Iran is a preposterous train wreck, right? I mean, the joint is sitting on top of massive oil reserves and they can't manage to turn that into wealth and stability. What's the deal there?
How about this: it's run by religious zealots who prioritize adherence to their religious rules over practical considerations. When given a choice between an act that violates the Koran, but makes things better and an act that obeys the Koran, but makes things worse, they pick the latter every time.
Say hello to Silicon Valley Bank.
We're evolving into Iran. Our mullahs are the woke progressives. With every mutation, they grow even more impractical. Now, we're at the point where the president of the United States feels the need to defend Ukraine's borders but leave our side open and that it's kind of sinful to not mutilate and poison mentally ill children.
Well. So how does this fit into SVB?
When Covid hit, we naturally locked down and took drastic measures. Within 2 months, we had the demographics of infection and mortality pretty well dialed in and the lockdowns were no longer necessary. Confronted with the choice between total control by the government and allowing people to make their own risk/reward decisions, our mullahs chose control. The economy ground to a halt.
In order to keep the lights on and things more or less moving, our mullahs printed money and dropped it from helicopters. Why not? That's what their Koran says - government spending is morally superior and you can print as much money as you want.
When inflation predictably hit, the Fed raised rates. No probs, fam! The government has got all this under control said the mullahs.
Meanwhile, over at SVB, their local mullahs were focused on diversity and equity and inclusion and sex with inflatable walruses whose pronouns are zirc/zarc. They handed out money to BLM by the truckload and talked about diversity a lot.
Was there regulatory failure? Perhaps. SVB was regulated like a bank but looked more like a money-market fund. Then there’s this: In its proxy statement, SVB notes that besides 91% of their board being independent and 45% women, they also have “1 Black,” “1 LGBTQ+” and “2 Veterans.” I’m not saying 12 white men would have avoided this mess, but the company may have been distracted by diversity demands.
Management screwed up interest rates, underestimated customer withdrawals, hired the wrong people, and failed to sell equity. You’re really only allowed one mistake; more proved fatal. Was management hubristic, delusional or incompetent? Sometimes there’s no difference.
How about their banking? Hey, man, the mullahs were focusing on the important stuff. They didn't have time to grub around for money. They stashed the cash in long-term government bonds. Those are safe, right?
Nope. They're not. When interest rates go up, the value of the bonds you're holding goes down. Whoops.
And so the whole thing blew up, just like Chicago blew up when it's mullahs screamed at the cops for being racists.
How about the mullahs in San Fran? Dig this.
San Francisco board open to reparations with $5M payouts
Payments of $5 million to every eligible Black adult, the elimination of personal debt and tax burdens, guaranteed annual incomes of at least $97,000 for 250 years and homes in San Francisco for just $1 a family.
Who's going to stick around to pay those bills? Even if they're 1/10 or 1/100 of that, this is bound to drive productive citizens away. Drive even more productive citizens away, I should say. But hey, their Koran says we need to pay reparations, so screw practicality.
Getting back to the mullahs in the banking system, they recently consulted their Korans and discovered that Allah says we need to backstop every depositor at SVB up to infinity. No worries, we can just print money to cover it. That's worked up to now, right? Err, wait.
"They have guaranteed the entire deposit base of the U.S. financial system," Roger Altman, who served as deputy treasury secretary in the Carter and Clinton administrations, told CNN on Tuesday morning.
"I didn't say it has been nationalized. I said they are verging on that because they have guaranteed the entire deposit base," he clarified.
Are you getting the picture? Every zealotry-induced screwup is corrected by yet another, bigger zealotry-induced screwup.
This is how you end up with Iran.
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| Is this San Diego? LA? SanFran? Who knows? Wherever it is, the mullahs who effectively legalized drugs and stopped punishing crimes have got a doozy of an idea to fix the problem. |
Bonus Content
Here's a look into an SVB board meeting.
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