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“This is one of those situations where the Progressives (who have taken over) really only care about the bottom 10%, maybe the bottom fifth of American society.”Mick, if only that were true. Look at the inner cities, the homeless, the rural poor, the state of immigration. Progressives don’t give a hoot about the bottom 10% and never have. Progressives care about agendas, and have their agendas helped the bottom 10? Not in generations. Yep. Libs have ruled Oregon for the last 40 years and they continue to blame Republicans for all that is wrong. A current talking point is Reagan is the root cause of mental health problems because he closed the mental institutions. Without getting into the weeds, one simple question ends the conversation. Ok, Reagan caused the problem, what are libs doing to fix it? No response is typical.
Reagan didn’t cause the problem. The Carter administration passed the Mental Health Systems Act of 1980. One year later, the 96th Congress, with a Democratic majority in both houses, repealed the act. All Reagan did was agree with the desires of the Democratic majority to return control to the states.
What Reagan did do, as governor of California, was to sign the Lanterman-Petris-Short Act in 1972. That bipartisan legislation made mandatory institutionalization of mental health patients by family members and civil courts illegal. That way a bad judge or vindictive relative couldn’t have you locked up indefinitely at a state hospital. Seems like an okay thing to do. The result of that humanitarian legislation was that populations in state hospitals dropped, but Reagan didn’t directly oversee, direct or cause any hospital closures.
The majority of mental hospitals in California were actually closed in the late 1990s, when Pete Wilson formed a task force to examine state hospital operations. The task force found that the populations of many state hospitals had dropped dramatically and the per-capita costs had skyrocketed to $114,000 per year. The Democratic-led California assembly agreed.
Agreed with both of you re: Progressives, but I’m also correct in that I was referring to orientation and noise versus action. We’re all men of action. Progressives, typically, are not. They whine, kvetch, criticize. But at the end of the day, they depend on the poor and dispossessed to support them. So they don’t really want to fix those problems.
But circling back to the main SVB point, Silicon Valley libertarians are hypocrites about regulation. They never wanted it when it “restrained” them, because they knew better. Then, Becker & Co. screwed up and screwed up big. All of a sudden, they needed the government.
Hiltzik: Silicon Valley libertarians’ hypocrisy over SVB bailout – Los Angeles Times (latimes.com)
SVB Employees begged management not to be so depend on the mid term treasuries. Oops.
(9) Matt Stoller on Twitter: “Oh look, SVB execs refused to do risk-management even though employees were begging them to do so. Why? It would ding their short-term profits and regulations mandating risk-management had been gutted in 2018-2019 by Trump regulators. https://t.co/GmSIyJfoQI https://t.co/JsTI7QzOiz” / Twitter
At least taxpayers won’t be affected directly. Supposedly the funds will come from the FDIC’s Deposit Insurance Fund, which had over $128 billion in assets as of 12/31/22. In other words, the cost to cover both insured and uninsured depositors will be covered directly by the banks. And technically speaking, SVB has enough assets to cover their liabilities, so…here’s hoping.
If the bank finds a buyer shortly, they might be able to continue as an operating entity.
Bailout, no, but buy out very possible. There’s a lot of undervalued assets there. This isn’t 2008. This apparently is a very conventional bank run, albeit on a massive scale by very wealthy people. James Stewart and Bedford Falls it ain’t.
You are correct, of course. As bad a job as Greg Becker, CEO did, it isn’t and shouldn’t be considered to be a disaster. I rather suspect they’ll get bought out. J. P. Morgan has wanted to boost their Technology portfolio for a very long time…my suspicion is that JPM will walk away with the winning bid.
9. A billionaire VC is calling for an SVB bailout, with a soft landing led by warrants; e.g., a situation in which the Feds could benefit. He correctly perceives SVB’s tanking as having far-reaching implications not just in the technology ecosystem, but in the American economy.
10. Unfortunately, American politicians will not want to bail out SVB. Politicians on the right hate technologists and their ground-zero bank, who almost exclusively support Democrat causes. They’ll relish the opportunity for payback, and viscerally enjoy the hit on California. Dems may like tech, and they love rich people even more than Repubs, but they will proceed cautiously here.
UPDATE: Janet Yellen says no bailout, but that the American banking system is resilient, well-capitalized and there will be no domino effect.
Yellen: No federal bailout for collapsed Silicon Valley Bank | AP News
On the other hand, Michael Burry says it’s just the tip of the iceberg:
‘Big Short’ Michael Burry Warns of Another Major Bank Collapse – TheStreet
The demise is shocking in its simplicity. I am hoping that given its crucial importance to the tech sector someone in the valley will do a buy out and keep the main business alive. They don’t need to be in investment banking, wine and other corollaries they expanded into. if they don’t make it, the world of tech banking will change forever and not for the best. I still remember when Wells Fargo, BoA et al wouldn’t work with my Start ups.
I completely agree. Banks are extraordinarily leveraged entities. Washington Mutual didn’t go bankrupt because of the 60% of its business that was a retail bank, or the 21% of its business that was credit cards. It went bankrupt because 14% of its business was from home loans, which were a complete disaster.
A good friend of mine was an SVP at Countrywide, the mammoth lender. Late in 2006, he told me there was going to be a bloodbath in residential real estate, extending throughout California and probably throught America. I asked him why. He said “You know that house, midway between us?” (we live four blocks apart). I did. He said “that house is owned by a house painter.”
I said “you mean a guy who owns a painting business, with 30 painters, right?”
He said “No…a house painter. And he owns a condo in Mountain View and a house in Gridley.” I asked how a man of limited means could afford all of that, and he replied “Have you heard of liar loans?”
I said, “Sure, they’re for people with uneven incomes. But you need close to pristine credit, like 760 FICO. You need a 20% down payment and the rate is 200 basis points over a normal mortgage.”
He replied “What if I told you that you could get that loan with a 640 FICO score, a 5% down payment — and you could borrow 3% of that — and the loans were made at market rates, not 200+ basis points above market?”
I was speechless. “But…that would be a disaster.” And so it was.
I’m very curious to see the quality of their credits, and the other decisions made when holding instruments that pay so little in interest in such an inflationary environment.
And yet, for 17 years, DeBerg collected NFL paychecks in the era of cable/satellite revenues. I’m actually attending a roast for him in Kansas City the end of this month… he’s not afraid to have a cocktail, or ten… LOL. I do remind him we kicked his ass at Stanford 😆
And everywhere else. He had a losing season 13 of those 17 years. Three pretty good seasons with the Chiefs, though.
Steve DeBerg Stats, Height, Weight, Position, Draft, College | Pro-Football-Reference.com
I would agree, Tech gets taken for granted. I can’t remember where I read it, but I recall reading that all of America’s GDP growth since 1970 can be attributed to the Tech revolution. I wouldn’t disagree. And people in other parts of the country often don’t understand or respect what Silicon Valley brings to the table, just in terms of their quality of every day life, as you point out.
As for social security benefits, I’m only 60 so I’m not yet eligible. I plan to take full benefits when I turn 65, just as my parents and grandparents did. Did I say 65? I meant 67… ;). At least I’m paying a much higher percentage of my income than those generations did in order to get those benefits. I figured my rate of return, at best, will be negative 8%. That’s if I live much, much longer than I probably will.
Trump approval sinking. Probably headed for the same approval rating territory as Greg Becker, (former) CEO of Silicon Valley Bank:
Trump’s Presidential Approval Is Sinking, Even Among White Men: Gallup Poll (thedailybeast.com)
Biden’s approval at 50% in the daily Rasmussen poll:
Daily Presidential Tracking Poll – Rasmussen Reports®
Re: geopolitics, I’ve been listening to this guy lately. I don’t know if he’s full of it, but he’s sure entertaining:
How Stable Is the Russian Oil Industry? – Zeihan on Geopolitics
A Ukraine War and the End of Russia—Repost – Zeihan on Geopolitics
Pretty long odds, I would imagine. Are you thinking sabotage?
Coincidentally, Venezuelan oil production has skyrocketed:
I agree with you BD, I don’t see the Republicans being able to take advantage of this. I don’t think they’ll be able to get out of their own way, but I also think that Progressive overstepping has a way to run before the average American figures out that it’s mainly empty promises and idiotic premises.
And of course, the Progressives will edge to Fascism when they can. For example, Trudeau didn’t like protestors…so he froze their bank accounts. Yikes…can you imagine the outcry if the American government did that?
Trudeau's Minion Openly Brags About Freezing Protestors Bank Accounts …… 🚨
😢
— Wall Street Silver (@WallStreetSilv) February 24, 2023
California’s population is dropping, too…there’s been a net 700,000 loss since April, 2020.
California’s population dropped by 500,000 in two years as exodus continues (msn.com)
At one time, Detroit had 2.4 million people. Geographically speaking, it’s a fairly large city. They now have 632,461. There are over 100,000 unoccupied residences in Detroit proper.
