Chairman Fed & the crypto put

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Let’s be clear what this is. It’s a bailout of the entire corrupt banking system– up to $17T in essence. US finance capital burned through over 10 years of free money (unlimited 0% Fed loans) and there is NOTHING to show for it. That’s what so many big bank balance sheets reveal when it’s tax season.

Washington, D.C., U.S., June 22, 2022. REUTERS/Elizabeth Frantz

The money all ended-up offshore (much through crypto) and into Swiss bank accounts, or into the Ukraine where it aids neo-Nazis at war, ISIS, etc. All this is to be paid for by increased exploitation of all wage workers & those who pay taxes– unless we organize under an international socialist banner and establish an international socialist banking system run by democratically-elected workers. It’s not a pipe dream, it’s economic & social science in revolutionary action.

Most people still fear socialism, but they can’t rationally say why? Money is so emotional & class is so fundamental. Anyway, the ‘Fed put’ is in effect for crypto (hence the latest bitcoin bounce) and all it’s financial partners. Working people must put an end to the Fed, otherwise we will be paying for crypto for the rest of our lives. The Federal Reserve & the bond market is the real power behind phony Democrat-Republican politics.

Update: Wed 15 Mar 2023 04:49 PM CDT

The US Federal Reserve’s Bank Term Finance Program will make US taxpayer-backed loans available to FDIC-banks. “These assets will be valued at par,” means these devalued treasury bonds all the banks are holding will be re-inflated to face value as collateral, instead of current market price. Convenient, huh? The Fed tells us these are one-year loans, which is a blatant lie, since it’s likely every bankrupt lender that gets a BTFP bailout will default. The “Powell put.”

FYI: As interest rates go up, bond prices go down– they move inversely. That means in 2022 when the Fed started raising interest rates above zero for the first time in ten years, it was predicable that bond yields would slide. Such rampant short-sighted greed & outright criminality (FTX, etc) has run the global banking system into the ground– again. The question of questions is: Are the working people & youth going to pay for ANOTHER bailout to the parasitic ruling elite?

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Silicon Valley Bank collapses, crypto under intense price pressure

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Two days ago Silvergate Bank was the largest US bank failure since 2008. That has now been surpassed by the shutdown of what was earlier-in-the-week the 16th-largest US bank, Silicon Valley Bank.

Sam Bankman-Fried on Silvergate’s website: “Life as a crypto firm can be divided up into before Silvergate and after Silvergate. It’s hard to overstate how much it revolutionized banking for blockchain companies.”

Satoshi Nakamoto’s bitcoin was put online in 2009, and still today no one knows who this guy is, or where all that Mt Gox bitcoin went. But today there are now two distinct eras in the history of post-Mt Gox crypto– FTX and post-FTX. Silvergate was the key crypto bank for the entire US industry and it just died Wednesday evening, March 8, 2023. It died from a malignant case of FTX.

Now Silicon Valley Bank has been shuttered by California state regulators due to mass discrepancies between what they can prove they have, and what they claim they have, etc. Stablecoin issuer Circle said late Friday that $3.3 billion in cash deposits remained at Silicon Valley Bank. According to Circle, this sum represents ~8% of the total reserves ($40 billion) backing Circle’s stablecoin USDC.

Stablecoins attempt to peg their market value to fiat currency 1:1. This means one US dollar (Euro, etc) ALWAYS equals one stablecoin. Tether is the top stablecoin, while Circle’s USDC is the second-largest stablecoin on the market. Stablecoins are now considered to be fundamental elements of the crypto ecosystem.

But the validity of stablecoins has been seriously called into question, especially since the Terra/Luna collapse in May 2022. Binance is also a big stablecoin issuer, and they have been forced to admit that their BUSD token hasn’t always maintained its 1:1 peg, like it’s supposed to be for people to trust. Where does the money go?

The Federal Reserve has sought to stifle worker wage increase demands by inducing a recession through its policy of raising interest rates. Note that this only increases inflation, which the ruling class is purportedly fighting. The Fed’s fight against “inflation” is actually a corporate-mandated attack on workers’ wages. It’s another example of Orwellian doublespeak in the fake media.

Unfortunately for the Federal Reserve Bank, this raising of interest rates has collapsed the crypto industry which relies on free money. Venture capitalists, hedge funds, blank check companies, and FDIC-banks have thrown trillions dollars into crypto which is now going bankrupt everywhere because it is expensive, wasteful & useless.

Binance CEO Changpeng Zhao, a Canadian citizen living somewhere in the far East, has been avoiding & deflecting accusations contained in investigative reports from Forbes and The Wall Street Journal recently, claiming that Binance’s math is fuzzy and their books don’t balance. CZ’s Twitter responses were more rhetoric about FUD, fake media attacks, etc, providing no evidence to contradict investigator claims.

It’s comparable to when Seymour Hersh published his Nord Stream bombshell, and no one in the US political establishment (or fake media) could mount a serious response to refute his claims. Eventually, most thinking people took that to mean that Seymour Hersh was correct and that the terrorist US government is lying again.

Somehow, all these realities, facts & nuances get lost in translation through the filters of fake news. Big crypto is secretly negotiating their next bailout with US officials. That is how the White House has been “monitoring the situation” in crypto since the Silvergate Bank collapse.

Crypto is one big hustle & dodge that is running out of time & money. Bitcoin is now under intense pressure, as the latest CoinDesk headlines reads, “Bitcoin Regains $20K After $200M in Crypto Liquidations; Some Traders signaling strength for [Circle’s] USD Coin, citing its treasury backing in U.S.-issued bonds.”

These are clear signals to elite Traders to bet that US taxpayers will pay for any crypto-connected bank bailouts, etc. As far as market manipulators go, crypto whale Elon Musk is having to burn through a lot of bitcoin these days to keep its price inflated at $20K. Musk is running out of Tesla stock to sell and companies to destroy. If Elon Musk doesn’t get a big bailout soon, the richest person in the world will go bankrupt.

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Silvergate Bank now defunct only weeks after getting $4.3B bailout

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Silvergate Bank announced Wednesday evening (Mar 8) that it has collapsed, voluntarily entering bankruptcy liquidation after market concerns over its inability to file required tax documents last week. It will not survive. This is the biggest US bank failure since 2008-09. This is not even two months after it was reported that Silvergate Bank’s Q4 tax filings revealed a $4.3 billion bailout loan from the Federal Home Loans Bank (FHLB), a quasi-private consortium of banks & bondholders that are backed by US Congress– meaning the US taxpayers.

Silvergate was the biggest crypto-friendly bank in the US. Founded in 1988, Silvergate Bank got into crypto in 2014, and out of it in 2023. For as much as libertarian crypto fanatics scream about ‘de-fi’ & ‘independence from tradition finance’, these zealots are learning (the hard way) that even bitcoin can’t survive without access to banking services.

Lots of people, from venture capitalists to young kids, have put their money into crypto, but it’s much harder to get their money out. That’s the most valuable service Silvergate Bank provided to it’s crypto customers & clients, until it couldn’t anymore. Silvergate even ran their own crypto exchange (SEN) which has now been turned-off forever.

It’s been known since mid-January that Signature Bank received an $11.3 billion loan from the FHLB. Signature is now facing US regulator scrutiny as it inherits the mantle of crypto industry leader in banking. Signature’s stock is down 10% or so with the news of Silvergate’s collapse. Anyone who has been following developments in crypto knows, there’s trouble in the entire crypto banking sector, with banks facing massive liquidity issues as customers rush to cash out & put their money somewhere safer.

How is US Congress or the SEC going to help with all this? The Fed is raising interest rates, and crypto simply can’t afford that. Crypto needs free money from the Fed & venture capitalists for ‘innovative’ start-ups, and then taxpayer bailouts for when they crash.

Ally Financial bank (founded 1919, HQ Detroit) received $7.2 billion from the FHLB in Q4 2022, so they can been seen as the next disaster after Signature Bank. Provident Bancorp received $80 million from the FHLB in Q4 2022. These were massive (& secret) bailouts to crypto-friendly banks that didn’t help for more than a few months. Now the entire crypto industry needs another bailout to prevent bitcoin from free-falling.

Bitcoin & tether (‘stable coin’) are the top name brands in crypto. Their price must be maintained with massive injections of liquidity to re-inflate the bubble, or else it risks total collapse. This is the existential crisis the crypto industry (& capitalism) is facing now. Since the traditional financial sector is deeply implicated in the crypto mess, none of these pertinent facts are being reported in the corporate media.

Instead we get misinformation on the subjective price of bitcoin, as there is much stupidity posing as intellectualism. For example, Coindesk, the self-proclaimed industry leader in crypto reporting, just published a piece titled, “Price, Not Intrinsic Value, Is the True Measure of Bitcoin’s Success”, a fairly typical example of their muddle-headed libertarian thinking. It pontificates:

“My question is, what is intrinsic value? There is no such thing – value has and will always be subjective based on an individual’s need at the time. Demand drives everything and always has. The idea of intrinsic value is a fool’s errand. The question of whether a Rolls Royce is worth more than a bottle of water is subjective based on where you are and what you need. The demand for water in the desert is certainly going to be higher than that of a Rolls Royce. I exaggerate to make my point, but demand drives value. That’s unchanging over time.”

To clarify & correct the nonsense you just read in the paragraph above, the question of which is worth more, a Rolls Royce or a bottle of water, is NOT subjective. The Rolls is ALWAYS worth MUCH more than the bottle of water, no matter the conditions, because MUCH MORE human labor goes into making a luxury car. In a desert the Rolls can provide shade & shelter, If the RR is gassed-up, it can drive you out of the desert. That has much more value than a bottle of water, Only fools & liars would argue otherwise. There is nothing subjective about this, and there hasn’t been since Karl Marx explained it in Capital (1867).

Of course, libertarians don’t read Marx, they are only concerned with making money for themselves. So they make up stupid stuff, anything to justify their ends. Crypto needs another massive US taxpayer bailout, and it’s getting harder to hide them. That’s the panic in the crypto markets right now, the elephant in the room that no one is mentioning in the fake media.

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The people aren’t fooled

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Yesterday, The New York Times published its account on who bombed the Nord Stream pipelines last September. Recall that at first they blamed Putin.  A summary on Yahoo! titled, “US intelligence sees ‘pro-Ukraine group’ behind Nord Stream sabotage: report” received many comments from readers. Here is my Top 10 list from that piece:

1) I’ll take “Things the CIA says to cover their tracks” for $100, Alex.
2) I don’t know who did it, but they found Joe Biden’s passport a few meters from the blast site.
3) It was the Palestinian Navy.
4) It was Chinese attack balloons.
5) Per the CIA, it wasn’t Joe Biden. Of course, if he did it, he wouldn’t remember ordering it.
6) Gaslight much? It’s already been exposed by a real journalist that the US did it.
7) The fake news is strong with this one.
8) I stopped reading after, “US officials…”
9) America has a propaganda epidemic.
10) US intelligence must have the best magic mushrooms.

Bonus comment:

11) I’m running out of conspiracy theories to mock– they’re all coming true!!

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Marilyn Manson vs. the abusive MeToo campaign

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Who anointed the MeToo campaign as the morality police, judge, jury & executioner? Whether you like Marilyn Manson or not isn’t the issue. The guy worked hard to make millions of fans, and his relationships with those people has been poisoned by cynical politics & a dirty-tricks campaign. I know fans of Marilyn Manson (men & women) who say his music helped them get through a tough period in their lives, etc. Who is MeToo to judge all this with absolute authority?

In the case of Marilyn Mansion & Ashley Morgan Smithline, it’s Evan Rachel Wood who is the abuser. Evan Rachel Wood is a perjurer who (among other criminal activities) submitted a fraudulent letter from the FBI as evidence under oath in court. Commenters online are now calling Evan Rachel Wood “Amber Heard 2.0”, which is accurate. Evan Rachel Wood has the full backing of the CIA Democrats as Marilyn Manson has been the victim of a coordinated MeToo-style hit job because he’s an easy target.

The MeToo campaign and its fanatic adherents have no compassion & understanding for a man’s career ruined with lies. Just as they have no compassion for women who are teaching in classrooms with COVID, or female healthcare workers, retail employees, etc.

The MeToo campaign supports the criminal US/NATO-led proxy war in the Ukraine against Russia, nevermind all the women & children who have become casualties. The MeToo campaign still supports sanctions on Syria, even after a series of devastating earthquakes hit the region. Women & children buried under rubble doesn’t register on the MeToo campaign’s radar.

MeToo doesn’t care one whit about women autoworkers who have been unfairly fired for reporting sexual harassment & wage theft to the UAW bureaucracy. When a woman working on the line in an Ohio auto plant had a miscarriage last year, because she was doing work she shouldn’t have been doing, the UAW helped deny her insurance claim. And so on, etc…

MeToo doesn’t care about working class women, it is only concerned with gaining privileges for a thin layer of women in the upper-middle class. That’s the focus of all the identity politics campaigns (Black Lives Matter, LGBTQ+, etc) which come directly from the CIA Democrats. This cynical attempt to divide workers & the poor only strengthens the hand of the far right.

Ashley Morgan Smithline has declared that Evan Rachel Wood manipulated & abused her. So why wouldn’t you believe her? MeToo (who claims women should ALWAYS be believed) is silent on this question.

The MeToo campaign, like capitalism, is exploitative & abusive to its core. The only way to end this nefarious, dirty-tricks MeToo campaign is by organized mass resistance to the capitalist system itself.

Music is such an important form of communication, perhaps the most influential as its primality touches & stirs our deepest emotions. The question of questions becomes: Who controls the music? Consider all music of the past in its historical materialist context, with a philosophical understanding of dialectics in revolution. These days, if the music doesn’t also stimulate the intellect, it’s crap.

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Seymour Hersh reports Joe Biden took out Nord Stream pipelines

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Seymour Hersh is an investigative journalist of the highest caliber. He is one of my inspirations along with the writers of the WSWS. When you read “discredited journalist” next to his name in the fake media, that refers to the right-wing attack campaign from the CIA Democrats to silence all leftists.

(Photo by Bettmann Archive/Getty Images)

In short, Hersh reports that Joe Biden blew up the Nord Stream pipelines last September, with help from US Navy/CIA deep sea divers who planted C4 charges on the pipelines which were remotely activated by a sound buoy dropped later by US military/CIA aircraft. This allowed Joe Biden to pick his time to execute this act of international terrorism.

This is now a January 6th moment for the Democrats, as there is a noticeable silence here in the US corporate media– on all sides. This is an international war crime by US President Joe Biden and it hardly gets a mention next to “spy balloons” and the Super Bowl.

The CIA Democrats have no plausible alternative to offer on who done it, only attacks on Seymour Hersh. This CIA playbook is run on all leftists through political & economic channels. This big lie technique activates all Nazis to join in the savagery, as they will take delight in trying to discredit this heroic work of investigative journalism.

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Wanted: bassists

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If you are a bass player and you don’t sing or help with songwriting, then you need to shut up & play bass. If you want to handle management, booking duties, etc, that’s fine– but since you don’t write songs, you are NOT qualified to be the bandleader and therefore you are NOT allowed to dictate every creative decision by leveraging your position of advantage. That fucks up a band every time. There are a million guitar players out there & a zillion singers too, with a more limited pool of good drummers, but quality bass players are very hard to find. Many of the best bassists let this instrumental scarcity go to their heads, by taking the attitude that if they don’t get their way, they’ll simply take their bass & go home– leaving the band stranded. One of the biggest problems in rock music today is there aren’t enough bassists who are team players.

I’ve learned over the years that many of the top bassists do corporate gigs for a living, including tribute acts & such that play six nights a week and twice on Sundays. Any left-handed bassist is wanted for Beatles tribute bands, etc. That’s where the steady money is, as compared to forming a band and trying to be something new. My biggest criticism of professional bass players is that they are too rigid as a rule, which limits them. You can’t be a great band without a solid bass player, and you can’t be a serious bassist if you don’t work well with others.

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Bankrupt crypto bank Silvergate gets $4.3B US taxpayer bailout

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It was reported last week that Silvergate Bank, the bankrupt crypto lender with FDIC affiliation (a rarity in the industry), received a $4.3B bailout from the San Francisco-based Federal Home Loan Bank, following the collapse of crypto exchange FTX, according to the firm’s Q4, 2022 filings.

US taxpayers, without their consent, have just bailed out this bankrupt crypto bank– and it barely made the news. Silvergate was the first, of what is to be many bailouts for crypto. As much as the crypto community howls about “de-fi, privacy & freedom”; it needs a bailout even more. Industry players have been angling for this since the FTX collapse.

To review, Silvergate provided banking services to crypto exchanges & investors, with ~90% of its deposits from crypto. Silvergate’s 10 biggest depositors, include bankrupt firms such as: Coinbase, Paxos, Crypto.com, Gemini, Kraken, Bitstamp & Circle. As a result of the FTX collapse in November, Silvergate was bankrupt, as it held worthless deposits for both FTX & Alameda Research.

Market manipulation is what is driving the current bitcoin bounce. This, along with venture capital, is what is sustaining the crypto industry on life support. Market manipulation through wash trading, and other pump & dump tactics are the rule in crypto. Wash trading is when a firm trades with itself to artificially boost prices, to give the illusion of liquidity & generate interest from investors. A recent paper from the National Bureau of Economic Research found that wash trades accounted for 50-70% of all crypto transactions, suggesting most trades on these platforms are fraudulent.

For example: bitcoin’s price had been languishing at ~$17K for weeks, but as of last week it has slowly been going up. Bitcoin currently sits at over $21K, and no one can explain why, as investors are leaving the industry in droves, lay-offs are everywhere, and hardly a day goes by without some news of another crypto firm, exchange, bank, etc, having liquidity issues. So where is all this money coming from? As it turns out, it’s now coming from the taxpayers.

Update: Sat 21 Jan 2023 5:50 AM CST

Silvergate Bank ($4.3B), Signature Bank ($11.3B), Provident Bancorp ($80M), and Ally Financial ($7.2B) have been bailed out by the Federal Home Loan Banks program, which is ostensibly meant to fund home loans. This is surely the tip of the iceberg as there are many others we don’t know about– yet. US taxpayers support FHLB financing, as their bonds are implicitly backed by Congress, which would not allow a default, hence their AAA rating from Moody. Should one of these crypto-friendly banks fail, FDIC accounts would be second in line, after the FHLB, in claims resolution. Banks always get bailed out first. Bloggers are the only ones reporting this story, as the corporate media is maintaining silence on this massive & secret crypto bailout scheme.

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Is Sam Bankman-Fried now an agent of US Intelligence?

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The conspiracy theory that SBF is now an agent of US intelligence is supported by the facts and his actions since pleading “not guilty” in a Manhattan courtroom. The DOJ normally takes no prisoners in its prosecutions, unless a secret deal has been reached.

From a historical perspective, the DOJ investigations of Donald Trump have been as restrained a legal action as you will ever see, because he’s so connected to right-wing militias (which intelligence agencies view as an asset), but the DOJ still went after him to some extent for his malfeasance. SBF has the same criminal credentials, but with even more value to US intelligence, so he’s been treated with kid gloves by the DOJ & the corporate media because they’re all tied-in to the CIA Democrats.

The dictatorship of finance capital can be clearly observed in crypto. SBF & Co. have surely made secret deals, as they are being integrated into US intelligence to help move dark money to Ukraine, etc. Thus, none of the defrauded customers will see a penny of the $5B in assets the US government has claimed to have recovered (so far) in the FTX fallout.

Republicans have now setup a new committee to bail out this distressed “asset class” known as crypto, and as a result of this activity, bitcoin has moved up by ~$2K in the past few days.

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Roger Goodell cancels Bill-Bengals MNF game: A true Hollywood story

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After Roger Goodell conferred with the top Vegas bookies & ESPN fantasy leagues for three difficult days, it was decided by the owners of football to be in their best interest to cancel the Bills-Bengals game. According to NFL records & the Black Hand, it never happened.

The NFL had cancel this game, but they REALLY didn’t want to. League officials & executives needed to confer behind-the-scenes with bookmakers & the biggest fantasy leagues for council on what to do, which is why it took three long days for the NFL to make it’s final decision, when it really had no choice from the start.

The fantasy leagues are a particularly sticky situation, because those are hardcore football fans who invested 4+ months in drafting, building & cheering their teams. The Bills-Bengals game was to be the final MNF contest of the season, and it’s the Super Bowl in most fantasy leagues. If this event had happened during a typical Sunday afternoon game, it wouldn’t have been as harmful to NFL interests. But it happened on Monday night, when the entire sports world is tuned-in, and not just any Monday night, but the biggest MNF game of the season.

Instead of being a nationwide football festival, the plug was pulled & the excitement killed. Most sports fans understand the situation and don’t blame the players, or cry foul, but there are interests that want to make sure this NEVER happens again. Docking wages for leaving the field would probably be bad optics for the NFL, so look for the owners to get together after the post-season and establish a “protocol” to prevent players from mutually leaving the field before a game is finished. Owners consider what happened as an unauthorized work stoppage, and that is strictly prohibited by the powers-that-be. This could become a CBA grievance if the owners take too much of a hard-line stance.

So how did Roger Goodell arrive at his judgement, three days after an on-field medical event stopped the Bills-Bengals MNF game, with the players refusing to resume the contest? First, the NFL Commissioner had to take heavy flak from all the East coast dweebs screaming in his ear about sponsors, ratings, fantasy leagues, etc– imagine a scene from Network (1976) and apply it here. After absorbing all this abuse, Goodell then had to fly to Las Vegas and stay at the Flamingo to take a meeting with Ace Rothstein & Nicky Santoro. After that, he had to hustle over to the Tropicana to see Moe Greene, and you know what that means— Don Barzini. Roger Goodell had to earn his paycheck this week.

Nicky Santoro: Hey commish, what happened?! I got all these betting slips and I don’t know what to do with them. I’m thinkin’ I’ll keep all the money. What do you think, Sam?

Ace Rothstein: You’re the muscle end Nicky, I just tell you the point spread.

Nicky Santoro: So commish, a player feints on the field, he’s taken-off, and the game just ENDS?!! Since when do we do THAT?!! Are we gonna put pink dresses on them next? [Lots of expletives…] I’m feeling like a chump for holding all these markers. The game was two nights ago!! [Lots of expletives…] I’m just trying to run a respectable bookmaking business here, I gotta pay the winners & collect from the losers to get my vig, you understand? How can I pay when there’s no game?!! [More expletives…] Since I’ve been holding this money for so long, I’d almost feel like a chump to return it. I’m thinking I’ll keep the money. What do you think, Sam?

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