WORLD WORLDWIDE ITALY News Journal Update - (en) Italy, FDCA, Il Cantiere n. 17 - The last financial crisis and the criminals of all time - Bruno Lima Rocha* (ca, de, it, pt, tr)[machine translation]

 The bankruptcy of three banks in the USA after carrying out risky maneuvers and

management reveals a structural feature. As of March 2023, Silicon Valley Bank
(SVB, headquartered in Silicon Valley itself and also in the integrative
healthcare sector), Signature Bank ("specialist" in law firm dividends,
headquartered in New York), and First Republic Bank (headquartered in San
Francisco Bay, Northern California) were supported by federal intervention.
Directly the first two and outsourced the third. They would be "average banks",
as their default risk should not generate a cascade due to the "low volume of
derivatives". That is, since there is little speculation on a global scale, its
bankruptcy should concern "only" small account holders and habitual custodians.
None of them are "too big to fail".
None of this is anything new, even if it has its own particularity. This time we
are not talking about the biggest "investment" banks, such as Bear Sterns
(incorporated by JP Morgan Chase in 2008) or the best known case, Lehman
Brothers, when it failed leaving a loss of more than $3.9 billion.
Of the three failures this March, the one that commands the most attention is the
SVB. One of the peculiarities of the collapse of Silicon Valley Bank (the big
lender of tech start-ups, both in the US and in England) was that its collapse
came after massive layoffs in so-called Big Tech. The leading companies of
platform capitalism (the ones that prevail in the West) have seen their profit
margins drop in the post-pandemic period and after the corporate tyranny of Elon
Musk on Twitter (80% of the workforce, including more experienced engineers and
programmers) , have gone down the path of outsourcing work.
Big Tech conglomerates have always recruited engineers in India and partly in
Pakistan. With the privatization of telecommunications companies in the early
1990s and the end of the Cold War, what the English-speaking world saw was the
outright outsourcing of entire telemarketing and call center sessions. Two
decades after this moment, today the "Silicon Valley giants" are outsourcing
systems development units and network maintenance. As always in the sickest
capitalism, the profit margin squeezes the workforce and mercilessly fires it in
the fourth sector. * At the same time, mass layoffs accompany a new "business"
front, such as the internet of things, heavy investments in Artificial
Intelligence (AI), and the post-pandemic goal of creating metaverses or parallel
realities with commercial exploitation . Everything suggests that the digital
sub-complex within the US Military Industrial Complex is operating above the
classic controls that are carried out through contracts and loans that correspond
to 38% of the Western power's budget. Speculative gambling and financial leverage
without a system of collateral advances through another mechanism, that of
cryptocurrencies. As a financial asset, a private Big Tech "investing in
cryptocurrencies" is like selling, buying, leasing and then mortgaging land on
Mars (since South African apartheid heir Elon Musk appears to be landing on the
moon soon).
Returning to the SVB, its bankruptcy is once again the result of financial
pressure. The "farce with the name of crisis" of the real estate bubble of 2007
and 2008 (in the USA) and of the European Union in the following years, is a
direct consequence of the deregulation of the US real estate market and the
permissiveness of the European banking market to sell guarantees (and toxic
assets) in retail banks. Before that, for more than ten years, the legal
framework that protected borrowers and mortgage holders and prevented developers
from entering the risk system of investment funds had been dismantled. The entire
trading system was known to the controllers of venture funds. A spiral of toxic
financial businesses, which resold mortgaged homes at five times their value and
were acquired by "buyers" with debts more than ten times their household capacity
and income.
Speaking directly. When there is perfect information, it is unlikely that we will
have uncontrolled behavior. Meaning what. There is nothing imponderable if
borrowers are provided with perfect information. In this way, the "crisis" of
2007 and 2008 was also the result of criminal behavior, as indeed is the very
nature of speculation and capitalism in its phase of financial accumulation. With
SVB it was pretty much the same. Why?

The "crisis" narrative and the usual hoaxers
The official "narrative" states that the Fed's (US central bank) interest rate
hike has opened a credit hole and generated a "default" in some operations. The
bank would have many cards with still low interest and there would have been a
race for new bonds, already with the increase in the discount rate. It's not just
that.
US President Joe Biden intervened in the management of the two banks, placing
them under state control. The San Francisco bank would have deposits guaranteed
by JP Morgan Chase. And that's still part of the explanation. This was the trick.
The law to avoid new provoked crises was passed in 2010, and defined a "stress
test" for any institution with deposits or operations of 50 billion dollars. In
2018, the speculative loan sharking lobby bought 50 (mostly Republican) senators
and also had the backing of the "casino" manager and then-president, Donald
Trump. Under the new law, only institutions larger than $250 billion would be
subject to a "stress test." In this way the "regional banks" would remain outside
the regulation. The same thing happened between 1987 and 1992 when Senator
Charles Keating and 4 others were part of the lobby task force to manage savings
and loans on a regional scale. Now the hack must have blasted exposure short
trades without insurance, deposit coverage or redemption and also abused
leverage. This, coupled with the massive layoffs of Big Tech, led to the collapse
and loss of credibility.
What will capitalism "save" in its financial phase? The required deposits of
other banks (FDIC) and the authority of the executive branch (Casa Bramca and
Secretary of the Treasury) intervening in the assets of the "casino" owners and
investment managers.
Even more the same thing to the nth degree. No such crisis happens without bad
faith and acts of criminal irresponsibility. Those who emptied the SVB's deposits
were its own controllers before announcing bankruptcy. Could the fraudulent
bankruptcy have been avoided? YES. Also in this case.
A curious fact is that in addition to being almost always the same scam, even the
scammers (natural persons) are the same. First, the recognition of similar
institutes. Forbes magazine named SVB one of the best and largest financial
institutions in the United States in 2023. It also named Silicon Valley Bank in
its list of "Financial All-Stars". Any similarity to Lehamn Brothers' highest
rating by all major "risk analysis" firms three weeks before its 2008 bankruptcy
is no coincidence.
By the way, the deception is the same. The head of financial asset securitization
at SVB (since 2007), Joseph Gentile, is a former Lehman Brothers (fixed income
manager) and previously worked at Bank of America as director of global corporate
and investment banking. It's not even a revolving door theory (since the
executive doesn't even change jobs) but rather a seat swap, switching similar
positions at two of three failed institutions, plus another one that merged with
the mega brokerage (fully involved in 2008 fraud) Merrill Lynch.
I repeat and insist. This is not an "isolated case", but a systemic and
structural one. Furthermore, there is no randomness when decision makers have
perfect information and monitor the behavior of other agents. Financial
speculative activity puts the economic balance in society at risk, and at the
same time accumulates profits through the state apparatus. Ultimately, the
capitalist state (generally through the executive branch) is the ultimate payer
to cover the financial crimes of those who directly affect the exercise of
political power itself.
The "Western" companies and their areas of influence are hostage - at least most
- of the financial "casino" and of the loan sharks who control the betting
operators. Breaking with this direct dominance of speculators is an urgent and
necessary task.
1) advanced service sector
*) The Portuguese version of the article is available on the Strategy and
Analysis blog
estrategiaeanaliseblog.com/2023/03/14/amais-nova-crise-financeira-e-os-criminosos-de-sempre
edited by journalist and political scientist Bruno Lima Rocha and makes use of
the collaboration of colleagues from Brazil and Latin America. The goal is to act
as a trench and banner of libertarian thought, acting in defense of the
principles of direct democracy, full participation, economic self-management,
political federalism, equality and social justice, based on full solidarity and
on collectivism.

http://alternativalibertaria.fdca.it/wpAL/blog/2023/05/03/il-cantiere-di-febbraio-2023-2/
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