Friday, April 28, 2023

First Republic and George Selgin on Bank Runs

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Economist George Selgin
The Wall Street Journal is reporting that troubled San Francisco-based First Republic Bank is on the cusp of being seized by the FDIC and its assets sold to JP Morgan Chase and PNC Financial Group.

Read more at:

First Republic, which like Silicon Valley Bank invested heavily over long terms at very low interest rates, has suffered from massive depositor withdrawals over the last six weeks. In its recent quarterly SEC filing First Republic announced it has lost over $100 billion of its $176 billion in deposits during the first quarter (-57%) partially offset by a $30 billion deposit injection by a consortium of major banks.

In other words, First Republic was suffering from a slow-motion bank run.

At which point the Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff would like to cite the wisdom of monetary economist George Selgin whom he has learned much from over the years.

Regarding the subject of depositors running on banks:

"Real life bank runs are seldom unprovoked. They're almost always runs on banks that are in trouble beforehand, that have been badly managed, that their loans are not performing, etc... 

".....They're not failing because they're being run upon. They're run upon because they're failing. And the runs have the desirable effect of shutting down the banks before they can pile up losses and cause even greater harm to their creditors..."

"...It's not random, it's depositors saying 'we hear you guys have blown it and we want to cash out.'"

-George Selgin

Wednesday, April 26, 2023

Future Prospects for the Global Reserve Dollar, Part 1: The Chinese Yuan is Still Not About to Replace the Dollar

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“China might become the major economic power, but if they want their currency to be the [global] reserve currency, as we know they have to have flexible exchange rates, they have to have elimination of capital controls, they have to have a deep and liquid market for their own currency—domestic and foreign—and they have to liberalize their financial system and make it safer and so on so on, and right now they're going in the other direction."

-Nouriel Roubini, aka. "Doctor Doom"

5 MIN READ - The Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff finds himself in the unusual position of defending the US fiat dollar—which he’s simultaneously a critic of—from the recent barrage of news opinions predicting its global reserve currency status is on the brink of collapse.

With a salvo of bad news for the U.S. dollar—high inflation, soaring fiscal deficits, and several countries signing limited bilateral currency agreements with China—a flurry of opinion pieces have hit the news predicting that the imminent collapse of the global reserve dollar is right around the corner.

While none of the recent developments can be considered positive for the dollar the Economics Correspondent believes that:

1) The dollar’s status as leading global reserve currency isn’t going away anytime soon

2) The dollar’s share of foreign reserve holdings has long been on a slow, nonlinear, multi-decade decline (73% in 1965 to 60% today) for a very different set of reasons and that gradual decline will continue.

3) Most predictions of imminent dollar collapse are being made by people with poor understanding of what reserve currencies are and how they are chosen, and many of the same people have predicted the immediate death of the dollar every day for at least the last fifteen years and/or been selling gold or Bitcoin for nearly as long.

The question of what makes a global reserve currency the most popular medium of exchange between nations is more complicated than “the petrodollar is holding the whole thing up” or “Russia is going to trade in Chinese yuan now.” 

An adequate understanding requires an explanation that might require, oh… twelve minutes of reading.

That’s not much of an investment to gain an underlying understanding of global reserve currencies is it?

Well it happens the Economics Correspondent posted just such a writeup three years ago right here at Cautious Optimism. Anyone who wants to make only a small time investment can’t do much better for a brief education on reserve currencies at:

To whet readers’ appetites with just a few teasers (much more in the linked articles), the ideal and most sought-after global reserve currency will exhibit at least eleven traits:

1. Incumbency and the largest network effect

2. A large economic zone

3. Large, developed, liquid securities markets

4. Trusted, transparent, and regulated securities markets

5. A commitment to low inflation

6. No capital controls

7. Free/floating exchange rates

8. Consistent trade deficits

9. Democracy or at minimum some political liberalization

10. Military superpower status

11. A lender of last resort central bank

The U.S. dollar with all its warts has done a better job, a far better job, of offering all eleven for over forty years. The next closest competitor has been the euro which still has problems with trade surpluses, military superpower status, incumbency, and doubts about government securities issued by periphery states like Greece, Spain, Portugal, and Italy.

And how about recent events?

Anyone who hasn’t been in a coma the last two years knows the dollar has stumbled on one requirement—low inflation—and the threat of the world’s central banks scoffing over inflation is just one more reason the Fed has taken getting it under control so seriously.

However where the dollar has gotten lucky is that nearly all other western central banks, plus a few eastern ones, have made the same inflation mistake with their own currencies, leveling the playing field.

The dollar’s continued acceptance has truly been a case of remaining the least dirty shirt in the laundry basket—even with all of the Biden administration’s recent unforced policy errors.

And what about China? Isn’t the Chinese renminbi (RMB aka. yuan) moving in to replace the dollar by the end of the year?

Well not only does the RMB fail miserably in the trustworthiness and transparency of its still-developing securities markets, not only does China still impose capital controls on investment flows, not only does the CCP insist on running consistent trade surpluses, and not only does Beijing still manipulate the RMB’s exchange rate—insurmountable problems all—but China’s political system also sows sufficient distrust for nations to avoid holding large balances of reserves in RMB or RMB-denominated assets.

Despite all the talk about Russia, Saudi Arabia, and BRICS countries discussing or agreeing to some level of bilateral trade using Chinese RMB, no one is going to convert the greater part of their hard-earned foreign reserves into Chinese currency other than symbolic balances used to make pointed political criticisms of the United States.

Consider that China’s dictatorship already stops western movies, western companies, and western investment from freely flowing into its markets if any company or a single sports league owner criticizes just one aspect of the regime. And if the Taiwan flag isn’t digitally removed from Tom Cruise’s bomber jacket, Top Gun Maverick is banned from Chinese theaters.

Now imagine you’re a central banker, finance minister, or sovereign wealth fund manager responsible for hundreds of billions of dollars in global reserves that your citizens have sweated for years to earn by producing and selling real goods and services for export.

Will you trust converting those reserves to RMB and parking them in Chinese securities markets? Where a corruption scandal can wipe out their value overnight? Where the CCP can slap down capital controls and lock down your money anytime they please? Where Beijing can intervene in foreign exchange markets and devalue you into a 10% of 15% haircut overnight? Or Xi Jinping can arbitrarily seize your financial assets if he wakes up one morning in a bad mood?

China is already in the habit of using its economic power to punish western companies and even small countries for the tiniest perceived sleight. So are they going to become less aggressive one day when they're the world’s largest economy and control the premier reserve currency? 

It doesn’t take much imagination to predict what will happen to your country’s hundreds of billions of dollars—or trillion-plus RMB—in foreign reserves if you displease the CCP.

Foreign governments, even those who publicly talk about friendly alliances with China, already know this. Even fellow autocracies that publicly broadcast their "limitless" friendship with China are smart enough to know when it comes to their money there will definitely be limits.

The US by contrast, while not angelic in its application of reserve dollar power, is far more trusted by world central banks. A perfect example is China itself whose relations with the USA are now more acrimonious than at any time since Mao Zedong. Yet even Beijing still trusts the USA enough to hold well over  $1 trillion in dollar reserves and assets, even after unleashing Covid upon America and angering Washington with its spy balloons.

If the shoe was on the other foot can anyone really see countries that offend China trusting the RMB in case their relationship goes south?

This explains in part why the Chinese yuan, despite being issued by the world’s second largest economy, maintains a 3% share of global reserve holdings compared to 60% for the dollar and 20% for the euro.

It's also why the Economics Correspondent predicts that while non-aligned countries like Saudi Arabia and Brazil announce agreements to trade in RMB, they will likely accept only enough RMB as payment for exports to meet their immediate purchasing/import needs from China and perhaps a tiny/symbolic amount in reserve—the rest being held in more trustworthy currencies like the pound, Swiss franc, yen, Canadian and Australian dollar, and mostly still the US dollar.

And yes, all this even as the Biden administration’s weak foreign policy, deficit-bloating fiscal policy, and Federal Reserve screwups nudge more countries slightly further away from the dollar—but not nearly enough to compensate for the glaring deficiencies of other competing currencies.

Anyway the Economics Correspondent highly recommends reading his 2019 columns on how the world chooses a currency to serve as its preferred reserve holding. In fact he wishes many of the columnists who have been predicting the imminent collapse of the global reserve dollar every day for the last fifteen years, some of whom he usually agrees with, would learn some of those basics themselves.

Another column or two will follow to address a few more recent global reserve dollar issues: the always-mentioned “petrodollar,” the role of the U.S. military, the prospect of competing gold-backed currencies, and the much longer-term.

Saturday, April 15, 2023

Karine Jean-Pierre: "We Are Not Headed To a Recession or a Pre-Recession"

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Karine Jean-Pierre
“White House Press Secretary Karine Jean-Pierre said job numbers and consumer spending are strong and chalked it up to President Joe Biden's economic plans, waving off a recession risk. ‘We're seeing the success of his plans… …Those are the indicators that show us that we are not headed to a recession or a pre-recession,’ she said.”

In the words of her slightly less clueless predecessor, the Cautious Optimism Correspondent for Economic Affairs suggests we “circle back” to KJP in a year and see how her prediction plays out.

Read more at:

Tuesday, April 11, 2023

Yellen Confirms Average $1.7 Trillion Deficits for the Next Decade

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Sen. Ron Johnson (R-WI)
Two months ago the Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff posted two articles using cruel math to predict the federal government will run $1+ trillion deficits in perpetuity and could easily run average deficits of $1.8 trillion for the next decade.

“The federal government can actually run even higher deficits - $1.81 trillion for the next decade - and the debt-to-GDP ratio will remain unchanged at 120.7%.”

-Cautious Optimism, February 15, 2023

The math is simple: between real economic growth and the Fed’s deliberate price inflation politicians and policymakers expect nominal GDP and tax revenues to grow significantly in the future, thereby allowing them to run bigger and bigger deficits forever.

Therefore the debt-to-nominal GDP ratio will remain fairly stable or rise slowly, enabled by both the U.S. economy producing more stuff and the central bank printing enough excess money every year to continuously drive up prices.

What the Economics Correspondent didn’t know was that a month later Treasury Secretary Janet Yellen would not only publicly confirm this prediction, but do it so openly and unabashedly.

From her Senate Finance Committee testimony of March 16, 2023:

Senator Ron Johnson (R-WI): So now you’re here to testify about the president’s budget. How much are the total deficits over that ten-year period according to the president’s budget?

Treasury Secretary Janet Yellen: (silent as she flips through pages of documents)

Johnson: You don’t know that off the top of your head?

Yellen: Umm (keeps checking documents)

Johnson: I’m running out of time. It’s $17 trillion, OK?

Yellen: Yes.

Johnson: You’re going to drive the debt from somewhere around $32 trillion up to about $50 trillion, correct?

Yellen: Yes, but what I believe is the single most important metric for judging the fiscal stance of the country is real net interest as a share of GDP. We have a large GDP.

Johnson: So are you concerned when you take the debt from $32 trillion to $50 trillion, are you concerned who’s going to buy that debt? And also at what rate they’ll expect to be compensated for buying riskier and riskier debt? Are you concerned about that?

Yellen: Well, if the net interest… real net interest costs of the debt remains low relative to GDP and we’re on a sustainable fiscal course…

Johnson: Well we’re not on a sustainable path.

Yes, you heard it from Yellen herself folks. The Biden budget is designed to deliberately accumulate a national debt of $50 trillion by 2033.

ps. The New York Times headlines Biden’s very same budget with “Biden Is Set to Detail Nearly $3 Trillion in Measures to Reduce Deficits.”

NPR: “Biden budget proposal to show nearly $3 trillion in deficit reduction over 10 years.”

Los Angeles Times: “Biden budget aims to cut deficits nearly $3 trillion over 10 years.”

ABC News: “Biden budget aims to cut deficits nearly $3T over 10 years.”

CBS News: “Biden's budget plan aims to cut federal deficit by $3 trillion.”

CNN: “Biden to propose cutting the deficits by nearly $3 trillion.”

Sunday, April 9, 2023

U.S. Banks With Largest Held-to-Maturity Losses

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 From the Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff: A list of America's top banks with the largest held-to-maturity securities losses as a share of their equity capital buffer (click to enlarge and see rightmost column: "Perc").

The Correspondent's memory of Common Equity Tier 1 (CET1) capital ratios is a bit old, but he recalls around the 2008 financial crisis if a bank's ratio of equity capital to risk-weighted-assets was more than 8% it was considered "well capitalized" by regulators.

6%-8% was "adequately capitalized."

4%-6% and regulators ordered the bank to immediately raise money and recapitalize.

Under 4% and the bank was immediately seized by regulators and sold off or wound down.

Any CO readers who work with bank regulators and know updated CET1 capital ratio rules for the year 2023 feel free to share in the comments section.

Basel III rules apply higher capital ratio premiums to GSIB banks like JP Morgan Chase, HSBC, BNP Paribas, or Mitsubishi UFJ to name a few.

Wednesday, April 5, 2023

If You Think SVB Was Undiversified, Just Look at America's First 150 Years

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5 MIN READ - The Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff compares Silicon Valley Bank’s now-heavily criticized lack of asset and depositor diversification with that of regulated unit banks during America’s past.

Now that multiple postmortems have been performed on the failure of SVB a consensus has emerged that its collapse was, in the words of Federal Reserve Vice Chair of Supervision Michael Barr, a “textbook case of mismanagement.”

Citing examples of SVB management’s failures, Barr and others have pointed to its overreliance on long-term U.S Treasury and mortgage securities in a zero-interest rate environment and a lack of depositor diversification.

Of course even with those mistakes SVB still wouldn’t have failed were it not for the Fed's fifteen years of near-zero interest rate policy running head-on into a twelve month, 500 basis point rate hike wall. But that’s another story.

But back to diversification, it’s been thoroughly reported by now that SVB loaned heavily to high-tech and healthcare companies and that its deposit base was also heavy in those same sectors.

In fact, according to the company’s website its clients included a full 44% of all venture-backed technology and health care initial public offerings in 2022.

According to Ernst and Young there were 328 technology IPO’s that year and another 168 in healthcare.

The Correspondent doesn’t know exactly how many of those 496 IPO’s were “venture-backed,” but given the nature of IPO’s in those two fields he’d wager “majority” is a conservative call.

Add IPO clients from years before 2022, corporate accounts from other industries, and high net worth individuals and the Economics Correspondent can confidently estimate SVB’s large depositor base at many hundreds of accounts if not in the thousands. After all, in its last SEC-10-K filing SVB reported $186 billion in deposits so even a high estimate of one thousand large accounts would still average a whopping $186 million each (excluding small accounts). 


Now let’s go back in time to the early 20th century.

Cautious Rockers may recall the Economics Correspondent wrote in detail last year about American “unit banking” laws that, for most of U.S. history, heavily restricted the right of banks to open branch offices.

Most states forbade banks from branching at all. Legislatures literally specified “one building” in their statutory language to define chartered banks, and 100% of states forbade branching into other states.

The result? In 1914 the United States had about 27,000 banks of which 95% were tiny and had no branches. Even the remaining 5% of banks that were allowed to branch averaged only five branches each (Calomiris & Haber, 2014)

The political rationale behind these restrictions was complicated and involved stuffing state government coffers with rent-seeking monopoly unit bank profits. Links to the Correspondent’s articles containing more of those details can be found in the comments section.

However the predictable result was—you guessed it—a protracted lack of diversification in America’s entire banking system that was far worse than SVB which looks like a multinational money center bank by comparison.

The nearly 26,000 U.S. banks with no branches were usually one building in a small rural town. Granted a monopoly to operate in that township, the unit bank was heavily reliant on the price of a single regional crop. And a few miles down the road in the next town would be another monopoly unit bank, also heavily dependent on just one local crop.

And depositor bases were nearly as narrow. In a town of a few hundred people, a handful of the wealthiest locals could constitute the majority of the unit bank’s entire deposit base. Just one or two wealthy customers getting nervous and cashing out in times of trouble could bring down a unit bank.

This “unit banking” structure goes all the way back to 1784 when America’s first two banks still in operation today—the Bank of Massachusetts and the Bank of New York—were granted local monopolies alongside their new charters.

The result was nearly 150 years of massive financial instability for the entire country. Falling prices in just one or a few different crops could bring down hundreds or even thousands of unit banks whose loans were dependent entirely on local agriculture or on loans to consumers and small businesses whose fortunes were also tied directly to local agriculture.

As one example informs us, food prices fell globally in the 1920s, the aftermath of World War I and European soldiers returning from the battlefield to farm again. During that decade over 5,000 American banks failed.

And this all happened before the Great Depression had even started. In the early 1930’s over 9,000 more banks failed.

Note: Canada never had any restrictions on bank branching so even as it weathered the Great Depression alongside the United States, zero Canadian banks failed. Canadian banks were larger, better-capitalized, typically had several hundred nationwide branches, and diversified their loans across the country’s entire economy with literally hundreds of thousands or even millions of depositors.


So what’s the point of going back to the early 20th century?

Well if the press and regulators are now declaring:

“Of course SVB was mismanaged: it relied on only a thousand-plus large depositors, loans heavily focused on tech and healthcare companies, and Treasury and mortgage-backed securities”

…all which is true, what do they have to say about U.S. banks a hundred years ago that were forced by law to rely on just a single crop and couldn’t expand outside a town of a few hundred people?

If SVB’s business model was a recipe for collapse and failure, then much more draconian unit banking regulations were a prescription for waves of nationwide bank failures and systemic crisis. 

And that’s exactly what happened—over and over again.

From 1792 to 1933 the United States was rocked by fifteen systemic banking panics while Canada experienced zero.

Unit bank laws were a primary driver of these repeated crises although, if you can believe it, they weren’t even the only bad regulations.

Adding fuel to the fire were the missteps of America’s three central banks—the Bank of the United States (1791-1811), the Second Bank of the United States (1816-1836), and the Federal Reserve System (1914-present)—alongside yet more complicated regulatory restrictions that undermined bank stability during the National Banking System era of 1863-1914.

So if we look at the level of undiversified risk at SVB—which the press and regulators are all calling “textbook mismanagement”—and compare it to the far worse lack of diversification at America’s 19th and early 20th century banks, one can see how financial crises were triggered so easily for 150-plus years.

Only unlike SVB, the lack of unit bank diversification wasn’t by choice. Rather it was mandated by Congress and state legislatures.


Postscript: Just a moment ago the Economics Correspondent asked rhetorically: “What do they [regulators, the press, and let’s throw in academia] have to say about U.S. banks a hundred years ago that were forced by law” to stay unbranched and far more undiversified than SVB?

Well here's a few responses: 

1) “For most of the 19th century and into the 20th century, laissez-faire attitudes and minimal state regulations led to a succession of financial panics.”

-Jon Talton, Seattle Times

2) “Andrew Jackson had famously allowed the charter of the Second Bank of the United States to expire in the 1830s. With only loose regulation, the financial system was decentralized and rudderless… …so the industrializing United States suffered a continual spate of financial panics, bank runs, money shortages and, indeed, full-blown depressions.” 

–Daniel Gross, Washington Post

3) “History tells us that banking is subject to occasional destructive “panics” that can wreak havoc with the economy… …Gilded Age America — a land with minimal government and no Fed — was subject to panics roughly once every six years.”

-Paul Krugman, (New York Times)

4) “An unregulated banking system in the nineteenth century contributed to a string of severe money panics. A short play in this lesson plan helps students understand why this happened and how today’s Federal Reserve System protects against panics.”

-National Council on Economic Education, New York

5) "With the failure to recharter the First Bank of the United States in 1811, regulatory influence over state banks ceased. Credit-friendly Republicans—entrepreneurs, bankers, farmers—adapted laissez-faire financial principles to the precepts of Jeffersonian political libertarianism."

-Wikipedia article on the Panic of 1819

Saturday, April 1, 2023

Janet Yellen: Trump Cut Eighteen Jobs At Treasury!

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5 MIN READ - An update from the Cautious Optimism Correspondent for Economic Affairs on the Biden administration’s latest “blame Trump for SVB’s failure” evasion. 

In the Biden administration’s latest attempt to deflect blame for the failure of Silicon Valley Bank—which happened two years and two months into their watch—Treasury Secretary Janet Yellen this week blamed yucky Orange Man Bad for reducing staff at the Treasury Department’s Financial Stability Oversight Council (FSOC) from 36 employees to 18 and pleaded that she has worked tirelessly to increase its staffing since she took office.

Yellen on Thursday: “When the President and I took office in January 2021, we inherited a financial stability apparatus at Treasury that had been decimated."

Read more at:

The message of course is “Don’t blame us. We saw the tremendous risk caused by Trump’s deregulation and budget cuts, but we were powerless to do anything about it in time. Otherwise we would have prevented SVB’s failure.”

Aside from the media and nearly half of America lapping up this latest excuse just before inhaling and regurgitating it back onto their smartphone screens, here are just a few of the problems with Yellen’s poorly-authored alibi:

1) Federal Reserve Vice Chair for Supervision Michael Barr testified last week that his office already audited SVB many times going back to 2021 and found multiple “deficiencies” and management problems before ordering the bank to take corrective measures. Clearly a smaller staff in one tiny Treasury Department office didn’t prevent the discovery of problems at SVB. 

Barr also stated that despite finding deficiencies at SVB there was a failure of supervision within his office’s procedures, so money for eighteen bodies at Treasury wasn’t going to resolve what was clearly an execution problem at the Fed.

May 9, 2023 addendum: A newly filed report from California's bank regulator, the California Department of Financial Protection and Innovation, blames itself for SVB's failure and claims it (according to AP) "did not act forcefully enough to get the bank to fix its problems."

2) Despite framing herself as clairvoyant enough to see in early 2021 the tremendous risk evil Orange Man created by reducing the FSOC’s staff, the Economics Correspondent can’t find a single instance of Yellen warning of systemic financial risk in the last two-plus years. 

Surely if she “saw it all along” and identified an existential threat to the financial system that threatened to usher in another Great Depression she would have spoken up publicly?

But she didn’t.

Strange for someone who was acutely aware of so chilling a threat to remain silent… unless she didn’t really see it and is now just playing CYA after the fact.

3) Not only did Yellen never warn about the great dangers ahead, but during the last two-plus years she found time to speak publicly and in Congressional testimony about the following issues that were more important than a novel threat of systemic financial crisis:

-SNAP benefits
-Electric vehicle credits
-Community college subsidies
-Diversity initiatives
-George Floyd’s murder
-Biden’s Covid deficit spending packages
-Harriet Tubman’s face on the $20 billZ
-Appointing Treasury’s first Counselor for Racial Equity
-Flying the gay pride flag outside the Treasury building
(this is only a partial list).

These policy priorities were all important enough to bring public attention to but the looming threat of financial crisis due to 18 empty cubicles in a corner of the Treasury building was not.

4) Given that Yellen publicly stated in 2017 the USA would not see another financial crisis in our lifetimes, one would think if she was alarmed at how yucky Orange Man was inviting another crisis with his budget cuts she would have acted to protect her reputation by immediately and pre-emptively screaming at the top of her lungs:

“Earlier I said we wouldn’t see another financial crisis in our lifetimes but right now in January of 2021 I rescind that statement because look at the danger Trump has created!”

Forget even covering for her 2017 statement. Wouldn't any career bureaucrat, seeing the threat of crisis blowing up in their faces, want to get out in front of the problem for political insurance and announce (before the crisis explodes and takes them down) "We've found this problem left to us by Trump and we're working to fix it right now before it's too late?"

Instead she was dead silent. Now she’s eating her own words about “no financial crisis in our lifetimes” even though, according to her, she saw the problem for over two years? Yeah, like that’s believable.

5) Multiple times in her tenure at Treasury Yellen actually *praised* the stability of the banking system during the stresses of the 2020 Covid pandemic--and credited the current regulatory regime. 

Yet we’re now expected to believe that all the time she was holding up the bureaucratic structure as steadfast/resolute she secretly knew it was wide open to a new financial crisis and never said a word?

Not likely.

Obviously the evidence points to a far more plausible explanation: Yellen and the entire Biden administration were blissfully confident that the regulatory system they oversaw was bulletproof on autopilot and then taken by surprise by SVB’s collapse. 

Now that they are being criticized for dropping the ball after two-plus years in power, they’re scrambling to blame someone, anyone other than themselves.

And who are their supporters more likely to believe is responsible than Trump? They could accuse Trump of causing the Chicago fire of 1871 and most Democrats would not only believe it, they'd share it with all their friends and call anyone racist for pointing out Trump wasn't born until 75 years later.

And their alibis are as poorly thought through and crumble in the face of five seconds of scrutiny. But that doesn’t matter to the TDS-afflicted who willingly believe anything so long as the message is Orange Lucifer evil.

There’s one more about the budget cuts.

6) Although Yellen only became Treasury Secretary in early 2021, the Democratic Congressional leadership had every chance to restaff the FSOC when they controlled the House of Representatives starting in January of 2019.

Democrats controlled all the oversight committees and knew all the details of the budget for Treasury. Surely with Maxine Waters heading the Financial Services Committee they could have plugged the tiny hole that threated America with a financial tsunami.

What, they didn't control the Senate yet?

That didn't stop the Pelosi House from successfully holding both of Trump’s Covid CARES packages hostage in 2020 and early 2021 to get hundreds of billions of dollars of pork added to the bills while Americans waited in their locked homes for help.

We’re told that adding a few million dollars’ pittance for FSOC to the combined $3.4 trillion in two CARES packages would have snuffed out the menace of another Great Financial Crisis for good, yet instead Pelosi and the Democrats secured hundreds of billions of dollars for more important priorities like gender diversity programs in Pakistan, race riot studies, Kennedy Center remodeling funds, a Women’s History Museum and Latino Museum, foreign aid to Burma, Cambodia, Sudan, Nepal, and Ukraine, diversity on U.S. airline corporate boards, funds for “freshwater mussel hatcheries,” LGBT-friendly senior housing in Dallas, and.... 

Well that’s just part of what was in the 5,539 pages of the first CARES Act alone.