Month: March 2023

Silicon Valley Bank collapsed today in the second-biggest bank failure in US history. Why? Because it put a ton of money into long-dated government and mortgage bonds. This would normally be pretty safe:

When the Federal Reserve began raising rates last year, however, those holdings became less attractive because newer government bonds paid more in interest. That might not have mattered so long as the bank’s clients didn’t ask for their money back.

But at the same time as interest rates were rising, the environment for start-up funding dried up, putting pressure on the bank’s clients — who then began to withdraw their money. To pay those redemption requests, Silicon Valley Bank had to sell off some of its investments at exactly the wrong time. In its surprise disclosure on Wednesday, the bank admitted that it had lost nearly $2 billion when it was all but forced sell some of its holdings.

It's not clear yet if SVB really did anything wrong. It invested in government bonds and then had to sell them at a loss when the startup market stalled and clients wanted to withdraw money. Clients were spooked by the reported loss and began a full-scale run on the bank.

Normally US government bonds are considered pretty safe, and SVB reported a Tier 1 capital ratio of 15% last quarter. This is well above the 6% Basel III requirement. Its Tier 1 leverage ratio was 8% compared to the Basel III requirement of 3%. Even after the $2 billion loss those ratios would have been 13% and 7% in the absence of any other losses. Overall, SVB looked pretty strong.

If anything, this makes the whole thing a little scarier. It's one thing for a weak, feckless bank to fail, especially in the face of a huge economic bust like the one in 2008. It's quite another for a strong bank to fail during normal economic times. The obvious conclusion is either (a) this was just a weird one-off failure, or (b) things are worse than we thought.

I don't have the chops to know which it's more likely to be. I imagine it will partly depend on whether depositors get most of their money back. If they do, it's a blip. If they don't, there might be follow-on problems. I'm sure we'll learn much more over the next few days.

Today I learned about a new fad on Instagram: pantry porn. But it's not what you think, so get your minds out of the gutter for just one second, you filthy perverts.

Ahem. Anyway, pantry porn is the name given to carefully curated photos of lovingly stocked and organized pantries. And Jenna Drenten, a marketing professor at Loyola University Chicago, is having none of it:

Storing spices in coordinated glass jars and color coordinating dozens of sprinkles containers may seem trivial. But tidiness is tangled up with status, and messiness is loaded with assumptions about personal responsibility and respectability. Cleanliness has historically been used as a cultural gatekeeping mechanism to reinforce status distinctions based on a vague understanding of “niceness”: nice people, with nice yards, in nice houses, make for nice neighborhoods.

What lies beneath the surface of this anti-messiness, pro-niceness stance is a history of classist, racist and sexist social structures. In my research, influencers who produce pantry porn are predominantly white women who demonstrate what it looks like to maintain a “nice” home by creating a new status symbol: the perfectly organized, fully stocked pantry.

There you have it. Pantry porn isn't just a harmless fad that will quickly disappear as fast as it popped up. It's a disturbing reminder of how white women prop up systemic classism, racism, and sexism by promoting supposedly color-blind virtues like cleanliness and niceness. Shame on them.

Another Scandinavian country has weighed in on gender-affirming care in children and teens. This time it's Norway:

Ukom recommends that puberty delaying treatment (puberty blockers) and hormonal and surgical gender confirmation treatment for children and young people are defined as experimental treatment. This is particularly important for teenagers with gender dysphoria.

(Ukom is the Norwegian Healthcare Investigation Board, an independent government agency.)

Interestingly, Ukom takes the time to recommend that we all cool it:

We see that in the field of gender incongruence a demanding climate of expression has developed....We hear about fear and dread of making mistakes from all sides. Different opinions about what is the right treatment can create a difficult cross-pressure. Different emphasis and mention of what is necessary at group level can confuse and destroy the patient-therapist relationship and a personalized approach for the person concerned. There is a need to establish a constructive community for everyone who is engaged in good health care for people with gender incongruence.

Those Norwegians. They think the only thing that matters is what's best for kids, rather than making trans care into a war zone for scoring political points. That's adorable. We could teach them a thing or two about that.

The American economy gained 311,000 jobs last month. We need 90,000 new jobs just to keep up with population growth, which means that net job growth clocked in at 221,000 jobs. The headline unemployment rate increased to 3.6%.

This jobs report is weaker than it looks at first glance. The number of unemployed people jumped by 242,000 and the employment level was up by only 177,000 (87,000 on a net basis). This doesn't suggest a booming economy.

The number of people working part-time voluntarily was down by 227,000. You may recall that just a couple of weeks ago the Wall Street Journal said that part-time work was "exploding." I guess not.

Average hourly earnings for blue-collar workers were up in February, but weekly earnings were down 1.5% on an annualized basis. Adjusted for inflation, this is a drop of about 7%.

From the New York Times:

Saudi Arabia is seeking security guarantees from the United States, help with developing a civilian nuclear program and fewer restrictions on U.S. arms sales as its price for normalizing relations with Israel, people familiar with the exchanges say.

Why in the everlasting fuck should the United States be on the hook for bribing Saudi Arabia into having diplomatic relations with Israel? Martin Indyk, a former U.S. ambassador to Israel in the Clinton administration, explains the proposal:

Mr. Netanyahu “wants it badly, and he can only get it with Biden’s help,” Mr. Indyk said. “That creates a situation where Biden has leverage over Netanyahu to persuade him that nothing good can happen with Saudi Arabia if he allows the situation in the West Bank and East Jerusalem to explode.”

He added that Mr. Biden would also see full normalization between the countries as being in the United States’ interest, particularly as a means of countering Iranian influence. Biden officials have long said it is their goal to build on the Trump-era accords.

Does Indyk think we're all idiots? Netanyahu isn't going to "allow" the West Bank and East Jerusalem to explode. He and his ultra pals want the West Bank and East Jerusalem to explode. That way they have an excuse to continue killing and expelling as many Palestinians as possible. Come on.

If Israel and Saudi Arabia want to normalize relations because they both hate Iran, they should go right ahead. But leave us out of it. The prospect of forming a Triple Alliance of Doom with those two fills me with nothing but existential dread. They'd be slavering for us to turn Iran into a glassy plain before the ink was dry, and then they'd want us to provide a million troops for occupation and a few trillion dollars to rebuild the place. In return, we'd get a heaping helping of barely concealed contempt. But we already get that for free.

Thanks but no thanks.

A couple of days ago I asked what lessons we should have learned from the COVID pandemic. Today the Washington Post tells us what lessons we did learn from the pandemic:

At least 30 states, nearly all led by Republican legislatures, have passed laws since 2020 that limit public health authority....Health officials and governors in more than half the country are now restricted from issuing mask mandates, ordering school closures and imposing other protective measures or must seek permission from their state legislatures before renewing emergency orders, the analysis showed.

....“One day we’re going to have a really bad global crisis and a pandemic far worse than covid, and we’ll look to the government to protect us, but it’ll have its hands behind its back and a blindfold on,” said Lawrence Gostin, director of Georgetown University’s O’Neill Institute for National and Global Health Law. “We’ll die with our rights on — we want liberty but we don’t want protection.”

Regardless of my already cynical view of human intelligence, I'm freshly astonished every time I remember how COVID was almost instantly turned into a weapon in the culture wars. A pandemic! It's the least political emergency you can imagine. But these days we could turn a Mother's Day resolution into a culture war battle.

So instead of something normal, we learned that the pandemic was a massive deep state hoax of some kind and we should make sure to prevent future leaders from having any authority to ever respond to one. All because a lot of people found masks kind of uncomfortable. God bless America.

Matthew Desmond has a very odd op-ed in the New York Times today. His topic is the lack of improvement in poverty despite 50 years of effort:

What accounts for this lack of progress? It cannot be chalked up to how the poor are counted: Different measures spit out the same embarrassing result. When the government began reporting the Supplemental Poverty Measure in 2011, designed to overcome many of the flaws of the Official Poverty Measure, including not accounting for regional differences in costs of living and government benefits, the United States officially gained three million more poor people.

....A fair amount of government aid earmarked for the poor never reaches them. But this does not fully solve the puzzle of why poverty has been so stubbornly persistent, because many of the country’s largest social-welfare programs distribute funds directly to people. Roughly 85 percent of the Supplemental Nutrition Assistance Program budget is dedicated to funding food stamps themselves, and almost 93 percent of Medicaid dollars flow directly to beneficiaries.

Desmond is perplexed that social welfare programs distribute money to the poor but somehow poverty doesn't go down. And that is indeed perplexing.

Or it would be, anyway, if Desmond were using a measure of poverty that accounts for social welfare programs. But he's not. Here's what happens when you do that:

This comes from Columbia University's Center on Poverty and Social Policy, which calculates historical poverty using several different measures. This one is the Supplemental Poverty Measure Desmond mentions, but counting social welfare benefits and then adjusting for inflation. When you do that, you find that poverty has dropped from 19% at the start of the Reagan era to 8% today. Child poverty has dropped even more dramatically.

One of the things that's baffled me for a long time is why liberals are so resistant to the idea that social welfare benefits have helped people. We're the ones who fight for them! Shouldn't we be thrilled to see evidence that they've lifted millions of families out of poverty?

Instead I mostly see complaints about how our "tattered" safety net and our "fragile" benefit structure are being constantly slashed by Republicans. But this isn't true. Our safety net has been steadily improving for many decades, and Republicans—to their chagrin—are routinely unable to shred it the way they'd like to. Partly this is because Democrats fight them and partly it's because aid to the poor is surprisingly popular.

I have issues with the way we handle poverty, though they revolve as much around the complexity and randomness of our programs as they do around the amount we spend. Regardless, there's not much question that programs to help the poor have been one of the great triumphs of the progressive movement over the past half century. Why are we so reluctant to brag about it?

Welcome to Paris, home of the greatest subway system in the world. Only New York comes close. Anyone disagree?

I've mentioned several times that the bulk of the scientific evidence points to a natural origin for the COVID virus, but you may be wondering just what that evidence is. First off, there's this:

The early cases of COVID in Wuhan clustered almost entirely around the Huanan Market. That's a helluva coincidence in a city of 11 million if the virus actually originated somewhere else. Note that the virology lab is eight miles away.

Second, there's the fact that there were actually two COVID lineages in the early days and both of them cluster around the Huanan Market. It's possible to conceive of one lab worker acquiring the virus, traveling directly to the market, and then having the virus spread from there. Unlikely but possible. However, the odds of two lab workers doing the exact same thing with two separate lineages is literally a one-in-a-million longshot. It's far too remote a coincidence to be believable.

Third, there's no genomic evidence of a non-natural origin. The famous furin cleavage site, for example, is found in other viruses. It isn't that hard for this short string of nucleotides to mutate its way into another virus.

There's more, and one of the best guides to the evidence is Michael Worobey, a professor of evolutionary biology at the University of Arizona. A journal article he co-authored in Science is here. A good NPR interview with him is here. And a one-hour lecture he gave a few days ago is below:

UPDATE: I originally located the Wuhan virology lab in the wrong place. It's about eight miles from the Huanan Market, not 15 miles.

Today Freedom House delivered its report on 50 years of political rights and civil liberties around the world. The United States managed to avoid another year of decline, but has still fallen precipitously over the past decade:

Currently the United States is rated just above Poland and just below Mongolia.

At the risk of being a homer, this seems . . . not right to me. Have we really gone from 93 to 83 on the freedom scale in the past decade? Or, perhaps to put it more accurately, have we really gone from 7 to 17 on the autocracy scale? Our propensity for autocracy has more than doubled?

Maybe so! But even with all the crap going on these days in the Republican Party, Fox News, and the Supreme Court, I have my doubts about this.