On the collapse of Silicon Valley and Signature Banks…

I have watched with increasing alarm as seemingly every reporter on the planet gets the story completely and totally wrong about what happened, why it happened, and why it will have dramatic and far reaching ramifications in areas far beyond finance. And if you are wondering why you should listen to me instead of the prestigious “journalists” at publications like the New York Times and Wall St. Journal, allow me to gloat for a moment and point out that I was the first person to publish an article publicly predicting the collapse of Signature Bank back in December when the stock cost $140, the company was worth almost $10 billion, and every single professional “analyst” and “journalist” in the world thought it was a great business that was bound for dizzying heights.

One may wonder how your humble narrator came to make such a spot on prediction. All I can say is that it’s really not that hard. You google stuff, read some SEC filings, do some basic addition and subtraction and voila: you see that a bank like Signature is a straight up criminal enterprise. At that point it’s easy. You publish on your substack, send a few tweets, maybe make a few phone calls, and (mostly) wait around until BOOM! down goes the 3rd largest bank failure in American history.

Long piece, grab a coffee.

More: If we look at the banks that have failed so far, we see a few common threads emerging, with fraud and Ponzi-like thinking at the heart of them. The question now will be how much of this toxic stuff there is tucked away inside other banks. If it’s largely isolated to the shadier side of the finance industry, the backstopping by the globe’s central banks might be enough to contain it. We’ll see.

h/t Melinda Romanoff

20 Replies to “WTFTX?”

  1. But crypto is vapor, right?
    The masses have always been idiots, and they are being primed to kill millions once again, and the so-called conservatives are all aboard, thinking that the brainwashed minds are their true enemy, while the fact is that the cult leaders are the real enemy, but the Canadian right loves its cult members…and, by extension, loves the mass murder that is immanent, because they are told that they will win in this battle.
    Jesus Wept.

    1. Crypto is vapor. Just wait until the government controls crypto and your money ceases to exist.

      1. Well, old Joe Depends and Justin Huggies are probably talking about that right now.

      2. Because the gov’t doesn’t control our currency now?
        You are just as brainwashed as folk who think that women can be men.

        1. I just spent 150 bucks cash at the store FOJ. Government had no hand in, or control of or knowledge of that transaction.

          Try to do the same with govt CBDC.

        2. Never said they were the same FOJ. Simply pointing out government does not control the currency in my possession.

          Have argued the merits of Bitcoin here.

        3. FOJ. They print money but cannot take away what I have in my hand. That is simplifying things but hey I think you need things simplified. Digital currency will be used to prevent you from buying what the government does not want you to buy. Sorry you can’t have gas this week your card is declined for any gas purchase. Wake up, time is getting short and stupid is not the answer.

  2. Ask yourselves, is a zero-trust society viable?
    Personally, I highly doubt it.
    So, who to trust? your neighbor, friend, lover, or the government?
    The Canadian right has chosen the same as the left: The government.
    Kate endorses this. Screw you, Kate.

  3. The thing about the article that I find humbling is that information hinting at a downfall of both Signature and SVB was under our noses for several months. It’s difficult to know where to search to find this stuff. Thanks Kate. I need to be a better search engine.

    I remain a bit skeptical that the $60 B in “other loan assets” is a total fraud representing 30% of the company’s total assets. Plus the Company had $120 B of “securities and investments” that were supposed to be mostly low interest bonds and $14 B in cash or cash equivalents.

    The author makes the point that if the $60 B in other loan assets were real the bank would have been rescued because it does look good on paper (lots of assets, just bad investment decisions that led to a liquidity problem).

    Will we ever see a breakdown of the $60 B in other loan assets?

  4. I lack the skill to determine who was naked shorting these failed banks, but it sure looks like the same MO so carefully detailed over many years at deep The money doesn’t just disappear… it goes “somewhere”

  5. I must admit, when I got into the piece my eyes started glazing over.
    But what was clear, was the author’s absolute hate-on for the douchebags responsible.
    And as we all know, those douchebags are everywhere.

  6. I’ve said before that these bank failures are the George Floyd of bank failures, you know there’s gonna be a bank failure every year somewhere it’s just a matter of waiting for the right ones and capitalizing on them, just like there are black guys killed with altercations with the police every year, you just need the right one.

    Socialization of the banking system needs to start somewhere.