"Woke" Banks, Financial Calamity, and the Safest Place to Park Your Money
Ask Matt goes Jim Cramer on you (apologies in advance)
Editor’s Note: Have a question for Matt, but aren’t sure he knows enough about the subject to answer satisfactorily? Ask him anyway at askmattlabash@gmail.com. He can pretend expertise as easily as the next guy, especially if the next guy is Janet Yellen.
Dear Matt,
Now that the economy is (again) teetering with a (woke?) banking contagion that could still become a full-fledged pandemic, where is a safe place to park my money?
Warren B.
First, Warren B., let me say that I really enjoyed your early work with Nate Dogg. (Or was that Warren G.? I can’t tell you Berkshire Hathaway/gangster-rapper types apart. ) Second, allow me to say that journalistically, I positively hate financial crises. Not only because tons of people lose lots of money – usually for no good reason besides greed or incompetence or a false sense of security in a system that is less system than racket, that incentivizes bad actors to be their true selves. But because I didn’t get into the painting-word-pictures business to have to write about credit default swaps or collateralized debt obligations (after the 2008 crash), or rollbacks of capital reserve thresholds or how spiking interest rates screw the pooch for banks that are up to their short’n’curlies in US Treasury bonds (2023). America does not need me to do a bad Jim Cramer impression. One Jim Cramer is already one too many. Besides, I didn’t get into my seedy little trade for the screaming groupies and generous wardrobe allowance (if only you could see my writing sweats – so hot). I got into it to hurt people with words, not math.
I don’t know about all this “woke-bank” rhetoric floating around on the right as being the culprit for bank failures. It’s not a stretch for me to believe their management is – or was - woke, however you define it, if you can define it. Corporate America is littered with sheeple, and most sheeple are woke these days. I’ve always tended to dislike the wokeness-pimps as much as anyone. But crying “woke!” now seems to be a reflexive tic more than it is an honest case-by-case diagnosis, wingers of the moment blaming wokeness not just for the things it should be blamed for (chilling free speech, gender-bender-pretenders, cancellation gang-bangs, social-media dogpiles), but for every other inconvenience they suffer, from their misplaced car keys to their irritable bowel syndrome. In other words, they’re becoming as tiresome as those they often correctly criticize. Note to both sides: all extremism leads to exhaustion.
I will sheepishly admit, however, that what awoke in me, however briefly, after the news of Silicon Valley Bank’s collapse (the second largest bank failure in U.S. history), was old Mr. Schadenfreude. After hearing that over half of its loan portfolio consisted of private equity and venture capital firms – mostly in the tech sector - I couldn’t help but think that after all these decades of Silicon Valley screwing America with its human-obsolescence and brain-rewiring contraptions, it was high time someone returned the favor. Of course, now that Treasury Secretary Janet Yellen and her trusty bowl-cut are riding to the rescue - in an effort to stanch the industry bleeding, bailing out all of that particular bank’s depositors no matter how much they exceeded the historic $250,000 ceiling on federal deposit insurance – well, she took all the fun out of it for me.
But my uncharitable impulses aside, it’s volatile out there. Which is why I’d say the safest place to park your money is probably in Slack Tide futures. Long after our banking system collapses, and people are trading William Devane-endorsed gold coins for paltry hunks of beef jerky (Patriot food) or glasses of lemonade, or else the angry masses are feeding on the human-flesh cutlets of the “experts” who got it all wrong when the nation resorts to cannibalism, gas-siphoning, and unapologetic anarchy as MAGA warlords make shirtless-Putin pictures our new paper currency, well, I’ll still be here. Telling you the truth. At least as I see it. Unadulterated truth-telling for no partisan advantage not being an overly-populated genre these days.
To that end, for non-paid readers who are thinking about joining the fun (giving you access to all paywalled columns, the entire archive, and to all the debauchery, tasteful light nudity, and some of the most civilized discourse on the internet in our comments section where I regularly mix things up with thoughtful readers), I figured I’d sweeten the incentive pot by having a drawing this week, which I haven’t done in a while. Anyone who signs up for a paid subscription from now until my next column publishes (whenever that is – who knows what tomorrow brings in a world where few hearts survive? – but I write weekly more or less), will be entered to win a signed copy of my Simon& Schuster-published collection of longform journalism, Fly Fishing With Darth Vader: And Other Adventures With Evangelical Wrestlers, Political Hitmen, and Jewish Cowboys. Believe it or don’t, but some of the stories in it are even longer than the book’s subtitle. The book, I hasten to add, won me the Noble Prize for Literature. Which is kind of like the Nobel, without all the annoying fanfare and prestige. (We had a quiet family ceremony.)
I have ignored inflationary pressure – unlike some I could mention – and have kept subscription rates among the lowest on Substack. It’s only five dollars per month if you have commitment issues, or $50 per year. (The better deal, since even though I’m bad at math, my calculator tells me that’s only $4.16 per month.) Likewise, if you join as a “co-founder” over this same roughly one-week period ($250 – for people who maybe like this thing of ours a little too much), you will automatically receive a book - no drawing for you – which I will sign however you like to whomever you like. You might even be able to read it. My handwriting is a bit iffy. You will also receive my undying gratitude.
So what are you waiting for? For the news to get better? Good luck with that. You could be waiting a long time. Join now.
Bluebird Bonus: For my fellow bluebird nerds (newcomers can get caught up here or here), I trekked across the yard the other day in the late-winter gloom to drop some mealworms in the tray I keep on the back of my bluebird house. In the off-season, I’m still like a drug dealer trying to lure little Johnny to sample my product so that he keeps coming back for more. Plus, life can be tough. Particularly in winter. For people, for birds, for all God’s creatures. If I can give some of those creatures who bring me so much pleasure even a little bit of ease when food isn’t so plentiful on the ground, it’s win-win for us all. In any case, when I dropped the worms in the tray, I noticed dried pine needles sticking out of the crack of the door. Those beautiful blue bastards had gotten the jump on family planning, having already constructed a perfect cup nest. No eggs yet. But it’s the earliest I’ve ever seen them do so. Guess I’m not the only one who’s ready for spring to get sprung. As I’ve stressed in this space again and again, ignore birds and fish and dogs at your own peril. It’s like spitting in the face of hope merchants
.
Bonus Tracks: One of the most beautiful songs ever written about financial struggle, Ryan Adams’ “In My Time of Need,” off his 2000 Heartbreaker album. I long ago lost my liner notes to it, but if memory and my ear are serving me correctly, that’s the great Emmylou Harris singing quiet background vocals.
And it might be professional malpractice to name check short’n’curlies upstairs without throwing the Stones’ song of the same name in. Featuring Ian Stewart’s roadhouse piano. The Scottish keyboardist didn’t stay a full-on member of the band – their manager thought his look was all wrong and his jaw was too blocky - even if he played on their records for decades. Though only on the songs he liked. Keith Richards once said of the shipping clerk at a London chemical company (who was the first person to respond to Brian Jones’s 1962 Jazz News ad seeking musicians to form the group that would become the Stones): “He used to play boogie-woogie piano in jazz clubs, apart from his regular job. He blew my head off too, when he started to play. I never heard a white piano player play like that before."
Well, Matt, I see that like any good capitalist you're ok with profiting off of other folks' misfortunes. Other folks being the now apparently not so down-and-out depositors at SVB, and your profit coming from hawking Slack Tide as a hedge against future financial fooldoodlery.
Barring a run of irrational exuberance on your offering, Alan Greenspan would no doubt approve, and maybe even dip in a toe himself. But the dude just turned like 97 or something, so he may not see hedging his financial bets for the long term as that much of a priority these days. Still, even as a short-term deal, he'd likely think the Tide not a half bad deal, with an acceptable ROI, in that although you only write weekly, you're not inclined to write weakly. And while I'm no economist, I'm pretty sure quality trumps quantitative easing most every time.
Of course, one must consider executive compensation in the deal, and whether the guy running the show is really worth the dough. But I've heard you're a pretty straight shooter, donating much to your favorite charities. I think they had something to do with education or some such, didn't they? So apparently, you're at least fairly responsible managing the loot... uh... funds, even with whatever portion of your gains that may be a bit ill-gotten through some wily pyramid scheme you could easily be running on the side with your investors' money. And while I can't seem to find any info on executive bonuses and whether they're exorbitant or not, you do consistently pay bonuses to your investors, often in multiples, at the end of your columns. So, there's that in your favor on the balance sheet.
I was gonna' check you out with those Arthur Andersen guys before issuing a personal 'buy' rating on the Tide, just to be sure. I try to be responsible when issuing financial advice. But those guys aren't answering their phone for some reason. Of course, it's a bit late for me, no matter what they might have said, since I already bought in. But I'm thinkin' my dough's probably safe with you. I mean if you can't trust a guy who feeds Bluebirds for a hobby, just who the hell can you trust, amirite?? That Madoff guy never even had a hobby as far as I can tell. At least not until he took up boxing with fellow inmates later in life.
Well, good luck with your latest gambit to attract new marks...er... investors. Gotta go tend to my other investments now, though it may not be long before I have to hire someone to do that for me. Seems the older I get, the harder it is for me to turn that damned mattress a couple of times a year.
Yeah Matt, sometimes the "Woke" crowd gives wokeness a bad name. Me? I try every day to be a little more woke than the day before, to look at the world and my place in it with honesty and compassion through a lens untainted by my privileges, which are many. It isn't easy. I have considerable empathy for those who try and sometimes fall short but only contempt for those who never try. And I admit to disgust for those who wield their own imagined wokeness as a cudgel because wokeness is a work in progress for everyone, the cudgel wielders included, sometimes especially.
The Christians here can find a message of wokeness in many of Christ's teachings. The non-Christians too. But living Christianity, like living wokeness, is different from and harder than talking about being either. For most people it seems that talking about either is close enough.
When it comes down to it wokeness is nothing but the celebration of rights. The only rights that really exist are those rights that we insist on for everyone; for ourselves and also for those we neither like nor respect. Rights that aren't universal aren't rights, they are privileges. When I claim a right to free speech but deny it to the person arguing a point I find vile, I am claiming a privilege to judge what other people should be allowed to say and to hear, what thoughts they should be allowed to entertain.
But with rights come responsibilities. When I claim the right to speak freely I also bear the responsibility to speak truthfully. Rights without concomitant responsiblities are also privileges. Understanding the difference is what wokeness is all about.