated to beneath the 28,000 level with financial stocks dominating the list of worst performers.
Hang Seng and Shanghai Comp. were positive with Hong Kong boosted by gains in tech after President Xi advocated strengthening science and technology at the closing remarks of the NPC and with Bilibili boosted following the inclusion of its Z shares to the Stock Connect, while the mainland was also kept afloat after China reported stronger-than-expected loans/financing data and surprisingly retained PBoC Governor Yi Gang as the head of the central bank.
NOTABLE ASIA-PAC HEADLINES
China’s parliament officially approved senior government positions with Li Qiang as Premier, while Yi Gang will remain PBoC Governor and Liu Kun will remain Finance Minister, according to Xinhua.
Chinese President Xi said China should implement a strategy of rejuvenating the country through science and education, while he added that they should work to achieve greater self-reliance, strength in science and technology, as well as promote industrial transformation and upgrading, according to Reuters.
Chinese Premier Li said China needs to further enhance scientific and technological innovation capabilities, speed up construction of a modern market system and focus on high-quality development. Li said that China will unswervingly deepen reform and opening up, while he noted there are many favourable factors supporting China’s economy but also said that China faces many difficulties this year and that it is not easy to achieve the 2023 growth target of around 5%.
China’s NBS head Kang Yi said China’s economy still contains deep structural contradictions and problems.
China reportedly privately suggested that the US consider a simultaneous visit by US VP Harris to China if House Speaker McCarthy decides to go to Taiwan, according to US sources cited by SCMP.
China’s city of Xi’an in the Shaanxi province revealed an emergency response plan last week that would enable it to shut schools, businesses and “other crowded places” in the event of a severe flu epidemic, according to CNN.
BoJ: From April 5th, will implement the following measures concerning the Securities Lending Facility (SLF) and fixed-rate purchase operations for consecutive days for 10-year Japanese government bonds #367 as needed. Click here for more.
BoJ purchases JPY 70.1bln in ETFs on Monday, via Reuters citing Central Bank disclosure.
DATA RECAP
Japanese BSI Manufacturing (Q1) -10.5% (Prev. -3.6%); Large All Industry (Q1) -3.0% (Prev. 0.7%)
MONDAY MORNING/SUNDAY NIGHT
SHANGHAI CLOSED UP 38.62 PTS OR 1.20% //Hang Seng CLOSED UP 376.05 PTS OR % 1.95 /The Nikkei closed DOWN 311.01% PTS OR 1.11% //Australia’s all ordinaries CLOSED DOWN 0.51% /Chinese yuan (ONSHORE) closed UP 6.8724//OFFSHORE CHINESE YUAN UP TO 6.8928// /Oil DOWN TO 75.31 dollars per barrel for WTI and BRENT AT 80.98 / Stocks in Europe OPENED ALL RED// ONSHORE YUAN TRADING ABOVE LEVEL OF OFFSHORE YUAN/ONSHORE YUAN TRADING STRONGER AGAINST US DOLLAR/OFFSHORE STRONGER
2 a./NORTH KOREA/ SOUTH KOREA/
///NORTH KOREA/SOUTH KOREA/
2B JAPAN
JAPAN/
END
3c CHINA /
CHINA/RUSSIA//USA//MIDDLE EAST
Robert H to us: in light of events in the uSA over the weekend, this is extremely important;
Exclusive: China’s Xi plans Russia visit as soon as next week – sources | Reuters
FYI .. to coordinate their moves in unison now that the Middle East is secured in trade and settlement. Because to move weight in settlement value, peaceful terms were needed to ensure oil and gas settlements. Oil is still largest monetary value settled each day. Rumor is that there will be switch over to the new currency for all OPEC oil and gas after the new currency is announced. This will curtail the vast need for USD overnight.
HSBC pays the huge sum of one pound for silicon banks UK unit in a rescue deal
(zerohedge)
HSBC Pays £1 For Silicon Valley Bank’s UK Unit In Rescue Deal
MONDAY, MAR 13, 2023 – 07:52 AM
Update (0752ET):
Banking regulators in the Western world are taking urgent action to prevent a crisis in ‘confidence’ from further spreading across regional banks following the collapse of Silicon Valley Bank and Signature Bank. In the US, on Sunday, the Federal Reserve, Treasury, and Federal Deposit Insurance Corporation said all deposits at SVB, including insured and uninsured, would be fully paid.
Across the Atlantic, UK regulators rushed a deal with HSBC UK Bank plc to take over the UK arm of SVB to restore confidence in the banking sector.
HSBC acquired SVB UK for the nominal sum of £1 (equivalent to $1.21 at current exchange rates). The transaction has been completed with immediate effect, and funding will be sourced from HSBC’s existing resources.
The acquisition means SVB UK “can continue to bank as usual, safe in the knowledge that their deposits are backed by the strength, safety, and security of HSBC,” CEO of HSBC Group Noel Quinn stated.
According to an email response received by Decrypt, the UK finance ministry said, “customers of SVB UK will be able to access their deposits and banking services as normal from today,” while the UK’s Chancellor of the Exchequer Jeremy Hunt ensured in a tweet that deposits are ‘safe.’
Shore Capital analyst Gary Greenwood wrote in a note to clients that the regulator’s move to quickly find a buyer for SVB UK is a “good solution for all.”
Hunt’s office told Decrypt:
“The UK’s tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs. I said yesterday that we would look after our tech sector, and we have worked urgently to deliver on that promise and find a solution that will provide SVB UK’s customers with confidence.”
Some folks are increasingly worried that the measures being implemented by Western regulators may not be adequate to address the banking crisis. They fear that this moment could signify the beginning of a much larger problem of confidence across the banking industry, which might ultimately result in more bank failures.
There is a “serious risk” to the UK’s technology and life sciences sectors from the collapse of the UK branch of the California-based Silicon Valley Bank, Chancellor Jeremy Hunt has warned.
U.S. federal banking regulators on March 10 assumed control of Silicon Valley Bank (SVB), a top lender for American tech and life sciences firms and start-ups.
The collapse of SVB, the 16th biggest bank in the United States, is the largest bank failure since Washington Mutual in 2008, during the last major bank crisis.
The Bank of England (BoE), the UK’s central bank, announced on March 11 that Silicon Valley Bank UK (SVBUK) is also set to enter insolvency.
The company will stop making payments and accepting deposits, said the BoE.
Talking to Sky News on Sunday, Hunt said the collapse poses “no systemic risk” to Britain’s financial system.
But he said, “There is a serious risk to our technology and life sciences sectors, many of whom bank with this bank.”
Chancellor of the Exchequer Jeremy Hunt (right), with Energy Secretary Grant Shapps, speaking at a meeting of senior leaders from across UK green industries at Queen Elizabeth Olympic Park, east London, on Feb. 21, 2023. (Stefan Rousseau/PA Media)
‘Significant Impact’
In a statement on Sunday morning, the Treasury said it was treating the issue “as a high priority.”
“The government and the Bank understand the level of concern that this raises for customers of Silicon Valley Bank UK, and especially how it may impact on cash flow positions in the short term,” the statement said.
It added that the government recognises SVBUK’s failure “could have a significant impact on the liquidity of the tech ecosystem.”
While Silicon Valley Bank has a limited presence in the UK and does not perform functions critical to the financial system, the Coalition for a Digital Economy (Coadec) warned that its collapse could have a significant impact on tech start-ups.
Coadec executive director Dom Hallas said on Saturday:
“We know that there are a large number of start-ups and investors in the ecosystem who have significant exposure to SVBUK and will be very concerned.
“We have been engaging with the UK government, including Treasury and Number 10, about the potential impact and I know that work has been going on overnight on policy options.”
‘Everything We Can’
The chancellor said the government and the Bank of England will do “everything we can” to protect the firms that stand to lose millions from the collapse of SVBUK.
“The prime minister and I and the governor of the Bank of England are absolutely determined to do everything we can to protect the future of these very, very important companies,” he told Sky News.
“We will come forward with a solution that helps those very, very important companies with things like payroll and their cash flow requirements, but we also want to put in place a longer-term solution so that their futures are secure.”
Asked if that could mean stepping in with taxpayers’ money, he said he did not “want to go into what the solution is.”
Hunt also declined to say whether the government will guarantee all the deposits of the companies in the collapsed bank.
He told the BBC:
“We want to find a way that minimises or, if we possibly can, avoids all losses to those incredibly promising companies. What we will do is bring forward very quickly a plan to make sure that they can meet their operational cash flow requirements.”
Labour Calls for ‘Specific Plans’
The main opposition Labour Party has accused the Conservative government of lacking “urgency” in its handling of the collapse of SVBUK.
Labour’s shadow chancellor Rachel Reeves urged the government to offer more than “warm words” to the affected companies.
She told Sky News on Sunday:
“I am slightly concerned about the urgency that you heard from the chancellor there, because when markets open tomorrow morning, a lot of businesses in the UK are not going to be clear about how they can pay the wages of their staff and whether their deposits with Silicon Valley Bank and their financing arrangements are still in place.
“So, I would urge the government to do more than offer warm words, but come forward with specific plans.”
Talking to the BBC, Reeves said the British start-up industry must not “pay the price” for the failure of the bank.
She said: “We need tomorrow morning to hear from the government how they are going to protect them.”
“We cannot let the British start-up community pay the price for this bank failure, because it will be the British economy then that ultimately pays the price,” she added.
end
SWITZERLAND/CREDIT SUISSE
the Silicon Valley Bank crisis spreads to Europe: Credit Suisse CDS hits record highs
(zerohedge)
Credit Suisse CDS Hits Record High As Silicon Valley Banking Crisis Spreads To Europe
Credit Suisse Group AG is one bank that caught our attention this morning. The shares of this troubled bank, trading in Switzerland, plunged as much as 15%, hitting a new record low. This decline was due to concerns about the bank’s ability to recapture client funds, revive its investment banking business, and manage ongoing legal and regulatory investigations.
The selling pressure on Credit Suisse shares returned thanks to the collapse of SVB, sparking a crisis of confidence throughout the banking industry in the Western world. As a result, the Zurich-based lender’s five-year credit default swaps jumped to a record high of 448 basis points, data compiled by Bloomberg show.
And it’s not just Credit Suisse, whole financial sector is seeing CDS spreads widen.
Credit Suisse’s demise and shares falling to a record low come as the bank faces a long list of challenges. Just last week, shares hit a new low after it announced it would postpone the release of its annual report at the request of the Securities and Exchange Commission.
Another concern is whether the bank can survive, given the substantial outflows from its wealth management division.
So much for aggressive interest rate hikes in Europe.
As for US regional banks, and to prevent a wave of failures, rate traders have priced out hikes for the rest of the year as some of the first cuts could arrive in the second half of the year.
Will the Fed’s rescue of SVB be sufficient to revive confidence in the banking sector?
5.UKRAINE// RUSSIA//MIDDLE EASTERN AFFAIRS//
ISRAEL/SAUDI ARABIA/USA
Interesting: the Saudi’s want a civilian nuclear program in exchange for normalization with Israle
(the cradle)
Saudis Want “Civilian Nuclear Program” In Exchange For Normalization With Israel
Saudi Arabia has asked the US for help with developing a “civilian nuclear program” and for fewer restrictions on arms purchases in exchange for normalizing ties with Israel, the New York Times reports.
Normalization between Tel Aviv and Riyadh would fulfill several goals of Prime Minister Benjamin Netanyahu, chief among them “downgrading the relative importance of the Palestinian issue,” analysts told the NYT. “I certainly believe that the peace agreement between us and the Saudis will lead to an agreement with the Palestinians,” Netanyahu told Italian daily La Repubblica on 9 March.Image: Reuters
Such a deal would also be the most significant step yet towards fulfilling Netanyahu’s promise to expand on the Trump-era Abraham Accords signed between Israel, the UAE, Bahrain, Morocco, and Sudan.
While Saudi Arabia has yet to sign the normalization agreement officially – citing its ‘concern’ for the mistreatment of Palestinians in the occupied territories – the country has already opened its airspace to Israeli flights and has hosted Israeli business people and officials over the past few years.
Nonetheless, questions remain about the viability of the kingdom’s latest demands due to the frosty relationship between Crown Prince and Prime Minister Mohammed bin Salman (MbS) and US President Joe Biden. US officials are reportedly also wary of Riyadh’s nuclear aspirations, as this could be the first step towards developing nuclear weapons.
Moreover, even if a backroom deal is reached, the NYT claims Biden is likely to face pushback from congress, as over the past year, several lawmakers have pressed the White House to downgrade relations with Saudi Arabia. “Our relationship with Saudi Arabia has to be a direct bilateral relationship… It should not run through Israel,” Senator Christopher S. Murphy told the NYT.
“The Saudis have been consistently behaving badly, over and over,” he added before saying that selling more weapons to the kingdom should come “in exchange for better behavior toward the United States, not just better behavior toward Israel.”
The decades-long relationship between the US and Saudi Arabia took a dramatic plunge last year following the start of the war in Ukraine, as the kingdom, alongside a large majority of countries worldwide, refused to cut ties with Russia.
Washington was further pushed to the brink after the OPEC+ group of countries – including Saudi Arabia and Russia – announced a major oil production cut despite US officials’ intense lobbying of Gulf states.
Despite all of this, the Biden White House approved several new arms sales to Saudi Arabia last year, ignoring his campaign promises to make the kingdom a “pariah” and the calamity US bombs have caused in Yemen. Last year, Biden also gave MbS immunity for the murder of Saudi journalist Jamal Khashoggi after the crown prince was named prime minister.
end
Israeli Official Blames American “Weakness” For China’s Iran-Saudi Deal
MONDAY, MAR 13, 2023 – 12:25 PM
Israeli officials are expressing dismay at the Iran and Saudi Arabia peace deal which was announced from Beijing last Friday, with an aide to Prime Minister Benjamin Netanyahu telling reporters that it’s the result of American “weakness” as well as failings of the prior Israeli government.
“There was a feeling of US and Israeli weakness and this is why the Saudis started looking for new avenues. It was clear that this was going to happen,” the unnamed senior official said while traveling in Netanyahu’s entourage in Rome, according to Axios.File image: AFP
Axios reported further, “The senior Israeli official who briefed reporters said the Israeli government is not concerned that the new Saudi-Iranian agreement will hamper the efforts to achieve a breakthrough that could lead to the normalization of relations between Israel and Saudi Arabia.”
But the former Israeli leaders hurled the same accusation at Netanyahu, saying the new coalition government is to blame. Former Israeli Prime Minister Yair Lapid and current opposition head in the Knesset, also lamented that the Saudi-Iran deal signals the “collapse of the regional defense wall that we started building against Iran.”
“This is what happens when one deals with legal insanity all day instead of doing one’s job against Iran and strengthening relations with the United States,” Lapid said, commenting on the Netanyahu government’s judicial overhaul, and the chaos it has sparked in Israeli politics along with massive street protests.
Israel’s number one priority has long been to isolate Tehran as a regional power, especially because of Iranian entrenchment in Syria as well as its longtime support to Lebanese Hezbollah. Closer Israeli relations with Riyadh were toward that end, but now the China-brokered deal puts all of this into question.
The normalization deal is also being widely viewed as a humiliation for America’s waning influence and presence in the Middle East. After trillions spent and many thousands of US soldiers’ lives lost in Afghanistan and Iraq following two-decade long occupations, China swoops in and plays peacemaker, growing its influence in the wake of Washington’s mess. Now US allies in the region, foremost among them Israel, find themselves in a weakened position and on the defensive.
END
More news on the Ukraine-Russian war:
(courtesy of Robert H)
UKRAINE//RUSSIA/USA/
Hungary’s PM Orban: NATO Troops to Enter Ukraine Soon to Fight Russians
Russian pincer “Ilovaisk No 2” in Bakhmut: The largest massacre of the Ukrainian Army so far – Dozens of destroyed phalanxes (vid 18+) – WarNews247
The tragic reality of trying to retreat from Bakhmut having waited too long for all the wrong reasons. Spring brings ground that is like a bog to traverse. Blessed by the black earth which runs up 15 feet in depth in places in spring it is so soft that you can sink into waist deep. It is also why the relief attack to turn Russian attention northward has not happened yet. Tanks will literally get stuck and have to wait for dryer weather as no board assaults across open fields are possible. And on highways columns of tanks are easy targets. There will be such assault perhaps this week if weather improves. And if not it will shelved as Bakhmut is simply a lost cause. A tragic lost of life and equipment that serves no one.
Escobar: Moveable Multipolarity In Moscow – Ridin’ The “Newcoin” Train | ZeroHedge
I encourage you to read this carefully.
About 7 years ago, i drafted a complete structured proposal which i tried to pursue in implementation. In the course of this extensive discussions took place with certain agency lawyers and no doubt were understood by external parties spoken with. For various reasons this did not turn out to become realized, more out fear than conceptual issues.
At the time I remarked forcibly that it was the only way to ensure placed hegemony based on trade and labor output giving rise to a stable currency free of manipulation by thieving Central bankers who already had lost the plot and the pot. As no settlement currency can be static as a source of intrinsic value and acceptance without stability that floats in accordance with the rise and fall of trade patterned not on who, but the totality of trade without opinion on national success or failure to succeed. Thus, being ambivalent to the rise and fall of nations or political actors.
At the time, it was explained to me that while i was correct, banks would never allow this to become an asset of the public, rather they would see this as tier one capital and pay a premium to get and keep it. Five years ago i told the same folks they were wrong because Stable-coins would dominate because the tools became clear that use traditional means of settlement could be bypassed and all that was required was the programming of a immutable relational database that was accepted by the parties in trade and settlement and had audited transparency without national or Central Bank interference or control.
This is now happening and I applaud Pepe for writing this the way he has as the parties he speaks of, are known as well the parties who did the programming.
As a dear friend of mine, now passed, once said to me “todays news was written yesterday”.
The new currency should be able to become an “external money” storage of capital and reserves down the road, not just a settlement unit…
Ah, the joys of the Big Circle Line (BKL, in Cyrillic): circumnavigating the whole of Moscow for 71 km and 31 stations: from Tekstilshchiki – in the old textile quarter – to Sokolniki – a suprematist/constructivist gallery (Malevich lives!); from Rizhskaya – with its gorgeous steel arches – to Maryina Roscha – with its 130 meter-long escalator.
The BKL is like a living, breathin’, runnin’ metaphor of the capital of the multipolar world: a crash course in art, architecture, history, urban design, tech transportation, and of course “people to people’s exchanges”, to quote our Chinese New Silk Road friends.
President Xi Jinping, by the way, will be ridin’ the BKL with President Putin when he comes to Moscow on March 21.
So it’s no wonder that when a savvy investor at the top of global financial markets, with decades of experience, agreed to share some of his key insights on the global financial system, I proposed a ride on the BKL – and he immediately accepted it. Let’s call him Mr. S. Tzu. This is the minimally edited transcript of our moveable conversation.
Thank you for finding the time to meet – in such a gorgeous setting. With the current market volatility, it must be hard for you to step away from the screens.
S. Tzu: Yes, markets are currently very challenging. The last few months remind me of 2007-8, except instead of money-market funds and subprime mortgages, these days it is pipelines and government bond markets that blow up. We live in interesting times.
The reason I reached out to you is to hear your insights on the “Bretton Woods 3” concept introduced by Zoltan Poszar. You’re definitely on top of it.
S. Tzu: Thank you for getting straight to the point. There are very few opportunities to witness the emergence of a new global financial order, and we are living through one of those episodes. Since the 1970s, perhaps only the arrival of bitcoin just over fourteen years ago came close in terms of impact to what we are about to see in the next few years. And just as the timing of bitcoin was not a coincidence, the conditions for the current tectonic shifts in the world financial system have been brewing for decades. Zoltan’s insight that “after this war is over, ‘money’ will never be the same again…” was perfectly timed.
Understanding “external money”
You mentioned bitcoin. What was so revolutionary about it at the time?
S. Tzu: If we leave aside the crypto side of things, the promise and the reason for bitcoin’s initial success was that bitcoin was an attempt to create “external” money (using Mr. Zoltan’s excellent terminology) that was not a liability of a Central Bank. One of the key features of this new unit was the limit of 21 million coins that could be mined, which resonated well with those who could see the problems of the current system. It sounds trivial today, but the idea that a modern monetary unit can exist without backing of any centralized authority, effectively becoming “external” money in digital form, was revolutionary in 2008. Needless to say, Euro government bond crisis, quantitative easing, and the recent global inflationary spiral only amplified the dissonance that many felt for decades. The credibility of the current “internal money” system (again, using Mr. Poszar’s elegant terminology) has been destroyed long before we got to the Central Bank reserve freezes and disruptive economic sanctions that are playing out currently. Unfortunately, there is no better way to destroy credibility of the system based on trust than to freeze and confiscate foreign currency reserves held in Central Bank custody accounts. The cognitive dissonance behind the creation of bitcoin was validated — the “internal money” system was fully weaponized in 2022. The implications are profound.
Now we are getting to the nitty-gritty. As you know, Zoltan argues that a new “Bretton Woods 3” system will emerge at the next stage. What exactly does he mean by that?
S. Tzu: I am also not clear on whether Mr. Poszar refers to the transformation of the current Western “internal money” system into something else, or whether he hints at the emergence of the “Bretton Woods 3” as an alternative, outside of the current financial system. I am convinced that a new iteration of the “external money” is unlikely to be successful in the West at this stage, due to the lack of political will and to the excessive government debt that has been building up for some time and grew exponentially in recent years.
Before the current Western financial order can move to the next evolutionary stage, some of these outstanding liabilities need to be reduced in real terms. If history is any guide, it typically happens via default or inflation, or some combination of the two. What seems highly likely is that the Western governments will rely on financial repression in order to keep the boat afloat and to tackle the debt problem. I expect there will be many initiatives to increase control over the “internal money” system that will likely be increasingly unpopular. Introduction of CDBC’s, for example, could be one such initiative. There is no doubt in my mind that we are in for eventful times ahead in this respect. At the same time, it also seems inevitable at this stage that some sort of an alternative “external money” system will emerge that will compete with the current “internal money” global financial order.
And why is that?
S. Tzu: The global economy can no longer rely on the “internal money” system in its current weaponized state for all its trade, reserve, and investment needs. If sanctions and reserve freezes are the new instruments of regime change, every government out there must be thinking about alternatives to using someone else’s currency for trade and reserves. What is not obvious, however, is what the alternative to the current flawed global financial order should be. History does not have many examples of successful “external money” approaches that could not be reduced to some version of the gold standard. And there are many reasons why gold alone, or a currency fully convertible into gold, is too restrictive as a foundation of a modern monetary system.
At the same time, recent increases in trade in local currencies unfortunately have a limited potential as well, as local currencies are simply a different instance of “internal money.” There are obvious reasons why many countries would not want to accept other’s local currencies (or even their own, for that matter) in exchange for exports. On that I fully agree with Michael Hudson. Since “internal money” is a liability of a country’s Central Bank, the lower the credit standing of the country, the more it needs investable capital, and the less willing other parties become to hold its liabilities. That is one of the reasons why a typical set of “structural reforms” that IMF demands, for example, is aimed at improving credit quality of the borrower government. “External money” is badly needed precisely by the countries and the governments that feel they are hostages to the IMF and to the current “internal money” financial system.
Enter the “newcoin”
A lot of experts seem to be looking into it. Sergey Glazyev, for instance.
S. Tzu: Yes, there were some indications of that in recent publications. While I am not privy to these discussions, I certainly have been thinking how this alternative system could work as well. Mr. Pozsar’s concepts of “internal” and “external” money are a very important part of this discussion. However, the duality of these terms is misleading. Neither option is fully adequate for the problems that the new monetary unit – let’s call it “newcoin” for convenience – needs to solve.
Please allow me to explain. With the weaponization of the current US dollar “internal money” system and a simultaneous escalation of sanctions, the world has effectively split into the “Global South” and the “Global North,” slightly more precise terms than East and West. What is important here, and what Mr. Pozsar immediately noticed, is that the supply chains and commodities are also getting weaponized to some extent. Friend-shoring is here to stay. The implication is that the newcoin’s first priority would be facilitating intra-South trade, without relying on currencies of the Global North.
If this were the only objective, there would have been a choice of relatively simple solutions, ranging from using renminbi/yuan for trade, creating a new shared currency (fashioned after euro, ECU, or even Central African CFA franc), creating a new currency based on the basket of participating local currencies (similar to the SDR of IMF), potentially creating a new gold-pegged currency, or even pegging existing local currencies to gold. Unfortunately, history is full of examples of how each one of these approaches creates their own host of new problems.
Of course, there are other parallel objectives for the new currency unit that neither of these possibilities can fully address. For example, I expect that all participants would hope that the new currency strengthens their sovereignty, not dilutes it. Next, the challenges with the Euro and previously gold standard demonstrated the broader problem with “fixed” exchange rates, especially if the initial “fix” was not optimal for some members of the currency zone. The problems only accumulate over time, until the rate is “re-fixed,” often through a violent devaluation. There needs to remain flexibility in adjusting relative competitiveness inside the Global South over time for participants to remain sovereign in their monetary decisions. Another requirement would be that the new currency needs to be “stable,” if it were to become successful unit of pricing for volatile things like commodities.
Most importantly, the new currency should be able to become an “external money” storage of capital and reserves down the road, not just a settlement unit. In fact, my conviction that the new monetary unit will emerge comes primarily from the current lack of viable alternatives for reserves and investment outside of the compromised “internal money” financial system.
So considering all these problems, what do you propose as a solution?
S. Tzu: First allow me to state the obvious: the technical solution to this problem is a lot easier to find than to arrive at the political consensus among the countries which might want to join the newcoin zone. However, the current need is so acute, in my opinion, that the required political compromises will be found in due course.
That said, please allow me to introduce one such technical blueprint for the newcoin. Let me start by saying that it should be partially (I suggest a share of at least 40% of value) backed by gold, for reasons that will soon become clear. The remaining 60% of the newcoin would be composed of the basket of currencies of the participating countries. Gold would provide the “external money” anchor to the structure and the basket of currencies element would allow the participants to retain their sovereignty and monetary flexibility. There would clearly be a need to create a Central Bank for the newcoin, which would emit new currency. This Central Bank could become a counterparty to cross-swaps, as well as provide clearing functions for the system and enforce the regulations. Any country would be free to join the newcoin on several conditions.
First, the candidate country needs to demonstrate that it has physical unencumbered gold in its domestic storage and pledge a certain amount in exchange for receiving corresponding amount of newcoin (using the 40% ratio mentioned above). Economic equivalent of this initial transaction would be a sale of the gold to the “gold pool” backing the newcoin in exchange for proportional amount of the newcoin backed by the pool. The actual legal form of this transaction is less important, as it is necessary simply to guarantee that the newcoin that is being emitted is always backed by at least 40% in gold. There is no need to even publicly disclose the gold reserves of each country, as long as all participants can be satisfied that sufficient reserves are always present. An annual joint audit and monitoring mechanism may be sufficient.
Second, a candidate country would need to establish a gold price discovery mechanism in its domestic currency. Most likely, one of the participating precious metals exchanges would start physical gold trading in each of the local currencies. This would establish a fair cross-rate for the local currencies using “external money” mechanism to set and adjust them over time. The gold price of the local currencies would drive their value in the basket for the newly-emitted newcoins. Each country would remain sovereign and be free to emit as much of local currency as they choose to, but this would eventually adjust the share of their currency in the newcoin’s value. At the same time, a country would only be able to obtain additional newcoin from the central bank in exchange for a pledge of additional gold. The net result is that the value of each component of newcoin in gold terms would be transparent and fair, which would translate into the transparency of newcoin’s value as well.
Finally, emissions or sales of newcoin by the central bank would be allowed only in exchange for gold for anyone outside the newcoin zone. In other words, the only two ways external parties can obtain large amounts of newcoin is either receiving it in exchange for physical gold or as a payment for goods and services provided. At the same time, the central bank would not be obliged to purchase newcoin in exchange for gold, removing the risk of the “run on the bank.”
Correct me if I’m wrong: this proposal seems to anchor all trade inside the newcoin zone and all external trade to gold. In this case, what about the stability of newcoin? After all, gold has been volatile in the past.
S. Tzu: I think what you are asking is what could be the impact if, for example, the dollar price of gold were to decline dramatically. In this case, as there would be no direct cross-rate between newcoin and the dollar, and as the central bank of the Global South would be only buying, not selling gold in exchange for newcoin, you can immediately see that arbitrage would be extremely difficult. As a result, the volatility of the currency basket expressed in newcoin (or gold) would be quite low. And this is exactly the intended positive impact of the “external money” anchoring of this new currency unit on trade and investment. Clearly, some key export commodities would be priced by the Global South in gold and newcoin only, making the “run on the bank” or speculative attacks on newcoin even less likely.
Over time, if gold is undervalued in the Global North, it would gradually, or perhaps rapidly, gravitate to the Global South in exchange for exports or newcoin, which would not be a bad outcome for the “external money” system and accelerate the broad acceptance of newcoin as reserve currency. Importantly, as physical gold reserves are finite outside of the newcoin zone, the imbalances would inevitably correct themselves, as the Global South will remain a net exporter of key commodities.
What you just said is packed with precious info. Perhaps we should revisit the whole thing in the near future and discuss the feedback to your ideas. Now we’ve arrived at Maryina Roscha, it’s time to get off!
S. Tzu: It would be my pleasure to continue our dialogue. Looking forward to another loop!
end
6. GLOBAL ISSUES/COVID ISSUES/VACCINE ISSUES
Entire US Congress Votes To Declassify COVID-19 Origins Intel
SATURDAY, MAR 11, 2023 – 05:00 PM
100% of lawmakers in the House on Friday voted to pass a bill requiring the Biden administration to declassify intelligence related to investigations into the Wuhan Institute of Virology in China and Covid-19.
The Covid Origins Act of 2023, sponsored by Sens. Josh Hawley (R-MO) and Mike Braun (R-IN), passed by a vote of 410 to 0, after clearing the Senate by unanimous consent last week.
“Covid-19 pandemic wreaked havoc across the country with almost every household feeling its effects. The United States death toll from this virus has surpassed one million people. Although concrete data is hard to lock down, millions of people are suffering from the long-term effects directly attributed to this virus. It is becoming increasingly clear that school-aged children face hurdles because of long-term school closures. The American people need to know all the aspects, including how this virus was created and specifically, whether it was a natural occurrence of the result of a lab-related event,” said House Intelligence Committee Chairman Mike Turner (R-OH) in a floor speech.
Next stop, President Biden’s desk.
And while Biden has officially said he hasn’t “made that decision yet” over whether to sign it into law and release the intelligence, we can’t imagine he won’t, lest he defy the entirety of Congress.
So, what will we get? Probably what’s already known; that the FBI and the Energy Department believe with ‘moderate’ and ‘low’ confidence respectively that Covid-19 likely arose from a laboratory leak – while four other agencies and a national intelligence panel continue to believe that the pandemic was likely the result of zoonotic spillover.
Will the disclosure point to door #1 – that Dr. Anthony Fauci offshored previously-banned Gain-of-Function bat covid research in a scientific collaboration on Chinese soil where it escaped (intentionally or otherwise)?
Or door #2 – that bats from a cave 450 miles away with a strain of Covid 96.8% similar to Covid-19 infected an intermediary species, of which either (or both) emerged with Covid-19 at a Wuhan wet market across town from the aforementioned Fauci-funded lab where they were infecting ‘humanized’ mice with Covid strains? A relatively rare occurrence according to the WIV in 2018.
Or Door #3, that China went rogue, stole Peter Daszak’s crazy plans (which DARPA turned down), and started going bat-covid crazy?
What we do know is that there were ‘humanized’ mice being bred in China in mid-2019, long before the outbreak in Wuhan. As Vanity Fair noted almost two years ago – a May 2020 Chinese research paper describing mice which had lung tissue that approximated a human’s (via National Review):
Using the gene-editing technology known as CRISPR, the researchers had engineered mice with humanized lungs, then studied their susceptibility to SARS-CoV-2. As the NSC officials worked backward from the date of publication to establish a timeline for the study, it became clear that the mice had been engineered sometime in the summer of 2019, before the pandemic even started. The NSC officials were left wondering: Had the Chinese military been running viruses through humanized mouse models, to see which might be infectious to humans?
After consultations with experts, some U.S. officials came to believe that this Beijing lab was likely conducting coronavirus experiments on mice fitted with ACE2 receptors well before the coronavirus outbreak — research they hadn’t disclosed and continued to not admit to. That, by itself, did not help to explain how SARS-CoV-2 originated. But it did make clear to U.S. officials that there was a lot of risky coronavirus experiments going on in Chinese labs that the rest of the world was simply not aware of. “This was just a peek under a curtain of an entire galaxy of activity, including labs in Beijing and Wuhan playing around with coronaviruses in ACE2 mice in unsafe labs,” the senior administration official said. “It suggests we’re getting a peek at a body of activity that isn’t understood in the West or even has precedent here.”
And how much of that was done with knowledge, funding or collaboration from entities outside of China?
China contacted Hawley’s office on Wednesday to object to the bill, telling him that its only purpose is to “politicize and stigmatize China.”
“The move by the U.S. Congress just shows that the U.S. is going further and further down the wrong path of political manipulation. The so-called traceability report by the U.S. intelligence agency is an attempt to ‘presume guilt’ on China. It is an attempt to shift the blame from its own failure to fight the epidemic to China,” wrote government attorney Li Xiang.
RAINBOW Fentanyl is a particular problem and parents have to know this; warn, talk to your teens, your younger kids as to being careful in school especially if you know it’s a risk; one grain kills!
‘On the morning of July 25, 2020, Matthew Thomas took what he believed was a Percocet, a prescription drug for pain relief. He died moments later, the victim of fentanyl poisoning.
On Jan. 26, 2019, Austen Babcock took what he believed was cocaine. Unbeknownst to him, it was laced with fentanyl, a potent synthetic opioid. He died shortly after, another victim of fentanyl poisoning.
A member of the Battlehawks training staff passed away last night at the team hotel. Ben Siegfried was in his early 20s when he passed away. A cause of death has not yet been released.
Given the temporal association and biological plausibility, FDA agrees with the assessments of the investigators that these events were possibly related to study vaccine.
FDA wrote: ‘Given the temporal association and biological plausibility, FDA agrees with the assessments of the investigators that these events were possibly related to study vaccine.’
These 2 graphs tell a devastating story and you would understand by looking at it; shows you what happened to our elderly, our precious parents and grand-parents in the nursing homes & hospitals
This potent paralytic, this midazolam with morphine, sedated our elderly and helped put granny and grandpa to death. Along with denial of antibiotics for bacterial pneumonia, and DNR orders, with kidney and liver toxic Remdesivir, with crushing isolation, with the ventilator, granny and grandpa had no chance. DOA.
We mourn all of our parents, I mourn for yours, we shed tears, we may never ever recover emotionally, for the children who hung themselves in desperation, we could not even bury them, denied. And you want me to have amnesty and forgiveness when I and others like McCullough and Risch gave you the data near 3 years now. You were power-drunk. We must punish you using our courts.
Back in February, Dr. Joseph Ladapo, Florida’s Surgeon General, wrote a letter to the FDA questing mRNA vaccine safety – citing a 4,400% increase in reports of life-threatening conditions in Florida following the COVID-19 vaccine rollout.
Below is the health alert from the Florida Department of Heath showing a whopping 1,700% increase in VAERS reports after the release of the COVID vaccine. The reporting of life-threatening conditions increased by over 4,400%. In Florida alone! The COVID-19 pandemic brought many challenges that the health and medical field have never encountered. Although…
Florida has never seen this type of response following previous mass vaccination efforts pushed by the federal government.
In Florida alone, we saw a 1,700% increase in reports after the release of the COVID-19 vaccine, compared to an increase of 400% in vaccine administration for the same period.
The Report of life-threatening conditions increased 4,400%.
According to a recent study, mRNA COVID-19 vaccines were associated with an excess risk of serious adverse events, including coagulation disorders, acute cardiac injuries, Bell’s palsy, and encephalitis, to name a few. This risk was 1 in 550, much higher than other vaccines. To claim these vaccines are “safe and effective” while minimizing and disregarding the adverse events in unconscionable.
I say 100% US soil, US labs, with China, but US led this, do not get misdirected, its not only China, US has serious culpability and people like Fauci et al. must be questioned, investigated
Open in app or onlineDr. Naomi Wolf apologizes to Conservatives, Republicans, MAGA: “Dear Conservatives, I Apologize My “Team” was Taken in By Full-Spectrum Propaganda; huge praise & I accept, it is never too late toapologize & IMO, mine, it is not too little or too late, Wolf is brave again as she fights for our babies against the mRNA technology gene shots, against the grain; DJT was pilloried wrongfully, MAGADR. PAUL ALEXANDERMAR 10SAVE▷ LISTEN My respect and appreciation for her work has grown even more. For the risk she is taking here. I have grown to appreciate Dr. Wolf’s fearlessness now. It is needed in this time and she is a remarkable warrior as we battle devils around us. Dr. Wolf agreed to interview Drs. Risch, McCullough, Tenenbaum, and myself early in the response and was very brave then and we appreciated her professionalism and depth.My take:This is Dr. Wolf’s apology but I want to tee it up with some background IMO.DJT (POTUS Trump) was savaged by the filthy fecal putrid bottom-dweller legacy media, radical democrats, deepstate, and RINOs for too long and it is refreshing to read this and some may reject, many may embrace, but I accept.IMO no apology was needed for Wolf’s work as a soldier in the trenches daily with her principles in full display and team fighting the stench of the fraud COVID pandemic used to hollow out and topple a sitting POTUS, is laudable. All the way to the fraud mRNA technology gene injections. She stands apart as many still hide behind keyboards pulling flint from between their toes telling us ‘oh, we admire all you do but we are not as brave as you to put our faces and jobs on the line”. I say BS, it is time you found that courage and join us, like Dr. Wolf, as we need help. This battle we face, confronting the enemy within America who just showed you the lengths they would go to so that they can unseat a sitting POTUS.POTUS Trump was on pace January 2020 save the fraud pandemic, to go down as one of the greatest Presidents save Abe and George. Unstoppable. Based on what he was delivering. With all the deviant steps taken against him by people like Paul ‘eunuch’ Ryan, the democrats and the RINOs. I thought even Rushmore bound, if the subsequent 4 materialized all Trump had teed up and had planned. And I think can be again. I am all for rewarding transformational beneficial actions. If any POTUS, regardless of political party comes along (knowing we really have a UNIparty) and does the great things that transforms the US for the better and is revolutionary, then I am for their face on Rushmore. And more.The fraud manufactured pandemic hurt Trump because he was devastatingly deceived by his senior scientific counsel he trusted, from the para ‘give us 2 weeks Mr. POTUS to bend the curve (knowing we have plans unknown to you Mr. POTUS that we will never re-open society and schools) to the ‘do not worry Mr. POTUS, we assure you the vaccines are and will be safe and effective, we will ensure that, all we need from you is for you to approve OWS, though you do not know we will be bypassing every safety test)”. From all I know and saw. The malfeasants hollowed out his pandemic response by implementing ‘theirs’, unknown to him as to the deep dark intent. They were successful. Evil criminals! A jail does not do the justice. IMO. I want us to always work with the courts and judges to write these and any wrongs, and I am hoping they can operate impartially to ensure proper justice comes about for all the COVID wrongs that costed lives. I am especially pained daily by the risks these Brach COVIDian Taliban-like malfeasants at CDC, NIH, FDA, state governments etc. have imposed on the police, our military, our border agents, the people who work while we sleep, to risk their lives to protect us. They, many are COVID mRNA technology gene injection injured. Silently. I pray for their safety. They were grossly and devastatingly misled.It is clear now, and has been for 2 years now, that an election was stolen, whether by votes or via a fraud pandemic and deliberate manufactured chaos by the CDC, NIH, FDA, NIAID and health officials. For a virus that was never ever of the lethality to close society down, for a deadly unsafe gene injection vaccine out of the box that never ever worked to justify it’s use. Had we done nothing, NOTHING, save isolate ill symptomatic persons ONLY, and use proper hand washing hygiene etc. Nothing. We would have not killed the tens of thousands we have with this fraud lockdown lunatic response and gene injection.Had we done NOTHING, more lives would have been saved! That is the irony of what was done. There was never ever a pandemic. None. This ILI could have been dealt with otherwise and I even argue (more to come) that this virus was circulating for years before. Benign. We created a pandemic that NEVER was. For a devious reason, to help remove a POTUS.Even if that fraud COVID mRNA technology gene shot was shown to be safe and effective which it has never been shown to be (research and anecdotal evidence), it is NOT needed. Never needed. Most have no problem being exposed to and handling COVID. NOT needed.I am really grateful for Dr. Wolf for writing this and it contains many tremendous nuggets written in a very intelligent manner, articulate, and an easy read. I am not demanding you accept. No. I am only sharing what I think is a tremendous piece of writing and a heartfelt apology. You can sit back and reflect and make your own decisions for we are a free people (well, to the extent that the government and business allows us to be in their drive to a fascist nation).The nation was misled to remove a POTUS and damage his elections and then lied to post the elections. In massive ways and IMO, to misdirect and cover up the fraud and damaging actions they took to topple him. Pure lies, boldfaced damaging lies and the media played their role and the left and haters in perpetrating. Dr. Wolf shows the humility, truthfulness, temerity, integrity, authenticity, the moral compass, the type of class, balance, and in many ways leadership here, that is absent in today’s society.I am inspired by this scholarship, for you Dr. Wolf, was greatly misled as you explained and you have come to the realization how wrong and fraught with untruths and blatant lies they were, and you are saying so clearly. You show strength. I am hoping others can follow your tremendous lead.It takes courage and gonads to say I am sorry and Dr. Wolf has done it. Again, to me, was not needed for I have seen what Wolf is doing to help save the US (it’s children) from the fraud of the pandemic, yet I know that she understands the lies and the falsehoods and what they can do to the nation and have done. The media and RINOs and elites and left and the lies and progressives are tearing the nation apart. They have so much TDR they cannot see clearly anymore. Deranged.Even though Trump is out of the WH over 2 years now, he lives in their head. In some way it is remarkable to watch but at some point they must stop. They remain beside themselves while someone like me know one thing, there is no one most suited at this time, at this time, to lead the US, than Trump. The type of actions needed now can only come from Trump for he will see to his vengeance and retribution for the wrongs done to him, his family, and this nation that he loves. He loves America. He must take Washington down to the very studs and fumigate it, fire most, and find space in prison cells for many.That is one of the reasons why I support him and some have written to me ‘how dare you openly support Trump, you tarnish us being associated with us’ I respond, ‘it is because I have real stones, you do not, so up yours! Like you, I have my freedom and I can think clearly and I am not blinded by hate. I am thinking logically. What is best for America, not ‘who do I align myself with to get a plum job and fame and write books and go on shows after’. Decisions now are for America, to help save her, not your pocket book.’ That is what I tell them. Needless to say we do not remain friends ;-). Their loss. They even try to silence and cancel me. Can’t.Thank you Dr. Wolf, thank you and your team for what they are doing! I cannot say it enough. I know what you are giving up and the risks to your career, name, safety even. I know, I lived it. I applaud you.Dear Conservatives, I ApologizeThere is no way to avoid this moment. The formal letter of apology. From me. To Conservatives and to those who “put America first” everywhere. It’s tempting to sweep this confrontation with my own gullibility under the rug — to “move on” without ever acknowledging that I was duped, and that as a result I made mistakes in judgement, and that these mistake…Read more
end
VACCINE IMPACT//
2nd FDIC-Insured Bank in 3 Days COLLAPSES! Bank Runs, Trading Halted on Some Banks
March 10, 2023 4:44 pm
Silicon Valley Bank became the second FDIC-insured bank to collapse in 3 days today. They are reportedly the 16th largest bank in the U.S., and the largest bank to collapse since the 2008 financial meltdown, and the second largest bank to ever collapse in the U.S. While it was still not the main headline news this morning in the corporate media, a glance at the headlines as I began to write this article shows that it is apparently now getting the headline news it should receive, as bank runs are starting, and some banks suspended trading today to stop the carnage. The Alternative Media is mostly still asleep, ranting and raving about new “Jan. 6 footage” and the Tucker Carlson show, or talking about the latest AI technology that is going transform everyone into transhumans and hack our brains. But this news about Silicon Valley Bank collapsing today has led to a dramatic drop in value in trading for ALL banks, and several of them reportedly suspended trading on the NYSE for a while today. Bank runs have also been reported across the country.
The Government May Stop Issuing Social Security Payments After the Debt Limit is Hit
March 10, 2023 6:23 pm
There’s a very real possibility the government will stop issuing Social Security payments after the debt limit is hit. Scary as that prospect is, however, the alternative might be even worse: A little-known provision of a 1996 law could be interpreted to allow the Social Security trust fund to be used not only to pay Social Security’s monthly checks but also to circumvent the debt limit and pay all the government’s otherwise overdue bills. If that happens, any short-term relief to Social Security recipients would come with a potentially huge long-term price tag: The Social Security trust fund could be exhausted much sooner than currently projected—in just a couple of years, in fact.
3rd FDIC-Insured Bank Fails in 5 Days but Feds Avoid Black Monday by Bailing Out Depositors
March 12, 2023 7:49 pm
Sunday morning U.S. Treasury Secretary Janet Yellen appeared on Sunday talk shows to announce that the Fed was NOT bailing out Silicon Valley Bank or any other banks, as they did in 2008. However, faced with the possibility of bank runs and a Black Monday collapse of the stock market, the Feds apparently reversed course (or maybe this was their intention all along?) and did just exactly what they said they would not do, and put into place a program to bail out depositors who were not covered by the FDIC’s limit of $250k per account. The FDIC also closed another bank, Signature Bank in New York, but assured depositors that they could get all of their money out of their accounts on Monday. And it worked, as futures trading that began Sunday night jumped up, instead of crashing, and Wall Street breathed a deep sigh of relief. We now have had 3 FDIC-insured banks fail in 5 days, but it doesn’t matter if your account was insured or not, as the Fed is just going to give everyone their money back. So the financial Armageddon has been postponed, again. The Big Tech billionaires, like Mark Cuban, whined and complained over the weekend that the Fed was not stepping in to save them, so the Fed obliged. The banking system was saved, for now, so the $billions can continue to pour into Wall Street to fund the military industrial complex to continue their wars, as well as $billions flowing into Big Pharma to keep funding never-ending emergency use authorizations for new drugs and vaccines. This won’t fix the systemic problem with our financial system, but at least depositors should be able to get access to their money Monday, even though that money will be worth far less than it was on Friday. Get ready for the mass consolidation of the banking industry now and the rollouts of Digital IDs and eventually Central Bank Digital Currencies (CBDCs).
The UK’s largest oil and gas producer, Harbour Energy, is cutting investments and jobs after the new windfall tax on the industry sapped nearly all of its 2022 profits.
Harbour Energy’s profits last year were $2.5 billion, pre-tax, but after taxes, the company was left with just an $8 million profit – that’s after the $1.5 billion that needed to go towards the Energy Profits Levy.
Harbour Energy has not divulged how many workers will lose their jobs.
Harbour Energy said it has cut back on investments, too, with Harbour choosing not to move forward on two drill sites and declining to participate in the North Sea offshore licensing round.
The windfall tax has hit UK North Sea producers, many which have already announced reduced investments on the UK Continental Shelf, the new head of trade body Offshore Energies UK said last month.
The UK raised the windfall tax on oil and gas operators’ profits last autumn by 10 percentage points, to 35 percent.
The increased rate for the Energy Profits Levy went into effect on January 1 of this year. It was also extended into March 2028, from December 2025.
The additional levies increased the total tax rate on oil and gas companies to 75 percent – the highest of any industry in the UK.
Shell has said it is reevaluating all of its UK projects which make up $30 billion of investments, and TotalEnergies has also said it would cut investments in the UK by 25 percent.
Oil and gas companies saw a substantial increase in profits last year thanks to higher oil and gas prices amid geopolitical turmoil and tight markets.
END
8. EMERGING MARKETS//AUSTRALA NEW ZEALAND ISSUES
YOUR EARLY CURRENCY/GOLD AND SILVER PRICING/ASIAN AND EUROPEAN BOURSE MOVEMENTS/AND INTEREST RATE SETTINGS MONDAY MORNING 7;30AM
EURO VS USA DOLLAR:1.0662 UP .0032
USA/ YEN 133.24 DOWN 1.591/NOW TARGETS INTEREST RATE AT .50% AS IT WILL BUY UNLIMITED BONDS TO GETS TO THAT LEVEL…//YEN STILL FALLS//
GBP/USA 1.2052 UP 0.0050
USA/CAN DOLLAR: 1.3792 DOWN .0018 (CDN DOLLAR UP 18 PTS)
Last night Shanghai COMPOSITE CLOSED UP 38.62 PTS OR 1.20%
Hang Sang CLOSED DOWN 376.05 PTS OR 1.95%
AUSTRALIA CLOSED DOWN 0.51% // EUROPEAN BOURSE: ALL RED
Trading from Europe and ASIA
I) EUROPEAN BOURSES ALL RED
2/ CHINESE BOURSES / :Hang SANG CLOSED DOWN 376.05 PTS OR 1.95%
/SHANGHAI CLOSED UP 38,62 PTS OR 1.20%
AUSTRALIA BOURSE CLOSED DOWN 0.51%
(Nikkei (Japan) CLOSED DOWN 311.01 PTS OR 1.11%
INDIA’S SENSEX IN THE RED
Gold very early morning trading: 1889.75
silver:$21.02
USA dollar index early MONDAY morning: 103.84 DOWN 32 BASIS POINTS from THURSDAY’s close.
The USA/Yuan, CNY: closed ON SHORE (CLOSED UP ..(6.8372)
THE USA/YUAN OFFSHORE: (YUAN CLOSED (DOWN)…. 6.8451
TURKISH LIRA: 18.97 EXTREMELY DANGEROUS LEVEL/DEATH WISH/HYPERINFLATION TO BEGIN.
the 10 yr Japanese bond yield at +0.267…VERY DANGEROUS
Your closing 10 yr US bond yield DOWN 19 IN basis points from FRIDAY at 3,509% //trading well ABOVE the resistance level of 2.27-2.32%) very problematic
USA 30 yr bond yield 3.609 DOWN 9 in basis points
USA 2 yr bond yield: 4.136 DOWN 45 basis points
Your closing USA dollar index, 103.25 DOWN 90 BASIS PTS ON THE DAY/1.00 PM/
Your closing bourses for Europe and the Dow along with the USA dollar index closing and interest rates MONDAY: 12:00 PM
London: CLOSED DOWN 162.01 PTS OR 2.09%
German Dax : CLOSED DOWN 376.44 POINTS OR 2.44%
Paris CAC CLOSED DOWN 168.18PTS OR 2.33%
Spain IBEX DOWN 138.20 POINTS OR 1.47%
Italian MIB: CLOSED DOWN 876,68 PTS OR 3.21%
WTI Oil price 75,90 12: EST
Brent Oil: 81.94 12:00 EST
USA /RUSSIAN /// UP TO: 76.10/ ROUBLE UP 1 AND 15/100 RUBLES/DOLLAR
GERMAN 10 YR BOND YIELD; +2.2625
UK 10 YR YIELD: 3.399 DOWN 24 BASIS PTS
CLOSING NUMBERS: 4 PM
Euro vs USA: 1.0726 UP 0.0096 OR 96 BASIS POINTS
British Pound: 1.2182 UP .01072 or 107 basis pts
BRITISH 10 YR GILT BOND YIELD: 3.404% DOWN 14 BASIS PTS
USA dollar vs Japanese Yen: 133.425 DOWN 1.444////YEN UP 144 BASIS PTS//
USA dollar vs Canadian dollar: 1.3733 DOWN .0077 (CDN dollar, UP 77 basis pts)
West Texas intermediate oil: 74.42
Brent OIL: 80.21
USA 10 yr bond yield DOWN 11 BASIS pts to 3.586%
USA 30 yr bond yield UP 3 BASIS PTS to 3.725%
USA 2 YR BOND: DOWN 55 PTS AT 4.034%
USA dollar index: 103.25 DOWN 96 BASIS POINTS
USA DOLLAR VS TURKISH LIRA: 18.97
USA DOLLAR VS RUSSIA//// ROUBLE: 75.00 UP 1 AND 10/100 roubles
DOW JONES INDUSTRIAL AVERAGE: DOWN 90.50 PTS OR 0.28%
NASDAQ 100 UP 92,88 PTS OR 0.79%
VOLATILITY INDEX: 26,83 UP 2.03 PTS (8.19)%
GLD: $177,89 UP 4.40 OR 2.32%
SLV/ $20.00 UP 1.14 OR 6.04%
end)
1 a)USA TRADING TODAY IN GRAPH FORM
Big Trouble In Little Banks – Bailout Sparks Buying Panic In Bonds, Bitcoin, & Bullion
MONDAY, MAR 13, 2023 – 04:02 PM
The Fed/TSY/FDIC stepped in and saved the world again last night… but nobody told regional banks, whose shares are down dramatically today…
Admittedly off the lows of the day, but all with multiple trading halts today. FRC, WAL, and MYFW are the highest default risk banks in the Russell 3000 Banks Subsector, according to Bloomberg…
Source: Bloomberg
But it’s not just the small banks who are seeing default risk increase, all of the global majors are seeing CDS spreads rise…
Source: Bloomberg
And Credit Suisse CDS has never closed higher (and is now more than double the risk than at the peak of the financial crisis)…
Source: Bloomberg
With the regional bank index continuing to crash-land…
After a year of hiking rates and hawkish FedSpeak, all it took to tighten financial conditions drastically was a open-ended facility to bail out the financial system. Bloomberg’s financial conditions index tightened massively overnight…
Source: Bloomberg
And the market has completely blown up any hopes that The Fed had for a hawkish path from here with the terminal rate plunging and significant rate-cuts being priced in. For context, the market expected over 110bps of rate-hikes by September on Wednesday, it now believes that by September, rates will be over 40bps lower…
Source: Bloomberg
For context, today was the biggest gain in the 3rd ED contact (which is currently the Sept 2023 contract) since 1987…
Source: Bloomberg
The shift in the market’s expectation for the Fed’s rate trajectory is simply stunning…
Stocks rallied after the bailout, but we note that the US Majors were unable to get back to pre-SVB-Fail levels. Small Caps (heavy with financials) have been clubbed like a baby seal…
Notably, 0DTE players faded the initial rebound in stocks…
The reaction in markets is dramatic, with expectations for The Fed’s rate-trajectory collapsing…
Source: Bloomberg
The terminal rate has plunged from September 2023 at 5.70% on Wednesday to June 2023 at 5.15%, and expectations for rate-cuts in H2 2023 are soaring…
Source: Bloomberg
The odds of a 50bps hike in March plunged from 75% to less than 20% and May has collapsed from a coin-toss for 50bps to just 85% odds of a 25bps hike…
Source: Bloomberg
The reaction in asset markets is QE-esque with stocks up 1-1.5% (not as much as expected)…
Treasury Futures surged at the open, implying a 10bps or so drop in the 10Y yield, but have pulled back a little…
Gold spiking to $1900…
And Bitcoin surging back above $22,000, erasing all the FUD post-SVB..
Source: Bloomberg
Additionally, USDC has re-pegged with the $1…
What a shitshow.
As we said earlier on twitter, “this is a regulatory failure of historic proportions by both the Fed and Treasury. Instead of preventing billions in losses, the Fed was worrying about board diversity and Yellen was flying to Ukraine. Everyone should be sacked immediately.”
end
TRADING MONDAY MORNING
Two yr treasury yields plunge by the most since “Black Monday”//gold soars as the rate hike odds collapse
(zerohedge)
2Y Treasury Yields Plunge Most Since ‘Black Monday’, Gold Soars As Rate-Hike Odds Collapse
MONDAY, MAR 13, 2023 – 08:18 AM
The Fed/FDIC/TSY bailout (BTFP!?) has prompted a massive repricing of the market’s expectations for The Fed’s rate-trajectory from here.
The terminal has plunged and pulled forward…
Source: Bloomberg
After Goldman’s forecast that The Fed will pause in March (next week), the odds of a 25bps rate-hike have dropped to 80% (from a 75% chance of 50bps on Wednesday after Powell’s hawkish comments)…
Source: Bloomberg
The market now expects rates to be lower than they are now by September…
Source: Bloomberg
All bond yields are lower overnight, led by the short-end…
In fact, the 2Y TSY yield is down almost 100bps in the last three days…
The biggest 3-day drop since 1987’s “black monday”…
Source: Bloomberg
This has steepened the yield curve dramatically (2s10s now at 2023 highs)…
Source: Bloomberg
…and that is the straw that breaks the model camel’s back on a recession warning.
Against all that, Gold is soaring, with futures testing $1900…
We leave you with the conclusion from The Wall Street Journal’s Editorial Board’s post-mortem: “critics have a point. For the second time in 15 years (excluding the brief Covid-caused panic), regulators will have encouraged a credit mania, and then failed to foresee the financial panic when the easy money stopped. Democrats and the press corps may try to pin the problem on bankers or the Trump Administration, but these are political diversions. You can’t run the most reckless monetary and fiscal experiment in history without the bill eventually coming due. The first invoice arrived as inflation. The second has come as a financial panic, with economic damage that may not end with Silicon Valley Bank.”
end
II) USA DATA
iii) USA ECONOMIC NEWS//
Chronological events leading up to Sunday night’s big bailout:
1. FRIDAY NIGHT
This is what happened to SBV: JPMorgan and Peter Thiel, a huge venture capitalist urged venture capital entities to remove their holdings from SBV. A total of 42 billion dollars were removed on Thursday March 9, leaving a negative $1 billion in cash and thus they were insolvent. It is interesting that JPMorgan was the only bank to see an increase in its share price as it picked up a majority of these funds. JPMorgan wants the Fed to QE.
(zerohedge)
Record Bank Run Drained A Quarter, Or $42BN, Of SVB’s Deposits In Hours, Leaving It With Negative $1BN In Cash
FRIDAY, MAR 10, 2023 – 07:21 PM
For much of the day, anyone doing analysis on the now-liquidated Silicon Valley Bank was confined to using stale financial data as of Dec. 31… we certainly were when analyzing the impact of SVB’s contagion (see here) as excerpted below:
For those who slept through yesterday, here is what you missed and why the US banking system is suffering its worst crisis since 2020. Silicon Valley Bank, aka SIVB, the 18th largest bank in the US with $212 billion in assets of which $120 billion are securities (of which most or $57.7BN are Held to Maturity (HTM) Mortgage Backed Securities and another $10.5BN are CMO, while $26BN are Available for Sale, more on that later )…
… funded by over $173 billion in deposits (of which $151.5 billion are uninsured), has long been viewed as the bank at the heart of the US startup industry due to its singular focus on venture-capital firms. In many ways it echoes the issues we saw at Silvergate, which banked crypto firms almost exclusively.
The big question, of course, is what happened in the past 24 hours to not only snuff the bank’s proposed equity offering, but to push the bank into insolvency.
We got the answer just a few moments after that tweet, when the California Department of Financial Protection and Innovation reported that shortly after the Bank announced a loss of approximately $1.8 billion from a sale of investments and was conducting a capital raise (which we now know failed), and despite the bank being in sound financial condition prior to March 9, 2023, “investors and depositors reacted by initiating withdrawals of $42 billion in deposits from the Bank on March 9, 2023, causing a run on the Bank.“
As a result of this furious drain, as of the close of business on Thursday, March 9, “the bank had a negative cash balance of approximately $958 million.”
At this point, despite attempts from the Bank, with the assistance of regulators, “to transfer collateral from various sources, the Bank did not meet its cash letter with the Federal Reserve. The precipitous deposit withdrawal has caused the Bank to be incapable of paying its obligations as they come due, and the bank is now insolvent.”
Some context: as a reminder, SIVB had $173 billion in deposits as of Dec 31., which means that in just a few hours a historic bank run drained a quarter of the bank’s funding!
But not everyone got out in time obviously, there is a long line of depositors who are over the $250,000 FDIC insured limit (in fact only somewhere between 3 and 7% of total deposits are insured). The following list, while incomplete, is approximately sorted by size of exposure:
USDC – Crypto Stablecoin run by Circle – Silicon Valley Bank is one of six banking partners Circle uses for managing the ~25% portion of USDC reserves held in cash. While we await clarity on how the FDIC receivership of SVB will impact its depositors, Circle & USDC continue to operate normally.
ROKU – Roku had 26% of its cash, $487 million with Silicon Valley Bank
RBLX – Roblox said 5% of its $3b cash and securities balance is held at SVB.
DNA – Gingko Bioworks: Only the cash balance of the company’s wholly-owned subsidiary Zymergen Inc. is held in deposit accounts at SVB, representing approximately $74M or 6% of the company’s cash and cash equivalents as of December 31, 2022
RKLB – RocketLab USA had about $38 million in its accounts with the bank, representing about 7.9% of the startup’s cash and equivalents
LC – Lending Club warned about potentially losing funds on deposit at SVB of $21 million, said amount isn’t material to its liquidity position or capital levels, and doesn’t pose a risk to the group’s business or operations.
PAYO – Payoneer: Of the company’s approximately $6.4B in total cash balances as of December 31, 2022, less than $20M is held at SVB
PTGX – Protagonist Therapeutics considers its exposure to any liquidity concern at SVB to be limited, given that cash held at SVB is approximately $13 million as of March 9, 2023.
ACHR – Archer Aviation entered into a $20 million loan with SVB in 2021, $10 million of which is due for repayment in 2023
COHU – Cohu announced that it has deposit accounts with SVB with an aggregate balance of approximately $12.3M, which is approximately 3.8% of the company’s total cash and investments.
IGMS – IMG Biosciences: ‘As of March 10, 2023, the Company holds less than $5.0 million in deposits at SVB. Therefore, the Company believes it does not have any material exposure to any liquidity concerns at SVB.’
RYTM – Rhythm Pharmaceuticals announced that it has deposit accounts with SVB with an aggregate balance of approximately $3.4 million, which is approximately 1.1% of the Company’s total cash and cash equivalents.’
SYRS – Syros Pharmaceuticals discloses that, as of March 10, 2023, it has two deposit accounts at Silicon Valley Bank. One of these accounts has a balance of less than $250,000, and the other has a balance of approximately $3.1 million pursuant to a letter of credit that the Company was required to provide to its landlord in connection with the execution of the lease for its corporate headquarters…
EYPT – EyePoint Pharmaceuticals currently maintains a de minimis amount of cash, in the single digit millions of U.S. dollars, with Silicon Valley Bank (SIVB)
ATRA – Atara Biotherapeutics currently maintains an account at Silicon Valley Bank (“SVB”) holding cash deposits of approximately $2 million, which amount the Company considers to be immaterial to its liquidity.’
ISEE – Iveric Bio currently maintains a de minimis amount of cash and cash equivalents, in the low single digit millions of U.S. dollars, with Silicon Valley Bank (“SVe”).’
VERA – Vera Therapeutics currently holds approximately 1.2% of its cash and investments with SVB. Accordingly, the Company considers its risk exposure relating to SVB to be minimal.
XFOR – X4 Pharmaceuticals had approximately 2.5% of its cash deposits with SVB.
CTMX – CytomX Therapeutics does not consider its exposure to any liquidity concern at SVB to be significant. The cash held at SVB in CytomX’s operating CTMX account is at or near the FDIC-insured limit of $250,000. CytomX also maintains a deposit account at SVB under a standby letter of credit issued pursuant to its office lease for approximately $917,000.’
AXSM – Axsome Therapeutics has material cash deposits with SVB.
WVE – Wave Life Sciences aggregate amount of the company’s cash and restricted cash held at SVB is approximately $1.5M.
JNPR – Juniper Networks maintains operating accounts at SVB with a minimal cash balance of less than 1% of the company’s total cash
QS – QuantumScape has very limited exposure to SVB, with only a low single digit percentage exposure relative to both the Company’s total liquidity and total assets.
And now the 64 trillion dollar question: was the bank run sparked by the bank’s attempted capital raise – which followed a modest $1.8 billion in losses as the bank sold off its AfS holdings to boost its liquidity – or was it the result of an external influence? What we mean by this is that as reported yesterday, several prominent venture capitalists – such as Peter Thiel – advised their tech startups to withdraw money from Silicon Valley Bank on Thursday. Would the bank run have happened if it wasn’t for their urging? Or another question: why would some of the VC luminaries actively encourage a bank run? Yesterday we proposed one possible answer.
And while such a course of action by venture capitalists would be understandable, if ethically questionable, what is perhaps more notable is what Bloomberg reported earlier, citing The Infromation: it wasn’t just the Peter Thiels of the world:
Let us get this straight: the largest US commercial bank was actively soliciting the clients of one of its biggest competitors, and the 16th largest US bank, knowing full well deposit flight would almost certainly lead to the collapse of a bank which courtesy of fractional reserve banking, had only modest cash to satisfy deposit demands: certainly not enough to meet $42 billion in deposit outflows.
Of course, Jamie, who has suddenly emerged as a key figure in the Jeff Epstein scandal alongside Jes Staley, knows this, and would be delighted with an outcome that kills two birds with one stone: take his name off the front pages and also make JPMorgan even bigger. Actually three birds: remember it was JPM that started that “Not QE” Fed liquidity injection in Sept 2019 when the bank “suddenly” found itself reserve constrained. We doubt that JPM would mind greatly if Powell ended his rate hikes and eased/launched QE as a result of a bank crisis, a bank crisis that Jamie helped precipitate.
And while we wait to see if Dimon’s participation in the Epstein scandal will now fade from media coverage, and whether Powell will launch QE, we know one thing for sure: JPM was a clear and immediate benefactor of SIVB’s collapse because in a day when everything crashed, JPM stock was one of the handful that were up.
end
2. Saturday morning.
Harvey: the bailout will not save Alecta as they were shareholders!!. Their stock plummets to zero)
This is big news:
The bankruptcy of SBV has just hurt Sweden as Alecta, Sweden’s largest pension fund
is SBV’s 4th largest shareholder. At Dec 31 year end, it held 608 million dollars worth of stock
in SBV and now all that money is gone! Total assets that Alecta oversees at Dec 31: 104 billion dollars.
3 UPDATES ON THE SILICON BANK FAILURE//OTHER BAILOUTS/SUNDAY AND THEN MONDAY
3.SUNDAY NIGHT
The Fed panics: signature bank suddenly is shutters and then the Fed, the treasury and the FDIC announce another banking system bailout
(zerohedge)
Fed Panics: Signature Bank Suddenly Shuttered; Fed, TSY, FDIC Announce Another Banking System Bailout
6:20pm ET Update: On Friday, we said that the Fed will have to make an announcement before the Monday open, and we didn’t have to wait that long: in fact, the Fed waited just 15 minutes after futures opened for trading to announce the new bailout, alongside even more shocking news: the Treasury announced that New York State regulators are shuttering Signature Bank – a major New York bank – adding that all depositors will have access to their money on Monday.
And as we process the shock of yet another small bank failure (which makes JPMorgan even bigger), the Fed just issued a statement saying that “to support American businesses and households, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors. This action will bolster the capacity of the banking system to safeguard deposits and ensure the ongoing provision of money and credit to the economy.“
Additionally, the Federal Reserve is prepared to address any liquidity pressures that may arise. Some more details:
The financing will be made available through the creation of a new Bank Term Funding Program (BTFP), offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral. These assets will be valued at par. The BTFP will be an additional source of liquidity against high-quality securities, eliminating an institution’s need to quickly sell those securities in times of stress.
With approval of the Treasury Secretary, the Department of the Treasury will make available up to $25 billion from the Exchange Stabilization Fund as a backstop for the BTFP. The Federal Reserve does not anticipate that it will be necessary to draw on these backstop funds.
After receiving a recommendation from the boards of the Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve, Treasury Secretary Yellen, after consultation with the President, approved actions to enable the FDIC to complete its resolution of Silicon Valley Bank in a manner that fully protects all depositors, both insured and uninsured. These actions will reduce stress across the financial system, support financial stability and minimize any impact on businesses, households, taxpayers, and the broader economy.
The Board is carefully monitoring developments in financial markets. The capital and liquidity positions of the U.S. banking system are strong and the U.S. financial system is resilient.
Depository institutions may obtain liquidity against a wide range of collateral through the discount window, which remains open and available. In addition, the discount window will apply the same margins used for the securities eligible for the BTFP, further increasing lendable value at the window.
The Board is closely monitoring conditions across the financial system and is prepared to use its full range of tools to support households and businesses, and will take additional steps as appropriate.
And just in case that’s not enough, the Treasury issued a joint statement with the Fed and FDIC in which Powell, Yellen and Gruenberg all said that they are “taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system. This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.”
Additionally, the trio announced that all depositors at Silicon Valley Bank will be bailed out, as will the depositors of New York’s Signature Bank, which has just failed as well, and whose depositors will be made whole after invoking a “systemic risk exception”
After receiving a recommendation from the boards of the FDIC and the Federal Reserve, and consulting with the President, Secretary Yellen approved actions enabling the FDIC to complete its resolution of Silicon Valley Bank, Santa Clara, California, in a manner that fully protects all depositors. Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.
We are also announcing a similar systemic risk exception for Signature Bank, New York, New York, which was closed today by its state chartering authority. All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer.
While depositors are safe, creditors and equity holders are not:
Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.
Finally, the Federal Reserve Board on Sunday announced it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors.
The conclusion:
The U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today’s actions demonstrate our commitment to take the necessary steps to ensure that depositors’ savings remain safe.
Translation: the Fed’s hiking cycle is dead and buried, and here comes the next round of massive liquidity injections. It also means that the Fed, Treasury and FDIC have just experienced the most devastating humiliation in recent history – just 4 days ago Powell was telling Congress he could hike 50bps and here we are now using taxpayer funds to bail out banks that have collapsed because they couldn’t even handle 4.75% and somehow the Fed has no idea!
To summarize:
Signature Bank has been closed
All depositors of Silicon Valley Bank and Signature Bank will be fully protected
Shareholders and certain unsecured debtholders will not be protected
New Fed 13(3) facility announced with $25 billion from ESF to backstop bank deposits
As we said earlier on twitter, “this is a regulatory failure of historic proportions by both the Fed and Treasury. Instead of preventing billions in losses, the Fed was worrying about board diversity and Yellen was flying to Ukraine. Everyone should be sacked immediately.”
Oh, and if the Fed really thinks that $25 billion from the ESF will be enough to backstop a bank run on $18 trillion of deposits…
… we wish them the best of luck.
6:10pm ET Update: Futures have opened for trading sharply higher, with bitcoin and precious metals also spiking amid rising expectations of either some sort of bank system bailout/backstop or, more likely, an end to the Fed’s hiking cycle.
Echoing what the WaPo reported in an earlier trial balloon, Bloomberg writes that the Fed and the Treasury Department are preparing emergency measures to shore up banks and ensure they can meet potential demands by their customers to withdraw money.
As reported earlier, the Fed is planning to “ease the terms” of banks’ access to its discount window, giving firms a way to turn assets that have lost value into cash without the kind of losses that toppled SVB’s Silicon Valley Bank (as we noted earlier, the access to the Discoint Window was never an issue, what was is the stigma associated with using it and the likelihood that depositors will flee the moment it becomes public).
Additionally, the Fed and Treasury are also preparing a program to backstop deposits using the Fed’s emergency lending authority.
The use of the Fed’s emergency lending authority is for “unusual and exigent” circumstances, and signals that US regulators view the spillovers from SVB’s collapse as a sign of systemic risk in markets. Bloomberg adds that the FDIC will need to declare a system risk exception in order to insure the uninsured depositors, but we doubt that will be an issue.
The emergency lending facility is a Depression-era statute in the Federal Reserve Act that allows the central bank to make loans directly. The Fed is required to establish that borrowers were unable to obtain liquidity elsewhere. Using the emergency authority requires a vote by the Fed’s board and approval from the Treasury secretary.
Meanwhile, as reported previously, some banks began drawing on the discount window Friday, seeking to shore up liquidity in a panicked frenzy as widespread liquidations on Friday saw many regional banks lose as much as half of their market cap before recovering.
Amid speculation of yet another taxpayer funded bailout – and a guaranteed end to the Fed’s rate hikes and potential return of QE – stock futures jumped above 3900…
…. with gold and bitcoin surging too.
* * *
4:30pm ET Update:It’s getting to the point where every new “proposal” or “idea” being thrown about is worse than the previous one (or maybe this is just how the clueless LGBTQ equity-focused Fed is doing trial balloons on a Sunday afternoon. Shortly after the WaPo reported that the Fed is “seriously considering safeguarding all uninsured deposits at Silicon Valley Bank”, BBG is out with a report that the Federal Reserve is also “considering easing the terms of banks’ access to its discount window, giving firms a way to turn assets that have lost value into cash without the kind of losses that toppled SVB Financial Group.”
Such a move would increase the ability of banks to keep up with demands from depositors to withdraw, without having to book losses by selling bonds and other assets that have deteriorated in value amid interest-rate increases — the dynamic that caused SVB to collapse on Friday.
The report goes on to note that as many had expected, some banks began drawing on the discount window Friday, seeking to shore up liquidity after authorities seized SVB’s Silicon Valley Bank, which is precisely why it is bizarre that this is even news: after all, the Discount Window has always been opened, and the fact that banks hate to use it has nothing to do with “ease of access” and all to do with the stigma of being associated with the discount window. Just recall how banks that were revealed to have used the discount window around Lehman’s failure saw accelerating bank runs.
Or maybe the Fed’s thinking goes that while it would be too late to save SIVB, other banks would somehow boost confidence of their depositors by yelling from the rooftops: “Hey, look at us, we are well capitalized: we just borrowed $X billion from the Fed’s Discount Window.”
Needless to say, the mere rumor that regional bank XYZ has been forced to access this “last ditch” funding facility will result in all its depositors fleeing, which is why we once again ask: after “fixing” Ukraine’s Burisma, is that polymath genius Hunter Biden now in charge of US bank bailout policy?
* * *
3:00pm ET Update: In a reversal of what Janet Yellen said just hours ago, WaPo reports that federal authorities are “seriously considering safeguarding all uninsured deposits at Silicon Valley Bank” – and by extension any other bank on the verge of failure – and are weighing an extraordinary intervention to prevent what they fear would be a panic in the U.S. financial system. Translation: bailout of all depositors, not just those guaranteed by the the FDIC (<$250K).
Officials at the Treasury Department, Federal Reserve, and Federal Deposit Insurance Corporation discussed the idea this weekend, the people said, with only hours to go before financial markets opened in Asia. White House officials have also studied the idea, per two separate people familiar with those discussions. The plan would be among the potential policy responses if the government is unable to find a buyer for the failed bank.
While selling SVB to a healthy institution remains the preferred solution – as most bank failures are resolved that way and enable depositors to avoid losing any money – there have been several reports that no big bank has stepped up as of yet, leaving the government/Fed as the only option.
As reported earlier, the FDIC began an auction process for SVB on Saturday and hoped to identify a winning bidder Sunday afternoon, with final bids due at 2 p.m. ET.
Some more from the WaPo report:
Although the FDIC insures bank deposits up to $250,000, a provision in federal banking law may give them the authority to protect the uninsured deposits as well if they conclude that failing to do so would pose a systemic risk to the broader financial system, the people said. In that event, uninsured deposits could be backstopped by an insurance fund, paid into regularly by U.S. banks.
Before that happens, the systemic risk verdict must be endorsed by a two-thirds vote of the Fed’s Board of Governors and the FDIC board along with Treasury Secretary Janet Yellen. No final decision has been made, but the deliberations reflect concern over the collateral damage from SVB’s collapse and authorities’ struggle to respond amid limits on their powers implemented following the 2008 financial bailouts.
“We’ve been hearing from those depositors and other concerned people this weekend. So let me say that I’ve been working all weekend with our banking regulators to design appropriate policies to address this situation,” Yellen said on the CBS program “Face the Nation.”
But more importantly, the WaPo report contradicts what Yellen said just a few hours earlier, namely that “during the financial crisis, there were investors and owners of systemic large banks that were bailed out . . . and the reforms that have been put in place means we are not going to do that again,”
This suggests that in just a few short hours, officials and regulators peaked behind the scenes and realized just how bad a potential bad crisis could be and have made a 1800 degree U turn.
The result: any erroneous higherer for longerer narrative spewed by some self-appointed experts has just blown up, and what is about to be unleashed is another vast liquidity wave, something that bitcoin clearly is starting to anticipate.
* * *
1:15pm ET Update: In a throwback to the legendary “Lehman Sunday”, when dozens of credit traders did an ad hoc CDS trading and novation session on the Sunday ahead of the bank’s Chapter 11 filing to minimize the chaos and fallout from the coming bankruptcy, Bloomberg reports that the FDIC kicked off an auction process late Saturday for Silicon Valley Bank, with final bids due by Sunday afternoon.
The FDIC is reportedly aiming for “a swift deal” but a winner may not be known until late Sunday. Bloomberg also reported that the regulator is racing to sell assets and make a portion of clients’ uninsured deposits available as soon as Monday; the open questions are i) whether there will be a haircut and ii) how big it will be. A table from JPM’s Michael Cemablest below shows historical haircuts on uninsured depositors in previous bank crises.
We get a slightly more positive vibe from a Reuters report according to which “authorities are preparing “material action” on Sunday to shore up deposits in Silicon Valley Bank and stem any broader financial fallout from its sudden collapse.”
Details of the announcement expected on Sunday were not immediately available. One source said the Federal Reserve had acted to keep banks operating during the COVID-19 pandemic, and could take similar action now.
As fears deepened of a broader fallout across the U.S. regional banking sector and beyond, Yellen said she was working to protect depositors but ruled out a bailout.
“We want to make sure that the troubles that exist at one bank don’t create contagion to others that are sound,” Yellen told the CBS News Sunday Morning show. “During the financial crisis, there were investors and owners of systemic large banks that were bailed out … and the reforms that have been put in place means we are not going to do that again,” Yellen added.
Meanwhile, more than 3,500 CEOs and founders representing some 220,000 workers signed a petition started by Y Combinator appealing directly to Yellen and others to backstop depositors, warning that more than 100,000 jobs could be at risk.
Reuters also reports that the FDIC was trying to find another bank willing to merge with SVB:
“Some industry executives said such a deal would be sizeable for any bank and would likely require regulators to give special guarantees and make other allowances.”
That said, the longer we wait without some resolution the more likely it is that SVB’s unsecured depositors will get pennies on the dollar, according to the following (unconfirmed) reporting from Chalie Gasparino: “Bankers increasingly pessimistic a single buyer will emerge for SVB, laying out options for clients w money in there: 1-ride it out. 2-sell deposits for around 70-80 cents on dollar to other financial players; borrow against deposits jpmorgan at 50 cents on dollar.”
The FDIC previously said the agency has said it will make 100% of protected deposits available on Monday, when Silicon Valley Bank branches reopen.
There was also news for those whose money remains frozen at SIVB. BBG notes that tech lender Liquidity Group is planning to offer about $3 billion in emergency loans to start-up clients hit by the collapse of Silicon Valley Bank.
Liquidity has about $1.2 billion ready in cash to make available in the coming weeks, Chief Executive Officer and co-founder Ron Daniel said in an interview on Sunday. The group is also in discussions with its funding partners, including Japan’s Mitsubishi UFJ Financial Group Inc. and Apollo Global Management Inc., to offer an additional $2 billion in loans, he said.
“By helping the companies to survive now, I’m hoping some of them would succeed and come back to us in the future,” Daniel said. “We’re nurturing our future clients.” A typical loan will be a one-year facility of $1 million to $10 million, or as much as 30% of the balances held with SVB, Daniel said. The priority is to help companies meet payroll expenses.
The fate of other SVB-linked entities appears to be somewhat rosier. Bloomberg reports that Royal Group, an investment firm controlled by a top Abu Dhabi royal, is considering a possible takeover of the UK arm of Silicon Valley Bank following its collapse last week, according to people familiar with the matter. The conglomerate, chaired by United Arab Emirates National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan, is discussing a potential buy-out through one of its subsidiaries.
END
4. MONDAY MORNING:
The Fed’s plan to bail out the banks has not worked as shares in many banks have plummeted:
(zerohedge)
First Republic Shares Crash 60% As Regional Bank ‘Crisis In Confidence’ Spreads
MONDAY, MAR 13, 2023 – 06:55 AM
First Republic Bank’s stock crashed in premarket trading in New York following a statement issued on Sunday night that sought to ease investor worries about its liquidity situation in the wake of the failures of Silicon Valley Bank and Signature Bank.
Shares of the regional bank are down 60% in the premarket. The lender said in a statement late Sunday that it had more than $70 billion in unused liquidity to fund operations from agreements that included the Federal Reserve and JPMorgan Chase & Co.
“The additional borrowing capacity from the Federal Reserve, continued access to funding through the Federal Home Loan Bank, and ability to access additional financing through JPMorgan Chase & Co. increases, diversifies, and further strengthens First Republic’s existing liquidity profile,” the bank said, adding that more liquidity is available through the Fed’s new lending facility.
“The plunge in its shares is classic market psychology at work, with investors starting to question the credentials of any lender that may be remotely in the same category of Silicon Valley Bank,” Bloomberg’s Ven Ram wrote.
We pointed out over the weekend, “as a result of the SVB failure – one look at what is already taking place at some smaller, vulnerable banks such as this First Republic Branch in Brentwood should be sufficient to see what comes tomorrow if the Fed makes the wrong decision today.”
Despite the emergency lending program announced by the Fed and Treasury on Sunday to increase the availability of funds to meet bank withdrawals and prevent runs on other banks, fears have not been alleviated as other regional banks continue to experience significant pressure.
And why would that be? Well, as we outlined, “banks which are sitting on some $620 billion in unrealized losses on all securities (both Available for Sale and Held to Maturity) at the end of last year, according to the Federal Deposit Insurance Corp.”
If the Fed’s goal was to shore up wavering confidence in the banking system by announcing the alphabet soup of bailout facilities, the BTFP lending program — well, it hasn’t worked yet this morning:
PacWest Bancorp’s stock tumbled 27%
Western Alliance Bancorp’s shares slid 17%
Charles Schwab’s shares lost 6.7%
Bank of America’s stock fell 4.4%
Citizens Financial Group’s stock declined 2.7%
Wells Fargo’s stock slid 2.3%
The current question on everyone’s mind is whether the measures taken by the Fed are sufficient in preventing further depositor panic at other regional banks.
Then there’s this: “There’s no doubt in my mind: There’s going to be more. How many more? I don’t know,” William Isaac, the former chairman of the Federal Deposit Insurance Corporation, told Politico on Sunday. “Seems to me to be a lot like the 1980s,” he added.
… and Cramer strikes again.
end
3 B)USA OTHER ECONOMIC ISSUES// SUPPLY ISSUES//
Tom Luongo on the war over the dollar//part ii
(Tom Luongo)
Luongo: The War For The Dollar Is Already Over, Part II: The Fly Or The Windshield?
Live images flashing by Like windshields towards a fly Frozen in that fatal climb But the wheels of time, just pass you by
-RUSH, “Between the Wheels”
In part I of this series I told you the war over the US dollar was over because the bane of domestic monetary policy, Eurodollar futures, lost the battle with SOFR, the new standard for pricing dollars.
The ignominious end of the Eurodollar system is a study in the evolution of markets, as a new system replaces an old one. Old systems don’t die overnight. We don’t flip a switch and wake up in a new reality, unless we are protagonists in a Philip K. Dick novel.
More than a decade ago I looked at the responses to President Obama cutting Iran out of the SWIFT system as the beginning of the end of the petrodollar system. The goal was to take Iran out of the global oil markets by shutting Iran out from the dominant dollar payment system.
Out of necessity Iran opened up trade with its major export partners, most notably India, in something other than dollars. India and Iran started up a ‘goods for oil’ trade, or as Bloomberg called it at the time, “Junk for Oil.”
The stick of sanctions created a new market for pricing Iranian oil and a way around the monopoly of US dollar oil trading. India, struggling with massive current account deficits because of their high energy import bill, welcomed the trade as a way to lessen the pressure on the rupee.
Iran needed goods. They worked out some barter trade and the first shallow cuts into the petrodollar system were made.
Turkey eventually joined the fray, seeing the opportunity to act as a middle man by accepting gold into its banks from Iran’s customers and settling up with Iran in dollars or whatever.
More than 10 years later we’re now looking at the lynchpin of the petrodollar, Saudi Arabia, seriously considering taking other currencies for their oil. The petrodollar was never going to die overnight, it was always going to die as the cost of doing business in dollars rose to make using other currencies a better path to buying/selling oil.
Every time the US went to the sanctions well to coerce conformity, the more “star systems slipped through its fingers,” to quote Princess Leia. While we joke today about never ‘going full retard,’ this is just another way of saying that you should never threaten to nuke someone either.
Trump went sanctions nuclear on Iran in 2018. He failed.
“Biden” and Davos went nuclear on Russia in 2022, going further than even Trump. And they failed even harder. All they did was raise the cost of using dollars in the minds of the dollar’s best customers.
When the cost/benefit framework flips, behavior changes accordingly.
In the world of money, since we don’t have anything close to resembling real capital markets, rather politicized ones, policy is the thing that alters that cost/benefit structure the most. This means while analyzing the market reaction to day-to-day data the listening to the tea-leaf reading by commentators becomes an exercise in chasing your tail through a wilderness of rhetorical mirrors if you don’t include policy changes.
So, with that in mind we have to analyze structural changes to markets from a policy perspective to see what the future really looks like. It’s not that the markets don’t have a say in the matter, it’s that if you analyze the policy through the lens of capital flowing to where it is treated best, then the future outcome is pretty predictable if there isn’t a competing policy put in place to redirect that capital flow later.
In this sense, financial analysis in politicized markets is better described by court politics than spreadsheet output cells.
People want oil. They will buy it regardless of what Davos or “Biden” or anyone else says about this. Until you replace oil itself, no amount of policy changes will fundamentally change the market for oil unless you destroy the supply chain supporting the oil industry.
And analyzing oil supply and demand fundamentals in this case is a fool’s errand when malign actors are materially affecting the supply and demand for oil and are incentivized to ‘game the statistics.’ It’s not that these numbers are worthless, it’s more that they should be discounted heavily until policy changes are assessed.
Diminishing Returns of Socialism
In the end all markets respond predictably to the Law of Diminishing Marginal Utility. If you don’t believe that, then you are a Malthusian and publicly admitting you are a moron with the inability to accept outcomes you cannot personally perceive.
I put the “Peak Oil” folks in this category. And you know who you are.
I put Climate Change believers in this category as well. Yes, by the transitive property of rhetorical mathematics, I just called them all morons.
The Davos solution to their problems of overpromising the deliverables of socialism financed through the dollar is to default on those promises through global monetary inflation using war with Russia and China as the cover and Climate Change as the reason why it’s necessary.
This is to save themselves and secure totalitarian control for their posterity into the next cycle of history.
But history will prove them wrong. Because, in the end, you can’t fight a flowing river any more than you can alter the mass of human behavior with respect to their preferences. If they want to drive a car, eat a steak, live in a house, own a gun or have a child, they will.
You can delay it or make it more expensive but that expense is a double-edged sword, because as Margaret Thatcher famously said, “The problem with socialism is that eventually you run out of other people’s money.” (OPM)
Think of the Eurodollar system as the ultimate expression of OPM, which is a homophone for ‘hopium.’
If you really want to change their behavior, you have to give them more carrot than stick. This appraoch worked for decades to guide us towards their more perfect technocratic dystopian unions as long as money got progressively cheaper during the dollar reserve standard.
This system broke in 2008 and by 2011 forced the world, through a compliant Federal Reserve, into birthing the Coordinated Central Bank Standard, where all the major central banks would take turns inflating a deflating credit system.
But back to Diminishing Marginal Utility. The law simply states that the acquisition of the next unit of a thing, any thing (water, money, food, credit dollars, etc.), is worth less to a person than the previous unit. We act to alleviate our perceived need to hedge against future uncertainty. So, in hurricane season, we Floridians stock up on bottled water, propane, toilet paper, preserved food, etc.
Price is supposed to tell us when to stop stocking up and really assess what’s important to us.
I’ll leave my rant about ‘anti-gouging’ laws on the cutting room floor.
It is this verity about human action in the face of both scarcity and abundance that creates the Newtonian ‘opposite reaction’ to rising/falling costs.
It is what always squashes the fears of Malthusian thinking against the windshield of history.
So, while you can bully people into acting against their preferred outcomes for a while by raising the costs of disobedience to be greater than the marginal return of defiance, eventually a reversal of that cost/benefit framework takes place.
For the Fed and the domestic banking interests, the best way to get to their preferred end, a domestically-driven cost structure to the US dollar, it meant offering the market gradually a better alternative to the old system or Eurodollars.
SOFR is a collateralized rate, delivered to the market by the market for dollars. It’s a fundamentally superior interest rate product than LIBOR, which is a number picked out of thin air by 18 banks of dubious character and even more dubious motivations.
Eurodollar futures are set based on LIBOR and because of LIBOR being written previously into every old debt and debt derivative instrument out there, LIBOR was the tail wagging the monetary policy dog.
The five-year roll out of SOFR was done to introduce the better system and phase it in allowing the market to come to the ‘right’ conclusion that it is superior. If SOFR wasn’t a superior product to LIBOR no matter how much the Fed tried to force it onto the market, the market would have rejected it.
Eurodollar futures would have remained a vibrant and liquid market up to the last day and call the Fed’s bluff.
But SOFR was a superior product, gradually weaning the markets off LIBOR. Now there is still a whole lotta LIBOR-indexed debt out there and a lot of people are holding out hope this is all just a bad dream, but it’s not.
There has been an uptick in loans switching to the Federal Reserve’s recommended Secured Overnight Financing Rate (Sofr) from Libor so far this year, but “a huge volume” still needs to transition, he said.
Of the loans, many of which are held by CLOs, that still need to remediate, about 55% risk falling back to the prime rate, which is 7.75%, compared to around 4.5% for Sofr, if they do not find a transition path before the deadline, according to KKR.
That difference could hurt borrowers with lots of debt and lower credit ratings, like CCC or B-, as their chances of downgrades rise, and it also puts lenders, such as CLOs that are measured by how many CCCs and defaults are in their vehicles, in a difficult spot, said Reback.
“That is a significant risk for the loan market,” she said.
Caught between the Scylla (a 25 bps spread over LIBOR) and Charybdis of prime, 3.50% over that, the outcome is inevitable. Anyone holding out is likely hoping for a last-minute policy change to help them out. If I had to guess those holdouts are at Blackrock trying to blackmail the Fed like they blackmailed the Bank of England last summer over UK pension obligations.
I don’t know that the situation is analogous but it certainly smells that way.
He’d been thinking about remonetizing gold, spurred on by a Twitter Spaces we did where we discussed gold redeemable Treasuries, or as Vince put it, “throw gold out onto the yield curve.”
Listen to the podcast as we go over this idea in detail.
Like the fall of the petro- and euro- dollar, the re-monetization of gold cannot happen overnight. Instead something like that has to happen over time. Again, using more carrot than stick is the better, more sustainable path.
The markets are screaming for a solution to the current mess — wanting less debt, even less leveraged debt, fewer wars, more decentralization — but everyone also doesn’t want to be reduced to Bartertown and all that that implies.
So, the best way to achieve that is to signal to the market that this exactly what you want. It starts with policy. In the case of the Fed it starts with being wholly unapologetic of the political consequences of aggressively tight monetary policy.
FOMC Chair Jay “Baller” Powell gave us that this week testifying before the Senate Banking Committee.
Powell reiterated his ‘higher rates for longer’ mantra. But, unlike in the past, the markets are now actually listening to him. There are still holdouts, trying to undermine the Fed, but I’ll leave the ECB and BoJ out of the discussion for now. The bond markets are grudgingly accepting this but the yield curve on US Treasury debt is still stubbornly inverted.
But more significantly, Powell told Sen. Cynthia Lummis the Fed flat-out does not consider the fiscal situation on Capitol Hill in making monetary policy.(H/T Jim Bianco).
Read that passage carefully and you’ll see this FOMC Chair isn’t above telling Congress their business. You may not believe Powell but we know there are ways of getting out of this fiscal and monetary mess if we commit to doing it, rather than pouring gasoline on the socialist fire that the “Biden” Administration just did with their budget proposal.
Moreover, what’s unspoken by Powell and others in the position to support him is what’s lurking on the other side of the International North South Transport Corridor (INSTC), a growing international framework for trade wholly outside the control or threats of the western political establishment and their slap-happy sanction monkeys we call heads of state.
Powell can see the de-dollarization writing on the wall and he knows now is the time to slow down that trend and find a way to make the dollar more trustworthy. But, again, he can only deal with one side of that equation — the monetary policy side. The Fiscal and regulatory side are still firmly controlled by, frankly, shitbag commies; old, terrified colonial interests in Europe and the northeast US who see their time passing and refuse to accept it with grace.
People who would rather burn the world to the ground than let it fall into the hands of those they consider ‘the help.’
But ‘the help’ are no longer helpless in the face of a big bully US dollar. They have a plan and they are executing it.
That plan clearly involves the return of gold as the asset to balance the trade books to rebuild global trust and if the US and Europe don’t stop acting like entitled, spoiled children on the world stage, they will drop the gradualism and one day we will wake up in a different reality.
This was Powell’s real message to Congress this week. It is the clear geopolitical imperative staring us all in the face. But if we don’t start down it now voluntarily, the superior monetary system will eventually outcompete and capital will flow to where it is treated best.
This is the future policy choice we have to make our peace with. Because if we don’t I’m reminded of an old, bad joke I first heard as a teenager.
“What’s the last thing that goes through a fly’s head before it hits the windshield of your car?”
“It’s ass.”
“We can move from boom to bust From dreams to a bowl of dust. We can fall from rockets red glare Down to — “Brother can you spare…” Another war — another wasteland — and another lost generation…” — RUSH, “Between the Wheels”
3D More fallout from the Silicon Valley bank bailout:
What Did These 3 SVB Execs Know?
SATURDAY, MAR 11, 2023 – 04:00 PM
As lines (real and virtual) full of anxious depositors grew last week outside of Silicon Valley Bank branches around the world, and reassurances of “liquidity” were gushed from the C-Suite, three individuals within the firm were perhaps less troubled than those seeking their hard-earned cash back from the soon-to-be-failed bank.
12 days ago (on Feb 27th), Gregory Becker, the CEO of Silicon Valley Bank, sold $3.6 million worth (11%) of his shares…
Daniel Beck, the CFO, sold 32% (around $600,000) of his holdings…
And finally, CMO Michelle Draper sold 28%…
Notice that none of them had sold anything sizable for a year or so before this most recent (pre-collapse) sale (so it is a stretch to call this a pre-planned sale).
Additionally, Silicon Valley Bank on Friday paid out annual bonuses to eligible U.S. employees, just hours before the bank was seized by the U.S. government, Axios has learned from multiple sources.
But hey, we are sure it’s probably nothing to worry about, right?
Thus far in this 3-year fiasco of mismanagement and corruption, we’ve avoided a financial crisis. That’s for specific reasons. We just had not traveled there in the trajectory of the inevitable. Are we there yet? Maybe. In any case, the speed of change is accelerating. All that awaits is to observe the extent of the contagion.
The failure of the Silicon Valley Bank (SVB), $212 billion in assets until only recently, is a huge mess and a possible foreshadowing. Its fixed-rate bond holdings declined rapidly in market valuation due to changed market conditions. Its portfolio crashed further due to a depositor run. And it all happened in less than a few days.
It’s all an extension of Fed policy to curb inflation, reversing a 13-year zero-rate policy. This of course pushed up rates in the middle and right side of the yield curve, devaluing existing bond holdings locked into older rate patterns. Investors noticed and then depositors too. The high-flying institution that specialized in providing liquidity in industries that have lost their luster suddenly found itself very vulnerable.
In addition, the bank was exposed with a portfolio of collateralized mortgage obligations and mortgage-backed securities. But with rates rising, those are coming under stress too as high leverage in housing and real estate become untenable amidst falling valuations. Borrowers are finding themselves under water and that in turn adds to stress on lenders.
And where did SVB, and the entire banking industry, get the funds to bulk up their portfolios with such debt holdings? You guessed it: stimulus payments. Billions flooded in and it had to be parked somewhere making some return. At the time it seemed like a good deal, until Fed policy changed.
A house of cards comes to mind. But perhaps a better metaphor is a game of billiards in which every move introduces a cascade of new issues. Lockdowns prompted immense government spending which produced debt that was quickly monetized and eventually caused inflation, prompting the Fed to reverse course with the largest/fastest rate increases in history.
This destabilized (or restabilized) production structures away from the right side of the yield curve toward the left, shifting capital in search of return to the consumer-goods sector. Labor has begun to follow, thus creating a surplus of resources in information tech and a shortage in retails.
It was always naïve to think that this shift would take place without touching the banking institutions that shoveled leverage in the direction of industries that thrived during lockdowns but are cutting back massively now.
These banks are exposed in speculative ventures from which capital is fleeing. Their asset portfolios were tied, as usual, to a continuation of the status quo that stopped continuing, so investors and depositors are fleeing to safety.
Could the Fed have anticipated this? Probably. But what choice did it have? Again, this entire mess traces first to lockdowns and second to Ben Bernanke’s preposterous policies as Fed Chair in 2008. He imagined that he would fix a financial crisis by abolishing a natural force like interest rates on bonds. Then he pulled a fancy trick of keeping his “quantitative easing” off the streets by having the Fed pay more for deposits than the same money could earn in markets.
What was the problem? The problem was that capital is never still. It is always on the hunt for return. It found it in Big Tech and internet media, bolstered by seemingly infinite resources for advertising and hiring. This further caused an absolute gutting of normal rates of saving simply because there was no money in it. This situation persisted for a good 13 years.
Jerome Powell took over the Fed with the determination to put an end to the nonsense. He hoped for a soft landing. But then came the pandemic lockdowns. He was called upon to provide funding for the idiocy of a panicked Congress that spent many trillions as fast as possible, which only perpetuated lockdowns.
Everything seemed fine for a while, as it always does, but by January 2021, the bill came due in the form of roaring price inflation. The Fed had to reverse course dramatically. Starting at zero, it had to get federal funds rates to equal or exceed price increases (the terminal rate). It is not there yet so it has no choice but to barrel ahead.
The rate increases of course drew capital out of the industries that thrived over the lockdown period and back to retail and consumer goods. But meanwhile, the yield curve responded, as it must. From 30 days to 30 years, every bond offering was repriced, causing institutions holding old bonds to look like chumps. This is where SVB found itself, with a suddenly declining market valuation.
The coup de grâce was depositor behavior. In the search for safety, cash has found the return on short-term Treasuries far more attractive than speculative ventures. The flight to safety doomed the bank and its many partners in the financial industry. It’s a huge wake-up call for the whole of markets. No one in the industry is sitting comfortably today.
My concern here is that people will look at all these disasters in isolation. They are not isolated. They trace to the catastrophic decision in 2020 to lock down and fund those policies with money that did not exist until it was created.
That decision doomed the Fed’s plans to unravel its previous stupid policies and thus set us on the course toward calamity.
At this point, I’m sorry to report, no one is in a position to stop anything. Markets can be ferocious under these conditions. Markets are not all knowing but once they lose trust, there is no stopping the stampede of incredulity. There is no one at the Fed who can stop it and no wise managers at the top who can patch things up.
Take note of the collapse of bank stocks only hours after regulators took over SVB. My friends, we could be in for a wild ride. Stay safe.
end
More fallout:
Crypto group Circle admits $3.3bn exposure to failed Silicon Valley Bank | Financial Times
Circle, the operator of one of the world’s largest stablecoins, has said $3.3bn of its reserves are trapped in Silicon Valley Bank, triggering a fall in the value of its token as the crypto market reels from the failure of two US banks this week.
The announcement from Circle overnight on Friday prompted the company’s USDC crypto token to lose its peg to the dollar.
US exchange Coinbase said it was temporarily pausing conversions between USDC and the US dollar. Rival exchange Binance also said it would pause automatic conversions of USDC to BUSD, a stablecoin that carries the Binance branding.
Circle called for an urgent federal rescue plan for SVB.
The collapse of SVB, the second-largest bank failure in US history, is beginning to fan out to customers, in a further blow to the crypto market which is still recovering from a confidence crisis last year that took down many of its biggest names.
Earlier this week Silvergate, a US bank that had courted crypto customers, said it would wind down operations following a run on deposits.
Stablecoins play a key role in connecting traditional and crypto markets, and traders use them like cash or crypto-native dollars to make trades. Most track the value of a major currency such as the dollar one-for-one. Stablecoin operators typically earn interest on the traditional assets that underlie their tokens, with a higher supply in circulation boosting revenue.
Circle’s USD Coin is the second-largest stablecoin on the crypto market with $42bn in circulation, according to company data.
The company said that it holds a quarter of USDC reserves in cash with six banking partners, of which SVB was one. The majority of its $40bn reserves are held in short dated US government bonds and other US banks.
In a blog post on Saturday, Circle said USDC liquidity operations will resume when banks open on Monday. The firm added it would use corporate resources, involving external capital if necessary, if SVB does not return 100 per cent of deposits.
“It’s not just cryptocurrencies themselves that are under pressure: now the banks that support the industry itself are failing. And stablecoins like USDC are the way in and out of crypto for many investors,” said Charley Cooper, a former chief of staff at the Commodity Futures Trading Commission, the US regulator.
“The threat to even the reserve-backed [stablecoin] model has called into question the viability of the intersection between crypto and traditional finance,” he said.
Dante Disparte, Circle’s chief strategy officer, warned on Saturday that the company was protecting its stablecoin from a “black swan failure in the US banking system”.
“SVB is a critical bank in the us economy and its failure — without a Federal rescue plan — will have broader implications for business, banking and entrepreneurs,” he tweeted.
Circle said it would continue to operate normally while it awaited clarity from US regulators on how the failure of SVB will impact its depositors, Circle and USDC. It did not immediately respond to a request for comment.
Since SVB’s collapse the USDC token has traded as low as 88 cents on the dollar, according to industry price tracking website CoinMarketCap.
Circle held cash in several US regulated financial institutions, including Silvergate and SVB, it has disclosed.
end
Silicon Valley Bank Followed Exactly What Regulation Recommended
The second largest collapse of a bank in recent history could have been prevented. Now, the impact is too large, and the contagion risk is difficult to measure.
The demise of the Silicon Valley Bank (SVB) is a classic bank run driven by a liquidity event, but the important lesson for everyone is that the enormity of the unrealized losses and financial hole in the bank’s accounts would have not existed if it were not for ultra-loose monetary policy.
Let us explain why.
As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits, according to their public accounts. Their top shareholders are Vanguard Group (11.3%), BlackRock (8.1%), StateStreet (5.2%) and the Swedish pension fund Alecta (4.5%).
The incredible growth and success of SVB could not have happened without negative rates, ultra-loose monetary policy, and the tech bubble that burst in 2022. Furthermore, the bank’s liquidity event could not have happened without the regulatory and monetary policy incentives to accumulate sovereign debt and mortgage-backed securities.
The asset base of Silicon SVB read like the clearest example of the old mantra: “Don’t fight the Fed”.
SVB made one big mistake: Follow exactly the incentives created by loose monetary policy and regulation.
What happened in 2021? Massive success that, unfortunately, was also the first step to its demise. The bank’s deposits nearly doubled with the tech boom. Everyone wanted a piece of the unstoppable new tech paradigm. SVB’s assets also rose and almost doubled.
The bank’s assets rose in value. More than 40% were long-dated Treasuries and mortgage-backed securities (MBS). The rest were seemingly world-conquering new tech and venture capital investments.
Most of those “low risk” bonds and securities were held to maturity. They were following the mainstream rulebook: Low-risk assets to balance the risk in venture capital investments.
When the Federal Reserve raised interest rates, they must have been shocked.
The entire asset base of SVB was one single bet: Low rates and quantitative easing for longer.
Tech valuations soared in the period of loose monetary policy and the best way to hedge that risk was with Treasuries and MBS. Why would they bet on anything else? This is what the Fed was buying in billions every month, these were the lowest risk assets according to all regulations and, according to the Fed and all mainstream economists, inflation was purely “transitory”, a base-effect anecdote. What could go wrong?
Inflation was not transitory and easy money was not endless.
Rate hikes happened. And they caught the bank suffering massive losses everywhere. Goodbye bonds and MBS price. Goodbye tech “new paradigm” valuations. And hello panic. A good old bank run, despite the strong recovery of the SVB shares in January. Mark-to-market unrealized losses of $15 billion were almost 100% of the market capitalization of the bank. Wipe out.
As the famous episode of South Park said: “…Aaaaand it’s gone”. SVB showed how quickly the capital of a bank can dissolve in front of our eyes.
The Federal Deposit Insurance Corporation (FDIC) will step in, but it is not enough because only 3% of the deposits of SVB were less than $250,000. According to Time Magazine, more than 85% of Silicon Valley’s Bank’s deposits were not insured.
It is worse. One third of U.S. deposits are in small banks and around half are uninsured, according to Bloomberg.
Depositors at SVB will likely lose most of their money and this will also create significant uncertainty in other entities.
SVB was the poster boy of banking management by the book.
They followed a conservative policy of adding the safest assets -long-dated Treasury bills- as deposits soared.
SVB did exactly what those that blamed the 2008 crisis on “de-regulation” recommended.
SVB was a boring and conservative bank that invested the rising deposits in sovereign bonds and mortgage-backed securities and believed that inflation was transitory as everyone except us, the crazy minority, repeated.
SVB did nothing but follow regulation and monetary policy incentives and Keynesian economists’ recommendations point by point.
SVB was the epitome of mainstream economic thinking. And mainstream killed the tech star.
Many will now blame greed, capitalism and lack of regulation but guess what?
More regulation would have done nothing because regulation and policy incentivize adding these “low risk” assets. Furthermore, regulation and monetary policy are directly responsible for the tech bubble. The increasingly elevated valuations of non-profitable tech and the allegedly unstoppable flow of capital to fund innovation and green investments would never have happened without negative real rates, and massive liquidity injections. In the case of SVB, its phenomenal growth in 2021 is a direct consequence of the insane monetary policy implemented in 2020, when the major central banks increased their balance sheet to $20 trillion as if nothing would happen.
SVB is a casualty of the narrative that money printing does not cause inflation and can continue forever.
They embraced it wholeheartedly, and now they are gone.
SVB invested in the entire bubble of everything: Sovereign bonds, MBS and tech. Did they do it because they were stupid or reckless? No. They did it because they perceived that there was exceptionally low to no risk in those assets. No bank accumulates risk in an asset they believe has considerable risk. The only way in which a bank accumulates risk is if they perceive that there is none. Why do they perceive it? Because the government, regulators, central bank, and the experts tell them so. Who will be next?
Many will blame everything except the perverse incentives and bubbles created by monetary policy and regulation and will demand rate cuts and quantitative easing to solve the problem.
It will only worsen. You do not solve the consequences of a bubble with more bubbles.
The demise of Silicon Valley Bank highlights the enormity of the problem of risk accumulation by political design. SVB did not collapse due to reckless management, but because they did exactly what Keynesians and monetary interventionists wanted them to do.
end
Fed Announces Probe Into Its Own Regulatory Failure At SVB
MONDAY, MAR 13, 2023 – 04:09 PM
The Federal Reserve Board on Monday announced that Vice Chair for Supervision Michael S. Barr is leading a review of the supervision and regulation of Silicon Valley Bank, in light of its failure.
“The events surrounding Silicon Valley Bank demand a thorough, transparent, and swift review by the Federal Reserve,” said Chair Jerome H. Powell.
As a reminder, it was Moody’s that initially brought up issues with SVB.
When SVB reported its fourth quarter results in early 2023, Moody’s Investor Service, a credit rating agency took notice.
In early March, it said that SVB was at high risk for a downgrade due to its significant unrealized losses.
In response, SVB looked to sell $2 billion of its investments at a loss to help boost liquidity for its struggling balance sheet. Soon, more hedge funds and venture investors realized SVB could be on thin ice. Depositors withdrew funds in droves, spurring a liquidity squeeze and prompting California regulators and the FDIC to step in and shut down the bank.
The Fed’s review will be publicly released by May 1.
“We need to have humility, and conduct a careful and thorough review of how we supervised and regulated this firm, and what we should learn from this experience,” said Vice Chair Barr.
What are the chances anyone is found responsible in any way?
Barclays Joins Goldman In Expecting A Fed ‘Pause’ Next Week “Due To Financial Market Turbulence”
MONDAY, MAR 13, 2023 – 01:25 PM
Update (1300ET): Hours after Goldman’s Jan Hatzius confirmed the bank’s new expectation that The Fed will not hike rates in March (next week), let alone consider a 50bps rise; Barclays’ Marc Giannoni and the Economics Research team is out with a report forecasting no hike at the upcoming FOMC meeting, justified by risk management considerations as financial stability concerns move to the forefront.
The market is now pricing in a coin-toss (0 or 25bps) for March, but expects the full 25bps in May…
Their flip-flop – from forecasting a 50bps hike just last week – to a pause is driven by the financial market turbulence over the weekend, and signs of a sudden intensification of risk aversion (outweighing their interpretation of incoming data, including from the US labor market, in combination with Chair Powell’s willingness to consider a return to aggressive hikes).
Additionally, Barclays lowers its terminal rate expectation to 5.1%…
We emphasize “pause” because we believe that the turmoil is likely to be contained in the coming weeks, especially following the backstops implemented over the weekend. We continue to believe that the Fed will see additional hikes as the baseline scenario, which it would carefully condition on an assumption that markets settle and that credit continues to flow from regional banks. Although recent distress will temper the appetite for additional aggressive hikes, we think that March’s dot plot will show the median dot peaking at 5.1% in 2023.
Which is still above the market’s 4.815% terminal rate expectation currently…
Even with financial stability considerations overshadowing data, Barclays does warn that a number of key prints will be released over the course of this week that will inform the evolution of rates at the coming meetings, including tomorrow’s CPI print for February and Wednesday’s estimates of retail sales.
* * *
Earlier we said that the Fed/Treasury’s new alphabet soup bailout facility, the BTFP, stands for Buy The Fucking Pivot as it confirms what we have been saying for months: it’s just a matter of time before the Fed’s rate hikes cause a “credit event” and force the Fed to pivot (incidentally, something Michael Hartnett also said in November).
Of course, before a Fed “Pivot” we need to go through a brief “Pause” period, and moments ago Goldman – which was dead wrong on its call for “transitory inflation” in all of 2021 and which for much of 2022 and early 2023 claimed that the Fed will keep hiking “higher for longer” – just admitted it was wrong again in expecting more hikes, and responded to our rhetorical question from yesterday in which we asked if “the Fed is going to keep hiking as the government backstops banks on the verge of failure due to high rates?”…
… by saying that the Fed is done.
Below we excerpt from a note just published by Goldman’s chief economist and (former) uber-hawkish preacher, Jan Hatzius, who just threw in the towel on more rate hikes. Expect the rest of Wall Street to follow in the next few hours.
The Treasury, Federal Reserve, and Federal Deposit Insurance Corporation (FDIC) made two major policy announcements intended to stabilize the banking system in response to recent bank failures and the risk of continued deposit outflows. We expect these measures to provide substantial liquidity to banks facing deposit outflows and to improve confidence among depositors. In light of recent stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its March 22 meeting with considerable uncertainty about the path beyond March
First, Hatzius looks at the liability side of the bank bailout and lays out the “two major policy announcements” which are meant to stabilize the bank run gripping small banks as follows (more details in the full note):
The FDIC has used the ‘systemic risk exception’ (SRE) to protect uninsured depositors in two bank resolutions, Silicon Valley Bank and Signature Bank. In both cases, the costs not covered by the banks’ assets would be funded out of the FDIC’s Deposit Insurance Fund (DIF), which had a $125bn balance as of Q4 2022. The SRE waives the requirement that FDIC resolution uses the method that is least costly to the DIF.
Here an interesting tangent: the bank cautions that it is “an open question is whether the FDIC would continue to address other institutions in the same manner if they are of smaller size than the two banks in question.” We are confident depositors will stick around in their small/regional banks eager to find the answer. Or maybe not.
The Fed and Treasury also announced the Bank Term Funding Program (BTFP), which would provide advances of up to one year to any federally insured bank that is eligible for discount window access, in return for eligible collateral (generally Treasuries and agency securities). A key aspect of the facility is that the Fed would value collateral at par without the standard haircut the Fed applies in other programs. This will allow banks to fund potential deposit outflows without crystalizing losses on depreciated securities. The loans are made with “recourse beyond the pledged collateral to the eligible borrower” suggesting that the par valuation of the collateral would only become relevant if the borrowing institution lacks sufficient assets to repay the loan. The facility is backstopped with $25bn from the Treasury’s Exchange Stabilization Fund (ESF), which has a net balance of $38bn.
… and is thus woefully insufficient, something we discussed earlier.
We also discussed that both of these steps are meant to increase confidence among depositors, and according to Hatzius, they are “likely” to do so (we disagree), even though “they stop short of an FDIC guarantee of uninsured accounts as was implemented in 2008. The Dodd-Frank Act limits the FDIC’s authority to provide guarantees by requiring congressional passage of a joint resolution of approval, which is only marginally easier than passing a new legislation. Given the actions announced today, we do not expect near-term actions in Congress to provide guarantees.”
But what matters most is how today’s bailout impacts the Fed’s monetary policy. The answer: the hikes are over.
In light of the stress in the banking system, we no longer expect the FOMC to deliver a rate hike at its next meeting on March 22 (vs. our previous expectation of a 25bp hike).
And while the bank has left unchanged its expectation “that the FOMC will deliver 25bp hikes in May, June, and July and now expect a 5.25-5.5% terminal rate” it sees “considerable uncertainty about the path.”
Translation: if the Fed fails to contain the bank run with today’s action, what follows Pause is Pivot, something which the market is clearly pricing in already…
… as is Jeff Gundlach.
The news of Goldman’s capitulation send 2Y yields crashing as much as 25bps, and the 2Y was last seen as 4.3725, down from 5.06% on Wednesday…
In another example of Washington’s inexorable slide into banana republic territory, Senate Majority Leader Charles Schumer (D-N.Y.) took to the floor of the U.S. Senate on Tuesday to call for the removal of an American journalist.
“I don’t think I’ve ever seen an anchor treat the American people, and American democracy, with such disdain,” Schumer said during his seven-minute authoritarian tirade.
“And he’s going to come back tonight with another segment. Fox News should tell him not to. Fox News, Rupert Murdoch—tell Mr. Carlson not to run a second segment of lies. You know it’s a lie.”
Schumer later reiterated his demand to a group of journalists who, rather than denounce one of the most powerful government officials in the country attempting to silence an influential member of the media, dutifully reported Schumer’s bleating without question.
Republican senators including Senate Minority Leader Mitch McConnell (R-Ky.) and Senator Mitt Romney (R-Utah) joined the fray, echoing Schumer’s faux concerns over “national security.”
Clearly, it’s panic time. The White House, Congress, and the Democratic Party propaganda arm that is the corporate media realize their carefully engineered narrative about January 6 is imploding in real time. Which is why they’re accusing Carlson of “whitewashing” and “rewriting” the events of January 6. Anything less than total fealty to regime-approved talking points about what happened before and after that day now is considered a “threat to democracy.”
But facts are facts. And no amount of pearl-clutching by the hags on “The View” or threats made by U.S. senators can alter the reality of January 6. Between video recordings, witness testimony, court filings, and news reporting, the undeniable truth about January 6 cannot be willfully wished away even by the most skilled spinmeisters.
Here’s what we know:
Some people acted badly. A handful came ready for a fight while others admit they were caught up in a mob mentality that unfolded over the course of the afternoon.
The overwhelming majority of protesters did not act badly or violently. Not only do security footage and other video sources demonstrate that is indeed true, the Justice Department’s own data supports it. “Parading” in the Capitol, a class B misdemeanor, is by far the most common charge in the Justice Department’s sweeping investigation. According to an update published this week, 919 out of 1,000 defendants face trespassing charges. Of the 518 who accepted plea agreements, 385 pleaded guilty to misdemeanors and 133 pleaded guilty to a felony.
The most common felony is not “insurrection” but rather obstruction of an official proceeding. Fewer than 20 people face seditious conspiracy charges.
Roughly 100 defendants are accused of attacking police officers with a dangerous weapon. No one is charged with carrying or using a firearm inside the building.
Speaking of police, body-worn camera and independent video show outrageous misconduct by law enforcement. D.C. Metropolitan Police launched an aggressive and unnecessary offensive against the crowd assembled on the west lawn. Even though protesters were respecting police lines at the time, footage shows officers throwing stun grenades into and other devices containing rubber bullets into the crowd beginning shortly after 1:00 p.m.
Video and testimony by Capitol police officers at trial confirmed how that activity enraged the crowd. Other officers shoved women down stairs and shoved one man off the upper terrace balcony.
This conduct continued inside the building. Some officers shoved and hit individuals inside the Rotunda and other areas. A brutal scene in the lower west terrace tunnel unfolded as police used their batons to beat at least two women on the head resulting in bleeding and injuries.
Excessive force caused the deaths of four Trump supporters: Ashli Babbitt, Rosanne Boyland, Kevin Greeson, and Benjamin Phillips.
On the flip side, despite persistent claims even by Attorney General Merrick Garland and White House spokeswoman Karine Jean-Pierre as recently as this week, no police officers died as a result of injuries sustained on January 6. Officer Brian Sicknick is on video walking around after he suffered a pepper spray attack; he died of a stroke the next day. There’s no evidence the reported suicides of other officers after January 6 were related to the protest.
Further, the responsibility of sufficiently protecting the Capitol with enough officers fell to the Capitol Police board—staffed by the sergeant-at-arms for then House Speaker Nancy Pelosi and then Senate Majority Leader Mitch McConnell. Former Capitol Police Chief Steven Sund repeatedly testified that he requested additional help including National Guardsmen days before January 6. Even as the chaos unfolded that day, House Sergeant-at-Arms Paul Irving and Senate Sergeant-at-Arms Michael Stenger delayed pursuing the proper authorization of the National Guard.
Irving told House Republicans that his staff as well as members of the House Administration committee began planning for January 6 weeks before the protest. Jamie Fleet, a security staffer for both Pelosi and the committee overseeing Capitol functions, told the January 6 select committee that he started preparations for January 6 in the summer of 2020.
When the building was breached at around 2:15 p.m., Congress was not voting to certify the electoral college results at the time, a common misperception. Senator Ted Cruz (R-Texas) and Rep. Paul Gosar (R-Arizona) were in the process of disputing the election outcome in Gosar’s home state, a process permitted under the Electoral Count Act. The joint session of Congress technically had been adjourned an hour earlier so debate could begin.
For all the wasted energy spent over the past two years that democracy almost died on January 6, the chaotic protest only delayed the certification ceremony for seven hours. Joe Biden officially was declared president at 3:00 a.m. the next day.
The surveillance video viewed by Carlson’s team has not been made available to defense attorneys, arguably in violation of defendants’ constitutional rights.
A separate trove of tapes that captured activity from the hours between noon and 8:00 p.m. was turned over to the FBI in early 2021 to use in its investigation. With few exceptions, all footage remains under protective orders. Defense attorneys consistently have complained that access to the full archive is constrained by the protective orders.
Plenty of other falsehoods and misrepresentations animate the fable of January 6. But for those honestly seeking the truth, consider this a cheat sheet for future use.
end
“It’s As Bad As We Thought”: CCP Money Flowed To Biden Family According Bank Records, Documents Obtained By House GOP
SUNDAY, MAR 12, 2023 – 02:45 PM
Republicans on the House Oversight Committee have been working with four witnesses with close ties to the Bidens, who have provided documents and other evidence tying the Bidens to the Chinese Communist Party.
“It’s as bad as we thought… Since we’ve last spoken we have bank records in hand. We have individuals who are working with our committee,” Committee chair James Comer (R-KY) told Fox News‘ Maria Bartiromo on “Sunday Morning Futures.”
“In the last two weeks we’ve met with either these individuals personally or with their attorneys. And that would be four individuals who had ties in with the Biden family in their various schemes around the world. So now we have in hand documents We have in hand documents in hand that show just how the Biden family was getting money from the Chinese Communist Party.“
end
Hundreds Of Illegal Immigrants Storm Border At Texan Port Of Entry
Border patrol agents were forced to erect temporary barricades at a port of entry along the southern U.S. border on March 12, as thousands of illegal immigrants tried to enter the country, with hundreds stampeding border officials by force.
The stampede incident started at the Paso Del Norte International bridge entry point in El Paso, Texas, around 1.30 p.m. local time.
Hundreds attempted to forcefully cross the entry point to the bridge at Juarez, Mexico.
Video footage captured by Fox News showed the illegal immigrants rushing the border checkpoint, pushing down permanent barriers and overwhelming armed border officials who struggled to hold back the crowd as they attempted to cross the bridge to the United States.
Meanwhile, others tried to enter the United States from other points.
Migrants, mostly of Venezuelan origin, attempt to forcibly cross into the United States at the Paso del Norte International Bridge in Ciudad Juarez, Chihuahua state, Mexico, on March 12, 2023. Hundreds of migrants, mostly Venezuelans, attempted to stampede across one of the border bridges in the northern Mexican city of Ciudad Juarez, desperate to enter the United States. (HERIKA MARTINEZ/AFP via Getty Images)
El Paso County Judge Ricardo Samaniego told ABC network affiliate KVIA that in total, the crowd was sized around 2,000 illegal immigrants. The judge said the majority of the immigrants were Venezuelan males.
After the Mexican National Guard was called in to disperse the crowd, some of whom were attempting to pull down the port barriers and concertina wire, around 100 asylum seekers remained, KVIA reported.
Human Wave Posed ‘Potential Threat’
Separate video footage captured and shared online appeared to show large numbers of the group returning to the Juarez checkpoint after the failed attempted crossing.
Fox News reported that the immigrants who reached the U.S. border were met with barbed wire fencing. They were later returned to Mexico.
According to the El Paso migrant situational awareness dashboard, CBP managed 1,210 encounters with illegal immigrants on Sunday, and took 2,023 individuals into custody.
In a statement shortly after the incident, U.S. Customs and Border Protection (CBP) said that officers, including members of the CBP Mobile Field Force, had implemented “port hardening measures” to prevent the migrants from illegally crossing the border, including the deployment of physical barriers.
“A large group of individuals formed on the Mexican side of the border and approached the international boundary posing a potential threat to make a mass entry,” the statement said.
CBP said that the incident had temporarily prevented northbound traffic at the Paso Del Norte Bridge.
El Paso Deputy City Manager Mario D’Agostino told CNN that crowds at the bridge were subsiding as of Sunday evening.
“At this time EOC (Emergency Operations Center) has shut down. Crowds [have] subsided and it’s just being monitored,” he said.
Traffic has resumed as of Sunday evening.
Parallel Charges at the Border
Additionally, similar breaches took place at two other crossings on Sunday: the Stanton crossing, and the Bridge of the Americas crossing, CBP said.
The attempted breach Stanton crossing took place from 2 p.m. until 2.45 p.m. and the one at Americas crossing happened from 2.45 p.m. until 3.30 p.m., CBP said.
Barricades were used in both of those incidents too to stop illegal entry, according to CBP.
“CBP is working to maintain the legal and orderly flow of entry to the U.S. while protecting the safety and security of legitimate trade and travel, CBP facilities, and the CBP workforce,” the agency said in a statement to CNN.
Biden Touts Work to Secure Border
Sunday’s incident comes after President Joe Biden in January announced that immigrants from Cuba, Haiti, Nicaragua, and Venezuela will be returned to Mexico under Title 42 if they illegally enter the country.
However, the administration will also provide legal immigration opportunities to eligible asylum seekers, allowing them to live and work in the United States, provided they find a sponsor inside the United States and pass a background check.
During his State of the Union address earlier this month, Biden touted the “record number of personnel working to secure the border.”
The Epoch Times has contacted U.S. Customs and Border Protection for comment.
THE KING REPORT
The King Report March 10, 2023 Issue 6065
Independent View of the News
The King Report March 13. 2023 Issue 6966Independent View of the NewsFed- Treasury statement on SVB and Signature Bank (NY): “All depositors… will be made whole… Shareholders and certain unsecured debtholders will not be protected…Senior management has been removed… no losses will be borne by taxpayers…” Depositors will have access to all their money today via a new ‘Bank Term Funding Program’. ESHs hit 59.50 on the non-bailout bailout. We’ll worry about inflation tomorrow, at Tara.https://twitter.com/NickTimiraos/status/1635044036041121792/photo/1
Federal Reserve Board announces it will make available additional funding to eligible depository institutions to help assure banks have the ability to meet the needs of all their depositors Offering loans of up to one year in length to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral.These assets will be valued at par… (This is a blatant bailout!) With approval of the Treasury Secretary, the Department of the Treasury will make available up to $25 billion from the Exchange Stabilization Fund as a backstop for the BTFP… https://www.federalreserve.gov/newsevents/pressreleases/monetary20230312a.htm
CBS: Treasury Secretary Janet Yellen rules out a bailout for Silicon Valley Bank. “We’re not going to do that again.” “During the financial crisis, there were investors and owners of systemic large banks that were bailed out,” Yellen said in an interview with “Face the Nation” on Sunday. “..we’re not going to do that again. But we are concerned about depositors and are focused on trying to meet their needs.”… (2008 bailout killed Bush & the GOP. So, Team Biden is proclaiming a non-bailout bailout. As usual, The Big Guy spent the weekend at his beach house.) https://t.co/cdWPW3xaP0
CNBC’s @SaraEisen: PNC is out. According to a source familiar, PNC sent an initial notice of interest to the FDIC to help with SVB. PNC held brief & preliminary discussions w/ FDIC. But after conducting initial due diligence, PNC informed FDIC yesterday that it decided not to move forward.
JPMorgan analysts warned about Silicon Valley Bank’s $16B in ‘unrealized losses’ in November https://trib.al/EcGh1wK
@WallStCynic: IMO, the significance of the SIVB debacle is not the news overnight, or even the market’s response to it today, but rather that their disastrous asset/liability mismatch has been well-known for months now. Yet it didn’t matter until management said it did. Efficient markets?
@SuburbanDrone: This fiasco can be traced back to the 1,000+ junk IPOs that got dumped into the market in 2021. Parking their cash at SIVB as their fraudulent business models slowly drained the bank of reserves. Leading to margin call two years later. Totally unpredicted by the Idiocracy.
@iBankCoin4tw: Silicon Valley Bank Chief Administration Officer Was the CFO at Lehman Brothers Global When It Collapsed in 2007
@GRDecter: Silicon Valley Bank’s Chief Risk officer was the Managing Director at Deutsche Bank during the 2008 crisis AND led credit ratings in 2007. Fail to plan. Plan to fail. https://t.co/zRdzsF8dap
@Mayhem4Markets: It’s odd that SIVB’s CEO was a director at the San Francisco Fed and yet seemed to have no understanding about how aggressive Fed tightening would impact their unhedged and concentrated MBS holdings.
@jameslavish: SVB had a Moody’s credit rating of A just 3 days ago.
@PauloMacro: This bank was a pile of garbage in both lending standards and balance sheet management. Uninsured depositors may reevaluate relationships and drift in time but the only people who should panic are the morons who thought the last decade was norm. https://twitter.com/PauloMacro/status/1634614699969990658
@disclosetv: The death of a climate bank: With the implosion of Silicon Valley Bank over 1,500 climate and energy-tech companies could face problems. In addition, more than 60 percent of community solar financing in the US involved the bank. https://disclose.tv/id/100117/
While Silicon Valley Bank collapsed, top executive pushed ‘woke’ programshttps://t.co/CJXtTYj4jc
Home Depot co-founder torches ‘woke’ Silicon Valley Bank collapse, warns recession may be here already – Banks are more concerned with ‘global warming’ than shareholder returns…“I feel bad for all of these people that lost all their money in this woke bank… it was more distressing to hear that the bank officials sold off their stock before this happened… Who knows whether the Justice Department would go after them? They’re a woke company, so I guess not. And they’ll probably get away with it,”… https://www.foxnews.com/media/home-depot-co-founder-torches-woke-silicon-valley-bank-collapse-warns-recession-here-already
Tucker Carlson warns the collapse of Silicon Valley Bank is a sign of what’s to come if those in power keep putting far-left pandering over financial responsibility. https://t.co/AZmXJESVLR
@VivekGRamaswamy: I’ll ask the obvious: were “ESG factors” part of Silicon Valley Bank’s credit score calculations? I have a funny feeling the answer is yes. I suggest Senate & House Republicans take a serious look. (SVG prided itself on its ESG and other woke initiatives)
Powell, in a speech (Ending “Too Big to Fail“) on March 4, 2013, advocated bailing out all depositors to prevent bank runs: In my years at Treasury, we faced a wave of well over 1,000 savings and loan and bank failures. That included the failure of the Bank of New England Corp., then the third largest bank failure in U.S. history. It happened in January 1991… We came to understand that either the FDIC would protect all of the bank’s depositors, without regard to deposit insurance limits, or there would likely be a run on all the money center banks the next morning–the first such run since 1933. We chose the first option, without dissent… https://www.federalreserve.gov/newsevents/speech/powell20130304a.htm?s=02
@FrogNews: Other banks will fail soon. It’s inevitable, because our Federal Reserve is run by morons. Clients and businesses with more than $250k will be caught. Hopefully their politics are correct, or joe may not bail them out. Capitalism lost tonight.
The Collapse of SVB Portends Real Dangers It’s all an extension of Fed policy to curb inflation, reversing a 13-year zero-rate policy… The high-flying institution that specialized in providing liquidity in industries that have lost their luster… the bank was exposed with a portfolio of collateralized mortgage obligations and mortgage-backed securities… Jerome Powell took over the Fed with the determination to put an end to the nonsense. He hoped for a soft landing. But then came the pandemic lockdowns. He was called upon to provide funding for the idiocy of a panicked Congress that spent many trillions as fast as possible, which only perpetuated lockdowns. Everything seemed fine for a while, as it always does, but by January 2021, the bill came due in the form of roaring price inflation. The Fed had to reverse course dramatically… My concern here is that people will look at all these disasters in isolation. They are not isolated. They trace to the catastrophic decision in 2020 to lock down and fund those policies with money that did not exist until it was created… https://www.zerohedge.com/markets/collapse-svb-portends-real-dangers
USHs soared as much as 3¾ points on Friday morning because everyone knows that when a ‘problem’ appears, one should buy US bonds. When the SVB saga is resolved, bonds will be vulnerable to a tumble. PS – A hot February CPI this week would be a huge problem for Mr. Bond and the Fed.
In March 1980, the Hunt Brothers almost took down 3 brokerage firms and 3 banks when their silver scheme imploded under pressure from Volcker’s high rates. After Volcker saved the system with liquidity and lower rates, commodities, particularly oil zoomed higher. By late summer, Volcker was back in rate hike mode. Oil peaked in November 1980; other commodities peaked in December. The economy and stocks cratered in 1981. By the way, Bear Stearns failed in March 2008. Hmmm
Disintermediation – This term became popular on Wall Street and in the fin media in the Seventies as funds fled banks for higher yields. Bankers back then, like bankers now, were spoiled by long periods of artificially low rates. Prior to the ‘70s, regulations kept bank interest rates artificially low. When rates soared on inflation, banks lost deposits. In recent decades, the Fed has kept interest rates artificially low. We are indeed repeating the Seventies. But we don’t know where we are: 1973-1974 or 1979? Now that bankers must manage instead of just arbing Fed largesse, they are screaming at the Fed to lower rates. Bankers loathe hiking rates because it reduces their earnings.
US Banks Are Finally Being Forced to Raise Rates on Deposits Deposits declined last year for first time since 1948 Rising funding costs for banks seen weighing on profit growth After years of earning next to nothing, depositors are discovering a trove of higher-yielding options… The shift has been so pronounced that commercial bank deposits fell last year for the first time since 1948 as net withdrawals hit $278 billion, according to Federal Deposit Insurance Corp. data… JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon made clear that some institutions will feel pressure on the firm’s earnings call in January: “Banks are competing for the capital, money, now. We’ve never had rates go up this fast.”… https://news.yahoo.com/us-banks-being-forced-raise-120000737.html
@FrogNews on Friday: Pretty much every California regional bank halted for volatility. This is contagion. PacWest, First Republic, Western Alliance, and Signature. Just wow… this is turning bad
In the 70s, financial firms faltered because they were used to borrowing short and lending long. This is precisely what has occurred over the past few decades (‘Carry Trade’). As long as bonds were in a 40-year Grand Super Cycle bull market, financial institutions and hedge funds coasted. Now, they have a problem because short rates (cost to carry) are escalating.
Liquidity crises are relatively easy to extinguish; just supply the liquidity. However, the system already teems with excess liquidity ($2+ T in RRP, +3T in Reserve Balances). So, crises are likely to be solvency driven. That’s a whole different ballgame. JP Morgan Jr., following Walter Bagehot’s central banking bible, Lombard Street, would lend to solvent companies that had a liquidity problem (at a penalty rate). “Jack” eschewed insolent companies. PS – High US inflation complicates the current situation.
February Employment Report Highlights NFP 311k, 225k consensus, 250k whisper #, 2-month revision -34k; Mfg -4k, 10k exp..; Unemployment Rate 3.6%, 3.4% expected; Wages +0.2%, 0.3% consensus; Workweek 34.5, 34.6 exp; Labor Force Participation Rate 62.5%, 62.4% consensus; Birth/Death Model +176k (+156k in Feb ‘22)
The BLS: Leisure and hospitality added 105,000 jobs in February… Food services and drinking places added 70,000 jobs… Employment in retail trade rose by 50,000… Government employment increased by 46,000 in February… local government… (+37,000)… Health care added 44,000 jobs… Construction employment grew by 24,000… https://www.bls.gov/news.release/empsit.nr0.htm
Household Survey ‘Employed’ is only +177k, another big discrepancy with NFP! Unemployed increased 242k. Employment-Population Ratio unchanged at 60.2%; Civilian Labor Force +419k; Not in Labor Force -269k; Asian Unemployment +0.6 to 3.4%; Hispanic Unemployment +0.8 to 5.3%; Black Unemployment +0.3 to 5.7%; White Employment +0.1 to 3.2%; Unemployment for less than high school degree (Ages 25+) +1.3 to 5.8%; Teenagers (16 to 19 years) +0.8 to 11.1% https://www.bls.gov/news.release/empsit.a.htm
@DowdEdward: US Disability data for February is up 26k at 32.611 million. The trend is not broken. This is not good news. We need to see trend broken. Not disastrous but no bueno. Obviously at http://phinancetechnologies.com we believe it’s the vaccines causing this 3-4 sigma y/y rate change.
WSJ: SVB Tapped Home Loan Bank for $15 Billion in Funding at End of 2022
Bonds peaked at 11:00 ET; they sank 1 7/32 by 11:37 ET as European traders liquidated for the weekend.
ESHs bottomed (3878.50) at 9:45 ET. Traders aggressively bought the dip; ESHs jumped 31 handles by 10:06 ET. ESHs then vacillated in a large range until ESHs broke higher at 10:55 ET. ESHs peaked at 11:35 ET and then tumbled. ESHs and stocks hit a bottom at 13:52 ET, -95.50 from their high. The Friday afternoon rally ahead of expiry commenced; ESHs soared 32 handles in 18 minutes! Alas, ESH quickly sank 21 handles. Another rally soon developed; it ended at 14:56 ET. ESHs and bonds sank until a final manipulation appeared at 15:547ET. ESHs rallied 11 handles into the close.
SVB demise hurt First Republic Bank, which hit a low of 45 on Friday. FRC topped out at 147.68 on February 2, 2023, the same day that SVB peaked. After the FDIC took over SVB, FRC soared to 95.44.
Economic Cycle Research Institute (ECRI) @businesscycle: Amid SVB turmoil, which is riskier for Powell: inflation or recession? (Inflation – With inflation you will eventually get a recession anyway!)
CNBC’s Jim Cramer eviscerated for touting Silicon Valley Bank weeks before disastrous collapsehttps://t.co/yb3IpSqhiT
Wells Fargo customers’ direct deposits missing: reports Customers took to social media to report that their direct deposit funds had disappeared from their Wells Fargo accounts which left some in the negative… Downdetector.com, an outage monitoring website, indicates that a surge in users experiencing problems occurred at 7 a.m. on Friday morning. There were more than 400 detected reports… Wells Fargo sent a message to customers acknowledging the issue and saying that it may be due to a technical problem, and that they are working to resolve it… A Wells Fargo spokesperson: “Wells Fargo is aware that some customers’ direct deposit transactions are not showing on their accounts. However, funds in accounts are accurate and available. Customers’ accounts continue to be secure,”… https://insiderpaper.com/wells-fargo-customers-direct-deposits-missing-reports/
Monstrously important news that was largely ignored on Friday because it reflects horribly on Joe: Iran and Saudi Arabia agree to resume relations after China mediation It’s a major breakthrough for the two Middle East rivals, who haven’t had diplomatic relations since 2016 when Saudi Arabia cut ties with Iran after Iranian protesters stormed its embassy in Tehran. It’s also a diplomatic achievement for the Chinese government and sends a signal from Saudi Arabia to the Biden administration about the role China is playing in the Middle East… https://www.axios.com/2023/03/10/iran-saudi-arabia-resume-relations-china-mediation
Saudi Arabia clearly no longer believes that the USA under Biden-Obama will protect it from Iran. Everyone knows that Team Obama has an unhealthy love for Iran. Obama lackeys on Team Biden embrace Iran and Schiff on Saudi Arabia and Israel. KSA’s shift toward China is very, very bad news!
VOA’s @pwidakuswara: Chinese Foreign Minister Wang Yi @MFA_China on Saudi-Iran deal brokered by Beijing, w/ some trolling on US – “the world is not limited to the Ukraine issue. There are many issues related to peace and people’s livelihood that require the attention of the international community.”https://twitter.com/pwidakuswara/status/1634197357117014024/photo/1
@KSAmofaEN Saudi Arabia government account: Joint Trilateral Statement by the Kingdom of Saudi Arabia, the Islamic Republic of Iran, and the People’s Republic of China. https://twitter.com/KSAmofaEN/status/1634180277764276227
VOA’s @pwidakuswara: The Saudis kept US informed but was not involved in the Saudi-Iran deal brokered by China – John Kirby of NSC. A rather odd response from @POTUS on the Saudi-Iran deal: “The better the relations between Israel and its Arab neighbors, the better for everyone.”
Positive aspects of previous session Stocks didn’t collapse
Negative aspects of previous session Banks got crushed again; bonds soared on safe-haven buying Equities got hammered again; uncertainty is mushrooming
Ambiguous aspects of previous session How extensive will be the collateral damage from SVB?
First Hour/Last Hour Action [S&P 500 Index]: 1st Hour from NYSE open: Down; Last Hour: Down
Pivot Point for S&P 500 Index [above/below indicates daily trend to traders]: 3880.70 Previous session High/Low: 3924.05; 3846.32
Tech pioneer Marc Andreessen @pmarca: Overheard in Silicon Valley: “The storyline keeps changing — terrorism, climate, pandemic, now AI risk. But somehow the proposed solution remains the same: total centralization of control by a single global government.”
Treasury inspector general audit: 42,000 federal employees ‘repeatedly’ don’t file federal turnshttps://t.co/rRN17PJMd7
House Freedom Caucus members unveil plan to address debt ceiling crisis amid battle with Biden, Democrats – The plan calls for legislation that would cut current spending and place a cap on future spending… https://t.co/vlKoh12Rf8
Girl Scout cookies could be delayed, production group says “Global supply chain issues, local labor shortages, and even unforeseen severe weather have all impacted the selling season.”… https://t.co/mVxl8JMKDP
For decades, Silicon Valley types to Flyover Americans that lost their jobs: “Learn to code.” Flyover Americans to Silicon Valley types that have or will soon lose their jobs: “Learn a trade.”
Today – This is expiry week; the usual suspects want to play for the upward manipulation. However, possible SVB fallout could still be problematic. No one knows if there will be more fallout from SVB or the extent of lurking problems. The technical damage to equities that we highlighted in our Friday missive was exacerbated by the decline on Friday. The DJIA closed well below its December intraday low (32,581.97). The Russell 2000 is down 11.6% from its February high.
Keep an eye on banks; Goldman has tumbled 10.7% in the past 9 sessions. Do not play unless you must! Wait & watch! Bailouts are very inflationary when inflation is already high! Based on history (Bear Stearns, Hunt Bros.), there should be Fed activism and market support for at least a few months.
Biden will speak on the SVB bailout this morning. The Fed blackout period for the March 21-22 FOMC Meeting is underway. The GOP will attack Biden for bailing out Silicon Valley elites while ignoring East Palestine, Ohio and average Americans.
Mexican president threatens to meddle in US elections with ‘information campaign’ against Republicans – telling Mexicans and Hispanics not to vote for them unless U.S. lawmakers change their treatment of Mexico – an apparent threat of election interference by the head of state in response to U.S. calls for action against cartels smuggling fentanyl across the border… (Everyone Schiffing on the US!) https://www.foxnews.com/politics/mexican-president-threatens-information-campaign-to-tell-mexicans-hispanics-not-vote-republican
NY Post’s @mirandadevine: Two thirds of voters think the FBI has been “politically weaponized” according to a @Rasmussen_Poll out later this morning. Not a good poll for an agency taxpayers fund to the tune of $10billion each year.
“An Expert in Ethics Violations” – Elon Musk Dunks on Debbie Wasserman Schultz and It’s Glorious – Earlier today Democrat cheerleaders howled with delight when Rep. Debbie Wasserman Schultz came down hard on leftist reporter Matt Taibbi for participating in the Twitter Files investigation. Taibbi and others discovered and released several threads of tweets now that show Twitter officials working with the government to censor free speech on the platform and crack down on conservatives… Elon Musk: “I think we should listen carefully to DWS, given that she is such an expert in ethics violations… She was forced to resign as DNC chair after being bust rigging the nomination against Bernie!”… https://www.thegatewaypundit.com/2023/03/an-expert-in-ethics-violations-elon-musk-dunks-on-debbie-wasserman-schultz-and-its-glorious/
Gold Star moms enraged after wounded Marine’s shocking testimony on Kabul suicide bombing She noted the House hearing confirmed what she already knew – that service members were “running amuck” amid the chaotic withdrawal with little strategic direction…”I’ve talked to several of the Marines that were there throughout the last 19 months, and they’ve all said the same thing… basically they were just running amuck,” Chappell said. “They were just doing what they thought they were supposed to be doing, and they didn’t really have a general direction of what they were supposed to do.”.. https://t.co/ETMhGMwQVK
Reporter accuses Karine Jean-Pierre of trying to ‘silence’ him after removal from WHCA Today News Africa reporter Simon Ateba… claims he is being removed from the White House Correspondents Association (WHCA) as retribution for pressing Jean-Pierre on tough issues and asking hard questions. (MSM mum; You can imagine the outrage if Team DJT canned an African reporter!) https://www.foxnews.com/media/reporter-accuses-karine-jean-pierre-trying-silence-removal-whca
@NewsBecker: A video re-emerges of Jacob Chansley reading Trump’s tweet, telling protestors to “GO HOME” and remain peaceful.https://twitter.com/kylenabecker/status/1634052892351950853?s=02 @elonmusk: Free Jacob Chansley! Chansley got 4 years in prison for a non-violent, police-escorted tour!? Dave Chapelle was violently assaulted on stage by a guy with a knife. That guy got a $3000 fine & no prison time.
Biden ‘dragging his feet’ on COVID origins intel because it will ‘open Pandora’s box,’ Kat Cammack says – House GOP, Dems voted unanimously on a bill to declassify intelligence on COVID origins…They would have to take action on all of the funding sources for the W.H.O. for NIH, CDC, FDA. … it would really expose the deep-rooted collusion between the Biden administration and all of the social media companies… to cover up all of the dissenting opinions on the issue of COVID… https://www.foxnews.com/media/biden-dragging-feet-covid-origins-intel-because-will-open-pandoras-box-kat-cammack-says
Steve Forbes assaulted by protesters at conservative book launch party Protesters yelled at attendees leaving the event calling them fascists and shouting homophobic slurs https://www.foxnews.com/politics/steve-forbes-assaulted-protesters-conservative-book-launch-party @JonathanTurley: The age of rage shows no signs of abating as protesters assaulted Steve Forbes and conservative authors at a book signing. Some believe they have license to silence others by simply labeling opponents “fascists.” In reality, such attacks are very hallmark…
@aaronsibarium: Fifth Circuit appellate judge Kyle Duncan, who was shouted down by Stanford Law students yesterday, says the protesters behaved like “dogschiff.” He is also calling on Stanford to fire the DEI dean who participated in the uproar. https://twitter.com/aaronsibarium/status/1634341761081397248
Precious metals expert and financial writer Bill Holter said last summer that the Fed rate increases would tank the economy. The collapse of SVB (Silicon Valley Bank) is the latest sign the Fed is breaking the financial system. Will it continue to raise interest rates as Fed Head Jay Powell said this past week? Holter says that is the biggest question out there because it comes down to picking what you want to save. It’s the U.S. dollar or the financial system. Holter explains, “They can save one thing or the other. They can save the financial system, or they can save the dollar. If they save the dollar, they will have to raise rates, and they will have to keep tightening. To save the financial system, they will have to loosen. They have tightened so hard and so fast over the last year they have raised rates and tightened faster than anytime before. This is in the face of the biggest over-levered situation in history no matter how you look at it. . . . They can only do one or the other, and they already look like fools. The world is already laughing at the United States. Think of what Russia and China think when we are walking out some army general wearing a skirt. We are getting to the end game.”
Holter, who is also a precious metals broker from Miles Franklin, says the bankruptcy of SVB is just the tip of the default iceberg. Holter says, “The problem is a global bankruptcy. In order to avoid the bankruptcy, you don’t go from bank A to bank B or some sovereign treasury. You don’t go to paper because paper can bankrupt. It’s going to dawn on people all of a sudden that gold and silver are the safe havens. That’s going to create a ‘failure to deliver’ event, and when you get failure to deliver, all confidence is gone. This is all about confidence. Failure to deliver is coming soon because you are talking about big, big money, and there is not big, big supply. . . . My phone has been blowing up all weekend. People are wanting wiring instructions so they can wire money Monday morning. . . .This failure to deliver event is right in front of us.”
You might think everything will be safe in the bank because of FDIC deposit insurance. That is not totally true because the government basically turned depositors into creditors in 2012. Holter says, “In 2012 or 2013, the FDIC amended their rules and said there would no longer be bailouts, but bail-ins. People don’t understand that when there is a bail-in and a bank goes down, it takes all or part of the money they are holding on your behalf to make themselves solvent. It is no surprise that Janet Yellen (Treasury Secretary) is saying there are not going to be bailouts because it’s been official policy for ten years or more. . . .There are cockroaches everywhere. The whole system is rotten to the core. The whole system is over-levered. The whole system is fraudulent. The entire system is a Ponzi scheme . . . . The government of the reserve currency of the world has to borrow a trillion dollars a year to stay solvent. That’s ridiculous.”
Holter thinks big inflation is coming when the Fed has to cut rates to save the system. He says, “The government will inflate or die.”
There is a lot more in the 46-minute interview.
Join Greg Hunter as he goes One-on-One with financial writer and precious metals expert Bill Holter for 3.12.23.
(Tech Note: If you do not see the video, know it is there. Unplug your modem and plug it back in after 30 sec. This will clear codes that may be blocking you from seeing it. In addition, try different browsers. Also, turn off all ad blockers if you have them. All the above is a way to censor people like USAWatchdog.com.)
Climate engineering researcher Dane Wigington says the extreme drought conditions that have plagued the Western U.S. are being turned around by more climate engineering. California has been in the bullseye. It’s not good news because it’s from one destructive extreme to another. Wigington explains, “We know the technology exists and is being used to steer upper-level wind currents and, thus, steer moisture currents, and they are directing moisture into where they have engineered back-to-back snow storms. There is no question that it is being engineered. . . . People act like this is some sort of fringe theory, and it’s hard science. We can test the snow and find the same things in climate engineering patents. We find aluminum, barium, manganese, polymer fibers, graphene and surfactants as well. All of these are found in our snow. . . . The directing of this moisture flow without chemical nucleation on top of this chemically frozen nucleated material is creating flooding right now as we speak. This is not debatable. . . . Whatever a person’s perspective is, can there be any legitimate discussion about the climate without addressing climate engineering first and foremost? The answer is patently NO.”
Wigington goes on to warn, “We have to stop climate engineering statistically and mathematically or we are done in the very near term. Stopping these operations are weather warfare. They only serve the masters by masking the true severity of damage done to the climate while using weather as a weapon at the same time. . . . By itself, climate engineering is the largest single factor, and it’s not just destroying the planet’s life support system, agricultural production, the Ozone layer, it’s also, and this is key and critically important, it’s contaminating every single breath we take. . . . There is likely 60 to 70 million tons being dispersed in our skies annually of these particulates. It’s not even factored into the dire warnings of how toxic the air we are breathing. It’s an incredible lethal brew we are breathing in. Nobody is looking for these nanoparticles even though they are the most harmful of all.”
Wigington says, “. . .Ecosystem collapse is happening all over the globe. At GeoEngineeringWatch.org, our mission is to expose this biggest hole in the bottom of the boat. . . . Critical mass of awareness is the only way out. . . .Climate engineering is pounding nails into all of our collective coffins. We have to plant the seed of awareness. . . . When you arm yourself with credible data and you wake those people around you, they begin to wake others. Now, they realize they do have power if they focus what is in their power. . . . they can move this fight forward.”
There is much more in the 35-minute interview.
Join Greg Hunter of USAWatchdog.com as he goes One-on-One with climate researcher Dane Wigington, founder of GeoEngineeringWatch.org, with an update to the ongoing global drought to flood calamity for 3.11.23.
(Tech Note: If you do not see the video, know it is there. Unplug your modem and plug it back in after 30 sec. This will clear codes that may be blocking you from seeing it. In addition, try different browsers. Also, turn off all ad blockers if you have them. All the above is a way to censor people like USAWatchdog.com.)
H.
US exchange Coinbase said it was temporarily pausing conversions between USDC and the US dollar © Bloomberg
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