If we needed any further proof that the financial system that we are in is totally corrupt and immoral we certainly got that in spades in the last few days. The sad part is that the way the news is SPUN it doesn’t sound as bad as it actually is.
Let’s start with Silicon Valley Bank where the Fed and Treasury have made it clear that any favored banks will be “fully covered” regardless of FDIC limits and many others will NOT. This is picking winners and losers and is likely hastening the runs on smaller banks as we speak. So much for capitalism!
The thing that really gets me about the SVB bailout is WHO got the money.
We saw that in 2008 $16 Trillion was handed out to banks- globally. This time, the Fed and other central banks are “providing UNLIMITED LIQUIDITY to banks”. Sounds like Buzz Lightyear to me- From here” to infinity and beyond”!
In this case, just a few who have benefitted from mine and YOUR tax dollars and debt piles:
Andon Health (Chinese Co- medical Devices) said in a filing to the Shenzen Stock Exchange that all deposits at SVB “can be used in full and have not suffered any losses”. Zai Lab (Chinese pharma) had $23 Million in deposits that YOU backstopped. You also helped bail out BeiGene (large Chinese pharma company) to the tune of $175 MILLION.
How does that feel as Ohio can’t get help, people are having SNAP (food) benefits reduced and billions are going to Ukraine?
In addition to the changing of bank rules- to bail out billionaires AGAIN- there is a worse situation developing in many areas.
There was a lot of focus put on the LME (London Metals Exchange) last year when nickel surged higher and since many billionaires (China again) were about to be wiped out because they were short nickel the trades were actually CANCELLED. There are people who stood to become new at least multi-millionaires and possibly billionaires- while wiping out current billionaires in the process. I guess TRADING PLACES only happens in the movies!
Those “in charge” are making no bones about it- there are two sets of rules and they are making and changing them to benefit the few and keep the many down.
In the latest act of chicanery, the Swiss National Bank has made a deal that allows UBS to buy out Credit Suisse at fire sale prices. This, however, is not the biggest problem. The biggest problem is that in a corporate structure the most secure assets get treated the best.
#1 Secured Bonds, #2 Non-secured bonds, #3 Convertible Bonds, #4 Preferred Bonds, #5 Common Shares.
In this bankruptcy (call it what it is!) , as in all cases the common shareholder gets wiped out first and it keeps going until, at some point, the secured bondholders get shares in a new unencumbered company. If it survives at all. This is over-simplified but you get the picture. In Europe, they issued what they called AT-1 bonds after the last financial crisis to move the losses from governments to investors. The AT-1 bonds, in the Credit Suisse case, are being COMPLETELY WIPED OUT ($16 BILLION) while common shareholders are getting a bailout of $3 Billion. This is not much (0.76 per share or 1 share of UBS for 22.48 shares of Credit Suisse) but those most likely to be bailed out are obviously the largest shareholders like Saudi National Commercial Bank, Qatar Investment Authority, Norges Bank, Blackrock and many others.
Basically, they have changed the laws with no oversight, no votes and no protections for ordinary citizens to, in my opinion, keep the ponzi going on a little longer until they spring their new system on us in 2025.
(Mandatory CBDCs by 2025- Bank of International Settlements)
Do you really trust this?
I don’t! I’ll take real- hard assets that don’t count on promises from those who have shown time after time that there is a club that calls the shots and gets all the wins- regardless of how it SHOULD have went- and you and I are NOT IN IT!
Be Prepared!
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