Melt Down Monday: Another Fine Mess Trumplicans got us into
Posted: March 13, 2023 Filed under: just because | Tags: Bank Runs, Bernie Sanders, CryptoCurrency, Dodd-Frank bill, Elizabeth Warren, FDic, Federal Reserve Bank, Flash Digital Bank Runs, Janet Yellen, junk bond king, Katie Porter, SEC, Silicon Valley Bank, US Treasury 15 Comments
My body still tells me to say Good Morning!
I’m only on my second cup of coffee while waiting for my Irish Oats to cook. The clock tells me it’s afternoon, but something about me refuses to believe it. Why am I rudely being pushed into a part of the day rather than enjoying my lazy morning and looking forward to my Night Life? The best thing about teaching Grad school is that I no longer teach morning classes. Thanks to Dubya (wrecked the country) Bush, I only have that sacred space with its full glory for about 4 months a year. I’m grading midterms and wading through a seriously unnecessary set of bank failures in a bit of a fog. This is my version of No Exit.
Every time I teach my Grad Derivatives class in the Spring, some unnecessary financial crisis pops up. It’s not a huge one like another thing for which we can thank Dubya (wrecked the economy), Bush, and his cronies. This will not be the next “Great Recession” creator.
The Republicans under Theodore Roosevelt and Ulysses S Grant determined that you cannot trust huge actors in concentrated markets to regulate themselves. They called them trusts back then. They muck things up worse than the regulations while taking advantage of their customers for extraordinary profits until the jig is up. They also lead to substantial negative spillover costs paid for with taxpayer money. Many times, especially with situations like the Norfolk situation, victims of these costs never fully recover their losses. Real economists know this. It’s why Republicans haven’t had one around since Bernanke.
I wrote extensively about why the financial system ran amok and wrecked the economy around 2008. I am again writing about a very similar situation. Much of it’s rooted in the chipping away of protections set up to protect us from a recurrence of the Great Recession removed by Trump, the Republicans, and any elected official that basically gets vast donations from Wall Street and Banks. NBC News Sahil Kapur follows the ties between that and what’s happening now. “Silicon Valley Bank collapse puts new spotlight on a 2018 bank deregulation law. Democratic Sen. Elizabeth Warren, who led the push against that Trump-era law, now wants to restore those rules on financial institutions. Biden is also calling on Congress to act.”
Five years ago, Warren was the most outspoken opponent of the Republican-led Congress’ push to undo regulations imposed under the 2010 Dodd-Frank law for small and midsize banks. The bill, led by Sen. Mike Crapo, R-Idaho, sought to reclassify the “too big to fail” standard, which came with enhanced regulatory scrutiny. By raising the threshold from $50 billion in assets to $250 billion, medium-size banks were exempted from those regulations.
“Had Congress and the Federal Reserve not rolled back the stricter oversight, S.V.B. and Signature would have been subject to stronger liquidity and capital requirements to withstand financial shocks,” Warren wrote Monday. “They would have been required to conduct regular stress tests to expose their vulnerabilities and shore up their businesses. But because those requirements were repealed, when an old-fashioned bank run hit S.V.B., the bank couldn’t withstand the pressure — and Signature’s collapse was close behind.”
Sen. Bernie Sanders, I-Vt., who also opposed the 2018 law, blamed it for Silicon Valley Bank’s collapse.
“Let’s be clear. The failure of Silicon Valley Bank is a direct result of an absurd 2018 bank deregulation bill signed by Donald Trump that I strongly opposed,” he said in a statement. “Five years ago, the Republican Director of the Congressional Budget Office released a report finding that this legislation would ‘increase the likelihood that a large financial firm with assets of between $100 billion and $250 billion would fail.’”
The 2018 battle featured intense lobbying by banks — including Silicon Valley Bank and an array of smaller community banks — that were seeking regulatory relief.
The bill passed the House 258-159, winning 225 Republicans and 33 Democrats. In the Senate, it needed some Democrats to defeat a filibuster and achieve 60 votes. Warren infuriated some colleagues when she called out some Senate Democrats by name for trying to weaken Dodd-Frank rules.
In the end, 17 Democrats joined a unanimous Senate Republican conference to pass it. Trump signed it into law.
The entire financial industry plays a role in the economy held by no other. The safekeeping role is why rules for bank deposits, the FDIC insurance mandates exist, and capitalization laws are in place. I think no one teaches about the Bank Holidays and Runs we experienced during the Great Depression. The more you chip away at what used to be legal differences and responsibilities between banks with deposits and fiduciary responsibility and their ability to play around with risky loans and investments, the more these things will reoccur. Also, speculative investors like hedge funds’ special tax treatment lower their risk costs and increase their ability to make investment decisions that have a likelihood of implosion. The rollback of substantial sections of Dodd-Frank was integral to last week’s runs.
More importantly, the recent failures of financial institutions and companies involved with Cryptocurrencies will be part of the focus as state and federal regulators–including the Fed–do a post-mortem on both Silicon Valley and the Signature Bank in New York. These banks look like Country Clubs for risky and poorly managed loan portfolios. They have many big accounts backed up by cryptocurrency, a highly speculative and risky asset. This is from CNBC. “Regulators close crypto-focused Signature Bank, citing systemic risk.” The reporter is Yun Li.
The banking regulators said depositors at Signature Bank will have full access to their deposits, a move similar to that which was made to ensure depositors at the failed Silicon Valley Bank will get their money back.
“All depositors of this institution will be made whole. As with the resolution of Silicon Valley Bank, no losses will be borne by the taxpayer,” the regulators said.
The regulators shuttered Silicon Valley Bank on Friday and seized its deposits in the largest U.S. banking failure since the 2008 financial crisis — and the second-largest ever. The dramatic moves come just days after the tech-focused institution reported it was struggling, triggering a run on the bank’s deposits.
Signature is one of the main banks to the cryptocurrency industry, the biggest one next to Silvergate, which announced its impending liquidation last week. It had a market value of $4.4 billion as of Friday after a 40% sell-off this year, according to FactSet.
As of Dec. 31, Signature had $110.4 billion in total assets and $88.6 billion in total deposits, according to a securities filing.
To stem the damage and stave off a bigger crisis, the Fed and Treasury created an emergency program to backstop all deposits at both Signature Bank and Silicon Valley Bank using the Fed’s emergency lending authority.
The FDIC’s deposit insurance fund will be used to cover depositors, many of whom were uninsured due to the $250,000 cap on guaranteed deposits.
While depositors will have access to their money, equity and bondholders at both banks are being wiped out, a senior Treasury official said.
The article is written by DDay. “The Silicon Valley Bank Bailout Didn’t Need to Happen. The debate over protecting all deposits in a blink looks past the incompetence that got us here.” Buried in the fine print of the joint statement is something exciting. It states that “certain unsecured debtholders” and shareholders are not protected. Certain unsecured debtholders may likely apply to crypto-tainted accounts used to secure debt. The Fed has been anxious to get more involved with the rogue market. Will today’s Republican Congress let them?
The brightest minds in and around San Francisco Bay had an unadulterated meltdown over the weekend over the failure of Silicon Valley Bank. This was a failure that they themselves caused, mind you, engineering a digital flash bank run that forced SVB to realize heavy losses, mostly from interest rate hikes and the bank’s unbelievable failure to even attempt to manage interest rate risk.
The venture capitalist–led mob quickly moved on to another dire warning: Because over 90 percent of SVB’s depositors exceeded $250,000 in guaranteed FDIC insurance, the government must make them 100 percent whole, immediately, or every regional bank in America will see the same failure. Hedge fund titan Bill Ackman, venture capitalist David Sacks, and angel investor Jason Calacanis led the charge, saying that thousands of startup firms will have trouble making payroll, and other regionals won’t be able to stop a torrent of withdrawals. They essentially took out a match next to a gas pump and demanded that federal regulators not force them to light it.
It worked. Federal officials announced a backstop to “fully protect all depositors” at both Silicon Valley Bank and Signature Bank, which was also closed on Sunday. “Depositors will have access to all of their money starting Monday, March 13,” the joint announcement by Treasury, the Federal Reserve, and the FDIC read. A special bank assessment will offset losses, they say; all shareholders and bondholders “will not be protected,” with senior management fired. A $25 billion fund has been initiated to protect deposits, even though the theory is that no taxpayer funds will be implicated.
Run on San Antonio’s City-Central Bank and Trust Company during the Depression, 1931
Have I ever mentioned how much I’d admire California Representative Katie Porter?
THE FIRST WORDS OUT OF THE MOUTH of Rep. Katie Porter (D-CA) when I talked to her on Sunday were: “Can you believe we have to talk about this shit again?” She was referring to a conversation we had in 2018, when she was still just a financial expert and a candidate for Congress, about S.2155, which I call the Crapo bill, a reference to its co-author (Idaho Republican Sen. Mike Crapo) and its underlying contents.
Some of these provisions don’t mitigate risk; they encourage it. For depository institutions with fiduciary responsibilities, it’s like giving Bourbon-drenched pecan pie to alcoholics. Remember when Bill Gates sold Tesla short? Anyone with an excellent eye for financial statement analysis can see this stuff coming. But wait, how do you explain that “KPMG Gave SVB, Signature Bank Clean Bill of Health Weeks Before Collapse. Accounting firm faces scrutiny for audits of failed banks“? This is from Jonathan Weil and WSJ.
Silicon Valley Bank failed just 14 days after KPMG LLP gave the lender a clean bill of health. Signature Bank went down 11 days after the accounting firm signed off on its audit.
What KPMG knew about the two banks’ financial situation and what it missed will likely be the subject of regulatory scrutiny and lawsuits.
KPMG signed the audit report for Silicon Valley Bank’s parent, SVB Financial Group SIVB 0.00%increase; green up pointing triangle, on Feb. 24. Regulators seized the bank on March 10 after a surge of withdrawals threatened to leave it short of cash.
“Common sense tells you that an auditor issuing a clean report, a clean bill of health, on the 16th-largest bank in the United States that within two weeks fails without any warning, is trouble for the auditor,” said Lynn Turner, who was chief accountant of the Securities and Exchange Commission from 1998 to 2001.
Two crucial facts for determining whether KPMG missed the banks’ problems are when the bank runs began in earnest and when the bank’s management and KPMG’s auditors became aware of the crisis.
This reminds me of Moody’s, which had no idea how to rate tranches of mortgage-based swaps and completely missed the boat on the Mortgage crisis in 2008. You may also remember Moody’s role during the Junk Bond Kings’ rule in the late ’80s. This was also a time of intense deregulation of the industry.
. Moody’s also missed this current one. “Moody’s Failed to Warn About Silicon Valley Bank’s Problems. The prestigious rating agency still gave the bank of startups an A rating until its collapse on March 10, repeating the same errors of the subprime crisis in 2008.” This is from The Street and Luc Olinga.
Fifteen years after the subprime mortgage crisis which devastated the global economy, rating agencies continue to make the same mistakes.
At least, this seems to be the case with the prestigious rating agency Moody’s Investors Service.
Regulators shut down California’s Silicon Valley Bank on March 10, after its US Treasury bets went awry, due to the interest rate hike by the Federal Reserve.
Consequently, the Federal Deposit Insurance Corporation (FDIC) seized its assets and created a new entity, which will begin operating on March 13.
Created in 1983, Silicon Valley Bank, which presented itself as a “partner for the innovation economy,” offered higher interest rates on deposits than its larger rivals, to attract customers. The company then invested the clients’ money in long-dated Treasury bonds and mortgage bonds with strong returns.
Moody’s Gave Silicon Valley Bank an A Rating
This strategy had worked well in recent years. The bank’s deposits doubled to $102 billion at the end of 2020 from $49 billion in 2018. In 2021, deposits increased to $189.2 billion.
But everything turned upside down when the Federal Reserve began to raise interest rates, which made existing bonds held by SVB less valuable. As a result, the bank had to sell the bonds at a discount to cover withdrawals from its customers. In selling these bond positions, SVB had to take a significant loss of $1.8 billion.
Due to this loss, SVB suddenly announced that it needed to raise additional capital of $2.25 billion, by issuing new common and convertible preferred shares. This decision caused panic and a run on the bank.
While investors saw nothing coming, this is also the case with Moody’s Investors Service, whose role is to assess the intrinsic value of a company and its ability to meet its obligations, including its ability to pay lenders back. Rating agencies must flag the financial risks associated with a company.
But everything turned upside down when the Federal Reserve began to raise interest rates, which made existing bonds held by SVB less valuable. As a result, the bank had to sell the bonds at a discount to cover withdrawals from its customers. In selling these bond positions, SVB had to take a significant loss of $1.8 billion.
Due to this loss, SVB suddenly announced that it needed to raise additional capital of $2.25 billion, by issuing new common and convertible preferred shares. This decision caused panic and a run on the bank.
While investors saw nothing coming, this is also the case with Moody’s Investors Service, whose role is to assess the intrinsic value of a company and its ability to meet its obligations, including its ability to pay lenders back. Rating agencies must flag the financial risks associated with a company.
American Union Bank, New York City. April 26, 1932.
I’ve lived through a banking crisis in charge of strategic planning and financial statement forecasting for one of the original too big to fail Savings and Loan Companies in the early 1980s. I was also trying to hedge our loan commitments using GNMA futures which is why Derivatives are real to me. Any time interest rates start moving in the wrong direction and any bank that hasn’t realigned their related risks, like being long on one side of the balance sheet and short on the other, you’ll lose big.
I had to tell the head of Financial Operations there was no way to break even when every rate marks an asset to market with every tick, and you’re mismatched. I was barely 25 at the time. I also saw loan brokers selling mortgages where due diligence was lacking in 2005. A student told me he was being offered a mortgage based on his student loan as income. I can’t imagine any in-house loan officer being that ignorant. That’s what happens when you farm out your core business ou to salespeople earning money by volume. I can’t imagine how Moody’s or major Auditing firms keep missing this. They’re probably as captured by their customers as the politicians are captured by their lobbyists and checks. Right Senator Sinema?
James Stewart and Donna Reed in a scene from the film ‘It’s A Wonderful Life’, 1946. (Photo by RKO Radio Picture/Getty Images)
So, these bank runs don’t exactly look like the ones in those black-and-white photographs from the 1930s. This is a good explanation from Fast Company. What exactly is a Digital Flash Bank Run? It’s not a DC comic. Silicon Valley Bank: An ‘It’s a Wonderful Life’ bank run for the digital age. The downfall of the Valley institution, which has been called “the backbone of the startup economy,” was caused by a good old-fashioned bank run, but one that ran at internet speed.”
The run began on Thursday, after a powerful Silicon Valley VC—Peter Thiel’s Founders Fund—had begun advising its portfolio companies to withdraw their money from SVB, sources told Fast Company. Other VCs soon caught wind of the advisory and began advising their own portfolio companies to withdraw funds from SVB, the people said. As the withdrawals accelerated, the bank began taking steps to stem the tide and preserve its solvency—just like George Bailey did in the 1946 classic It’s a Wonderful Life.
SVB Financial Group CEO Greg Becker seemed to be reading from director Frank Capra’s script when he uttered the fateful words “stay calm” during a Thursday conference call with customers, as fears over the bank’s solvency grew. Those words probably only increased depositors’ anxieties. And the withdrawals likely continued to snowball.
“The whole thing was predicated on a few folks who put out calls to make withdrawals,” Spencer Greene, a general partner at the venture fund TSVC, tells Fast Company. “I think the folks who made those calls weren’t correct on the facts, but once the thing got going it was hard to stop.” In other words, before the run started there was not sufficient evidence to suggest the bank was facing serious solvency issues.
Northern Rock Bank run, September 2007
Just another point, we knew these things could happen. Here’s a 2019 article speculating about a digital bank flash run by Joe McGrath, writing for The Raconteur. “Turmoil, panic and bank runs in a digital future.”
Potentially, cash can now be transferred from accounts in greater amounts, more quickly than before and, even if banks enforce temporary limits on online withdrawals, what effect would the resulting panic have on the banking system as a whole?
“In a world without physical cash, the rules of engagement for situations such as a bank run will require a different framework,” says Simon Fairbairn, director of solution development, western Europe, for Ingenico Group. “The rules and systems of today will need to evolve to accommodate the demands of a run.”
Mr Fairbairn questions whether present digital banking infrastructure is sufficient to cope with sustained pressure of this nature. “Regulation, compliance, technology; processes have all evolved to try and prevent the sins of the past, but until tested, can we really be sure it won’t already be found wanting,” he says.
It may sound like scaremongering, but Mr Fairbairn’s cautious view has broad support from many in the financial services community.
“A digital bank run in a hypothetical future would be much more dangerous as it would happen in seconds and minutes when clients could simply use mobile banking apps to transfer money to another account,” says Susanne Chishti, chief executive of Fintech Circle.
“Such a digital bank run would be much more difficult to contain and an appropriate technical response for such a scenario would have to be coded in at the outset to offer any chance of being effective.”
In 2020, Harvest Finance experienced the first type of digital bank run. “Harvest Finance: $24M Attack Triggers $570M ‘Bank Run’ in Latest DeFi Exploit, Harvest Finance has seen its total value locked drop by more than $500 million in the 12 hours since being hit by a flash loan attack.” DeFi is short for Decentralized Finance, which is based on peer-to-peer finance services on blockchains. Welcome to the Wild West World of cryptocurrency and bitcoins. This should give you pause.
An arbitrage trade exploiting weak points in decentralized finance (DeFi) protocol Harvest Finance led to some $24 million in stablecoins being siphoned away from the project’s pools on Monday, according to CoinGecko.
According to reports, an attacker used a flash loan – a technique that allows a trader to take on massive leverage without any downside – to manipulate DeFi prices for profit. The exploit sent the platform’s native token, FARM, tumbling by 65% in less than an hour, followed by the project’s total value locked (TVL), which dropped from over $1 billion before the exploit to $430 million as of press time.
The funds were eventually swapped for bitcoin (BTC), but not before being swept through Ethereum mixing service Tornado Cash.
The jargon term for this was a “bad harvest.” Stay out of this stuff is the only thing I have to say, which is the advice I would have given to these banks. Unfortunately, Silicon Valley is rife with Elon Musk Clones taking risks for adventure and attention. All traders have their own language. I’m still surprised youngest daughter can keep her department of derivatives traders and products on a leash. They’ve always thought of themselves as Wild West Cowboys. (See Lions of Wall Street.) But then, she and the brokerage firms she’s worked for are licensed and babysat by the SEC to keep the nonsense in check. We both stay out of this market.
So, a part of this and a bit more will be a lecture for me tomorrow. Last year the Game Stop thing did this to me. You’ll be glad to know billionaire Carl Icahn is happy about that crash. Someone always is because there are two sides to every trade. If you’re head’s spinning, you’re doing just fine. I got a Ph.D. and real-life experience in the stuff, plus a daughter that lives it daily and who I consult for a reality check. It still makes my head spin.
What’s on your reading and blogging list today?
And the SEC is far behind
Down in the swamp with the gators and flamingos
A long way from Liechtenstein
I’m a junk bond king playing Seminole Bingo
And my Wall Street wiles
Don’t help me even slightly
‘Cause I never have the numbers
And I’m losing nightly
I cashed in the last of my Triple B bonds
Got a double-wide on the Tamiami Trail
I parked it right outside the reservation
Fifteen minutes from the Collier County Jail
(Warren Zevon, backed up by Neil Young live)
Wednesday Reads: Me worry?
Posted: March 3, 2021 Filed under: 2020 Elections, Biden’s First 100 Days, Black Lives Matter, COVID19, Discrimination against women, Foreign Affairs, Fox News, misogyny, morning reads, open thread, Republican politics, Saudi Arabia, the GOP | Tags: Bernie Sanders 8 Comments
And good morning to you…
Some hard hits there…as usual, the political comics bringing the point home.
First tweet I saw when I started to write this post:
This is one of my favorite pictures…please click on that link and read more about Raymond Cauchetier.
Now for some news updates:
And one last thing…
#FuckBernieSanders
( And #FuckJoeManchin too!)
Ugh…
Try and stay safe today…
Tuesday Reads
Posted: December 29, 2020 Filed under: morning reads, U.S. Politics | Tags: 5G conspiracy theory, Anthony Quinn Warner, Bernie Sanders, coronavirus pandemic, Covid-19, defense bill, Donald Trump, Mitch McConnell, Nashville bombing, post-holiday surge, QAnon, stimulus checks, veto override 12 Comments
Good Morning!!
Just 22 more days until Biden’s inauguration, and one more week until Congress counts the electoral votes on January 6. There’s still plenty of time for Trump to throw tantrums and pardon more war criminals, but his time in the White House is almost over. Unfortunately, it looks like January will be nightmarish.
Justin Hendrix at Substack: January will be one of the worst months in American history.
Simply put, the COVID-19 pandemic is raging across the country, and the record number of new cases since Thanksgiving is about to produce tens of thousands of additional hospitalizations, pushing health systems beyond the limit and likely driving daily death counts well beyond where they are today. Consider just a few data points:
- The IHME model now predicts more than 100,000 Americans will die in January alone, taking the total known pandemic death toll over 450,000.
- Hospitalizations, now at record highs, will likely explode. Last night the Covid Tracking Project reported a record number of hospitalized Americans, at 118,720, despite a number of states not reporting new figures due to the holiday. If that number seems enormous, consider that California’s model suggests that the state, which just crested 20,000 current hospitalizations, may itself reach 100,000 in January.
- The vaccination rollout is not going to plan. While it may improve in the coming days, official promises that 20 million Americans would receive the vaccine by the end of the year have fallen far short of the goal. As of December 26th, the CDC tracks less than 2 million first doses administered.
Imagine- nearly double the American death toll of the Vietnam War- across its nine years- in a single month. A quarter the number of all American losses in the roughly four years it fought in World War II- in a single month. In the face of this mounting disaster, the President is golfing in Florida. The Vice President and Head of the White House Coronavirus Task Force is vacationing in Vail, Colorado. The nation is effectively without leadership as we approach an event horizon of a black hole of death and anguish more acute than anything we’ve seen for generations.
Click the link to read the whole thing.
December was already bad enough. Eyewitness News Los Angeles: December deadliest month in US since COVID-19 pandemic began; January projections ‘nightmarish,’ expert says.
December has been the nation’s deadliest month since the COVID-19 pandemic’s start — with more than 63,000 Americans lost to the virus in the past 26 days.
In comparison, the entire month of November saw about 36,964 deaths, CNN reported.
The grim death toll comes on the heels of several brutal months for the US, with COVID-19 ravaging communities from coast to coast, crippling hospital systems and prompting new widespread restrictions.
The authorization of two COVID-19 vaccines earlier in December offered some hope of a light at the end of the tunnel. But experts continue to warn that while the end is in sight, the pandemic is not over and another surge stemming from the Christmas holiday could be on its way.
“We very well might see a post-seasonal — in the sense of Christmas, New Years — surge,” Dr. Anthony Fauci said on CNN’s “State of the Union” Sunday morning, pointing to holiday travel and private gatherings taking place despite the advice of health experts.
The nation’s top infectious disease expert described the potential rise in cases as a “surge upon a surge,” telling CNN’s Dana Bash, “If you look at the slope, the incline of cases that we’ve experienced as we’ve gone into the late fall and soon to be early winter, it is really quite troubling.”
NBC News: Biden adviser warns of ‘worst’ January ever from post-Christmas Covid surge.
Despite the rollout of two new vaccines, the pandemic is accelerating and the United States should brace itself for “one of the worst months in this nation’s history in January,” one of President-elect Joe Biden’s top Covid-19 advisers warned Monday.
“There is no doubt about that,” the expert, Dr. Celine Gounder, said on CNBC. “That cake is in the oven already, with the travel that has happened over the holidays.”
That dire warning came as the number of Covid-19 infections rose past 19.2 million after Christmas and the number of deaths from coronavirus neared 334,000, the latest NBC News data showed.
Gounder, a member of the Biden’s Covid-19 advisory board, described a nightmarish scenario in which local health officials are forced to erect field hospitals because hallways and even some parking lots are already packed with sick patients.
And an even bigger crisis, Gounder said, will be finding enough doctors and nurses to treat everybody.
“You can’t stand up new doctors and nurses the way you can field hospitals,” Gounder said. “You can’t just create them out of thin air.”
Yesterday the House voted to increase the stimulus checks from $600 to $2,000, as Trump demanded. The Washington Post reports: House votes to boost stimulus checks to $2,000 with bipartisan support.
The state of play: It’s still an uphill battle. But Republican senators are feeling more pressure from constituents — pumped by Trump — to do more.
Tuesday Reads: Six Primaries Today, But Coronavirus Still Tops the News
Posted: March 10, 2020 Filed under: Foreign Affairs, morning reads, U.S. Politics | Tags: 2020 Democratic primaries, Bernie Sanders, coronavirus, COVID19, Donald Trump, Italy, Joe Biden 24 Comments
The 2020 presidential contenders
Good Morning!!
Today there will be primaries in 6 states with 352 delegates up for grabs: Michigan, Washington, Missouri, Mississippi, Idaho, and North Dakota. What to watch for in each state, according to Buzzfeed News:
The 2020 Democratic primary radically changed last Tuesday, when Joe Biden surpassed even the highest expectations to build a delegate lead over Bernie Sanders. This Tuesday, the race could effectively lock into place.
Six states with a total of 352 delegates vote in the Democratic presidential primary today, which isn’t really a second Super Tuesday, even though many are calling it that (California, which voted last week, had 415 delegates on its own). But with Biden already up just about 80 delegates over Sanders going into Tuesday, a strong performance in these states could give him a lead that will be tough for Sanders to overcome. And alternatively, a surprising result for Sanders could make the primary more competitive than some assume it is right now, leading into states later this month that on paper look strong for Biden.
The biggest haul of delegates will come from Michigan, followed by Washington.
Michigan…is the big state tonight, with 125 delegates. Sanders won the primary here in 2016 over Hillary Clinton in a surprise, helping to revive his campaign even as the two basically split delegates evenly (67 for Sanders and 63 for Clinton).
Sanders and Biden have both spent much of the last week focused on winning the state. A win for Biden, especially one by a decisive margin, could be brutal for Sanders. A win for Sanders could prove that his promised coalition of young people — including young people of color — and the white working class still has life. Recent polls have shown a double-digit lead for Biden, but they showed one for Clinton ahead of the 2016 primary, too….
Washington…is tonight’s second-biggest state, with 89 delegates. Sanders won the state in a blowout in 2016 and is hoping to win by a decent margin again this year.
But Sanders has a disadvantage this year relative to 2016: The state will no longer hold caucuses, where he performed well with hyper-engaged, organized supporters. Washington this year is conducting its primary entirely by mail. About 22% of ballots were returned before Super Tuesday, which could limit a Biden bounce. Voting by mail has also reduced fears about the state’s coronavirus outbreak limiting turnout. But the result here isn’t necessarily certain: There’s been limited recent polling, and neither candidate has campaigned here in the last week.
NBC News: Democrats vote: What the polls show for Biden and Sanders in Michigan, other states.
A Detroit Free Press poll released Monday found that Biden has a 24-point lead over Sanders, with the former vice president drawing 51 percent of Democratic voters’ support to Sanders’ 27 percent. A Monmouth University poll, also released Monday, saw Biden with 51 percent of likely Democratic primary voters, while 36 percent supported Sanders. The RealClearPolitics polling average puts Biden up by 22.6 points.
Still, the Free Press noted, Sanders overcame a similar polling margin to win the state four years ago: The paper’s 2016 survey by the same pollsters gave Hillary Clinton a 25-point lead, but Sanders eventually won by 1.4 percentage points thanks to an unexpected surge of younger voters….
Biden has a narrow lead in Washington after eroding Sanders’ early lead with his Super Tuesday momentum. According to the RealClearPolitics polling average, Biden’s up by 2 points over Sanders.
The progressive-leaning state has 89 delegates — it’s the second-biggest trove of the day after Michigan — and Sanders won it handily in 2016….
Biden is also leading the polls in Missouri and Mississippi. Results in the tiny states of Idaho and North Dakota are anyone’s guess.
Obviously, the coronavirus is is leading the news today, despite the importance of the primaries. Here’s the latest.
Is what’s happening in Italy a preview for the U.S.? CBS News: Coronavirus brings Italy’s “darkest hour,” and takes a mounting toll in the U.S.
As Italians woke up to the most severe restrictions on their every-day lives since World War II, China said it was easing virus-control measures in the province where the COVID-19 disease emerged late last year. The contrasting conditions on two of the biggest battlefronts against the virus showed its severity, and the feasibility of corralling and controlling it.
AlJazeera: Italy in nationwide lockdown to prevent spread of coronavirus.
Italy has imposed unprecedented travel restrictions on its 60 million people to control the deadly coronavirus outbreak in the country.
“I am going to sign a decree that can be summarised as follows: I stay at home,” Conte said on television, announcing that the entire country would effectively be placed on lockdown from Tuesday.
“Travel must be avoided across the entire peninsula unless it is justified by professional reasons, by cases of need or for health reasons,” Conte said.
These measures extend a quarantine zone that Italy had imposed on its northern heartland around Milan and the greater Lombardy region, Venice, and Pesaro Urbino on Sunday.
The restrictions will run until April 3.
All schools and universities will immediately close. Serie A football matches and all other sporting events are also being suspended for the coming month.
All ski resorts are out of action and cinemas, museums, nightclubs and similar venues must remain shut after being ordered to close their doors over the weekend, the decree said.
While religious institutions will stay open, as long as people can stay a metre from one another, ceremonies such as marriages, baptisms and funerals are banned.
Read more at the link.
The Trump administration’s coronavirus strategy is still gaslighting and covering up.
Time Magazine: The Trump Administration Is Stalling an Intel Report That Warns the U.S. Isn’t Ready for a Global Pandemic.
The office of the Director of National Intelligence (DNI) was scheduled to deliver the Worldwide Threat Assessment to the House Intelligence Committee on Feb. 12 and the hearing has not been rescheduled, according to staffers and members of the House and Senate intelligence committees. The DNI’s office declined requests for a comment on the status of the report. Democratic staffers say they do not expect the report to be released any time soon.
The final draft of the report remains classified but the two officials who have read it say it contains warnings similar to those in the last installment, which was published on January 29, 2019. The 2019 report warns on page 29 that, “The United States will remain vulnerable to the next flu pandemic or large-scale outbreak of a contagious disease that could lead to massive rates of death and disability, severely affect the world economy, strain international resources, and increase calls on the United States for support.”
The 2019 warning was the third time in as many years that the nation’s intelligence experts said that a new strain of influenza could lead to a pandemic, and that the U.S. and the world were unprepared. “Although the international community has made tenuous improvements to global health security, these gains may be inadequate to address the challenge of what we anticipate will be more frequent outbreaks of infectious diseases because of rapid unplanned urbanization, prolonged humanitarian crises, human incursion into previously unsettled land, expansion of international travel and trade, and regional climate change,” the 2019 threat assessment warned.
Rather than acting on these recurrent warnings and bolstering America’s ability to respond to an outbreak, the Trump administration has instead cut back money and personnel from pandemic preparedness.
Click the link to read the rest.
Apparently, Trump doesn’t want immigrants to know how to protect themselves from the virusThe Miami Herald : Trump administration orders immigration courts to immediately remove coronavirus posters.
Immigration court staff nationwide have been ordered by the Trump administration to take down all coronavirus posters from courtrooms and waiting areas.
The Executive Office for Immigration Review, which falls under the Department of Justice, told all judges and staff members in an email Monday that all coronavirus posters, which explain in English and Spanish how to prevent catching and spreading the virus, had to be removed immediately.
“This is just a reminder that immigration judges do not have the authority to post, or ask you to post, signage for their individual courtrooms or the waiting areas,” wrote Christopher A. Santoro, the country’s acting chief immigration judge in a mass email to immigration court administrators nationwide.
“Per our leadership, the CDC flyer is not authorized for posting in the immigration courts. If you see one (attached), please remove it. Thank you.”
The information in the flyers came from the CDC. Why doesn’t the Trump administration want people in these courts to have the information?
Will the Republicans change their attitudes now that some GOP lawmakers–and maybe even Trump and Pence–have been exposed to the virus?
The Daily Beast: CPAC Attendees Want to Know Who the Mystery Coronavirus Patient Is.
Revelations that a man infected with the novel coronavirus hobnobbed with top Republicans at the annual Conservative Public Action Conference last month has prompted a wave of fright among Republican operatives who attended the conference and fear they may have been exposed, too. And as the fear has mounted so too have complaints that the conference’s planners have been too secretive about the man’s identity.
“If you’re not rich and important, you don’t get to know if you were exposed to someone with Coronavirus at CPAC,” Breitbart reporter Brandon Darby tweeted Monday….
The American Conservative Union, which organizes the annual event in National Harbor, Maryland, announced Saturday afternoon that a man who was infected with the coronavirus attended CPAC. Since then, four prominent Republicans—Sen. Ted Cruz (TX), Rep. Paul Gosar (AZ), Rep. Doug Collins (GA), and Rep. Matt Gaetz (FL)—have announced that they’re self-quarantining after interacting with the man.
Gaetz has undergone a test for the virus. In contrast, Rep. Louie Gohmert (R-TX), who also had contact with the infected man, said he won’t self-quarantine.
Gaetz flew on Air Force One with Trump yesterday and rode with him in the presidential limosine. Doug Collins was seen shaking hands and talking with Trump after the conference. For unknown reasons, Trump has not been tested for the virus.
Politico: ‘My phone’s been blowing up’: CPAC attendees rip the group’s virus messaging.
A CPAC attendee infected with coronavirus attended multiple days of the conference on a gold-level VIP ticket as well as a Friday night Shabbat dinner associated with the event, according to people familiar with the situation.
The infected attendee was a CPAC regular who made a hobby of meeting high-profile conference speakers and taking photographs with them. His gold-level ticket gave him access to a private lounge directly outside the green room for speakers on the conference’s main stage.
As of early Monday evening, event organizers have contacted “just over a dozen” people who they have identified as having direct contact with the infected attendee, according to Ian Walters, spokesman for the American Conservative Union, which organizes the annual Conservative Political Action Conference.
The ACU’s handling of the case has led to grumbling from some conferencegoers, who have complained of a two-tiered system: VIPs have been notified directly even to be told they did not interact with the infected man, while ordinary rank-and-file attendees have by and large been left to wonder, receiving only vaguer information in mass emails. Meanwhile, critics have noted the irony of prominent officials downplaying the outbreak even as the disease may silently have been spreading among the Trump administration’s own members and supporters.
More stories to check out today:
The Atlantic: COVID-19 Has Dangerously Inverted the Long-Standing White House Theme.
Jennifer Senior at The New York Times: President Trump Is Unfit for This Crisis. Period.
Brian Klass at The Washington Post: The coronavirus is Trump’s Chernobyl.
The Atlantic: The Dangerous Delays in U.S. Coronavirus Testing Continue.
Tom Bossert at The Washington Post: It’s now or never for the U.S. if it hopes to keep coronavirus from burning out of control.
AP: Trump talks down virus as his properties face possible hit.
The Daily Beast: Trump Chatted With Taliban Leaders on Secret U.S. Kill-or-Capture List.
Tuesday Reads: The Corona Virus and Finally Vetting Bernie
Posted: February 25, 2020 Filed under: Foreign Affairs, morning reads, U.S. Politics | Tags: Bernie Sanders, cuba, Donald Trump, Fidel Castro, South Carolina primary 22 CommentsGood Morning!!
I had a flu shot in January, and since then I’ve had a week-long bout a stomach flu and now I have a full-blown case of the flu. I came down with it on Saturday morning and since then I’ve had a low grade fever that comes and goes along with a hacking cough, headaches, ear pain, and muscle aches. I felt better yesterday, and my temperature was normal until late last night. Now it’s already over 100 again.
I’m really not looking forward to catching the corona virus, but according to James Hamblin at The Atlantic, we are all likely to get it eventually: You’re Likely to Get the Coronavirus. Most cases are not life-threatening, which is also what makes the virus a historic challenge to contain.
Coronaviruses are similar to influenza viruses in that they are both single strands of RNA. Four coronaviruses commonly infect humans, causing colds. These are believed to have evolved in humans to maximize their own spread—which means sickening, but not killing, people. By contrast, the two prior novel coronavirus outbreaks—SARS (severe acute respiratory syndrome) and MERS (Middle East respiratory syndrome, named for where the first outbreak occurred)—were picked up from animals, as was H5N1. These diseases were highly fatal to humans. If there were mild or asymptomatic cases, they were extremely few. Had there been more of them, the disease would have spread widely. Ultimately, SARS and MERS each killed fewer than 1,000 people.
COVID-19 is already reported to have killed more than twice that number. With its potent mix of characteristics, this virus is unlike most that capture popular attention: It is deadly, but not too deadly. It makes people sick, but not in predictable, uniquely identifiable ways. Last week, 14 Americans tested positive on a cruise ship in Japan despite feeling fine—the new virus may be most dangerous because, it seems, it may sometimes cause no symptoms at all.
Hamblin explains that this COVID-19 is likely to spread and then keep coming back every year, because it is contagious even when people have no symptoms and it doesn’t kill off most of the people who get it.
The Harvard epidemiology professor Marc Lipsitch is exacting in his diction, even for an epidemiologist. Twice in our conversation he started to say something, then paused and said, “Actually, let me start again.” So it’s striking when one of the points he wanted to get exactly right was this: “I think the likely outcome is that it will ultimately not be containable.”
Containment is the first step in responding to any outbreak. In the case of COVID-19, the possibility (however implausible) of preventing a pandemic seemed to play out in a matter of days. Starting in January, China began cordoning off progressively larger areas, radiating outward from Wuhan City and eventually encapsulating some 100 million people. People were barred from leaving home, and lectured by drones if they were caught outside. Nonetheless, the virus has now been found in 24 countries….
Lipsitch predicts that, within the coming year, some 40 to 70 percent of people around the world will be infected with the virus that causes COVID-19. But, he clarifies emphatically, this does not mean that all will have severe illnesses. “It’s likely that many will have mild disease, or may be asymptomatic,” he said. As with influenza, which is often life-threatening to people with chronic health conditions and of older age, most cases pass without medical care. (Overall, around 14 percent of people with influenza have no symptoms.)
Lipsitch is far from alone in his belief that this virus will continue to spread widely. The emerging consensus among epidemiologists is that the most likely outcome of this outbreak is a new seasonal disease—a fifth “endemic” coronavirus. With the other four, people are not known to develop long-lasting immunity. If this one follows suit, and if the disease continues to be as severe as it is now, “cold and flu season” could become “cold and flu and COVID-19 season.”
The New York Times: ‘Recipe for a Massive Viral Outbreak’: Iran Emerges as a Worldwide Threat.
Religious pilgrims, migrant workers, businessmen, soldiers and clerics all flow constantly across Iran’s frontiers, often crossing into countries with few border controls, weak and ineffective governments and fragile health systems.
Now, as it struggles to contain the spread of the coronavirus, Iran is also emerging as the second focal point after China for the spread of the disease. Cases in Iraq, Afghanistan, Bahrain, Kuwait, Oman, Lebanon, the United Arab Emirates — even one in Canada — have all been traced to Iran, sending tremors of fear rippling out from Kabul to Beirut.
The Middle East is in many ways the perfect place to spawn a pandemic, experts say, with the constant circulation of both Muslim pilgrims and itinerant workers who might carry the virus. Iran’s economy has been strangled by sanctions, its people have lost trust in their government and its leaders are isolated from much of the world, providing little clarity about the extent of the epidemic.
Civil wars or years of unrest have shattered the health systems of several neighboring countries, like Syria, Iraq, Afghanistan and Yemen. And most of the region is governed largely by authoritarians with poor track records at providing public transparency, accountability and health services.
“It is a recipe for a massive viral outbreak,” said Peter Piot, director of the London School of Hygiene and Tropical Medicine and the former founding executive director of the Joint United Nations Program on H.I.V./AIDS.
An even more immediate threat is the rise of Bernie Sanders. Over the weekend Sanders used his 60 Minutes interview to defend his past support of Fidel Castro’s Cuba.
The reaction in Florida-home was swift and angry.
Marc Caputo at Politico: Florida Dems in uproar after Sanders’ Cuba comments.
Florida Democrats insist he‘s the worst-equipped [to defeat Donald Trump] after Sanders’ refusal Sunday night to thoroughly condemn the Cuban revolution. His comments on 60 Minutes sent shock waves through the nation’s biggest battleground state, where Democratic members of Congress, state legislators and party leaders warned that his nomination — and Sanders’ self-described “Democratic socialism” — will cost them the biggest battleground state of them all.
“Donald Trump wins Florida if Bernie is our nominee,” said state Rep. Javier Fernandez, a Democratic candidate in a majority-Hispanic state Senate district….
As a state with an influential cross-section of Latinos whose families fled leftist Latin American regimes and violence, Sanders embrace of far-left leaders and his past refusals to wholeheartedly condemn Latin American strongmen and the Soviet Union have long been seen as fatal flaws.
Sanders on Sunday did nothing to allay those concerns in a 60 Minutes interview in which he was asked about his 1985 comments stating that the Cuban people didn’t “rise up in rebellion against Fidel Castro” because “he educated their kids, gave their kids health care, totally transformed society.”
There was no mention of the firing squads, political purges and mass arrests that accompanied the 1959 revolution.
There’s much more at the link.
At least Sanders is finally getting vetted by the media. For example, Griffe Witte at The Washington Post: In Cold War travels, Bernie Sanders found much to admire behind enemy lines. Now that’s a problem for his campaign.
The mayor of tiny Burlington, Vt., was back from Nicaragua and eager to share the good news.
The country’s Soviet-backed government — forged via armed rebellion — was cutting infant mortality, reducing illiteracy and redistributing land to peasant farmers. Its Sandinista leaders, branded terrorists by the U.S. government, impressed him with “their intelligence and their sincerity.”
Three years later, Bernie Sanders was fresh off the plane from Moscow, reveling in the beauty of the land and the contentedness of the people.
And a year after that, he returned from Cuba having tapped into a revolutionary spirit “far deeper and more profound than I understood it to be.”
With Sanders now surging to the top of the Democratic presidential field, those three-decade-old impressions introduced a volatile new element in the race Monday as rivals reacted to Sanders’s decision to defend his remarks, not disclaim them….
The fact that Sanders’s long-ago travels in the communist world have become an issue in the 2020 campaign reflects how unorthodox a choice he would be to lead the Democratic Party….
Returning home from visits to some of the United States’ most avowed enemies, Sanders offered some criticism but also plenty of praise in Vermont community television recordings. Many of the videos were kept in storage for decades — including during his 2016 campaign — and, even after being posted online, have remained relatively unknown.
Now, Sanders’s comments are coming back to life as opponents say his warm feelings toward his hosts decades ago make him vulnerable to attack and reveal a soft spot for left-wing despots.
Read the rest at the WaPo. More Bernie critiques:
Jonathan Chait: If Democrats Aren’t Terrified of Bernie, They’re Not Paying Attention.
William Saletan at Slate: The Great Socialism Gap. Socialism doesn’t freak out Democratic voters the way it freaks out other Americans. That’s a problem.
Never Trumper Michael Gerson at The Washington Post: A Trump-Sanders election would destroy our politics.
The South Carolina primary is coming up on Saturday, followed three days later by Super Tuesday. There’s another debate tonight, and I hope Elizabeth Warren will finally get up the nerve to address Sanders’ many weaknesses instead continuing to focus on Mike Bloomberg. I’m pretty sure the other candidates won’t hesitate to attack Bernie.
Natasha Korecki at Politico: Sanders under fire in South Carolina from all directions.
Joe Biden’s campaign is airing a new digital ad in South Carolina accusing Bernie Sanders of trying to undermine Barack Obama’s 2012 reelection by threatening to primary him. Pete Buttigieg was on TV in South Carolina hitting Sanders over health care and Mike Bloomberg targeted Sanders’ past gun votes.
“When it comes to building on Barack Obama’s legacy, Bernie Sanders just can’t be trusted,” the Biden ad, first obtained by POLITICO, warns.
The fusillade targeting Sanders on the eve of a Democratic debate in the fourth early state of South Carolina marked the latest turn in a Democratic primary that now has a decisive frontrunner. Each of the candidates, competing for a fraction of the moderate vote, are attempting to blunt the Vermont senator’s momentum coming off a landslide win in Nevada.
“When we rallied together to defend our president and all the progress he made they had his back,” the narrator says. Panning to then-Vice President Biden, the voice-over continues, “He had his back,” and moving to images of African American supporters at an Obama rally, says: “And you had his back.”
“But back in Washington, there was one guy with another plan,” the narrator says before an audio clip is heard of Sanders saying, “I think it would be a good idea if President Obama faced some primary opposition.”
More at the WaPo.
Are you going to watch the debate? I might give it a try. The last one was pretty entertaining, and it would be fun to see Bernie get his ass kicked. As always, this is an open thread.
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