You've Got the Runs
Regional (Bank) Pain, The Oscars!
Long story short, we don't stress test our banks well enough, but we are stress-testing the hell out of bank customers and investors. As I covered on Friday, a series of unfortunate events led to the largest bank run in history. Silicon Valley Bank's customers withdrew "$4.2 billion an hour, or more than $1 million per second for ten hours straight." By the weekend, the Feds had taken over the bank, but it was still unclear whether large account holders would ever see their money again. Startups that had tens of millions in the bank were emailing investors to say they might not make their next payroll. On Sunday, the depositors' fears abated as federal regulators announced that SVB's customers would have access to all their money by Monday morning. The same is not true for other stakeholders. As Janet Yellen explained, SVB and New York-based Signature Bank (another instituiton that failed this weekend) are not getting a bank bailout like the ones we saw during the last financial crisis. "Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out, and the reforms that have been put in place means that we’re not going to do that again."
+ Just Another Manic Money: If the bank run gave the runs to SVB, the gastrointestinal contagion spread to other regional banks, their depositors, and especially their shareholders when the market opened Monday. First Republic Bank was down as much as 75% in early trading. (I bought some of their shares on Friday afternoon when I thought the stock had already been oversold. I planned to pop champagne, instead I needed to pop some Imodium.)
+ "The ability of these banks to fly under the radar in the US was no accident. Greg Becker, SVB’s CEO, lobbied US officials several years ago to raise the asset threshold at which banks would be considered systemically important." Thanks to heavy lobbying and bipartisan support, the failed Silicon Valley Bank and Signature Bank weren't required to take the Fed's stress tests. (Instead, the rest of us were.)
+ Elizabeth Warren's I told you so moment in the NYT (gift article): Silicon Valley Bank Is Gone. We Know Who Is Responsible. "In the aftermath of the 2008 financial crisis, Congress passed the Dodd-Frank Act to protect consumers and ensure that big banks could never again take down the economy and destroy millions of lives. Wall Street chief executives and their armies of lawyers and lobbyists hated this law. They spent millions trying to defeat it, and, when they lost, spent millions more trying to weaken it ... Banks like S.V.B. — which had become the 16th largest bank in the country before regulators shut it down on Friday — got relief from stringent requirements, basing their claim on the laughable assertion that banks like them weren’t actually 'big' and therefore didn’t need strong oversight."
+ Signature Achievement? Here's a related twist: Barney Frank, who put the Frank in the Dodd-Frank Act, is a board member of just-failed Signature Bank.
+ Here's the latest on the mayhem from Bloomberg. (I gotta say, this investment shit was more fun when everything went up all the time and we were all geniuses.)
2. Everything In Its Place
Everything Everywhere All at Once seemed to win every big awardduring a slap-free Oscars ceremony that was nice, friendly, inspiring, entertaining, and largely forgettable. Jimmy Kimmel did a solid job as host. You can check out his monologue here. The best acceptance speeches came early, highlighted by best supporting actor, Ke Huy Quan. There was also a great moment as Ke Huy Quan hugged Harrison Ford. The acquaintance started back in 1984 when Ke Huy Quan "got an audition by accident to play Chinese pickpocket Short Round in Indiana Jones and the Temple of Doom." Amazing reunion! From forgotten child star of Indiana Jones and The Goonies to Oscars hero. Michelle Yeoh's acceptance speech focused on mothers. So here's a look at her mother watching her win the award from Kuala Lumpur. (Her reaction is surprisingly close to the way my mom reacted when she read my Imodium joke in today's top section.)
+ Naatu Naatu from the must-see RRR won best song, and provided one of the most entertaining moments from the show. And an unmakeuped, raw Lady Gaga gave the performance of the night. (After helping a photographer who fell!)
+ Navalny took home a much-deserved Best Doc prize. If you haven't seen it, it's on HBO Max.
+ Here are the winners, the not-red red carpet looks, and the snubs and surprises.
+ Meanwhile, The Rock went with a pink tuxedo. OK, Tennessee, your move.
3. The Ingrates are Running the Asylum
"There’s only one topic of conversation feverishly consuming the United Kingdom this weekend: soccer. But it’s not what’s going on between two rival teams on the pitch that’s causing a stir. Instead, it’s a fierce debate about free speech, impartiality and a proposed government immigration law, which has seemingly pitted two hugely popular British institutions — the public broadcaster BBC and soccer, including its most famous presenters and commentators — against each other." WaPo (Gift Article): Soccer hero’s tweet on asylum kicks up huge culture war and BBC boycott.
+ This is a crazy story (and a crazy policy from BBC). Thankfully, Gary Lineker is returning to Match of the Day can tweet with ‘no restrictions.’ (Even though he should get off Twitter and move to Mastodon.)
4. Child Stars
"Claire ... has never known a life that doesn’t include a camera being pointed in her direction. The first time she went viral, she was a toddler. When the family’s channel started to rake in the views, Claire says both her parents left their jobs because the revenue from the YouTube channel was enough to support the family and to land them a nicer house and new car ... Once, she told her dad she didn’t want to do YouTube videos anymore and he told her they would have to move out of their house and her parents would have to go back to work, leaving no money for 'nice things.'" Teen Vogue on Influencer Parents and The Kids Who Had Their Childhood Made Into Content.
+ I tried. Believe me, I tried. But as I wrote so many years ago ... My Kids Refused to Go Viral.
5. Extra, Extra
In Through the Clout Door: "An agreement between Iran and Saudi Arabia to reestablish diplomatic relations has cast China in a leading role in Middle Eastern politics — a part previously reserved for longtime global heavyweights like the U.S. and Russia. It’s another sign that China’s diplomatic clout is growing to match its economic footprint." (This is a big story.)
+ The Political Wind and the Willow: "The approval came as the interior department announced it was going to ban any future oil and gas drilling in the US Arctic Ocean, as well as protect millions of acres of Alaska land deemed sensitive to Native communities. But the Willow decision has still stirred anger." Biden approves controversial Willow oil drilling project in Alaska. AP: Alaska’s Willow oil project is controversial. Here’s why.
+ Moral Code Red: Mexico kidnapping: A twisted moral code explains cartel's apology. "Four Americans were kidnapped by a drug cartel, and two of them were murdered, when they visited the town of Matamoros, Mexico. So why would the cartel apologize for the incident and hand over its own gunmen to the police?" (Hint: Because killing Americans brings a heat these guys don't want. It's not morals. It's strictly business.)
+ Bear Hug: "Zucchero and his brother, Dominic, started the business in the late 1970s, building a reputation as a classic spot for the Italian-American speciality." A Chicago legend, whose Italian beef sandwich helped inspire 'The Bear,' has died.
+ Duke Score: In NorCal, we're preparing for another atmospheric river. The rain just won't stop. Neither will the snow and ice in the mountains, which can be hazardous, and incredibly beautiful.
6. Bottom of the News
"WWE is working with the accounting firm EY to secure scripted match results in hopes it will convince regulators there’s no chance of results leaking to the public." WWE is meeting with state gambling regulators to try to legalize betting on scripted match results. (If this gets approved, someone needs to be thrown against the turnbuckle and hit over the head with a folding chair.)
+ Team Italy has espresso machine in dugout at WBC.
+ Odd headline of the day from WaPo: Hungry moose fingered as possible factor in climate change. (I know you're worried about climate change, but that's no way to treat a moose.)