We should never forget that humans are in fact animals.

There's this trope that has been run on people from childhood forward that is near-universal: Animals generally have rational behavior and its our poor impulse control in many cases that is the issue.  Priests run that nonsense, its taught in schools and is all over the television in various nature shows.

Anyone with 30 seconds worth of thought ought to know its BS.  If you've ever owned a cat you know its nonsense.  A cat will kill birds or rodents it does not intend to eat and it will "play" with humans with its pins out in full-malice mode.  People say "oh the kitty doesn't know."  Oh yes it does.  Cats, like all other animals, have different and highly-individual dispositions.  I grew up with a tom in the house that required you don elbow-length heavy leather gardening gloves if you wished to "play" with him and not wind up with serious claw and bite damage; Gotto was quite the monster during such times.  He was an outdoor cat and often came home with significant damage (particularly to his ears) from fights and such, presumably with other male cats, and often delivered "presents" on the rear porch step.  One of those presents was a full-grown Raccoon that out-massed him by a fair bit, which he killed but did not eat.  You'd think the 'coon would have won that battle but there he was on the step one morning, very dead with Gotto meowing to be let back inside.

Likewise Animal Planet and similar like to make "nice-nice" about mating rituals.  The truth is something else entirely.  If you've ever been around chickens with a rooster or two you know exactly what I'm talking about.  I lived in Florida for 20 years on the water and several times while on my dock relaxing in the late afternoon saw a pod of dolphins -- all males save one female they had corralled up into water about a foot deep so she could not escape and they were taking turns.  It was quite explicit, that the dolphins doing it were male was really obvious (yes, Matilda, it does stick out when they're into what they're about to do) and very not consensual.

Humans have tried, over the ages, to put in place structures that tamp down such things.  How serious we are about it is open to some dispute.  Unfortunately "social structures" -- including governments -- are in many ways indistinguishable from gangs if the population refuses to demand that the rules be followed equally by all and, if they're not, that they remove those who are refusing in an organized fashion using whatever force is required to do so.

Epstein anyone?

If you don't force said "government" and its attached "favored people" to live by those same rules it is indistinguishable from that gang of male dolphins running a train on the single hapless female.

We have seen plenty of such examples over time in human history.  Many seem to believe that this is a recent phenomena -- it is not.

Nor is the human tendency to claim that such is "isolated" or even to not care because someone is not personally impacted.  The foolish notion that if you're not getting it good and hard now you won't in the future if you sit on your hands is also as old as humanity -- and equally wrong.

America allegedly burnt "the divine right of Kings" -- that is, the capacity of the government and its favored minions to exempt itself from the law when The Founders penned the Constitution.  It took very little time for that notion to be disabused, and over the last 240-odd years it has only accelerated.  The premise of the Constitution is that one does not have "rights" bestowed by Government as an entity cannot give what it does not first possess; that which you have as a consequence of being human is yours, but it cannot obligate anyone else to do any more than leave you alone.  To claim and enforce otherwise is the definition of slavery and, once again, I refer you to the male dolphins off my dock who I'm sure were all convinced that it was utterly essential to the survival of the species that they corral and impregnate said hapless female, whether she liked it or not.

Correct or not that was their position and they were willing to execute on it -- and did.

Where were the other dolphins who said "nope!" and broke that up?  Nowhere to be found.

Are we better than that?

Well, there's 330 million of us here in America, roughly.

Plenty of people were willing to incarcerate or even execute those who refused a shot that, we now know, doesn't work "as advertised."  May I note that Congress and its minions were exempt from the mandates forced on others?  There are plenty of humans who when challenged with this try to rules-lawyer the test; "oh it makes it much less likely you'll get really sick or die" they now say.  But that's not what you were promised, is it?  We all know what the politicians and so-called "experts" claimed so if you're using that now as justification then you are the thug because you are fully aware you're lying, just as Biden, Trump, Fauci, Birx and everyone in your state and local public heath and doctor's offices were all the way back to December of 2020.

We underwent two years of riots and general lawlessness because a drug addict ODd.  That's conclusive, by the way; all you had to do was read the ME report, which was published.  Whether the cops contributed to the death is a clean question and that's why we have trials and, allegedly, a public process for accusations like this.  You can agree or disagree that the outcome was just but what's very clear and without question is that exactly zero of the burnt businesses and other riot damage was inflicted on anyone who had any culpability whatsoever in the original incident.

Who went to prison for those riots -- which were national in scope, I might add.  Essentially nobody yet Arson upon a building is supposed to be one of the most-serious crimes one can commit because it always implicates the risk of killing humans; someone may be in the building or die trying to put the fire out.  We seem to have lost our collective consciousness when it comes to this, have we not?

These are just two small examples.

A much-larger one is the collusive action of not only tech firms but the government as well to censor speech they do not like.  Did we not just witness another example of that on the Senate floor with Chuck Schumer?  Collusive behavior of this sort, with or without the government, has been illegal where market power exists for over one hundred years and it is both a civil offense and criminal felony.  The number of prosecutions for same, never mind immediate ejection from said chamber for that clear violation of the Constitution has been..... zero.

Are we in fact better than those dolphins, or the rooster -- or not?

Lots of questions flying around about SVB and what it means.

There are plenty of moving parts here and lots of unknowns, most-specifically who's connected to what, where, and with what reserves?

Apparently the firm attempted to raise capital, failed, and now is looking for a buyer.  The FDIC stepped in and locked the doors -- they typically do this on a Friday after the market closes but acted early this time.

One very interesting element of this situation is that the bank, being a bank, is supposed to have reserves against this type of loss, especially startup funding which is extraordinarily risky even in the best of times.  As I've repeatedly noted one of the big concerns anyone with a brain ought to have is the wildly-distorted market picture you get from a long-term run of negative interest rates in real terms.

I can run a cash furnace, basically, that looks pretty good so long as I can keep financing it at ever-lower interest rates because I can roll over my alleged "debt" (whether I do it formally by redeeming the former debt or informally by issuing more at much lower coupons, thereby diluting the "blended" total rate) on a continual basis.

In theory these sorts of loans are supposed to be backed by assets when held by a bank.  The question of course is always what are the assets worth if you need to sell them?  The price of a used truck, for example, is very different if there are no new ones because there are no chips yet the roofers all need one to haul their stuff to jobs .vs. the converse -- the economy is in a deep recession, there are fifty new trucks on the local dealer's lot, people are putting blue tarps up instead of reroofing their house when it leaks and nobody is building new houses.

Reality is that if you hold paper at a below market rate it is always discounted to its market value.  Why?  Because if you have to sell it that's all you'll get; the buyer would be stupid to buy your 2% 10 year Treasury when he can have a new one at 3.94%.  Therefore while it is absolutely true that if you hold it for the entire 10 years you'll get your entire $10,000 (for example) back you will also get the old coupon rate until then instead of the new one.  While you can certainly make the claim that for Treasuries you can hold them to maturity that claim only holds up if they're not the backing for something else; if they are (e.g. deposits) and someone demands their money you must sell.  Therefore any logical accounting practice is that on any rise in rates you may only count them as "hold to maturity" and thus "money good" if they are not part of your collateral base for something that can be called -- such as a demand deposit.

To do otherwise -- and I don't care what the Federal Reserve, Congress or FASB claims -- is fraud.

Let's remember that Colonial claimed in an earnings report that they were fine during the crash -- and about a month later the FDIC came in, closed them, and when BB&T bought the remains they published a valuation which essentially claimed the assets had lost roughly a third of their value over a month's time.

The odds of that being real across an entire portfolio are basically zero, never mind that if you're so-poorly underwriting things that it is true you're basically running a scam outfit in the first place.  Either way there's no plausible legitimate explanation.

Now we're doing it again, and at the core of the problem was a known false premise -- rates would never rise and thus the cash furnace game was permanent.

No, it isn't.  It never was.  It never could be.

Everyone knew it too and that means representing otherwise was fraud.

So is allowing an institution to mark assets to a model when there is no guarantee that the asset will be worth the modeled price when it matures.  There is only one such asset that meets this criteria and that is a Treasury obligation of some description which does not back anything that can be called, such as a demand deposit, because if Treasury fails so does the monetary system and government -- and thus the rest is irrelevant.

This specific instance is about a bank that has a portfolio of assets with very long duration that allegedly "back" its deposits and which were issued at much lower rates than today.  If there is a demand for funds you can't sell them at par because nobody is obligated to buy and the other alternatives are trading at a higher coupon.  Its even worse in this case than usual because roughly half, from what I can see, is 5+ years out in duration!  So if that paper yields 3% but the new paper of equivalent quality yields 6% you have to discount the face to get someone to take it by the difference times the duration.

Anyone who thinks that the very same regulators that should have stomped on this six months ago didn't let other institutions do the same stupid crap has rocks in their head.  Said "regulators" were, just as back in 2008, watching Redtube instead of doing their jobs so yeah, there's more to come.

If you remember we were all told back in February of 2008 that Bear Stearns was "fine"; it then failed.  The next lie was that it was contained and not an indication of systemic fraud writ large among the banking and financial system generally -- the deliberate statement that alleged "assets" are in fact money good.  That was a lie.

Indeed the Federal Reserve knew, as did Citibank, that Lehman was insolvent weeks before it formally blew up.  How do we know this?  Because it was documented in the post-mortem; they attempted a tri-party repo with Citibank (the other party being the NY Fed), Citi rejected the collateral as not worth its claimed value and thus both unsuitable and unstable and Lehman had nothing else to put up.  The attempt failed and was deliberately concealed from the public as a whole but of course both The Fed and Citi knew it at that moment in time.

Many people were shorting Lehman at the time, which looked extraordinarily dangerous unless you knew they were bankrupt, in which case it was the trade of the century as you knew you couldn't lose.  Was it ever run to ground as to exactly who knew, who told who and that nobody shorting the stock knew -- that is, had material inside information and was trading on it, which is illegal by the way?  No.

Is this incident localized?  I have no idea.

But what I'm quite-certain of is that a lot of financial institutions have loans out at crazy leverage due to the zero reserve requirements Ben Bernanke had made available to him via the TARP bill that was eventually passed (which I reported on at the time) which, in point of fact, simply accelerated a timeline that had already been there.  In other words Congress had already planned to give the banks the ability to do this sort of thing before the 2008 blow-up despite it being ridiculously unsound and fraudulent.  Neither party has done a thing to reverse that in the 15 years since and you'll note that not one word has been spoken about it in recent years during the Fed Chair's semi-annual testimony either.  Every single one of the 535 fraudsters in Washington DC and every President since Bush has been intimately and personally responsible for same.

So is there a ticking bomb -- or three -- out there in the financial system today?  Yes.

There has been for the last 15 years and nobody has been willing to cut the burning fuse.

The fuse is now in the box and nobody knows how long it is or how big the explosive is inside.

It might be a very long fuse and a firecracker.  Whoopie de-doo-dah.

But given the incentives while the length of the fuse is not necessarily tied to incentives that the explosive is extremely large and might surround a hollow sphere with a pit in the center is in fact rather likely.

Oh look what the cat dragged in!

Total nonfarm payroll employment rose by 311,000 in February, and the unemployment rate edged up to 3.6 percent, the U.S. Bureau of Labor Statistics reported today. Notable job gains occurred in leisure and hospitality, retail trade, government, and health care. Employment declined in information and in transportation and warehousing.

It "edged" up, they say, two ticks.  Will it "edge" down?  Naw, it'll "drop" when it goes two ticks the other way, right?

What's the unadjusted data tell us?

Several things -- first, nearly all of the adds came from the "not-in-labor-force" pools, which dropped 958,000 while the unadjusted adds were 1.021 million.  Statistically speaking almost nobody who was a new entrant or unemployed person found work -- it was people getting off the couch.

Ok, fair enough.

Hours worked dropped a tick, is which is huge -- every tenth is hundreds of thousands of jobs, and what's worse is that in the lowest wage positions (leisure and hospitality) that hours worked loss meant that average weekly earnings was off close to $5 last month.  In an inflationary economy when you lose gross purchasing power, before inflation, you really get screwed -- especially when the loss is about 1% in a single month.

The screamfest about tech job loss is nonsense; basically all of the unadjusted gains came from those with a Bachelor's or better, so spare me the tears or go find a cry room and have it out where I don't have to hear it.  I'll rubber-line the room for all the so-called "displaced" out in silly valley. The data says its a bunch of screaming by crybabies and not of economic significance.

Another internal piece of data that I really don't like I've commented on before, and that's the disability rolls.  Here we got trouble; over the last 12 months among the entire civilian population those rolls have increased 597,000 to 32.6 million.  That's a 1.83% increase, which isn't good.

The bad news is among the employed; it has gone from 6.6 million to 7.2, a 601,000 increase or more than the total, and an 8.3% increase.

Employed people are generally healthier than unemployed, obviously.  This is household data, not establishment (which skews to large corporations) but the implications here are stark, particularly considering that the not-in-labor-force numbers over the same 12 month period added only 61,000.  The productivity hit in this regard is very severe; gee, there wasn't anything employers mandated that might be responsible for this, is there?

The market was all over the place on this report and Treasuries are down substantially on rate (up in price); apparently Mr. Market thinks this will dampen The Fed's rate cycle.

I certainly don't see anything in here that suggests that, particularly when in real terms those on the lower ends of the economic ladder are taking nominal weekly pay losses rather than making gains.

Through the years after my MCSNet tenure I have been asked several times for advice by parents with kids in High School looking toward college if I had anything to offer as someone who has obviously done reasonably well in my professional life.

Most people probably assume I hold a Masters or even a PhD in something computer-related.  Nope.  Not even a Bachelors, in point of fact.

My advice was consistently the same: Credentialism is a thing you tolerate but it is not the same as learning, nor is it the same as the capacity to perform deductive reasoning.  A credential is only as good as the organization that issues it and the rigor with which it is issued; if anyone can obtain such a credential without actually demonstrating the alleged capacities it denotes all of them are worthless and thus nobody should pay anything for any of them.

Many years ago -- before I graduated High School -- said credentials were consistently worth what they claimed.  By the time I graduated High School the destruction of this paradigm was well underway.  Colleges started it by "appointing" TAs to teach large lecture classes on the premise that this was "as good" as a fully-tenured Professor at that level.  That's false; the real reason they did it is that the TA was a lot cheaper.

At that point dorms were still cinder-block buildings and the cafeteria was nothing special.  Not anymore.

Now the "college experience" has become about "deserving" to live in luxury, with all manner of this and that which has exactly zero to do with mastery of anything, other than pretending you're worth $500,000 a year and thus can live that sort of lifestyle when you have no demonstrated skills yet.

Standardized testing such as the SAT and ACT, and their few-year-back in High School PSAT/NMSQT have been deemed racist.  It is apparently racist to be able to provide the solution for a two-term algebraic expression; you see, its unfair to expect a student to know that the easiest way to do this is to set one of the two variables to zero (that's why they're called variables) which now reduces you to one term that is unknown -- and vice-versa.  We are told that mathematical equations which are intentionally ambiguous in the way they're written have more than one answer instead of taking the teacher who writes them that way and ejecting said person from their field permanently because, in point of fact, mathematics is an exact set of facts and an ambiguous equation is either written by an ignorant or stupid person, neither of whom is qualified to teach anything.

We are told that if an inner-city school has nobody that is competent at grade-level math that the reason is not the incompetence of the instructor.  If in fact that is not the reason then the school should not exist at all because there is no point; such a "school" serves no purpose other than taxpayer theft and should be instantly and permanently destroyed.  The other alternative is that the instructor(s) involved are incompetent, must be stripped of their alleged credential that was obviously issued under false pretense, all others from that same institution and year must also be voided as they are all untrustworthy and the alleged "teacher" removed immediately and permanently from certification and the classroom.

Colleges have gone along with all this.  This didn't start in the last few years; I saw it in the early 1980s -- but it certainly has accelerated.  The problem with "woke" policies, including the premise that we "must" make it easier for certain people to have this or that is that doing anything of that sort -- anything -- in the area of credentials means you can no longer trust the credential to be worth anything at all.

A driver license allegedly is evidence that (1) you can safely operate a motor vehicle of a given general type and (2) you can be identified with reasonable certainty if you don't so that the aggrieved party can come after you.  That is the purpose of the credential.  If you never have to demonstrate capacity in either the credential is now a pure extraction racket and no longer serves as evidence of capacity to perform at a minimal required level or the ability to redress grievance if you harm someone due to inattention or incapacity.

When I was much younger I obtained a motorcycle endorsement, which I still hold.  To obtain it I had to prove I could actually operate a motorcycle; the "road test" was in a large parking lot where I was required to perform low-speed figure 8s and while doing so the examiner would step unannounced into my path.  I had to both show that I could perform said maneuver around the cones and not hit the examiner when he stepped in front of me, coming to a safe and stable stop.  That's a fairly minimal test but it does prove you can coordinate the controls of the motorcycle while balancing it and not immediately run over a small child, for example.  I passed.

A friend of mine failed that exam, which I found amusing at the time as he hit the examiner -- he had to go get some more practice (in a parking lot off public roads!) and take the test again.  He did ultimately pass.

Universities have ruined their own alleged credential system by lowering standards to non-existence when it comes to many if not most fields.  "Education" is a prime example but by no means exhaustive; we have a whole bunch of doctors out there who, it appears, do not understand both inorganic and organic chemistry yet that is an absolute must if you are to understand the basics of how every single element operates in the body.  Nowhere is this rot more in evidence than in the dissertations and alleged "defenses" you can find among advanced-degree awardees.  The premise of a Masters or PhD is that you have broken new ground in the field, examining and defending something never before known.  As the state of the art in a field advances this gets much harder and it should!  Regurgitation is easy while actual deductive reasoning to advance a particular field is hard.  If I cannot use superior deductive reasoning to discover somethin new then I'm no better than anyone else and I certainly do not deserve an advanced degree in said field.

Yet a huge percentage of these dissertations and thesis are nothing more than word salad garbage.  The alleged "analysis" in a huge percentage of them that claim to present some sort of "revelation" is nothing beyond conjecture and belief!  That such is permitted by universities to count as a defensible thesis is garbage and it shows in said person's alleged "work product" down the road.

Again, if you think this is new with the "woke disease" over the last decade or so you're nuts.  It isn't.  In the 1990s I had several employees who were looking to make some money while going to college and being in Chicago a fair number of them were at UofC.  A substantial percentage of applicants, approaching half, who were current students could not write a basic business letter using the English language or perform basic four-function arithmetic with nothing other than a piece of paper and a pencil sufficient to, for example, calculate the sales tax on a product and the change resulting from said transaction if the customer wished to pay in cash.

These were current college students at UofC in the 1990s.  There is no way those individuals had a reasonable score on either the SAT or ACT; you can't achieve that without being able to both handle the English language and calculate on a fairly decent basis.  Therefore either UofC didn't give a crap what their cognitive capacity was or they cheated.

What "colleges" sell now is not what it is represented to be -- and it has been that way since the 1980s although its certainly gotten much worse in the last couple of decades.  Nobody goes to prison anymore for what is clear and obvious intentional misrepresentation.  Someone who can't show mastery of the English language and basic arithmetic has no business in a college or university of any sort -- period -- and for such an institution to "accept" that person is to either rob them of their funds because they cannot do the work or they intend to operate as a pure cash-for-credential machine and are issuing unearned credentials.

It cannot be otherwise.

I'm not surprised industry is pushing back on this with their own certifications.

Good.

Now let me test out in the general sense, no degree required, and suddenly providers of information will have to compete if they wish to sell said services.  If I can pass The Bar why am I not qualified to practice as an attorney?  What difference does it make if I have a "degree" in law or not if the test in fact covers the material I must know?  If the test doesn't cover what I must know then the testing is defective so either the credential is good enough or the exam is good enough.  Pick one.

Thus it is becoming in various fields, and its only a matter of time before the so-called "modern university" has a worthless product since they have, for forty years, refused to actually enforce their own claimed set of standards.

Then again that seems to always be where we wind up when money is involved -- doesn't it?

Well now there's a problem.

Tucker has released video that pretty-much blows a hole in the entire January 6th narrative.  In fact, it blows it up, sets it alight and watches it burn to ash.

This is a serious problem for a number of reasons, not the least of which is the number of people sitting in prison -- or convicted on connived, false claims with no ability for their defense to access the evidence proving that in many cases they were escorted.

At worst most of these people are guilty of trespass, but even there you likely can't make it stick as trespass is voided if you're invited or chaperoned, and its quite clear that at least in some cases -- they are.

There's another problem too: The Brady decision by the USSC makes clear that the prosecution must turn over all evidence they have which exculpates a defendant.  It's not optional and it dates to 1963.  The violations here are severe and in fact it appears basically universal.

Indeed the definition of malicious prosecution is to bring a case before the court where you know the exculpatory evidence is so strong you'd never win a conviction and you intentionally withhold it from the defense.  That opens up the DOJ and even the individuals involved to personal liability.

I have no idea how the DOJ thought they'd get away with this indefinitely, but apparently they did think they would.

Well, not any more.

Now the question becomes if the government will not live to its own laws, what remains?

It's not a pleasant question to ponder, but ponder it we must, and the implications do not just extend to January 6th.

Unfortunately.