Big Bang Bank | Opinion by Mariano Gistaín
The truth is that it is not easy to know where we are. Neither how many unemployed there are, nor if it will be long before the FAIL, nor if the level of confidence will hold a tweet… Banks, however tiny, shake the system. A FAIL is fixed faster and better… but it also happens at great speed.
Capitalism changes so fast that even it cannot keep track of itself. The bankruptcy of US and Swiss banks was repaired at full speed and everything is calm or almost calm… but that sentence is from two minutes ago… Tense calm and expectation, no panic has set in… or has it? Just as there is the end of the world clock for the atomic issue (knock on wood if you can find it) there should be a confidence level meter: the confidence meter, which would also be an end of the world clock.
Each individual entity or company feels its digits to see if it is still alive. Every bank, small or big, creates teams of accountants and alert social networks 24h. SVB is the first bankruptcy accelerated by Twitter and Whatsapp. Cryptocurrencies shine again. There is even a billionaire guru (Balaji Srinivasan) who has bet that in 90 days bitcoin will go to $1M.
Panic is on hold. A finger on the red button and antennas deployed. The scare has stopped for the moment…. which one? The system breathes and is even glad to be alive. zombie or alive? When there is no CRACK like 2008 -which on the other hand could happen at any time-, the immediate thing is unleashed euphoria and innovation: let the money flow, that is, digital notes that circulate 24×7. Inventions, derivatives of derivatives, mysterious acronyms only for the initiated, algorithms and algoTimos (who invented the fabulous word preferential?).
When confidence goes down, the game becomes a little more expensive, but also that, like everything else, is a source of business and an excuse for new bets. Networks can change everything in seconds. U.S. institutions have bailed out all customers of failed banks. In one weekend. There was a cap of $250,000 guaranteed, but that would have left out most SVB customers (97% had more than that amount), so the best, quickest and most effective thing to do to avoid a system-wide sizzle, bail out everyone. Yep. With a little conceptual trickery and working all last weekend the scare was patched. So did Credit Suisse.
All measurements oscillate on huge forks. Confidence is a flan on a motorcycle
The banking system is the system. There is no other. Even the missiles for Ukraine have stopped. No ammunition is arriving. Nothing arrives. Logistics circulates, like everything else, through a bank, in the shadow, in the light or in the intermediate zone. A network of banks that they themselves do not know how they are. There are so many criteria, so many organisms, so many ways of measuring the health or ruin of a bank or any object…. Unemployment, for example. Nothing coincides. All measurements oscillate in immense ranges. Confidence is a flan on a motorcycle.
In the USA, after the crash of SVB, etc. it is clear that lhe multiplicity of regulators and supervisorsapart from the very variety and confusion of the banking world, are unmanageable. And yet they have done it fast and well: they have pulled up. They have declared everyone systemic and have rescued every last client. Of course, this may have triggered the contagion of panic and will be expensive in general (bailouts without repayment), but they have acted quickly. Friday bankruptcy, Monday patched up.. Or so they say.
Then Deustche Bank has jumped in, which is now known that it was already known years ago that it was blah blah. The doubt is whether we are in a Bang Bank, in uj Big Bang Bank or it’s a long way off… or on Monday everything will be OK again.
The banks are the power first, the states are their auxiliaries. The central banks are in charge: raising and lowering the price of money and lending to other banks at zero percent are their levers. Now, in a delirium typical of the moment of chaos, they operate both at the same time: they raise the price of money and announce new spurts of liquidity. (Draghi’s phrase has stuck). According to experts both levers are contradictory, so the combined use reflects the world as it is/is not.
Banks are broken by definition, by law, although if all depositors wanted to withdraw their money at once they would turn to, one assumes, states, insurance (triggered), notional funds, high regulatory and supervisory institutions that neither regulate nor find out. Trump lightened the control over non-systemic banks (it is already clear that this word is also fallacious), but they do not watch over the big ones either. Unless this debacle is a stress test, a real dry run. to check the health of the system in the heat of the moment. We will know later.
The already unleashed power of finance manifests itself in the creation of a language of its own, hermetic jargon that not even its own high priests understand, metaphysics that replaces the original metaphysics, already forgotten.as. The methods of science do not penetrate the jungle of finance which, paradoxically, is supposed to work with numbers. Banks have created a vocabulary of their own to wrap up and dizzy indecipherable operations. All the creativity that is lacking in the arts has been passed on to finance. It is a complete poetics, a theology whose dogmas are changed every ten minutes. at the whim of imponderables, sensations, inventions, algorithms… exuberant irrationality, etc. Finance is Goya’s Caprichos… and sometimes the black paintings of the Quinta del Sordo.
With the disappearance of ideologies and religions has arisen this empire of finance, which at least does not deceive, it is money, papers, digital notes. The lyrical CSR ODS… has remained for the old industry, that is to say, things. The pure, immaterial financial world is quite sincere: it doesn’t even resort to such psalms.
Banks and states create money and pass it from one to another in the cloud. without it touching mortals, except when it falls on them in the form of derivative bangs: mortgages, swindles, percentages, inflations, corralitos… and that rain of percentages would be the weight of history on the life of each one of us.
The good thing about this madness is that there are rules… although nobody knows them and they are renewed so fast -creative disruption-, that there is no time to apply them. May the golden calf of Wall Street have mercy on us, amen.