Forum Replies Created
-
Posts
-
The second anniversary of Greg Becker’s debacle, a/k/a Silicon Valley Bank bankruptcy is upon us. I thought I would commemorate it with a few interesting items.
Item #1:
A few weeks back, the FDIC sued 17 former executives and directors of Silicon Valley Bank alleging gross negligence and breaches of fiduciary duty. They claimed that the defendants ignored basic fundamentals of banking prudence and the bank’s risk policies, taking on excessive risk for short-term gains.
They cited failure to hedge interest rate-sensitive, long-term government bonds and related mortgage backed securities, along with a “grossly imprudent” $294 milllion dividend to its parent that drained needed capital less than three months before the bank collapsed.
Named defendants include Gregory Becker, Daniel Beck, Marc Cadieux, Laura Izurieta, Michael Kruse, Michael Descheneaux, Eric Benhamou, Roger Dunbar, Joel Friedman, Mary Miller, Kate Mitchell, Beverly Matthews, Garen Staglin, Elizabeth Burr, Richard Daniels, Alison Davis and Jeffrey Maggioncalda. The executives had lobbied hard to water down oversight requirements.
Lawyers for former Chief Risk Officer Laura Isurieta said that it was outrageous that she was named in the suit because she had repeatedly warned against imprudent investments for (literally) years. But, of course, she had to be named, though she stepped down in April 2022, long before the collapse.
Audaces fortuna iuvat
We can add the Fillmore Safeway to the list of closings. Technically, today is the last day, but there’s nothing on the shelves.
SF’s Fillmore District Safeway closes | Watch
They wanted to close it a year ago, but the city and “activists” pushed to have it remain open. Bordered by Fillmore, Geary, Webster and Ellis. Safeway said too many thefts, poor safety. Too bad. It was in an area with lots of foot traffic.
There are 14 remaining Safeways in SF. There’s a Mollie Stone’s about six blocks north, a grove street market about eight blocks south, and others. Tough for Fillmore.
Audaces fortuna iuvat
Those numbers are really grim…and what’s worse is that the negative discrepancy increased over the year…the discrepancy increased eight of the 11 months (December is still preliminary). Basically it shows a current shortfall of 610,000 jobs compared to what the Biden administration was publicizing.
The labor force participation rate, since end of WWII averaged 62.84%. Current rate is 62.6%. When Trump took over in 1/2017, it was 62.8% and it increased to 63.3%…what that means is that there were about 765,000 more people employed between the start of his term and the end. Incidentally, Obama presided over a long-term decline in LFPR from 65.7% in 1/09 to 62.7% in 12/16…and it reached a low of 62.4% in 2015. Don’t forget, Obama had 0.25% Fed interest rates for seven of his eight years…that’s quite a trick, having employment that bad with rates that low.
Obviously, it tanked at COVID, dropping to 60.1% at its nadir, but increasing to 61.5% by Trump’s last month, and continuing to increase as America came out of our self-imposed economic shutdown. It peaked at 62.8% (the long term average) last January, dropped to 62.5% last month, increased by a tick in Trump’s first month to 62.6%.
Civilian labor force participation rate
Audaces fortuna iuvat
Reducing almost any government spending is recessionary. It’s a big reason it’s so hard to do. as to BTD: there will be some good / some bad (the Gaza comments sound bad to me), but there’s more transparency in the first two weeks than we had for the last 4 years. The comparisons to fascists are overdone: Trump has pretty consistently acted out in the open and has if anything worked against entrenched interests. Fascists capture them.
Not trying to be funny, but Fascists sound like present-day Democrats and Antifa.
Audaces fortuna iuvat
Fun fact: David Hogg was admitted to Harvard with a 1270 SAT score. Hogg was denied entrance to UCLA, UC-San Diego and UC-Irvine. Graduated with a degree in – quelle surprise – political science. He keeps busy these days pressuring companies to drop their support
Audaces fortuna iuvat
What’s worse than weaponizing governmental entities?
Weaponizing those entities to attack a political opponent.
What’s worse than that?
Making everything up. Inventing it out of whole cloth.
What’s worse than that?
Co-opting foreign entities to do the same.
Audaces fortuna iuvat
Incidentally, I genuinely hope it works. I don’t see how it can. It’s bloated, inefficient, and ineffective…basically, everything that government is.
Audaces fortuna iuvat
The new mayor Lurie in San Francisco is apparently going to attempt to fix the hash that London Breed (and generations of Democratic leadership) made of the city of San Francisco.
He’s saying the right things. We’ll see if he can actually deliver:
- He says overspending of $1 billion will end.
- Reduce bureaucratic bloat; e.g., SF has nine homeless outreach teams, five departments that touch homelessness and more than 100 contractors who provide homeless services.
- He has named four “czars” to advise him on:
- health, homelessness and family services (McKinsey consultant). Kunal Modi, has 10 departments and about $6 bils. in budget.
- infrastructure, climate and mobility (CEO of SPUR civic think tank). Alicia John-Baptiste has seven budgets with$4.5 bils. in budget, including MTA, utilities, GGPark, the port and office of innovation.
- public safety (former SFPD captain) Paul Yep, has eight budgets, about $1.5 billion
- economic development and housing (ex-Twitter CFO). 15 budgets, including airport, about $3 billion in budget.
Audaces fortuna iuvat
The Atlantic‘s take on tariffs. It’s a left of center magazine, and it absolutely acknowledges the doctrinaire down side of tariffs…but…
Economists Aren’t Telling the Whole Truth About Tariffs – The Atlantic
…there’s good to be had with tariffs. A few of the pro-tariff arguments that are rarely voiced:
- Domestic manufacturing needs protection because it drives innovation. When manufacturing goes offshore, supply chains and engineering know-how follow.
- Manufacturing anchors local economies in ways that personal services do not.
- A tariff is basically the same structurally as a carbon off-set. One can’t be a bad idea with the other being brilliant.
- Uncharacteristically, economists tend to focus on the short-term consequences of tariffs. Typically they focus on the long-term; e.g., free trade is good because while companies may close in the short term, the long run efficiency gains will offset the losses. For tariffs, they only think short-term. For example, a tariff is a tax on American manufacturers and they emphasize the drag on growth but ignore that higher import prices would encourage investment in manufacturing. When UCLA researchers studied tariffs imposed on Chinese companies, they estimated that higher important prices cost the U. S. Economy $51 billion, but when factoring in the full economy’s response, it was indistinguishable from zero. There was a redistribution from buyers of foreign goods to U. S. producers.
- The Atlantic found that if you extended the Chinese tariffs through to the end of 2019, the higher prices completely vanished. Samsung and LG brought U. S. factories online, much in the same way that the Japanese now build in America.
- Final point…oh yeah…where does the money go? The weird assumption by economic models is that tariff revenue disappears (see The Tax Foundation’s model) but it moves to the U. S. Treasury. Thomas Jefferson essentially funded the government through tariffs in the early days.
Audaces fortuna iuvat
https://x.com/RealEJAntoni/status/1885002183512383786 Interesting point. The debt fueled juicing of GDP is not sustainable and has already slowed real growth.
I’ve been worried about this for a while. The basic calculation of GDP is:
- Consumer spending +
- Business investment/spending +
- Government spending +
- Net of Exports – Imports
Consumers don’t have any money left to spend. That’s constant. We still have a trade deficit. Trump is about to massively reduce government spending at the Federal level.
And that’s all fine, if business investment steps up. If the re-shoring of American manufacturing goes well, if tariffs (and tariff threats) have the desired effect of getting more countries to build here — which is what the Japanese have done — then maybe we avoid recession and have a stronger country. Energy investment and exploration will have something to do with that. Ideally, that will help with the trade deficit as well.
Audaces fortuna iuvat
Three attributes of tariffs that no one discusses:
- Dear dumb sxxts who complain about Trump’s 25% tariff on Canadian goods: The Canadians have tariffs on American (and other country of origin) goods. Mexico does not have a general tariff, but there are exceptional tariffs in 20 different industry sectors depending on the item.
- The fact that a tariff is income for the government. It stays in the country and helps pay for the Democratic programs. The foreign nation selling the product into the American market takes a haircut, the American competing companies get a leg up, and yes, the American consumer pays a bit more, and the excess funds go to the American government to pay benefits for the less fortunate.
- No one is forcing people to purchase tariffed goods. You don’t want to pay the increased price, fine, buy your maple syrup from Maine instead of Canada.
Audaces fortuna iuvat
Both my brother and my sister (Stanford PhD) are employed in the public sector, specifically by the State of California. Their pay, benefits and retirement packages are enviable — basically unbelievable — and nowhere to be found in the private sector. BTW, California state employees are paid an average of $100,505. Must be nice. I saw a graph not long ago that showed a long, steady decline over the years in funding for the University of California and CSU systems and a long, steady increase in payments for public employees and retirement contributions.
Reminds me of when Mrs. Mick started as a teacher in the Palo Alto Unified School District. Her third year there, the union representatives asked her and the other teachers what they wanted in the negotiations. All of the new teachers — all young women — asked for pregnancy benefits. When the union reps got back, they bragged about the fat retirement increases they negotiated. No pregnancy benefits. When Mrs. Mick challenged them on that point, the 60+ year old union rep said they didn’t bring it up because he “would have looked stupid arguing for pregnancy benefits.”
Mrs. Mick retired three years after that, still in her 20s. When she retired, the same union rep demanded that she leave her retirement fund untouched (she had the option to convert it into an IRA) because “the retired teachers needed her money” — I sxxt you not, he really said that.
I’m assuming that the Federal government has similarly structured pay, benefits and retirement packages, completely out of sync with the private sector, negotiated by the public unions — unions that, per FDR, shouldn’t exist. But they do, of course.
Audaces fortuna iuvat
First one’s behind a paywall, but here’s the gist: three dozen “highest priority” opportunities since 2013 LA County identified — but never repaired — necessary fixes and upgrades to the water system. Total cost, $57 million. Basically, the entire system needed repairs and upgrading; pipes, connections to adjacent water systems in emergencies (could have come in handy, don’t you think?), pumping stations, additional tanks, leaking water lines, etc.
There were 13 upgrades mandated in a 2019 priority list. All but one would have been completed by September, 2024, cost of $59.3 million.
Audaces fortuna iuvat
And consumer confidence fell slightly, although still above the level that signals recession.
U.S. Consumers Lose Confidence at Start of Trump’s Second Term – WSJ
Under 55 consumer confidence dropped, consumers over the age of 55 had increased confidence.
Audaces fortuna iuvat
And Americans are taking second jobs, side hustles, extra gigs to make ends meet, thanks to the ridiculously high prices caused by Democratic policies.
More Americans take on a second job or side hustle. They come at a cost.
Audaces fortuna iuvat
