Replaying 1929: The Bank Run Marker’s In

Silicon Valley Bank is likely not to be the only bank in this period to go down. Because in our work in long wave economics, for more than 20-years, the severity of economic recessions (and “depressions”) the number of failing banks in a period is a good (early) indicator as to severity.

For example, in the Dot Com Bust, less than three dozen banks failed.  The Housing Bust saw more than 500 folded.

And now we see the “Leading Edge of Tainter” – the urge to walk out and away from a failing economy – with the takeover this week of Silicon Valley Bank (SVB).

In addition, the break becomes even more stark when we roll out this weeks update (in our ChartPack) to the long-running Replaying 1929 charts.  The next few weeks could be a 24-karat bitch.

But no point in getting upset about it.  Economic agnostics (like us) are usually well positioned to make money in fair weather, or foul.  Certainly, the case again this week.

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George Ure
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13 thoughts on “Replaying 1929: The Bank Run Marker’s In”

  1. Ahem, x2 your Ureness. Add Silvergate. There, the short hedge defeated long hedge (despite weighty fellers giving it a go). Own goals at two niche banks may pass in the maelstrom of media. Or not.
    Big Kahuna,

    Just found this last nite and is biggest news for myself this century.
    Xi Jinping brokers peace deal betwix Iran and Saudia Arabia.
    Celebrating his third term.
    Embassies to re-open in the next couple months.
    Peace in the Middle-East?
    Israel, America and Nato who?

  3. “we have exactly zero sympathy for them.” Quote from today’s subscribers side. I totally agree, sympathy is between sh*t and syphilis in the dictionary!

  4. ” the urge to walk out ”

    Didn’t the walk out already take place? Think of David pinging the Goliath. It took a minute for the Goliath to hit the mat.

    As far as we can tell 2008 General Motors was when contract law was nullified. At that point common folk became aware business leaders walked out on their obligations. (.gov scooped it all up and people went along but that transfer took place.)

    Pension funds were already underfunded in 2001. This means in 2001 the ‘captains of industry’ knew 2008 was coming at some point. But since the funds were already underfunded in 2001 I think this means it goes back to when pensions were written for the ‘common folk’. The captains knew the obligations would be handed off way back in 1952 and never funded them more than a token amount.

    Thinking about SVB, why payback the overdraft protection? They got bailed out.

    “However, in 2001, the stock market drop following the September 11, 2001 attacks, combined with historic pension underfunding, caused a severe pension and benefit fund crisis at GM and many other American companies and the value of their pension funds plummeted. “

  5. While bank failures are not new, there are aspects of the SVB failure which are a bit unusual. Reports of the police being called to thump small depositors at the counter, while billions are drained out the wire in hours sounds kinda of ugly. I would like to see the list of who got the disbursements in the run, as compared to affiliations of the SVB Board. Was the run preplanned ? If so, where were the regulators? Oh wait, how many Reserve Board members were at SVB too? COI.
    It is so hard to hide cash in a foam mattress. Maybe I should go back to springs. Now I am worried.

  6. Easy peasey lemon squeezey G –

    mere childs play for the home gamerz, math wizzes and bridge playas – Time 4 the classic wealth creation/destruction spread or long real hard asz assets and short the fakery…ie Long GLD Calls (long Gold) vs Short SPY (SPY itm Puts)..ride Sallie ride!
    Chart that puppy – Spread is starting to diverg..go in opposite directions, presactly what chu want, GLD is ascending while SPY is Decending.
    Little bird keeps peeping on about ENERGY – and ENERGY backed currency/ies..think the changes are already taking place in Chynah.Indiah, Saudi Aradiah, Russiah, Venezaulah. So coot still wanna be long Energy, and just about any other commodity that comes outta the ground.
    The “Waste as Growth” economic model is going kaput before our very eyes, planned obsolescence, low quality “chineseum” junk rusting stainless steal as an example, signs of times. JUNK. And dem commodities are getting harder and harder to find and extract.

    Got energy underfoot with grains and critters above ? If not – how you planning on heating and eating in future? Guess you can always burn the zombie bodies for heat while cooking the flesh long and hot enough to kill the zombie virus (fentanyl) theory at least.

    got freeze dried?

  7. Mr. Ure. I cannot express enough the gratitude I have for this site. Looks like a black swan[s] is[are] approaching.

    Say, with no liquidity or collateral. How will all that fiat actually maintain velocity that needed so as to keep with spin cycle and skim operations going? It’s not. No money flow = bank holidays.

    Seems to me block chains that use on demand liquidity technology wouldn’t need collateral or reserves/ NOSTRO/VOSTRO to operate and settle monetary transactions.

    Got ripple? LOL. BCN you watching this liquid cheese hitting the oscillating blades?

    Game theory: What if the lender window is being slammed shut now and the specialists and bankster client class now lacks the other peoples money to borrow and short BTC and other’s on the exchanges? Well. Price discovery will occur.

    The event horizon is nearing home gamers. Get Ready.

  8. In our greater family lore, is a tale of banks. The Family, and all its members, swears on a stack of Bibles that it’s true. Minor variations in fine specifics are quickly dismissed as Missing The Point. Personally, knowing the members of our weird tribe, I believe it’s substantially accurate. You’d have to know Cousin Frank to fully grok.


    In the early 1960s (Important — bear that in mind) Cousin Frank was running a dairy farm, as he had been doing all through the Great Depression and WW2. He had two sons drafted, and one lost in the fields of France; but Frank himself just ran the farm, and ran it well. There were lean years, but he persisted.

    Frank hated banks — and indeed all larger businesses where people dressed nice, spoke nice, had clean fingernails, and wore neckties. Frank was a Simple Man Of The Earth, and did business with handshakes and his word.

    By and by, his relatives strongly advised him to put his money in a bank — it was much safer now, especially with all the new regulations. The Depression had made him leary of this, but ultimately he gave in and agreed maybe times had changed.

    So, after picking a local bank, he dragged in a milk can (well familiar to us kids who had Lionel electric trains) about two and a half feet high, and all banged-up silvery metal. Clean, but battered by years of service. Frank was a thorough man, and had brought a two-wheeled hand cart and his remaining strong son to get the very heavy can on the hand truck, and in the door.

    The banker who had been warned of this in advance, allowed as how they had to count it for him, since it was largely in the form of coins; but in gratitude for his business there would be no charge for this service. Frank agreed, and was told he could pick up his deposit ticket two days later. Fine.

    Two days later, Frank dropped by the bank, and the banker (who actually did resemble Mister Drysdale) proudly handed him the receipt and a warm welcoming big-smile handshake.

    Frank was cordial, and studied the receipt. $146,753.19 it said. Frank did not speak. After a long, pregnant moment Mister Drysdale asked if all was well.

    Frank said, “Oh yes — just fine. But I brought the wrong milk can.”

    Depending on the specific family tale-teller, what happened next was that Frank brought another milk can a couple of days later, to much the same result with a slightly different number.

    Frank never did say — to anyone — just how many milk cans there were.

    Sworn to by various respected family members as true.

    I knew Frank. I never doubted it.

  9. The “Insiders” to the money game are going to shout, scream, and DEMAND that the FDIC either pay off the depositors in full … or somehow find a “buyer” (who will actually just be a conduit for FDIC money) who will.

    Based upon what happened in 1990, 2000, and 2008, of course the Fed and the FDIC will publicly protest … but behind the curtain manipulate the government’s bureaucrats to do just that, and VOILA maybe not directly, it may have to be indirect, they will ensure that their WEALTHY friends are made 100% whole, and those serving as the middle men in the transactions make MANY millions in the process. The cost to be born by the working people of America of course … just like in 1990, 2000, and 2008.

    Social any losses while Privatizing any gains. It is how the system works.

    Questions by the taxpaying rubes are NOT allowed. Just pay up.

  10. I’m not rich. But there is a reason my personal bank is the only ‘National’ bank (Fed Member) in Hawaii. Local low profile, ‘small business bank’, but behind the scenes it is the one that supplies money to the other local high-profile banks. Also a few large international transactions are noted. If my bank fails, the FED itself has failed… not that it couldn’t happen, but… I think I’m as safe as can be expected. Like Ure says… I don’t have any debt and don’t have far to fall.

  11. There will be a massive deflation in the general price level if deposits over 250K get bailed in.

    Wouldn’t that be something. The purchasing power stolen from the saver over the last 90 years gets returned over one weekend.

    The other side of the bail in means notes on cars and houses will be called that weekend too.

    OR a new system is put into place and all deposits are bailed in.

  12. Re: Battle for the Controls
    feat. Keynes for Pains


    Consternation abounded across the time zones this morning as PN appeared an hour early. Don’t forget to spring forward one hour tomorrow morning. Tool Tyme waits for no one.

    PM Sunak’s pick for the Bank of England’s Monetary Policy Committee, Dr. Swati Ghingra, spoke this past Wednesday speaking firmly against any further rise in UK interest rates for the next MPC meeting on March 23rd. The anticipated outcome is hawks 7 to doves 2. (This is not investment advice.) The Economy 2030 talk series is hosted by The Resolution Foundation. It’s funded by high school educated Sir Clive Cowdery, and claims to work for the betterment of the lower and middle classes. The event took place at 2 Queen Anne’s Gate which is adjacent to Birdcage Walk. The latter was formerly home to a menagerie founded early in the 17th century by King Charles I previously known as Charles VI of Scotland, daughter of Mary, Queen of Scots.

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