canberra-state-of-affairs

San Francisco Board of Supervisors Reviews Reparations Plan: $5 Million Per Black Person

By Cristina Laila

California was never a slave state, but the San Francisco “Reparations Committee” is proposing to pay each longtime black resident $5 million and grant them total debt forgiveness for suffering decades of “systemic repression.”

San Francisco Council President Shamann Walton

“While neither San Francisco, nor California, formally adopted the institution of chattel slavery, the tenets of segregation, white supremacy and systematic repression and exclusion of Black people were codified through legal and extralegal actions, social codes, and judicial enforcement,” the proposed draft says.

“A lump sum payment would compensate the affected population for the decades of harms that they have experienced, and will redress the economic and opportunity losses that Black San Franciscans have endured, collectively, as the result of both intentional decisions and unintended harms perpetuated by City policy,” the draft says.

The committee is also proposing the debt forgiveness plan because “Black households are more likely to hold costlier, riskier debt, and are more likely to have outstanding student loan debt.”

The reparations committee is also planning to supplement lower-income blacks so they can afford housing.

“Racial disparities across all metrics have led to a significant racial wealth gap in the City of San Francisco,” the draft says. “By elevating income to match AMI, Black people can better afford housing and achieve a better quality of life.”

San Francisco Council President Shamann Walton says the millions of dollars in reparations, debt forgiveness and supplemental income is not enough.

The San Francisco Board of Supervisors met on Tuesday to review the committee’s plans to pay reparations to black residents.

“An estimated 50,000 Black people live in San Francisco, but it’s unclear who among them would be eligible for reparations. Under the committee’s draft reparations plan, a person must be at least 18 years old and identified as “Black/African American” in public documents for at least 10 years. Eligible people must also meet two of eight other criteria, such as living in San Francisco during a certain time period or descending from someone incarcerated for the police war on drugs.” Fox News reported.

The Board of Supervisors will vote to accept all or parts of the reparations committee’s recommendations.

Fox News reported:

The San Francisco Board of Supervisors is meeting Tuesday to review a proposal to dole out $5 million each to qualifying Black residents in reparations as a way to make amends for slavery.

At the board meeting, the city’s African American Reparations Advisory Committee will present the controversial idea, along with dozens of other recommendations from its draft reparations plan released in December.

The other recommendations range from offering grants to buy and maintain homes to exempting Black businesses from paying taxes. But the $5 million lump-sum payment has garnered the most attention — and controversy.

The Board of Supervisors can vote to adopt all, none, or some of the committee’s recommendations and even change them. Tuesday’s hearing was originally scheduled for last month but was postponed.

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There’s a Deeper Story to Silicon Valley Bank’s Failure. What Can We Learn From It?

By Robert Reich

On Friday, bank regulators closed Silicon Valley Bank, based in Santa Clara, California. Its failure was the second largest in US history and the largest since the financial crisis of 2008.

Will other banks fail? On Sunday, regulators closed New York-based Signature Bank.

As they rushed to contain the fallout, government regulators at the Federal Reserve, Treasury and Federal Deposit Insurance Corporation announced in a joint statement on Sunday that depositors in Silicon Valley Bank would have access to all of their money starting Monday. They’d enact a similar program for Signature Bank.

They stressed that the bank losses would not be borne by taxpayers but by bank shareholders.

What happened?

The surface story of the Silicon Valley Bank debacle is straightforward. During the pandemic, startups and technology companies enjoyed heady profits, some of which they deposited in the Silicon Valley Bank. Flush with their cash, the bank did what banks do: it kept a fraction on hand and invested the rest – putting a large share into long-dated Treasury bonds that promised good returns when interest rates were low.

But then, starting a little more than a year ago, the Fed raised interest rates from near zero to over 4.5%. As a result, two things happened. The value of the Silicon Valley Bank’s holdings of Treasury bonds plummeted because newer bonds paid more interest. And, as interest rates rose, the gusher of venture capital funding to startup and tech companies slowed, because venture funds had to pay more to borrow money. As a result, these startup and tech companies had to withdraw more of their money from the bank to meet their payrolls and other expenses.

But the bank didn’t have enough money on hand.

There’s a deeper story here. Remember the scene in It’s a Wonderful Life where the Jimmy Stewart character tries to quell a run on his bank by explaining to depositors that their money went to loans to others in the same community, and if they’d just be patient, they’d get their deposits back?

In the early 1930s, such bank runs were common. But the Roosevelt administration enacted laws and regulations requiring banks to have more money on hand, barring them from investing their depositors’ money for profit (in the Glass-Steagall Act), insuring deposits and tightly overseeing the banks. Banking became more secure, and boring.

That lasted until the 1980s when Wall Street financiers, seeing the potential for big money, pushed to dismantle these laws and regulations – culminating in 1999, when Bill Clinton and Congress repealed what remained of Glass-Steagall.

Then, of course, came the 2008 financial crisis, the worst collapse since 1929. It was the direct result of financial deregulation. Alan Greenspan, chairman of the Federal Reserve from 1987 to 2006, called it “a once-in-a-century credit tsunami”, but pressed by critics, Greenspan acknowledged that the crisis had forced him to rethink his free market ideology. “I have found a flaw,” he told a congressional committee. “I made a mistake … I was shocked.”

Shocked? Really?

Once banking was deregulated, such a crash was inevitable. In the 1950s and 60s, when banking was boring, the financial sector accounted for just 10 to 15% of US corporate profits. But deregulation made finance exciting and exceedingly profitable. By the mid-1980s, the financial sector claimed 30% of corporate profits, and by 2001 – by which time Wall Street had become a gigantic betting parlor in which the house took a big share of the bets – it claimed a whopping 40%. That was more than four times the profits made in all US manufacturing.

When the bubble burst in 2008, the Bush administration moved to protect investment banks. Treasury Secretary Hank Paulson, former CEO of Goldman Sachs, and Timothy Geithner, president of the New York Fed, arranged a rescue of the investment firm Bear Stearns but allowed Lehman Brothers to go under. The stock market crashed. AIG, an insurance giant that had underwritten hundreds of billions’ worth of credit on the Street, faced collapse. So did Citigroup (to which Robert Rubin, Clinton’s former Treasury secretary, had moved after he successfully pushed for the Glass-Steagall repeal), which had bet heavily on risky mortgage-related assets.

Paulson asked Congress for $700bn to bail out the financial industry. He and Ben Bernanke, the Fed chair, insisted that a taxpayer bailout of Wall Street was the only way to avoid another Great Depression.

Obama endorsed the Wall Street bailout and appointed a team of Clinton-era economic advisors (led by Geithner, who became Obama’s Treasury secretary, and Lawrence Summers, who became director of the National Economic Council). These were the same people who, working under Rubin in the 1990s, had prepared the way for the financial crisis by deregulating Wall Street. Geithner, as chair of the New York Fed, had been responsible for overseeing Wall Street in the years leading up to the crisis.

In the end, the Obama administration rescued Wall Street, but at enormous cost to taxpayers and the economy. Estimates of the true cost of the bailout vary from half a trillion dollars to several trillion. The Federal Reserve also provided huge subsidies to the big banks in the form of virtually free loans. But homeowners, whose homes were suddenly worth less than the mortgages they owed on them, were left hanging in the wind. Many lost their homes.

Obama thereby shifted the costs of the bankers’ speculative binge onto ordinary Americans, deepening mistrust of a political system increasingly seen as rigged in favor of the rich and powerful.

A package of regulations put in place after the financial crisis (called Dodd-Frank) was not nearly as strict as the banking laws and regulations of the 1930s. It required that the banks submit to stress tests by the Fed and hold a certain minimum amount of cash on their balance sheets to protect against shocks, but it didn’t prohibit banks from gambling with their investors’ money. Why not? Because Wall Street lobbyists, backed with generous campaign donations from the Street, wouldn’t have it.

Which brings us to Friday’s failure of the Silicon Valley Bank. You didn’t have to be a rocket scientist to know that when the Fed raised interest rates as much and as fast as it did, the financial cushions behind some banks that had invested in Treasury bonds would shrink. Why didn’t regulators move in?

Because even the thin protections of Dodd-Frank were rolled back by Donald Trump, who in 2018 signed a bill that reduced scrutiny over many regional banks and removed the requirement that banks with assets under $250bn submit to stress testing and reduced the amount of cash they had to keep on their balance sheets to protect against shock. This freed smaller banks – such as Silicon Valley Bank (and the Signature Bank) – to invest more of their deposits and make more money for their shareholders (and their CEOs, whose pay is linked to profits).

Not surprisingly, Silicon Valley Bank’s own chief executive, Greg Becker, had been a strong supporter of Trump’s rollback. Becker had served on the San Francisco Fed’s board of directors.

Oh, and Becker sold $3.6m of Silicon Valley Bank stock under a trading plan less than two weeks before the firm disclosed extensive losses that led to its failure. There’s nothing illegal about corporate trading plans like the one Becker used, and the timing could merely have been coincidental. But it smells awful.

Will the failure of Silicon Valley Bank be as contagious as the failures of 2008, leading to other bank failures as depositors grow nervous about their safety? It’s impossible to know. The speed with which regulators moved over the weekend suggests they’re concerned. The Wall Street crisis of 2008 began with one or two bank failures, as did the financial crisis of 1929.

Four lessons from this debacle.

1. The Fed should hold off raising interest rates again until it has done a thorough appraisal of the consequences for smaller banks.

2. When the Fed rapidly raises interest rates, it must better monitor banks that have invested heavily in Treasury bonds.

3. The Trump regulatory rollbacks of financial regulations are dangerous. Small banks can get into huge trouble, setting off potential contagion to other banks. The Dodd-Frank rules must be fully reinstated.

More broadly, not even Dodd-Frank is adequate. To make banking boring again, instead of one of the most profitable parts of the economy, Glass-Steagall must be re-enacted, separating commercial from investment banking. There’s no good reason banks should be investing their depositors’ money for profit.

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2 More Banks Seek to Reassure Customers After Silicon Valley Bank Collapse

By Jack Phillips

California-based First Republic Bank and Arizona-based Western Alliance Bancorporation both attempted to calm nerves around the collapse of Silicon Valley Bank after shares for both financial institutions plunged in the past week or so.

First Republic Bank told customers that their deposits were safe amid fears of spillover caused by SVB’s collapse late last week and as shares of First Republic Bank dropped 33 percent over the past five days.

In a regulatory filing with the U.S. Securities and Exchange Commission (SEC) on Friday, First Republic said its liquidity position remains strong amid falling share prices.

The U.S. Federal Deposit Insurance Corporation (FDIC) insures deposits up to $250,000 per depositor per insured bank, for each account category. There were reports that about 85 percent of  Silicon Valley Bank (SVB) accounts weren’t insured as the financial institution was often used by tech firms and startups.

“Within business deposits, no one sector represents more than 9 percent of total deposits, with the largest being diversified real estate. Technology-related deposits represent only 4 percent of total deposits,” First Republic also said. Its investment portfolio is less than 15 percent of total bank assets and only less than 2 percent of total bank assets are categorized as available for sale.

Meanwhile, Western Alliance, based in Phoenix, issued a news release on March 11 that “deposits remain strong,” saying that “total deposits of $61.5 billion, an increase of $7.8 billion since year end, led by our deposit verticals of Settlement Services, Home Owner Associations and Mortgage Warehouse. The company expects deposits to moderately decline from these levels by quarter end due to typical seasonal and monthly activity.”

Fears

On Twitter, a highly visible post alleged that people were going on “a bank run” at a Brentwood, California, First Republic Bank location. That post’s video, shot from a moving vehicle, showed what appeared to be a long line of people standing outside the branch.

“I’ve never seen a bank run in Brentwood Los Angeles in over 40 years—this is at first republic bank branch. People standing in rain,” the user alleged on March 11. The Epoch Times has contacted First Republic Bank for comment on the claim and others.

Those concerns were also exacerbated by a Wall Street Journal article with a headline that blared, “First Republic Hit by Silicon Valley Bank Failure” and that “investors have grown wary of First Republic Bank for reasons similar to those that caused concern at SVB.”

The bank, which was founded in San Francisco in 1985, has some 80 branches in 11 states around the United States. The WSJ article noted that the bank’s funding relies largely on wealthy individuals who want to seek higher yields on their money.

With about $212 billion in total assets, First Republic Bank is the 14th largest in the United States. Western Alliance is smaller, with about $34 billion in total assets.

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Situation Update, Mar 13, 2023 – The Non-Bailout BAILOUT Commences – Banking System Flooded with BILLIONS in liquidity to DELAY Total Collapse

By Health Ranger Report

0:00 The Non-Bailout BAILOUT

– Janet Yellen announces Treasury “backstop” of deposits for THREE failed banks

– FDIC says it will use its Deposit Insurance Fund (DIF) money

– Claims “no taxpayer money” will be used for bailout – but it’s A LIE

– FDIC only has $100 billion max, and bailouts will cost MORE

– After FDIC burns through cash, Fed will PRINT money for bailouts

– Banks encouraged to act recklessly, running risky bets that fail

– We’ve entered the chapter where Fed prints money to bail out all the failed banks

– This will cause #inflation and dollar devaluation – currency collapse

– There are nearly $10 TRILLION in bank deposits across the USA

– Over $300 trillion in derivatives exposures among banks

– FDIC has already burned through all its cash as of today

– How will FDIC cover the NEXT bank collapse?

– Rational people will pull money out of banks to reduce risk of exposure to collapse

– More people will move to gold, silver, crypto, ammo and other hard assets

– As Fed raises interest rates even higher, more banks will fail

– Controlled demolition of the banking sector and the US economy

Here’s what others had to say:

Nebelwerfenzex
So, taxpayers are footin the bill for the banker scumbags AGAIN..
Go figure huh? Who didn’t see this comin last week?
Not that it really matters, worthless fiat paper.. I grabbed 3 tubes of
Brittanias during the recent metals dip..
Grab em while ya can!

Kevin Merck
Bank collapse is a blessing in disguise. It should force all the PC fence riders to decide whether they want to live a worthwhile life, of just continue worshipping and serving pure evil for the almighty dollar.
Real change never happens when people are in their comfort zones. People need to lose their fear of death. Life under these diabolical, demonic freaks, will make people envy the dead. Dying for truth and justice is a good (God) experience, that no one should be afraid of.

Cupcake
Banks create wealth by loaning currency that does not exist until they loan it to someone. That is what my econ professor said.

Tess W
Gotta make sure people keep their money in the bank so they can trap us when they switch to CBDCs.
If I had money in the bank, I’d still make a bank run. And buy up all the silver I could.

Susan
These bank failures sound like another scam between the uber rich and the government.
Let’s say we are bankrupt and steal 70 billion from the government for free. We are the rich and we do what we want and never are questioned let alone go to jail.

skreet3
We have a circulation issue in the economy. The hyper automation of the economy means that money flows from the poor to the rich like a one way valve. This is the core problem of the modern economy money doesn’t trickle down anymore and the poverty cycles trickle up over time. Giving bail outs to banks doesn’t solve the core issue of the economy there’s a blood clot essentially in the economy. How can you have a business without customers? How can you have customers when nobody has employees?

WilliamC
The $25 billion that the FDIC has in their emergency bailout fund is not cash… it is in T-bills, as is Social Security. So, the T-bills have to be sold in the market to get the cash. They cannot be redeemed to the US Treasury, because the Treasury would have to sell more T-bills to the market to cash out the FDIC’s bonds.
So, when the banks fail, there is a flood of T-bills into the market, which has just lost their cash accounts in the banks.
It is a self-feeding whirlpool of monetary doom.

Texas Bill
One way to figure out what the FED will do about interest rates and what banks to get out of: listen to CNBC Bloomberg & Forbes especially Jim Cramer and do opposite.

Sandy
Actually a pretty competent rap tune. I wonder if the bank cues were seeded with crisis actors? (problem) The bailout flooded big tech investers with cash (reaction) The Dem bribe machine from Biden election was paid off (solution)?

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