Does SVB rhyme with SBF?
joking aside, this thing ain't over
I suppose that if the collapse of Sam Bankman-Fried’s cozy little FTX thing is Round One in the End of America then the SVB failure is Round Two.
But honestly, an old guy like me would rather do without all the excitement and the possibility that my IRAs might go to zero.
Still, I was worried a couple days ago when genius Treasury Secretary Janet Yellen was only going to bail out customers with less than $250,000 deposits at SVB. Can’t you spell “lender of last resort” Madam Secretary? Now it looks like the bailout will be pedal to the metal.
But I tell you what I find most interesting. It is that apparently the cheeky chappies at Silicon Valley Bank were caught swimming naked when the tide went out because they had invested in long-term Treasuries just before the fastest increase in short-term rates in US history. So now we know the origin of the phrase “slow and steady wins the race.”
Ahem. I see that the rate on 1-year and the 2-year Treasuries dropped by one percent in the last few days. The 1-year was 5.25 percent on March 8. Today, March 13, it closed at 4.3 percent. Wow.
And now that the gaping hole in the narrative has opened up, I would just like to pile on and say to my liberal friends: What Were You Thinking when your chappie Biden went pedal to the metal on increased spending for World War Climate and World War Reparations?
Imagine if you chaps had said to your supporters: First we have to get the economy moving sensibly. Then we can save the world.
I guess it’s a bit late for that. But I think it would be a good thing for nice liberal ladies to tell their woke grandchildren. They could quote James Carville approvingly: “it’s the economy, stupid” and complain about how Jill Biden flubbed it: “I can’t believe she did that.”
Mind you, if I were a liberal, I’d blame Trump. Acting on instructions from Vlad Putin, Trump overreacted to the COVID thing and printed a bunch of money in 2020 that the Biden administration could not fix without a bear market and a recession. Oh the evil genius of that orange guy!
Or it could be Peter Thiel’s fault. He, apparently, put out the word that SVB was toast.
OK, I’ll stop making jokes. Because this thing ain’t over. And before it’s over millions of Americans are going to suffer. There will be people with variable-rate mortgages who don’t have a clue that interest rates could rise and wipe them out. There are people struggling from paycheck to paycheck that aren’t going to get real increases in wages for five years. And there are the people that will lose their jobs. And then there are poor helpless seniors like me that will see their IRAs and 401(k)s evaporate.
I’d say that in 2024 it will be Time for a Change. And as for whether Trump or DeSantis gets to lead the rarin’-to-go Republican Congress, it won’t make a dime’s worth of difference. It will be Frack Baby Frack, Cut Baby Cut, and Jobs, Jobs, Jobs six ways from Sunday. As it should be.
And Round Three will be Morning in America Version 2.0. Oh wait, not if there’s a knockout in Round Two.