Is First Republic Next?

Is this thing all about regional banks becoming insolvent due to unrealized losses? And are the big-five too-big-to-fail-banks relatively secure? 

This comes on the heels of crypto exchanges and companies that previously went belly up. Three big boys are still strong: Binance, Coinbase and Galaxy Digital. That contrasts with the likes of FTX, Blockfi, Three Arrows, Voyageur Digital and Celsius that either went or are in the process of likely going under. Meanwhile, over at Gemini, changes are coming to its business relationships while DCG is cutting jobs. 

That brings us to Silvergate, a Silicon Valley Bank subsidiary. When it went down, it likely had a cascading effect on SVB. SVB is purportedly the second-biggest American bank bankruptcy in history. And to add insult to injury for depositors, Yellin said that a bailout is out of the question. The Biden Administration fears a cascading effect. No kidding. But what about the elephant in the room: a bail in by depositors, under Dodd-Frank? À suivre.

SVB had bank runs before going under and First Republic is subject to considerable ATM withdrawls since yesterday. Not good. Hopefully, FR won't be the next victim.

Then there's the canary in the coalmine but what exactly is it chirping: some stocks dropped on Friday: Charles Schwab, Wells Fargo and the aforementioned First Republic -- while hedge funds are now shorting, among other companies, KeyCorp, with its biggest quarterly loss in its history, Signature, Zions and Truist. That's the trouble with bank panics, perception, not reality, very quickly becomes nine-tenths of the law. 

So, the FOMC is bound to have a very interesting private and closed meeting tomorrow morning. Watch them sweat, as they should.

UPDATE: Two MSN.com and MarketWatch.com articles that are a must-read.

10 banks that may face trouble in the wake of the SVB Financial Group debacle (msn.com)

20 banks that are sitting on huge potential securities losses—as was SVB - MarketWatch

2ND UPDATE: Reports say that Signature Bank just went down and a bailout is coming, but it won't technically be a bailout. Right.

3RD UPDATE: Federal Reserve and JPMorgan come to First Republic's rescue to boost liquidity.

Meanwhile, rumours are swirling around PacWest Bancorp.

4TH UPDATE: First Republic shares are still sinking even though liquidity was further injected. Looks like a bank crisis of confidence. Definitely not good.

China: Inquiry, What Inquiry?

The Trudeau Liberals are perfectly OK with Chinese election interference both in 2019 and 2021. Makes you wonder if they actually encouraged it. The CCP wanted the Trudeau Liberals re-elected. You know, this fool of a Prime Minister as an enthusiastic dupe of a totalitarian regime. Par for the course, given that this PM is on his best day, a certifiable idiot. But that gang of fawning dumbasses is far worse. They're enthusiastically ready to put our national security at risk, no questions asked. But I digress.

So...you may ask yourself why our KnumbskullTM refuses to hold a public inquiry. Simple. The Trudeau Liberals are so arrogant and self-serving that they actually believe that Martin was wrong to look into Sponsorship. That's why this poor excuse for a PM will never, ever, agree to an inquiry. And "unreasonably", people will conclude that this government has so much to hide that they already know that an inquiry will undoubtedly be politically fatal. So...no inquiry but eventually an election, and down will go the Liberals for at least a decade. Most people have finally had enough.

Marc Garneau Hangs It Up.

Marc is leaving politics. He's resigned his seat in the Commons. I can't let him go without thanking him for his service to Canada in so many ways: in the Navy, in our space program and, of course, in politics. 

Marc is one of the nicest people I ever met in politics. With a record like his and his quite obvious decency and sense of integrity, it was no contest during my Liberal incarnation to support him for leader. For me, he's the Stanfield of our age.

I know whatever may lie ahead for Marc, he will still keep his hand in at least indirectly to continue serving his fellow man and to make Canada an even better place than when he found it. 

All the best going forward and God's speed for what lies ahead.

Trudeau WILL Resign.

This Chinese election interference thing is well on its way to taking on a life of its own. Like most scandals, it's not so much about which Canadian politicians, Liberal or Conservative, who were prepared to enthusiastically do China's bidding, it's far more about who got money, in what quantities, and for what purpose. And on this front, the usual suspects with the last name of Trudeau are likely exceedingly vulnerable.

So, this will hit this Prime Minister where he lives: the guy is no genius, but he's sentient enough to recognize major political trouble when it's coming so quite naturally, he doesn't want an inquiry or commission. Think back to Sponsorship and how that PC and Liberal largesse killed the Liberals for almost a decade -- this is definitely reminiscent of that.

As in so much that amounts to a political scandal, the fun part will be following the money. One suspects that many a class in Ottawa is already out for Trudeau's hide, deeming him, at the very least, as being a serious national security risk. 

As a result, expect this PM to get the George Santos treatment: first a trickle, then a brook, followed by a river, a sea and ultimately coming face with ocean currents. Liberals have to ask themselves at precisely what point does this guy become expendable? The short answer is, of course, before they do. 

That means that when push inevitably comes to shove, they will have no other realistic choice but to JettisonJustinTM. For his part, Trudeau will want to save himself from utter humiliation, so that's when he'll finally resign.

Can't happen soon enough for me.

Kellyanne & George Are Divorcing.

My God, the end of any marriage is always sad and somewhat tragic, but this was predictable and, dare I say it, long overdue. I mean, why they stayed together this long given their irreconcilable differences, political that is, is way beyond me. All that misery, suffering in silence and general unhappiness. What a waste of time, given our collective precious short period on Earth.

So, I wish the best for each of them. I hope they find happiness eventually. But this really needed to be done and finally will be. Generally speaking, a Chinese water torture of a marriage is never fun.

On The Phone With An American Conservative.

I spoke with an American Conservative on Thursday. We were discussing the French fact in North America and how Quebec stuck with the British after 1759 when they were promised they could keep their religion and language. Otherwise, they might have joined the Revolutionary War down south, which was less than two decades away. At some point, I mentioned how the British had burned the White House, not to mention occupied Congress. He said he hoped that would happen again. I replied, I hope not.

And then I went into my lecture on the greatness of the United States of America, and more importantly, what made that country great: not American power, economic or military, not prestige. What made and makes today the United States great is the American experience, and who Americans are.

Just think back to how the rest of the world was so grateful for the Yanks in WWI. When Americans finally came in, it was decisive enough to ensure that we won that war. Then there's what happened when America joined WWII, right after Pearl Harbor. That quite literally saved Western democracy and rid the Earth of the Hitler demon seed and his evil worshippers.

SO...what I tell Americans until I'm blue in the face is that your country can continue to be great because of who the average American is and what he or she stands for in their heart -- not their mind. Put another way, you can be an American, first, last and always like McCain, or you can ignore your better angels and run on tribalism by giving way to your political mind and its inherent biases. 

We're at an inflection point where the United States must take a fork in the road to achieve its true destiny on Earth. Only your average American can make that choice, both individually and collectively. America can continue to do God's work in Ukraine (even though Ukraine is a very flawed nation) or the country can go the other way. If the United States sticks to its higher angels, America will once again save the free world in the next WW, which isn't that far off. Now, if the country collectively decides to continue on its current domestic political trajectory, where the other side is the blood enemy, to which no quarter must ever be given, then the fuse will be lit for the inevitable: a second Civil War.

Americans have a choice. I have no doubt which path they will choose, when push comes to shove. Without the United States of America, totalitarianism would quite literally control this planet. It would be hell on Earth, no doubt about that. So, as every American president says: may God bless the United States and protect her troops.

Chinese Election Interference.

This Prime Minister has painted himself in a corner. The TRUDEAU Liberals have boxed themselves in: most of the PRC's favourite candidates were Liberals and money flowed freely to a number of Liberal causes.

They have to stonewall -- they quite literally have no other choice -- if they don't and it all comes out, for starters, they lose power for at least a generation. And then there's the other thing: who and how many people get convicted and end up doing a stretch in the big house?

So...kiss off an inquiry. Never going to happen.