He's Baaaack

Awhile back I posted about Mikkel Thorup and his "advice".  Shortly after that, his incessant emails dried up.  No loss.  Then a couple of months ago I got a promo email.  Shortly after that, I received another "newsletter" type thing.  And it looks like he and his tools have only gotten worse.

First, he's completely come out as a COVID denier who believes "woke" is destroying civilization.  Second, he's using that fear-mongering to sell his latest grift, Veritas Villages scattered throughout developing nations, where you can live independent of "government" grids because you have your own water and power and apparently (though Thorup doesn't mention this point of course) your own staff of locals to maintain all this because you sure as Hells aren't going to.  In other words, rank neocolonialism.  Not that the types who buy into this rubbish see anything wrong with that.

The other big drum he's beating is for Pavel Durov, the Russian tech bro who was arrested in France in August.  According to Thorup, Durov was arrested because he protected free speech.  According to France and its case filings, it was because Durov refused to cooperate with investigations into criminal activities on his Telegram platform.  I would note that crime is not free speech, at least not when it's fraud, drug dealing, trafficking, and political hits, so it doesn't really look like Durov was protecting free speech.  But the truth wouldn't help Thorup's sales pitch.

Yet More Bank Garbage

Trump and his minions are claiming the recent bank failures were caused because those banks were "woke".  As with everything else having to do with their use of that word 1) it's meaningless, and 2) it's just being thrown out there to provide cover for the accusers' wrongdoings.

Immediately after taking office, Trump took steps to "relieve community banks" from the evils of Dodd-Frank.  SVB was a community bank the way Elim Garak was a plain, simple tailor.  Once again Der Drumpfenfuehrer and the Reich Wing Media are lying.  There is no way they can connect these dots so they have meaning for anyone other than their tin-foil-hat minions.  The actual dots lead straight to Trump.  In standard GOP form, Trump lifted a bunch of Dodd-Frank liquidity regulations for no reason other than "Regulations BAD!"  (If I were to let my more cynical side run, I could say he also did so to facilitate grift by financial executives, but....).  SVB, which had become Deposit and Clearing Central for a number of crypto companies, now had effectively all of its cash reserve requirements removed.  SVB took the newly freed cash and put it with most of its other investments, buying long Treasury bonds (This was actually a fairly prudent move.  Under normal circumstances.).  Then FTX failed, and seismic shock waves moved through the crypto community.  People decided to cash out of crypto, and the crypto companies had to make large withdrawals from their SVB accounts to cover.  So the run wasn't actually on SVB; it was on the cryptos, who then made withdrawals on their accounts.  The problem was SVB didn't have the cash on hand.  It had to raise it, and that meant selling its Treasury bond positions.  Unfortunately, the Fed has been raising interest rates, and when that happens the value of older bonds goes down because they have the older, lower rates.  SVB had to sell its bond positions at a discount, which left it short.  Also unfortunately, much of the rest of its investment positions were loans back to its depositors, and since those loans had been made with the deposits that were now being drawn on, SVB had a liquidity loop going nowhere.   On top of that SVB was going to have to mark these investments to market, and since they had lost value, that meant its assets would have to be written down.  It was teetering on insolvency when DFPI and FDIC walked in.  This doesn't address some the shadier insider moves, nor does it address just how much cash reserve would have been needed to shield SVB from its crypto positions, but Trump's moves definitely let SVB's executives bury it roof-deep in a mud hole.

I'm Not Crying for Argentina

It's just that I'm not crying for the bondholders either.  We're having a big brouhaha over at Credit Slips over Argentina's default on its bonds, its workout agreements with most bondholders, and recent court decisions on its obligations to pay the holdouts.  I think both the Ghana court and the Second Circuit were flat wrong on the law, and call me funny, but I believe that's what the courts are there to enforce.  A pair of Germans on the board, though, are really going after me because I refuse to buy into their arguments, which really only amount to argumenta ad passiones.   Willi1 sunk 500 million euros (probably his retirement) into this junk and now wants it back.  Jakob represents 150 people who pulled the same stunt and want the same results.  They can't accept that everyone is going to take a massive haircut and that it's just reality and not a massive conspiracy the international legal community cooked up just to defraud them.

The problem is that the same greed they accuse the Argentine government of (properly, in my in no way humble opinion) is what got them into this in the first place.  They sunk their retirement accounts into this refuse pile because all they could see were the promised returns; they never bothered to look at the risks.  They also probably never sought professional advice to sort it out for them either, although I would note that if Jakob advised these folks to buy, and he were in the US, his insurance carrier would be defending a malpractice class action right now.  As I've said repeatedly, if you can't afford to lose the money, don't put it on the craps table, and if you don't understand the rules, DON'T PLAY.