Of Deposit Insurance, Bailouts, Precedent, Unintended Consequences, Moral Hazard, and Risk Transference

Wow, that was a mouthful. Even for me. Now that we're clear on just what happened with SVB and Signature Bank, let's talk about the topics in the title of this post.

First, deposit insurance. Nearly all banks, savings banks, and credit unions have federal deposit insurance, either through the Federal Deposit Insurance Corporation (FDIC), which insures bank and savings bank deposits, or the National Credit Union Association (NCUA), which insures credit union deposits. (Back before the S&L crisis, there was a third insurer, the Federal Savings and Loan Insurance Corporation, or FSLIC, but it's defunct now, and savings banks - the survivors of the S&L industry - are insured by FDIC.) FDIC and NCUA are government agencies. They're also regulators.

I said "nearly all" financial institutions have federal deposit insurance, because a relative handful of institutions have private insurance, but that's becoming increasingly rare. American Share Insurance (ASI), one such private insurer, insures the deposits of about 100 of the nation's 4,000-plus credit unions. ASI is not a regulator, but it is regulated and audited, and is supervised by credit union regulators in the states in which it operates.

(Although I've spent my career serving credit unions, I'm going to use the term "bank" throughout this blog post, because it's less cumbersome than typing "banks and credit unions," and because "bank" has four letters and "credit union" has 12, including the space. Sorry, credit unions, but I'm lazy. I still love you more, and I encourage readers of this blog to do business with a credit union.)

Bank deposits are insured up to $250,000 per account. A married couple can get creative, and hold up to $1 million in deposits with a single bank, fully insured, through structuring the ownership of the accounts between the two of them. Ask your bank for details. Naturally, you could have even more in insured deposits by spreading your money among different banks.

Now, let's talk about the history and purpose of federal deposit insurance, then we'll look at who pays for it. There's probably nobody reading this who lived through the Great Depression. My parents did, and I've heard their stories. And I've studied the economics of that period extensively. The crash of 1929 devastated the financial system. It made 2008 look like a stroll in the park. The suicide rate among bankers and Wall Street executives was high. Millions of people lost millions of dollars, and those were 1929 dollars; a dollar in 1929 would be $18.15 today.

Among the many reforms in response to the collapse of the banking system that took place in 1929 was the creation of the FDIC and federal deposit insurance, which was implemented on January 1, 1934. The initial deposit limit was $2,500.

This is a critically important point, and one that I'm going to be coming back to, so if you weren't paying full attention to the last paragraph, go back and re-read it now.

Deposit insurance is funded by the banks whose deposits are insured, not by the taxpayers. Sort of. Banks pay into the insurance fund, and when a bank fails, the fund covers the insured deposits. It does NOT cover the stockholders or the bondholders. When you buy stock or bonds, you assume the risk of your investment, and nothing insures that you'll get your money back. Everyone is supposed to understand that when they invest in stocks and bonds. The insurance fund is also not supposed to cover the uninsured deposits, for similar reasons. We'll talk more about that.

Why was deposit insurance put in place in the first place, and why was the limit set at $2,500?

Unemployment in 1929 was 3.2%, not too different from where it is today (3.6%). By 1933, it was nearly 25%. Think of it: a quarter of the U.S. labor force was out of work (and not just for a couple of months, as was the case when the COVID shutdown pushed the jobless rate to nearly 15%, but for the entire year). The average household income was $2,300 per year in 1929; by 1932 it had fallen to $1,500. Virtually everyone's savings was wiped out, because there was no deposit insurance, and ...

4,000 banks failed in 1933 alone. A total of 9,000 failed during the decade.

Compare that to the 25 that failed in 2008, and you see why there's no comparing the two crises.

Now, in 1929 the average family probably had less than $1,000 on deposit in a bank (I say "probably" because the data is scarce, but there's enough for me to make an educated estimate; if my Dad were alive, I'd ask him). The wealthiest income decile (what we'd call "the 10%" today), probably had at least ten times that amount, maybe $10,000 or more.

When FDR put together the New Deal, creation of the FDIC and deposit insurance was a part of it. And FDR - a Democrat, and a pretty liberal one at that - was primarily interested in protecting the small depositor, the average American family. He knew, being a very wealthy man himself, from a very wealthy industrial family, that the rich can take care of themselves; they can effectively self-insure. They take their own risks, and are expected to live with the consequences of those risks - and are entitled to reap the rewards.

So it isn't surprising that FDR's administration set the initial deposit insurance limit at $2,500 per account. That probably would have covered more than 100% of the deposit balance held by 90% of the families in the U.S. in 1929, before the crash, and it probably would have covered at least a fourth of the balances of the wealthiest 10% of American families in 1929. (The rest of them would have been assumed to be financially savvy enough to either divide their money into at least four different banks such that their full savings total would be insured, or they'd invest some of the money in riskier assets - at least at some point, after the Great Depression ended. In any event, they'd be expected to be able to weather the consequences of their own risk-taking, given their relative wealth.)

Today, the deposit insurance limit, as noted above, is $250,000 per account. Makes sense, you say; inflation, right? Well, I agree in concept. As inflation has increased, the amount of protection that the average family of average means should be afforded by deposit insurance should increase - by the inflation rate. So let's examine what that would look like.

There are various inflation calculators on the internet. The Federal Reserve Bank of Minneapolis has one; it goes back to 1913, although it only goes as far as 2022. However, we can extrapolate from 2022 to 2023 using the most recent year-over-year inflation data. So if we plug in the $2,500 federal deposit insurance limit that was in place in January 1934 - again, designed to protect average American families' bank deposits - and look at what that amount should be today, given inflation over the ensuing 89 years, today's deposit insurance limit should be ...

$58,195.46-. That's a lot less than $250,000, isn't it?

So who is federal deposit insurance protecting today? Well, let me ask you this: do you have $250,000 deposited in your bank? I sure don't. Do you know anyone who does? If you do, they're pretty well off, right? They're probably in a position where they can take their own risks, and bear the consequences if they take on too much risk - and they also probably reap the rewards for the risks they assume.

I actually know quite a number of investors who regularly deposit $250,000 in banks. They're credit unions. That's right, institutional investors, not individuals. Instead of buying bonds for their investment portfolios, they sometimes buy bank CDs. They'll put a few million dollars in bank CDs, with not more than $250,000 in any one institution so as to ensure that their entire CD portfolio is fully insured.

Now, they're in the business of managing risk. They normally buy bonds, which are subject to market value declines - and, in the extreme case, to default. So why should institutional investors be entitled to deposit insurance? That's not who it was intended for when it was conceived back in 1934.

That excess insured amount - in this case, about $191,805 per account - comes at a cost. To find out who pays the tab, read on.

As mentioned above, banks pay deposit insurance premiums to ensure there's enough in the insurance fund to cover the occasional bank failure. In so doing, they self-insure the industry. (It's not unlike you and me paying homeowner's insurance premiums; I may never need the coverage, but if my neighbor's house burns down, my premiums help provide the coverage needed to pay the claim. If my house burns down, my neighbors' premiums cover my claim. Either of us may pay premiums for the entire time we own our homes, and never have a claim. Likewise, a bank may pay deposit insurance premiums forever, and never fail.)

However, banks are a business. And like any business, they pass along the cost of doing business to their customers. Require restaurants to provide their workers with health insurance? Fine, but they're going to charge you more for a meal. Raise the minimum wage? Okay, but your groceries and other costs are going to go up, because businesses are going to pass along the higher wage and benefits costs to you, the consumer.

Charge banks an insurance premium to offer deposit insurance to protect depositors? All well and good. But they're either going to raise fees, or pay less interest on deposits, to cover the cost of those premiums.

And here's the most important point: increase the deposit insurance limit to offer greater protection for depositors? Okay, but you're going to need a larger balance in the insurance fund, to cover those depositors in the event of a bank failure. To build up that larger balance, you're going to need to increase the premiums you charge banks for deposit insurance. And if you increase banks' deposit insurance premiums, they're going to either increase fees, or take a larger haircut off the rates they pay on deposits.

It's like that children's book, "If You Give a Mouse a Cookie." A higher deposit insurance limit => larger insurance fund balance => higher deposit insurance premiums charged to banks => higher fees or lower interest rates for bank customers.

Fine, you say. If that's the price we as depositors must pay in order to be protected, so be it. Except ...

The proportionate burden of paying for deposit insurance, as borne by bank customers, is regressive. Let me explain.

Banks charge a number of fees. They charge maintenance fees just to have an account open. They charge fees if you overdraw your account. They charge fees for certain transactions.

Now, you can get those fees waived. How do you get them waived?

You carry a larger minimum balance. That's right - the largest depositors (those who receive the greatest benefit of high deposit insurance limits) benefit the most from those fee waivers, and thus the additional cost of that deposit insurance isn't passed along to them. It's borne by those who only need a much smaller amount of deposit insurance - say, about $58,000 or so; what the limit would be had it just been adjusted for inflation since deposit insurance was put in place in 1934.

In other words, the people who only need a relatively small amount of deposit insurance are paying the excess premiums for those who are enjoying the benefits of excess deposit insurance up to an amount that the smaller depositors will probably never accumulate.

Banks also pay interest. But they don't pay the same interest rates to all depositors. Some depositors get higher rates. Who gets the higher rates?

Depositors with larger balances.

Are you beginning to see the picture? Whether the banks pay for the excess insurance premiums through higher fees or lower interest rates, smaller depositors carry a disproportionate share of the burden, while large depositors enjoy all of the benefit by receiving all of the excess protection.

At the risk of channeling Jen Psaki, whom I'm sure we'd all just as soon forget, I'll "circle back" to deposit insurance and the limit toward the end of this post. But first, let's address how deposit insurance limits got so far ahead of where they should be given inflation.

The deposit insurance limit was doubled to $5,000 in June of 1934, just six months after deposit insurance was put in place. In 1950, it was doubled again, to $10,000, as part of the Federal Deposit Insurance Act. It was increased further to $15,000 in 1966, to $20,000 in 1969, and to $40,000 in 1974, as the U.S. economy faced multiple recessions in the 1960s and 1970s.

In 1980, it was increased to $100,000. According to the FDIC, "The increase to $100,000 was not designed to keep pace with inflation. Rather, it was in recognition that many banks and savings and loan associations, facing disintermediation in a high interest rate climate, had sizable amounts of large certificates of deposits (CDs) outstanding. The new limit facilitated retention of those deposits or replaced outflows from other deposit accounts with ceiling-free CDs."

In other words, the insurance limit was more than doubled, from $40,000 to $100,000, simply because there were a lot of depositors that carried large deposit balances due to high interest rates, and the FDIC wanted to help banks keep those deposits, rather than face disintermediation - withdrawal of funds in favor of other alternatives, like money market funds - and allow them to pay very high interest rates, which may have encouraged them to take excessive interest rate risk (and, in fact, was a contributing factor to the S&L crisis after the Depository Institutions Deregulation and Monetary Control Act of 1980 was passed).

Who held those $100,000 deposits in 1980? Well, the median family income that year was about $21,000, and the personal saving rate was about 11%, so the answer is probably only the very well-to-do. That means that the $100,000 limit didn't meet the original intent of protecting the average American family's savings; instead, it protected the wealthy, and as we discussed above, the cost was disproportionately borne by the average family.

Finally, in 2008, in response to the financial crisis, the limit was more than doubled again, to $250,000. Again, it protected large depositors - the wealthy, and institutional depositors (businesses and other financial institutions). And you can bet that when the next crisis rolls around, there will be another massive increase in the limit.

In fact, a friend told me that after the SVB and Signature Bank failures, he heard someone on a news show arguing that the $250,000 limit wasn't high enough. Who was making that argument? David Sacks, a tech venture capitalist and co-founder of PayPal, the kind of company that had millions of dollars deposited with SVB. Do you think perhaps his argument for a higher insurance limit was self-serving, and not in the interest of the average American family?

Okay, next, I want to talk about bailouts.

In discussing bailouts, I should mention that deposit insurance is, in essence, a "bailout before the fact." I'm okay with that in principle, since it's what deposit insurance was intended to do. But the higher the deposit insurance limit, the more risk the bank is encouraged to take, which creates a moral hazard. Set the limit too high, and the moral hazard becomes too great, and the bank takes on excessive risk, and makes bad decisions. Maybe that's why Silicon Valley Bank did some of the things it did.

When a bank does this, it's transferring risk to the other banks that aren't taking those risks, but are paying deposit insurance premiums ... except we now know that those banks aren't really paying the premiums, they're passing them along to their customers ... except we now know that they're disproportionately passing along the excess premiums, which we could also call the excess risk incentives, to their smallest depositors, the very people that deposit insurance is supposed to protect.

In other words, high deposit insurance premiums, in the event of a bailout, result in a massive transference of risk to small depositors.

It gets worse, however. As we now know (and it's happened way too often before), in the case of SVB and Signature Bank, even the uninsured depositors were made whole - in other words, they got an outright bailout. They were entitled to nothing under federal deposit insurance; the banks paid no premium on their behalf, and yet, they got the same benefit from the insurance fund as the insured depositors.

Why do I say "from the insurance fund?" Because that's where the bailout money came from! The government - FDIC, Janet Yellen, Joe Biden - all like to boast that it won't cost taxpayers a penny. (It actually will - more on that later.) But it will cost small bank depositors dearly, because in the case of SVB alone, 94% of its roughly $209 billion in deposits were uninsured, so the insurance fund has to cover about $194.5 billion of deposits that weren't entitled to one red cent of protection.

We saw a lot of this in 2008-09, and during the S&L crisis. Even worse, during those times, the failures were so widespread, the bailouts so prevalent, that the taxpayer eventually did have to pick up the tab for some of it, because the deposit insurance fund was insufficient to cover it all. (I'll talk more about that later, as well.)

So occasionally the taxpayer does have to pay, and in those cases, the risk is transferred to the taxpayer. But I'd say there's always some transference of risk to individual taxpayers. Why? Because banks pay income tax (credit unions don't - there's a very sound reason that I don't have time to explain in this post). And like most large organizations, big banks (the ones that would be most likely to cost the taxpayers money in the event of a bailout) avail themselves of loopholes that reduce their effective tax rate to a level much lower than you or I pay. Thus, if they ever do get bailed out, and it winds up costing the taxpayer, they've transferred their excess risk to the taxpayer.

It would appear obvious that the Treasury shouldn't be bailing out uninsured depositors, but their position in the case of SVB and Signature Bank is that these depositors are large corporations, and to not cover their deposits would undermine confidence in the U.S. banking system.

I'm going to throw the BS flag on that one. These are large corporations that make campaign contributions to the politicians who pressured Treasury to make the decision to cover those deposits, pure and simple. The only thing not covering their deposits would undermine is the confidence that, if they go ahead and deposit their money in another U.S. bank, and that bank fails, their uninsured deposits will be covered again. So they'll just keep depositing millions of dollars in a single bank.

In other words, we've set a precedent here, and as a result, de facto, there is no deposit insurance limit.

However, there is a limit on the premium paid into the fund. And that means that, sooner or later, when there is another systemic banking problem, the fund will be insufficient to cover all the deposits, and the taxpayer will pay the cost.

That is a massive moral hazard. What it says to large banks is, "Take all the risk you want. You're covered." What it says to huge corporations who want to be lazy and just park all their cash in one bank, rather than spreading it among different banks - or want to avail themselves of the same protections that the average American family enjoys, which was the original intent of deposit insurance, rather than assuming and managing risk, as huge corporations should be in the business of doing - is, "Go ahead and park your cash in one bank - all $500 billion of it, or whatever the amount. You're covered."

That moral hazard is the unintended consequence of the precedent set by bailing out uninsured depositors, which kind of sums up the title of this post.

Now, I mentioned that during 2008-09, and the S&L crisis, the insurance fund was insufficient to cover all the losses. Why, you may ask, would the Treasury set up an insurance fund that isn't enough to cover all the losses?

When Hurricane Katrina hit the Gulf Coast in 2005, the damage was far beyond anything ever anticipated or experienced in the region previously. And the insurance losses exceeded what insurers were able to cover, because their projections did not capture damage of the magnitude that Katrina wrought. That's why insurance companies now use hedging instruments related to weather events, buy reinsurance, etc.

Likewise, the insurance fund, as noted above, is set up to cover a "normal" expected level of losses, but not a crisis of the magnitude of the S&L crisis or the 2008-09 financial crisis, neither of which had ever been anticipated before. (I'd call them "once in a lifetime" events, except they both happened not only in my lifetime, but in my career.)

There are a couple of points to be made here. First, it would be prohibitively and probably unnecessarily expensive to set up the insurance fund to cover an absolute worst-case, S&L crisis or 2008-09 magnitude banking system event. The premiums would be very high, and that cost would be passed along to bank customers - again, disproportionately - and that level of coverage would only rarely be needed. It would be like property insurance companies charging premiums based on models that assumed a Hurricane Katrina-magnitude storm would hit the Gulf every year; nobody who lived there could afford insurance.

But this is the more important point:

The excessive level of deposit insurance creates a moral hazard that encourages the excessive risk-taking that results in these near-worst-case crises occurring every 20 years or so to begin with.

In other words, by setting the deposit limit so high, and by setting the precedent of bailing out uninsured depositors, and by setting another precedent that I'll address momentarily, banks are encouraged to assume outsized risk - in pursuit of outsized profits - that will eventually, when conditions are right (like a massive collapse in home prices combined with a lending model that required little equity and allowed questionable appraisals, as happened in 2008) result in a systemic banking crisis that will exceed the insurance fund's ability to cover it.

Since they do this in pursuit of outsized profits, they're actually transferring risk that should be borne by shareholders to depositors and taxpayers, yet another inappropriate transference of risk.

Now, what's that other precedent that I alluded to?

It's the concept of "Too Big to Fail." There is no magic threshold for TBTF, no minimum asset size. It's like the courts' definition of obscenity: "We'll know it when we see it." But we heard a lot about it back in 2008-09, when the government bailed out Washington Mutual, a $328 billion mortgage lender; Bear Stearns, a Wall Street firm that specialized in mortgage-backed securities; Lehman Brothers, another large Wall Street firm; and AIG, an insurance company that specialized in insuring the assets underlying collateralized debt obligations.

The concept was that, if these giant institutions were allowed to fail, it would threaten the entire global financial system and economy.

Well, let's see: 25 financial institutions failed in the U.S. alone in 2008. The U.S. unemployment rate ultimately reached 10% in 2009, and remained above 8% for 3 1/2 years. A total of 8.7 million jobs were lost from early 2008 to early 2010; it would take until mid-2014 to recover them. The housing market took a decade to recover. And the U.S. economy was in recession for 18 months, the longest and deepest downturn since the Great Depression. And as the U.S. goes, so goes the rest of the world, which didn't fare any better. So I'd say that even though we bailed out those institutions, it didn't do much to avoid the entire global financial system and economy being threatened.

Ah, the pundits say, but how much worse would it have been if the government hadn't intervened?

That's always the question, and I've addressed it before in this blog, always the same way. It's like those old Tootsie Pop commercials with the wise old owl, where the kid asks the owl, "Mr. Owl, how many licks does it take to get to the center of a Tootsie Pop?" The owl rips the wrapper off a Tootsie Pop and starts counting the licks: "One, two, three ..." then he bites into the center, and the voice-over says, "The world may never know."

So it is with the question of whether it's better to intervene and bail out banks (and other businesses, for that matter), or let them fail: the world may never know, because government always steps in and - "CRUNCH!" - takes the bailout bite.

Well, here's my proposed free-market solution. It would avoid the transference of risk from those who are in the business of risk-taking to those of us who shouldn't be, and keep the costs associated with risk where they should be.

1. Treasury should announce that there is no more "Too Big to Fail." Period. And they should mean it.
2. Treasury should make this clear to the banking system: if you take excessive risks, you will not be bailed out. The insurance fund will cover insured deposits, and that's it.
3. Treasury should make this clear to the markets: stockholders, bondholders, and banking analysts, there will be no more "Too Big to Fail." If you're going to buy stock in a bank, or invest in its debt securities, do your research, look at their financials, analyze their management, scrutinize their risk, and then - and only then - invest ... at your own risk. If they fail, you lose your investment. We will not, under any circumstances, no matter how much Jim Cramer screams, bail them out.
4. Treasury should make this clear to depositors: we will always, 100% of the time, cover all insured deposits, up to the insurance limit. We will never fail to do that. We will never, 0% of the time, cover a single penny of uninsured deposits. We will never fail on that promise, either. So if you insist on depositing $250,000.01, know that that last penny will be lost if the bank fails. If you insist on depositing $478 million (that means you, Roku), know that $477.75 million will be lost if the bank fails.

If those messages are made clear to the banks, the markets, and the depositors, the following should happen:

1. Bank stock prices will probably fall, to a level that is more realistically commensurate with the risk the banks are actually taking. But after that market adjustment, stock prices in the banking sector will normalize.
2. Banks' debt securities will probably get downgraded, to a level that is more realistically aligned with the risk the banks are actually taking. But as banks adjust their risk-taking, their debt ratings will be adjusted accordingly.
3. Large depositors will move money around to different banks to ensure they remain under the deposit limit per account. This will likely result in a run on deposits in banks that have a high concentration of uninsured deposits, therefore it would probably need to be phased in over some period of time to avoid a liquidity crisis that would result in those banks failing. An alternative would be to backstop the liquidity crunch with a temporary liquidity facility, but it would have to be funded directly by those large depositors to avoid billing it to the banks, who would just pass it along to their customers, probably disproportionately. So maybe charge an excess insurance premium directly to those depositors who need it, just as some of us carry umbrella insurance policies over and above our homeowners' policies.
4. Eventually - and this is the best news - banks would adjust their risk-taking behavior to a more reasonable level, making the banking system safer for everyone, resulting in fewer bank takeovers, fewer systemic crises, lower insurance premiums, lower fees, and higher deposit rates. Of course, lower risk-taking would mean lower returns to stockholders, but they're currently enjoying the transference of risk to depositors and taxpayers, when it should be borne by them.

A final step in my plan, and this one would have to be phased in over some time - at least a decade, I reckon - would be to adjust the deposit limit down to where it should be given inflation, and then increase it annually by the inflation rate. I'd take it down to maybe $75,000 to provide a bit of cushion. We could start by freezing it where it is, then gradually adjusting it downward until the appropriate threshold is reached. Allowing for future inflation, in a decade, that $75,000 limit should probably be about $106,000, assuming the long-run average inflation rate of 3.5%. So if you wanted to phase in the adjustment over a decade, you could reduce the limit by about $17,000 a year for ten years, and you'd be where you should be. That shouldn't be too painful.

Now, don't hold your breath for any of this to happen. There are too many powerful lobbying interests working to keep deposit insurance limits high, and Congress loves big numbers, so the next adjustment to the insurance limit will be upward, and it'll probably be big, especially if it's in response to a true systemic crisis. Even though the current situation doesn't meet that standard, I would not be surprised to see this administration push for an increase, and the current Speaker of the House would undoubtedly support it, given that special interests in his home state would be among the loudest voices clamoring for it.

But if my proposal were put in place, one of the benefits would probably be lower market interest rates. The reason for that is that there would be a reduced expectation that the U.S. Treasury would be called upon to bail out banks in the future, thus the market perception of Treasuries would result in lower yields on U.S. Treasuries. That would mean less debt servicing cost as a percentage of the federal budget, lower deficits, and ultimately, all else being equal, the ability to gradually reduce the federal debt.

I know, I know, it will never happen. But we can dream, can't we?

Is The Banking System Safe?

I'm returning to the blogosphere after a five-month hiatus to write this post, and it's out of necessity. Because there are too many self-proclaimed "experts" on social media and in the Fourth Estate who would have you believe that we're on the precipice of a systemic banking crisis in light of recent events. Rather than offer up a spoiler alert with regard to that claim, I'm going to make you read on to the conclusion. But here's a hint: those social media "experts" and media pundits don't know baby poop from apple butter about the banking system, from what I've seen.

So what are my qualifications to weigh in on the topic? I have an MBA with a concentration in Economics and Finance, and hold a Chartered Financial Analyst (CFA) charter. I've worked with or for financial institutions for 37 years. I started my career as a savings and loan examiner during the S&L crisis of the 1980s, when over 1,000 S&Ls failed. I've written a published white paper about the crisis. I then worked for an $11 billion S&L that was taken over by the regulators, and I was sufficiently deeply involved that I wound up being deposed in the subsequent court proceedings. (Many years later, the U.S. Treasury admitted that the regulators had wrongfully taken over my former employer, an admission almost unheard of in its rarity, but that's another story in itself.)

Since that time, I have worked as an investment advisor to, then as CEO of a broker/dealer and investment advisory firm serving credit unions, for a total of 21 years. During that span, I also served a stint as Chief Economist of a $30 billion wholesale financial institution that was the investment advisory firm's parent organization. For the past ten years I've been a risk management consultant to credit unions. I witnessed first-hand not only the S&L crisis, but the Federal Reserve bailout of the Long-Term Capital Management hedge fund (which led to the dot-com bubble of 2000); the housing bubble and subsequent crash, which led to the Great Recession (which I predicted in early 2007); and, of course, the short-lived recession and sharp, rapid recovery from the ill-advised economic shutdown in response to COVID (both of which I also predicted, in this blog).

To borrow a line from Farmers' Insurance, I know a thing or two, because I've seen a thing or two.

So I'm going to lay out the facts. First, I'll recap the situation over the last week. Then, we need to lay some foundation for exactly how and why all this happened, and define some terms. Next, I'll look at each event, involving each bank in question, in turn, so that you can see whether they appear to be related. If they're unrelated, the problem isn't systemic. We'll also examine whether this is anything like 2008 (a connection the media seems hell-bent on making), and along the way, we'll look at the anatomy of a bank takeover - a subject that I know intimately and painfully, because I lived it. (I've also seen it, both from the perspective of a regulator and an industry advisor/consultant.) We'll also talk a bit about ratings agencies, specifically Moody's.

I'm going to use plain English. This will not be a technical treatment. If you don't understand banking or finance, I don't believe you'll get lost here. I've had to explain some pretty arcane subjects to credit union board members, who were laypersons like anyone who might be reading this, and I've gotten rather adept at doing so in a manner that they can understand it. So I think you'll be able to follow just fine.

Here we go.

The Sitrep

(I read a lot of spy and military fiction, and I've always wanted to use that term - it means "situation report.")

• Last Friday, March 10, Silicon Valley Bank (SVB) of Santa Clara, CA, with $209 billion in assets, was taken over by its state regulator, the California Department of Financial Protection and Innovation (DFPI). (The "Innovation" part of their name is pretty funny. Regulators tend not to be a very innovative bunch.) The DFPI immediately handed the reins to the Federal Deposit Insurance Corporation (FDIC), the federal bank regulator and overseer of the banking industry's deposit insurance fund. The takeover occurred during business hours (more on that later).
• On Sunday, Signature Bank of New York, NY, with $110 billion in assets, was seized by the New York State Department of Financial Services (DFS), which also turned the bank over to the FDIC. This takeover happened on a Sunday (more on that later also).
• As the ensuing week progressed, attention turned to Credit Suisse, a $574 billion Swiss bank, although the bank's problems had been known for quite some time. (By this time, media and social media hysteria over a "systemic banking crisis" had led business "journalists" to beat the rushes looking for any bank that might have problems - whether related to those of SVB or Signature or not - in order to reinforce the siren call of impending doom.)
• By Thursday, it was announced that First Republic Bank of San Francisco, a $181 billion institution, had received $30 billion in funding from a group of other large banks to ensure that it had enough liquidity (funds to meet deposit withdrawal demand, loan demand, and repayment of borrowings) in the wake of the SVB failure (and, of course, the media frenzy).
• On Wednesday, Moody's downgraded the entire U.S. banking system, and placed a number of banks on watch for further downgrades, including UMB Bank, a Kansas City bank with about $33 billion in assets. (We'll address the whole Moody's downgrade, and talk about UMB, separately from the "Big 4" mentioned above.)

The reporting of all of this noted - actually, noted is not nearly a strong enough word; it screamed from the rooftops - that the SVB failure was THE LARGEST SINCE 2008 and that the failures of SVB and Signature combined were NEARLY AS LARGE AS THE 25 BANKS THAT FAILED IN 2008. We'll address that later.

Setting the Stage

Now, we need to look at some of the things that have taken place in the economy and the financial system over the last year or two that have laid the foundation for what befell SVB and Signature, and what threatened Credit Suisse (at least in part) and First Republic. Don't misconstrue my use of the word "befell," SVB and Signature died by their own hand, but they got an assist from these macro factors. 

• Foremost among these contributing factors is that the Federal Reserve (Fed) has raised interest rates by 450 basis points (bp) over the last 12 months. A basis point is 1/100th of one percent, so the Fed has raised rates by 4.5%. Let's put this cycle of tightening, or rate-raising, in its proper perspective: the Fed has been using interest rates, instead of the money supply, to effect monetary policy since 1980 ("the Monetarist Era"). During that entire 43 years, they have only raised rates by 75bp on a total of five occasions. Four of those occurred in 2022, and were consecutive. That is unprecedented in its aggressiveness, in terms of raising rates.
• At the same time, the Fed was reducing the program of buying bonds that it began in response to COVID. That program, called "Quantitative Easing," was also used in the aftermath of the Great Recession of 2008-09, and was intended to assist in reducing market interest rates. So discontinuing the program has the opposite effect: it allows rates to rise. But it also has another effect: it pulls liquidity out of the markets, and the banking system. During 2022, the Fed reduced the amount of bonds it held by $310 billion.
• During that same span, the U.S. money supply shrank by about a trillion dollars. Besides the Fed pulling liquidity out of the system, another contributing factor was that people started withdrawing their savings and spending money again, as COVID fears waned and confidence returned (although recent consumer confidence figures are down). People started traveling again, and holiday spending hit record levels. Remember all that COVID stimulus? It's gone. As a result of it, the U.S. Personal Saving Rate was a whopping 33.8% (of disposable income) in April 2020, far and away a record. The second round of stimulus spiked the saving rate to 26.3% in March 2021. By June 2022, it had fallen to 2.7%, the lowest level since 2005.
• Now imagine you're a bank, and think about all those savings deposits being sucked out out of your bank in a matter of about 15 months. Most of my clients have seen quarter-on-quarter deposit declines throughout 2022. And yet loan growth in 2022 was the strongest since the early 1990s, more than 15% year-over-year. So most banks and credit unions found themselves in a liquidity crunch: the ratio of loans to deposits approached 100%, or in some cases was above that threshold. (How can loans be more than deposits, you ask? Borrowings. Institutions can borrow money on lines of credit, and use that money to make loans, thus their loans-to-deposits ratio may exceed 100%.)
• All of that isn't an insurmountable problem, as long as three things hold true. First, rates don't go up so much that the cost of deposits, borrowing, or other funding sources becomes so high that it gets too expensive to raise additional liquidity. In that case, you have to increase pricing on loans to discourage borrowers; in other words, turn off the lending spigot. Second, you still have ample contingent sources of liquidity: lines of credit, assets you can sell (but that can be a problem when rates are rising, as we'll see) or pledge as collateral for borrowing, or access to brokered deposits outside your core customer base. And third - there isn't a run on deposits.
• A couple of final things that were going on in 2022 that are pertinent to the SVB and Signature failures: the tech sector was experiencing a downturn, the likes of which hadn't really been seen since the dot-com bubble, and Sam Bankman-Fried's FTX crypto exchange infamously collapsed. In the case of the tech sector, tech firms had liquidity issues of their own, as their ability to raise capital was impaired due to their weakening condition. And the FTX melt-down had a ripple effect across other crypto exchanges. (It's still lost on me why anybody invests in that crap.)

Before we go any further, we need to define a few terms. Again, I'm going to keep it non-technical, although the terms I'm defining are anything but.

• First let's establish that, in general, banks don't invest in stocks, they invest in bonds. Next, let's set forth a simple truth about bonds: in nearly all cases, the price of a bond moves in the opposite direction of interest rates. So when rates go up, bond prices go down.
• Now let's define a term that relates to bonds: duration. Here's where I promise not to get technical, because to explain duration would require calculus, and I'm not going to do that to you. Just accept that the duration of a bond is, in general, both a measure of time and a measure of price sensitivity. More specifically, the longer the duration of a bond, the longer you (the investor) have to wait to get your cash flows back from the bond (interest and principal payments). A ten-year bond will have a longer duration than a two-year bond. Pretty simple. Also, remember that we said bond prices go down when rates go up? Well, the longer the bond's duration, the more its price will go down for a given increase in rates. So if rates go up, say 450bp in a year (wink, wink), a ten-year bond will go down in value by much more than a two-year bond, because the ten-year bond has a longer duration. That wasn't so hard, right?
• Next, let's take that same concept and apply it to a bank's entire bond portfolio. We can calculate the weighted average duration of the entire portfolio, but what's important is that the same principle applies: the longer the duration of the portfolio, the more it will decline in value for a given increase in rates. What's the lesson here? In a rising rate environment, you want to keep your portfolio duration short.
• You can manage the risk that your portfolio value will fall as rates rise through hedging. This is most commonly done using instruments called interest rate swaps.
• There are different accounting treatments for bank investments. One is called Held-to-Maturity, or HTM. If you use this treatment, you can carry the investments on the books at their historical cost, rather than "marking them to market," or writing down the value as it declines in a rising rate environment. That allows you to effectively overstate the value if rates fall. (It would be like looking at your IRA balance as the price you paid for the investments in it, rather than the current value.) The caveat is that you have to be able to actually hold the bonds until they mature. If you sell just one bond that's classified HTM, you "taint" the entire portfolio, and have to immediately adjust the value of all your investments to the market value, which is an immediate hit to the value on the books. The alternative is to classify investments as Available-for-Sale, or AFS. Under this treatment, you have to mark the bonds' value down to the market value as prices fall, but you can sell any bond at any time, for any reason - say, to raise liquidity. Most institutions - in fact, all of my clients, as far as I know - classify their investments as AFS, both for liquidity purposes and to afford them maximum flexibility in managing the portfolio, in the event they ever want to reposition it to, say, adjust portfolio duration as rates change. (Imagine not being able to sell any of the stocks or funds in your IRA without some kind of onerous penalty that would affect the entire portfolio.)
• One final thing: under either treatment, the difference between what you paid for a bond and what it's worth now (assuming the value has fallen) is called the "unrealized loss" (actually, that's true for any investment). The loss is "unrealized" because it's only on the books; it wouldn't become realized unless you actually sold the investment at that loss. Banks have to report their unrealized losses.

Okay, I believe we've set the stage sufficiently to be able to talk about exactly what happened with SVB and Signature, and what's going on with Credit Suisse and First Republic. Let's look at each in turn.

SVB

Here were the problems with SVB, in no particular order:

• For roughly the two years prior to the time SVB was taken over, the bank had no Chief Risk Officer. This is unfathomable - it's beyond comprehension. For one thing, they had had a CRO prior to that - why they didn't have one subsequently, I have no idea. Most banks with at least a couple billion in assets have a CRO. And some of the responsibility is on their regulator, because regulators are usually on the backs of large financial institutions to have a CRO and a strong risk management program in place.
• They were heavily concentrated in loans to the tech sector, which, as mentioned above, ran into difficulty in 2021. Moreover ...
• Their deposits were also heavily concentrated in the tech sector. Big global tech firms accounted for a lot of their deposits, as opposed to individual depositors like you and me. In fact ...
• 94% of their deposits were uninsured. Let me repeat that: 94% of their deposits were uninsured. This means the deposit amounts were above the FDIC's $250,000 insurance limit. These deposits were held by huge tech firms like Roku, among others, which had $487 million on deposit with SVB. That's more than 25% of Roku's total cash.
• It gets better. They were hedging their interest rate risk with swaps in 2021, but ... they stopped hedging in 2022 - the same year that rates went up 450 basis points. In other words, when they didn't need to hedge against rising rates, they were, and when they desperately needed to, they stopped.
• Why did they "desperately" need to hedge, besides the fact that rates went up 450bp? After all, not all financial institutions hedge against interest rate risk. Well, SVB's average investment portfolio duration was .. SIX YEARS. I'm not sure I've seen a depository institution with an average duration of six years, at least not since the S&L crisis. I'd guess my clients' average duration is a third of that. Given that SVB's loans-to-deposits were less than 50%, most of its balance sheet was in investments, and those investments were highly sensitive to interest rate risk, and interest rates went up by almost 5%, and they had stopped hedging, so they had massive unrealized losses, and ...
• Nearly the entire portfolio was classified Held-to-Maturity. So that's fine if they don't ever have to sell a bond to raise liquidity. But ...
• During the week leading up to March 10, SVB's big depositors started withdrawing funds, and the bank faced a liquidity crisis. They had no alternative but to sell their $21 billion in AFS investments at a massive loss. Unable to sell bonds out of the HTM portfolio without tainting the entire portfolio, which would have resulted in having to realize the full decline in market value on the portfolio, they tried - and failed - to raise over $2 billion in capital. Word got out that the capital raise failed, which led to more withdrawals, which led to the DFPI coming in and taking over.
  

It's almost as if SVB's executive team had a crystal ball and in 2021 could see the coming trifecta of sharply rising rates, a liquidity crunch, and a decline in the tech sector, and they gathered in the board room and said, "Let's write a Harvard Business School case study on how, in the face of all that, to completely destroy a bank." Then they set about doing it.

Signature Bank

This one's pretty simple:

• They had exposure to FTX.
• They made loans to other crypto exchanges, which were hurt when FTX imploded.
• They also had somewhat of a concentration in taxi medallion loans. Those loans were solid gold for a long time, as NY taxi medallions only went up in value forever. Then along came Uber, and in two short years, the value of taxi medallions collapsed. Several large NY banks and credit unions specialized in taxi medallion loans, and had large concentrations in them. All of those institutions have been seized by their regulators. I was scheduled to do a risk management program implementation for one of them. I had all of my travel booked, and was set to go. About a week out, on a Friday afternoon (that's when most takeovers happen), the news hit the trade press that they'd been seized by the regulator. So much for that trip. I've had two other clients that bought portfolios of taxi medallion loans from that or other credit unions, and they ultimately had to write them off entirely.
• All financial institutions are trying to make it easier and easier for customers to access their money. As I like to say, money is a tool, and they want to make it easy for you to access the toolbox. (Of course, that opens the toolbox to fraudsters as well.) But that also means that you don't have to wait until Monday morning to withdraw all your money if you want to; you can do it on the weekend, from your couch, using your phone. You just open an account somewhere else, and transfer it there.

And that's what happened. Signature's depositors, knowing of the bank's crypto exposure and taxi medallion loan concentration, and having heard of the SVB failure, started pulling money out of the bank on Friday after the SVB news broke. The hemorrhage continued through the weekend until the NY regulator said, "No mas!" and stepped in on Sunday.

Credit Suisse

This one's simpler still: Credit Suisse's problems were almost entirely compliance-related, have been going on for some time now, and were relatively well-known. In fact, there were articles about them in the press in the days prior to the SVB takeover. Specifically, their issues were around improprieties in their financial reporting and disclosures. Now, that has led to liquidity issues, as they've been bleeding deposits for quite a while. And their largest investor, Saudi National Bank, recently declined to provide more capital, although that was due in part to the fact that it already owns 9.9% of Credit Suisse, and if its ownership stake goes above 10%, some pretty onerous regulatory requirements kick in.

However, Credit Suisse has secured funding from the Swiss central bank. To be sure, it remains a poorly managed crap-show of a bank, but its problems, as you can see, are entirely unrelated to those of SVB or Signature, other than the fact that it's just another poorly-run bank. (I can think of at least three or four poorly-run restaurants, but I don't run around saying there's a "systemic crisis" in the food service industry.)

First Republic

Also a simple case; First Republic's woes are due primarily to its geographic proximity to SVB. It also has a number of large tech customers, and 68% of its deposits are uninsured. So as the week progressed and the media/social media hysteria spread like wildfire, depositors started pulling money out of First Republic. In response, they secured funding from a number of their peers. That alone should tell you something: those other banks wouldn't touch First Republic with a ten-foot pole if they thought it was in the same league as SVB and Signature. But they gave it a vote of confidence.

***************

Thanks for sticking with me so far (assuming you have). By now, it should be readily apparent that these four situations bear no resemblance to one another, and thus this is not anything close to a "systemic banking crisis." Anyone who suggests otherwise is ... well, I'm going to be nice and refrain from using disparaging terms like "moron" and "idiot," and just say that anyone who suggests otherwise doesn't know baby poop from apple butter about the banking system. I'll come back to them at the end, bless their hearts.

Let's talk about Moody's, and the other ratings agencies. So Moody's downgraded the banking industry last week? Okay, fine. But Moody's also gave SVB an "A" rating - its highest bank rating - prior to the takeover. So how much faith can we really place in Moody's, and the other ratings agencies (Fitch and S&P)?

None. Moody's downgraded the banking system to save face because it had rated SVB "A" prior to the takeover. We learned in 2008 that Moody's, Fitch and S&P are nothing more than three very high-priced call girls, offering their wares to the highest bidder.

I "made my bones" in the world of mortgage finance, and I probably understand what precipitated the meltdown in 2008-09 as well as anyone. I've written and spoken about it extensively. And a huge part of the problem is that Wall Street firms would buy up subprime mortgages - loans that were almost certainly going to default - and package them into crappy mortgage-backed securities (MBS), collateralized mortgage obligations (CMOs), and collateralized debt obligations (CDOs), that were just as certainly going to default. Then they'd go to, say, Moody's, and tell them, "We need a Aaa rating on this bond issue (Moody's highest bond rating) in order to sell it. If you don't give it to us, we'll go to Fitch or S&P." And Moody's, which gets paid to rate bonds, would give it to them, often without even reading the details of the bond issue.

As for Kansas City-based UMB Bank, Moody's based its decision to place them on ratings watch on the fact that the bank has a "concentration of uninsured deposits" (it's nowhere near the levels of First Republic or certainly SVB), and that it has "an elevated level of unrealized losses." News flash, people: in this rate environment, every financial institution has an elevated level of unrealized losses. Remember, bond prices go down when rates go up. And rates have gone way up. So bond prices have gone way down. And banks buy bonds. So they have unrealized losses. UMB's unrealized losses are about 41% of its unadjusted equity. I've seen a lot higher in this environment. They'd have to face a massive liquidity crisis before they ever had to even think about selling bonds at a loss, and realizing those losses.

So what about this looking like 2008? Fox Business News apparently cited SVB's holdings of MBS, and on that basis said this looks just like 2008. (This isn't first-hand; I've been avoiding watching business news, because there isn't anybody on Fox Business News who knows an MBS from an MBA.)

There's nothing going on in the mortgage market that would make this look remotely like 2008. Yes, home prices have fallen for about the last six months. That was an inevitable correction, because home prices rose at an unsustainable pace for the 20 months prior to that, in virtually every market in the country. It was a housing bubble that was more widespread than the bubble of the early 2000s, which was largely concentrated in the "Sand States:" California, Arizona, Vegas, and Florida.

But the more recent bubble was very different. There was hardly any unsold speculative construction by homebuilders. All the new construction was sold before it was completed. There was no subprime lending; borrowers had to have sufficient equity to qualify for a conventional mortgage - in most cases, 10-20%. Appraisers weren't fudging values to match the amount needed to buy the home; if the price was above the true market value (which in many cases it was), the buyer had to put up more equity.

And even though prices have fallen and the bubble has burst, mortgage delinquencies are actually down, according to the most recent data. Foreclosures are below pre-pandemic levels.

CNN Business ran a graphic showing that SVB and Signature alone had a combined $319 billion in assets, which was almost as much as the $374 billion in assets held by the 25 banks that failed in 2008. What the morons at CNN failed to mention (sorry, I wasn't going to use that word) was how much bank assets have grown since 2008. Comparing 2023 assets to 2008 assets isn't apples-to-apples; it's apple seeds to apples.

You know how much SVB and Signature had in assets in 2008? Neither do I. My research only took me as far back as 2010. But in 2010, SVB had $15.66 billion in assets (vs. $209 billion in 2023), and Signature had $10.93 billion (vs. $110 billion in 2023). So in 2008, the two banks combined had less than $25 billion in assets. That's less than 7% of the total assets held by the 25 banks that failed in 2008. Two divided by 25 is 8%, so their asset size was less than the average bank failure in 2008.

(To address a couple of other media myths, Signature Bank's failure had nothing to do with the stupid videos its management made years ago. The videos were embarrassingly ridiculous, and probably a waste of money, but they didn't tank the bank. And no, this is neither Trump's nor Biden's fault. I won't even dignify that nonsense. The blame falls squarely on the shoulders of the banks' management teams, and to some degree on their regulators, who appear to have been asleep at the switch.)

One other note. One of my Facebook connections tried to claim that a bank takeover during business hours is unusual - his assertion was that it typically happens after hours. He also claimed that it's normal for the regulator to already have another bank lined up to acquire the failed bank, and that it's rare that the regulator has to act as receiver for the failed bank. He cited both of these "anomalies" as an indication that the SVB failure was an indication of a looming banking crisis.

He has no idea what he's talking about. A takeover after hours (or on a weekend, like the Signature seizure) is highly unusual. The regulators typically come in during the day on a Friday, so that they can inform management and the board that their services are no longer required, and so that they can inform personnel that their services will be needed, but that they will now be working under government leadership. Then, those personnel are required to spend the rest of the day working on various tasks like communications to depositors, valuation of assets, etc.

I know this from experience. The S&L I worked for that was taken over was seized on a Friday morning. I was at my desk when a colleague said that he'd heard a rumor that we'd been taken over. I went to a Bloomberg terminal and looked up "Franklin Savings Association," and found that the rumor was true (the regulator had issued a press release after meeting with the board). Just then, our receptionist came back to our area and told us that the regulators were in the office, and all staff were requested to meet with them. My group spent the rest of that day working on valuing the portfolio. If the regulator had come in after hours, none of us would probably have shown up for work on Monday, and the regulators would have had to do all the work themselves.

As for the notion that another bank would be waiting in the wings - imagine the regulators going to a group of banks and saying, "Hey, we're going to take over SVB on Friday. Anybody want to buy them?" You think that wouldn't get leaked? It's preposterously silly. I've never heard of a regulator having another bank lined up to buy a failed bank. A troubled bank, yes. A failed bank, no. Hell, during the S&L crisis, the regulators created a special agency just to act as conservator or receiver for failed S&Ls.

This is part of the problem. People who think they know more than they do get on social media and proclaim their expertise, and unfortunately some of their friends think that they do know more than they do, and believe them. Then people start pulling money out of their banks, and those banks start to face liquidity issues. And that can turn into a real problem, and it becomes a self-fulfilling prophecy. So if you're one of the people doing that, stop it, right now. It's bad enough that you don't know baby poop from apple butter; you're screwing around with other people's livelihoods. That's worse than being a mere moron or idiot.

So that's what going on in the banking system. In a word, the answer to the question in the title of the post is "Yes." Deposits in financial institutions are insured up to $250,000 per account. A married couple can actually have up to $1 million in insured deposits with one institution, by structuring ownership of those accounts between the two individuals, and jointly. (If you have more money to deposit than that, you can put it in more than one institution, and it'll be fully insured, as long as each account's balance is no more than $250,000.) And it is very, very unlikely that your bank is going to fail, because there is no systemic banking crisis on the horizon.

In fact, the FDIC made the decision to cover the deposits of even the uninsured depositors of SVB and Signature Bank. Of course, that sets a dangerous precedent, creates a moral hazard, and represents a massive inappropriate transference of risk. But that's another topic for another day. Probably tomorrow, or the next day. Stay tuned.

You Choose

When it comes time to vote in about three weeks, you really only have to ask yourself two questions: first, am I better off today than I was two years ago? And second, is the country headed in the right direction?

Now, I can't answer that first question for you personally. But I'm a pretty average guy. Okay, maybe above average, in terms of income and assets, compared to the national average, certainly. So if I'm worse off than I was two years ago, the average Joe (or Jane) has got to be a lot worse off. Without telling you more than I care to divulge, let me give you a view of where I am today vs. where I was a couple of years ago.

Two years ago, I was basically making twice as much annually on my investment portfolio as I earn in salary, and my salary puts me in a pretty high percentile among U.S. earners. Year-to-date this year, my portfolio is down about 30%. Joe Biden and his vapid Press Secretary like to argue that the stock market isn't the best barometer. Yeah, well, when you're 63 years old and thinking about retirement, it's certainly a consideration.

True, my income has increased in each of the past two years, such that it's up nearly 10% vs. two years ago. However, my cost of living is up 8.3%, so I'm hardly better off, income-wise. And my income has only increased because of my own performance, not because of anything the current administration or legislature has done. My income has increased by at least that amount throughout my career, no matter who was in office.

Speaking of my cost of living, that 8.3% is an overall number. Two years ago (January 2021 is my exact benchmark, by the way), I was paying $2.25 a gallon for gas. Now, I'm paying close to four bucks, and I'm supposed to be thanking Joe Biden for what he's done to "bring it down" from closer to five bucks. (Which is unadulterated BS, by the way; what brought it down from the peak was reduced demand, because nobody could afford to drive at those prices.) So my 18.8 gallon gas tank costs me about $33 more to fill each time.

The cost of food is up 11.2% year-over-year. It hasn't been up that much since just after I started college. It's up 10% vs. two years ago. So between gas being up about 50% and food being up about 10% (I'm annualizing these numbers, if you're paying attention), my salary increases are pretty much gobbled up.

All my other costs are higher, too, but I'm not going to delve into every spending category. Suffice it to say that by any standard of living metric, I'm worse off. And since overall I'm better off than about 90% of most Americans, chances are you're worse off, too.

Fortunately, I live in an area where crime isn't a big problem. However, I love to travel. Not long before covid reared its ugly head, I had a two-week work trip in the Fall to Oregon. It was beautiful. A colleague and I stayed the weekend, and we spent one day driving from Portland down to Eugene, then over to the coast, up to the Willamette Valley, and back to Portland. The next day, we drove along the Columbia Gorge, visited Multnomah Falls, then drove around Mt. Hood and down to Bend, before returning via the Santiam River valley.

I vowed to make a return trip with my wife. But Portland has become such a cesspool of lawlessness that I'm too concerned about our safety to travel there. The same is true of New York, where we've spent many enjoyable trips, walking the city, feeling the energy, seeing the sights, enjoying Broadway shows, strolling Central Park. Now, I'm afraid I'd get knifed on the street. Same with Chicago, another great city where I've spent a fair amount of time.

The only state I've never been to is Delaware, and I'd like to cross it off my list. But, I've always imagined combining it with a trip to Philadelphia to see the Liberty Bell and other historical sites. Yet Philly, too, has become crime-infested, and so I'm holding off on that trip as well.

We had a cruise booked out of L.A. in March 2024, to the Mexican Riviera. We'd never done that itinerary before, and it sounded interesting. We always spend the night before a cruise in a hotel, so that we don't miss our embarkation due to flight delays.

Then we learned that the city of L.A. is planning a ballot initiative that would require hotels to house homeless people in their vacant rooms. Now, I'm sensitive to the plight of the homeless, and have gone out of my way to help them, and have contributed to their causes. But not all the homeless, especially in L.A., are just down-on-their-luck individuals that need a place to sleep. Early this year, a homeless man walked into a furniture store in L.A. and stabbed the 24-year-old female clerk to death. And last summer, another homeless man stabbed a NASCAR driver to death while he was filling his tank at a suburban gas station.

Needless to say, we switched our itinerary to a cruise out of Florida.

What am I waiting for to travel to these locales? Well, the reason for the rampant uptick in crime in cities like New York, Chicago, Portland, Seattle, L.A., and Philly is liberal lawmakers and governors who push no-bail or cash bail laws that put violent criminals back on the street hours after they commit crimes, only to offend again; and liberal district attorneys who refuse to prosecute even serious crimes. So until that changes, I'll stick to the safer enclaves, with sane governments.

And you know what? If I'm not safe in those cities, neither are you. You can take your chances and go there anyway. But you're taking your chances. There's no getting around it: those cities are more dangerous by far than they were two years ago. And for the people unfortunate enough to live there, it's certainly not safe. In suburban Portland, a man recently listed his home for sale as-is, because squatters had moved in, and he couldn't afford a lawyer to evict them under Oregon's liberal laws, which favor the squatters. When the man went to ask the squatters to leave, they beat him up and put him in the hospital, yet the police still wouldn't remove them. I doubt that he'd say he's better off than he was two years ago.

Now, back to the economy; what about economic conditions in general? Well, if you have a job, count yourself lucky, and know that the condition may be temporary: more than 35,000 layoffs have been announced in the U.S. since June. In case you haven't noticed, we're in a recession, and all the current administration is doing about it is trying to convince you that the definition of a recession isn't what you've always understood it to be. And even if you want to drink the administration's kool-aid, a number of very reliable leading indicators point to recessionary conditions, including the fact that consumer sentiment is lower than it was during the pandemic or the 2008-09 housing crisis or the 2000-01 housing bubble or the early 1990s credit recession or the recession before that. Then there's the fact that the yield curve is currently inverted (meaning short-term interest rates are higher than long-term rates, which signals an expectation that, longer-term, the Fed is going to have to start cutting rates to jump-start a struggling economy; of course, first they have to finish raising rates to try to rein in the runaway inflation caused by rampant government spending and backwards energy policy).

Want to buy a house? You're going to pay more in interest than at any time since 2002. Couple that with the fact that inflationary conditions have driven house prices into bubble territory, and home affordability is worse than it's ever been. Of course, all bubbles must burst, so if you bought a house in the last year or so, you paid more than it was really worth, so expect that home's value to drop like a rock over the next year.

Now, you pay taxes, right? Do you care about what that money gets spent on? Well, did you go to college? Did you pay your own way? Maybe take out some student loans that you worked hard to pay off? Now your tax dollars are paying off somebody else's student loans - and that somebody's parents might make a lot more money than you do, because the $125,000 income limit now applies to Junior, if he's graduated and out on his own.

What else are your taxes going toward? Well, the equivalent population of Houston, Texas, the nation's fourth-largest city, has entered the U.S. illegally under this administration, and those people are going to receive health care, education, and other services that the government is going to pay for (and when it comes to paying for things, the government is you).

We just learned today that some of your tax dollars are going to go toward a program to pay for our military to volunteer for duty at the southern border. Doing what, you ask? Running errands for the illegal immigrants there. Picking up prescriptions for them. Shredding documents. (What, pray tell, will they be shredding?) Cleaning refrigerators, for crying out loud. Yes, my fellow Americans: our military, cleaning refrigerators for illegal immigrants. On your dime.

Were you worried about covid? Did you think it was a big deal? Well, do you know what else has been flowing freely across the southern border under this administration? Fentanyl. And fentanyl has killed more young people than covid over the last two years, by far. You probably know someone who's lost a loved one to fentanyl poisoning (we say "poisoning" rather than "overdose," since fentanyl is so often disguised as or blended with some other drug).

I could go on. The bottom line is that it's hard to imagine how anyone is better off today than they were two years ago. Now, let's turn our attention to whether the country is headed in the right direction.

Numerous polls, including some from liberal news sources like NBC, show that an overwhelming majority of Americans - 74% in the NBC poll, similar to the numbers from other polls - believe the country is headed in the wrong direction. So if you believe otherwise, congratulations - you're in a very small minority. (Other polling has found that about a quarter of Americans should have their heads examined, are blindly partisan, or are just plain crazy. Of course, at least a quarter of Americans work for the federal government, so ...)

Which party has been in power for the last two years? The Democrats. And which party is responsible for the direction in which we're heading? The party in power - the Democrats.

Now, what are the Democrats running on? What's their platform?

First, abortion. They want abortion on demand, in all 50 states. So if you want to be able to get an abortion any time you want it, right up until birth, anywhere in the U.S., the Democrats are the party for you. If that's what you care most about, by all means, vote Democrat.

Of course, you may say that it's not about that - what you really care about is "women's freedom." Really? How much do you care about a woman's freedom to not have to choose between buying groceries for her family and heating her home this winter? How much do you care about a woman's freedom to not get stabbed to death while she's working at her job in a furniture store, or standing on a subway platform in New York City? How much do you care about a woman's freedom to not get beaten while she's walking home from the corner bodega in Portland? (That's "bogada" to you, Dr. Jill.) Or to not lose her job because there's a recession? Or to not be raped by an illegal immigrant who happens to be a sex offender in his home country?

The second - and only other - plank in the Dems' platform is January 6. You know, the "insurrection." Do you really want to base your vote on something that happened 22 months ago, rather than what's happening today, and what's going to happen for the next two years? If January 6 is that important to you, consider these things:

• Go back and look at what your retirement savings balance was on January 6, 2021.
• Note that a gallon of gas cost $2.25 on January 6, 2021. It's $3.91 now.
• A gallon of milk cost $3.59 in January 2021, vs. $4.41 now.
• A pound of bacon cost $5.83 in January 2021, vs. $7.37 in August 2022.
• Think about the people who were alive on January 6, 2021 that no longer are, due to murders by offenders who were back on the street as a result of lax bail laws, or due to fentanyl poisoning.
• Remember that the U.S. population grew - illegally - by 2,000,000 since January 6, 2021. And you're going to pay for those people's health care and education, among other things.
• Note that the average 30-year fixed mortgage rate was 2.65% on January 6, 2021, vs. 6.92% now.

If you really care about that date in history, think about how things were then, and vote for the party that was responsible for that.

The Democrats claim that the Republicans have nothing to run on. That they have no plan. Well, let me give you a couple of points to consider.

First, the Republicans do have something to run on, something very compelling: they're not the Democrats. They didn't create this mess, and they're not the ones trying to lie about it and make excuses for it now.

Second, even if it were true that the Republicans have no plan, the Democrats certainly don't have a plan. Their plan is to keep doing what they're doing now, which is to drive this train completely off the cliff it's currently hanging precariously over.

But the Republicans do have a plan: restore the policies that were in place before this mess ensued. Low inflation. Cheap gas. A strong economy. Law and order. Safe cities. A secure border. Affordable housing and low interest rates. The Republicans proved they could do all that, because they did it. The Democrats have proven only that they can undo it, in two short years. Two short and painful years.

So you see, the choice is really quite simple: do you want more of the same? Two more equally painful years? Even higher inflation? Eight-dollar gas? Double-digit mortgage rates? Violent crime in a suburb near you? Five million new illegal immigrants over the next two years? Double the number of fentanyl deaths we have today - including your kid?

Or would you rather go back to the way things were two years ago?

Think about it. You have three weeks.

Class Warfare

The Democrats today are dividing Americans into two classes, but they aren't the classes you think. Not strictly so, anyway.

It's not Democrat and Republican, left and right, blue and red, liberal and conservative, progressive and MAGA. It's not really the haves and the have-nots, the elites and the commoners, the one percent and the lower class, the bourgeoisie and the proletariat, the degreed and the non-degreed, white collar and blue collar, the rich and the poor.

No, the classes the Democrats are dividing us all into cross some of those lines, drawing into each of these two classes some folks from either side of those more traditional divides.

The classes the Democrats are dividing us into today are the Sharks and the Remora.

The Sharks may be those people on Shark Tank, successful, rich entrepreneurs ruthlessly striking deals to get even richer. But they also include teachers, handymen, consultants, veterinarians, physical therapists, bank tellers, hairdressers, firefighters, policemen, auto mechanics, landscapers, fry cooks, painters, and plumbers. A good many of them are immigrants, many of whom may have originally come here illegally, believe it or not.

By Sharks, I don't mean ruthless, greedy, Type-A people, though many of them are Sharks. I mean people who understand that you eat what you kill. That you and you alone are responsible for providing for yourself. That, like a shark, you hunt for your own food, provide for your own sustenance, don't expect anyone to give you anything. And that expect the government to get the hell out of their way and let them do it, and let them keep what they kill.

Remora, in case you're not familiar with them, are bottom-feeding suckers. Now, they serve a purpose in the whole oceanic eco-system, as cleaners. They suck onto the sharks and get a free ride, and clean up after them, eating what the sharks discard. The sharks, for the most part, leave them alone, because, for the most part, the remora are fairly unobtrusive.

Enter the Democrats, who would seek to upset the entire eco-system. They're doing everything in their power to create a larger, and permanent, Remora class. When the government shut down the economy due to covid - which will forever rank in history as the single most stupid decision humankind ever collectively made - Democrats and Republicans alike made all kinds of aid available as accommodation for those adversely affected economically by the shutdown. PPP loans, extended unemployment benefits, student loan payment pauses, etc.

Once the economy rebounded, though, the Democrats sought to extend those benefits. They kept the unemployment benefits going far longer than was necessary, in order to keep unemployment high, businesses suffering, and the economy sputtering, in order to hurt Donald Trump's chances at re-election in 2020. In Republican-run states, the jobless benefits were terminated early, and job growth in those states took off much faster than in Democrat-run states, where the benefits were extended. The Democrats didn't care if their states' economies suffered; there was a Bad Orange Man to defeat!

The Democrats also extended the pause on repayment of student loans, long after unemployment returned to pre-pandemic levels. Why? To buy the youth vote in the 2022 mid-terms. See, the Dems are taking a beating in the polls, what with a porous southern border, soaring crime (especially in Dem-run cities), skyrocketing inflation, horrendous foreign policy, and a President who can't think straight. So, even though everyone who wants a job now has a job (and there are still more job openings than there are available people to fill them), people who owe money on student debt aren't being required to pay it back until (drum roll, please) after the mid-term elections.

Now, Joe Biden, in utter defiance of the Constitution that he has used so often to wipe his diarrhetic arse, has, without the requisite Congressional approval, authorized the "forgiveness" of $10,000 of student loan debt for anybody who makes, or whose parents make, $125,000 a year individual or $250,000 combined. (FYI, a combined income of $250,000 is pretty darn near the top 5% of income earners in the U.S.) If that person qualified for a Pell Grant when they went to college, they can double down and get $20,000.

Get this: the current maximum amount for a Pell Grant is $6,895. So, if you qualified for the maximum amount (note that this is this year's maximum; if you were in school one to four years ago, the maximum was lower), you can parlay that $6,895 into $10,000 of additional student loan forgiveness. That's not a bad arbitrage, and proof positive that Joe Biden flunked every math class he ever took. But it gets better. The minimum Pell Grant amount is $650. In its sheer and utter brilliance, Biden's plan stipulates that if you got any Pell Grant, in any amount, you get the full extra $10,000 in student loan forgiveness. So, you can go full-on arbitrageur and turn $650 into a cool $10k.

Brilliant, Joe.

Now, the Democrats would argue that the dollar amount of the Pell Grant doesn't matter; if you were poor enough to qualify for one, you ought to get the additional student loan forgiveness. The problem with that argument is this: your parents might have been relatively poor, such that you got a small Pell Grant, sure. Now, you've finished your degree, and you're making a cool $120k a year. Your spouse is making the same coin, putting the two of you near the top 5% of the income scale. If you had college-age kids today, they wouldn't come anywhere close to qualifying for grant money. Yet you still get that extra $10k. And who pays for it? The Sharks - the plumbers, painters, landscapers, and fry cooks. People who make a hell of a lot less than $120,000 a year.

Some Remora are not to blame for being what they are. They simply believe they're taking advantage of something the government is legitimately offering them - just like a Shark will deduct his mortgage interest from his income taxes, assuming he itemizes deductions. (I'm using male pronouns here. If you don't like it - well, my pronouns are she/it. Meaning, if you can't figure out my gender without asking my pronouns, you don't know she/it.) And it's the government's fault, really, for offering all of these handouts, for creating and expanding the Remora class to begin with.

But the difference between the mortgage interest deduction and student loan forgiveness (well, one difference, anyway) is that student loan forgiveness isn't actually forgiveness at all. See, the debt isn't being forgiven, it's being PAID. Who's paying? The Federal government. Who funds the Federal government? The taxpayer. In other words, it's a massive transfer of wealth, from the Remora class to the Sharks. Those of us who eat what we kill - from the fry cook who didn't go to college; to me, the guy who was a CEO and also went to college on student loans, but paid his off like he was obligated to - are stuck paying for this criminally stupid scheme.

Welcome to Joe Biden's America.

Maybe some of these hapless, unwitting Remora never do figure out that they're bottom-feeding suckers. Maybe they never do realize that they're living off the Sharks, that their smack-on-the-forehead, well-golly-will-ya-look-at-what-I-found-in-my-pocket good fortune came at the expense of someone else's initiative, pluck, and labor.

In other words, maybe they're just that stupid.

Others do figure it out, however. They may start out not realizing it, but pretty soon they do. And you know what? They don't care. Because they have no incentive to be a Shark. They've been conditioned to be bottom-feeding suckers, living off the efforts of others. They've been conditioned to be a Remora.

But it's the rest of the Remora class that are the most insidious. These are the ones that know exactly what they're doing from the get. It's their goal to be a Remora. It's their intent to never be Sharks. Oh, they're smart enough - most anyone is. They're capable of the work - most everyone is. No, for them, the Remora life is a grift.

An excellent example of this type of Remora is Alexandria Ocasio-Cortez. You know her as AOC. You probably think she's dumb, because she says really dumb things. She's not dumb. She doesn't know much; that's true. Her grasp of things like education, economics, energy, foreign policy, is as weak as a Joe Biden air-handshake. But she's smart. Smart enough to play the system.

Smart enough to play you.

She got a degree from a pretty prestigious private college; never mind that she didn't learn much, except how to tend bar and how to dance. She then got herself elected to Congress by promising free stuff to poor people - in other words, by offering to make Remora out of them. Her current income is definitely Shark-worthy. But she's no Shark.

See, she doesn't work for it. Never sponsored a bill. Hell, she showed up at a protest, pretended to be arrested, and had to fake getting handcuffed. She's got the best benefits going. She gets enough in donations to buy fancy designer dresses, plaster them with Socialist slogans, and wear them to tony society balls that you and I couldn't get an invitation to no matter who we bribed.

Think she's not smart? On her website, she sells kitsch with anti-capitalism slogans. SELLS it, for money. And people buy that shit. Let that sink in.

And guess what? Remember that prestigious college she went to? How did she fund it? That's right, student loans. And guess what?

The Sharks are gonna pay off $10,000 of those loans for our favorite professional Remora.

The problem with all three types of Remora - the unwitting buffoon Remora; the reluctant-at-first Remora who eventually figure it out, but remain Remora; and the professional grifter Remora - is that they have zero incentive to stop being Remora, and become Sharks. The Democrats give them every reason to permanently remain in the Remora class, and to forego the opportunity to move into the Shark class.

For it is an opportunity: to break the chains of dependency, become your own person, enjoy the pride and satisfaction of knowing you made your own way in the world; and, more than anything, to have unlimited upside, being able to go as far as your brains, your drive, your willingness to work hard will take you. And to do it all honestly, with integrity.

But at the same time the Democrats are creating more and more incentives for people to become and remain Remora, they are discouraging people from becoming and remaining Sharks. By increasingly burdening the Sharks with these inequitable wealth transfers, disincentivizing hard work, increasing taxes on individual initiative, they are discouraging expansion of the Shark class.

So the Democrats are upsetting the balance of nature, by increasing the number of Remora in the eco-system relative to the number of Sharks. What's the outcome when that happens in nature?

Well, scientists (the real ones, not the guys like Tony Fauci) are already concerned about how well the Remora are gonna fare long-term, because in the world's oceans, sharks are becoming endangered.

So, too, in the U.S. (and in Canada, and Australia), Sharks are becoming endangered. And that endangers the Remora. Because when there aren't enough Sharks for the Remora to suck off of - or, when the Sharks don't collectively have enough left to feed all the Remora what they think (or have been led to believe) they're entitled to, the Remora will begin to die off.

Or - and this will work in my analogy; it wouldn't work in the ocean - they'll figure out that they'll have to become Sharks to survive. They'll figure out that it's time to say a big, hearty FU to the Democrats, and vote in leaders who will stop creating incentives to become Remora, and start creating incentives to become Sharks. Leaders who will stop taking from the Sharks and giving to the Remora.

Now, there's another, quicker path to this equilibrium, and I offer it for consideration by all my fellow Sharks.

We don't have to wait for the Remora class to get hungry, and decide they've had enough, that it's high time they become Sharks.

See, we're the effing apex predators here, am I right? We can do what some species of sharks do in the ocean. Namely ...

We can eat the Remora.

Think about it.

The Kansas Vote: I Don't Think It Means What You Think It Means

In the wake of last week's spate of primary elections that saw voters in five states head to the polls, pundits on the national cable news outlets - including conservative Fox News - were focused on ... Kansas, of all places. Not 2020 swing states like Arizona or Michigan, which also held primaries that day, but Kansas, which went for Donald Trump in 2020 by a 56-42 margin, with the former President carrying all but five of the state's 105 counties.

Why?

On the ballot in Kansas was Amendment 2, which related to abortion. In a nutshell, all the amendment would have done would have been to eliminate the right to an abortion from the state's constitution - a "right" that was put there by the state Supreme Court - and place the power to regulate abortion in the hands of the people, through their duly elected legislature (and subject to the veto power of their duly elected Governor), rather than leave that right in the hands of a largely unelected group of seven judges.

However, the amendment was couched in language that confused many of the few voters who bothered to read its actual language. And the opposition movement - which drew thousands of supporters from both coasts - used a campaign of lies to battle the amendment. Yard signs said, "Vote No - Stop the Ban," even though the amendment would not have banned abortion by any stretch of one's paranoid imagination. Campaign ads featured more lies, and scare tactics. Mailbox stuffers bore dire warnings reminiscent of the kinds of religious tracts handed out by the Westboro Baptist Church loonies. The mayor of Kansas City, Missouri - a little despot who let his mandate powers go to his head in 2020, to the point that he came to see himself as the sovereign of the entire metro area - crossed the state line to knock on doors to persuade Kansas suburbanites to vote no.

Uninformed voters took to Facebook to proclaim that a vote for the amendment meant that a pregnant woman couldn't terminate an ectopic pregnancy, which - if one actually understands what an ectopic pregnancy is - is so laughable a falsehood that the only people who would fall for it probably shouldn't be having children in the first place.

In the end, the campaign of lies was a smashing success. Nearly two-thirds of voters voted "No," and the amendment failed. Thus the Kansas Supreme Court remains sovereign over all Kansans, a sobering fact that could have implications that make this Kansan shudder (and consider moving outside the state he has called home for 62 of his 64 years).

So, back to the national news pundits. All eyes were on Kansas, because, in their deep analytical view, the Kansas vote is a harbinger of things to come in the November mid-terms. They reckon that, in a post-Dobbs world, the pro-abortion-on-demand crowd (and let's face it, that's what they are; no lipstick-on-a-pig terminology like "pro-choice" here, please) is so up in arms, so rabid, that they'll come out in force across the land, and the Dems will retain control of the House and the Senate.

Good, I say. Keep thinking that. Because the Kansas vote doesn't mean what you think it means.

First, those pundits are sitting there in Washington and New York, not understanding the dynamics of the Kansas vote. They don't know how the amendment was worded; heck, they didn't even read it themselves. (I did.) They themselves referred to it as a "ban." So they don't know that a number of voters voted against it because they were confused, and that large numbers voted against it because they were swayed by the campaign of lies.

See, most voters - and especially Democrats - don't read source documents. They vote on the basis of the news they watch, campaign ads, and maybe yard signs and mailbox stuffers. They vote with their hearts, not their heads.

Now, you may be crying "foul," especially if you're a Democrat. How can I say that "especially Democrats" don't read source documents, and instead base their vote on the news?

Easy. The covid pandemic gave me all the evidence I need to make that assertion with a high confidence interval. You watched the news and panicked; I dug into the data and did not. I called out the media for their hysteria on the basis of sound research using source documents and real data. You bought the hype. And by and large, the people that bought into the hype hook, line and sinker, the ones who panicked the most, were on the left, while the skeptics were on the right. Dems believe what their beloved media outlets tell them.

The pundits don't get all that. They think that these were informed voters who went into that vote eyes wide open. They were not. They were emotional voters fueled by misinformation who reacted to it.

The second thing the pundits don't get is the numbers. Again, I look at the data. If the Kansas amendment vote really were a harbinger of things to come in November, that would have played out in the numbers in other races in the state. Let's look at some of those races.

Gov. Laura Kelly, a Democrat, is running for re-election. She won her primary handily, winning 94% of the Dem vote against a challenger most of us have never heard of. Her opponent, Republican Attorney General Derek Schmidt, also easily won his primary, but by a narrower margin: 81% to 19% over an equally relatively unknown challenger.

However, let's look at the vote count, and here's where it gets interesting: Schmidt got 367,604 votes to Kelly's 264,857. Kelly's opponent got just over 17,000 votes, so in total, the Dems had about 282,000 votes on offer. Yet you know they came out in droves to vote on the abortion amendment, so low turnout on the blue side wasn't a factor. Yet Schmidt got nearly 100,000 more votes than the total votes cast by Democrats. And his primary opponent got another 88,000 votes.

Think Laura Kelly views the amendment vote as a harbinger of things to come in the fall? Think again. Her camp hustled up more than 5,000 signatures on a petition to get a far-right state legislator's name on the ballot as an Independent in the general election, in hopes of splitting the Republican vote. Why? Because she knows she can't beat Schmidt in a fair fight.

See, Kelly burned her bridges in 2020 by acting like a little tyrant, wielding her mandate powers using false information (yes, the same false information her Democrat followers swallowed whole, without questioning the data provided by her KDHE Director - but which data I dug into, and debunked), and Kansans got sick of it. So, no more experiments with a Dem governor running this red state. Hence her resorting to dirty politics to try to split the vote and beat Schmidt. She'll have to hope that her Independent lackey can get about 170,000 votes. It's not likely, as he's less well-known than Schmidt's primary opponent was.

Oh, did I mention that Schmidt opposes abortion?

Then there's Kris Kobach. Remember him? Former Kansas Secretary of State, former Chairman of the Kansas Republican Party. Known for his strong stance against illegal immigration. Hated by the left. Lost the 2018 gubernatorial election to Laura Kelly. Rumored to have been considered for the post of "immigration czar" by President Trump.

Kobach ran in the primaries against first-term State Senator Kellie Warren for Attorney General. Kellie Warren: Nice. Suburbanite. Woman.

Kobach, who was seen as more conservative than Warren, won. Who won the Democrat primary?

Chris Mann, whoever the hell he is. Who was unopposed. No one else bothered to run, because the Dems know they'll be crushed in November.

See? The numbers show that, even though the Democrats came out in force to "stop the ban," and a number of Republicans who don't want a ban on abortion were swayed by the campaign of lies voted against the amendment, the Republican votes in the actual races still clearly point to a red wave in November.

Now, Kansas is a red state. But, across this great nation, there are two things I know.

First, there aren't likely to be a lot of abortion amendments on ballots across the country come November 8 (which, by the way, is my birthday, and I'm expecting one hell of a celebration).

And second, the issues that Americans care more about than abortion - the ones that touch every man, woman, and born child in this country - still demand change. Inflation is 9.1% year over year, and rising. GDP has contracted for two consecutive quarters. 401(k) balances are shrinking. Prices are rising nearly twice as fast as wages. Crime is soaring. Our southern border is wide open, and every state is now a border state. Property rights are becoming non-existent: a Portland homeowner recently listed his home for sale as-is, because it's occupied by squatters and he can't afford the legal fees to get them out. He went to the house to persuade them to leave, and they put him in the hospital. He's hoping an investor will take the risk, or will have the resources to remove them.

("Lack the resources to remove squatters from your property?" I'd call that an ammo shortage.)

More people - mostly young people - are dying of fentanyl overdoses, thanks to the free flow of drugs across our southern border, than died with covid. And more people died with covid under this administration than under the last, even though the last administration left this administration with vaccines, treatments, and a plan. Neither our President nor our Vice President can string two coherent sentences together, and we're the laughingstock of the world. We're afraid of our enemies, and our allies don't trust us. Our first family is corrupt to the core, but so are the agencies that should be investigating them. We're about to spend another trillion dollars in an inflationary environment, raise taxes in a recession, and increase IRS enforcement on people who can't afford to buy gas or groceries.

And these pundits think that, come fall, voters will forget all that and keep this party in power because some uninformed knuckleheads in Kansas voted against a poorly-worded amendment based on yard signs and mailbox stuffers?

Good. Keep thinking that.

Covid Don't Care

Pardon the poor grammar. Yes, my Mom taught me better.

It finally happened: The Curmudgeon caught the 'rona. My number finally came up. I'm officially one of the cool kids. I was starting to feel left out.

(Forgive me for the "cool kids" comment; I'm sensitive to the fact that many have lost loved ones to covid. And the flu. And heart disease. And cancer. And suicide. And auto accidents. And a lot of other things that kill people. It was just starting to feel like I was the only person I knew that hadn't had covid yet, and now I have.)

I made it through the initial wave in the spring of 2020, when we shut everything down to flatten the curve. Then the bigger wave that summer, after we re-opened. Then the much larger wave in the winter of 2020-2021, when New York and California shut down again. I made it through the Delta wave in the fall of 2021, and the massive Omicron spike last winter. Then, the second Omicron variant got me.

And I made it through all that as someone who didn't really take any precautions. I traveled quite a bit in the first three months of 2020, visiting San Francisco, Austin, and Florida on business, going on a cruise, and vacationing in Hawaii. (I actually may have had covid in March of 2020, but it was diagnosed as influenza "and this nasty virus we've been seeing going around.")

Once covid hit and restrictions started being put in place, I largely ignored them. When the Governor of Kansas ordered everyone to stay home for two weeks beginning in late March, 2020, except to go to the doctor or the grocery store, I continued to take my dogs to the park every day. If I heard of a "non-essential" business that re-opened early in defiance of the shutdown order, I patronized them to show support, because I thought the shutdown was BS. When things re-opened, we began to eat out again, two or three times a week. When mask mandates were put in place, I wore one as little as I could get away with. When they expired in some jurisdictions in the Kansas City metro, but not in others, I shopped and dined out in those jurisdictions that had dropped them, and avoided the others.

I continued to travel, for both business (although a lot less than I used to) and pleasure, including a trip to Mexico. I took 40 flights during the TSA mask mandate, and I rarely wore a mask on board the plane or in the airport. I never got hassled about it. I didn't put my mask on at the airport until I got ready to clear security, and once I did, it came off while I sat and waited for my flight, only going on again during boarding. As soon as the flight attendants sat down for taxi and takeoff, my mask came down, and it stayed down throughout the flight as I sipped water and nibbled almonds, or at least pretended to. It only came back up during deplaning. Once out of the jetway, it came down again as I either changed planes or exited the airport. I didn't wear one while checking into hotels - I usually had my room already assigned, and a digital key on my phone, so I just went straight to my room, bypassing the front desk.

During the first big wave in the summer of 2020, we drove to New Mexico for vacation. There was a mandatory 14-day quarantine for out-of-state visitors, which I ignored. At one state park, we got stopped by police, who noticed our Kansas tags. They simply asked us to leave the park - they had no more interest in enforcing a stupid rule than we had in complying with it. No one else asked about our out-of-state tags, and our VRBO landlords said nothing about the quarantine requirement.

Once the vaccines became available, I was in no rush to get vaccinated. I knew that the vaccines would not prevent covid, long before Delta exposed that truth through widespread breakthrough infections. How did I know this? Simple: I understand what 95% efficacy means. I also knew that, given all the risk factors, my odds of getting covid were probably about 8% without the vaccine, and about 5% with it (that was before Delta reduced the efficacy rate). And my odds of being hospitalized or dying if I got it were also very low, given my risk factors. So I wasn't afraid of the vaccine; I merely thought, why bother?

In other words, for two years, I thumbed my nose at covid. Then covid said, "Tag - you're it!"

Okay, time for a sidebar.

Now here's another big reveal: The Curmudgeon finally did get vaccinated, in July-August of 2021. Why?

Certainly not because of health considerations. My "why bother?" view toward the vaccines has never changed. I still don't think I needed to get it to prevent covid (that's rather obvious now). I may or may not have needed to get it to avoid serious illness; we'll never really know, though I suspect that at least for some, the vaccines are effective in preventing serious illness. I don't think this recent bout would have landed me in the hospital had I not been vaccinated. Of course, I can't know that.

When the Delta variant first reared its ugly head in the summer of 2021, the hysteria accompanying it rapidly grew beyond the pale. I anticipated new restrictions being put in place, including vaccination requirements for things like domestic air travel, something that was hinted at by one airline CEO. I had a business trip coming up in late August. I didn't want to get stranded out of state, only to have a mandate put in place while I was gone, and not be able to fly home until I got the two shots, a month apart, then waited the two additional weeks to meet the "fully vaccinated" definition. (Happily, that never happened.)

I also knew that, even if those restrictions didn't materialize, there were already vaccine requirements for things I'd eventually want to do, like cruising and international travel (we already had a Transatlantic cruise departing from Barcelona booked in October 2022, and we've been itching to get back to cruising, something we've done more than 20 times). So I knew that, eventually, I'd get vaccinated.

Meticulous researcher that I am, the more I studied the vaccines, the less concerned I became about them. Interestingly, much of that research came as people tried to convince me - I'm not sure why - that the vaccines were dangerous. I won't go into great detail regarding that research here, but suffice it to say that it was laughably easy to debunk everything I was sent or that I read regarding the dangers of the vaccines. If anyone who has read this blog knows anything about me by now, they know I'm a math guy, and simple math overwhelmingly refutes the notion that the vaccines are as dangerous as their harshest critics would have us believe. Ironically, that's the same math that I used to combat so many of the myths about covid, in posts that those same people read and wholeheartedly agreed with.

I'll address the whole question of the vaccines in another post for another day, but it comes down to this: they don't prevent covid, not at all. In fact, unless you're in a real at-risk category, and maybe even if you are, they don't really change your odds of getting it. They may reduce your chances of serious illness or death, especially if you are in an at-risk category, though read on for some thoughts about that. But certainly, if I were in an at-risk category, I'd roll the dice on the assumption that maybe they would reduce my chances. You take all the help you can get, right?

On the flip side, for the vast, vast, vast majority of people, they aren't dangerous. They have their risks for young people, especially young males, though we now know that contracting covid poses those same risks to those same demographics, if not a little bit worse. So maybe, just maybe, the balance of the equities bears taking the risk. We also know that there are ways of mitigating that risk, such as adjusting the timing of doses. In any event, we further know that, either way, it's largely unnecessary, because the long-term risk that covid presents to the young and healthy is minimal.

So I really wish that all the vaccine proselytizing would stop, on both sides. If you believe that getting vaccinated is the right decision for you, do it. Say so, even, but stop there. Stop trying to convince everyone else that it's the right decision for them, that it prevents covid (because it doesn't), that it prevents serious illness or death (because it may or may not), and just let it be the right decision for you. It doesn't have to be the right decision for everybody. Just like getting the flu vaccine, or taking sugar in your coffee, or eating sushi, or getting circumcised. Fauci has enough acolytes.

Likewise, if you believe that it's not the right decision for you, don't do it. In fact, if you think the vaccine is dangerous, that it's a killer, that it causes HIV, that it'll make you grow a third arm out of your forehead, fine - believe that. But just say that it's not for you. Drop the crusade of trying to convince the world that it's going to kill them. Because you've already lost that battle: you're about 5 billion people behind, and they're still alive and kicking. (If you're really convinced you're right, by the way, you need to be stockpiling food and ammo like a fiend, because if 5 billion people worldwide - 63% of the population - suddenly die, Stephen King's "The Stand" is going to look like a Nicholas Sparks novel.)

Enough with the vaccine sidebar. Let's get back to The Curmudgeon's bout with the 'rona.

My lovely wife and I were in Siesta Key, Florida. By the way, if you're going to wind up having to isolate somewhere with covid, I highly recommend Siesta Key. It's a beautiful place, and you can walk on the beach and soak up all the vitamin D your little immune system desires.

We flew in on a Saturday - our first flight since a judge struck down the CDC's extension of the TSA mask mandate - so we flew maskless. But, as I said earlier, that was hardly a change for me, as I spent little time with a mask on when I flew while the mandate was in place. We went to our condo, went out to dinner, went to the beach Sunday, got groceries, went to lunch and dinner. Then, I spent most of Monday in the pool, as I had gone for a week-long swimming class.

Late Monday, I started to get a mild sore throat. Now, it's been a very long time since I spent hours in a swimming pool, getting water in my sinuses and ears. I'm also prone to sinus infections - I get one or two a year. And I'm so familiar with the symptoms that I can self-diagnose: for me, they start with a sore throat, usually in the evening, becoming worse overnight, to the point that my sleep is interrupted. (Check.) The sore throat lasts through the next day, in this case, Tuesday. (Check.) Then, it goes away, and I start to get sinus congestion and a runny nose the next day, with maybe some mild body aches, and chills at bedtime. (Check.) (This time, I also seemed to be a little more achy, and to get tired earlier in the evening, but again, I was swimming all day, which I wasn't used to.) Finally, the congestion moves into my chest, and I develop a cough. (Check.)

So familiar is this symptom progression to me that I usually just go to the doctor and say, "I have a sinus infection, and I need a Z-pack" (Zithromax, an antibiotic that generally knocks the infection out in a few days). My doc is really good about complying. When I'm traveling, I sometimes have to plead my case, and I occasionally get a holistic medicine-type who gives me the Madame Curie lecture about the dangers of antibiotics, and I have to suffer until I get home to my doc, who's been practicing medicine longer than those yahoos have been on the earth. Once, on a cruise, I went to the ship's doctor and gave him the I-have-a-sinus-infection-and-I-need-a-Z-pack pitch. The doctor, a Colombian, gave me a wry smile and asked if he could give me a second opinion. "Sure," I agreed. He checked me out, then said, "You have a sinus infection. I'm going to give you a Z-pack."

So, I thought I got a sinus infection. Why? Because I get them all the time. It's spring, and I figured maybe it was related to seasonal allergies. I was going from our climate in Kansas, where the weather had been crazy - 70 degrees one day, snowing three days later, 70 degrees again three days after that, lather, rinse, repeat - to the Florida Gulf Coast, where it was a predictable 85 degrees every day. And, I had that pool water up my nose and stuck in my ears every day.

Only this time, my wife got it too. And she got it hard. She had a fever most of the week. (I may have, except I was getting the headaches that usually accompany my sinus infections, so I was taking Advil, which would have reduced my fever, whereas she was letting her fever burn out.) And her aches were worse than mine, but again, she wasn't taking Advil. And I was exercising every day, some days forcing myself to go to the pool, because I'd paid for the class.

On Friday, after the class ended, we were getting our things together to fly home Saturday. My wife thought we should test ourselves for covid; even though it wasn't required to fly, we were supposed to attest that we hadn't tested positive for covid before boarding our flight. (A good friend asked, "Why would you test?" I explained our reasons, but in hindsight, as I think about it, the better answer to that question is, "Why on earth wouldn't you?")

We purchased home covid tests from Walgreen's, took them, and ... we both tested positive. I couldn't believe it. I hadn't lost my sense of smell or taste, I didn't have any of the other covid symptoms I'd heard about - in fact, my symptoms were firmly indicative of an all-too-familiar sinus infection, and I was convinced that was all this was. I suspected the tests, and insisted that we do another, since we had extras. We did, and got the same result.

So we decided to isolate for another week in Florida. Our condo was booked for the next week, and our rental car company was sold out for the following week. So we had to find another condo, and rent a car from another company, and change our flights, and ask my wife's Mom to watch our dogs for another week, and otherwise do some schedule-juggling.

We came home the following weekend. It's now been nearly three weeks since the onset of symptoms, and more than two weeks since that positive test, and a week since we got home. My wife is fully recovered, but I'm still battling a cough, though it seems to be getting better. I did go to an urgent care clinic in Florida, and they put me on a steroid and an antibiotic, which seemed to do pretty much nothing for me. (Note that the clinic diagnosed me with "covid and sinusitis," which is a sinus infection. And sometimes my sinus infections result in a cough that lingers for a few weeks, so this isn't necessarily unusual. By the way, when I asked the doctor at the clinic if they needed to test me again, she said they actually recommend against it. Why, I wonder? I found that curious.)

So, now that I'm a card-carrying member of the covid club, herewith are my observations.

1. It is just a matter of time. We are probably all at risk of getting covid at some point. Vaxxed or unvaxxed, boosted or unboosted, masked or unmasked. Covid don't care. It's here to stay, and we're going to have to live with it. It is entirely indiscriminate. In a post a year or so ago, I said that the virus itself is the superspreader, not some event. That's absolutely true. I also used an analogy based on some words of wisdom from my wife. We were watching news coverage of flooding on the Mississippi River. Residents of a small town in Missouri were stacking sandbags on the riverbank trying to protect the town. My wife observed, "You know, that river's been going pretty much wherever it wants to go for more than a million years, and it's going to keep going wherever it wants to go for the next million years, and all the sandbags in the world won't change that."

So it is with covid. Covid don't care. It's gonna go where it wants to go, and all the masks and vaccines and social distancing and Plexiglas and shutdowns and arrows on supermarket aisle floors in the world aren't going to change that.

2. To wit: based on what we know about the incubation period of the second Omicron variant, there's a good chance that I was exposed at a physical therapy appointment on the Friday before we left for Florida. And the physical therapy facility requires that masks be worn at all times, by all patients, therapists, and staff.

Now, the mask brigade will pooh-pooh that idea, and insist that my exposure came while traveling maskless. "See?" they'll cry with sanctimonious glee. "That's what you get for that judge striking down the mask mandate!" Well, not so fast. First, that would mean an incubation period of two days or less, which is inconsistent with what the "experts" say about Omicron II (the same "experts" that say we should still be wearing masks on planes). Second, as previously noted, I've never really worn a mask while traveling by plane. I flew during the OG phase, the first summer wave, the first winter spike, the Delta wave, and the first Omicron spike, all with my mask mostly down around my chin. True, for those last two waves I was vaccinated, but we saw how well that worked for me, right?

Also, there's the experience of some of my friends. I have a friend who isn't vaccinated, and has never worn a mask, as far as I know, and she had both the OG and Delta variants. I also have friends who were absolutely diligent about mask-wearing. And yet, around the end of 2020, they came down with covid, while my bare face went unscathed. And I'm guessing that, if they got on a plane today, they'd be wearing masks. I know other religious mask-wearers who've gotten covid twice.

3. The caveat here is that, besides my belief that masks are ineffective, I don't believe the experts know squat about incubation periods, among other things. Maybe I did get it on the plane to Florida. (I rather doubt it, knowing what I know about air circulation on airplanes, exposure times, etc.) Maybe I got it in the airport. Maybe I got it at a restaurant. Or maybe I did get it at PT, with my mask on. Who knows? And who cares? Covid don't care. Neither do I. I got it. And no amount of contact tracing in the world could ever prove where I got it. And I personally don't think we know what the incubation period is for any of the variants. Because we can't prove when someone was actually exposed.

4. The vaccine did not prevent me from getting it. My friend who is unvaccinated got it. Her natural immunity from getting it once didn't do much for her, because she got it again. I personally know people who are religious mask-wearers, are vaccinated and boosted, and have had it twice. Covid don't care.

Will I get boosted? Not for health reasons, because it won't do any more good than the original round did. Like I said, I know people who are vaccinated and boosted, and have gotten it once or even twice. Neither the vaccine, nor the booster, nor their natural immunity did squat for them. Covid don't care. It's no different than the flu or a cold.

I know a guy who I used to ride bikes with. He still rides, so he's in pretty good shape, though I understand he has some heart condition. But he's younger than I am. He apparently got covid recently also. He's a firm believer in masks. He's vaccinated and boosted, but "hasn't gotten around to getting the second booster yet." Yet he encourages people to do so. Why? His triple-vax and mask-wearing didn't keep him from getting covid. Does he think one more dose is going to do the trick? Covid don't care.

Moreover, in spite of the fact that he's younger and fitter than I am, and triple-vaxxed, he apparently had it worse than I did. He described his symptoms as similar to mine, only with "severe body aches - the worst symptom so far." I sure didn't have "severe body aches." I went swimming for four hours every day, and walking on the beach after that.

The answer is that yes, I'll get another dose, but only because Spain requires that my most recent dose be within the last 270 days in order to enter the country in October. I'm already well beyond that, so sometime between now and then, I'll need another shot, unless the rules change. Because, you know, "the science" definitively shows that if you've had a dose in the last 270 days, something magical happens.

The bottom line is that my number finally came up. It would have come up if I'd worn a mask all the time, it would have come up if I were boosted - even double-boosted. And you know what? It's probably gonna come up again. Maybe next year. Heck, maybe this year. It's just something that we're going to have to learn to live with. Like those pesky sinus infections that I get on a regular basis. You don't panic, you don't shut down the world, you don't cover your face, you don't plaster Anthony Fauci's mug all over every TV screen in America. You deal with it - and you move on.

5. Is everybody going to eventually get covid? I'll bet not. There are probably people who have never had the flu. I have a friend who has pretty much never worn a mask, will never get vaccinated, and hasn't had covid. He rode his Harley to Sturgis in 2020 (superspreader!), he eats out all the time, he travels (not by plane, but that's personal preference), he goes out in public. And he hasn't had so much as a cold.

Maybe it's his immune system. Maybe it's the luck of the draw. Maybe it's math: there have been about a half-billion cases of covid in the world, out of a global population of nearly 8 billion. Sure, there have probably been a ton of cases that have been unreported, either because the people didn't know they had it, they didn't test, or they tested at home and never went to the doctor. A bunch more have had it twice, maybe more.

Just in the U.S. alone, there have been 84 million reported cases, but that's still just 25% of the population. And note that cases were overstated in 2020 for political reasons, using inflated cycle thresholds to increase positive results, as reported in this blog. But regardless of any noise in the data, it's a fact that most of the U.S. population hasn't had covid. And over 20% of the population - nearly 73 million - haven't had a vaccine dose. And it's fairly safe to say that there's a good correlation between that number and the number of people who never or seldom wore masks.

So there's a good chance that a quarter of the population will never get covid. Is that scientific? Nope, it's a guess, albeit an educated one, based on some math. And you know what? I don't care whether it's scientific or not.

You know what else?

That's right. Covid doesn't, either. Because it's not out to get you. It just ... is. And your number is either gonna come up, or it's not. If it doesn't, it won't be because you're wearing a mask, or because you're vaxxed, boosted, double-boosted, wrapped in bubble wrap, or have a shrine to Anthony Fauci in your backyard. And if it does, it won't be because you flew on planes, went on cruises, rode your Harley to Sturgis, took vacations, and lived your life. Either way, it'll be because ...

Covid don't care.

The Friendly Skies Return

By now you’ve heard that a Federal judge has struck down the CDC’s ridiculous two-week extension of the mask mandate on airplanes and other public transportation, and in airports and other transportation terminals. The mandate was set to expire on April 18 before the CDC extended it to May 3, but the judge’s ruling took effect on April 18, so the mandate effectively ended then.

The judge ruled that the CDC failed to provide any justification for its decision to extend the mandate, and did not follow proper rule-making procedures for a federal agency. In so doing, it overstepped its authority. The judge was ruling on a lawsuit brought by a small number of individuals; however, she noted that it would be impossible to end the mandate selectively for that group. Thus the only remedy was to vacate the decision entirely, ruling that “a limited remedy would be no remedy at all.”

As pilots and flight attendants announced the decision mid-flight shortly after it was made public, passengers cheered the decision, consistent with polls that have shown that a significant majority of Americans oppose the continuation of the mandate. However, the reaction of a minority was predictably vocal – and entirely devoid of logic.

One doctor tweeted his complaint that the airlines didn’t wait “another month or two” to comply with the order, which makes zero sense, since the CDC extension was only for two weeks. Why would they extend the requirement weeks beyond the CDC mandate?

Several people opposed to the judge’s decision declared that they would boycott the airlines that complied with the order, and fly on their competitors instead.

Just one problem with that strategy: every U.S. airline announced immediately after the judge’s decision that masks would heretofore be optional on all domestic and most international flights. So good luck with that. As one friend of mine suggested, perhaps those folks can hop in their electric cars and drive across the country. They’ll just have to stop and charge up every couple of hours.

Another woman lamented that the decision came even as “the equivalent of a plane-load of passengers die every day of COVID.” Well, U.S. deaths from COVID the day the decision was handed down totaled 70, and the day before they totaled 104, so those would be pretty small planes. And considering that about 45,000 passenger flights per day take off in the U.S., I guess the odds are pretty good.

You’re infinitely more likely to wreck your car on the way to the airport than you are to get COVID on your flight and die.

But the best comments were from those who cried that a judge’s order “shouldn’t take the place of the legislative branch.” This illustrates the brilliance of those who made that argument – and there were a good many of them, which should frighten us all, because they undoubtedly vote, and probably even procreate – for three reasons.

First, the CDC is not the legislative branch. It’s an arm of the executive branch. These geniuses don’t even understand the three branches of government, and they’re griping about one of them. Checks and balances, anyone? Moreover, they don’t understand – nor do they care – that the legislative branch never had a say in whether we all had to wear masks on planes or not. In other words, since we the people elect the legislature to make law on our behalf, we the people never had a say.

(One person tweeted that “you should be really, really concerned that the Courts are effectively taking away power from the federal government.” Ummm … this was a federal judge. Maybe you should be really, really concerned about your proclivity for tweeting without knowing what the hell you’re talking about. Bless your heart.)

Second, these lemmings are opposed to a judge making a decision they have to live with, but they’re perfectly okay with an executive agency making an unsupported, arbitrary and capricious decision that they’re subject to? Good on ya, comrade. Again, I’ll take an order of checks and balances with a large side of justice, please. Make that to go – I’ve got a flight to catch.

Third – and this is the richest irony of all – these same people were delighted, thrilled, over-the-moon, every time a judge overturned a decision made by President Donald J. Trump’s administration. But now that a judge has overturned a decision made by the jack-booted stormtroopers of the Biden administration, they’re aghast. It’s beyond the pale. It cannot stand.

And their tears are like the sweetest nectar.

Look, many of us put up with wearing masks for a very long time, as the CDC extended the mandate again, and again, and again, and again, even as mask mandates in all states were being eliminated, and cases, hospitalizations and deaths were falling to well within endemic range. An isolated minority made a scene over it, but most of us just complied with it, because it was required, and we wanted or needed to fly.

And we all knew that it would end at some point, just like the state mandates ended, the county mandates ended, and the city mandates ended. No, this isn’t different because people are all sitting together on a plane. It’s no more crowded than many restaurants in major cities. No, it isn’t different because the passengers come from all over the world. So do people you encounter every day, once they get off of planes. We live in a connected world.

So instead of insisting that your will be imposed on the rest of us, how about you do you, and we’ll do us? You can still wear your mask. We won’t judge. We’ll be polite. And if your mask is that effective, you really don’t need for us to be wearing one, too. (If you do, then just don a second one. Fauci said it was a good idea, after all.)

And if you still don’t like it? Then, by all means, boycott the airlines. It’s just that you’ll have to boycott them all. So take Amtrak. (Oops – they made masks optional, too.) Or a bus. (Oops again.) Take an Uber cross-country. (Oops.) Walk, for all I care.

I’m just glad to have that empty seat next to me.