You may be wondering, dear reader, why your humble Eyewitness has been talking up the Bank failures in the US. You do remember last week’s collapse of two U.S. mid-size banks – Silicon Valley Bank ($209 billion in assets) and Signature Bank ($110 billion)?? Well, Biden had to step in and bail them out, since, in the US, customers’ deposits over $250,000 aren’t insured. And for those banks, that was chicken feed – especially SVB with its go-go startup venture capital concentration!!
But even though those were regional banks, your Eyewitness explained that because of the seamless interrelationship of the global financial system, tremors in the US can cause earthquakes elsewhere!! And let’s remember that the source of the Banks’ troubles originated nowhere else than in the mighty US Fed that’s supposed to be looking out for the largest economy in the world. But as soon as the Fed raised interest rates to dampen inflation, this made the long-term bonds that the banks had massively invested in lose value – as they became discounted!! Actions – especially in banking – have consequences!!
Even across the Atlantic, tremors were felt as British Banks looked for Sunak’s UK Government to also intervene. But it’s Switzerland –regarded as the gold standard in global banking – that their second largest bank, Credit Suisse (CS), with over US$500 billion in assets – is tottering!! And they’re a global institution that wasn’t even too affected by the American travails. What this means is we have a new epicenter for troubles in the global financial structure. So how come Credit got into trouble?
The same way that most of us do – by playing fast and loose in what we’re involved!! But since we know how quickly global policemen jump all over us when the slightest error is committed, your Eyewitness wonders where were the Swiss regulators during all described below. We can start with the 2021 collapse of the British financial firm Greensil – forcing CS to shutter four funds with $10 billion exposure!! Four weeks later, they lost $5 billion when US hedge fund Archegos imploded!!
They same year, they had to pay fines of $475 million for bribery in Mozambique!! Gasp!! Yes, bribery for loans!! Then a press investigation revealed that the bank had billions in deposits from criminals dating back to the 1940s. And last year, a Bermuda trial revealed that CS had caused a client to lose $537 million. And was fined for facilitating a Bulgarian coke network; paid off $500 million to settle subprime loans in the US and paid $38 million euros to avoid money laundering charges in France, etc etc.
They’ve just had to turn to the Swiss Central Bank for a $54 billion loan to maintain liquidity!! So, who’s corrupt?? And who’s sinking??
They say some old people don’t think any longer…they only remember. So, when confronted with a particular situation, rather than dealing with it with tools available in the present, they dredge up things from the deeeep recesses of their fading memories – and lay it on!! Unfortunately, at the very best, that’s a hit-or-miss proposition. It’s like the “infinite monkey theorem” which claims that a monkey hitting keys at random on a typewriter keyboard for an infinite amount of time will almost surely type any given text, – such as the complete works of William Shakespeare!!
Right now in Guyana, we got some old geezers dredging up an old political strategy from the seventies to call for the army to stand down – or turn their guns on the PPP – when they launch their action to remove them from office!! Problem is, during the 1970s we had a totalitarian dictatorship that oppressed the ENTIRE population – according to Walter Rodney.
That ain’t so today!!
Is your Eyewitness too old school to believe that discipline must be IMPOSED in schools?? To him, the very raison d’etre of schools is to impart knowledge to children. And the latter gotta be inclined to receive that knowledge!!