Moon of Alabama Brecht quote
March 20, 2023

Casino Aficionados Will Have A Busy Day

Warren Buffet:

"Only when the tide goes out do you discover who's been swimming naked."
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One large dealer was quoting Credit Suisse bonds at levels that were as much as 6.5 points higher than Friday, according to a person with knowledge of the matter, who asked not to be identified discussing private activity in the over-the-counter market.
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Holders of Credit Suisse Group AG bonds suffered a historic loss when a takeover by UBS Group AG wiped out about 16 billion Swiss francs ($17.3 billion) worth of risky notes.

The deal will trigger a “complete write-down” of the bank’s additional tier 1 bonds in order to increase core capital, Swiss financial regulator FINMA said in a statement on its website. Meanwhile, the bank’s shareholders are set to receive 3 billion francs.
...
Pacific Investment Management Co., Invesco Ltd. and BlueBay Funds Management Co. SA were among the many asset managers holding Credit Suisse AT1 notes, according to data compiled by Bloomberg. Their holdings may have changed or been sold entirely since their last regulatory filings.
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AT1 bonds were introduced in Europe after the global financial crisis to serve as shock absorbers when banks start to fail. They are designed to impose permanent losses on bondholders or be converted into equity if a bank’s capital ratios fall below a predetermined level, effectively propping up its balance sheet and allowing it to stay in business.

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HSBC Holdings Plc fell as much as 6.6% in Hong Kong trading, the biggest drop in nearly six months, with its newly issued AT1 bond declining more than 5 cents. Standard Chartered Plc slid as much as 5.6%.

The complete write-down of Credit Suisse’s AT1 debt as part of a Swiss bailout has investors in the $275 billion market scrambling to determine how much protection the notes offer in a crisis.

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A $1 billion AT1 bond with a coupon of 4.5% was bid as low as 1 cent on the dollar, Tradeweb pricing showed.
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Hong Kong plummeted 2.7 percent, with heavyweight HSBC off nearly six percent on worries about its exposure to risky bonds related to Credit Suisse. Standard Chartered also sank.

The losses came even as the city's de facto central bank said its banking sector had "insignificant" exposure to Credit Suisse.

Other regional bank shares were also hit, including Japan's Mitsubishi UFJ Financial, National Australia Bank and India's ICICI.
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London, Frankfurt and Paris all fell in early Monday trade.

Tokyo, Sydney, Seoul and Mumbai were also in the red.

Shanghai rose after the Chinese central bank cut the amount of cash banks must keep in reserve, hoping to boost the country's economy.

Posted by b on March 20, 2023 at 8:57 UTC | Permalink

Comments
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Fictitious capital to match the fictitious narratives. The Empire of Lies flounders into another crisis.

Posted by: Lev Davidovich | Mar 20 2023 9:08 utc | 1

Bullshit can only take you so far ...

And then you better have an "exit strategy".

Posted by: Bemildred | Mar 20 2023 9:40 utc | 2

Old friendships will be ruined. New enemies will be made.

Posted by: too scents | Mar 20 2023 9:43 utc | 3

Canada’s finance minister Chrystia (glory!) Freeland meets with Canada’s bank regulator (will she become mayoress of Toronto?? Speculation) Yes, this is a thing in the banking industry. Guess which country didn’t de-regulate to allow the shenanigans that lead to 2007-8? Canada. No place more modern in these parts than TO.

https://www.bloomberg.com/news/articles/2023-03-14/freeland-meets-with-canada-s-bank-regulator-after-svb-collapse

Posted by: Bruised Northerner | Mar 20 2023 9:48 utc | 4

Head of UBS: “‘Please remember that, until this deal closes, Credit Suisse is still our competitor and we cannot discuss business matters with their employees or take any action that could be interpreted as a step toward the merging of business,’ Hamers wrote in a memo to UBS’s 74,000 staff.”

The deal hasn’t closed. And because Credit Suisse didn’t suspend trading in its stock today, the deal is off. What Credit Suisse got out of it was a $16 bn debt write-off under emergency powers and a few more days of life to demand a bailout. Plus it sunk a Swiss army knife right into the back of its biggest competitor, UBS, whose stock is crashing.

Posted by: anonymous | Mar 20 2023 9:52 utc | 5

Ben Norton interviews Prof. Michael Hudson:

https://www.youtube.com/watch?v=uvm9qrXhqf8

They discuss the nature and causes of the banking crisis.

The conversation largely follows issues covered Hudson's near 10 year old book where he explains the widening chasm developing between modern, post 1980's Finance Capitalism and Industrial Capitalism, and the problems it is bringing to the a world economy dominated by the West:

https://www.amazon.com/Killing-Host-Financial-Parasites-Bondage/dp/3981484282

Posted by: Et Tu | Mar 20 2023 9:54 utc | 6

Simply the effects of what happens when people who can't afford nice things elect themselves governments that keep interest rates artificially low so that said people can afford nice things.

Posted by: Vikichka | Mar 20 2023 10:20 utc | 7

Swiss bail-in regime

AT1 bonds were introduced in Europe after the global financial crisis to serve as shock absorbers when banks start to fail. They are designed to impose permanent losses on bondholders or be converted into equity if a bank’s capital ratios fall below a predetermined level, effectively propping up its balance sheet and allowing it to stay in business.

Yesterday someone tweeted a very complex graphic illustrating the Swiss bail-in regime. I found the original in this article from October 2022.

Credit Suisse Is In Deep Trouble, But This Is Not A Lehman Moment - Seeking Alpha, Oct. 3, 2022

The minimum capital requirement ("CET1" for CS is 10.5%). At 13.5%, it has a significant headroom and buffers above the minimum requirement.

Importantly, the liquidity coverage ratio ("LCR") is exceptionally high at 191% compared to a minimum of 100%. The LCR measures the proportion of highly liquid assets held by financial institutions, to ensure their ongoing ability to meet short-term obligations. In a sense, the LCR is meant to protect the bank in a stressed liquidity outflows scenario or otherwise known as a bank run.

The graph shows that there are a number of instruments that have priority lower than equity capital. AT1 and tier 2 creditors may get their money back or not, depending on the trigger point set for their bond.

Posted by: Petri Krohn | Mar 20 2023 10:20 utc | 8

The little banks have not yet started to fall[merge] as a consequence of the failures of derivatives tied to the credit industry giants?

deposits in alternative currencies in non USD settlement terms look a little stronger today than yesterday.

Posted by: snake | Mar 20 2023 10:26 utc | 9

The banking crisis in Europe is nothing compared to what will happen and could happen in the USA. The situation of Credit Suisse is just a distraction right now. A default of Credit Suisse could have its consequences, that is for sure, but it would not be a major blow to the European financial system as a whole, especially to that of the EU. The real crisis right now is looming over the USA, where the financial crisis could become systemic and there is no real (industrial) economy to back it up.

Posted by: SG | Mar 20 2023 10:27 utc | 10

Posted by: Vikichka | Mar 20 2023 10:20 utc | 7

Economics 101: The purpose of QE is to maintain a similar stimulative effect on the economy without having to lower interest rates to a negative range.

Therefore, QE is to keep am "artificially high interest rate" rather than an "artificially low interest rate".

QE did not increase the purchasing power of the poor who can't afford nice things. On the contrary, the poor are subject to excessive interest rates and thus have to pay more taxes to the holders of the national debt (which has been the purpose of the national debt since the days of the Bank of England, and which Volcker has further exacerbated) and more interest to the bankers. It only allowed the rich who can afford nice things to afford more nice things from the increased asset prices.

Posted by: Colin | Mar 20 2023 10:35 utc | 11

Asia-Pacific stocks closed lower today, probably because their plunge protection teams were not out in force.

The fact that the Swiss government went out of its way to merge two too-big-to-fail monopoly banks suggests that there is more going on under the surface of this crisis than meets the eye.

While Europe's major indices have not plummeted, this may mean expecting another QE stimulus after an economic collapse, rather than implying that the economy itself is doing well.

Posted by: Colin | Mar 20 2023 10:42 utc | 12

Banking crises always get worse before they get better. This one just started. Europe never recapitalized their banking system after the 2008 fiasco, so there are some really big zombies awaiting a coup de grace. DB would be a good candidate for most vulnerable of the big EU banks as DB is actively involved in most systemic scandals, has an enormous derivatives book, and is the main bank for a sanctions wounded economy which has only begun to hemmorhage.

The US big 4 banks are well capitalized. Not so much the echelon below that.

Posted by: First Time Poster | Mar 20 2023 11:15 utc | 13

A default of Credit Suisse could have its consequences, that is for sure, but it would not be a major blow to the European financial system as a whole

Posted by: SG | Mar 20 2023 10:27 utc | 9


Oh yes it would. CS has a large derivatives book, and if it was to collapse, the contagion would spread to most of the large banks worldwide because the other banks are the counterparties for the derivatives. That contagion would be mostly in the EU. Fortunately, CS is small enough that the systemic issues posed by its demise would be manageable for most counterparty banks. DB is the EU bank with the largest systemic risk, and its failure would collapse most EU banks and perhaps some in US and Japan.


Posted by: First Time Poster | Mar 20 2023 11:21 utc | 14

“The real crisis right now is looming over the USA, where the financial crisis could become systemic and there is no real (industrial) economy to back it up.”

We are confiscating your industry after destroying your supply of cheap gas. Imperialism — we learned from the best.

Posted by: anon | Mar 20 2023 12:13 utc | 15

The US financially elite are keeping close tabs on sales of sturdy rope at the major US building retailers. Buy American.

Posted by: Elmagnostic | Mar 20 2023 12:18 utc | 16

Posted by: First Time Poster | Mar 20 2023 11:21 utc | 16

Deutsche Bank has "near zero" exposure to the AT1 bonds of Credit Suisse. As I said, and you conceded, the risk of systemic contagion from Credit Suisse is low in Europe, because European investors divested from Credit Suisse and because their financial resources are still good.

Posted by: anon | Mar 20 2023 12:13 utc | 17

Those who are not into manufacturing have a distorted view of what is going on. European industry can endure much more than this. The American financial and industrial system is, on the other hand, heavily dependant on the US international posture (e.g. the patent system, trade restrictions etc.), and as such it is in much greater danger right now. Europe right now is more industrialized than the US and there is no chance that this fact could change in the near future.

Let's keep an eye open for the NYSE opening today, because the real canaries in the coal mine are there.

Posted by: SG | Mar 20 2023 12:45 utc | 17

Credit Suisse has been on the edge for some time, 6 months or more.

An economy where NO ONE goes out of business isn't a healthy economy. An economy that "churns" the bottom 5% every few years is what makes it healthy. The lessons learned from the churn should go into startup companies, or be used by savvy remaining companies to improve their operations and market.

If mot, it is liking watching a sports match where all scores end up tied, and everyone gets the participation ribbon.

As for the CS bondholders, they should read the small print. Bonds generally are last in line when it comes to distribution of assets during a company default. Hence they get the "you are now worthless" letter first.

I had some great bonds during the S&L crisis in mid 80's. Great interest rates, solid banks. In 1 week they went to nothing. Eventually I did get about 10% of the value, which was far below the annual interest rate on the bonds themselves.

Understanding the bond yield relationship to prevailing rates is Investing 101.

Posted by: BroncoBilly | Mar 20 2023 13:01 utc | 18

QE did not increase the purchasing power of the poor who can't afford nice things. On the contrary, the poor are subject to excessive interest rates

Posted by: Colin | Mar 20 2023 10:35 utc | 11

ROFL.

Posted by: Vikichka | Mar 20 2023 13:08 utc | 19

B evades the obvious question: How did Putin cause this?

Posted by: jared | Mar 20 2023 13:39 utc | 20

Posted by: Vikichka | Mar 20 2023 13:08 utc | 19

Truth doesn't care about your feelings.

Every year, the U.S. loses 2% of its GDP by issuing treasury bonds with too high interest rates

Without these excessive interest rates, fiscal deficits and the national debt would never have been an issue.

Workers also spend a disproportionate amount of money on mortgages for housing as a result.

Posted by: Colin | Mar 20 2023 13:51 utc | 21

On average, after World War II, the U.S. government wasted the equivalent of 1.5% of its GDP each year on interest payments, which led to higher taxes.

And, governments around the world have failed to follow the lead of the Bank of Japan, the Swiss central bank, the Norwegian sovereign fund and Singapore's state-owned enterprises in using their fiscal capacity to invest in equity to close the revenue gap. This has resulted in the proletariat paying a considerable amount of extra taxes each year.

Posted by: Colin | Mar 20 2023 13:54 utc | 22

Posted by: jared | Mar 20 2023 13:39 utc | 20

The private equity industry is the direct cause, the root cause is the further decline in productivity and social deterioration of capitalism in the US and around the world (e.g. financialization, higher interest rate policies & QE, further tax cuts for billionaires).

QE is actually swapping debt leverage for equity leverage, so leverage is actually still rising since 2008.

Posted by: Colin | Mar 20 2023 14:00 utc | 23

LoL and people criticize bitcoin and say its a scam. LoL

The world financial system is the real scam. Wake up.

Posted by: Comandante | Mar 20 2023 14:04 utc | 24

Anybody has any idea where the money's going?

People seem to be taking their money out of these banks. But where are they putting it?

Posted by: FieryButMostPeaceful | Mar 20 2023 14:06 utc | 25

Posted by: FieryButMostPeaceful | Mar 20 2023 14:06 utc | 25

Banks that are "too big to fail", or treasury bills.

Posted by: Colin | Mar 20 2023 14:15 utc | 26

Re: First Time Poster | Mar 20 2023 11:21 utc | 14

Yes, the $100T+ (that’s a 1 followed by 11 zeros) derivatives market is the issue that drives Western central banks to change their underwear and their tactics.

But I disagree that European counterparty risk will not endanger US banks. They are all entwined.

US/NATO’s political and military actions have been rightly recognized as existential threats to the RF. The current banking crisis is an analogous existential threat to the Western system. Central banks will act accordingly by flooding the system with liquidity.

They caused the crisis tried to stop supply-side inflation by raising interest rates, a fool’s errand, which begs the questions: “Is this crisis planned? If so, why?” If planned, it is probably to implement CBDCs.

Central banks cannot cure supply-side inflation, not can they even target inflation during a liquidity crisis. Either the house of cards will tumble or there will be hyperinflation. The system is being killed by excess debt.

Posted by: Ciaran | Mar 20 2023 14:26 utc | 27

@ 25

I don’t have an answer but in times like this, I’d recommend Canada’s BNN Bloomberg for glimpses into the Manhattan-London-Toronto-? comings and goings.

Here’s the clip of the mid-market update for today.

https://www.bnnbloomberg.ca/video/bnn-bloomberg-s-mid-morning-market-update-mar-20-2023~2650627

Posted by: Bruised Northerner | Mar 20 2023 14:27 utc | 28

@ Bruised Northerner | Mar 20 2023 9:48 utc | 4

Freeland will not take the cut in pay/prestige to become Mayor of Toronto. After she is done her damage in Federal politics, her Davos handlers will place her in some globalist role.

Posted by: Diva of Davos | Mar 20 2023 14:47 utc | 29

Posted by: Colin | Mar 20 2023 13:51 utc | 21

Looooooool. You are a piece of work.

Posted by: Vikichka | Mar 20 2023 14:48 utc | 30

QE did not increase the purchasing power of the poor who can't afford nice things. On the contrary, the poor are subject to excessive interest rates and thus have to pay more taxes to the holders of the national debt (which has been the purpose of the national debt since the days of the Bank of England, and which Volcker has further exacerbated) and more interest to the bankers. It only allowed the rich who can afford nice things to afford more nice things from the increased asset prices.

Posted by: Colin | Mar 20 2023 10:35 utc | 11

You seem to be stuck in the 1980s. The holders of the national debt are now:
1. Other Central Banks
2. Pension Funds and Insurance
3. Private Banks

No sensible private investor holds treasuries where the real rate of return is negative.

Posted by: Diva of Davos | Mar 20 2023 14:55 utc | 31

Maybe, Diva of Davos. I looked for insight from Canada’s satire news outfit, The Beaverton and all I found was a repost of this article on mansion sales and portals to hell.

https://www.thebeaverton.com/2019/05/court-rules-that-mansions-portal-to-hell-not-valid-reason-for-buyer-backing-out-of-real-estate-deal/

“The BC Real Estate Association estimates that at least thirty percent of detached homes in Metro Vancouver and ten percent of condos contain portals to other worlds, but approximately half of them lead to high fantasy realms and increase the value of the property.”

Posted by: Bruised Northerner | Mar 20 2023 14:55 utc | 32

In the US at least, the current issue with the banking industry's liquidity issues is directly associated with the US Fed raising interest rates in the last year more than in any prior 12 month period in the last 50 years. This rise in the interest rate of new treasuries means a bank's holdings of low interest Treasuries are worth less because they must be sold at a discount. Therefore, a bank has less liquidity to meet demands for current withdrawls (eg payrolls, account transfers, etc). Banks have kept these low interest securities on their ledgers because they are booked at par value not their true or discounted value. This gives a bank the appearance of liquidity when it does not exist. Variances in currency exchange rates further complicate the picture.

The Fed appears to have based its interest rate increase solely on inflationary considerations, and not banking liquidity. The Fed's interest rate increase last week will create additional pressures on banking liquidity.

The Fed decision-making making on interests rates has essentially changed the capitalization structure of the banking industry over night. And the Fed will continually adversely affect the banking industry's capitalization with each interest rate increase.

Posted by: Jerr | Mar 20 2023 14:59 utc | 33

European? This latest installment (of something going back to the nineties) started with that Silicon Valley bank going tits up didn't it?

(Also —as I (mis-)understand it— it didn't start in Europe last time either, it was the US then too. The reason and main difference seems to me to be that there is actually some regulation and laws in Europe so they can't hide it to the same extent as in the US where such things are ignored if needs be).

The US bank went under because of its reckless drive towards being "modern" and getting into "crypto" failed.

Did I get any of this wrong?

Posted by: Sunny Runny Burger | Mar 20 2023 15:39 utc | 34

re: jared | Mar 20 2023 13:39 utc | 20

I thought your comment was hilarious, thanks.

re: Ciaran | Mar 20 2023 14:26 utc | 27

I agree, the response this SNAFU will be a torrent of liquidity that dwarfs previous "quantitative easings".
14 years of zero interest rates, i.e. free money, combined with essentially no regulation (business as usual), resulted in many banks, insurance companies, and pension funds acquiring enormous amounts of US Treasury notes, bills, and bonds (European pension funds are legally required to own these, as they are "stable" investments).

When the US Federal Reserve (the Fed) ran up interest rates from 0.8% to 4.58% in less than a year, this caused dramatic losses in the value of any long term securities, losses in the neighborhood of 20% to 30% (the value of the securities is inversely proportional to the rates). While US "regulations" don't require that securities be valued at market prices ("mark to market"), large depositors keep track of such losses and when that created a run on these banks, the banks were forced to sell these securities at market prices to provide liquidity . . . leading to bankruptcy.

And, of course, the same goes for the EU. That is why bail-ins were created after the 2008 "crisis", so that depositors could be more easily robbed of their deposits the next time a bigger crisis rolled around.

Since all the "too big to fail" banks are in bed with each other, tied to each other with more than a quadrillion dollars worth of unregulated derivatives (many of which are interest rate swaps, very sensitive to ANY changes in rates), there has to be an avalanche of deals going bad.

Unlimited digital currency creation leads to the destruction of the dollar and Euros and Yen, etc. etc. They cannot let the system collapse (ok to let regional banks collapse, as the Central Banks don't want the competition and are happy to loot their good assets), so it will be the currencies that are destroyed. Which somehow fits quite nicely into the substitution of Central Bank Digital Currencies.

Posted by: Perimetr | Mar 20 2023 16:03 utc | 35

In my previous post, I should have said that the European pension funds are required to own significant amounts of securities, but not necessarily US securities, just as likely EU securities.

Posted by: Perimetr | Mar 20 2023 16:16 utc | 36

It seems like someone forgot to take the PPT server off of auto-pilot this morning.
It's embarrassing.

We keep re-living the John Law experience until one day it may actually work (well of course it does make some people very, very wealthy).

There will be some "mad" crowds, one day.

Posted by: jared | Mar 20 2023 16:36 utc | 37

Yes, the $100T+ (that’s a 1 followed by 11 zeros) derivatives market is the issue that drives Western central banks to change their underwear and their tactics. [Bold added.]

Posted by: Ciaran | Mar 20 2023 14:26 utc | 27

Assuming American terminology for large numbers, it's 1 followed by 14 zeroes.

Posted by: David Levin | Mar 20 2023 16:39 utc | 38

No sensible private investor holds treasuries where the real rate of return is negative.

Posted by: Diva of Davos | Mar 20 2023 14:55 utc | 31

Also not true. You don't hold the bond to maturity. You just sold it at a higher price.

Posted by: Vikichka | Mar 20 2023 16:50 utc | 39

LoL and people criticize bitcoin and say its a scam. LoL

The world financial system is the real scam. Wake up.

Posted by: Comandante | Mar 20 2023 14:04 utc | 24

Both are scams. The real money had been in use for 6000 years and still keeps its value, no matter what wars, revolutions, and societal changes happen. You know, the thing which uses the quantum security (aka no-cloning theorem) to prevent counterfeiting, the useless relic you can't eat. And which you cannot create in any useful quantities outside of exploding stars.

Yep, gold.

Posted by: averros | Mar 20 2023 17:26 utc | 40

For whom the bell tolls

Midi accepts invitation to elite summit
https://www.rt.com/india/573295-modi-invitation-g7-summit/

Freeland to address the plebs on the economy in… now
Live on cpac (looks like she’s late, not sure if this will reveal much but it’s quite the coincidence so I’ll post it)

https://www.youtube.com/live/_BjK2M97YGk

Posted by: Bruised Northerner | Mar 20 2023 17:40 utc | 41

From ZH posting/quotes with title

"This Just Makes No Sense": European Regulators Rush To Calm AT1 Investors After Credit Suisse Wipeout Shock

The quote

As noted last night, the wipeout of 16 billion francs ($17.2 billion) of Credit Suisse’s so-called AT1 bonds is the biggest loss yet for Europe’s $275 billion market in these securities, which were created after the financial crisis to ensure losses would be borne by investors not taxpayers.

Realizing that the chaos and fury among AT1 investors could spark the next leg of market contagion, on Monday morning European regulators rushed to reassure investors that shareholders should face losses before bondholders after the takeover of Credit Suisse Group AG wiped the bank’s Additional Tier 1 debt while preserving over $3 billion in equity value.

Junior creditors should bear losses only after equity holders have been fully wiped out, according to a joint statement from the Single Resolution Board, the European Banking Authority and the ECB Banking Supervision, who apparently were not consulted on Sunday during the whirlwind decisions that preserved some equity value at CS while wiping out its entire AT1 tranche.

Other European officials also weighed in. ECB Governing Council member Ignazio Visco said at an event in Milan that that regulators have the tools to deal with liquidity problems, but there are no issues currently. Italy’s Finance Minister Giancarlo Giorgetti said the risk for Italian banks is “not significant.” He added that he was “surprised” by the Swiss decision to prioritize shareholders over some bondholders.

As Bloomberg notes, the clauses that led to the bonds being marked to zero aren’t common. Only the AT1 bonds of Credit Suisse and UBS Group AG have language in their terms that allows for a permanent write-down and most other banks in Europe and the UK have more protections, according to Jeroen Julius, a credit analyst at Bloomberg Intelligence.

If the AT1 new-issue market reopens, equity conversion may become the dominant loss-absorption mechanism to reassure investors that they won’t be wiped out ahead of shareholders, BI’s Julius said.

Yet, judging by the market action, investors aren’t sticking around to find out. All kinds of risky bank debt tumbled on Monday and analysts predicted far-reaching consequences to Europe’s funding market. The market for new AT1 bonds will likely go into deep freeze, traders said.

Perpetual notes issued by Deutsche Bank AG, Unicaja Banco SA, Raiffeisen Bank International and BNP Paribas SA all dropped by more than 10 points on Monday. Deutsche Bank’s £650 million ($792 million) 7.125% note dropped as much as 17 pence to about 64, its biggest-ever one-day decline. Most other European lenders’ Additional Tier 1 (AT1) notes fell to record lows.

Posted by: psychohistorian | Mar 20 2023 17:47 utc | 42

@ 41, that should be Modi, auto-corrected itself

Hey did everyone hear about Volkswagen’s historic investment in Canada? EV battery manufacturing

https://news.ontario.ca/en/release/1002817/canada-and-ontario-welcome-historic-investment-from-volkswagen

Posted by: Bruised Northerner | Mar 20 2023 17:49 utc | 43

Yep, gold.

Posted by: averros | Mar 20 2023 17:26 utc | 40

How about silver? You can readily buy it in US coinage so that when the depression hits it might be better accepted by sellers as its purity could be trusted. How would one actually spend gold not in coin form?

Posted by: Chas | Mar 20 2023 18:22 utc | 44

@29. "Freeland will not take the cut in pay/prestige to become Mayor of Toronto. After she is done her damage in Federal politics, her Davos handlers will place her in some globalist role."

pretty please? Send her to NATO where she can go down with that ship.

She is a cancer on the Canadian political landscape.

Posted by: BP | Mar 20 2023 18:23 utc | 45

Posted by: Jerr | Mar 20 2023 14:59 utc | 33

Seems that FED created Catch 22 scenario: do I let the hyperinflation run or do I crash entire internal banking system?

Posted by: Milos | Mar 20 2023 18:29 utc | 46

Bad news is good news. Banks failing is good news for USA stock market because the market WANTS to believe failures will force FED to pivot and lower rates...perhaps pause rates. But, instead FED will raise rates a quarter-point to the Markets chagrin. High on hopium, the market should turn down later this week. Hopium hangover incoming.

1. FED raises rates to curb inflation.
2. FED raises rates to extinguish Congress dumpster fire spending spree.
3. FED raises rates to prop up dollar and force EU to raise rates. EU globalists do not want high rates. EU globalists spend 0%-free money RENTING World leaders. Higher FED rates hurt EU. Rent Hike.

Posted by: Ramsey Glissadevil | Mar 20 2023 18:35 utc | 47

As Gerald Celente says "the bigs keep getting bigger". This is exactly what will happen here. New markets were opened for the bigs in 2008 when they swallowed up failed banks and mutual entities. The same thing happened in the S/L crisis in the '80's.

Money is flowing away from the smaller commercial banks into the "too big to fail" banks. In the end the smaller banks will fail and the biggs will swallow them up backstopped by the regulators who will go to work for them managing their new assets when this is over. The entities they do not want will die.

Wash-rinse-repeat.

Posted by: circumspect | Mar 20 2023 18:37 utc | 48

Correction to my earlier post (#27):

$1 trillion is a 1 followed by fourteen 0s, not 11.

But, as points out Perimetr (#35), the total exposure is closer to $1 quadrillion: $1,000,000,000,000,000.

Devaluation, anyone?
Hudson’s description of the financialization of the Western economy captures the last several decades last efforts at Western control, after the golden billion became too highly compensated to provide basic finished goods for themselves.
As with most, similar efforts, avoiding the decrease in consumer goods or the increase in consumer prices for Westerners that could have solved their problem, the end result (financialization without hegemonic political control) made the eventual outcome much worse for Westerners.
Justice will be served.

Posted by: Ciaran | Mar 20 2023 19:02 utc | 49

Milos | Mar 20 2023 18:29 utc | 46

It appears to be a conundrum, but not really. The cause of inflation in the US are related to two reversible actions by the Biden administration. The first is the elimination of new oil and natural gas production in the US, which started the new inflationary cycle. The second is the extreme budget deficit which is feeding the inflationary cycle by unproductive government spending.

The first step is not only removing Biden's impediments to new oil and gas production, but to ensure their future marketability by giving assurances against future cancelation of leases, pipelines and new supply-side and demand-side regulations.

The second step is very simple freeze all agency budgetary expenditures for FY2023 that exceed FY2022. The Ukraine war needs to end let it be now. This would solve unproductive spending very quickly and reduce deep State government employment.

However, I would like to see the Fed not only freeze interest rates but not issue new Fed securities until the end of FY 2023. This would force government to live within their current means (like a laid off employee would have to do) and allow existing low interest debt to perhaps be sold at a premium set by market demand for capital, rather than at a discount driven by Fed miscalculation.

Just some thoughts.

Posted by: Jerr | Mar 20 2023 19:25 utc | 50

"The US financially elite are keeping close tabs on sales of sturdy rope at the major US building retailers. Buy American.

Posted by: Elmagnostic | Mar 20 2023 12:18 utc | 16"

That and #2
The keys to balance.

Posted by: osi | Mar 20 2023 20:06 utc | 51

"Justice will be served.

Posted by: Ciaran | Mar 20 2023 19:02 utc | 49"

What cheery posts today. Love this place.

Posted by: osi | Mar 20 2023 20:08 utc | 52

"LoL and people criticize bitcoin and say its a scam. LoL

The world financial system is the real scam. Wake up.

Posted by: Comandante | Mar 20 2023 14:04 utc | 24

Both are scams. ...
Yep, gold.

Posted by: averros | Mar 20 2023 17:26 utc | 40"

Like this view also:
CIA's bitcoin heist 2021
https://novusconfidential.wordpress.com/2023/03/16/cias-bitcoin-heist-originally-posted-4-sep-2021/

Posted by: osi | Mar 20 2023 20:12 utc | 53

At this point it should be irrefutable that the economy is completely fake. On the road to western total financial centralization culminating in the upcoming rollout of the Fed's CBDC, the market will appear to show a fictiously-grand rebound as the Fed pumps more liquidity into the collapsing system.

When this happens, gold and silver may dip perhaps even gold dropping to years-level lows. I would suggest to everyone to divest their portfolios at that point and stack precious metals. This will be the last dip we will likely see in our lifetime.

When gold supply will not be able to keep up with demand, silver will then outshine gold as it will then outpace it and return to a historically-acceptable ratio. The window will then be closed.

It is a wonderful time to be alive and to see the coming reckoning.

Posted by: NemesisCalling | Mar 20 2023 21:17 utc | 54

The Credit Suisse bail-in to UBS is the weak helping the frail in a "shot gun Wedding".

UBS Was Quietly Bailed Out in 2008; Now It's Getting a $173 Billion Backstop To Buy Credit Suisee at 82 cents a Share

March 20, 2023 ~ Yesterday, the Swiss banking giant, UBS, agreed to a shotgun wedding with its collapsing long-time Swiss rival, Credit Suisse. Switzerland has committed $173 billion in loans and guarantees to the combined firm.

A key player in this deal was the central bank of Switzerland, the Swiss National Bank. That’s the very same central bank that had quietly bailed out UBS during the financial crisis of 2008 with the assistance of dollar swap lines from the Federal Reserve (the “Fed”) – the central bank of the U.S.

Yesterday, the Fed announced the return of those emergency dollar swap lines as the shotgun wedding of UBS and Credit Suisse failed to quell a spreading banking panic. [.]

This morning, the UBS and Credit Suisse deal is looking more like a hit and run than a bank merger. Here’s a sampling of the road kill:


Swiss regulators have decided that shareholders will not get to vote on the terms of the merger, which prices Credit Suisse shares at approximately 82 cents, less than half of where Credit Suisse stock closed on Friday. The Financial Times reported yesterday that “Swiss authorities [are] poised to change the country’s laws to bypass a shareholder vote as they rush to announce a deal before Monday.” The Saudi National Bank and the Qatar Investment Authority are the two largest holders of Credit Suisse stock and are nursing deep loses this morning, as are Swiss pension funds.
[.]

https://wallstreetonparade.com/2023/03/ubs-was-quietly-bailed-out-in-2008-now-its-getting-a-173-billion-backstop-to-buy-credit-suisse-at-82-cents-a-share/

AND as the article details, there is the CS legal battles, derivatives of unending troubles. Last two years in the news, Monkey regulators saw nothing.

Cue next. Trading in First Republic Bank halted 7x today.

Posted by: Likklemore | Mar 20 2023 21:38 utc | 55

What cheery posts today. Love this place.

Posted by: osi | Mar 20 2023 20:08 utc | 52


Sorry, osi, but there’s nothing cheery on the ground level about either the imminent economic chaos or about the decades of financialization of the Western economies that preceded the current crisis.

Go back 50 years. Nixon removed the US$ from the gold standard, unleashing fiat madness via control of industrial finance and world trade by bankers. Yet Nixon’s next step was worse, i.e. the Nixon/Kissinger quid pro quo to China that US finance, preferable trade agreements, and the UN Security Council seat would be given to Communist China only in exchange for China’s instituting their murderous and disastrous One-Child Policy.

Add in the misery of the average Chinese factory worker, now living only for the profits of the elite class, who send their own money and their families overseas whenever possible. Keep in mind that the Chinese economic miracle is over unless they themselves obtain economic hegemony via OBOR, without which they are even now be outcompeted for cheap labor by other nations of the Global South.

Add in the misery of the millions of government-dependent, drug-addicted US residents and their broken families, largely caused by the unnecessary offshoring of US manufacturing.

It benefitted the banking elites. And their greed blinded them to the ultimate outcome, which is systemic collapse.

No economic system can stand without justice. Modern economic science is taught as a game of numbers, rather than as how to best allocate scant resources among actual living human beings.

Posted by: Ciaran | Mar 20 2023 22:35 utc | 56

Also not true. You don't hold the bond to maturity. You just sold it at a higher price.

Posted by: Vikichka | Mar 20 2023 16:50 utc | 39

Do you even know that such a strategy is losing money these days?

Posted by: Colin | Mar 20 2023 22:49 utc | 57

No sensible private investor holds treasuries where the real rate of return is negative.

Posted by: Diva of Davos | Mar 20 2023 14:55 utc | 31

Bonds are used as part of the classic 60/40 asset allocation because of their higher nominal yield relative to cash and risk cushion/volatility decay reduction relative to equities.

Bonds are used as part of the classic 60/40 asset allocation because of their higher nominal yield relative to cash and risk cushion/volatility decay reduction relative to equities.

The billionaires just did market timing and sold their bags to the central banks after the covid pandemic QE.

This is another reason why QE programs and pandemic stimulus fiscal programs are funding the rich (and not the poor).

Posted by: Colin | Mar 20 2023 23:00 utc | 58

No economic system can stand without justice. Modern economic science is taught as a game of numbers, rather than as how to best allocate scant resources among actual living human beings.

Posted by: Ciaran | Mar 20 2023 22:35 utc | 56
—————

For sure. It starts with a government bought out by corporations.

Even a $15 minimum wage can’t keep up.

Employers and employees would be helped out by a free medical system for one thing.

Also housing and education are financialized to crazy prices.

The solutions to these problems have to be forced on us by crashing the financial system.

We spend hundreds of billions on weapons and bailing out banks but can’t fix these problems among others.

Posted by: financial matters | Mar 20 2023 23:06 utc | 59

Don't worry; there will always be money for wars'. Hello, we were broke before WWII and all of a sudden there was all the money needed for the war. Money especially Fiat money is the only fantastical scam bigger than the invisible man in the sky. It's all a giant fraud. It's the wizard behind the curtain in Oz which wasn't a children's story, it was the financial system told the only way it could be. Yes Virginia, they had censorship and cancel culture then too. They only have the power because of the indoctrination industrial complexes. Genes, schools, churches, media and on and on and most of the people doing it don't even know they're doing it, it's that insidious, that omnipresent. Like Catholic dogma, just made up stuff with the promise of paradise if you obey the rules they made up. Not picking on the RCs, they're all the same, giant fraud, just like money.

Posted by: Bob | Mar 20 2023 23:11 utc | 60

How about some music? An eclectic mix. "Don't fear the Reaper", Blue Oyster Cult, "Madison Avenue Man", Greg Kihn, "Symphony of Destruction", Megadeth, "Why don't you do right?", Peggy Lee, and lastly, "China Girl" Iggy Pop and David Bowie. I like David's version best, but it was on an earlier Iggy album. Cheers for beers! I know, it's not Vivaldi.

Posted by: Immaculate deception | Mar 21 2023 0:09 utc | 61

What a lot of gibberish landed here up this thread.

First. Understand. The difference between ‘money’ and what it merely represents.

Clue: they are not the same.

Posted by: DunGroanin | Mar 21 2023 0:23 utc | 62

The sound you hear is the last gasps of the western economy's growth. And poof, it's gone! Now how will the grow-or-die model work out?

Posted by: Seer | Mar 21 2023 0:41 utc | 63

Mish:

The Perfect Solution to the Banking Crisis Is to Make a Truly Safe Bank
https://mishtalk.com/economics/the-perfect-solution-to-the-banking-crisis-is-to-make-a-truly-safe-bank


All is a function of growth. Lack of growth means an inability to operate: the current economic system has no devices to guide for non-growth/continued non-growth. Poor assumptions always lead to predicaments: and in this case, as is typical, we won't acknowledge that it's all based on a false premise- how could we, that would show us all up as being stupid.

Posted by: Seer | Mar 21 2023 1:07 utc | 64

Posted by: DunGroanin | Mar 21 2023 0:23 utc | 62

When we discuss derivatives, we completely ignore that the earliest derivatives are useless artifacts or beautiful stones.

Gold is a derivative, gold or other metals as currency is a further derivative, bonds and notes are the next derivative, commodity futures, stocks and state-issued paper money are further derivatives, and then we now have derivatives of derivatives of derivatives of derivatives of derivatives (cdo squares, options, equitiy futures , currency swaps, futures synthetic ETFs, leveraged ETFs of options)

Cryptocurrencies are further financialized, for example there are over a hundred cryptocurrencies that exist in futures, but individual stock options exchanges are effectively closed.

If we want to go back to the root of things, we have to implement a planned economy.

If we want to oppose socialism, then the financialization process of "privatization gain, socialization loss" is the inevitable way to go.

Posted by: Colin | Mar 21 2023 1:34 utc | 65

From what I've gleaned via the Meme Scream Media, the District of Corruption is a little twitterpated. They're lashing out at Russia and China, which is understandable. Like an old lion about to lose his pride, he still has teeth, but it's only a matter of time. Cheers!

Posted by: Immaculate deception | Mar 21 2023 1:45 utc | 66

The solution is more cow bell

We wouldn't ever want to discuss the difference between public and private finance like China and the West are current examples of, would we?

More cow bell, that's it, more cow bell.

Posted by: psychohistorian | Mar 21 2023 2:06 utc | 67

#b

---
Credit Suisse Bonds Gain in a Weekend Trading Session - Mar 18, 8:21 UTC - Bloomberg/Yahoo

One large dealer was quoting Credit Suisse bonds at levels that were as much as 6.5 points higher than Friday, according to a person with knowledge of the matter, who asked not to be identified discussing private activity in the over-the-counter market.

Thank you b that really made my day.

Bloomberg - cheerleader for the chumps - and here they are referencing the stock exchange on Easter Island ;) If bloomberg ain't boosting for JP Morgan Chase then its Credit Suisse taking a turn. Bloomberg is the true anti-barometer of the lying, thieving vampire squid.

Posted by: uncle tungsten | Mar 21 2023 2:23 utc | 68

Music ?

From an Aussie perspective I could recommend
we all live in a yellow submarine

But that would offend a very large number that refuse to live that way. Bob Conolly wrote the anthem - Yankee go home.

Posted by: uncle tungsten | Mar 21 2023 2:35 utc | 69

@ uncle tungsten | Mar 21 2023 2:35 utc | 69

Er, how about, Black Sabbath ~ War Pigs Youtube. 7m54s.

Posted by: Outraged | Mar 21 2023 2:56 utc | 70

The final word on Russia's weakness vis-a-vis Ukraine: they don't have to win and they know it. But they will be able to watch the U.S. lose. A pretty good strategy if I do say so myself.

Posted by: NemesisCalling | Mar 21 2023 3:12 utc | 71

Below is the latest posting title and quote from Wall Street On Parade

UBS Was Quietly Bailed Out in 2008; Now It’s Getting a $173 Billion Backstop to Buy Credit Suisse at 82 Cents a Share

This morning, the UBS and Credit Suisse deal is looking more like a hit and run than a bank merger. Here’s a sampling of the road kill:

Swiss regulators have decided that shareholders will not get to vote on the terms of the merger, which prices Credit Suisse shares at approximately 82 cents, less than half of where Credit Suisse stock closed on Friday. The Financial Times reported yesterday that “Swiss authorities [are] poised to change the country’s laws to bypass a shareholder vote as they rush to announce a deal before Monday.” The Saudi National Bank and the Qatar Investment Authority are the two largest holders of Credit Suisse stock and are nursing deep loses this morning, as are Swiss pension funds.

Holders of $17.3 billion of a Credit Suisse convertible bond, known as AT1, will be wiped out completely, according to the Swiss regulator, FINMA. This action flips on its head the century-old concept that bondholders get priority treatment over common stock holders.

The AT1s are officially called Contingent Convertible Bonds or CoCos. This is a quarter of a trillion dollar market and these CoCos will assuredly see major upheaval in their trading prices today – delivering more losses and panic to investors

Posted by: psychohistorian | Mar 21 2023 3:26 utc | 72

psychohistorian @ 72

I can only think of this quote:

"The chief cause of problems is solutions." - Eric Sevareid

Posted by: Seer | Mar 21 2023 3:45 utc | 73

Thank you for that quote, Seer.

Posted by: lex talionis | Mar 21 2023 3:50 utc | 74

Below is a Xinhuanet posting showing that the fall out continues

NEW YORK, March 20 (Xinhua) -- New York Community Bancorp, Inc. announced on Monday that its wholly-owned subsidiary Flagstar Bank, N.A. has acquired partial assets of Signature Bridge Bank N.A. from the Federal Deposit Insurance Corporation (FDIC).

The transaction marks significant progress in the FDIC's receivership of Signature Bank, which was closed by the New York State Department of Financial Services on March 12. The FDIC created Signature Bridge Bank on the same day to take over the operations of Signature Bank.

In particular, Flagstar Bank bought about 38 billion U.S. dollars of assets from Signature Bridge Bank including around 25 billion dollars in cash and about 13 billion dollars in loans.

Meanwhile, Flagstar Bank assumed about 36 billion dollars of liabilities in the deal, including around 34 billion dollars of deposits and around 2 billion dollars of other liabilities.

Flagstar Bank also takes over all branches of Signature Bridge Bank and operates them under the Flagstar Bank brand, according to a press release by Flagstar Bank.

Flagstar Bank purchased commercial and industrial loans from Signature Bridge Bank, excluding any digital asset banking, crypto-related assets or deposits as well as loans and deposits related to the fund banking business.

Flagstar Bank did not buy approximately 4 billion dollars of deposits related to the former Signature Bank's digital banking business and the FDIC will provide these deposits directly to customers whose accounts are associated with the digital banking business, said an FDIC press release on Sunday.

Following the deal, approximately 60 billion dollars worth of loans will remain in the receivership for later disposition by the FDIC.

By the end of 2022, the former Signature Bank had total deposits of 88.6 billion dollars and total assets of 110.4 billion dollars.

With nearly 400 branches across nine states in the United States, Flagstar Bank is one of the largest regional banks in the country. New York Community Bancorp reported 90.1 billion dollars of assets and 58.7 billion of deposits by the end of 2022.

Fueled by concerns over safety of deposits, recent bank runs have caused the collapse of Silicon Valley Bank and Signature Bank, which rank as the second and the third largest bank failures in U.S. history.

The implications of the semi-unresolved pieces are the shrapnel that will hit other unseen victims along the way.....

Posted by: psychohistorian | Mar 21 2023 4:39 utc | 75

I see the unfolding financial situation as a good thing because it will force the public to become more aware of what money is and how used and controlled currently and what potential alternatives exist and are being proven.

I am reading the the US GOP is not happy with covering deposits over $250K and agree with Mish linked to by Seer in #64 that banks should be a truly safe place to store accumulated assets.

I continue to posit that finance should be a core utility of sovereign nations instead of the private global finance cult that runs Western finance currently, with EU nations acting against their public interests and under the historic Might-Makes-Right jackboot.

The China/Russia axis have and will expand the alternative global/regional finance tools to the financial structure that I posit necessary, a reality in the near future. Since globalization is a given, the result of totally sovereign global finance tools will end the private cult system quickly, IMO, because the comparison will become more stark than it is already. The denouement of the death of global private finance may take a few years but its death will come quickly, IMO, when the public trance/ignorance is broken/ended.

Posted by: psychohistorian | Mar 21 2023 6:47 utc | 76

what better way to use a crisis to bring in CBDC. with an expirey date of course, its like all the bad things in crypto , none of the good things all in one fedcoin

Posted by: hankster | Mar 21 2023 8:03 utc | 77

How amusing!

The Hong Kong based International Bank suffered a minor loss and fall in the fairy valued ponzi stock price.

Since Ponzi Stock market share stock prices are mere light weight fraud dressing on the usual fake annual balance sheet. Useful to hide the pending future bad debts arising from the doubling/tripling down speculative insecure bad lending debts portfolio.

Since this POS (W)bank since 1949. Is a well known and convicted money launderer. Including a very long list of numerous illegal banking malpractices.

I'm sure the board will quickly recover the losses by doubling down on all current and future deliberate breaches of the tax/money laundering laws. Plus double down on speculative lending. Made possible throughout the free unregulated banking control laws. Within the hyper-stag-inflation rampaging out of control western world.

Posted by: Bad Deal Motors On | Mar 21 2023 8:04 utc | 78

I continue to posit that finance should be a core utility of sovereign nations instead of the private global finance cult that runs Western finance currently, with EU nations acting against their public interests and under the historic Might-Makes-Right jackboot.

---

Posted by: psychohistorian | Mar 21 2023 6:47 utc | 76

Yes, those big piles of money are weapons, and are managed and used that way. THAT is why they are "too big to fail".

Posted by: Bemildred | Mar 21 2023 10:50 utc | 79

Posted by: psychohistorian | Mar 21 2023 6:47 utc | 76

This is unlikely considering that the U.S. is even accelerating the privatization of its military utilities.

https://utilityprivatization.org/

"As of January 2017, the military departments have privatized approximately 23 percent (601 of 2,574) of their utility systems"

https://www.gao.gov/products/gao-20-104

Even the GAO is clearly supporting this shift.

Posted by: Colin | Mar 21 2023 12:25 utc | 80

@ Posted by: Colin | Mar 21 2023 1:34 utc | 65
“When we discuss derivatives, we completely ignore that the earliest derivatives are useless artifacts or beautiful stones.
If we want to go back to the root of things, we have to implement a planned economy.
If we want to oppose socialism, then the financialization process of "privatization gain, socialization loss" is the inevitable way to go.”

Thank you for that interesting reply. I wonder what do you make of say arrow or flint axe heads?
Or in the modern day what you consider is the difference between the cave i live in and the amount of ‘money’ it cost me to buy it from its previous owner?

And indeed the cave paintings that I have ‘bought’ to enjoy and expect that their ‘value’ will increase in line with inflation at least. Or the rock furniture that I have?

It is the difference I think most miss - including the most senior accountants and every fucking economist ever - MONEY is not WEALTH. The former is only a variable measure of the later. The later just IS real . The former is transient and can evaporate like the mirage it always has been. Just look over there , that’s the next Reserve Currency coming over the horizon…

Posted by: DunGroanin | Mar 21 2023 13:16 utc | 81

So according to the data presented by b, the Chinese were happiest (93%) during their mandated draconian COVID lockdowns.
I take that info with a shaker full of salt.
Who did this study. The CCP?

Posted by: JoeDontSurf | Mar 21 2023 13:21 utc | 82

Popular post shared on social media today. Don’t know if there is any validity to it. But it is what the bar here has been predicting for almost a year at least.

THE CRASH OF THE BANK ▪️ 71 American banks and 1,400 banks around the world have collapsed since last Friday, March 10 so far. ▪️Banks of Rothschild (Central Banks) that went bankrupt:. ▪️Bank of Mexico ▪️National Bank of Moldova ▪️bank of Mongolia ▪️Central Bank of Montenegro ▪️Bank Of Morocco ▪️Bankof Mozambique ▪️Namibia ▪️Nepal ▪️Netherlands ▪️Bank OF Netherlands Antilles ▪️New Zealand ▪️Nicaragua ▪️Niger ▪️Nigeria ▪️Norway ▪️Oman ▪️Pakistan ▪️Papua New Guinea ▪️Paraguay ▪️Peru ▪️Phi ▪️Poland ▪️Portugal ▪️Qatar ▪️Romania ▪️Rwanda ▪️San Marino ▪️Samoa Senegal ▪️Serbia ▪️Seychelles ▪️Sierra Leone ▪️Singapore ▪️Slovakia ▪️Slovenia ▪️Solomon Islands ▪️South Africa - South African Reserve Bank ▪️Spain ▪️Sri Lanka ▪️Sudan ▪️Suriname ▪️Swaziland ▪️Sweden ▪️Switzerland ▪️Tajikistan ▪️Tanzania ▪️Thailand ▪️Togo ▪️Tonga ▪️Trinidad and Tob United Arab Emirates ▪️United Kingdom ▪️United States: Federal Reserve, Federal Reserve Bank of New York ▪️Vanuatu ▪️Venezuela ▪️Vietnam ▪️Yemen ▪️Zambia ▪️Zimbabwe ▪️ Their official announcement is yet to come. All Central Banks in all countries in the world were owned by the Rothschilds except Syria. The central banks of the BRICS countries - Brazil, Russia, India, China and South Africa have managed to break out of the Rothschild petrodollar and will not go bankrupt. They have already switched to their gold backed currency. When all Rothschild Central Banks - every National Bank in all countries in the world went bankrupt, a global currency revaluation will take place and the G_E_S_A_R_A Act will be introduced. ▪️ It is reasonable to store food, water, money and basic items - gasoline, batteries, candles, flashlights, medicines for at least one month. When the banks close, the ATMs will also be closed. It will not be possible to withdraw money with your plastic cards. When the banks close, the stores won't be able to work either. Just some groceries I guess in smaller towns. ▪️ The Quantum Financial System will then be activated.

Posted by: MervRitchie | Mar 21 2023 16:16 utc | 83

Wall Street On Parade has a posting up that basically say about two thirds of bank deposits held are above the $250K insurance limit.

I wonder how many individuals that two thirds belongs to?

If the US decides to expand the $250K insured limit it will speak volumes to the definition of "capitalism" being socialism for the rich and capitalism for the poor.

If its true that Russia is now going to focus on the China Yuan as international "currency" then maybe we are close to the alternative to Bretton Woods being born.

Posted by: psychohistorian | Mar 21 2023 16:19 utc | 84

f its true that Russia is now going to focus on the China Yuan as international "currency" then maybe we are close to the alternative to Bretton Woods being born.

Posted by: psychohistorian | Mar 21 2023 16:19 utc | 84

Not so sure China wants the hassle of a World reserve currency.

Posted by: Ramsey Glissadevil | Mar 21 2023 17:10 utc | 85

Michael Roberts has an interesting blog on the Banking crisis. Highly recommended to our friend PsychoHistorian!

"...One other solution offered is the so-called Chicago Plan, which is promoted by Martin Wolf and some leftist post-Keynesians. Originally this was an idea of a group of economists at the University of Chicago in the 1930s who responded to the Depression by arguing for severing the link of the commercial banks between the supply of credit to the private sector and creation of money. Private banks would lose the power to create deposits by making loans, as all deposits would have to be backed by public sector debt or by bank profits. In effect, lending would be controlled directly by government. “The control of credit growth would become much more straightforward because banks would no longer be able, as they are today, to generate their own funding, deposits, in the act of lending, an extraordinary privilege that is not enjoyed by any other type of business,” says an IMF paper on the plan. “Rather, banks would become what many erroneously believe them to be today, pure intermediaries that depend on obtaining outside funding before being able to lend.” And that outside funding would be the government. The banks would still be privately owned, but could not lend. Ironically, to exist they would have to turn into outright speculative investment operations like hedge funds to make a profit. That could create even more instability in the banking system than before. The Chicago Plan would only work if the banks were brought into public ownership and made part of an overall funding and investment plan. But if that happened, there would be no need for a Chicago Plan.

"What is never put forward is to turn modern banking into a public service just like health, education, transport etc. If banks were a public service, they could hold the deposits of households and companies and then lend them out for investment in industry and services or even to the government. It would be like a national credit club. We could then make a state-owned banking system democratic and accountable to the public. That means directly elected boards, salary caps for top managers, and also local participation. Way back in 2012, I presented such an idea to the Institute of Labour Studies in Slovenia, as structured below...."
https://thenextrecession.wordpress.com/2023/03/21/bank-busts-and-regulation/

Posted by: bevin | Mar 21 2023 17:42 utc | 86

@86 bevin

Hey, you are Canadian. Perhaps you should ask the truckers who were standing up to Trudeau if they would be happy to have their banks centralized into government hands?

I'm sure that those who had their funds frozen would be happy with your plan.

When it doubt, centralize MORE!

Once again, communism is trying to seize the opportunity using revolutionary defeatism a la Lenin: the elites are planning to offer the people the saving plan of total centralization.

In effect they are saying: "Look, we know our controlling hand has failed so far...but we are better now and trustworthy and we just need you to sign here and then all will be better."

Talk about battered-wife syndrome.

Liberalism can not help but be a backdoor to full-blown communism.

Watch out for those who come trying to sell you a monorail, as the Simpsons so wonderfully asserted.

Posted by: NemesisCalling | Mar 21 2023 18:22 utc | 87

@ NemesisCalling | Mar 21 2023 18:22 utc | 87

what we have now is worse... keep that in mind.. it is not a free system.. it is an exploitative one which heavily favours the wealthy..

Posted by: james | Mar 21 2023 20:40 utc | 88

Bevin wrote "What is never put forward is to turn modern banking into a public service"

In the US, the Federal Statutes do make deposit institutions public services.
US Code Chap 12 Sec 2901(a) says:

(1) regulated financial institutions are required by law to demonstrate that their deposit facilities serve the convenience and needs of the communities in which they are chartered to do business;
(2) the convenience and needs of communities include the need for credit services as well as deposit services; and
(3) regulated financial institutions have continuing and affirmative obligation to help meet the credit needs of the local communities in which they are chartered.

There is whole Chap 12 of the US code is devoted to the laws and regulation intended to guarantee banks act as a service to the public in exchange for their privilege of creating the money that people must use out of nothing.
Banks are supposed to utilities just like the water, sewer and electric utilities are in most municipalities.

The whole process breaks down because the regulators (the ones that are supposed to enforce the law) are captured by Wall Street and spend their time not regulating the Wall Street owned banks but communicating to Congress and the people that those banks can regulate themselves by market forces. In regard to the deposit facilities owned by Wall Street, the regulators have become nothing but a propaganda arm of Wall Street.

Posted by: jinn | Mar 21 2023 20:51 utc | 89

@88 james

I get it James. You think what we have now is not actual creeping centralization and if we were only to install a somewhat different set of elites when actual centralization occurs, that will fix the problem.

Jews dressed-up in the novelty Groucho Marx disguise I admit would be funny. Because tragedy becomes comedy if repeated. 🥸

Posted by: NemesisCalling | Mar 21 2023 21:26 utc | 90

From ZH with the title

Putin To Xi: "We Support Chinese Yuan Use With Asia, Africa, Latin America"

The quotes

Putin also said his country stands ready to support Chinese business replacing Western companies inside Russia that left in the wake of the Ukraine war. "We are ready to support Chinese business in replacing Western enterprises that left Russia," Putin said.

But among the most important statements to come out of the day's formal China-Russia summit and press conference was concerning the further erasing of dollar-reliance in favor of the yuan. Putin said, "We support the use of Chinese yuan in payments between Russia and countries of Asia, Africa, and Latin America," and further expressed confidence that such "forms of payments will be developed between Russian partners and their colleagues in third countries." Further:

"National currencies are more and more actively used" in the bilateral trade and two thirds of the trade turnover between Russia and China are already "made in rubles and yuan," Putin noted.

"This practice should be encouraged further" and mutual presence of financial and banking institutions on Russian and Chinese markets should be expanded, he added.
........
Additionally, Russia is not alone. The Iraqi central bank announced Wednesday that, for the first time, it plans to allow trade from China to be settled directly in yuan instead of the US dollar to improve access to foreign currency.

Posted by: psychohistorian | Mar 21 2023 21:42 utc | 91

james wrote: .. it is not a free system.. it is an exploitative one which heavily favours the wealthy..

Be that as it may, I am positive the central govt in your country has absolute control of the money supply and the banks that create that money.

The part of the central govt that controls banks is the part that the wealthy spend enormous effort in maintaining control over. And their main means of maintaining control over the govt regulation of the banks and the money supply is propaganda. They tell you "the govt cannot control the banks because that would be communism and govt control of banks is bad" and so the people are led to believe the govt has no control of banks or money because that would be bad. Once they have people convinced that it would be the work of the devil to have control of your own money supply the wealthy become allowed to control it however they wish.

The fact that you seem to not believe the govt of your country does not have the power to tell the banks what they must do every minute of the day is evidence that the propaganda campaign is 100% successful.

Posted by: jinn | Mar 21 2023 22:43 utc | 92

@ jinn | Mar 21 2023 22:43 utc | 92

hey jinn.. i am impressed with how many assumptions you make! is this your personal style? lol..

Posted by: james | Mar 21 2023 22:55 utc | 93

James wrote : "i am impressed with how many assumptions you make"

If you ever catch me making an assumption that you think is not factual please say so.
That is a very serious request.
If you think the words I write are false then don't be shy and point it out.

Posted by: jinn | Mar 21 2023 23:29 utc | 94

Posted by: psychohistorian | Mar 21 2023 16:19 utc | 84

If the US decides to expand the $250K insured limit it will speak volumes to the definition of "capitalism" being socialism
___________________________________________________

I don't understand what you mean by the definition of "capitalism" being socialism

but FYI, right now The deposits over 250K are insured by the US govt and those deposits do not pay a dime in deposit insurance.

Deposits under 250K are charged a fee for insurance and that fee charged to small deposits is scheduled to increase in order to pay the increased cost of covering all the deposits over 255K that don't pay the fee. It sounds like you want to continue with the present law that allows the insurance of big depositors to be paid by small depositors.

What this means is the rich get rich and the poor get poorer and you seem to be in favor of continuing that practice.

Posted by: jinn | Mar 21 2023 23:46 utc | 95

@ jinn | Mar 21 2023 23:46 utc | 95 who seems to be a newbie barfly

I have a sign in my front yard that says I Support Public Banking and links to www.publicbankingistitiute.org so your misread and characterization of me is like I am reading you doing to other barflys here. I have been posting here for over a decade and suggest you do more reading and provide less ignorance proving comments.

I read you as supportive of private finance. Is that correct? I am asking so barflys get some clarity as to your textual white noise here and whether to ignore you going forward.

Posted by: psychohistorian | Mar 21 2023 23:55 utc | 96

@ bevin | Mar 21 2023 17:42 utc | 86 with the link and quote....thanks, I will get to it.

I also want to respond to whoever said that China does not want to be Reserve Currency....I agree but think they may be forced into it for a period of transition until the breadbasket concept (THAT CAN'T BE GAMED) is firmed up....I know I am a dreamer but I am not the only one and any system set up will need to be monitored and evolve with our species.....away from the greed priority narrative.

Posted by: psychohistorian | Mar 22 2023 0:17 utc | 97

psychohistorian @86 wrote: "I have a sign in my front yard that says I Support Public Banking and links to www.publicbankingistitiute.org so your misread and characterization of me is like I am reading you doing to other barflys here."

I have trouble with parsing the meaning of that statement. The grammar is weird or maybe their are typos I can't figure out.
I've never said a word against public banking. Did you think I have?
If I misread you as being against charging bank deposit deposits over 250K for deposit insurance then I'm sorry. I am glad you support deposit insurance on all bank deposits. Large deposits have always enjoyed the benefits of deposit insurance so why should they not be charged like my deposits are?

psychohistorian @86 also wrote: " I read you as supportive of private finance. Is that correct? "

No that is absolutely not correct. I despise private finance.
Deposit institutions are not private finance. You and millions of other Americans have been brainwashed into believing that they are. It sounds like you believe the govt can't tell deposit institutions how they must behave because they are just private entities. That is bullshit. If you believe that deposit facilities are private finance you have been brainwashed.

The Bank of North Dakota is what lots of people think of as public bank. The main difference between the Bank of North Dakota and your local deposit institution (whatever that may be) is the Bank of North Dakota insures all deposits while yours does not.

Posted by: jinn | Mar 22 2023 0:29 utc | 98

@ jinn | Mar 22 2023 0:29 utc | 98 with more ignorance and/or obfuscation

You wrote
"
Deposit institutions are not private finance.
....
The main difference between the Bank of North Dakota and your local deposit institution (whatever that may be) is the Bank of North Dakota insures all deposits while yours does not.
"

Maybe you need to take public/private banking 101 and tell us where the average 20% bank profits go every year in each case above.

It seems like obfuscation to assert that these "deposit institutions" are something other than privately owned and where the profits go instead of sovereign government entities like the state of North Dakota.

Do you really think MoA barflys are going to buy your deposit institutions obfuscation BS? I don't.

Posted by: psychohistorian | Mar 22 2023 0:42 utc | 99

NemesisCalling@87
Do you feel some sort of compulsion to recycle the anti-communist garbage that you never had the honesty or courage to question when it was served up to you in your formative years?
There is nothing original about your comments, as you must be aware.
So far as Canadian banks are concerned the fact that they have been, at least for the past century and a half, much better regulated than those in the United States is understood by all who have looked at the matter. And has been the occasion of popular satisfaction as US banks fail.
As to those 'Canadian Truckers' they were simply pawns in the hands of reactionaries many of whom were financed by US crypto fascists who were unconcerned over the spread of epidemic disease in Canada.
Wouldn't you feel more at home at the Unz Review?
I note that you refer to Marx's 'Eighteenth Brumaire of Louis Napoleon.'
Perhaps you should read it.

Posted by: bevin | Mar 22 2023 0:54 utc | 100

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