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