Shut Down Those Free Markets

Keep this timely trading halt in mind the next time you hear some moronic economist blathering on about the so-called “free market” and its very important benefits:

Trading was temporarily halted in dozens of regional banks this morning as shares fell by up to 75 percent when the market opened after Joe Biden claimed ‘US banking is safe.’ Major US banks were also hit as contagion fears spread through the sector with Wells Fargo plummeting 7.5 percent, Bank of America falling 7.4 percent, Citigroup plunging 5.8 percent and JP Morgan down 2.7 percent.

Regional bank Western Alliance saw its stock price plunge by three quarters as the opening bell sounded on Wall Street, while shares in First Republic dived 67 percent and PacWest by more than 35 percent. Trading circuit breakers were swiftly implemented to protect the market from rampant volatility.

I doubt this is the final cataclysmic crash, but it is certainly a harbinger of the eventual and inevitable one.

DISCUSS ON SG



Systemic Risk Exception

The FDIC is now effectively ensuring ALL bank deposits for all depositors, no matter how much money they have in their accounts.

The statement from the regulators was issued to announce a new emergency program to protect depositors of failing banks. They explained that they would make a “systemic risk exception” for both Signature and Silicon Valley Bank (SVB), a tech and start-up focused lender that was shut down following a bank run last week, allowing the clients of both banks to have full access to their deposits.

“[SVB] depositors will have access to all of their money starting Monday, March 13… We are announcing a similar systemic risk exception for Signature Bank… all depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer,” the regulators said, adding that they would use the FDIC’s deposit insurance fund to fully protect all depositors, both insured and uninsured.

The deposit guarantee was raised from $40,000 to $100,000 in 1980 and from $100,000 to $250,000 in 2008. This “new emergency program” is not really new, as despite the initially responsible statements by Yellen and the Federal Reserve, plans to implement the no-limit program have been in place since at least 2020:

The FDIC radically increased account protections from $100,000 to $250,000 for a temporary period; eventually, the $250,000 protection level became standard. Now, the revised level is expected to greatly surpass the $250,000 protection mark, though it’s unclear how much the increase will be. It’s also unclear what additional protections and safeguards are being considered. Another source tied into the U.S. banking sector said to expect a “drastic increase” designed to calm any run on the banks and general banking jitters. It was also noted that one possibility would be a no-limit FDIC protection plan, at least temporarily.

FDIC Planning to Increase Deposit Insurance Protection Beyond $250,000, 26 March 2020

Now the protection level has been made de facto limitless, which means that the next series of failures will threaten the collapse of the entire system. This is the fundamental problem with centralization, as it removes the protective limits of decentralization in a foolish, and inevitably futile, attempt to avoid the consequences of limited failure. Combine a) this increased centralization, with b) the $620 billion in unrealized losses that the US banks had not yet accounted for at the end of 2022, and c) the fact that the current zero-reserve banking system is a literal Ponzi scheme with the Fed desperately trying to make depositors whole each time a bank can’t keep up with its outstanding loans, and systemic failure is inevitable.

DISCUSS ON SG


The SVB Death List

This was posted on Gab tonight:

30 companies now face extinction as a result of being tied to the SVB failure. They are as follows:

  • Coinbase
  • DoorDash
  • TikTok
  • Twilio
  • Plaid
  • Affirm
  • Etsy
  • Zoom
  • 23&Me
  • Airbnb
  • AllBirds
  • DocuSign
  • Udacity
  • Betterment
  • Checkr
  • Klarna
  • Marqeta
  • NerdWallet
  • Stripe
  • WeWork
  • ImpossibleFoods
  • Instacart
  • Patreon
  • BigCommerce
  • FarFetch
  • Lemonade

Now, not all of these companies will find the disruption, and possible partial loss of funds, to be a killer. I’d be very surprised if Stripe, Zoom, Airbnb, or Etsy found the collapse of SVB to be much more than a minor annoyance due to the particular natures of their respective businesses. TikTok probably won’t even notice. But companies like Patreon, which are very low-margin operations that don’t run a profit, are considerably more vulnerable.

So it will be interesting to see precisely how severe the eventual consequences turn out to be.

DISCUSS ON SG


Weekend Arktoons

CLASSIC BIBLE TALES Episode 87: Den of Thieves

BOB Episode 119: Swing

FRIDAY FISH FUNNIES Episode 10: Wall Flower

THE SWORD OF GOD Episode 49: They Fell Into a Burning Ring of Fire

RIOT TOWN, USA Episode 5: identity crisis

FLYING SPARKS Episode 62: Worth the Pain

A MIND PROGRAMMED Episode 15: Homo Posthomo

CHATEAU GRIEF Episode 213: Cut A Rug (R)

THE WISE OF HEART Episode 13: An Unauthorized Disclosure

VEGFOLK FABLES Episode 204: The Final Challenge

INVASION ’55 Episode 35: No Escape

PAPER DOLL VERONIKA Episode 51: Slip into the Pit

DON & CARL – THE DAGGER OF DEMONS Episode 4: Airport

DON & CARL – THE DAGGER OF DEMONS Episode 5: Meet Ami

DON & CARL – THE DAGGER OF DEMONS Episode 6: The Medicine

FULL OF EYES Episode 27: Blessed from His Place

NEURAL NETWORK NOVELLAS Episode 1: The Bum

Arkhaven is pleased to welcome NEURAL NETWORK NOVELLAS, which is a new illustrated text series featuring AI-created art, to Arktoons today. Check it out!


Anacyclosis in Action

This is a recent post from /pol/ that is well worth reading, especially by those whose knowledge of history and the classics is less complete than might be desired. And it correctly points to the way in which the demoralization and denationalization of Western civilization is rooted in the decline of the Christianity that is one of its integral elements. Polybios would definitely be an early candidate for a second history-based Library subscription.

This was already noted by Polybios in the 2nd century BC, and he referred to his own society – the Hellenistic Greece. Polybios is recognized as “father of sociology”, and he witnessed his own civilization falling and being conquered by Rome.

Anacyclosis is the circulation of governmental forms: warlordship-monarchy-dictatorship-aristocracy-oligarchy-democracy-ochlocracy. Which follows with societal collapse and back into warlordship. The cycle starts anew. The cycle can skip one or more phases or go backwards, but it will never stop on itself.

The theory of anacyclosis is based upon the Greek typology of constitutional forms of rule by the one, the few, and the many. Anacyclosis states that three basic forms of “benign” government (monarchy, aristocracy, and democracy) are inherently weak and unstable, tending to degenerate rapidly into the three basic forms of “malignant” government (tyranny, oligarchy, and ochlocracy). They, however are disliked and not tolerated well, and people tend to seek the “benign” forms.

According to the doctrine, “benign” governments have the interests of all at heart, whereas “malignant” governments have the interests of a select few at heart. However, all six are considered unworkable because the first three rapidly transform into the latter three due to political corruption, and the latter three tend to collapse from violence.

Widespread Atheism is a sign of democracy transforming into ochlocracy – the mob rule – and Polybios himself witnessed that happening in the Hellenistic Greece. The rise of Materialism and philosophy had killed off the Greek Pagan religion, and it was nothing but an empty shell any more – he said nobody believed in the gods any more. The result was general hedonism, disinterest in upkeeping of the society, amassing of personal fortune and collapse of birth rates.

Polybios himself was a soldier, and he complained of the demoralization of the Hellenistic civilization in general. He lived through collapse of Macedon and defeat of the last king, Perseus, in the battle of Pydna 168 BC. Polybios stated that when a nation loses its faith on its gods, it loses its faith on itself and in the future. He also saw the Roman military, witnessed the Punic Wars and saw how Republican Rome was far less civilized than the Hellenistic sphere, but it was young and hungry.

Polybios considered democracy as the pinnacle of the anacyclosis. Yet in the same way that the descendants of kings and aristocrats abused their political status, so too will the descendants of democrats. Accordingly, democracy degenerates into ochlocracy, literally, “mob-rule”. In an ochlocracy, according to Polybius, the people of the state will become corrupted, and will develop a sense of entitlement and will be conditioned to accept the pandering of demagogues and Populist politicians. Essentially, government becomes a puppet show because a transition in power does not affect a civilian on a day-to-day basis.

This phase sees a widespread Atheism. People lose their faith in gods, and they lose their faith in the society and themselves and in the future. They rather concentrate on what they have here and now – and the result is widespread Hedonism, amassing of wealth and collapse of birth rates. Eventually an ochlocratic society will collapse – either into civil war and anarchy – or is conquered by an external conqueror. The cycle starts anew.

The same happened to Rome 400 years later with the Third Century Crisis. The Roman Polytheism was moribund already in the Early Imperial era, and it collapsed during the Middle Imperial. The Roman Empire was basically a religious vacuum – or a chaotic hotbed of religious competition – by the 3rd century, and the Empire tore in three parts by 242. Only the reconquest of Aurelianus and the reforms of Diocletianus saved the moribund empire and purchased it 100 years more time. But the Empire cleft in two in 395 and the Western Empire went bankrupt 476. Only the rise of a new religion – Christianity – consolidated the situation, and saved the Roman civilization in West and the Roman Empire in the East – the Eastern Roman Empire lasted for 1000 years more.

But also the fate of the Cordoba caliphate in Spain and its collapse is an example of anacyclosis, and the most striking example is the fate of USSR – and each and every Communist regime.

Not all Atheists are Communists, but all Communists are Atheists. The USSR was a acumen of an Atheist society, and Atheism was enforced on all levels of the society. The result was an Orwellian totalitarian dictatorship – the worst tyranny and oppression the world has ever seen, a genocide of millions of people and destruction od centuries of culture – and eventually collapse. USSR collapsed in less than three generations after it had been founded. The only way it could stay together was excessive use of lies, coercion and state violence.

Both Dima Vorobiev, Misha Firer and Dimitry Kosh can confirm my observations and tell how it was. They lived through the USSR. They have first hand experience of it all. And they can tell how it went and what happened to Atheism in the USSR.

Another way to inspect the deleterious effect of widespread Atheism in society are the fates of various ideal communities and ideal societies. All non-religious ideal societies, such as kolkhozes, kibbutzim, Hippie communities and Naturist communities, have collapsed in three generations at latest – due to internal disputes and strife – while religious ideal societies can last for millennia. The Hutterites are a primary example of this, but so are monasteries. Monte Cassino was founded in 529 AD and Heian in 711 AD, and both Christian and Buddhist ideal societies are still going strong. The only kibbutzim in Israel today are those which are religious.

There is also a third way to observe and confirm this phenomenon – that widespread Atheism is a sign of a collapsing society – and it is meme theory, 12 leverage points’ theorem and cultural evolution. The meme theory claims the cultural evolution is analogous to biological evolution – the nature works on analogies – and same principles apply. The meme theory insists that cultural evolution works on similar information carrying replication units as the biological, called memes – which form memeplexes like the biological evolution forms organisms and species. And for each species there is an ecological niche – and the same applies for memeplexes in the cultural evolution.

Religion is perhaps the oldest memeplex there is – it predates Homo sapiens, and can even be observed on some animals. There clearly is thus an ecological niche for it. An ecological niche can be vacated, but never destroyed. And when an ecological niche is vacated, it keeps getting re-occupied – the evolutionary race to occupy it starts anew.

In the 12 leverage points’ theorem, religion corresponds to the most powerful leverage point – the power to transcend the paradigm. Religion is the only thing which can overcome the Dunbar number, and it is the mortar which binds the individual human bricks of the society into a durable societal edifice. Religion is the basis of all ethics, social contracts, how we form the society, how we relate to society, to each other, what we value, what we shun, what we consider beneath our dignity, how we relate to work and labour and how we relate to outsiders. Every religion creates a society of its image. Not the other way – this was Marx’s tragic error. Lutheranism creates the Scandinavian model while Islam creates Talibanistan.

Atheism corresponds to an empty ecological niche. It is basically an all-bets-are-off situation. Remove the mortar, and all you have is a heap of individual bricks, which will collapse at the slightest push. An Atheist society cannot endure setbacks or violent challenges, while religious can.

And KGB knew all this. It did not know of memetics, but it knew of “cultural hegemony” by Antonio Gramsci, and it knew religion was the only force which could turn the Communist subversion back and restore the citizen society. This was the reason why anti-religious work was so important in the ideological warfare of the Communist world against the free world. By rottening the religion from inside, USSR aimed for the collapse of the free world. And it was a success beyond measure. But the irony of history is that USSR collapsed first.

There is also a fourth way to confirm these observations. Religions do not spread by conversion. They spread by breeding. Remember Polybios observed that widespread Atheism goes hand in hand with collapsing birth rates?

This is exactly what is happening in the Western world today.

DISCUSS ON SG


The Persecution of Ricky Vaughn

The US federal government is shattering the Constitution and inadvertently revealing the existence of the surveillance state in its persecution of a memelord.

Last month, Revolver profiled the Biden Administration’s persecution of former Twitter anon Doug Mackey, who was a famous pro-Trump voice back in 2016 under the moniker of Ricky Vaughn…

In its latest filings, the DOJ reveals that one of the group chats it is currently using as evidence against Mackey contained a person who is now working with the FBI as a federal informant. According to the government, the “Confidential Witness” (or CW) was a pro-Trump, “alt right” leader who pleaded guilty to the same conspiracy to deprive civil rights charges that Mackey faces, and is now collaborating with the government.

In its filings, the government declines to say what CW’s current role with the government is, except that he is “presently engaged in proactive investigations, working with the Federal Bureau of Investigation (“FBI”), and may engage in additional investigations in the future.” Based on that statement, the government is asking that CW’s identity be kept secret, and that Mackey’s defense team be barred from asking any questions about CW’s current work.

This is a much bolder request than it might seem to the legally uninitiated. The Sixth Amendment of the Bill of Rights guarantees the right of any criminal defendant to “be confronted with the witnesses against him.” Like most constitutional rights, this law is not absolute, but limitations to it have historically been very limited. Courts have long disallowed anonymous witnesses due to the Sixth Amendment, except in extreme circumstances involving violent, organized criminal organizations with the capacity to retaliate against witnesses and their families. And even then, courts have restricted the right to testify anonymously. For instance, in 2014, the U.S. 10th Circuit said this, about the possible danger of retaliation from the ruthless Salvadoran street gang MS-13.

“…a generalized statement about danger — such as anyone who testifies against one of [MS 13’s] members faces danger from [MS-13] — would be insufficient to show that a threat against a witness was actual and not a result of conjecture.” [United States v. Gutierrez de Lopez, 761 F.3d 1123, 1140 (10th Cir. 2014)]

But now, in the Mackey case, the Biden DOJ asserts that its witness’s identity must be hidden, because if not, he might face, wait for it… harassment on the Internet!

CW through the CW’s internet moniker(s) occupied a prominent position within the online, alt-right community. In that capacity, the CW participated in, among other things, the online harassment of individuals with whom the CW maintained political disagreements, including by encouraging the CW’s followers on Twitter and other social media to amplify the harassment. In this case, the government anticipates that the CW will provide inculpatory evidence against the defendant and other individuals who, like the CW, had engaged in such harassing behavior. As such, the government anticipates that, if the CW’s true identity were to become known, then those with whom the CW associated online would likely engage in such behavior towards the CW. Revealing the CW’s true identity would also likely lead to the public exposure of the CW’s physical whereabouts. This could in turn subject the CW to more than simply online harassment and could very easily jeopardize the CW’s safety.

Mackey has never been convicted or even accused of a single violent crime, or of threatening violence online. There is no evidence at all of any kind of organized or predictable effort by the online “alt right” to physically target witnesses. Yet now, the government claims that Mackey’s Sixth Amendment rights can be nullified because of the vague possibility a witness against him might face “harassing behavior.”

This particular federal informant is widely rumored to be none other than “Baked Alaska”. But that’s not what is interesting, at least to me. What I believe to be more significant is this observation from AC:

Notice, Ricky had an informant before he had any hint of anything prosecutors might try to charge him with, going on around him. He was just a a squeaky clean, preppy guy, posting funny memes on Twitter. With an informant sent in. Which means an FBI/intelligence agent assigned to him.

So one guy posting on Twitter had an informant sent in and an intelligence operation dedicated to him on nothing more than the basis of his rhetorically-effective memes. What this means is that literally everyone with more than 200+ followers on any social media platform is being targeted, tracked, and infiltrated.

Given my family background and my national press syndication dating back to 1994, I’ve been aware of being on the radar for at least three decades, if not four. It comes with the territory and it’s understandable; no society will tolerate its iconoclastic outliers going too far astray. But it is nevertheless a little startling to see confirmation that the surveillance state in the USA is at least as prevalent and comprehensive as it was in East Germany during the Soviet years.

DISCUSS ON SG


Knock-On Effects

The SVB failure is having serious consequences for the California wine industry.

California’s wine industry is on the brink of a financial crisis following the collapse of Silicon Valley Bank.

The bank had been the main financial institution for bank for wineries in the Golden State for almost three decades.

The California Department of Financial Protection and Innovation closed the bank on Friday following a run by venture capital customers.

On Friday night, thousands of wineries found that they were completely locked out of their accounts with no clear timeline as to when they might be able to access their funds…

Wineries represented 2 percent of the bank’s total loan business but the ramifications are far-reaching including an inability to pay employees, bills, or credit card payments. Silicon Valley Bank, the nation’s 16th largest bank, had extended more than $4 billion in loans to wineries and vineyards since 1994.

Interesting that it says “16th largest” when just two days it was being reported as the 14th largest. But this demonstrates the folly of both the easy credit economy and allowing banks to buy other banks, as the consequences of single failure points become considerably more serious. In this case, the negative effects are crossing not only the United States, but the Atlantic Ocean.

Following SVB’s collapse, tech companies in Britain have had their accounts frozen, meaning they have no access to their money and are unable to pay staff.

Major firms such as online retail giant Shopify and Pinterest are also directly affected by the failure.

UK business leaders have raised concerns that the failure could create further problems in Britain, warning they face going bust if they cannot get their funds from the bank – which could cause thousands of job losses.

There are also fears the crash of the bank will spread around the world, with bases in countries including China, India and across Europe.

These knock-on effects may have even affected us. Starting Friday night, without any reason being provided or communication from our account manager, Castalia was suddenly locked out of one of our regular book production sites for the first time in nine years. This will have no effect on the Library, but could affect our traditional book publishing business. Fortunately, we already have an alternative lined up, although I very much doubt that it will be necessary.

UPDATE: Yellen: No federal bailout for collapsed Silicon Valley Bank

UPDATE: Treasury: New York State regulators are shuttering Signature Bank – a major New York bank – adding that all depositors both at Signature Bank, and also the now insolvent Silicon Valley Bank, will have access to their money on Monday.

DISCUSS ON SG