March 14, 2023

Tuesday, March 14, 2023. Annette’s News Roundup.

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Joe is always busy.

On Monday morning, President Biden reassured Silicon Valley Bank and Signature bank customers that the money they deposited in these banks was safe and would be returned to them, even if the deposit amount passed the $250,000 level insured by the FDIC. He also said the failed banks’ leaders are fired, and the bank shareholders would not be protected.

“Thanks to the quick action my administration [has taken] over the past few days, Americans can have confidence that the banking system is safe. Your deposits will be there when you need them,” Biden said today in his brief remarks.

The President emphasized that taxpayers won’t be paying for the rescue of SVB’s customer base — so don’t call it a “bailout.” “Instead, the money will come from the fees that banks pay into the Deposit Insurance Fund, he said.

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Historian Heather Cox Richardson wrote about the Silicon Valley and Signature Bank failures Monday morning. You should read this.

At 6:15 this evening, Secretary of the Treasury Janet L. Yellen, Federal Reserve Board Chair Jerome H. Powell, and Federal Deposit Insurance Corporation (FDIC) Chairman Martin J. Gruenberg announced that Secretary Yellen has signed off on measures to enable the FDIC to fully protect everyone who had money in Silicon Valley Bank, Santa Clara, California, and Signature Bank, New York. They will have access to all of their money starting Monday, March 13. None of the losses associated with this resolution, the statement said, “will be borne by the taxpayer.”

But, it continued, “Shareholders and certain unsecured debtholders will not be protected. Senior management has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by law.”

The statement ended by assuring Americans that “the U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry. Those reforms combined with today's actions demonstrate our commitment to take the necessary steps to ensure that depositors' savings remain safe.”

It’s been quite a weekend. 

On Friday, Silicon Valley Bank (SVB) failed in the largest bank failure since 2008. At the end of December 2022, SVB appears to have had about $209 billion in total assets and about $175 billion in deposits. This made SVB the sixteenth largest bank in the U.S., big in its sector but small compared with the more than $3 trillion JPMorgan Chase. This is the first bank failure of the Biden presidency (while Donald Trump Jr. tweeted that he had not heard of any bank failures during his father’s presidency, there were sixteen, eight of which happened before the pandemic). In fact, generally, a few banks fail every year; it is an oddity that none failed in 2021 or 2022. 

The failure of SVB created shock waves for three reasons. First, SVB was the major bank for technology start-ups, so it involved much of a single sector of the economy. Second, only about $8 billion of the $173 billion worth of deposits in SVB were less than the $250,000 that the FDIC insures, meaning that the companies who had made those deposits might not get their money back quickly and thus might not be able to make payrolls, sparking a larger crisis. Third, there was concern that the problems that plagued SVB might cause other banks to fail, as well. 

What seems to have happened, though, appears to be specific to SVB. Bloomberg’s Matt Levine explained it most clearly: 

As the bank for start-ups, which have a lot of cash from investors and the initial public offering of stock, SVB had lots of deposits. But start-up companies don’t need much in the way of loans because they’ve just gotten so much cash and they don’t yet have fixed assets. So, rather than balancing deposits with loans that fluctuate with interest rates and thus keep a bank on an even keel, SVB’s directors took a gamble that the Federal Reserve would not raise interest rates. They invested in long-term Treasury bonds that paid better interest rates than short-term securities. But when, in fact, interest rates went up, the value of those long-term bonds sank.  

For most banks, higher interest rates are good news because they can charge more for loans. But for SVB, they hurt.

Then, because SVB concentrated on start-ups, they had another problem. Start-ups are also hurt by rising interest rates because they tend to promise to deliver returns in the long term, which is fine so long as interest rates stay steadily low, as they have been now for years. But as interest rates go up, investors tend to like faster returns than most start-ups can deliver. They take their money to places that are going to see returns sooner. For SVB, that meant their depositors began to need some of that money they had dumped into the bank and started to withdraw their deposits. 

So SVB sold securities at a loss to cover those deposits. Other investors panicked as they saw SVB selling at a loss and losing deposits, and they, too, started yanking their money out of the bank, collapsing it. Banks that have a more diverse client base are less likely to lose everyone all at once.

The FDIC took control of the bank on Friday. On Sunday, regulators also shut down Signature Bank, based in New York, which was a major bank for the cryptocurrency industry. Another crypto-friendly bank, Silvergate, failed last week. 

Congress created the FDIC under the Banking Act of 1933 to restore trust in the American banking system after more than a third of U.S. banks failed after the Great Crash of 1929, sparking runs on banks as depositors rushed to take out their money whenever rumors suggested a bank was in trouble, thus causing more failures. The FDIC is an independent agency that insures deposits, examines and supervises banks to make sure they’re healthy, and manages the fallout when they’re not. The FDIC is backed by the full faith and credit of the government, but it is not funded by the government. Member banks pay insurance dues to cover bank failures, and when that isn’t enough money, the FDIC can borrow from the federal government or issue debt.

Over the weekend, the crisis at SVB became a larger argument over the role of government in the protection of the economy. Tech leaders took to social media to insist that the government must cover all the deposits in the failed bank, not just the ones covered under FDIC. They warned that the companies whose deposits were uninsured would fail, taking down the rest of the economy with them. 

Others noted that the very men who were arguing the government should protect all the depositors’ money, not just that protected under the FDIC, have been vocal in opposing both government regulation of their industry and government relief for student loan debt, suggesting that they hate government action…except for themselves. They also pointed out that in 2018, under Trump, Congress weakened government regulations for banks like SVB and that SVB’s president had been a leading advocate for weakening those regulations. Had those regulations been in place, they argue, SVB would have remained solvent.

It appears that Yellen, Powell, and Gruenberg, in consultation with the president (as required), concluded that the collapse of SVB and Signature Bank was a systemic threat to the nation’s whole financial system, or perhaps they concluded that the panic over that collapse—which is a different thing than the collapse itself—was a threat to the nation’s financial system. They apparently decided to backstop the banks to prevent more damage. But they are eager to remind people that they are not using taxpayer money to shore up a poorly managed bank.

Right now, this appears to leave us with two takeaways. The Biden administration had been considering tightening the banking regulations that were loosened under Trump, and it seems likely that the need for the federal government to step in to protect the depositors at SVB and Signature Bank will make it much harder for those opposed to regulation to keep that from happening. There will likely be increased pressure on the Biden administration to guard against helping out the wealthy and corporations rather than ordinary Americans.

And, perhaps even more important, the weekend of panic and fear over the collapse of just one major bank should make it clear that the Republicans’ threat to default on the U.S. debt, thus pulling the rug out from under the entire U.S. economy unless they get their way, is simply unthinkable. (Letters from an American).

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Kamala is always busy.

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Michelle Yeoh won the Academy Award for best actress. On Sunday night, she said this at the Awards.

“For all the little boys and girls who look like me watching tonight, this is a beacon of hope and possibilities,” said Yeoh, who is the first Asian woman to win in the lead actress category.

“Ladies, don’t let anybody tell you you are ever past your prime.”

She also wrote this.

Michelle Yeoh: The Crisis That Changed My Life 8 Years Ago Keeps Happening.

Ms. Yeoh is an actor and a United Nations Development Program goodwill ambassador.

Women react at the site of a collapsed building in the aftermath of the major earthquake in the Elbistan district of Kahramanmaras.

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Over the past few weeks, many people around the world joined me in celebrating my career firsts — from winning my first Golden Globe, Screen Actors Guild Award and Independent Spirit Award to earning my first Oscar (for actress in a leading role). While I am grateful for this unforgettable moment in my professional life, I want to redirect that global spotlight to an issue that is very personal to me and warrants the world’s attention.

My life changed eight years ago when one moment shook my outlook on the world.

It was April 25, 2015, and I was in Nepal with my partner, Jean Todt, visiting local organizations. Suddenly, I felt the earth begin to tremble violently. Outside the doors of the low-rise building I was in, a deadly earthquake ravaged the country. I’ve never felt the type of fear and panic I felt that day, when the ground beneath me shook so powerfully, I couldn’t stand on my feet. I had to crawl to try to make it to the door to escape. When we emerged, we had to stay outside for hours, unsure which buildings were strong enough or safe enough to return to.

I was fortunate to make it through that day unscathed, but not untouched. The experience was terrifying. Its effects linger with me still. Our hotel was damaged during the earthquake and was no longer safe to enter, so we made our way straight to the airport, where we spent two nights before being evacuated by plane. As we got on the road, I saw the ruins and destruction all around me. I couldn’t shake the thought of how unfair it was that I had a home to go to, unlike the thousands of families whose entire lives were suddenly reduced to rubble.

Disasters of such magnitude cause irreparable damage to the lives of those who already have so little. I witnessed this when I returned to Nepal to help with relief efforts three weeks after the earthquake and then again a year later, when I returned as a goodwill ambassador for the United Nations Development Program.

I thought again of Nepal when I watched the coverage of the devastating earthquake that hit Turkey and Syria last month. Even before the earthquake struck, the socioeconomic conditions in Syria were dire, with approximately 90 percent of the population living in poverty and millions in need of humanitarian assistance. Many are now homeless and lack the means to rebuild their lives or keep their families safe.

Crises aren’t just moments of catastrophe: They expose deep existing inequalities. Those living in poverty, especially women and girls, bear the brunt. In the immediate aftermath of a disaster, lack of sanitation, health facilities and safety disproportionately affect women. In my time as a goodwill ambassador, I have seen up close how women and girls are often the last to go back to school and the last to get basic services like clean water, vaccines, identity cards and counseling. They are typically the last to get jobs and loans.

In Syria the United Nations anticipates some 40,000 women will give birth in the coming months without access to sanitary conditions. When women have to sleep out in the open — often the case when buildings have collapsed or are unsafe — or in group shelters without adequate privacy or protection, they are at increased risk of sexual violence and assault, which skyrocket in the aftermath of a disaster.

To continue reading Michelle Yeoh’s Guest Essay in the New York Times, click here.

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Abortion Rights in the news.

Missouri voters could restore abortion rights in 2024.

Four states — California, Kentucky, Michigan, Vermont — voted in favor of abortion rights in November 2022, joining voters in Kansas that did the same in August.

JEFFERSON CITY, Mo. (AP) — Missouri voters could decide on whether to restore abortion rights in the state if constitutional amendments made public Thursday make it to the 2024 ballot.

The proposals would amend Missouri's Constitution to protect abortion rights and pregnant women, as well as access to birth control.

Currently, most abortions are outlawed in the state. There are exceptions for medical emergencies, but not for cases of rape or incest.

The Missouri proposals are backed by a new group called Missourians for Constitutional Freedom, which has hired at least one Missouri Democratic strategist. The group and its treasurer did not immediately respond to a request for comment Thursday.

Missouri's Republican-led Legislature crafted a law, signed by Republican Gov. Mike Parson in 2019, to ban most abortions, in case the U.S. Supreme Court overturned Roe v. Wade. The law took effect last year, following the court's decision to end constitutional protections for abortion.

Several coalitions of lawmakers, including a top Republican donor, tried to put the law to a public vote in 2019. But Republican Secretary of State Jay Ashcroft, widely considered a top candidate for Missouri governor in 2024, initially rejected the petitions until a court forced him to approve them.

Advocates ultimately gave up on efforts to put the law to a public vote, accusing Ashcroft of dragging his feet in handling the proposals and leaving them with the impossible task of collecting the roughly 100,000 voter signatures needed in just two weeks.

Ashcroft also will play a role in the fate of Missouri's pending constitutional amendments. His office is in charge of writing summaries of the proposals, which are used as voter guides.

Once Ashcroft and other elected officials finish the summary and a fiscal analysis, advocates can start collecting the voter signatures required to get the proposal on the ballot.

Abortion-rights supporters in Missouri are the latest to go directly to voters in hopes of restoring rights that were lost after Roe fell.

Kansas voters in August sent a resounding message about their desire to protect abortion rights by rejecting a ballot measure to add language to the Kansas Constitution stating that it does not grant the right to abortion.

Abortion-rights supporters won in the four states where access was on the ballot in November, as voters enshrined it into the state constitution in battleground Michigan as well as blue California and Vermont — and dealt a defeat to an anti-abortion measure in deep-red Kentucky.

Ohio advocates submitted ballot proposals in February to establish “a fundamental right to reproductive freedom” with “reasonable limits.”

Missouri's proposed constitutional amendments would allow the Republican-led Legislature and state agencies to put some restrictions on abortion.

But limits on abortion would only be allowed “if it is for the limited purpose and has the limited effect of improving or maintaining the health of a person seeking care, is consistent with widely accepted clinical standards of practice and evidence-based medicine, and does not infringe on that person’s autonomous decision-making,” the amendment states.

Penalties for both patients seeking reproductive-related care and medical providers would be outlawed.

Meanwhile, Republican state lawmakers this year are focused on raising the bar to amend the state Constitution from a simple majority vote to at least 60%, which could make it harder to pass the abortion-rights proposals.

Republican lawmakers have been trying for years to crack down on initiative petitions, which have been used to enact policies that the Republican-led Legislature either avoided dealing with or opposed. For example, a 2020 citizen-led ballot initiative forced the state to expand Medicaid coverage, despite years of resistance from Republicans.

Other efforts by abortion-rights advocates to lift Missouri’s ban on the procedure include a lawsuit filed in January by religious leaders who support abortion rights. They argue that lawmakers openly invoked their religious beliefs while drafting the measure and thereby imposed those beliefs on others who don’t share them. The lawsuit is pending. (The American Independent.)

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Judge who could overturn federal approval of abortion pill tries to stop the public from knowing about the case.

Judge in Abortion Pill Case Set Hearing for Wednesday Morning but Sought to Delay Telling the Public.

Saying he wanted safe and orderly proceedings, Judge Matthew J. Kacsmaryk asked lawyers not to disclose the hearing and planned to add it to the public case file only the evening before.

The federal judge in a closely watched lawsuit that seeks to overturn federal approval of a widely used abortion pill has scheduled the first hearing in the case for this week, but he planned to delay making the public aware of it, according to people familiar with the case.

Judge Matthew J. Kacsmaryk, of the Northern District in Texas, told lawyers in the case on Friday that he was scheduling the hearing for Wednesday morning. However, he asked them not to disclose that information and said he would not enter it into the public court record until late Tuesday evening.

One person familiar with the case, which is being heard in federal court in Amarillo, Texas, said such steps were “very irregular,” especially for a case of intense public interest.

Judge Kacsmaryk, a Trump appointee who has written critically about Roe v. Wade and previously worked for a Christian conservative legal organization, told lawyers in a conference call Friday that he did not want the March 15 hearing to be “disrupted,” and that he wanted all parties involved to share their points in an orderly fashion, according to people familiar with the discussion.

On Friday, the public court record showed subtle signs that something unusual had occurred. That morning, the first new entry in 10 days was added to the case’s docket: a notice of appearance for a Justice Department lawyer, a standard document usually added to a case in advance of an upcoming proceeding, but the docket did not show any proceeding.

In addition, there was a gap in the numerical listing of documents in the docket — document 124 was missing — suggesting that a recent entry had been sealed. People familiar with the case said the sealed document referred to the Friday meeting between the judge and the lawyers.

After the meeting, the participants shared Judge Kacsmaryk’s request with their team members, who noted that it was unusual to hold the status conference under seal and to keep the public from knowing about the hearing. The federal government generally objects to closed hearings unless they are necessary to protect national security interests.

The lawsuit claims that the F.D.A. did not adequately review the scientific evidence or follow proper protocols when it approved mifepristone in 2000 and that it has since ignored safety risks of the medication. The lead plaintiff, the Alliance for Hippocratic Medicine, was incorporated in August in Amarillo, shortly after the Supreme Court overturned Roe v. Wade. Judge Kacsmaryk is the only federal judge covering the Amarillo division in the court’s Northern District.

If the judge issues a preliminary order to bar access to mifepristone, the federal government is expected to immediately appeal and to seek a stay of the injunction while the trial proceeds. Legal experts said that even if the preliminary injunction remained in place, there were several legal options that could allow the manufacturers of mifepristone to continue supplying the drug and providers to continue prescribing it to patients.

If legal access to mifepristone is blocked, some abortion providers plan to provide only the second abortion medication, misoprostol, which is used safely on its own in many countries. Misoprostol, which is approved for other medical uses, causes contractions similar to a miscarriage and is considered slightly less effective on its own than in combination with mifepristone and more prone to cause side effects like nausea. (New York Times).

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This sounds wonderful/even transformative.

Pfizer CEO says it will be able to deliver Seagen’s cancer therapy at a scale not seen before with $43 billion deal.

• Pfizer CEO Albert Bourla said the company will be able to deliver Seagen’s cancer therapy to the world “at a scale that has not been seen before” with its $43 billion acquisition. 

• Seagen is a leading developer of medicine called antibody-drug conjugates, which are designed to directly kill cancer cells and spare healthy ones.

• Bourla called ADCs “one of the greatest technologies to battle cancer” and likened them to mRNA for vaccines. 

Pfizer CEO Albert Bourla on Monday said the pharmaceutical giant will be able to deliver Seagen’s cancer therapy to the world “at a scale that has not been seen before” with its $43 billion acquisition. 

“We can add value to what Seagen is bringing,” Bourla said in a CNBC interview. “It’s more or less a situation like when mRNA was in our hands. With our scale, with our capabilities, this is the same here.”

Seagen is a leading developer of medicine called antibody-drug conjugates, or ADCs, which are designed to kill cancer cells and spare healthy ones. ADCs use antibodies to deliver small molecule drugs directly to a tumor site, which may reduce side effects and offer greater efficacy, according to Seagen’s website. 

Bourla called ADCs “one of the greatest technologies to battle cancer” and likened them to the successful mRNA, or messenger RNA, technology the company helped manufacture with BioNTech for Covid-19 vaccines. The mRNA technology is basically used as a vehicle to deliver instructions to cells. In Covid vaccines, mRNA technology is used to trick our immune system into developing antibodies against the virus.  

ADCs “are turbo charge guided missiles that are attacking the cancer cells and can make a huge difference,” he said. 

Bourla emphasized during the interview that cancer’s impact reaches far beyond the patients themselves: “If not patients, they will be affected as husband or wife, they will be affected by daughter or son.” 

He added: “We can make a big difference with this technology in our hands.” (CNBC).

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Here are two kinds of wonderful.

Remove the bad ones. Add the good ones.

Stripping Confederate Ties, the U.S. Navy Renames Two Vessels.

The vessels will be named for Robert Smalls, a mariner who commandeered a Confederate ship to freedom from slavery, and Marie Tharp, an ocean geologist who studied continental drift.

The Naming Commission, a committee created by Congress in response to a public backlash against Confederate memorials in the wake of the 2020 murder of George Floyd, identified two ships to be rechristened in the Navy’s fleet.

Robert Smalls was an enslaved person and pilot of Planter, an ammunitions transport ship of the Confederate Army. In the early morning of May 13, 1862, he commandeered the ship out of Charleston Harbor, S.C., and delivered it to the Union forces. Credit...U.S. Naval History and Heritage Command.

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One night in 1862, as the Civil War raged, an enslaved mariner named Robert Smalls seized an opportunity.

When the enlisted crew of a Confederate steamer disembarked for a night of carousing in Charleston, S.C., Mr. Smalls, the ship’s pilot, gathered his family and the other enslaved sailors and their families. He then steered the ship for a dramatic escape past heavy fortifications to Union-controlled waters and freedom.

Disguised in a top hat and a Confederate captain’s long overcoat, Mr. Smalls gave the passcodes at each of five Confederate forts and, once past the reach of cannon fire, hoisted a white flag of sewn-together bedsheets that his wife Hannah had made — delivering the ship to Union forces.

Mr. Smalls and the crew had lined the bottom of the boat with dynamite to detonate rather than be recaptured and face execution.

After his daring escape, he fought for the Union, becoming the first Black American to command a Navy vessel. After the war, he represented South Carolina in Congress, owned a newspaper and founded a railroad.

Marie Tharp aboard the U.S.N.S. Kane as it traveled over the Mid-Atlantic Ridge in 1968.

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The eponymous oceanographer, Ms. Tharp, was pioneering in her field, creating the first scientific maps of the Atlantic Ocean’s floor and helping to shape the U.S. military’s understanding of plate tectonics and continental drift, with some of her research funded by the Navy.

Born in 1920, Ms. Tharp took advantage of a change in university admissions allowing women to enroll during World War II to receive an education that until then had been restricted to men. Ms. Tharp and a colleague studied sonar data taken from the research vessel of the Woods Hole Oceanographic Institution, the Atlantis, to create highly detailed seafloor profiles and maps.

Ms. Tharp noticed a cleft in the ocean floor that she hypothesized to be a rift valley that ran along the ridge crest and continued along the length of its axis, which she posited (and was later proven) to be evidence of continental drift.

“I had a blank canvas to fill with extraordinary possibilities, a fascinating jigsaw puzzle to piece together: mapping the world’s vast hidden seafloor,” Ms. Tharp wrote in a book about the Lamont-Doherty Earth Observatory at Columbia University, where she once worked. “It was a once-in-the-history-of-the-world opportunity for anyone, but especially for a woman in the 1940s.”

The significance of her contributions would become evident as research in her field continued over the decades, others said.

“For most of her working career, her contributions weren’t really celebrated. Her intellectual contributions were discounted,” Maureen Raymo, dean of the Lamont-Doherty Earth Observatory, said, even though her “evidence of sea floor spreading was probably the biggest scientific revolution of the 20th century, certainly in earth sciences.” (New York Times).

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Change in Albany redefines history.

‘Million-Dollar Staircase’ Adds a New Face: Ruth Bader Ginsburg.

After 125 years, the male-dominated architectural fixture of New York’s Capitol is getting an update.

ALBANY, N.Y. — Even then, the gender imbalance was glaring.

The so-called Million Dollar Staircase, spanning 444 steps and four floors of the New York State Capitol, memorialized the faces of dozens of distinguished figures in delicate carvings, but not one was a woman.

Scrutiny prompted a state official to hastily authorize the addition of several women to the staircase’s lower level. The year was 1898.

Now, after 125 years, the state will make the first addition to the roster of honorees, and it will again be a woman: Ruth Bader Ginsburg, the trailblazing Supreme Court justice, feminist icon and Brooklyn native.

The Ginsburg Family approved the work of sculptor, Meredith Bergmann. (New York Times)

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The Great Western Staircase was carved in place from massive blocks of sandstone from 1884 to 1898. It was modeled after a similar work at the Paris Opera house, although for observers today it might conjure the work of the artist M.C. Escher.

It was supposed to cost $1 million, leading to its nickname. Like many things in Albany, it ended up running over budget — by $500,000.

The staircase boasts intricate carvings of flora and fauna as well as symbols, like the Eye of Providence. It also features 78 carvings of 77 distinguished figures of the day (John Jay, a slaveholder and New York governor who was the first chief justice of the United States, appears twice).

The new carving will be fashioned from the same Corsehill sandstone used for the original stairs. Flown in from a quarry in Scotland, it is expected to cost about $150,000 and to be ready for unveiling sometime this spring, although it seemed unlikely to be finished by the end of March, Women’s History Month.

The few faces of women that were originally depicted are clearly more for ornamental than honorific purposes; they include babies, goddesses and the architect’s granddaughter.

The six female additions include the suffragist Susan B. Anthony and the novelist Harriet Beecher Stowe, as well as Civil War nurses and a temperance crusader. Keen observers might notice that the portrait of the Revolutionary War legend Molly Pitcher, looks slightly generic, probably because she was not a real person at all, but a convenient amalgam of the many women who fought for the colonies.

Governor Hochul (right) with the sculptor, Meredith Bergmann.

(New York Times).

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