the DON JONES INDEX…
		GAINS POSTED in GREEN LOSSES POSTED in RED 3/20/23… 14,979.08 3/13/23… 14,983.57
	6/27/13… 15,000.00
(THE DOW JONES INDEX: 3/20/23...31,861.98; 3/13/23...31,909.64; 6/27/13… 15,000.00)

LESSON for March 27, 2023 – “BANK on the RUN”

“Well the crypto cratered with a cracklin’ crash

As we plunged into the red.

And the hedge fund trader and the Wall Street raider,

Well we’re in the swamp, they said...

Banks on the run.

Banks on the run?

And the S.E.C., and the D.M.V.

They were barkin’ up a tree...

For the bank on the run,

Bank... on the run!”

The weekend looked like a flashback to 2008 – long lines of anxious Americans queued up in from of the Silicon Valley Bank, trying to save their life’s savings from the Devil. Or older footage from 1929... perhaps, at best, a clip from “It’s a Wonderful Life” with Jimmy Stewart doling out five dollars to one depositor, maybe ten to another.

The crash of 2023 was under way.

On Friday, March 10, Silicon Valley Bank, one of the most prominent lenders in the start-up ecosystem, collapsed.

According to a New York Times account of the debacle (March 15^th, Attachment One) the crisis commenced two days earlier when Silvergate Capital, a cryptocurrency-focused bank, announced it would cease operations and liquidate its assets after a bank run forced the California lender to sell a chunk of its debt securities.

Silicon Valley Bank (SVB) which held a quantity of SVB’s no-longer-performing assets sold a bond portfolio at a $1.8 billion loss. Greg Becker, CEO of SVB said the bank enjoyed the “financial position to weather sustained market pressures,” but Moody’s, a credit ratings firm, downgraded the bank’s bond rating and slashed its outlook to negative, from stable.

Mr. Becker conference called investors on Thursday and urged them to stay calm but “(p)anic spread on social media among investors” and the stock plummeted 60 percent.

After spending Friday morning searching for a buyer, SVB officially failed and the Federal Deposit Insurance Corporation was named the receiver. The failure of the 40-year-old institution became the largest bank crash since the 2008 financial crisis, and it put nearly $175 billion in customer deposits under regulatory control.

By the end of the day, President Joe, Janet Yellin, the regulators and authorities told the small depositors that the Federal Deposit Insurance Company (FDIC) would, as the banking industry always assured them, cover their losses up to $250,000 – barring exceptional circumstances. Those with accounts over $250K would be S.O.o.L. (to follow the contemporary practices of euphamisms, so as not to offend the tender eyes and ears of the bankrupt).

According to British correspondents from the Guardian and Reuters, SVB Financial Group (including subsidiaries and intangibles) as well as two top executives have been sued by shareholders over the collapse of Silicon Valley Bank – no doubt the first of many likely lawsuits over the demise of SVB.

As global stocks continued to suffer through the week on Tuesday despite assurances from the US president, Joe Biden, politicians, bankers and even regulators were wincing at the “B” word, The White House has been careful to emphasize that this isn’t a 2008-esque situation because SVB and Signature aren’t going to be revived, and the money for depositors would come from a fund banks pay into, not taxpayers. But whatever technicalities aside, this is a bailout, contends Vox (March 15^th, Attachment Two); the banks went under, the government is stepping in.

Vox listed nine questions and (to the best of their, or anybody’s ability) answers, and Number Nine had asked that question directly two days before.

Q&A Number Two, simply asking “What happened?”, pronounced SVB’s demise to be, largely, “the result of a good old-fashioned bank run.” A George Bailey moment, in other words – with “big name Venture Capitalists such as Peter Thiel and Union Square Ventures” reportedly playing Potter and starting to tell their companies to pull their money out of the bank while they could.

“People started freaking out, and unfortunately, it would appear rightly so,” said Alexander Yokum, an analyst at CFRA Research who told Vox that, in answer to Number Nine... whether or not this is/was a bailout... the answer is, “well, pretty much yes.”

The White House has been careful to emphasize that this isn’t a 2008-esque situation because SVB and Signature aren’t going to be revived, and the money for depositors would come from a fund banks pay into, not taxpayers. But whatever technicalities aside, this is a bailout — the banks went under, the government is stepping in.

Anyway, Vox tried to put a rosy spin on the situation, “you’re here now — Silicon Valley Bank isn’t.”

The bank’s shareholders now accuse the SVB Financial Group chief executive Becker, and chief financial officer, Daniel Beck, of concealing how rising interest rates would leave its Silicon Valley Bank unit “particularly susceptible” to a bank run.

The proposed class action was filed on Monday in the federal court in San Jose, California.

Time (March 13^th, Attachment Three, has attempted to spread a non-combustable oil over the flaming fiscal waters by asserting that “(t)here are some signs that the banking system could be facing larger, systemic issues—though nothing compared to the global financial crisis of 2008. At the end of 2022, U.S. banks were sitting on $620 billion in unrealized losses. That is, they are holding assets that had decreased in value—mostly due to rising interest rates. That figure is up from just $8 billion one year earlier.

While numerous media mavens jabberwalking in their sleep over SVB being the second worst bank crisis ever... after 2008’s failure of Washington Mutual, which had roughly $300 billion in customer deposits before the 2008 financial crisis, scuttled the Lehrman brokerage firm ... reality begs to differ. What about... uh... 1929? The capital losses may have been somewhat smaller back then, but the dollar wasn’t worth as much back then, either.

And what about America – from its founding to the dawn of the twentieth century?

The Fed itself runs a website on which is posted various announcement by Chairman Powell, news of this and that and an occasional dip into history. One such dip, penned by Gary Richardson and Tim Sablik, Federal Reserve Bank of Richmond takes us back to the Gilded Age – between end of the Civil War through the very early 1900s. Mark Twain and Charles Dudley Warner popularized the term, using it as the title of their novel The Gilded Age: A Tale of Today, which satirized an era when economic progress masked social problems and when the siren of financial speculation lured sensible people into financial foolishness and banking crises occurring between the passage of the National Banking Acts in 1863-64 and the formation of the Federal Reserve in 1913.

Banking panics may have been less costly but were far more numerous. “Between 1863 and 1913, eight banking panics occurred in the money center of Manhattan. The panics in 1884, 1890, 1899, 1901, and 1908 were confined to New York and nearby cities and states. The panics in 1873, 1893, and 1907 spread throughout the nation.” Regional panics also struck the midwestern states of Illinois, Minnesota, and Wisconsin in 1896; the mid-Atlantic states of Pennsylvania and Maryland in 1903; and Chicago in 1905,” not to mention innumerable small institutions in smaller communities.

The focus of this particular essay (Attachment Four) was the Panic of 1873... a companion essay discusses the Panic of 1907, “the shock that finally spurred financial and political leaders to consider reforming the monetary system and eventually establish the Federal Reserve.”

(The Fed may be forgiven for patting itself on the back within so many laudatory essays... the knives in the back now coming from the likes of Elizabeth Warren and even some Republicans.)

The 1873 Panic derived from something somewhat more necessary to most Americans, and more lasting... the railroads. These had expanded rapidly in the nineteenth century, “and investors in many early projects had earned high returns. As the Gilded Age progressed, investment in railroads continued, but new projects outpaced demand for new capacity, and returns on railroad investments declined.”

In other words, it was a supply-side panic and also, in some respects, a labor-induced panic... the great railroads of the West couldn’t find enough cheap workers and had to resort to immigrants from places like Ireland and China. A cash cutoff to the Northern Pacific caused a loss of confidence, which spread throughout the markets and, on September 20, “for the first time in its history, the New York Stock Exchange closed.”

Nationwide, at least one-hundred banks failed.

The panic phenomenon was not, however, attributable to the stock market... sudden and devastating reversals and evaporations of fortune/s occurred routinely through the Olden Days; before there was a stock market and even before there was an America. A Wikipedia list of crashes... runs, panics and such notes the Panic of 1792, New York and, beyond the borders of the United States - the Crisis of 1763, started in Amsterdam, and a British banking crisis 1772-3. (Attachment Five)

Even before these, connoisseurs of chaos might recall the great “bubbles” of yesteryear... the South Seas bust where investors in the slave trade three hundred years ago were, quite deservedly, busted - or, a century before that, the Great Tulip Scam in the Netherlands, the sort of non-fungible fraudulence that the guilty and the gullible are always playing out.

As the crashing and the clattering and screeching continued through the weekend, simple and simple-minded investors and depositors having nothing to do with the intricacies of AI, or crypto or novelties like virtual reality glasses and the newest litter of emojis began to worry.

Once news of the cataclysm hit the physical and social media, some ventured out into the cold rains of California to stand in line in front of SVB and, then, Signature branches to withdraw their savings despite assurances from the media that small deposits (under $250,000) were safe and would remain so.

“But more than 85% of the bank’s deposits were uninsured, according to estimates in a recent regulatory filing. That’s because FDIC deposit insurance is meant for everyday bank customers and maxes out at $250,000. Many Silicon Valley startups had millions, or even hundreds of millions of dollars deposited at the bank—money they used to run their companies and pay employees. Right now, nobody’s sure how much of that cash is left.” (Time, March 10^th, 6:38 PM, Attachment Six)

SVB, Time’s Andrew Chow recalls, for the ignorant and uninitiated, was founded in 1983 and is headquartered in Santa Clara, which sits right in the middle of Silicon Valley. “The bank was the 16th-largest in the country, and has long prided itself in its close relationship with tech entrepreneurs, calling itself the “financial partner of the innovation economy.” The bank claimed at the end of 2022 that “nearly half” of all U.S. venture-backed startups used its services.

The Times (NY, not Washington or another) called the collapse “a reckoning” for the venture capitalists of Cyberia as last week began. (Attachment Seven, March 13^th and 14^th). “Even as the government assured depositors that they would be able to recover their money from Silicon Valley Bank, the episode exposed the tech industry’s vulnerabilities,” stated correspondents Vivian Giang and Mike Dang.

“It’s like a Lehman Brothers moment for Silicon Valley,” said one Silicon Valley startup founder whose company has, or had, millions of dollars tied up in SVB and spoke on the condition of anonymity because they are worried about losing customers over their ties to SVB.

The FDIC has confirmed that customers will have full access to their insured deposits up to $250,000 this coming Monday. But $250,000 is “chump change” compared to what most tech companies stashed in SBV, the anonymous founder (above) told Time’s Chow. They estimate that “hundreds if not thousands of companies” have millions of dollars tied up with the bank.

The founder (whether a “he”, a “she” or possibly an “it” from, perhaps, another country or another world) says that SVB’s failure could fundamentally change the way money flows in Silicon Valley, with people perhaps becoming more hesitant to trust smaller institutions. “People will be much more cautious, and that’s a bad thing,” they say. “It may be that more money gets aggregated into the hands of the biggest players.”

Or, as Question Eight from Vox (Attachment Two) asked: “What is FDIC insurance, and how does it work? And will SVB customers get their $250,000 back?

And answering that “the Federal Deposit Insurance Corporation was created in the wake of the Great Depression, when a lot of banks failed and their customers lost all of their money, to protect consumers who use American banks and provide some stability to the American banking system.” If a member bank fails, its deposits — that’s the money you’ve put in said bank — are still insured for up to $250,000. Anything beyond that, and there’s no guarantee you’ll ever see again.

“At least, that’s how it used to work,” Vox qualified their answer (in Attachment Two, above), because... a few days after SVB’s failure... “the Federal Reserve Board, Department of the Treasury, and the FDIC announced that it would “make available additional funding to eligible depository institutions,” which would reimburse depositors in full. That funding, the announcement said, will come from loans from the newly created Bank Term Funding Program.

President Joe, Madam Yellin and assorted banking its, bits and whodunits loudly proclaimed that the bailout which they loathed to admit was a bailout would not be financed with taxpayers’ money.

Others did and still do disagree.

Because this is so new, we don’t yet know exactly how it will all work or when depositors can expect to get their money back, Vox contended. The FDIC said earlier that the $250,000 iinsured funds would be available no later than Monday, March 13. To protect depositors, on Monday, March 13, 2023, the FDIC transferred all the deposits, both insured and uninsured, of Silicon Valley Bank to Silicon Valley Bridge Bank, N.A. a full-service 'bridge bank' that will be operated by the FDIC as it markets the institution to potential bidders.It’s still trying to figure out who exceeds that $250,000 cap and by how much.

Irregardless of their investigations and decision, the effect of the crash, the “bailout” (if it was that?) and the obstreperous crisis in consumer confidence has spooked mortgage rates into finally coming down this week, CNN reported, even though “longer-term uncertainty is expected to hamper many homebuyers and keep the cost of buying unaffordable for many.”

The 30-year fixed-rate mortgage averaged 6.60% in the week ending March 16, down from 6.73% the week before, according to data from Freddie Mac released Thursday.

After hitting a 2022 high of 7.08% in November, rates had been trending down. A year ago, the 30-year fixed-rate was 4.16%.

CNN’s end-of-the-week timeline was represented by nine little newsnuggets, here designated as (a) to (i). (See Attachment Eight) As frequently occurs with timelines, the articles were placed in reverse order – DJI. The gist of The Nine was as follows...

a) Stocks rallied on news that ailing First Republic Bank could be rescued

b) The Wall Street Journal (reported that) First Republic Bank was talking to J. P. Morgan and Morgan Stanley about a lifeline

c) CNN advised First Republic customers: “What to do if you're worried your bank is failing...” and answered that if your balance is (or was) under $250,000: don’t worry, be happy and, if over, suggested some banking tips and tricks to salvage at least some of your wealth

d) Apropo above the: “The New York Stock Exchange halted trading in shares of First Republic Bank Thursday morning after the stock fell 26%” (WSJ)

e) SVB collapsed because it “couldn't meet liquidity needs,” (see below) SecTreas Janet Yellen told Congress

f) Europe’s bank stocks “wobbled” after rate hikes by the European Central Bank (ECB)

g) The European Central Bank hiked rates by half a point

h) The Dow fell by more than 200 points as “bank fears” gripped Wall Street after, half an hour earlier...

i) J. P. Morgan leaked that UBS could take over Credit Suisse.

"Turbulence in the financial markets is putting significant downward pressure on rates, which should benefit borrowers in the short term," Sam Khater, Freddie Mac's chief economist, told CNN.

The bad news wafted Eastwards, like toxic smoke, across the Atlantic Octean and southerly, like a flock of ravens... all the way to Qatar where Al Jazeera expressed hope that Manic Janet Yellen could wave her wand and calm the stormy seas and disperse the bad birds. (March 16th, Attachment Nine)

“I can reassure the members of the committee that our banking system is sound and that Americans can feel confident that their deposits will be there when they need them,” Yellen said during a Finance Committee hearing in the Senate, also scrutinized by persons and other entities outside the U.S.A.

On Thursday, Yellen had said: “Shareholders and debt holders are not being protected by the government. Importantly, no taxpayer money is being used or put at risk with this action.”

However, Senator Mike Crapo said he was “concerned about the precedent of guaranteeing all deposits and the market expectations moving forward”.

Regulators then convened over the weekend and announced that New York-based Signature Bank, almost a quarter of whose deposits were from the cryptocurrency sector, had also failed.

Facing pressure from the influential tech industry to act, Washington on Sunday launched a raft of emergency measures to shore up confidence in the banking system. The move appeared to stem any broader run on banks.

Speaking on CBS’s Face the Nation programme on Sunday, Yellen had said that bailouts were not on the table.

“We’re not going to do that again,” she said, referring to the US government’s response to the 2008 financial crisis, which led to massive government rescue policies for large US banks.

Numerous media sources also referenced crypto... particularly in regard to Signature... but Time, noting that the U.S. government and the Federal Reserve had “acted quickly to rescue bank customers whose deposits were above the insured amount” (Attachment Three, above). But they also asked: Are other banks at risk?

Shares of several regional banks fell sharply after the markets opened, according to Time-server Nik (not Vox) Popli, triggering “a series of temporary trading halts and raising fears that another bank could be headed for a similar fate.

The biggest stock plunge happened to First Republic Bank, a regional bank based in San Francisco. In 2022 the bank had experienced major turnover among its top executives and warned shareholders that the Fed’s interest rate increases were hurting its profitability.

First Republic had $119.5 billion in uninsured deposits at the end of last year, accounting for 67% of its total deposits. But on Sunday, the bank announced that it had $70 billion in “unused liquidity” after securing cash loans from the Federal Reserve and JPMorgan Chase, placing it on much more solid footing.

And there also were, and are (and, depositors and investors hope) will continue to be...

PacWest Bancorp, a regional bank in Los Angeles, also saw its stock fall significantly after depositors had recently pulled out around $700 million in cash, reducing its holdings to $33.2 billion as of Thursday...

Western Alliance, a Phoenix regional bank, which reported on Friday that there had been “moderate” withdrawals from their $61.5 billion in deposits. Its stock fell more than 50% at one point on Monday, though Western Alliance said its cash reserves “exceed $25 billion and are growing.”

Zions Bank, based in Salt Lake City, was also hammered by the recent turmoil; its share price from falling over 40% on Monday.

Other print, broadcast and social media... partisan or not, proffered other explanations as to why the SVB, Silvergate, Signature and Credit Suisse collapsed. The New York Times, a week ago, cited the Justice Department’s opening of an inquiry into Silicon Valley Bank’s collapse; anonymous “legal experts” contending that the focus could be insider sales by several bank executives in the weeks before the failure. (March 13^th, Attachment Ten)

Axios raised up another reason for the banking blowout... the Plague, which necessitated a cultural paradigm shift as regards remote, or work-at-home work. While noting the benefits to workers, and their companies, reporter Emily Peck (Attachment Eleven) also noted that management became sloppier and shoddier without having its employees under their physical, not virtual, thumbs.

Yahoo famously called all its employees back to the office a decade ago, Peck took notice of, when a new CEO “took the helm and tried to turn that sinking ship around.”

Back to the office... back to work... back to profits?

SVB’s career site touted its flexible culture. "If our time working remotely has taught us anything, it’s that we can trust our employees to be productive from wherever they work," the site says.

The executive team at SVB was spread out around the country, with CEO Greg Becker at times working from Hawaii, according to the FT.

Whether remote work led directly to a bank failure, or whether poorly-managed remote work was simply a sign of bigger problems at the company, we may never know, Axios concluded. “Either way, what happened at SVB will likely enter the broader debate about returning to the office.”

The liberals at GUK (via Rebecca Burns and Julia Rock, reporters for The Lever, an independent investigative news outlet) cited many of the reasons already mentioned and yet to come as contributing to the collapse of SVB but settled, ultimately, upon a corporate culture of arrogance, greed and denial as the determing factor in its fracture and demise.

Eight years ago, when the bank’s CEO, Greg Becker, personally pressed Congress to exempt SVB from post-2008 financial reform rules, he cited its “low risk profile” and role supporting “job-creating companies in the innovation economy”. Those companies include crypto outfits and venture capital firms typically opposed to the kind of government intervention they benefited from on Sunday, when regulators moved to guarantee SVB customers immediate access to their largely uninsured deposits. (Friday, March 17^th, Attachment Eleven)

Fifteen years after the global financial crisis, the logic of ‘too big to fail’ still prevails (or, rather, “prevailed” until last week)... “Moral hazard for thee, but not for me,” declared Burns and Rock.

Pumping close to a million dollars into the veins of the deregulatory politicians and their deregulatory policies, SVB pumped even more cash into an ocean of fishy VC bottom feeders, crawling things like Ribbit Capital, a key investor in the collapsed cryptocurrency exchange FTX (managed by goin’-to-prison snake oily Sam Bankman-Fried), which lauded SVB’s tech-friendly ethos in a 2015 New York Times profile. “You can go to a big bank, but you have to teach them how you are doing your investment,” Ribbit’s founder told the Times. At SBV, “these guys breathe, eat and drink this Kool-Aid every day.”

Amidst the bipartisan corruption, the Lever sisters concluded, “the possibility of change looks grim.”

SVB has reported spending more than $2m on federal lobbying efforts, while the bank’s political action committee and executives have made nearly $650,000 in campaign contributions, the bulk to Democrats.

Republicans smile at the campaign contribution disclosures, but have a different take on the bank failures... they are a consequence of the “woke” Wall Street elites (mostly Democrats) imposing woke rules on their woke banks...

“(P)rominent Republicans are seizing on the federal response to the latest banking crisis to further a prominent line of attack in conservative circles: that elite corporations with liberal agendas are thriving at the expense of ordinary Americans,” reported Time.

“This bank, they’re so concerned with DEI and politics and all kinds of stuff, I think that really diverted from them focusing on their core mission,” Florida Governor Ron DeSantis, widely considered a frontrunner for the 2024 Republican presidential nomination (until last week’s endorsement of Putin’s War), told Fox News, referring to diversity, equity, and inclusion initiatives embraced by many employers.

Home Depot co-founder Bernie Marcus echoed the same theme, telling Neil Cavuto of Fox News: “I feel bad for all of these people that lost all their money in this woke bank. You know, it was more distressing to hear that the bank officials sold off their stock before this happened. It’s depressing to me. 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.”

“Kind of reminds me of stuff that we saw in the financial crisis or (the famous wokester) Bernie Madoff where you had warning signs and yet the government that this is supposed to be their job and they always seem to whiff when it counts.”

Other Republicans, including Rep. Marjorie Taylor Greene of Georgia and House Oversight Committee Chairman James Comer of Kentucky have also derided Silicon Valley Bank as “woke,” suggesting its political leanings were behind its failure.

Some Democrats started pushing back Monday on efforts to fit the collapse of a regional bank into the Republican practice of working “woke” into nearly every line of attack.

“Count me in for all the ‘woke means everything I don’t like or understand’ content. Tremendous,” Senator Chris Murphy of Connecticut tweeted. “FYI it was a Republican super donor who backed the bank and then led the run that created the crisis.”

Murphy then jokily added, “Woke! It’s all woke!!”

While the Right looks to blaming unqualified ethnic, sexual and cultural bankers for bungling their lending and deposit practices, lefties like Edward Ongweso at Slate hint at an old but venerable practice among the corporate elites... the woke and the sleepers... insider trading.

“The collapse of Silicon Valley Bank late last week may have resulted from a perfect storm of ugly events, Ongweso posited. “But it was also emblematic of a startup ecosystem and venture-capital apparatus that are too unstable, too risky, and too unmoored from reality to be left in charge of something as important as the direction of our technological development.”

Could the “pandemic bull run” have inflated the value of tech startups and the funds of investors, resulting in a tripling of deposits at the regional bank that specializes in the industry’s fledgling companies (SVB), from $62 billion at the end of 2019 to $189 billion at the end of 2021?

Or, could there have been another factor in the failure... Slate’s Ongweso has taken a contrarian posture against the weeping businesses with over $250K in deposits, hectoring the media and the regulators that they will not be able to meet their payrolls – thus plunging innocent workers into a dark room of fiscal depravity. (Attachment Thirteen)

That’s what (and why) federal regulators spent the weekend invoking something called the “systemic risk exception” in order to get every depositor their money. (Stockholders in SVB will take a bath, and the institution’s leadership were all fired.)

Who knows if the hysteria made the difference, but on Sunday, the FDIC announced it would be backstopping SVB and providing full access to all depositors to their funds on Monday. The VCs could rest their Twitter thumbs.

“The reality, however, is that VCs are herd animals. The industry is overconcetrated—enmeshed, as Geri Kirilova at venture capital firm Laconia Group puts it—and structurally drives capital into a few well-connected hands who pile it into larger funds, cut it into larger checks, and hand it off to a tightly knit network of entrepreneurs and startups. This overreliance on established actors or social networks may seem like a shortcut when you’re risk-averse or unable (and unwilling) to vet every single prospective investment, but it has at times left venture capitalists unable to weed out well-connected or charismatic charlatans.”

Or, as the SEC and DOJ are now looking into, “inside traders.”

And there is yet another arrow in the critics’ quiver... what USA Today’s Jessica Guynn called “liquidity.”

Aggressive fiscal and monetary policy since the 2008 financial crisis has contributed to high levels of inflation not seen since the 1980s.

“To fight this inflation, the Federal Reserve in the past year has raised rates nearly 500 basis points. This is one price we’re already paying for years of easy money – and was the first domino to drop,” Blackrock CEO Larry Fink, who runs the world’s largest money manager and warned that the Silicon Valley Bank collapse may not be the last, told Guynn.

Silicon Valley Bank was the second. The third domino that may tumble is “liquidity mismatches,” according to Fink. (“Liquidity” is defined by the Capital One defininators as the ease with which one converts a financial asset into cash without causing a big loss in value.)

“Years of lower rates had the effect of driving some asset owners to increase their commitments to illiquid investments – trading lower liquidity for higher returns,” Fink said. “There’s a risk now of a liquidity mismatch for these asset owners, especially those with leveraged portfolios.”

There has also been risk (with scanty rewards) to the Federal Reserve which, after raising short-term interest rates at the fastest pace since the early 1980s in an attempt to curb the hottest inflation since the early 1980s, has been “seemingly indifferent to all the ways that sudden sharp shifts in the economic wind can have unintended and potentially severe side effects,” according to Zachary Karabell, author of “Inside Money: Brown Brothers Harriman and the American Way of Power” and commentator for Time (March 16^th, Attachment Fifteen).

The two recent bank runs on SVB and Signature, followed by general panic among depositors and investors, were more like a sudden car-crash opined Karabell: everything appeared relatively smooth until it absolutely wasn’t. “And the culprit in this case was the very institution whose mission is to prevent bank runs and systemic collapse: the Federal Reserve.”

In the wake of the panic of 2008, banks were required to hold more capital and reduce their risk. Silicon Valley Bank did just that in holding nearly risk-free assets: U.S. government bonds. The arcane part, albeit crucial, is that there is a significant difference in holding 2-year bonds versus 30-year bonds when interest rates are rising quickly. The longer the duration of a bond, the more its price drops when rates are rising. Because Silicon Valley Bank had more of its holdings in those long-dated bonds, it started suffering paper losses as those bonds declined in value. And because it was not so large that it had been classified as systemically dangerous like banks with over $250 billion in assets, it did not face as stringent capital and regulatory requirements as, say, Chase. When it sold a tranche of those bonds at a loss to cover customer withdrawals, the entire VC industry in California and elsewhere got spooked, told their clients to pull their funds, and voila, a bank run.

Which brings us to the real cause of what happened: a Fed (which Karabell calls a “technocratic agency”) that has been so focused on curbing inflation that it has essentially ignored the risks of its policy of raising rates more quickly than at any point in history. It has acted as if inflation is such a threat to financial stability that it lost sight of the fact that fighting inflation can, if pursued in too draconian a fashion in “a zealous crusade to tame higher-wages, a tight labor market and robust consumer spending,” can itself be a threat to financial stability.

While runaway inflation has had historic and calamitous effects... “Weimar Germany in the 1920s and multiple Latin American and African nations in the last decade of the 20th century”... in what the Time piece describes as “the real world”, a tight market means that more people are employed and getting paid more. Treating that as a negative will likely “enrage a substantial portion of the actual humans who comprise the economy and that in turn will eventually undermine the credibility that the Fed needs to do its job.”

It is unclear yet whether this particular own-goal is a one-off or the start of a crisis. Either way, Karabell accuses, “it was an entirely preventable one, and the result of reckless policy. The best the Fed can do now is pause and re-assess its current inflation fighting path. Otherwise, it may succeed in taming inflation but only at the cost of ravaging an otherwise stable and sound economy.”

But politicians, seeing the crisis through the lenses of the American culture wars (while sneering and scoffing at the machinations of the VietCong brokers, bond traders and economists... all smart people, thus Democrats – enemies of hard-working, God-fearing, MAGA-trusting patriots who may have escaped with most or all of their inflation-ravaged savings but still risk losing their jobs and, perhaps, their homes to the parasites and scavengers crawling out from America’s woodpiles.

Another Timepiece, published three days before Karabell’s Fed flaming, followed the Fox and the Vox (above) and their sources, pro and con, in citing politicians who believe that it was “wokeness” that cut the throats of SVB and Signature. Mimi Racker (Attachment Sixteen) also cited DeSantis, Comer and MTG, in Fox, and Aaron Klein, in Vox, while adding proposed legislation from Sen. Josh Hawley (R-Mo) from “passing on new fees to customers to fund costs related to SVP’s collapse, suggesting that the government’s efforts represent a “woke bailout” that his constituents won’t pay for,” provoking woke Senator Murphy into shrieking “Woke! Woke! All woke!” like a demented parrot aa authorities drag his pirate captain off to the Graybar Hotel.

And so, claims Racker, fighting “bailouts” has joined the conservative crusade against masking, vaxxing and social distancing as standing up to the gays, the scientists, the coloreds, the doctors, the bureaucrats and President Joe for Americans’ freedom to...

Stop woke! Go broke!

“A smokescreen!” Republican entrepreneur and author Vivek Ramaswamy, who is running for president (and polling in the sub one percent of one percent 15^th of 15^th Republican 2024 candidates in the most recent Five Thirty Eight poll) told TIME, aiming at the “systemic risk exception” allowing SVB investors to recoup their losses.

“You can’t have it both ways,” he says. “I think that is part of what creates populist frustration, and if I’m being really honest, I think it’s justified. Tech startups effectively got bailed out for their own risk management failures.”

House Oversight Committee chairman and Kentucky Republican James Comer called Silicon Valley Bank “one of the most woke banks in their quest for the ESG-type policy and investing.” (USA Today)

“SVB is what happens when you push a leftist/woke ideology and have that take precedent over common sense business practices,” Donald Trump Jr. tweeted.

And Wall Street Journal opinion columnist Andy Kessler speculated that one reason for the Silicon Valley Bank’s demise was its diverse board which was nearly half women and had one Black member, one LGBTQ member and two veterans. 

“I’m not saying 12 white men would have avoided this mess,” Kessler wrote, “but the company may have been distracted by diversity demands.”

As evidence for the workeness of SVB’s dreamers and schemers, Joe Schoffstall of Fox Business (March 14^th, Attachment Seventeen) cited “two maximum checks totaling $5,800 to the campaigns of New York Senate Majority Leader Chuck Schumer and Virginia Sen. Mark Warner during the 2022 midterm election cycle” cut by SVB’s Becker. The two Democrat senators were the only politicians the bank’s president and chief executive officer, financially backed directly during the most recent cycle but he has also gifted President Joe while other SVB officials donated to Democrats in Massachusetts, California and Michigan, and even to a Republican... North Carolina’s Patrick McHenry.

(Perhaps they mistook him for Patrick Henry – American Founding Father... attorney, planter, politician and orator/author of "Give me liberty, or give me death!" Or, perhaps, historic Fort McHenry.)

Nonetheless, the Daily Haymaker derided “Lil’ Pat McHenry and his purty bowtie” as very, very woke. “With the GOP takeover of the US House, McHenry has been appointed chairman of the House Financial Services Committee.  Many of us have been struggling with the evil DEI, CRT and SEL which have infested everything from public education to the workplace and even banking and investing.  Lil’ Pat has apparently not received the memo.”

Sprinkling their denunciation of “the RINO runt” with screenshots of Pee Wee Herman, the Haymakers added to the aforesaid three initialed iniquities the addendum that “DEI is an important ingredient in this ESG (Environment, Sustainability, and Governance) crap infesting the finance world where investors are encouraged to ignore things like performance and profit, and instead focus on a company’s commitment to diversity, the environment, and other woke favorites.” 

Neither McHenry nor any of the Democrats replied to Fox-y inquiries, and Schoffstall reported that “(a) spokesperson for Signature Bank (also) declined to comment.” But Schumer, buckling under pressure, subsequently said he would forward Becker’s bounty to an unnamed charity.

There have been no new bank failures, runs, or jumping out of windows since SecTres Yellen assured Senate lawmakers Wednesday that the U.S. banking system is "sound" despite those three bank failures over the previous week and that the industry-wide capital injection into First Republic (FRC) announced Thursday had potentially avoided a fourth, as Yahoo Finance reported on Thursday (Attachment Eighteen).

And the Senators and other politicians were quick as funny bunnies to either take credit... Democrats and a few RINOs... or point fingers and whisper of more dire circumstances ahead, like thet economists surveyed by Wolters Kluwer Blue Chip Economic Indicators who, contrary to the contrarians of calm, are predicting a recession this year.

On Thursday, Senator and Becker beneficiary Warner (D-VA) found yet another Evil Empire to blam, saying he thought Silicon Valley Bank's failure would go down in history as the first internet-driven bank run, asking Yellen about the role social media played in the bank's failure. Janet Planet agreed, saying that “if a bank has an overwhelming run that's spurred by social media, or whatever,” deposits might flee and the bank can be put in danger of failing.

Sen. Warren (D-Ma) renewed her campaign to revive regulatory procedures scuttled under a bipartisan cabal of deregulators... Yellen responding that the Dodd-Frank supervisory stress tests focus on capital requirements not the liquidity, which played a key role in the events of last week, but did promise to further examine the liquidity requirements.

There was no mention of the tougher Glass-Steagall sanctions.

While Democrats pointed fingers at Republicans for rolling back capital requirements, Republicans blamed regulation itself for the failures.

"It appears that the San Francisco Fed was asleep at the wheel," said Senator Tim Scott (R-SC).

Higher wages and lower unemployment fomented a surge in deposits at institutions like SVB, leading to what Scott, like other Republicans, deemed “profligate spending by the Biden administration leading to inflation and higher interest rates that hammered the bank's Treasury holdings ultimately doomed the firm.

“The chances of contagion that other banks might be regarded as unsound and suffer runs seemed extremely high and the consequences would be very serious," Yellin responded to the politicians’ and media inquiries.

"And that's an important reason why we stepped in to intervene, because we do believe the banking system in the U.S. is sound, and reliant, and that the problems at Silicon Valley Bank didn't undermine confidence in the soundness of banks around the country."

Still, bankers, wankers, jankers and politicians from both parties continued to hurry and scurry and to urge the public to keep “calm” and thus prevent more runs on the banks, while spinning their spin on the collateral damage to those same hard-working, thrifty Americans whom influencers are trying to steer this way or that in order to reap their votes in 2024,

USA Today’s Paul Davidson cited several confidence men from the likes of Goldman Sachs and Moody’s who “modestly lowered their forecasts for economic growth this year” but denied that a depression, or even serious recession was in the cards. (Attachment Nineteen)

“Smaller regional banks are likely to become more cautious about lending to consumers and businesses to preserve their cash in case of unusually large depositor withdrawals, Goldman economists Manuel Abecasis and David Mericle wrote in a note to clients.

Mark Zandi, chief economist of Moody’s Analytics, estimates that stricter bank lending standards will shave 2023 GDP growth by a slightly smaller two-tenths of a percentage point. He’s also forecasting 1.2% growth this year

“This optimism goes to the aggressive government response to the bank failures, strongly signaling that it has the banking system's back and will do whatever is necessary to ensure the system continues to function well,” Zandi said. And CNN’s Anna Bahney (Attachment Eight) thinks a little pause in the war on inflation might be a good thing... for borrowers and mortage seekers, at least in the short run.

Other players in the great game of gotcha! have their cards and the money on the table... one of which is vital to all Americans, regardless of wealth, class or politics, and one which is... well... less so.

The bankruptcies which have persuaded VC brokers to rein in their lust for more tech and more money for same has impacted the U.S. Department of Defense.

Had the Biden administration not acted quickly to back up account holder funds at SVB, the United States—and the national-security community in particular—would have faced a major challenge in supporting and growing innovative new technologies, Michael Brown, a venture partner at Shield Capital and former head of the Defense Department’s Defense Innovation Unit, told Defense One newsletter (March 15^th, Attachment Twenty).

Brown, who previously ran the Defense Department’s outreach to Silicon Valley, said the national-security implications of SVB depositors’ funds vanishing would have gone well beyond the lost money. Many of the young startups that had funds in SVB were working on projects with clear defense and national-security applications.

“You certainly would have seen the national-security implications for autonomy for AI, for cyber space, a lot of the sectors which are so vibrant right now and could be used to better effect by the Defense Department,” he said. “It would be like cutting the [research and development] for all of those different companies. And you can imagine what happens, right? That means you're just living on your current product. And as soon as they run out, nothing's coming.”

Except, perhaps, the Chinese Red Army.

“If you want to change the capability of the force near-term, you've got to be looking at buying lots of small things, which are what the commercial sector provides. We’re seeing that put to great use in Ukraine right now. That's going to come out of the…sector that the venture capitalists are backing,” Brown said.

And the relationship between those entities and a very small handful of key institutions like SVB is a big national-security concern, he said. “If you want to kind of knock out the seed corn for the next decade or two of innovative tech, much of which we need for the competition with China, [collapsing SVB] would have been a very effective blow. [Chinese President Xi Jinping and Russian President Vladimir Putin] would have been cheering to see so many companies fail.”

A sphere of perhaps less importance, except to its dwellers, is the legal industry... which is already striving to cash in on the crisis.

On Tuesday, Reuters announced that SVB Financial Group and two top executives have been sued by shareholders over the collapse of Silicon Valley Bank.

The bank’s shareholders accuse the SVB Financial Group chief executive, Greg Becker, and chief financial officer, Daniel Beck, of concealing how rising interest rates would leave its Silicon Valley Bank unit “particularly susceptible” to a bank run.

The proposed class action was filed on Monday in the federal court in San Jose, California.

It appeared to be the first of many likely lawsuits over the demise of the Silicon Valley Bank (March 14^th, Attachment Twenty One). Shareholders said SVB “failed to disclose how rising interest rates would undermine its business model, and leave it worse off than banks with different client bases,” and are seeking unspecified damages for SVB investors between 16 June 2021 and 10 March 2023.

Reuters also reported on the effects of the collapses and subsequent bailouts... tho’ some still deny the epithet... reporting that, in addition to the Credit Suisse bankruptcy, financial markets overseas... from the EU to the Orient, and even Australia feeling the pain.

Banking stocks in Asia extended declines on Tuesday, with Japan’s banking subindex leading the fall, down 6.7% in early trade to its lowest since December.

“Bank runs have started [and] interbank markets have become stressed,” said Damien Boey, chief equity strategist at Sydney-based investment bank Barrenjoey. “Arguably, liquidity measures should have stopped these dynamics but Main Street has been watching news and queues – not financial plumbing.”

CNN reported that Chinese bank stocks advanced, even as other Asian stocks plunged Thursday.

And as far as goes the Swiss banking system... formerly considered the apex of professionalism and solvency... well, that just turned out to be plain wrong.

Already heavily indebted to the Saudi National Bank (see this, and this), Credit Suisse agreed to a $53 billion loan from the Swiss central bank while the European Central Bank hiked rates by a half point to fight inflation, sending a signal that central banks like the Federal Reserve may not budge in their rate hiking campaigns. (CNN, 3/16, Attachment Twenty Two)

After bailing out the sinking banks, or not... (“Joe Biden is pretending this isn’t a bailout,” tweeted Republican presidential candidate Nikki Haley, but “it is”), SecTreas Yellen said that the... whatevers... of Signature and SVB would be the last of their kind.

Under questioning, Yellen admitted that not all depositors will be protected over the FDIC insurance limits of $250,000 per account for failures yet to be failed as they the gumment did for customers of the two failed banks. (CNBC, March 16^th, Attachment Twenty Three)

Lawmakers questioned Yellen about whether backstops for big banks will become “a new norm”, and what that could mean for community lenders.

“I’m concerned about the precedent of guaranteeing all deposits and the market expectation moving forward,” Mike Crapo, R-Idaho, the Senate Banking Committee’s ranking member, said in his opening remarks.

Republican Sen. James Lankford of Oklahoma pressed Yellen about how widely the uninsured deposit backstops will apply across the banking industry.

“Will the deposits in every community bank in Oklahoma, regardless of their size, be fully insured now?” asked Lankford. “Will they get the same treatment that SVB just got, or Signature Bank just got?”

Yellen acknowledged they would not.

Lankford said the impact of this standard would be that small banks would be less appealing to depositors with more than $250,000, the current FDIC insurance threshold.

“I’m concerned you’re ... encouraging anyone who has a large deposit at a community bank to say, ‘we’re not going to make you whole, but if you go to one of our preferred banks, we will make you whole.’”

“That’s certainty not something that we’re encouraging,” Yellen replied and denied, but left open a loophole... uninsured deposits would henceforth, she said, only be covered in the event that a “failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences.”

America’s civil lawyers loved it!

And the criminal bar may also have reason to stand up and cheer... not only with the multiple investigations of former President Trump and his circle (he has predicted that he’ll be arrested for his storming of Stormy’s virtue on Tuesday, calling for a mob to protect him somehow)... but as the SEC, FBI the DOJ and... who knows? XFL?... marshal their prosecutorial resources and march forth to fight crime like the TV cops and prosecutors do... with SVB’s Beck and Becker’s peckers in the squeezing vise.

Will “the Jailer Man and Sailor Sam” run down those run-running bankers and lock them up?

The Atlantic’s Annie Lowery (March 16^th, Attachment Twenty Four) hopes so. Not only is she angry, she wants America to be angrier, too. “SVB had no chief risk officer for eight months last year—the year of the crypto crisis, the year that tech began to melt down— and its chief executive officer, Mister Becker, had started cashing out his stock.

Or, in the lingo of the law... insider trading.

“The bank failed,” concluded Lowery. “The government failed. Once again, the American people are propping up a financial system incapable of rendering itself safe.

“That system might become even more cavalier in the future, knowing that the Fed will paper over problems on bank balance sheets and that public officials will not tolerate any risk to the deposit accounts that make payrolls. The risk is not that SVB is endangering the financial system. The risk is that incompetent supervision and a dearth of rules are.”

But there seem to be other factors in this instance beside the namby-pamby complaints of “incompetent supervision and a dearth of rules” and even the contention of tweeterer Bill Ackerman (Slate, Attachment Thirteen) that: “Senior management screwed up and they should lose their jobs.”

There was hanky panky involved, as Clintonian SecLabe Robert Reich alleged in his rather mea culpistic column for the Guardian U.K. (March 13, Attachment Twenty Five) where he serves up a heapin’ helpin’ of blame to his old boss, Slick Willie. Also channelling “It’s a Wonderful Life” – the scene where the Jimmy Stewart character tries to quell a run on his bank by explaining to depositors that their money went to loans to others in the same community, and if they’d just be patient, they’d get their deposits back... remember?

“In the early 1930s, such bank runs were common. But the Roosevelt administration enacted laws and regulations requiring banks to have more money on hand, barring them from investing their depositors’ money for profit (in the Glass-Steagall Act), insuring deposits and tightly overseeing the banks. Banking became more secure, and boring.

“That lasted until the 1980s when Wall Street financiers, seeing the potential for big money, pushed to dismantle these laws and regulations – culminating in 1999, when Bill Clinton and Congress repealed what remained of Glass-Steagall.”

Fast forward to the crisis of 2008 and thereafter where another Democrat, Barack Obama bailed out the banks and “shifted the costs of the bankers’ speculative binge on to ordinary Americans, deepening mistrust of a political system increasingly seen as rigged in favor of the rich and powerful.”

Reich all-but-dismisses the package of regulations put in place after the financial crisis (called Dodd-Frank) as “not nearly as strict as the banking laws and regulations of the 1930s.” It required that the banks submit to stress tests by the Fed and hold a certain minimum amount of cash on their balance sheets to protect against shocks, but it didn’t prohibit banks from gambling with their investors’ money. Why not? Because Wall Street lobbyists, backed with generous campaign donations from the Street, wouldn’t have it.

But even the limpid, illiquid Dodd-Frank offended the bankers, so “even the thin protections of Dodd-Frank were rolled back by Donald Trump, who in 2018 signed a bill that reduced scrutiny over many regional banks and removed the requirement that banks with assets under $250bn submit to stress testing and reduced the amount of cash they had to keep on their balance sheets to protect against shock. This freed smaller banks – such as Silicon Valley Bank (and the Signature Bank) – to invest more of their deposits and make more money for their shareholders (and their CEOs, whose pay is linked to profits).

“Not surprisingly,” Reich added, “Silicon Valley Bank’s own chief executive, Greg Becker, had been a strong supporter of Trump’s rollback. Becker had served on the San Francisco Fed’s board of directors.”

But not all evil is criminal. “Becker sold $3.6m of Silicon Valley Bank stock under a trading plan less than two weeks before the firm disclosed extensive losses that led to its failure.” There was nothing illegal about corporate trading plans like the one Becker used.

Becker will probably avoid prison, contends The Street (Attachment Twenty Seven) because he exploited a rule set up in 2000 by the U.S. Securities and Exchange Commission (SEC), called Rule 10b5-1, to avoid prosecution for insider trading on his sale of 12,451 SVB shares for $3.6 million on Feb. 27.

“To avoid insider trading, the regulator has limited the sale of shares by the executives of a company to dates set in advance. Executives must notify in advance that they are going to sell shares. Becker respected this rule: he had indicated on Jan. 26 that he intended to sell shares, according to regulatory filings.” 

Was Becker aware of the company's plans to raise capital when he filed his plan to sell shares? 

SVB didn't immediately respond to a request for comment.

Faced with criticism that executives are abusing Rule 10b5-1, Gary Gensler, the current SEC Chairman, proposed new rules last year. These require executives using Rule 10b5-1 to sell shares, to wait 90 days between the plan filing and the actual sale. 

These rules will become effective on April 1. 

Becker could not have sold his SVB shares if these rules had already been in place.

So... what can Don Jones do to protect the family next egg?

Adriana Morga of the Associated Press (Attachment Twenty Seven) counsels relaxation if your money is in a bank insured by the Federal Deposit Insurance Corp. and you have less than $250,000 there. If the bank fails, you’ll get your money back.

But if you have over $250,000 in individual accounts at one bank, “experts recommend that you move the remainder of your money to a different financial institution, according to Caleb Silver, editor in chief of Investopedia, a financial media website.”

Overdepositors in SVB and Signature will be compensated... this time... but President Joe, SecTreas Yellin and the gang have warned “no more bailouts.” Actually, many still deny that what happened last week was a bailout but... regardless... next failed bank gets no slack from the wolfpack.

But don’t withdraw your savings over $250K and hide the swag under your mattress.

“Despite the recent uncertainty, experts don’t recommend withdrawing cash from your account. Keeping your money in financial institutions rather than in your home is safer, especially when the amount is insured.”

And beware of scammers. Almost all of those who promise get rich quick schemes will walk away if you get poor, instead.

Boys n’ girls, meet Mark Chaikin.

Mr. C... author, trader, stock broker, analyst, seer and see-er into the future as well as head of the options department for a major brokerage firm... has already warned 8.4 million Americans to prepare immediately for “A historic financial reset in 2023.” He’s appeared on 30 different TV networks to share his warning.

Chaikin describes his accomplishments as having predicting the COVID-19 crash, the 2022 sell-off, and the overnight collapse of Priceline.com during a CNBC debate. “In his 50-year Wall Street career, he worked with hedge funds run by billionaires Paul Tudor Jones and George Soros.”

Uh, oh... puts him on MAGA’s hit list.

“His work is based on the Chaikin Power Gauge, a 20-factor alpha model proven effective at identifying a stock’s potential. And now, he has launched Power Gauge Report to bring his knowledge to everyday investors in a brand-new way.”

Click here for the full story, and his free recommendation. Or don’t.

When the bucks are counted and advice is said and done, perhaps the greatest arousal of public concern (at least among those of the public not enmeshed in the entrails of the failures) is “moral hazard.”

“The idea of moral hazard is when someone behaves differently, [they’re] less careful because they know that the consequences of their action are going to be insured,” said Tom Baker, professor at the University of Pennsylvania Law School. “They’re not going to bear the cost themselves.”

“The term gained traction,” Matt Levin of marketplace.org (Attachment Twenty Nine) describes, “in the 19th century, when fire insurance companies didn’t want to insure the type of person who leaves the kerosene lamp burning at home when they head out for the evening.”

That was the original “moral” in “moral hazard,” moralists contend... not woke banks run by colored folks and women, nor the gays, nor Jews, nor even venture capitalist in drag. In modern economics, rather, the phrase is more about “how all types of insurance can create perverse incentives.”

SVB execs probably didn’t say out loud: “The feds will rescue us, so let’s not worry about all these problematic Treasuries on our books,” said Patricia McCoy, professor at Boston College Law School.

But maybe the bankers felt a little less worried because of what the feds did in 2008, then again during the pandemic.

“It sends a terrible signal long-term,” said Arthur Wilmarth, professor at George Washington University Law School. “People will now absolutely believe that all deposits are protected.”

But if the FDIC didn’t send that message, maybe people panic and withdraw their uninsured deposits from every regional bank in the country. In that case, the financial world could fall part again. That’s why the feds deemed an SVB failure a “systemic risk” to the entire financial system.

Wilmarth told Levin that the real antidote to moral hazard in the banking sector is preemptive regulation — preventing the banks from taking bad risks in the first place.

Sounds simple, doesn’t it!

Update: Yesterday, Switzerland’s USB bought out Credit Suisse, effectively ending (or postponing) the Eurocrash. (Time, Attachment Thirty) The price, in U.S. dollars was around one billion... widely believed to be a bargain!

	March 13^th– 19^th, 2023
Monday, March 13, 2023 Dow: 31,819.14	It’s time for awards, sports nominations and banking abominations... Oscars So Yellow: “Everything Everywhere All at Once” sweeps the slate with the exception of Brendan Fraser in “The Whale”. Old-timers Key Quan and Jamie Lee Curtis make their comebacks, and Michelle Yeoh chops her way to the top. Best Picture, writers and directors (two of them) too. See Attachment One, below. March Madness brackets set. Alabama, Houston, Kansas and Purdue are the top seeds in the regionals. And for the wishers and hopers, Cinderella teams like Princeton, Furman and Fairleigh Dickenson. (Attachment Two) And then there are the banks (see above). The good news is that SVB and Signature small depositors will get their money back, up to $250,000. The bad is that the larger ones, mostly businesses, will not... meaning that payrolls will not be met and the little people will still get screwed. Crypto crashes, too, but few real Americans are sorry about that. Still, Kamalala pleads for calm. Can’t have 1929 everywhere, all at once. And let the losers sing along ... “Jump out the window... Bang your head on the door... Bank’s on the run, so... Everybody’s poor!”
Tuesday, March 14, 2023 Dow: 32,156.40	It’s National Pi (or, for the hungry, Pie) Day. While financial fortune-tellers eat “humble” and float away, disgraced lawyer Michael Cohen testifies at the Trump/Stormy Daniels retrial and stormy storms flood Pajaro (“Bird”), California as the levees bust like banks, blizzards settle over Pottersville and other Northeast Borscht Belt locations and foreigners suffer from Euroheat and the kangaroos and koalas flee Australian deluges. More bad news for foreigners... Eurostrikers paralyze German transit, garbage piles up in France as the recyclers and others protest raising of retirement age from 62 to 64 and “Not My King” protesters in Britain rally against royals and hurl eggs at Charlie in advance of his coming coronation. Repubs. hurl insults at JB on woke banks and Tucker Carlson pontificates. American politician/pope cum Governor Ron deSantis (R-Fl) doubles down on his assertions in last week’s Lesson that Putin’s War is just a Russo-Ukrainian territorial dispute and America should just let Mad Vlad have the remaining rubble and cancle our finanancial commitments. Primary rival Trump goes to Iowa and says more bad words while General Election rival Biden goes on the Daily show and says that the Millenial Generation is damned. Or doomed... something... SCOTUS expected to ultimately support Amarillo test case on nationwide abortion pill ban. Legislation battle predicted. Also riots. Texas also takes over schools in Houston. Some are citing racial motivations.
Wednesday, March 15, 2023 Dow: 31,874.57	Gumment regulator swarm as two more planes nearly collide at Reagan Natl. airport in Virginia “runway incursion”, causing the FAA to convene emergency meetings about the outbreak of crashes and near crashes. Bad weather, meanwhile, causes over 1,000 cancellations. Russian fighter jets piss fuel on, then ram American drones over the Black Sea, actions that President Joe calls Unintentional? Coward! FDA moving too, appealing to ban “forever chemicals” from peoples’ water supply. More instances of spyig and brain-dead teenagers increase calls to ban Tik Tok but teenagers say they can afford to waste their time because AI apps are being developed that will do their homework for them. Spurred on by dozens of dognappers, the French Bulldog deposes Labradors as America’s favorite breed. London Breed, Mayor of gentrified San Francisco, hears proposals to give every black person in the city five million dollars. And a house.
Thursday, March 16, 2023 Dow: 32,246.55	Old, cold cases are heating up. Murdaugh conviction results in predictable appeal. Alec Baldwin’s “Rust” shooting results in prosecutor resignation. One Six trials drag on but Trump’s newest danger is a move by prosecutors to lock him up over paying off Stormy Daniels (hey, it almost worked on Slick Willie with the Monicagate). Five Virginia cops and assorted healthcare workers accused of murdering a “combative” black prisoner. Crappy car recalls include Honda... 450,000 for seat belts that do not save lives but, rather, kill; bad breaks for drivers of 1.3 million Fords with bad brakes. And you can’t stay home and go to sleep either because Sunbeam is recalling electric blankets that are a little too electrifying. Following the two eruptions in Italy and others otherwheres, scientists announce that they have discovered volcanoes on Venus. Can’t get a brake... or a break... anywhere.
Friday, March 17, 2023 Dow: 31,861.98	It’s St. Patrick’s Day. But little or no green’s to be found across the northern half of America from the California mountains to the Rockies to the plains, the Great Lakes and all the way to Potterville (New York state) and New England. At least Old England is warm, as are the French - burning all those barricades and police cars in riots over raising the retirement age to 64. As Russia sneers at weak USA response to drone destruction and awards medals to its fighter jet pilots, the International Criminal Court indicts Bad Vlad for war crimes... specifically taking 60,000 Ukrainian children, sending them to Russia and presumably selling them off to pedophiles to be given away as door prizes. Putin sneers again and makes plans to meet with China’s Xi and finalize their plans to conquer the world. Impotent politicians whine about China too, following evidence that the COVID plague was caused by the sale of meat from “raccoon dogs” at the Wuhan Meat Market, down a ways from the Wuhan biowarfare labs. (Isn’t eating dogs a Korean trait?) Xi also stalls on selling Tik Tok to an American or, at least, Western buyer as more evidence of spying on hostile journalists arises. American spies profiting too... facial recognition techniques allegedly developed to curb an outbreak of shoplifting (up 45% this year) are being used for other, darker purposes. And a mad monkey attacked a woman in Oklahoma, ripping off her ear before being gunned down by a family member.
Saturday, March 18, 2023 Dow: (Closed)	It’s National Corn Dog (not French Bulldog, nor Raccoon Dog) Day. Wicked weather rules the kennel... an arctic blast blows coast to coast and Gulf to Canada. Blizzards that cover gas meters with ten feet of snow are being blamed for explosions as the meters rupture and pipes burst; even frozen hepatitis strawberries are recalled. In legal news, Prince Harry is suing the Daily Mail U.K for defamation in calling him a liar. The DM responds: “He’s a liar.” As many as 77,000 Covid relief scammers suspected of pocketing over five billion from relief funds intended for victims and using the money to indulge in pleasurable fantasies like buying rare Pokemon cards. The alt-righters blame... who else... President Joe for not supporting stronger rules for vetting applicants.
Sunday, March 19, 2023 Dow: (Closed)	Ex-President Trump proclaims that he will be arrested Tuesday in the Stormy Daniels matter by the evil, “woke” Manhattan D.A. He appeals to MAGAmen everywhere to pick up their guns and come to New York (or Mar-a-Lago... wherever the Feds decide to bust him) to form another mob and prevent him from being seized by the Stormy-troopers. Even foes like Pence and DeSantis decry the prospect of arrest as a political ploy. Bad Vlad Putin dares a trip to the bombed out ruins of Mariuople in the Ukaraine, preparatory to his meeting with Chinese dictator Xi. They’ll plot and plan the ruin of the West and, maybe, enjoy seeing some dissidents hanged. Sen. Elizabeth Warren (D-Ma) completes a busy trifecta by denouncing Republicans and pimping her new book on This Week (ABC – with former VP Pence), NBC’s “Meet the Press” — with Warren; Sen. Mike Rounds (R-S.D.) and CBS’ “Face the Nation” — Warren; Rep. Patrick McHenry (above). NCAA “March Madness” gets really mad as Cinderella teams like Princeton and Furman advance, along with #16 Fairleigh Dickenson upsetting #1 Purdue.
It was a depressing week for Don Jones... but not one of those catastrophic weeks that usher in a Depression. Infusions of money from mysterious gumment sources assuaged not only the small depositors, but the big VC investors, freeing them up to continue funding tech startups like AI apps to help stupid students cheat on their homework. Also code to crack the Russo-Chinese defense computers, neutralize their nukes, then obliterate them. So all in all, a mixed week.

THE DON JONES INDEX

CHART of CATEGORIES w/VALUE ADDED to EQUAL BASELINE of 15,000

(REFLECTING… approximately… DOW JONES INDEX of June 27, 2013)

See a further explanation of categories here…

ECONOMIC INDICES (60%)

CATEGORY	VALUE	BASE	RESULTS			SCORE		OUR SOURCES and COMMENTS
INCOME	(24%)	6/17/13 & 1/1/22	LAST	CHANGE	NEXT			SOURCE
Wages (hrly. per cap)	9%	1350 points	3/6/23	+1.24%	3/23	1,434.03	1,434.03	https://tradingeconomics.com/united-states/wages   28.61
Median Inc. (yearly)	4%	600	3/13/23	+0.28%	3/27/23	602.54	602.71	http://www.usdebtclock.org/   35,761
Unempl. (BLS – in mi)	4%	600	3/6/23	+5.56%	4/23	633.65	633.65	http://data.bls.gov/timeseries/LNS14000000/  3.6
Official (DC – in mi)	2%	300	3/13/23	-0.20%	3/27/23	277.55	278.10	http://www.usdebtclock.org/      5,522
Unofficl. (DC – in mi)	2%	300	3/13/23	-0.18%	3/27/23	267.38	267.87	http://www.usdebtclock.org/    11,930
Workforce Particip. Number Percent	2%	300	3/13/23	+0.035% +0.018%	3/27/23	301.19	301.24	In 161,036 Out 100,297 Total: 261,333 http://www.usdebtclock.org/  61.61
WP % (ycharts)*	1%	150	2/27/23	+0.16%	3/23	150.95	150.95	https://ycharts.com/indicators/labor_force_participation_rate 62.50
OUTGO	15%
Total Inflation	7%	1050	3/13/23	+0.4%	4/23	998.57	996.88	http://www.bls.gov/news.release/cpi.nr0.htm     +0.4
Food	2%	300	3/13/23	+0.4%	4/23	279.90	278.78	http://www.bls.gov/news.release/cpi.nr0.htm     +0.4
Gasoline	2%	300	3/13/23	+1.0%	4/23	245.67	243.21	http://www.bls.gov/news.release/cpi.nr0.htm    +1.0
Medical Costs	2%	300	3/13/23	-0.7%	4/23	292.85	294.90	http://www.bls.gov/news.release/cpi.nr0.htm     -0.7
Shelter	2%	300	3/13/23	+0.7%	4/23	283.33	281.06	http://www.bls.gov/news.release/cpi.nr0.htm     +0.8
WEALTH	6%
Dow Jones Index	2%	300	3/13/23	-0.15%	3/27/23	258.45	258.06	https://www.wsj.com/market-data/quotes/index/ 31,861.98
Home (Sales) (Valuation)	1% 1%	150 150	3/6/23	-0.50% -2.15%	4/23	125.77 267.55	125.77 267.55	https://www.nar.realtor/research-and-statistics Sales (M):  4.00 Valuations (K):  359.0
Debt (Personal)	2%	300	3/13/23	+0.08%	3/27/23	279.16	278.93	http://www.usdebtclock.org/    72,972
NATIONAL	(10%)
Revenue (trilns.)	2%	300	3/13/23	+0.008%	3/27/23	384.29	384.42	debtclock.org/       4,610.6 0.918 611.3
Expenditures (tr.)	2%	300	3/13/23	+0.033%	3/27/23	341.17	341.06	debtclock.org/       6,019 021 023
National Debt tr.)	3%	450	3/13/23	+0.047%	3/27/23	426.97	426.77	http://www.usdebtclock.org/    31,596 609 624 (The debt ceiling was 31.4)
Aggregate Debt (tr.)	3%	450	3/13/23	+0.11%	3/27/23	422.70	422.25	http://www.usdebtclock.org/    94,466 556 660
GLOBAL	(5%)
Foreign Debt (tr.)	2%	300	3/13/23	+0.11%	3/27/23	346.67	347.05	http://www.usdebtclock.org/   7,224
Exports (in billions)	1%	150	3/13/23	+2.92%	4/23	163.94	163.94	https://www.census.gov/foreign-trade/current/index.html 257.5
Imports (bl.)	1%	150	3/13/23	+2.52%	4/23	165.54	165.54	https://www.census.gov/foreign-trade/current/index.html 325.8
Trade Deficit (bl.)	1%	150	3/13/23	+1.32%	4/23	300.76	300.76