3/14/23

 Tuesday, March 14, 2023

In bed at 11:10,  up at 6:20, dreaming of fishing with TSJ and Jessie in Lund Mr. Pike.  15℉ outside under clear skies, wind NNW at 10 mph, gusts up to 20 today, the current wind chill is +2℉ and will vary between 2 and 27℉ today.  Sunrise at 7:05, sunset at 6:56, 11+50.

American Banking Instability.  Just about everything we are hearing from the government about the security and stability of our banking system seems to be a lie, the 'happy horseshit' we heard in Vietnam from our government, believable only if we ignore the truly extraordinary steps taken by the Federal Reserve Bank, the Treasury, and the FDIC under shotgun conditions over the weekend.  Silicon Valley Bank is described as only a 'regional, midsized bank,' a "niche bank" whose failure only affects the tech industry in California, yet in 24 hours, depositors tried to withdraw $42,000,000,000 from this bank and the FDIC has taken the extraordinary step of extending its insurance coverage to the 90+% of the deposits in SVB that were, until last weekend, uninsured, hundreds of millions of dollars deposited by venture capitalists, start-up high tech companies, and others.    The FDIC did so under its "systemic risk" authority though we have been hearing for days that the failure of SVB and the other 2 banks did not create a 'systemic risk.'  Furthermore, the Federal Reserve is offering basically interest-free loans to all banks so that all those American banks don't have to sell off their interest-rate-sensitive assets, i.e., bonds, at a loss because of the Fed's having dramatically raised interest rates which decreased the value of all bonds carrying lower interest rates than current market rates.  Moreover, the Fed is accepting as collateral for those bank loans those same bonds artificially valued at their face value rather than their depressed market values affected by current high interest rates.  What I am reading from all this is that the Fed's ability to address economically harmful high inflation is materially reduced by the inherent weakness and vulnerability of our banks.  Increasing interest rates to fight inflation = increasing likelihood of bank failures = increased likelihood of business losses, recession, and business failures.  The linchpin is the banks, holding down the Fed's ability to fight wealth-eroding inflation.  What I am also reading is that the government obviously does not closely monitor or regulate what is going on in the banks in terms of risk management and hedging.  We are not through this financial storm yet.  More trouble ahead.

81-Year-Old McConnell Moves from Hospital to In-patient Rehab.  McConnell has spent almost a week in the hospital following his trip and fall in a restaurant that resulted in a concussion and "a minor rib fracture."  Now he is off to inpatient rehab, perhaps for a week or two.  All this suggests something pretty serious going on in his brain, problems with concentration, memory, balance, and/or coordination.  The "minor rib fracture" is a lot less dangerous than the big fear with falls: a broken hip/pelvis followed by pneumonia and death.  That McConnell is 6 months younger than I am reminds me of the daily vulnerability to falling.  😨