12 Mar A nightmare in 48 hours
Image by Rudy and Peter Skitterians from Pixabay
“Here’s how the second-biggest bank collapse in U.S. history happened in just 48 hours” –https://www.cnbc.com/2023/03/10/silicon-valley-bank-collapse-how-it-happened.html
If you’ve ever heard people in the preparedness community say, “I’d rather be 10 years too early than 10 seconds too late,” this is a case in point of why. People imagine that banking collapses and/or financial collapses always seem to happen somewhere else to other people but it would just neeevvvverrrr happen _____ (in America, at my local bank, to me).
* The company’s downward spiral began late Wednesday, when it surprised investors with news that it needed to raise $2.25 billion to shore up its balance sheet.
* ‘This was a hysteria-induced bank run caused by VCs,’ Ryan Falvey, a fintech investor of Restive Ventures, told CNBC.
* All told, customers withdrew a staggering $42 billion of deposits by the end of Thursday, according to a California regulatory filing.
* Now, those who remained with SVB face an uncertain timeline for retrieving their money.” -CNBC, Ibid.
We’ve seen so many shadows of ’07, ’08, and ’09. The other day I received some desperate marketing email from a realtor like, “Hey, ole buddy, ole pal. Is there ANYTHING I can do to help you buy a house right now?” Uh, no. Someone who overpaid for a poo-poo house in the FOMO of 2021 is in such a precarious position. They are one layoff and/or one bank failure away from oblivion.
“The episode is the latest fallout from the Federal Reserve’s actions to stem inflation with its most aggressive rate hiking campaign in four decades. The ramifications could be far-reaching, with concerns that startups may be unable to pay employees in coming days, venture investors may struggle to raise funds, and an already-battered sector could face a deeper malaise.” -CNBC, Ibid.
“‘The number one question is, How do you make payroll in the next couple days?’ said Ryan Gilbert, founder of venture firm Launchpad Capital.” –https://www.cnbc.com/2023/03/10/silicon-valley-bank-customers-scramble-to-meet-payroll-pay-bills.html
So many people live paycheck-to-paycheck. One missed or late paycheck can be the difference between solvency and insolvency.
“68% of Americans couldn’t cover their living expenses for even a month if they lost their job, survey finds.” –https://www.marketwatch.com/picks/68-of-americans-couldnt-cover-their-living-expenses-for-even-a-month-if-they-lost-their-job-survey-finds-the-good-news-now-is-the-best-time-in-years-to-fix-that-a9842d35
“‘Man has lost the capacity to foresee and forestall,’ wrote Albert Schweitzer. A colossal banking crisis and a big freeze in the middle of what was meant to be a mild winter don’t encourage confidence to the contrary.” –https://www.theguardian.com/commentisfree/2010/jan/11/nine-meals-anarchy-sustainable-system published on January 11, 2010
Indeed. I think back to The Divide: The Real People Behind the Wealth Gap, a documentary I watched on Java Discover:
“The sun shines
And people forget
The spray flies as the speedboat glides
And people forget…”
“Eminence Front” by The Who.
Whenever I publish anything about the déjà vu the current markets are giving me, I will have at least one troll – usually either a mansplainer, corporate shill, or bot – assure me that we could just neeeevvvveeerrrr have another 2008 again. Really?
The crappy thing is: Wall Street is right. The public forgets. I recently watched The Divide: The Real People Behind the Wealth Gap on Java Discover and one of the interviewees, a former VP at Deutsche Bank, recalls a conversation about the bailouts in which she was told, “Well, here’s the thing: the public always forgets.” Now here we are.
You can find the film here: https://www.youtube.com/watch?v=Z1WvDqj1qzQ
– “Bonus Episode: “The Public Always Forgets” published on August 22, 2022 https://www.buzzsprout.com/1125110/11163035
Even though we’ve lived through this movie before, there will still be people who look around in a daze and say, “I just can’t believe this is happening.” I hope you’re not one of them.
“Reassurance is fine as long as it’s well founded. And in the midst of fears about gas supplies and the panic buying of food Gordon Brown is hardly likely to scream that we are all doomed. It is, after all, his job to tell us that all will be well. But will it? People were shocked at the scale of social breakdown when Hurricane Katrina revealed a long-term, creeping erosion of civic resilience. Are we just waking up to the fact that several wrong turns have left our essential supplies much more vulnerable than they need to be?” -The Guardian, Ibid.
The politicos and bankers are not gonna go out in the MSM and say, “It’s time to panic. You need to freak out and run through the streets screaming.” Not gonna happen. For God’s sakes, we’re still being told the unemployment rate is 3.6% even though no rational person could believe that. These are the same folks who expected you to believe that inflation was transitory:
“‘They have a ways to go,’ said Quincy Krosby, chief global strategist for LPL Financial. ‘It took them a long time to acknowledge that inflation was stickier than they initially assessed.’
Indeed, Fed officials for months stuck to the narrative that inflation was ‘transitory’ and would abate on its own. In the interim, prices soared, wages increased but failed to keep up, and central bankers were left with a public impression that they were asleep at the switch while an economic crisis raged.” https://www.cnbc.com/2023/03/01/a-year-later-the-fed-still-has-a-long-way-to-go-in-the-fight-against-inflation.html
“As a child I was quietly haunted by Doris Lessing’s book The Memoirs of a Survivor. Society had broken down, and people were on the move, displaced amid an increasingly brutal disorder. The presiding government was useless but just about able to ‘adjust itself to events, while pretending probably even to itself that it initiated them.’
Events are revealing that many of the things we take for granted, like bank accounts, fuel and food, are vulnerable. If we value civilisation, the litmus test for economic success should not be short-term profitability, but resilience in the face of climatic extremes and resource shortages.” -The Guardian, Ibid.
Although that article from The Guardian is now more than 13 years old, nothing has changed. These systems of bank accounts, food, fuel, etc., are still vulnerable.
The complete Albert Schweitzer quote is: “Man has lost the capacity to foresee and to forestall, he will end by destroying the world.”