Brownstone Institute
Where Is Occupy Silicon Valley?
From the Brownstone Institute
Bank failures tend to come in waves, and we are experiencing at least a mini-wave now.
Banks fail for three basic reasons: 1. Credit transformation: deterioration in borrower creditworthiness, usually due to an adverse economic shock (e.g., a real estate bust). 2. Maturity transformation: borrowing short, lending long, and then getting hammered when interest rates rise. 3. Liquidity transformation combined with an exogenous liquidity shock, a la Diamond-Dybvig, where idiosyncratic depositor needs for cash lead to withdrawals that exceed liquid assets and therefore trigger fire sales of illiquid assets.
The two most notable failures of late–Silicon Valley Bank and Silvergate–are examples of 2 and 3 respectively.
In some respects, SVB is the most astounding. Not because a bank failed in the old-fashioned way, but because it was funded primarily by the deposits of supposed financial sophisticates–and because of the disgusting policy response of the Treasury and the Fed.
SVB took in oodles of cash, especially in the past couple of years. The cashcade was so immense that SVB could not find enough traditional banking business (loans) to soak it up, so they bought lots of Treasuries. And long duration Treasuries to boot.
And then Powell and the Fed applied the boot, jacking up rates. Bonds have cratered in the last year, and took SVB’s balance sheet with it.
Again, an old story. And hardly a harbinger of systemic risk–unless such reckless maturity mismatches are systemic.
SVB was the Banker to the Silicon Valley Stars, notably VCs and tech firms. These firms are the ones that deposited immense sums in exchange for a pittance of return. Case in point, Roku, put almost $500 million–yes, you read that right, 9 figures led with a 5–into SVB!!!
I mean: what the eff? Was the Treasurer a moron? For who other than a moron would hold that much in cash in a single institution? (Roku claims its devices “make your home a smarter.” Maybe they should have hired a smarter treasurer and CFO, or replaced them with one of its devices). Hell, why is a company holding that much in cash period?
A few of these alleged masters of the universe (like Palantir) saw the writing on the wall and yanked their deposits: deposits fell by a quarter on Friday alone, sealing the bank’s doom. Those who were slow to run howled to the high heavens over the weekend that if there was not a bailout there would be a holocaust in the tech sector.
Even though the systemic risk posed by SVB’s failure is nil (or if not, then every bank is systemically important), the Treasury Department and the Fed responded to these howls and guaranteed all the deposits–even though the FDIC’s formal deposit insurance limit is $250,000. You know, .05 percent of Roku’s deposit.
When evaluating this, one cannot ignore the reality that the Democratic Party is completely beholden to Silicon Valley. This is beyond scandalous.
Occupy Silicon Valley, anyone?
Treasury Secretary Janet Yellen insulted our intelligence by assuring us this is not a bailout. Well, it’s not a taxpayer bailout, strictly speaking, because the Treasury is not providing the backstop. Instead, it is being funded by a “special assessment” on solvent banks. Which are owned and funded by people who also pay taxes. And such an “assessment” is a tax in everything but name–because it is a contribution by private entities compelled by the government.
The policy implications of this are disastrous. The whole problem with such bailouts is moral hazard. What is to stop banks from engaging in such reckless behavior as SVB did if they can obtain seemingly unlimited funding from those who know that they will be bailed out if things go pear-shaped?
And the regulatory failure here demonstrates that bank regulation–despite the supposed “reforms” of Frankendodd–can’t even catch or constrain the oldest bet-the-bank strategy in the book. Free banking–no deposit insurance, no bailing out of depositors–couldn’t do worse, and would likely do better.
No, the failure of SVB is not the scandal here. The scandal is the political response to it. This reveals yet again how captured the government is. This time not by Wall Street, but by tech companies and oligarchs that are currently the primary source of Democratic political funding.
A couple of weeks ago the Silvergate story looked juicy, but SVB has put it in the shade. Silvergate also grew dramatically, but on the back of crypto rather than SV tech. It became the main banker for many crypto firms and entrepreneurs. The crypto meltdown did not affect Silvergate directly, but it did crush its depositors, the aforesaid crypto firms and entrepreneurs. They withdrew a lot of funding, and an old-fashioned liquidity mismatch did it in.
In traditional banks, deposit funding is “sticky.” Banks that rely on wholesale funding (“hot money”) are more vulnerable to runs. Silvergate’s funding was not traditional sticky deposit funding, nor was it hot money per se. It was money that was pretty cool as long as crypto was cool, and became hot once crypto melted down.
A run started, but the run was precipitated by a liquidity shock. Simple story, really.
Silvergate’s failure was not a scandal. SVB’s failure per se was not a scandal (except to the extent that our vaunted banking regulators failed to prevent the most prosaic type of failure).
Again–the scandal is the politically tainted response that will have baleful consequences in the future, as the response virtually guarantees that there will be more SVBs in the future.
Author
From the Brownstone Institute
The document was only removed on about March 26, 2023. During the entire intervening time, the plan survived on the CDC’s public site with little to no public notice or controversy.
No matter how bad you think Covid policies were, they were intended to be worse.
Consider the vaccine passports alone. Six cities were locked down to include only the vaccinated in public indoor places. They were New York City, Boston, Chicago, New Orleans, Washington, D.C., and Seattle. The plan was to enforce this with a vaccine passport. It broke. Once the news leaked that the shot didn’t stop infection or transmission, the planners lost public support and the scheme collapsed.
It was undoubtedly planned to be permanent and nationwide if not worldwide. Instead, the scheme had to be dialed back.
Features of the CDC’s edicts did incredible damage. It imposed the rent moratorium. It decreed the ridiculous “six feet of distance” and mask mandates. It forced Plexiglas as the interface for commercial transactions. It implied that mail-in balloting must be the norm, which probably flipped the election. It delayed the reopening as long as possible. It was sadistic.
Even with all that, worse was planned. On July 26, 2020, with the George Floyd riots having finally settled down, the CDC issued a plan for establishing nationwide quarantine camps. People were to be isolated, given only food and some cleaning supplies. They would be banned from participating in any religious services. The plan included contingencies for preventing suicide. There were no provisions made for any legal appeals or even the right to legal counsel.
The plan’s authors were unnamed but included 26 footnotes. It was completely official. The document was only removed on about March 26, 2023. During the entire intervening time, the plan survived on the CDC’s public site with little to no public notice or controversy.
It was called “Interim Operational Considerations for Implementing the Shielding Approach to Prevent COVID-19 Infections in Humanitarian Settings.”
By absence of empirical data, the meaning is: nothing like this has ever been tried. The point of the document was to map out how it could be possible and alert authorities to possible pitfalls to be avoided.
“This document presents considerations from the perspective of the U.S. Centers for Disease Control & Prevention (CDC) for implementing the shielding approach in humanitarian settings as outlined in guidance documents focused on camps, displaced populations and low-resource settings. This approach has never been documented and has raised questions and concerns among humanitarian partners who support response activities in these settings. The purpose of this document is to highlight potential implementation challenges of the shielding approach from CDC’s perspective and guide thinking around implementation in the absence of empirical data. Considerations are based on current evidence known about the transmission and severity of coronavirus disease 2019 (COVID-19) and may need to be revised as more information becomes available.”
The meaning of “shielding” is “to reduce the number of severe Covid-19 cases by limiting contact between individuals at higher risk of developing severe disease (‘high-risk’) and the general population (‘low-risk’). High-risk individuals would be temporarily relocated to safe or ‘green zones’ established at the household, neighborhood, camp/sector, or community level depending on the context and setting. They would have minimal contact with family members and other low-risk residents.”
In other words, this is what used to be concentration camps.
Who are these people who would be rounded up? They are “older adults and people of any age who have serious underlying medical conditions.” Who determines this? Public health authorities. The purpose? The CDC explains: “physically separating high-risk individuals from the general population” allows authorities “to prioritize the use of the limited available resources.”
This sounds a lot like condemning people to death in the name of protecting them.
The model establishes three levels. First is the household level. Here high-risk people are“physically isolated from other household members.” That alone is objectionable. Elders need people to take care of them. They need love and to be surrounded by family. The CDC should never imagine that it would intervene in households to force old people into separate places.
The model jumps from households to the “neighborhood level.” Here we have the same approach: forced separation of those deemed vulnerable.
From there, the model jumps again to the “camp/sector level.” Here it is different. “A group of shelters such as schools, community buildings within a camp/sector (max 50 high-risk individuals per single green zone) where high-risk individuals are physically isolated together. One entry point is used for exchange of food, supplies, etc. A meeting area is used for residents and visitors to interact while practicing physical distancing (2 meters). No movement into or outside the green zone.”
Yes, you read that correctly. The CDC is here proposing concentration camps for the sick or anyone they deem to be in danger of medically significant consequences of infection.
Further: “to minimize external contact, each green zone should include able-bodied high-risk individuals capable of caring for residents who have disabilities or are less mobile. Otherwise, designate low-risk individuals for these tasks, preferably who have recovered from confirmed COVID-19 and are assumed to be immune.”
The plan says in passing, contradicting thousands of years of experience, “Currently, we do not know if prior infection confers immunity.” Therefore the only solution is to minimize all exposure throughout the whole population. Getting sick is criminalized.
These camps require a “dedicated staff” to “monitor each green zone. Monitoring includes both adherence to protocols and potential adverse effects or outcomes due to isolation and stigma. It may be necessary to assign someone within the green zone, if feasible, to minimize movement in/out of green zones.”
The people housed in these camps need to have good explanations of why they are denied even basic religious freedom. The report explains:
“Proactive planning ahead of time, including strong community engagement and risk communication is needed to better understand the issues and concerns of restricting individuals from participating in communal practices because they are being shielded. Failure to do so could lead to both interpersonal and communal violence.”
Further, there must be some mechanisms to prohibit suicide:
Additional stress and worry are common during any epidemic and may be more pronounced with COVID-19 due to the novelty of the disease and increased fear of infection, increased childcare responsibilities due to school closures, and loss of livelihoods. Thus, in addition to the risk of stigmatization and feeling of isolation, this shielding approach may have an important psychological impact and may lead to significant emotional distress, exacerbate existing mental illness or contribute to anxiety, depression, helplessness, grief, substance abuse, or thoughts of suicide among those who are separated or have been left behind. Shielded individuals with concurrent severe mental health conditions should not be left alone. There must be a caregiver allocated to them to prevent further protection risks such as neglect and abuse.
The biggest risk, the document explains, is as follows: “While the shielding approach is not meant to be coercive, it may appear forced or be misunderstood in humanitarian settings.”
(It should go without saying but this “shielding” approach suggested here has nothing to do with focused protection of the Great Barrington Declaration. Focused protection specifically says: “schools and universities should be open for in-person teaching. Extracurricular activities, such as sports, should be resumed. Young low-risk adults should work normally, rather than from home. Restaurants and other businesses should open. Arts, music, sport and other cultural activities should resume. People who are more at risk may participate if they wish, while society as a whole enjoys the protection conferred upon the vulnerable by those who have built up herd immunity.”)
In four years of research, and encountering truly shocking documents and evidence of what happened in the Covid years, this one certainly ranks up at the top of the list of totalitarian schemes for pathogenic control prior to vaccination. It is quite simply mind-blowing that such a scheme could ever be contemplated.
Who wrote it? What kind of deep institutional pathology exists that enabled this to be contemplated? The CDC has 10,600 full-time employees and contractors and a budget of $11.5 billion. In light of this report, and everything else that has gone on there for four years, both numbers should be zero.
Author
From the Brownstone Institute
For the first time in 30 years, we have gone a long swath of time – since October 8-10 – since this service has chronicled the life of the Internet in real time.
Instances of censorship are growing to the point of normalization. Despite ongoing litigation and more public attention, mainstream social media has been more ferocious in recent months than ever before. Podcasters know for sure what will be instantly deleted and debate among themselves over content in gray areas. Some like Brownstone have given up on YouTube in favor of Rumble, sacrificing vast audiences if only to see their content survive to see the light of day.
It’s not always about being censored or not. Today’s algorithms include a range of tools that affect searchability and findability. For example, the Joe Rogan interview with Donald Trump racked up an astonishing 34 million views before YouTube and Google tweaked their search engines to make it hard to discover, while even presiding over a technical malfunction that disabled viewing for many people. Faced with this, Rogan went to the platform X to post all three hours.
Navigating this thicket of censorship and quasi-censorship has become part of the business model of alternative media.
Those are just the headline cases. Beneath the headlines, there are technical events taking place that are fundamentally affecting the ability of any historian even to look back and tell what is happening. Incredibly, the service Archive.org which has been around since 1994 has stopped taking images of content on all platforms. For the first time in 30 years, we have gone a long swath of time – since October 8-10 – since this service has chronicled the life of the Internet in real time.
As of this writing, we have no way to verify content that has been posted for three weeks of October leading to the days of the most contentious and consequential election of our lifetimes. Crucially, this is not about partisanship or ideological discrimination. No websites on the Internet are being archived in ways that are available to users. In effect, the whole memory of our main information system is just a big black hole right now.
The trouble on Archive.org began on October 8, 2024, when the service was suddenly hit with a massive Denial of Service attack (DDOS) that not only took down the service but introduced a level of failure that nearly took it out completely. Working around the clock, Archive.org came back as a read-only service where it stands today. However, you can only read content that was posted before the attack. The service has yet to resume any public display of mirroring of any sites on the Internet.
In other words, the only source on the entire World Wide Web that mirrors content in real time has been disabled. For the first time since the invention of the web browser itself, researchers have been robbed of the ability to compare past with future content, an action that is a staple of researchers looking into government and corporate actions.
It was using this service, for example, that enabled Brownstone researchers to discover precisely what the CDC had said about Plexiglas, filtration systems, mail-in ballots, and rental moratoriums. That content was all later scrubbed off the live Internet, so accessing archive copies was the only way we could know and verify what was true. It was the same with the World Health Organization and its disparagement of natural immunity which was later changed. We were able to document the shifting definitions thanks only to this tool which is now disabled.
What this means is the following: Any website can post anything today and take it down tomorrow and leave no record of what they posted unless some user somewhere happened to take a screenshot. Even then there is no way to verify its authenticity. The standard approach to know who said what and when is now gone. That is to say that the whole Internet is already being censored in real time so that during these crucial weeks, when vast swaths of the public fully expect foul play, anyone in the information industry can get away with anything and not get caught.
We know what you are thinking. Surely this DDOS attack was not a coincidence. The time was just too perfect. And maybe that is right. We just do not know. Does Archive.org suspect something along those lines? Here is what they say:
Last week, along with a DDOS attack and exposure of patron email addresses and encrypted passwords, the Internet Archive’s website javascript was defaced, leading us to bring the site down to access and improve our security. The stored data of the Internet Archive is safe and we are working on resuming services safely. This new reality requires heightened attention to cyber security and we are responding. We apologize for the impact of these library services being unavailable.
Deep state? As with all these things, there is no way to know, but the effort to blast away the ability of the Internet to have a verified history fits neatly into the stakeholder model of information distribution that has clearly been prioritized on a global level. The Declaration of the Future of the Internet makes that very clear: the Internet should be “governed through the multi-stakeholder approach, whereby governments and relevant authorities partner with academics, civil society, the private sector, technical community and others.” All of these stakeholders benefit from the ability to act online without leaving a trace.
To be sure, a librarian at Archive.org has written that “While the Wayback Machine has been in read-only mode, web crawling and archiving have continued. Those materials will be available via the Wayback Machine as services are secured.”
When? We do not know. Before the election? In five years? There might be some technical reasons but it might seem that if web crawling is continuing behind the scenes, as the note suggests, that too could be available in read-only mode now. It is not.
Disturbingly, this erasure of Internet memory is happening in more than one place. For many years, Google offered a cached version of the link you were seeking just below the live version. They have plenty of server space to enable that now, but no: that service is now completely gone. In fact, the Google cache service officially ended just a week or two before the Archive.org crash, at the end of September 2024.
Thus the two available tools for searching cached pages on the Internet disappeared within weeks of each other and within weeks of the November 5th election.
Other disturbing trends are also turning Internet search results increasingly into AI-controlled lists of establishment-approved narratives. The web standard used to be for search result rankings to be governed by user behavior, links, citations, and so forth. These were more or less organic metrics, based on an aggregation of data indicating how useful a search result was to Internet users. Put very simply, the more people found a search result useful, the higher it would rank. Google now uses very different metrics to rank search results, including what it considers “trusted sources” and other opaque, subjective determinations.
Furthermore, the most widely used service that once ranked websites based on traffic is now gone. That service was called Alexa. The company that created it was independent. Then one day in 1999, it was bought by Amazon. That seemed encouraging because Amazon was well-heeled. The acquisition seemed to codify the tool that everyone was using as a kind of metric of status on the web. It was common back in the day to take note of an article somewhere on the web and then look it up on Alexa to see its reach. If it was important, one would take notice, but if it was not, no one particularly cared.
This is how an entire generation of web technicians functioned. The system worked as well as one could possibly expect.
Then, in 2014, years after acquiring the ranking service Alexa, Amazon did a strange thing. It released its home assistant (and surveillance device) with the same name. Suddenly, everyone had them in their homes and would find out anything by saying “Hey Alexa.” Something seemed strange about Amazon naming its new product after an unrelated business it had acquired years earlier. No doubt there was some confusion caused by the naming overlap.
Here’s what happened next. In 2022, Amazon actively took down the web ranking tool. It didn’t sell it. It didn’t raise the prices. It didn’t do anything with it. It suddenly made it go completely dark.
No one could figure out why. It was the industry standard, and suddenly it was gone. Not sold, just blasted away. No longer could anyone figure out the traffic-based website rankings of anything without paying very high prices for hard-to-use proprietary products.
All of these data points that might seem unrelated when considered individually, are actually part of a long trajectory that has shifted our information landscape into unrecognizable territory. The Covid events of 2020-2023, with massive global censorship and propaganda efforts, greatly accelerated these trends.
One wonders if anyone will remember what it was once like. The hacking and hobbling of Archive.org underscores the point: there will be no more memory.
As of this writing, fully three weeks of web content have not been archived. What we are missing and what has changed is anyone’s guess. And we have no idea when the service will come back. It is entirely possible that it will not come back, that the only real history to which we can take recourse will be pre-October 8, 2024, the date on which everything changed.
The Internet was founded to be free and democratic. It will require herculean efforts at this point to restore that vision, because something else is quickly replacing it.
Authors
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