Month: March 2023

Venture vulture capital needs a haircut

benfell

Banking


Fig. 1. “East River Savings Bank,” apparently now a CVS drug store. Photograph by Jim Henderson, July 3, 2021, via Wikimedia Commons, CC BY 4.0.

The previous issue, which dealt with contagion to Credit Suisse,[1] has been updated. Now we’re looking at SoftBank, which “isn’t a bank,” but “has bankrolled many tech startups.”[2] Seems like there are an awful lot of fires to put out.

The [Silicon Valley Bank] collapse could bring forward the “day of reckoning” for [venture capitalists] and private-equity funds and force them to mark down the value of their holdings in private startups, says Atul Goyal, an analyst at Jefferies.

There has been a widening discrepancy between valuations in public and private markets in recent months. The 50 largest tech companies that have gone public since 2020 have lost nearly 60%, or more than $600 billion, of their combined market value, according to CB Insights. On the other hand, median valuations for late stage, privately held startups last quarter were still above 2020 levels. Partly, that’s because only stronger startups managed to raise capital amid the deepening funding winter last year. But if the SVB debacle forces more startups to reluctantly seek equity funding, that could push valuations lower.

That would be a problem for SoftBank, which has invested in hundreds of startups through the $100 billion Vision Fund and its successor. Jefferies estimates that SoftBank has only written down the unlisted holdings at its Vision funds by 20%, compared with a more than 50% drop in the value of its listed portfolio since the beginning of 2022.[3]

We’ve been seeing signs of stress in the technology sector for a while now,[4] which I kinda have to pay attention to because Uber and Lyft style themselves as and are treated as “technology companies” as part of their “independent contractor” scam on drivers—they are part of this ecosystem.

It appears that SoftBank sold off the last of its Uber holdings last year,[5] so there should be no direct impact.

But it seems possible that that a focus on banking may be too narrow. It looks like venture capital is up to its neck in the Silicon Valley Bank collapse.[6] If we see these vultures as a cause, as they were of the dot-com crash in 2001, and if we see them folding up their checkbooks as they did in 2001, then we could be looking at a feedback loop that may yet be unchecked; this in turn could—I’m not forecasting this—lead to another crash.

A couple days ago, I wrote that

I think the conclusion here is that a $250,000 limit on Federal Deposit Insurance Corporation coverage is simply the wrong approach to this problem. Large companies need large checking account balances to make payroll and pay their bills and, setting aside arguments about capitalism, the nature and function of money, etc., we probably would acknowledge that these are legitimate balances that should be protected.[7]

Now I’m thinking it isn’t just “systemically important” banks that are the problem here. We’ve got entire corporations even outside that sector that are “too big to fail,” but are on precarious venture capital footing. And if that’s the case, then fixing the $250,000 limit isn’t really the fix: We need to at the very least to 1) limit the size of companies that rely on this kind of financing, and 2) find ways to limit the power of venture capital over the economy. Even if my analysis is incorrect, these measures would be good things in themselves.

Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality

Saleha Mohsin, Lydia Beyoud and Sridhar Natarajan, “FDIC Races to Return Some Uninsured SVB Deposits Monday,” Bloomberg, March 11, 2023, https://www.bloomberg.com/news/articles/2023-03-11/fdic-races-to-start-returning-some-uninsured-svb-deposits-monday

Associated Press, “US government: Silicon Valley Bank clients will get funds,” March 12, 2023, https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e

William D. Cohan, “SVB’s Valley of Death,” Puck, March 12, 2023, https://puck.news/svbs-valley-of-death/

Ben Foldy, Rachel Louise Ensign, and Justin Baer, “How Silicon Valley Turned on Silicon Valley Bank,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/how-silicon-valley-turned-on-silicon-valley-bank-ee293ac9

Victoria Guida and Sam Sutton, “‘There’s going to be more’: How Washington is bracing for bank fallout,” Politico, March 12, 2023, https://www.politico.com/news/2023/03/12/silicon-valley-bank-fallout-washington-00086662

Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023, https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/

Nick Timiraos, “SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98

Zachary Warmbrodt, “Banks fought to fend off tougher regulation. Then the meltdown came,” Politico, March 12, 2023, https://www.politico.com/news/2023/03/12/banks-regulations-feds-svb-meltdown-00086694

Adam Cancryn, Ben White, and Victoria Guida, “How Biden saved Silicon Valley startups: Inside the 72 hours that transformed U.S. banking,” Politico, March 13, 2023, https://www.politico.com/news/2023/03/13/the-emergency-bank-rescue-that-almost-didnt-happen-72-hours-00086868

John Cassidy, “The Old Policy Issues Behind the New Banking Turmoil,” New Yorker, March 13, 2023, https://www.newyorker.com/news/our-columnists/the-old-policy-issues-behind-the-new-banking-turmoil

Telis Demos, “Were SVB and Signature Bank Just Bailed Out by the U.S. Government?” Wall Street Journal, March 13, 2023, https://www.wsj.com/articles/were-banks-just-bailed-out-by-the-government-6b0a582f

Eric Lutz, “The Silicon Valley Bank Crisis Is Complicated. But Donald Trump’s Role In It Isn’t,” Vanity Fair, March 13, 2023, https://www.vanityfair.com/news/2023/03/silicon-valley-bank-collapse

David J. Lynch and Tony Romm, “Washington’s bank rescue fails to erase all doubts,” Washington Post, March 13, 2023, https://www.washingtonpost.com/us-policy/2023/03/13/silicon-valley-bank-doubts/

Jeff Stein, “Is this a bailout and 6 other questions about the SVB collapse,” Washington Post, March 13, 2023, https://www.washingtonpost.com/us-policy/2023/03/13/svb-bank-bailout-fed/

Zachary D. Carter, “This Bank Panic Should Not Exist,” Vanity Fair, March 14, 2023, https://www.vanityfair.com/news/2023/03/silicon-valley-bank-run-panic-should-not-exist

Myriam Balezou, “Credit Suisse Is In Crisis. What Went Wrong?” Bloomberg, March 15, 2023, https://www.bloomberg.com/news/articles/2023-03-15/credit-suisse-what-s-going-on-and-why-is-cs-stock-falling

William D. Cohan, “Two Days in the Valley,” Puck, March 15, 2023, https://puck.news/two-days-in-the-valley/

Simon Foy, “Is Credit Suisse, the bad apple of European banking, really ‘too big to fail, too big to be saved’?” Telegraph, March 16, 2023, https://www.telegraph.co.uk/business/2023/03/15/credit-suisse-share-price-bailout/

Nicholas Jasinski, “How SVB Triggered Credit Suisse’s Latest Mess—and Sparked Fears of a Financial Crisis,” Barron’s, March 15, 2023, https://www.barrons.com/articles/credit-suisse-svb-banking-crisis-3faac588

Brian Swint, “Credit Suisse Stock Surges as Central Bank Loan and Debt Buybacks Tame Panic,” Barron’s, March 16, 2023, https://www.barrons.com/articles/credit-suisse-buy-back-debt-svb-banks-crisis-bf792d0d

Stephen Wilmot, “Panic Abates at Credit Suisse. Now Comes the Hard Part,” Wall Street Journal, March 16, 2023, https://www.wsj.com/articles/panic-abates-at-credit-suisse-now-comes-the-hard-part-2b93c578

Jacky Wong, “The SVB Tremors Will Shake SoftBank,” Wall Street Journal, March 16, 2023, https://www.wsj.com/articles/the-svb-tremors-will-shake-softbank-dc7fab4

Pennsylvania

Pittsburgh

Unauthorized violence


Fig. 1. “Ed Gainey poses with CeaseFirePA during the 2020 Women’s March in Downtown Pittsburgh.” Photograph by Megan Gloeckler, undated, via Pittsburgh City Paper,[8] fair use.

Laura Malt Schneiderman, “Gang violence in Pittsburgh has given way to a new, less organized form of crime,” Pittsburgh Post-Gazette, March 16, 2023, https://newsinteractive.post-gazette.com/pittsburgh-gang-violence-organized-crime/

  1. [1]Myriam Balezou, “Credit Suisse Is In Crisis. What Went Wrong?” Bloomberg, March 15, 2023, https://www.bloomberg.com/news/articles/2023-03-15/credit-suisse-what-s-going-on-and-why-is-cs-stock-falling; Simon Foy, “Is Credit Suisse, the bad apple of European banking, really ‘too big to fail, too big to be saved’?” Telegraph, March 16, 2023, https://www.telegraph.co.uk/business/2023/03/15/credit-suisse-share-price-bailout/; Nicholas Jasinski, “How SVB Triggered Credit Suisse’s Latest Mess—and Sparked Fears of a Financial Crisis,” Barron’s, March 15, 2023, https://www.barrons.com/articles/credit-suisse-svb-banking-crisis-3faac588; Brian Swint, “Credit Suisse Stock Surges as Central Bank Loan and Debt Buybacks Tame Panic,” Barron’s, March 16, 2023, https://www.barrons.com/articles/credit-suisse-buy-back-debt-svb-banks-crisis-bf792d0d↩
  2. [2]Jacky Wong, “The SVB Tremors Will Shake SoftBank,” Wall Street Journal, March 16, 2023, https://www.wsj.com/articles/the-svb-tremors-will-shake-softbank-dc7fab4↩
  3. [3]Jacky Wong, “The SVB Tremors Will Shake SoftBank,” Wall Street Journal, March 16, 2023, https://www.wsj.com/articles/the-svb-tremors-will-shake-softbank-dc7fab4↩
  4. [4]Gerrit De Vynck, Caroline O’Donovan, and Naomi Nix, “The age of the Silicon Valley ‘moonshot’ is over,” Washington Post, March 2, 2023, https://www.washingtonpost.com/technology/2023/03/02/big-tech-moonshots-google-meta-amazon/↩
  5. [5]Arjun Kharpal, “Japanese giant SoftBank dumps its entire stake in Uber as losses mount at its investment unit,” CNBC, August 8, 2022, https://www.cnbc.com/2022/08/08/softbank-sells-entire-stake-in-uber-as-vision-fund-losses-mount.html↩
  6. [6]William D. Cohan, “Two Days in the Valley,” Puck, March 15, 2023, https://puck.news/two-days-in-the-valley/↩
  7. [7]David Benfell, “The Federal Deposit Insurance Corporation dilemma,” Irregular Bullshit, March 14, 2023, https://disunitedstates.com/2023/03/14/the-federal-deposit-insurance-corporation-dilemma/↩
  8. [8]Charlie Wolfson, “Neighborhood groups try to curb shootings as Pittsburgh’s mayoral campaign puts political focus on gun violence,” Pittsburgh City Paper, October 20, 2021, https://www.pghcitypaper.com/pittsburgh/neighborhood-groups-try-to-curb-shootings-as-pittsburghs-mayoral-campaign-puts-political-focus-on-gun-violence/Content?oid=20401296↩

Now Credit Suisse?

benfell

This post has been updated since it was originally published.

Banking


Fig. 1. “East River Savings Bank,” apparently now a CVS drug store. Photograph by Jim Henderson, July 3, 2021, via Wikimedia Commons, CC BY 4.0.

It all begs the question: How did the failure of Silicon Valley Bank, a $212 billion regional bank with a concentrated deposit base, spill over to Credit Suisse and the world’s banking system?

SVB and Credit Suisse don’t seem to have too much in common. Unlike the regional U.S. banks that failed over the weekend, Credit Suisse is a global institution. It had assets worth about 530 billion Swiss Francs ($575 billion) on its balance sheet at the end of 2022—more than double Silicon Valley Bank’s. Credit Suisse is one of two dozen primary dealers with the Federal Reserve. The Bank for International Settlements’ Financial Stability Board considers it a Global Systemically Important Bank—“too big to fail” in colloquial terms. It has investment banking, wealth management, and other business lines on several continents on top of traditional banking.

It also has lots of problems. In recent years, Credit Suisse has been the European banking industry’s sickest member. It suffered major losses on junk bond trades in the mid 2010s, was at the center of the downfalls of Archegos Capital Management and Greensill Capital, and has churned through several CEOs and chairmen, among other issues and scandals. The result was an outflow of more than 110 billion Swiss francs of customer deposits in the fourth quarter alone.[1]

Remember, these are the folks who feel entitled to assess your creditworthiness. (And yeah, I’m pretty sure I made a similar crack during the 2008 Financial Crisis.)

Credit Suisse’s failings have included a criminal conviction for allowing drug dealers to launder money in Bulgaria, entanglement in a Mozambique corruption case, a spying scandal involving a former employee and an executive and a massive leak of client data to the media. Its association with disgraced financier Lex Greensill and failed New York-based investment firm Archegos Capital Management compounded the sense of an institution that didn’t have a firm grip on its affairs. Many fed up clients have voted with their feet, leading to unprecedented client outflows in late 2022.[2]

For years, Credit Suisse has been the bad apple of the European banking industry. A series of costly and cack-handed blunders had cost it billions and seen its share price slide almost continuously.

But on Wednesday, what had been a slow-burning mess exploded into an acute crisis that triggered a scramble across City trading floors.

What triggered the panic was two words: “Absolutely not”.

Credit Suisse’s share price plunged as much as 30pc after its biggest investor said it will not stump up any more cash to backstop the struggling bank. Ammar Al Khudairy, chairman of the Saudi National Bank, ruled out any further support, saying there were “many reasons” not to put any more money in. . . .

Nouriel Roubini, an economist known as “Dr Doom”, raised the spectre of a Credit Suisse default becoming a “Lehman moment”.

He told Bloomberg TV: “The problem is that Credit Suisse, by some standards, might be too big to fail, but also too big to be saved.”[3]

The way Bloomberg spins this, it looks like Credit Suisse should survive, that a significant part of this is an emotional reaction to what happened with Silicon Valley Bank.[4]

The Wall Street giant, whose failure in 2008 triggered the global financial crisis, succumbed when funding dried up and other banks stopped dealing with it. Unlike Lehman and SVB, Credit Suisse has substantial liquid assets to call upon and access to central bank lending facilities and is less sensitive than many rivals to sharp moves in interest rates. It has rebuilt its cushion against more deposit withdrawals since the worst wave of outflows in October. It also has enough money-like liquid assets to pay back half of all its liabilities in deposits and loans from other banks, according to Bloomberg Opinion banking columnist Paul J. Davies. [Chief Executive Officer Ulrich] Koerner said the firm’s liquidity coverage ratio showed it can handle over a month of heavy outflows in a period of stress.[5]

One problem here is with economists’ assumption that human beings are rational actors. We really won’t know how the psychology plays until it has played:

Yet as its share price tumbled, Credit Suisse reached out to the Swiss National Bank (SNB) to ask for a public show of support. Late on Wednesday night, it announced it would be borrowing up to $54 billion (£44 billion) from the central bank.

Some in the market believe more radical intervention was inevitable. The City trader said: “It doesn’t look like there’s much Credit Suisse can do from here to change the narrative themselves.

“Investors are eagerly waiting for a potential nationalisation scenario from the SNB to avoid it becoming systemic.”[6]

Another part of the problem, that Nouriel Roubini alluded to, is Credit Suisse’s size.[7]

Hendrik du Toit, chief executive of UK asset manager Ninety One, which has a very small holding in the Swiss bank, said: “Sizeable bank failures, unless dealt with firmly, sow the seeds of contagion.

“It is too early to tell whether this will cause further damage [but] Credit Suisse needs to be dealt with.

“Expect volatility to continue.” The Bank of England declined to comment.[8]

As with [Silicon Valley Bank], customer deposit outflows have been a drag on liquidity at the bank, as have its restructuring costs. Together they are hurting its ability to meet short-term liabilities—even if the overall balance sheet remains well within regulatory capital requirements. It creates the worry that if outflows continue, Credit Suisse could become a forced seller of longer term assets. That’s what brought about SVB’s downfall—many of its assets were sold at a steep loss after a year of Federal Reserve interest-rate increases pushed down the value of bonds on its balance sheet. As with SVB, regulators and governments will be under pressure to save the day and prevent an even greater crisis of confidence or contagion in the global banking system.

“Despite Credit Suisse’s protests, it is looking inevitable that the Swiss National Bank (SNB) will have to intervene and provide a lifeline,” says Octavio Marenzi, CEO at management consultancy Opimas. “The SNB and the Swiss government are fully aware that the failure of Credit Suisse or even any losses by deposit holders would destroy Switzerland’s reputation as a financial centre.”[9]

It doesn’t look to me like people are reacting to substantial information. It looks to me like people are reacting precisely to what they don’t know, which is to say that they don’t trust what they do know, which is further to say that they don’t trust that what they’re being told is a complete picture.

If you want to fix the psychology, it might help to fix the transparency. Which would be kind of a different way from how the powers that be here are used to doing business.

From here, I get a bit confused:

Late on Wednesday, Credit Suisse (ticker: CS) tried to reassure investors of its financial health by saying it would use the option to borrow as much as 50 billion Swiss francs ($54 billion) from the country’s central bank. To further shore up confidence, it said it would buy up to $2.5 billion of its dollar-denominated bonds, as well as up to $530 million worth of euro-denominated debt. The prices of both had dropped along with Credit Suisse’s share price.

Credit Suisse stock closed down 24% on Wednesday after its largest shareholder, the Saudi National Bank, said it wouldn’t be investing any more money in the lender because it would surpass a regulatory threshold. That sent bank shares falling worldwide. The S&P 500 gave back all its gains for the year so far in the rout.

On Thursday, Saudi National Bank Chairman Ammar Al Khudairy told CNBC the panic over Credit Suisse is “unwarranted.” There haven’t been any discussions with the Swiss bank about providing additional assistance, he said.[10]

Accessing credit and buying back debt is all straight-forward enough, although I wonder why a bank borrows money it doesn’t apparently need in the first place. What gets me is that having sparked the panic in the first place, Ammar Al Khudairy waited a day to call it unwarranted.[11]

It’s no wonder folks are panicking. They’re being fed bullshit.

Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality

Saleha Mohsin, Lydia Beyoud and Sridhar Natarajan, “FDIC Races to Return Some Uninsured SVB Deposits Monday,” Bloomberg, March 11, 2023, https://www.bloomberg.com/news/articles/2023-03-11/fdic-races-to-start-returning-some-uninsured-svb-deposits-monday

Associated Press, “US government: Silicon Valley Bank clients will get funds,” March 12, 2023, https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e

William D. Cohan, “SVB’s Valley of Death,” Puck, March 12, 2023, https://puck.news/svbs-valley-of-death/

Ben Foldy, Rachel Louise Ensign, and Justin Baer, “How Silicon Valley Turned on Silicon Valley Bank,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/how-silicon-valley-turned-on-silicon-valley-bank-ee293ac9

Victoria Guida and Sam Sutton, “‘There’s going to be more’: How Washington is bracing for bank fallout,” Politico, March 12, 2023, https://www.politico.com/news/2023/03/12/silicon-valley-bank-fallout-washington-00086662

Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023, https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/

Nick Timiraos, “SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98

Zachary Warmbrodt, “Banks fought to fend off tougher regulation. Then the meltdown came,” Politico, March 12, 2023, https://www.politico.com/news/2023/03/12/banks-regulations-feds-svb-meltdown-00086694

Adam Cancryn, Ben White, and Victoria Guida, “How Biden saved Silicon Valley startups: Inside the 72 hours that transformed U.S. banking,” Politico, March 13, 2023, https://www.politico.com/news/2023/03/13/the-emergency-bank-rescue-that-almost-didnt-happen-72-hours-00086868

John Cassidy, “The Old Policy Issues Behind the New Banking Turmoil,” New Yorker, March 13, 2023, https://www.newyorker.com/news/our-columnists/the-old-policy-issues-behind-the-new-banking-turmoil

Telis Demos, “Were SVB and Signature Bank Just Bailed Out by the U.S. Government?” Wall Street Journal, March 13, 2023, https://www.wsj.com/articles/were-banks-just-bailed-out-by-the-government-6b0a582f

Eric Lutz, “The Silicon Valley Bank Crisis Is Complicated. But Donald Trump’s Role In It Isn’t,” Vanity Fair, March 13, 2023, https://www.vanityfair.com/news/2023/03/silicon-valley-bank-collapse

David J. Lynch and Tony Romm, “Washington’s bank rescue fails to erase all doubts,” Washington Post, March 13, 2023, https://www.washingtonpost.com/us-policy/2023/03/13/silicon-valley-bank-doubts/

Jeff Stein, “Is this a bailout and 6 other questions about the SVB collapse,” Washington Post, March 13, 2023, https://www.washingtonpost.com/us-policy/2023/03/13/svb-bank-bailout-fed/

Zachary D. Carter, “This Bank Panic Should Not Exist,” Vanity Fair, March 14, 2023, https://www.vanityfair.com/news/2023/03/silicon-valley-bank-run-panic-should-not-exist

Myriam Balezou, “Credit Suisse Is In Crisis. What Went Wrong?” Bloomberg, March 15, 2023, https://www.bloomberg.com/news/articles/2023-03-15/credit-suisse-what-s-going-on-and-why-is-cs-stock-falling

William D. Cohan, “Two Days in the Valley,” Puck, March 15, 2023, https://puck.news/two-days-in-the-valley/

Simon Foy, “Is Credit Suisse, the bad apple of European banking, really ‘too big to fail, too big to be saved’?” Telegraph, March 16, 2023, https://www.telegraph.co.uk/business/2023/03/15/credit-suisse-share-price-bailout/

Nicholas Jasinski, “How SVB Triggered Credit Suisse’s Latest Mess—and Sparked Fears of a Financial Crisis,” Barron’s, March 15, 2023, https://www.barrons.com/articles/credit-suisse-svb-banking-crisis-3faac588

Brian Swint, “Credit Suisse Stock Surges as Central Bank Loan and Debt Buybacks Tame Panic,” Barron’s, March 16, 2023, https://www.barrons.com/articles/credit-suisse-buy-back-debt-svb-banks-crisis-bf792d0d

  1. [1]Nicholas Jasinski, “How SVB Triggered Credit Suisse’s Latest Mess—and Sparked Fears of a Financial Crisis,” Barron’s, March 15, 2023, https://www.barrons.com/articles/credit-suisse-svb-banking-crisis-3faac588↩
  2. [2]Myriam Balezou, “Credit Suisse Is In Crisis. What Went Wrong?” Bloomberg, March 15, 2023, https://www.bloomberg.com/news/articles/2023-03-15/credit-suisse-what-s-going-on-and-why-is-cs-stock-falling↩
  3. [3]Simon Foy, “Is Credit Suisse, the bad apple of European banking, really ‘too big to fail, too big to be saved’?” Telegraph, March 16, 2023, https://www.telegraph.co.uk/business/2023/03/15/credit-suisse-share-price-bailout/↩
  4. [4]Myriam Balezou, “Credit Suisse Is In Crisis. What Went Wrong?” Bloomberg, March 15, 2023, https://www.bloomberg.com/news/articles/2023-03-15/credit-suisse-what-s-going-on-and-why-is-cs-stock-falling↩
  5. [5]Myriam Balezou, “Credit Suisse Is In Crisis. What Went Wrong?” Bloomberg, March 15, 2023, https://www.bloomberg.com/news/articles/2023-03-15/credit-suisse-what-s-going-on-and-why-is-cs-stock-falling↩
  6. [6]Simon Foy, “Is Credit Suisse, the bad apple of European banking, really ‘too big to fail, too big to be saved’?” Telegraph, March 16, 2023, https://www.telegraph.co.uk/business/2023/03/15/credit-suisse-share-price-bailout/↩
  7. [7]Simon Foy, “Is Credit Suisse, the bad apple of European banking, really ‘too big to fail, too big to be saved’?” Telegraph, March 16, 2023, https://www.telegraph.co.uk/business/2023/03/15/credit-suisse-share-price-bailout/↩
  8. [8]Simon Foy, “Is Credit Suisse, the bad apple of European banking, really ‘too big to fail, too big to be saved’?” Telegraph, March 16, 2023, https://www.telegraph.co.uk/business/2023/03/15/credit-suisse-share-price-bailout/↩
  9. [9]Nicholas Jasinski, “How SVB Triggered Credit Suisse’s Latest Mess—and Sparked Fears of a Financial Crisis,” Barron’s, March 15, 2023, https://www.barrons.com/articles/credit-suisse-svb-banking-crisis-3faac588↩
  10. [10]Brian Swint, “Credit Suisse Stock Surges as Central Bank Loan and Debt Buybacks Tame Panic,” Barron’s, March 16, 2023, https://www.barrons.com/articles/credit-suisse-buy-back-debt-svb-banks-crisis-bf792d0d↩
  11. [11]Brian Swint, “Credit Suisse Stock Surges as Central Bank Loan and Debt Buybacks Tame Panic,” Barron’s, March 16, 2023, https://www.barrons.com/articles/credit-suisse-buy-back-debt-svb-banks-crisis-bf792d0d↩

When social science theory becomes a set of blinders

benfell

Imperialism

It’s a pretty good demonstration of realpolitik (or ‘realism’): Under Donald Trump, the U.S. didn’t want its soldiers prosecuted for crimes committed in Afghanistan. Under Joe Biden, the U.S. wants Russians, including Vladimir Putin, prosecuted for crimes committed in Ukraine.[1]

The idea of realism theory is that states act amorally and callously according to their own perceived interests. And it is true that they often do. It’s a partial picture, however, and a demonstration of my point that social science theories should be treated like tools in a toolbox, deployed and shamelessly cited when useful, left in the toolbox when not.[2]

So, is the U.S. guilty of hypocrisy with regard to the International Criminal Court? Of course it is. Was the U.S. guilty of war crimes in Afghanistan? Of course it was. Is Russia guilty of war crimes in Ukraine? Of course it is. Modern warfare is inherently and unavoidably criminal, particularly when, as in Afghanistan, and as is often the case in asymmetric conflict, it is difficult to tell combatants apart from noncombatants. But especially so when parties to a conflict, as with Russia, see criminality as militarily advantageous.

The trick here is to see beyond the lens of realism theory. There will be more to the story in nearly every case. We don’t know what it is because journalists treat realism paradigmatically and form their stories accordingly. Social science theory thus becomes a set of blinders.

Adam Taylor, “The United States and ICC have an awkward history,” Washington Post, March 16, 2023, https://www.washingtonpost.com//world/2023/03/16/icc-us-cooperation-international-criminal-court-history/

Gilead

Right-wing militias

Police White supremacist gangs


Fig. 1. Photograph by Lorie Shaull, April 1, 2021, via Wikimedia Commons, CC BY-SA 2.0.

Mark Belko, “Allegheny County Police are again patrolling Downtown Pittsburgh a week after leaving,” Pittsburgh Post-Gazette, March 15, 2023, https://www.post-gazette.com/business/development/2023/03/15/allegheny-county-police-downtown-pittsburgh-mayor-gainey/stories/202303150085

Banking


Fig. 1. “East River Savings Bank,” apparently now a CVS drug store. Photograph by Jim Henderson, July 3, 2021, via Wikimedia Commons, CC BY 4.0.

What caused the sudden loss of confidence in [Silicon Valley Bank] is the stuff of rumors. The made-for-Twitter rumor with the most staying power posits that the iconoclastic Silicon Valley billionaire Peter Thiel decided the gig was up at SVB and that he, or one of his executives, urged his portfolio companies at his Founders Fund to take their money out of the bank. Did he also buy short-dated puts on the SVB stock, or short it, to help make the whole thing a self-fulfilling prophecy? Who knows? (His spokesman, Jeremiah Hall, at Torch Communications, did not respond to a request for comment. But his partner, Trae Stephens, all but confirmed to Bloomberg that Founders Fund initiated the stampede.) Further speculation has it that both Sequoia and a16z then followed Thiel’s lead and urged their portfolio companies to get their money the heck out of SVB. There have also been reports that as early as December, Fred Wilson, the dean of New York’s venture capital industry, at Union Square Ventures, began telling its portfolio companies to flee SVB.[3]

Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality

Saleha Mohsin, Lydia Beyoud and Sridhar Natarajan, “FDIC Races to Return Some Uninsured SVB Deposits Monday,” Bloomberg, March 11, 2023, https://www.bloomberg.com/news/articles/2023-03-11/fdic-races-to-start-returning-some-uninsured-svb-deposits-monday

Associated Press, “US government: Silicon Valley Bank clients will get funds,” March 12, 2023, https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e

William D. Cohan, “SVB’s Valley of Death,” Puck, March 12, 2023, https://puck.news/svbs-valley-of-death/

Ben Foldy, Rachel Louise Ensign, and Justin Baer, “How Silicon Valley Turned on Silicon Valley Bank,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/how-silicon-valley-turned-on-silicon-valley-bank-ee293ac9

Victoria Guida and Sam Sutton, “‘There’s going to be more’: How Washington is bracing for bank fallout,” Politico, March 12, 2023, https://www.politico.com/news/2023/03/12/silicon-valley-bank-fallout-washington-00086662

Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023, https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/

Nick Timiraos, “SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98

Zachary Warmbrodt, “Banks fought to fend off tougher regulation. Then the meltdown came,” Politico, March 12, 2023, https://www.politico.com/news/2023/03/12/banks-regulations-feds-svb-meltdown-00086694

Adam Cancryn, Ben White, and Victoria Guida, “How Biden saved Silicon Valley startups: Inside the 72 hours that transformed U.S. banking,” Politico, March 13, 2023, https://www.politico.com/news/2023/03/13/the-emergency-bank-rescue-that-almost-didnt-happen-72-hours-00086868

John Cassidy, “The Old Policy Issues Behind the New Banking Turmoil,” New Yorker, March 13, 2023, https://www.newyorker.com/news/our-columnists/the-old-policy-issues-behind-the-new-banking-turmoil

Telis Demos, “Were SVB and Signature Bank Just Bailed Out by the U.S. Government?” Wall Street Journal, March 13, 2023, https://www.wsj.com/articles/were-banks-just-bailed-out-by-the-government-6b0a582f

Eric Lutz, “The Silicon Valley Bank Crisis Is Complicated. But Donald Trump’s Role In It Isn’t,” Vanity Fair, March 13, 2023, https://www.vanityfair.com/news/2023/03/silicon-valley-bank-collapse

David J. Lynch and Tony Romm, “Washington’s bank rescue fails to erase all doubts,” Washington Post, March 13, 2023, https://www.washingtonpost.com/us-policy/2023/03/13/silicon-valley-bank-doubts/

Jeff Stein, “Is this a bailout and 6 other questions about the SVB collapse,” Washington Post, March 13, 2023, https://www.washingtonpost.com/us-policy/2023/03/13/svb-bank-bailout-fed/

Zachary D. Carter, “This Bank Panic Should Not Exist,” Vanity Fair, March 14, 2023, https://www.vanityfair.com/news/2023/03/silicon-valley-bank-run-panic-should-not-exist

William D. Cohan, “Two Days in the Valley,” Puck, March 15, 2023, https://puck.news/two-days-in-the-valley/

  1. [1]Adam Taylor, “The United States and ICC have an awkward history,” Washington Post, March 16, 2023, https://www.washingtonpost.com//world/2023/03/16/icc-us-cooperation-international-criminal-court-history/↩
  2. [2]David Benfell, “Where does Vladimir Putin stop?” Not Housebroken, November 16, 2022, https://disunitedstates.org/2022/03/04/where-does-vladimir-putin-stop/↩
  3. [3]William D. Cohan, “Two Days in the Valley,” Puck, March 15, 2023, https://puck.news/two-days-in-the-valley/↩

Zoonotic hypothesis for the origin of COVID-19 affirmed

benfell

COVID-19 Pandemic


Fig. 1. Photograph by author, November 8, 2022.

Somebody, Michael Worobey, did his own research. And concluded that the Wuhan wet market was indeed the most likely source of the COVID-19 pandemic. We’ll probably never know specifically which species passed the disease onto humans because testing of the animals was not done.[1] I’m far outside my field here, but at least the way Karen Kaplan presents it, this seems like pretty solid work.

The wet markets seem particularly egregious, but I have previously addressed implications of the zoonotic hypothesis.[2] And it’s not even remotely like COVID-19 is the first disease to implicate our relationship with non-human animals.[3]

The trouble here is that, like with guns, a lot of politically-oriented toxic masculinity is bound up in that relationship. Even without that toxic masculinity, a particular notion of allegedly divinely-ordained “natural order”[4] is bound up in that relationship.

To challenge that relationship is to draw upon oneself a fury that too many vegan activists have already experienced.

Karen Kaplan, “The problem with the lab leak theory,” Los Angeles Times, March 14, 2023, https://www.latimes.com/science/newsletter/2023-03-14/coronavirus-today-the-problem-with-the-lab-leak-theory-covid-wuhan-market-coronavirus-today

Banking


Fig. 1. “East River Savings Bank,” apparently now a CVS drug store. Photograph by Jim Henderson, July 3, 2021, via Wikimedia Commons, CC BY 4.0.

I’ve done a bit more with the banking page. It’s now pretty close to being wrapped up with a bow tie.

Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality

Saleha Mohsin, Lydia Beyoud and Sridhar Natarajan, “FDIC Races to Return Some Uninsured SVB Deposits Monday,” Bloomberg, March 11, 2023, https://www.bloomberg.com/news/articles/2023-03-11/fdic-races-to-start-returning-some-uninsured-svb-deposits-monday

Associated Press, “US government: Silicon Valley Bank clients will get funds,” March 12, 2023, https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e

William D. Cohan, “SVB’s Valley of Death,” Puck, March 12, 2023, https://puck.news/svbs-valley-of-death/

Ben Foldy, Rachel Louise Ensign, and Justin Baer, “How Silicon Valley Turned on Silicon Valley Bank,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/how-silicon-valley-turned-on-silicon-valley-bank-ee293ac9

Victoria Guida and Sam Sutton, “‘There’s going to be more’: How Washington is bracing for bank fallout,” Politico, March 12, 2023, https://www.politico.com/news/2023/03/12/silicon-valley-bank-fallout-washington-00086662

Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023, https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/

Nick Timiraos, “SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98

Zachary Warmbrodt, “Banks fought to fend off tougher regulation. Then the meltdown came,” Politico, March 12, 2023, https://www.politico.com/news/2023/03/12/banks-regulations-feds-svb-meltdown-00086694

Adam Cancryn, Ben White, and Victoria Guida, “How Biden saved Silicon Valley startups: Inside the 72 hours that transformed U.S. banking,” Politico, March 13, 2023, https://www.politico.com/news/2023/03/13/the-emergency-bank-rescue-that-almost-didnt-happen-72-hours-00086868

John Cassidy, “The Old Policy Issues Behind the New Banking Turmoil,” New Yorker, March 13, 2023, https://www.newyorker.com/news/our-columnists/the-old-policy-issues-behind-the-new-banking-turmoil

Telis Demos, “Were SVB and Signature Bank Just Bailed Out by the U.S. Government?” Wall Street Journal, March 13, 2023, https://www.wsj.com/articles/were-banks-just-bailed-out-by-the-government-6b0a582f

Eric Lutz, “The Silicon Valley Bank Crisis Is Complicated. But Donald Trump’s Role In It Isn’t,” Vanity Fair, March 13, 2023, https://www.vanityfair.com/news/2023/03/silicon-valley-bank-collapse

David J. Lynch and Tony Romm, “Washington’s bank rescue fails to erase all doubts,” Washington Post, March 13, 2023, https://www.washingtonpost.com/us-policy/2023/03/13/silicon-valley-bank-doubts/

Jeff Stein, “Is this a bailout and 6 other questions about the SVB collapse,” Washington Post, March 13, 2023, https://www.washingtonpost.com/us-policy/2023/03/13/svb-bank-bailout-fed/

Zachary D. Carter, “This Bank Panic Should Not Exist,” Vanity Fair, March 14, 2023, https://www.vanityfair.com/news/2023/03/silicon-valley-bank-run-panic-should-not-exist

  1. [1]Karen Kaplan, “The problem with the lab leak theory,” Los Angeles Times, March 14, 2023, https://www.latimes.com/science/newsletter/2023-03-14/coronavirus-today-the-problem-with-the-lab-leak-theory-covid-wuhan-market-coronavirus-today↩
  2. [2]David Benfell, “Elite priorities: Why social, animal, and environmental justice remains essential with COVID-19,” Not Housebroken, April 26, 2020, https://disunitedstates.org/2020/04/26/elite-priorities-why-social-animal-and-environmental-justice-remains-essential-with-covid-19/↩
  3. [3]Jared Diamond, Guns, Germs, and Steel (New York: W. W. Norton, 1999).↩
  4. [4]George Lakoff, Moral Politics, 2nd ed. (Chicago: University of Chicago, 2002).↩

The Federal Deposit Insurance Corporation dilemma

benfell

Banking


Fig. 1. “East River Savings Bank,” apparently now a CVS drug store. Photograph by Jim Henderson, July 3, 2021, via Wikimedia Commons, CC BY 4.0.

I’ve been making further edits to the banking page. It was still really rather out of sequence yesterday and today I have more quotations that help pull the picture together.

“There’s not a way to help the people [Joe Biden] wants without also helping the uninsured depositors who made a bad choice by putting too much money into a single bank,” said one adviser to the White House. “I have no doubt in my mind that he feels ambivalent about it. But he’s not willing to take a risk with this economy.” . . .

Throughout the weekend, Biden’s inner circle emphasized the potential impact on workers’ paychecks, which they believed would resonate both with the president and the public, said one of the people familiar with the deliberations. And they urged Biden to speak to the public before U.S. markets opened to ward off runs on other regional banks. . . .

[The proposal to bailout depositors] also raised questions about whether the [Federal Deposit Insurance Corporation] might be expected to make all depositors whole anytime a bank fails, something it is not designed to do, making the decision especially painful for [FDIC Chair Martin] Gruenberg and his fellow board members.

Though the Fed and the FDIC were each designed to stop financial panics, the moves by both agencies also risked ratifying the notion that the government would always be there to dull the consequences of the collapse of a larger bank. It was the “moral hazard” question that dogged rescue efforts in 2008 and 2009. . . .

Bob Kocher, a partner at venture capital firm Venrock and former Obama-era White House official, said some panicked companies are going as far as transferring all their money into board members’ individual bank accounts while they set up their own new accounts with major financial institutions.

“There’s no way now as a board member you can sign off on putting all your money into a regional bank,” he said, adding that he expects to see significant outflows at similarly sized institutions like First Republic Bank and PacWest Bancorp. “Everybody’s racing to put their money into JPMorgan and Goldman Sachs.”

Beyond making payroll, Kocher said, [Silicon Valley Bank’s] failure raised questions about how companies would pay for basic services like cloud storage and website maintenance, as well a constellation of smaller suppliers, if their deposits got tied up in a troubled bank.[1]

I think the conclusion here is that a $250,000 limit on Federal Deposit Insurance Corporation coverage is simply the wrong approach to this problem. Large companies need large checking account balances to make payroll and pay their bills and, setting aside arguments about capitalism, the nature and function of money, etc., we probably would acknowledge that these are legitimate balances that should be protected. But that wasn’t everybody who had deposited large sums at these banks—hence the moral hazard problem which I discuss at length on the banking page.

What we need, if it’s possible to do, is a distinction between legitimately large balances and recklessly large balances, the very distinction the Joe Biden administration was unable to make.[2]

The extraordinary measures—which do not quite amount to bailout in the 2008 sense but bear more of a resemblance to a bailout than some venture capitalists would like to admit—come after the stunning collapse of Silicon Valley Bank. SVB officially shuttered Friday after a run on deposits, followed by similar failure of Signature Bank, which regulators closed Sunday amid concerns that it could threaten the financial system more broadly. The Biden administration cast the intervention as necessary to “maintain a resilient banking system.” But what this whole fiasco has made clear is that the banking system is actually pretty far from resilient, and has instead been left in a fragile state from deregulation.[3]

Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality

Saleha Mohsin, Lydia Beyoud and Sridhar Natarajan, “FDIC Races to Return Some Uninsured SVB Deposits Monday,” Bloomberg, March 11, 2023, https://www.bloomberg.com/news/articles/2023-03-11/fdic-races-to-start-returning-some-uninsured-svb-deposits-monday

Associated Press, “US government: Silicon Valley Bank clients will get funds,” March 12, 2023, https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e

William D. Cohan, “SVB’s Valley of Death,” Puck, March 12, 2023, https://puck.news/svbs-valley-of-death/

Ben Foldy, Rachel Louise Ensign, and Justin Baer, “How Silicon Valley Turned on Silicon Valley Bank,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/how-silicon-valley-turned-on-silicon-valley-bank-ee293ac9

Victoria Guida and Sam Sutton, “‘There’s going to be more’: How Washington is bracing for bank fallout,” Politico, March 12, 2023, https://www.politico.com/news/2023/03/12/silicon-valley-bank-fallout-washington-00086662

Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023, https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/

Nick Timiraos, “SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98

Zachary Warmbrodt, “Banks fought to fend off tougher regulation. Then the meltdown came,” Politico, March 12, 2023, https://www.politico.com/news/2023/03/12/banks-regulations-feds-svb-meltdown-00086694

Adam Cancryn, Ben White, and Victoria Guida, “How Biden saved Silicon Valley startups: Inside the 72 hours that transformed U.S. banking,” Politico, March 13, 2023, https://www.politico.com/news/2023/03/13/the-emergency-bank-rescue-that-almost-didnt-happen-72-hours-00086868

John Cassidy, “The Old Policy Issues Behind the New Banking Turmoil,” New Yorker, March 13, 2023, https://www.newyorker.com/news/our-columnists/the-old-policy-issues-behind-the-new-banking-turmoil

Telis Demos, “Were SVB and Signature Bank Just Bailed Out by the U.S. Government?” Wall Street Journal, March 13, 2023, https://www.wsj.com/articles/were-banks-just-bailed-out-by-the-government-6b0a582f

Eric Lutz, “The Silicon Valley Bank Crisis Is Complicated. But Donald Trump’s Role In It Isn’t,” Vanity Fair, March 13, 2023, https://www.vanityfair.com/news/2023/03/silicon-valley-bank-collapse

David J. Lynch and Tony Romm, “Washington’s bank rescue fails to erase all doubts,” Washington Post, March 13, 2023, https://www.washingtonpost.com/us-policy/2023/03/13/silicon-valley-bank-doubts/

Jeff Stein, “Is this a bailout and 6 other questions about the SVB collapse,” Washington Post, March 13, 2023, https://www.washingtonpost.com/us-policy/2023/03/13/svb-bank-bailout-fed/

Gilead

Abortion


Fig. 1. Sign at demonstration in front of the U.S. Supreme Court, May 3, 2022. Janni Rye, via Wikimedia Commons, Creative Commons CC0 1.0 Universal Public Domain Dedication.

Perry Stein, Ann E. Marimow, and Caroline Kitchener, “After unusual delay, Texas judge announces abortion-pill hearing,” Washington Post, March 13, 2023, https://www.washingtonpost.com/national-security/2023/03/11/texas-abortion-pill-hearing-kacsmaryk/

Illiberalism


Fig. 1. Photograph by Joachim F. Thurn, August 1991, Bundesarchiv, B 145 Bild-F089030-0003, via Wikimedia Commons, CC BY-SA 3.0 DE.

Carrie Keller-Lynn, “MKs approve 1st reading of override clause, in major step toward judicial overhaul,” Times of Israel, March 13, 2023, https://www.timesofisrael.com/knesset-debates-override-clause-as-president-warns-national-situation-very-serious/

  1. [1]Adam Cancryn, Ben White, and Victoria Guida, “How Biden saved Silicon Valley startups: Inside the 72 hours that transformed U.S. banking,” Politico, March 13, 2023, https://www.politico.com/news/2023/03/13/the-emergency-bank-rescue-that-almost-didnt-happen-72-hours-00086868↩
  2. [2]Adam Cancryn, Ben White, and Victoria Guida, “How Biden saved Silicon Valley startups: Inside the 72 hours that transformed U.S. banking,” Politico, March 13, 2023, https://www.politico.com/news/2023/03/13/the-emergency-bank-rescue-that-almost-didnt-happen-72-hours-00086868↩
  3. [3]Eric Lutz, “The Silicon Valley Bank Crisis Is Complicated. But Donald Trump’s Role In It Isn’t,” Vanity Fair, March 13, 2023, https://www.vanityfair.com/news/2023/03/silicon-valley-bank-collapse↩

‘Independent contractor’ scam lives for another day in California

benfell

So-called ‘ridesharing’

Drivers


Fig. 1. Yeah, this is me. The sign says, “If you’re whining about a labor shortage, STOP ignoring my job applications!” And the QR-code leads here. Photograph by author, January 16, 2023.

Preetika Rana, “Uber, Lyft Score Victory as California Court Affirms Right to Treat Drivers as Contractors,” Wall Street Journal, March 13, 2023, https://www.wsj.com/articles/uber-lyft-score-victory-as-california-court-affirms-right-to-treat-drivers-as-contractors-642bdd67

Banking


Fig. 1. “East River Savings Bank,” apparently now a CVS drug store. Photograph by Jim Henderson, July 3, 2021, via Wikimedia Commons, CC BY 4.0.

Battle lines are already being drawn over what caused [Silicon Valley Bank’s] stunning demise. Progressives and some investors are blaming the Federal Reserve for its rapid interest rate hikes, which have burdened many lenders. Democrats say Republican-led deregulation of banks removed critical safeguards. Others say regulators failed to spot red flags in the bank’s investment portfolio and customer base. Many blame SVB itself.[1]

I have a substantial introductory text on the banking page discussing the rationale for the bailout—yes, it’s a bailout—and moral hazard—yes, there’s moral hazard.

Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality

Saleha Mohsin, Lydia Beyoud and Sridhar Natarajan, “FDIC Races to Return Some Uninsured SVB Deposits Monday,” Bloomberg, March 11, 2023, https://www.bloomberg.com/news/articles/2023-03-11/fdic-races-to-start-returning-some-uninsured-svb-deposits-monday

Associated Press, “US government: Silicon Valley Bank clients will get funds,” March 12, 2023, https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e

William D. Cohan, “SVB’s Valley of Death,” Puck, March 12, 2023, https://puck.news/svbs-valley-of-death/

Ben Foldy, Rachel Louise Ensign, and Justin Baer, “How Silicon Valley Turned on Silicon Valley Bank,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/how-silicon-valley-turned-on-silicon-valley-bank-ee293ac9

Victoria Guida and Sam Sutton, “‘There’s going to be more’: How Washington is bracing for bank fallout,” Politico, March 12, 2023, https://www.politico.com/news/2023/03/12/silicon-valley-bank-fallout-washington-00086662

Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023, https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/

Nick Timiraos, “SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98

Zachary Warmbrodt, “Banks fought to fend off tougher regulation. Then the meltdown came,” Politico, March 12, 2023, https://www.politico.com/news/2023/03/12/banks-regulations-feds-svb-meltdown-00086694

John Cassidy, “The Old Policy Issues Behind the New Banking Turmoil,” New Yorker, March 13, 2023, https://www.newyorker.com/news/our-columnists/the-old-policy-issues-behind-the-new-banking-turmoil

Telis Demos, “Were SVB and Signature Bank Just Bailed Out by the U.S. Government?” Wall Street Journal, March 13, 2023, https://www.wsj.com/articles/were-banks-just-bailed-out-by-the-government-6b0a582f

Jeff Stein, “Is this a bailout and 6 other questions about the SVB collapse,” Washington Post, March 13, 2023, https://www.washingtonpost.com/us-policy/2023/03/13/svb-bank-bailout-fed/

  1. [1]Victoria Guida and Sam Sutton, “‘There’s going to be more’: How Washington is bracing for bank fallout,” Politico, March 12, 2023, https://www.politico.com/news/2023/03/12/silicon-valley-bank-fallout-washington-00086662↩

Federal government affirms that moral hazard is A-OK for the rich.

benfell

Silicon Valley Bank

The U.S. government took emergency steps Sunday in an attempt to prevent more instability among banks after the historic failure of Silicon Valley Bank, and assured clients of the failed financial institution that they would be able to recover all of their money quickly.[1]

Federal officials had been hoping for a buyer.[2] Apparently that failed.

This isn’t a systemic event. This [Silicon Valley Bank] is a midsize bank that was badly managed. It may be a little messy. But that’s different than if you have somebody at the core of the financial system stop making payments to somebody else at the core of the system and then the core implodes.[3]

But while they aren’t bailing out the bank, the federal government is assuring depositors at Silicon Valley Bank and at a second bank to be closed, Signature Bank, they’ll have access to their money anyway.[4] The government’s rationalization is a fear of contagion,[5] that the run on deposits that took down Silicon Valley Bank[6] might spread to other banks perceived to be similarly situated.[7]

Officials took the extraordinary step of designating SVB and Signature Bank as a systemic risk to the financial system, which gives regulators flexibility to backstop uninsured deposits. The Federal Reserve and the Treasury Department also used emergency lending authorities to establish a new facility to help meet withdrawals.[8]

William Cohan isn’t the first[9] to blame the bank’s failure on its decision to invest in long-term bonds, in pursuit of a higher yield, to cover deposits that might be withdrawn on a moment’s notice.[10] But he does explain it and, indeed, the entire mess better.

[W]e shouldn’t be surprised by these occasional eruptions. First, banking is a confidence game. We’ve decided as a species that it’s safer to keep our money in a bank rather than say, at home, in our mattresses. Maybe it’s the confidence inspired by the marble bank façade, or the huge, 10-foot-thick steel door to the vault over in the corner. But here’s the fallacy in that logic: in our fractional banking system, one in which banks are only required to hold a fraction of their deposits as reserves, the money—our money—that we think is safe and secure is not even at the bank. And whether it is safe and secure is a matter of a myriad of factors that a depositor has nothing to do with, and no control over. In other words, in our fractional banking system, the mirage of safety and security is a clever and extremely persuasive narrative created to get us all to put our money in a bank thinking that a bank is the safest place to put our money. Even the banks that we perceived to be the most august—Lehman Brothers, Merrill Lynch, Bear Stearns—turned out to be elaborate and highly sophisticated houses of cards. . . .

[Silicon Valley Bank] didn’t do itself any favors when, on Wednesday [March 8], it announced that it needed more capital because “we expect continued higher interest rates, pressured public and private markets, and elevated cash-burn levels from our clients as they invest in their businesses.” The stampede for the exits, pretty much at the same time, is always a recipe for financial disaster and so it was again with Silicon Valley Bank, just as it was at FTX, and Bear Stearns and Lehman Brothers, et al.[11]

There is, of course, always an excuse for bailing out the ‘donor class.’ As for me, I don’t know what banks Uber and Lyft have—or had—their money in. Unaware that a decision had been made to hold Silicon Valley Bank’s depositors harmless,[12] I took the precaution of pulling out my money at the end of my day today via an instant deposit anyway.

Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality

Saleha Mohsin, Lydia Beyoud and Sridhar Natarajan, “FDIC Races to Return Some Uninsured SVB Deposits Monday,” Bloomberg, March 11, 2023, https://www.bloomberg.com/news/articles/2023-03-11/fdic-races-to-start-returning-some-uninsured-svb-deposits-monday

Associated Press, “US government: Silicon Valley Bank clients will get funds,” March 12, 2023, https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e

William D. Cohan, “SVB’s Valley of Death,” Puck, March 12, 2023, https://puck.news/svbs-valley-of-death/

Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023, https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/

Nick Timiraos, “SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98

  1. [1]Associated Press, “US government: Silicon Valley Bank clients will get funds,” March 12, 2023, https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e↩
  2. [2]Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023, https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/↩
  3. [3]Anil Kashyap, quoted in Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023, https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/↩
  4. [4]Associated Press, “US government: Silicon Valley Bank clients will get funds,” March 12, 2023, https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e; Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023, https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/; Nick Timiraos, “SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98↩
  5. [5]Associated Press, “US government: Silicon Valley Bank clients will get funds,” March 12, 2023, https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e; Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023, https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/; Nick Timiraos, “SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98↩
  6. [6]Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality↩
  7. [7]Associated Press, “US government: Silicon Valley Bank clients will get funds,” March 12, 2023, https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e; Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023, https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/; Nick Timiraos, “SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98↩
  8. [8]Nick Timiraos, “SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98↩
  9. [9]Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality↩
  10. [10]William D. Cohan, “SVB’s Valley of Death,” Puck, March 12, 2023, https://puck.news/svbs-valley-of-death/↩
  11. [11]William D. Cohan, “SVB’s Valley of Death,” Puck, March 12, 2023, https://puck.news/svbs-valley-of-death/↩
  12. [12]Associated Press, “US government: Silicon Valley Bank clients will get funds,” March 12, 2023, https://apnews.com/article/silicon-valley-bank-bailout-yellen-deposits-failure-94f2185742981daf337c4691bbb9ec1e; Jeff Stein et al., “U.S. says ‘all’ deposits at failed bank will be available Monday,” Washington Post, March 12, 2023, https://www.washingtonpost.com/us-policy/2023/03/12/silicon-valley-bank-deposits/; Nick Timiraos, “SVB, Signature Bank Depositors to Get All Their Money as Fed Moves to Stem Crisis,” Wall Street Journal, March 12, 2023, https://www.wsj.com/articles/federal-reserve-rolls-out-emergency-measures-to-prevent-banking-crisis-ba4d7f98↩

Don’t, and I do mean don’t, get me started on ‘moral hazard’

benfell

Silicon Valley Bank

It’s an old-fashioned bank run, really with no suggestion of fraud, but possibly of mismanagement:[1]

[Silicon Valley Bank] took in tens of billions of dollars from its venture capital clients and then, confident that rates would stay steady, plowed that cash into longer-term bonds.

In doing so, it created — and walked straight into — a trap.

[Greg] Becker and other leaders of the Santa Clara-based institution, the second-largest US bank failure in history behind Washington Mutual in 2008, will have to reckon with why they didn’t protect it from the risks of gorging on young tech ventures’ unstable deposits and from interest-rate increases on the asset side.[2]

A reimbursement beyond Federal Deposit Insurance Corporation (FDIC) limits appears to already be in progress.[3]

There is nothing ‘moral’ about venture capital; it specializes in inordinate risks and from what I’m seeing, the story seems likely to be about Silicon Valley Bank treating such capital as stable.[4] But the story I got during the dot-com boom was that venture capitalists expect to lose many of their bets in the hope that a few of them will pay off and cover their losses on the others.

The innovation economy is the best place to be. We’re very fortunate to be right in the middle of it.[5]

The problem of moral hazard classically is that by protecting ‘investors’—we might better call them “gamblers”—from losses on bad ‘business decisions,’ it incentivizes them to make bad bets. The high technology industry relied heavily on venture capital—we might better call venture capitalists “high rollers”—in the dot-com boom; my impression since has been that the industry has generally never weaned itself off of it, which is to say that many of their decisions are “bad” decisions, kept afloat on “high rollers’” money.

Moral Hazard: “Socializing the risk” of bad loans (see Bad Debt) or gambles via taxpayer bailouts of bankers or bondholders who lose money on bad and even fraudulent loans. There is nothing socialist (although some call it socialism for the rich”) about this particular form of Big Government. A better term for this tnora hazard is “oligarchizing the risk.” (See State Socialism.) Reversing the idea that the role of banks and other financial institutions is to serve the economy, financialization sacrifices the economy to protect the One Percent from suffering losses on its assets and bad loans. The effect of such subsidy to banks Too To Fail/Jail is to shift assets from the public at large (the 99 Percent, euphemized as “taxpayers,” although the Federal Reserve plays the major role) to the financial sector (the non-taxpayers under oligarchies).

For instance, the U.S. Government reimbursed uninsured depositors in high-risk S&Ls in the 1980s, leading to insolvency of the Federal Savings and Loan Insurance Corporation (FSLIC) after a fire sale of assets. In the wake of the 2008 crash Ireland’s government likewise bailed out Anglo-Irish Bank depositors at public (taxpayer) expense, plunging the economy into depression. Moral hazard also increased as the bubble economy gained momentum leading up to 2008, under Robert Rubin’s gang, Citibank embarked on a series of risky ventures, secure in the knowledge that the Obama cabinet (following Citigroup’s recommendations) would bail it out. The alternative, bankers threatened, was to block depositors from access to their banks’ ATM machines.[6]

In reimbursing venture capitalists for uninsured deposits, some 93 percent of Silicon Valley Bank’s deposits,[7] the FDIC incentivizes these high stakes bets. This is classic moral hazard.

Gilead

Academic repression

Student loans


Fig. 1. Unattributed and undated image via James G. Martin Center for Academic Renewal,[8] fair use.


The application of the term moral hazard to student loan debt stigmatizes debtors, suggesting that they accepted unwarranted or “even fraudulent” loans. This in turn relies on a notion of education as a private or individual benefit rather than as a public good.[9]

John Harwood, “will the same people who oppose student debt relief . . .” Twitter, March 11, 2023, https://twitter.com/JohnJHarwood/status/1634558943082029057

Gilead

Twitter


Fig. 1. “Elon Musk shared a video of his entrance on his Twitter account.” Photograph attributed to Elon Musk, October 26, 2022, via the New York Post,[10] fair use.

I’ve been on Twitter tonight more than I have in a while. From what I can see, some folks are actually taking this seriously:

Min-Liang Tan, co-founder and CEO of Razer, tweeted “I think Twitter should buy SVB and become a digital bank.”

“I’m open to the idea,” Musk tweeted in response. The billionaire entrepreneur had last year acquired Twitter in a $44 billion deal. He had then floated the idea of bringing payments to the microblogging platform as the first step towards making Twitter an ‘everything app.’[11]

MoneyControl, “Elon Musk says he’s open to buying Silicon Valley Bank,” March 11, 2023, https://www.moneycontrol.com/news/trends/elon-musk-says-hes-open-to-buying-silicon-valley-bank-10232901.html

Elon Musk, “I’m open to the idea,” Twitter, March 11, 2023, https://twitter.com/elonmusk/status/1634374859043270678

Antonio Vieira Santos, “Nice joke. . . .” Twitter, March 11, 2023, https://twitter.com/AkwyZ/status/1634525487622963200

Min-Liang Tan, “I think Twitter should buy SVB and become a digital bank,” Twitter, March 11, 2023, https://twitter.com/minliangtan/status/1634371553059119104

  1. [1]Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality↩
  2. [2]Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality↩
  3. [3]Saleha Mohsin, Lydia Beyoud and Sridhar Natarajan, “FDIC Races to Return Some Uninsured SVB Deposits Monday,” Bloomberg, March 11, 2023, https://www.bloomberg.com/news/articles/2023-03-11/fdic-races-to-start-returning-some-uninsured-svb-deposits-monday↩
  4. [4]Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality↩
  5. [5]Greg Becker, quoted in Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality↩
  6. [6]Michael Hudson, J is for Junk Economics (Dresden, Germany: Islet, 2017), 161-162.↩
  7. [7]Brian Chappatta, “SVB’s 44-Hour Collapse Was Rooted in Treasury Bets During Pandemic,” Bloomberg, March 10, 2023, https://www.bloomberg.com/news/articles/2023-03-10/svb-spectacularly-fails-after-unthinkable-heresy-becomes-reality↩
  8. [8]Richard K. Vedder, “Eliminate or Radically Restructure Federal Student Loans,” James G. Martin Center for Academic Renewal, September 16, 2020, https://www.jamesgmartin.center/2020/09/eliminate-or-radically-restructure-federal-student-loans/↩
  9. [9]Ellen Schrecker, “The 50-Year War on Higher Education,” Chronicle of Higher Education, October 14, 2022, https://www.chronicle.com/article/the-50-year-war-on-higher-education↩
  10. [10]Thomas Barrabi, “Elon Musk barges into Twitter HQ as deal nears: ‘Let that sink in,’” New York Post, October 26, 2022, https://nypost.com/2022/10/26/elon-musk-barges-into-twitter-headquarters-as-deal-nears/↩
  11. [11]MoneyControl, “Elon Musk says he’s open to buying Silicon Valley Bank,” March 11, 2023, https://www.moneycontrol.com/news/trends/elon-musk-says-hes-open-to-buying-silicon-valley-bank-10232901.html↩

COVID-19 is dead; long live COVID-19

benfell

COVID-19 Pandemic


Fig. 1. Photograph by author, November 8, 2022.

Ciara Linnane, “Leading infectious-disease expert says COVID-19 is now endemic, but Americans are divided on whether pandemic is over,” MarketWatch, March 10, 2023, https://www.marketwatch.com/story/leading-infectious-disease-expert-says-covid-19-is-now-endemic-but-americans-are-divided-on-whether-pandemic-is-over-cc391dec?g=ef386d39-3a07-4fb1-997f-4e6eb5e975aa

Gilead

White Christian nationalism (Trumpism)


Fig. 2. In terms of geographic area, Pennsylvania is very much a white Christian nationalist kind of place. Photograph by author, January 5, 2023.

There is a new blog post entitled, “A new taxonomy of conservatism?”

Twitter


Fig. 3. “Elon Musk shared a video of his entrance on his Twitter account.” Photograph attributed to Elon Musk, October 26, 2022, via the New York Post,[1] fair use.

Reports from online technology news sites this week are saying that Twitter’s daily revenue is down 40 per cent against the same period last year; as are its adjusted earnings.

An internal staff meeting was also reportedly told fourth-quarter revenue last year was down 35 per cent and that more than 500 advertisers have left the platform. That fits with external research that found more than 70 of the top 100 advertisers before Musk’s $US44 billion ($65 billion) acquisition of the social media platform have ceased spending on it.[2]

Stephen Bartholomeusz lays a lot of blame on Elon Musk’s commitment to so-called “free” speech, of the hate speech variety, even using quotation marks as I have used them here. It more than exacerbates an already “challenging” debt situation.[3]

Clare Duffy, “Twitter hit with one of the biggest outages since Elon Musk took over,” CNN, March 6, 2023, https://www.cnn.com/2023/03/06/tech/twitter-website-down/index.html

Ryan Tracy, &ldqo;FTC Twitter Investigation Sought Elon Musk’s Internal Communications, Journalist Names,” Wall Street Journal, March 7, 2023, https://www.wsj.com/articles/twitter-investigation-ftc-musk-documents-db6b179e

Stephen Bartholomeusz, “Elon Musk’s Twitter is on the road to nowhere,” Sydney Morning Herald, March 7, 2023, https://www.smh.com.au/business/companies/elon-musk-s-twitter-is-on-the-road-to-nowhere-20230307-p5cpxp.html

Work


Fig. 4. Yeah, this is me. The sign says, “If you’re whining about a labor shortage, STOP ignoring my job applications!” And the QR-code leads here. Photograph by author, January 16, 2023.

This story[4] fills in a few details of what I’ve been hearing, very, very occasionally from nurses who’ve been my passengers. It’s surely safe to say this is certainly not by any means just an Altoona problem.

Ryan Deto, “UPMC nurse lost job for speaking publicly about staffing shortages, labor complaint says,” Pittsburgh Tribune-Review, March 10, 2023, https://triblive.com/local/regional/upmc-nurse-lost-job-for-speaking-publicly-about-staffing-shortages-labor-complaint-says/

  1. [1]Thomas Barrabi, “Elon Musk barges into Twitter HQ as deal nears: ‘Let that sink in,’” New York Post, October 26, 2022, https://nypost.com/2022/10/26/elon-musk-barges-into-twitter-headquarters-as-deal-nears/↩
  2. [2]Stephen Bartholomeusz, “Elon Musk’s Twitter is on the road to nowhere,” Sydney Morning Herald, March 7, 2023, https://www.smh.com.au/business/companies/elon-musk-s-twitter-is-on-the-road-to-nowhere-20230307-p5cpxp.html↩
  3. [3]Stephen Bartholomeusz, “Elon Musk’s Twitter is on the road to nowhere,” Sydney Morning Herald, March 7, 2023, https://www.smh.com.au/business/companies/elon-musk-s-twitter-is-on-the-road-to-nowhere-20230307-p5cpxp.html↩
  4. [4]Ryan Deto, “UPMC nurse lost job for speaking publicly about staffing shortages, labor complaint says,” Pittsburgh Tribune-Review, March 10, 2023, https://triblive.com/local/regional/upmc-nurse-lost-job-for-speaking-publicly-about-staffing-shortages-labor-complaint-says/↩

Capitalists bypass Russia sanctions because, of course, they do

benfell

Imperialism

Russia

Ukraine


Fig. 1. “Destroyed Russian military vehicles located on the main street Khreshchatyk are seen as part of the celebration of the Independence Day of Ukraine in Kyiv, August 24.” Photograph by Gleb Garanich for Reuters, August 24, 2022,[1] fair use.

Ah, yes, capitalism will always support war:

While Russia-bound exports of semiconductors, machinery and other equipment from places like the U.S., the European Union and Japan have dropped sharply, firms in numerous sanctions-skeptical Asian and Middle Eastern jurisdictions—especially China, Turkey and Hong Kong—have stepped into the breach, selling their own equipment or reshipping foreign goods to Russia. Both Russian customs data provided to The Wall Street Journal by national-security nonprofit C4ADS and official data from China, Turkey and elsewhere demonstrate how quickly trade flows have reorganized after an initial dip in early 2022.[2]

Nathaniel Taplin, “How Russia Supplies Its War Machine,” Wall Street Journal, March 10, 2023, https://www.wsj.com/articles/russia-ukraine-tech-chips-exports-china-f28b60ca

Gilead

Abortion


Fig. 1. Sign at demonstration in front of the U.S. Supreme Court, May 3, 2022. Janni Rye, via Wikimedia Commons, Creative Commons CC0 1.0 Universal Public Domain Dedication.

The bills being introduced in Arkansas, Texas, Kentucky and South Carolina look to establish that life begins at conception. Each of these bills explicitly references homicide charges for abortion. Homicide is punishable by the death penalty in all of those states.

Bills in Oklahoma, South Carolina and Texas also explicitly target medication abortion, which so far has fallen into a legal grey zone in much of the country.

A bill in Alabama has also been announced, although not yet been introduced, by Republican representative Ernest Yarbrough, that would establish fetal personhood from conception and repeal a section of Alabama’s abortion ban that expressly prevents homicide charges for abortion. The state’s current law makes abortion a class A felony, on the same level as homicide, but exempts women seeking abortions from being held criminally or civilly liable.[3]

It’s odd to me that this occurs. There is little question that one reason the Republicans did so poorly in the midterm elections is[4] that the Supreme Court overturned Roe v. Wade.[5] So this can’t be just about winning elections. It’s about an imperative to assert a power relationship:

This exposes a fundamental lie of the anti-abortion movement, that they oppose the criminalization of the pregnant person. They are no longer hiding behind that rhetoric.[6]

Really, this is a question that’s bugged me since I read Jack Holland’s Misogyny:[7] Why, I have wondered, would men prefer a power relationship over women, in which women must play gatekeepers for pleasure, to one in which women would feel free to express attraction?[8] How is it that domination is imperative and mutuality is not?

Poppy Noor, “Republicans push wave of bills that would bring homicide charges for abortion,” Guardian, March 10, 2023, https://www.theguardian.com/us-news/2023/mar/10/republican-wave-state-bills-homicide-charges

So-called ‘ridesharing’

Drivers


Fig. 1. Yeah, this is me. The sign says, “If you’re whining about a labor shortage, STOP ignoring my job applications!” And the QR-code leads here. Photograph by author, January 16, 2023.

Michael Sainato, “‘It was traumatic’: Uber, Lyft drivers decry low pay and unfair deactivations,” Guardian, March 10, 2023, https://www.theguardian.com/business/2023/mar/10/uber-lyft-driver-suspension-deactivation-pay

  1. [1]Reuters, “Ukraine puts destroyed Russian tanks on display in Kyiv,” August 25, 2022, https://www.reuters.com/news/picture/ukraine-puts-destroyed-russian-tanks-on-idUSRTSALV9Q↩
  2. [2]Nathaniel Taplin, “How Russia Supplies Its War Machine,” Wall Street Journal, March 10, 2023, https://www.wsj.com/articles/russia-ukraine-tech-chips-exports-china-f28b60ca↩
  3. [3]Poppy Noor, “Republicans push wave of bills that would bring homicide charges for abortion,” Guardian, March 10, 2023, https://www.theguardian.com/us-news/2023/mar/10/republican-wave-state-bills-homicide-charges↩
  4. [4]Dan Balz, “The vaunted red wave never hit the shore in midterm elections,” Washington Post, November 9, 2022, https://www.washingtonpost.com/politics/2022/11/08/midterms-dissatisfied-voters-render-judgments-biden-republicans/; Samantha Melamed, “Voters cited abortion as a key issue in Pennsylvania’s first election since ‘Roe’ was overturned,” Philadelphia Inquirer, November 8, 2022, https://www.inquirer.com/news/election-day-pennsylvania-abortion-reproductive-rights-voters-20221108.html; Rachel Roubein, “It was a pretty good Election Day for abortion rights,” Washington Post, November 9, 2022, https://www.washingtonpost.com/politics/2022/11/09/it-was-pretty-good-election-day-abortion-rights/; Greg Sargent, “Republicans want Trump to take the blame. Good luck with that,” Washington Post, November 11, 2022, https://www.washingtonpost.com/opinions/2022/11/11/trump-midterm-elections-gop-abortion-rights-2024/; Mike Wereschagen, “What went wrong? How the GOP’s hope for a red wave in Pennsylvania crumbled,” Pittsburgh Post-Gazette, November 13, 2022, https://www.post-gazette.com/news/election2022/2022/11/13/pennsylvania-republicans-election-control-congress-legislature/stories/202211110116↩
  5. [5]Brent Kendall and Jess Bravin, “Supreme Court Overturns Roe v. Wade, Eliminates Constitutional Right to Abortion,” Wall Street Journal, June 24, 2022, https://www.wsj.com/articles/supreme-court-overturns-roe-v-wade-eliminates-constitutional-right-to-abortion-11656080124↩
  6. [6]Dana Sussman, quoted in Poppy Noor, “Republicans push wave of bills that would bring homicide charges for abortion,” Guardian, March 10, 2023, https://www.theguardian.com/us-news/2023/mar/10/republican-wave-state-bills-homicide-charges↩
  7. [7]Jack Holland, Misogyny: The World’s Oldest Prejudice (New York: Carroll and Graf, 2006).↩
  8. [8]Jaclyn Friedman and Jessica Valenti, eds., Yes Means Yes! (Berkeley, CA: Seal, 2008).↩