U.S. Banking Economy and Redefinition of Financial Globalization
by Said El Mansour Cherkaoui – cherkaouijournal@gmail.com
Updated 5/26/2023
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Introduction – Synopsis
Cranked Globalization, Tossed Financial Capitalism, Derailed Banking System
This essay attempts to question the descriptions made by the American and European media about the current turbulence in the American banking system under the aegis of the Silicon Valley Bank. As usual, the Western media and those elsewhere who imitate them tend to privilege the narration of the News facts by emphasizing the procedures and the measures taken at the level of the organizations and their decision-making structure. This descriptive approach calls into question both the institution in question and the strategy pursued by those who have granted their “label” to such actions.
In such an environment, the system remains sealed and untouchable by genuine analytical critics and in the case of this banking crisis, it is safe and sound, as Madam Secretary of the United States Treasury Mrs. Janet Yellen declared before the US Congress, “more on that in the heart of this article”.
Thus, the justification and at the same time the accusation focus on questioning the Silicon Valley Bank as the origin of the defects and as the source of the evil.
The reality is actually quite different!
To highlight this reality, the content of our present article addresses the real reasons for this synchronized and complementary upstream and downstream cascade in fertilizing the real causes of such a financial collapse not only regional but also global and which has deep determinations and strong inclinations to ambush in expansionist policies and the characteristics of American foreign policy and its supports in the world of business and national finance, all of which are close to and also very far from the only missteps of Silicon Valley bank
In fact, as we are going to read through the rest of these lines, this banking turbulence coupled with an upheaval in the credit functions of the banks is, in short, only a questioning of the overall financial, economic and commercial model adopted and defended by the financiers of the United States and how they remain attached to the Dollar as the central convertible currency for the main international transactions. The paradox is that such concentration on the Dollar as the central mean of conciliation has many other ramifications within the niches of innovative high technology and operational artificial intelligence which generate all the productive activity and its vagaries of competitiveness between the most developed nations and those in the process of establishing themselves as the new purveyors of multipolar regional and geostrategic power.
The dispute arising around the dollar is not new and what it is really new is the emergence and consolidation of an alternative development model for developing countries that is offered by China, India, Brazil and South Africa without interference of European or US based financial and banking agencies and administration.
The actual generation of the leadership in Africa is no more related to an inheritance of allegiance through belonging to the colonial armies of France or to the administrative apparatus of the British Empire. The new generation of politicians and military officers in Africa had been raised through the ranks of a local elite, regional bureaucrats, ethical technocrates and tribal originated army ranks.
This direct relationship has built blocks of internal allegiance without having any sense of gratitude or reconnaissance in the colonial or even the neo-colonial time. The new rulers of Africa as in Latin America came directly from the masses and from the path of socially driven concerns and consideration which orient them toward the search for alternative and innovative way that the old approaches privileged by their predecessors that were tightly connected to the euro-metropolitan deciders and their officers that were the coach, the consultant and the provider of training for the question of security and supply of the needed weapons.
The new form of relations is now based on competencies, efficiencies and the demand of no interference in local, regional and national affairs by those who were supposed to provide assistance and guidance for the good of the governed. Development in its national expression is then considered the new weapon to fight against poverty and social marginalization that are the causes and the promoters of instability and dysfunction of the State responsibilities which all favored easy recruitment and development of tensions within the African countries.
These considerations are the reasons we witness that motivate the expansion of the Wagner group and the development of the China direct and indirect investments, which combined have reduced opportunities for French and American Groups to expand and to enhance new possibilities of cooperation and new forms of mutually beneficial relationship outside of the traditional rim of the North and South Subcapitalistic frame of work.
The United States is thus led to use the fight against jihadist terrorism in Africa to define its policies with regard to its relations with the heads of African businesses and states.
Thus, the head of the United States Africa Command (AFRICOM), Michael Langley, briefed senators in Washington this week of March 20, 2023 by highlighting the Chinese threat in Africa through the stranglehold of the China on minerals critical to the abuses of the Russian group Wagner, going through the need for a second naval vessel dedicated to Africa.
Regional banking chaos continues
JPM to cut 1K First Republic staff – Updated 5/25/2023
First Republic — which regulators seized and sold to JPMorgan — was paying dozens of employees more than $10 million apiece annually in the heyday before its collapse.
PMorgan Tells 1,000 First Republic Employees They’ll Lose Their Jobs
Updated 5 hours ago – Updated 5/25/2023
JPMorgan Chase laid off 15% of First Republic Bank’s former employees Thursday. The approximately 1,000 affected staffers were informed of the decision in brief, scripted phone calls and will receive pay and benefits for 60 days, The San Francisco Standard reports. Most of those let go were workers that First Republic intended to lay off before it was seized by regulators and acquired by JPM earlier this month, an anonymous source tells Bloomberg. The other 85% of the roughly 7,000 people employed by First Republic at the time of the takeover were offered transitional or full-time roles at JPM.
JPMorgan Culling First Republic Bank’s Personal Credit Lines
JPMorgan letting go 1,000 First Republic employees
Layoffs have begun at First Republic Bank. In a series of scripted phone calls Thursday morning, employees at the bank were informed that their service was no longer needed and given a minimum of four weeks’ pay.
The bank’s new owner, JPMorgan Chase, gave no reason for the cuts.
First Republic Employees Laid Off in Brief, Scripted Calls – sfstandard.com • 2 min read
– 60 days pay/benefits + a lump sum. Thousands are laid off each year with nothing but last check, if that.
Scoop: Bye bye personal credit lines for wealthy First Republic Bank customers 😢
J.P. Morgan is culling jumbo personal credit lines for First Republic‘s wealthy clients. The failed lender, which was sold to JPM, had offered personal lines of credit to its wealthy client base as a key way of attracting customers.
“First Republic did a great job at service, but being in the low-cost lending business is not what JPMorgan does” – Jamie Dimon, earlier this month.
The Information: https://lnkd.in/eQcqXndr – https://lnkd.in/evWWd2y4
Bloomberg News – First Republic — which regulators seized and sold to JPMorgan — was paying dozens of employees more than $10 million apiece annually in the heyday before its collapse.
Michael Wilson – Although I was at First Republic Bank for a short time, it was a pleasure to be part of a tremendous culture and the best co-workers I have ever had.
I have experienced different companies and cultures but First Republic Bank was the best place I have ever had the pleasure of working. I am very sad to see it go.
As I say good bye I am putting up my open to work banner one more time. Someone is going to hire a tireless, hardworking and knowledgeable person in the near future. It is time to get to work.
Stephen Moye – One thing that I have not seen mentioned is that First Republic was likely granting these mortgages to high net worth clients as a “loss leader” with the likely intent of obtaining more lucrative business from those clients
First Republic’s $35 Million Banker Outearned JPMorgan’s Dimon Before Bust – bloomberg.com •
LinkedIn News – Updated 5/4/2023
- The Californian bank PacWest’s shares fell around 45% early Thursday and trading was briefly halted after the regional lender confirmed a report that it was considering “all strategic options” — including a sale — to stay afloat. Trouble for the Beverly Hills-based bank began after Silicon Valley Bank’s collapse in March led to about a fifth of its customers withdrawing deposits. While the latest news further “underscores how investors remain unconvinced about the health of regional banks,” Americans are worried, too; 48% of U.S. adults are very or moderately concerned about their money following the recent turmoil, according to a Gallup poll released this week.
- PacWest, which had a market value of about $772 million, has lost about 85% of it since the beginning of March.
- Federal Reserve Chair Jerome Powell stated Wednesday that the banking crisis had not deterred policymakers in their fight against inflation.
The Salvation Board Identified in Startups and Alliance with Institutional Investors
The sum of the Effects of such restrictions have forced banks to turn to Startups as a bearing and substitute and beyond, as the effects of the Dot.com period Dot.gone is still alive in people’s minds, banks have wanted to try everything for the whole by investing in Startup formulas having no value or guarantee in the event of insolvency in addition to the deposits of such Startups being not guaranteed or protected by the insurance of the Federal State American or the American Treasury and its administrations.
Change and Continuity of Liberalism Sanctioned by Crises and Recessions
The international banking system has been and continues to be shaken several times since the advent of capitalism and this is nothing new.
This system has been decried by many economists since Karl Marx, Hilferding and Keynes and now we see the end result of such a confrontational problem between investment firms, institutional investors, financial conglomerates, cohesion and the integration of financiers within the energy, logistics and high-tech sectors as well as the automotive industries.
Added to this is the tendency to manipulation and fraud which destroys the foundations of investor confidence in the investment system but without becoming a solid memory directing their new capitalization attempts. American investors therefore have a short memory and the lure of easy gains combined with the notion of rapid success and total success in a short time arouses greed and feeds the greed of both fraudsters and potential investors.
From this perspective, among the largest and most infamous frauds on Wall Street is the story of Enron, a major energy services company. Before the fraud debacle that wiped Enron off the financial map, it was considered one of the ten largest companies in the United States.
The most famous example of investment fraud involves Bernie Madoff. Former NASDAQ Chairman Madoff executed the biggest Ponzi scheme in history – a scam that lasted at least 17 years. In 2008, when the financial crisis caused investors to withdraw their funds, Madoff was unable to pay them. It turned out that he was paying existing investors with money from new ones. It is estimated that he lost some $20 billion in investors’ money which resulted in a restitution of $170 billion. Madoff was sentenced to 150 years in prison for his crimes.
New International Order: World Trade, Foreign Debts and Technological Rivalry
In parallel with these prevarications of the world of populist finance, the confrontations between these sub-fields of international finance have found their limits with the rise in power of Russia, India, China and more recently the conflict between Russia and Ukraine who demonstrated that the Federal Reserve Bank and the European Central Bank, the World Bank, the IMF and the IFC were not ready to bear the damage on their respective countries that the American and European sanctions against the Russia have caused in punishment for the rest of the world economy without distinction of level of development, level of their respective financial integration in the world market or even the level of regional and local economic development.
“Redefining Banking Globalization” with U.S. and European Union in the World Economy: Financial Clashes, High Tech Rivalries and Synchronization of War Politics
“Dossier – Analytical Study on Cranked Globalization, Tossed Financial Capitalism, Derailed Banking System“
Which we present it to you in the form and content as:
Focusing on the actions of bankers and lenders as well as stock market participants cannot alone explain the real reasons for this upheaval in the terms, conditions and purposes of banking operations either in the United States or in Europe. This aspect of the equation is only the tip of the iceberg, the rest is rooted in the competitive system and the merciless confrontation that takes place in the international market for basic necessities, starting with energy products and all which affects the consolidation of the economic power of the United States as a decision-making center for the prices of these strategic materials.
The sinews of war is the financial control of these strategic first-rate products and their financing and distribution logistics. Countries producing and supplying raw materials continued to suffer from the conditionalities of international loans from the World Bank, the IMF and groups of private banks in Europe and the United States.
Loans used for the plans imposed by these same organizations requiring the modernization of tourist infrastructures for reception, transport and delivery of these products intended for export in their raw state and this is intended for Western countries which, as luck would have it, are those who set and control their prices as they decide the level of interest rates for the payment of debts contracted with them by African and other Latin American countries. A vicious circle of profit and exploitation thus took shape also by the fact that all the suppliers of the plans, construction materials and advisers and engineers for these infrastructures originated in the country where the credit and the loan were granted.
For more details read the content of this article:
- Changing World Economy
- Said El Mansour Cherkaoui – California – January 15, 2021
- https://fr.moroccodigitall.com/2023/03/06/economy-mondiale-en-mutation/
Emergence and Consolidation of China in the Strongholds of Western Economic Powers
Faced with this environment dominated by institutions of Western origin, China undertook to break this massive encirclement of international finance and the continual speculation raging at the level of access, appropriation and distribution of raw materials. With this in mind, China opted for the expansion of its financial interventions beyond its own Asian regional zone of influence.
Report and Compilation by Said El Mansour Cherkaoui / July 1, 2018
The new foreign policy consensus in Washington rejects American internationalism at precisely the time when it is needed most to define more accurate and less expansionist diplomatic approaches to the challenges and the rise of nationalism and seclusion in Europe, military coups and internal rifts and wars in Africa , instability and inter-confessional confrontation in the Middle East, expansionism and rivalry in Southeast Asia, institutional uncertainty, economic downturn, ethnic rejection along immigration and refugee around the globe, argues Dr. Said El Mansour Cherkaoui in Global Affairs, Business and Trade Magazine .
China Giant panda startle and U.S. paper tiger awakening
The products of the consolidation of the development of the Chinese model had motivated China’s desire to create its own financing network for its projects in Africa as well as in Latin America and the rest of Asia.
New Challenge for Europe: The Global Semiconductor Race
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US Social Tech Distancing with China
U.S. and European Union in the World Economy: Financial Clashes, High Tech Rivalries and Synchronization of War Politics
For the American economy and the European Union, the effects of the economic war on the level of the sources of management and innovation on the level of technological inventions and scientific progress made on the level of high technology on earth, sub- navy and space had narrowed the areas for expansion and creation of additional value for the United States thus making private American Capital more dependent on debts to the Federal Reserve Bank, the United States Government and Startup companies given the drying up of external sources and international investment opportunities.
The rapid development of China increased the pressure on the United States to increase its reactions in the form of a departure from the fundamental principles of international trade liberalism, the norms and laws governing international trade with regard to subsidies and financial support, national companies and agreements signed in the past regarding trade, investment and the location of American companies in China and Chinese companies in the United States. Authorities in Washington under President Trump and currently with Biden have opted for the tough stance of resistance and non-negotiation of the US national interest which they see as directly threatened by Chinese expansion in high-tech sectors such as through investments in other countries that were within the sphere of influence and support of the US government.
China was thus stigmatized as one of the reasons for the decline of Western economies and an untrustworthy partner who according to Western media that Chinese advances in various scientific fields were also the result of espionage and diversion and that any Chinese company developing communication, information, artificial intelligence and semiconductor technologies should be marginalized from all technological modernization and research projects undertaken by Western societies and states. A certain “Chinophobia” was accentuated at all levels which combined the condemnation of China as being the source of the Covid-19 contamination and also unfair acts at the level of international trade and rivalry in advanced technological production.
This media campaign orchestrated during the time of fear and insecurity experienced by Western populations took over from those identified in Islamism, jihadist terrorism and militant Arabism. Also, this strategy of blaming the distant other for nearby problems and difficulties is reminiscent of what Japan endured as a campaign to denounce their expansion into the American economy during the successful Reagan Presidency that forced Japanese automakers to build their cars. in Ohio and not in Mexico.
Pour plus de détails lire ces articles:
Said El Mansour Cherkaoui – USA 15 Janvier 2021 Sciences Po, Grenoble Institut des Hautes Etudes de l’Amérique Latine, Paris Université de la Sorbonne, Paris III During the 1980s, the differences between non-Western countries and Third World countries became evident with regard to economic changes and progress at the level of the participation in the new industrial division of labor and the implementation of industrial strategy. East … Continue reading
Huawei Hit with Racketeering 6-page indictment here).
The U.S. Government has charged Huawei with intellectual property theft under the federal racketeering law. The move exponentially increases the potential penalties against the company if it’s convicted.
Nouvelle Économie Mondiale : Inflation, Récession, Protectionnisme Et Course Aux Armements – Version Française
- Said El Mansour Cherkaoui
- December 28, 2022 Saïd El Mansour Cherkaoui Saïd El Mansour Cherkaoui Originally published on November 2, 2021 1:05 p.m. Feature: Euro zone, euro, inflation and …
Recession symptoms in the United States
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Boomerang of the International Economic Sanctions
Indeed, economic sanctions against China, Iran, Sudan, Ethiopia, Guinea, Chad, Mali, Russia and other indirectly blacklisted countries had all narrowed the space for US and European banks to invest, stimulate investment and participate through institutional investors.
China therefore could not allow itself to remain with its hands crossed and become a liable spectator of all these maneuvers undertaken with the aim of correcting the excesses of the military interventions and invasions which had in no way resolved the structural deficits of the liberal system pursued by the way of free-trade treaties and by the military way to subdue the reluctant and the regimes which oppose it. In fact, it is in the direction of response, that the so-called emerging countries first tried to build coalitions and regional agreements parallel to the domination of the business world by groups of Western origin. BRICS and the creation of a Bank affiliated to this grouping of Brazil, Russia, India,
Thus, the West tends to use sanctions wishing to control more the basic economic necessities such as those of energy. In this, the Gulf War and its raison d’être in the definition of the New World Order based on hegemony and the exclusive control of oil energy sources by the financial groups of the United States.
The beginning of the end of such grabbing was manifested in this war and especially following the invasion of Iraq and the hanging of Saddam Hussein. The second intervention that broke the camel’s back was the overthrow and execution of Gaddafi.
Already political instability in the UK had sounded the death knell for the European and international financial system as the combination of high inflation, recession and the effects of Brexit had all conditioned the advent of chaos in the UK financial markets from October 2022 This accumulation of problems was also accompanied by the sovereign debt crisis of many countries, inflicting the international financial system with a fragility unprecedented since Mrs. Thatcher and Mr. Reagan’s implementation of corrective economic measures.
For more details read this article:
English language version:
The European Monetary System and the Continual Errors of Madame Christine Lagarde
The European monetary system could not bear the burden of the differences in development existing within the European Union and neither the payment and reconciliation of their respective debts and their new needs for loans and even new lines of credit to meet to the surge of inflation that has become the engine of economies to precipitate them into stagflation and recession as the destination for all countries directly implicated in the sanctions imposed on Russia. African countries had thus become the victims of such a settling of accounts between the holders of financial power, the suppliers of raw materials, and the disputes between the contenders for world power with regard to the polarity of power or the multipolarism of decisions and the finance around the world.
Intervention of the State and New Redistribution of Financial Power
The cascade of bankruptcies, layoffs and closures of stores and restaurants where successively accentuated by Covid-19, added to the continual worsening of the terms of the credits and the gradual increase of the interest rate at the level of the Federal Reserve Bank, Mr. Jerome Powell and defended by the US Treasury Secretary, Ms. Janet Yellen, former FR Bank and emulated by their follower Ms. Christine Lagarde President of the European Central Bank. They presented themselves as firefighters but their hidden and avowed desire to increase the interest rate at all costs as a means of controlling inflationary pressure turned them into arsonists of the recession and the national and world economy.
Treasury Secretary Janet Yellen offered on Thursday [March 16, 2023] told senators during a Capitol hearing that the U.S. banking system “remains strong” and that Americans “can be confident” about the safety of their deposits, even as US financial institutions and European agencies ordered new bailout efforts in the wake of the second-largest bank failure in US history.
At the end of his testimony, another major institution, First Republic Bank, received an emergency injection of $30 billion in deposits from 11 banks, according to the Treasury. And a few hours earlier in Europe, Credit Suisse, the second lender of the Swiss Confederation had obtained from the Swiss central bank the promise of a loan of up to 50 billion francs (54 billion dollars).
For more details on the financial difficulties of the European Union, read the collection of articles published in this Newsletter:
For more details read these articles:
Dot Come, Dot Gone: Does Fintech Finish Tech?
Said El Mansour Cherkaoui May 26, 2022 My take on a high-tech startup in Silicon Valley Said El Mansour Cherkaoui was director … Continue readingDot Come, Dot Gone: Does Fintech Finish Tech?
- Zooming American Layoff Cascades
- https://moroccodigitall.com/2023/03/04/zoom-american-layoffs-cascade/
The second side of the coin is allied with Venture Capitalists, Capital Risk Management firms which do not have the same procedures, nor the same motivations and nor the same principles of management and circulation of the currency.
The third component is what I mentioned at the beginning, all of this is part of the saturation that is currently going through the entire system of competitiveness between the old school of economics, which relies on the banking institution as the pillars of international expansion and of the determination of the faith of other countries and of the world economy with it.
It was in this trajectory that the American banks had almost received the coup de grace. Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation on Friday, March 10, 2023, and the FDIC was appointed receiver.
So Silicon Valley Bank was just the spark that ignited the whole dried up hill of the American financial system which is riddled with debt and credit card use coupled with inflation and speculation and successive “ scams” and frauds at all levels of action and operations of new forms of high-risk capital accumulation and capitalism that I called populist or popular whose investors are operators of multiple actions and various formulas on the level of the stock exchange, of which they control and dominate the movements of capital and investments.
First Republic (FRC) is the consensus choice to be the next domino
On Wednesday, March 16, 2023, Fitch Ratings and S&P both downgraded the bank’s credit rating, fearing depositors would withdraw their money despite federal intervention. The bank will explore strategic options, including a sale, according to Bloomberg. First Republic shares fell 35% in morning trading.
On Thursday, March 17, 2023, Fitch warned Western Alliance Bank (WAL), saying its credit rating could plummet if customers continue to withdraw money from the bank. Shares of Western Alliance, a regional bank like SVB, fell 16%. PacWest Bank (PACW) fell 12% and shares of other regional banks also fell.
Following these warnings, NYDFS took over Signature over the weekend of March 20, 2023, selling it to the Federal Deposit Insurance Corporation (FDIC). The move follows the California banking regulator’s seizure of Silicon Valley Bank last Friday, March 19, 2023, and Silvergate Bank announcing it was voluntarily liquidating its assets last week. Signature, like Silvergate, has served a number of crypto clients.
Switzerland Shaken on its Banking Foundations
UBS has agreed to acquire struggling rival Credit Suisse in a deal worth around $3 billion that will bring together the two biggest Swiss banks. Swiss regulators had urged the two to reach an agreement this weekend [March 3, 2023] to boost confidence in the banking system and reduce panic in financial markets. The news came just days after the Swiss National Bank declared the lender solvent and offered it a $54 billion line of credit.
The merger will have to bypass the six-week approval period normally allotted to UBS shareholders to assess the deal. Credit Suisse published its 2022 annual report last week on March 13, 2023, which referred to “material weakness”, worrying investors after the collapse of Silicon Valley Bank.
A roughly $3 billion deal with UBS to take over struggling rival Credit Suisse did not reassure investors about the health of the financial sector, as stocks and bonds in the global banking sector fell sharply early on Monday. Shares of Credit Suisse fell 65% and shares of other Asian and European banks fell. While Credit Suisse shareholders are protected to some extent, the UBS deal will eliminate investors holding around $17 billion in additional Tier 1 bonds, called AT1s, causing turbulence in this $275 billion market for bank financing.
The American Bank – Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank have announced that they will increase the flow of American dollars from Monday March 20, 2023.
Additional Bibliographic Notes
US and China: Their Chips Challenges are Not Cheap
Africa China International Division of Labor Robotics United States of America Europe Finance Technological Industrialization Inflation Artificial Intelligence Silicon Valley Ukraine
