Destroying Fiduciary Protections: Why We Need to Preserve Trust and Responsibility… 

Without the legal protections afforded by fiduciary accounts, financial advisors are absolved of the legal responsibility to protect their beneficiaries…

What does market manipulation look like…

One of the 2008 financial crisis's underlying factors was creating a false sense of security, pun intended, surrounding dodgy investments. Whereas financial institutions, pension funds, and the like were prohibited from investing in low-grade, high-risk securities, the Wall Street Wizards concocted phony schemes that were sold to the public as “insurance” against issues arising from investment defaults and interest rate mismatches. Unlike proper insurance based on actuarial science, these products were uncontrolled and unmonitored as they turned dodgy “BB” rated securities into “AA” investment grade securities where financial institutions snapped them up for their superior yields.

As we have seen with the Silicon Valley Bank failure, the bank was crippled by a maturity mismatch in a rising interest rate environment. It was the fiduciary duty of the bank’s executives to monitor and mitigate market risks using non-actuarial insurance products, such as swaps, which are financial contracts that allow parties to transfer financial risk between them. Unlike traditional insurance policies, which protect against specific events, swaps are designed to hedge against financial risks associated with market fluctuations, interest rate changes, or other economic variables.

A swap is an agreement between two parties to exchange cash flows based on different financial instruments, such as interest rates, currencies, or commodity prices. The parties agree to exchange cash flows periodically over a specified time period based on a predetermined formula. Swaps can be used for various purposes, such as managing interest rate risk, hedging against currency fluctuations, or speculating on market movements. They are typically used by financial institutions, such as banks and investment firms, as well as by corporations and other organizations.

While swaps can offer benefits, such as reducing financial risk and improving liquidity, they also come with potential hazards, such as counterparty risk, liquidity risk, and market risk. Counterparty risk refers to the risk that the other party to the swap will default on their obligations. In contrast, liquidity risk refers to the risk that a party may be unable to exit the swap contract when needed. Market risk refers to the risk that the value of the underlying financial instrument may change unfavorably.

The Obama-Biden regime’s bailout provides cover to the banker’s Democrat asses…

By manipulating the customary FDIC insurance coverage from $250,000 to millions and promising to make depositors whole, the regime eliminated a round of crippling lawsuits that would have seen the bank’s executive team liable for a breach of their fiduciary duties and possible fines and prison terms.

What wasn’t mentioned was that many of the bank’s loans went to projects will fell in line with the progressive communist democrat green power agenda and other social engineering ventures.

Go woke go broke! SVB hired board obsessed with diversity, invested $5BN for 'healthier planet' and held month-long Pride celebration - but had NO chief risk officer for eight months last year

• Silicon Valley Bank had an A rating for its Environmental, Social and Governance policies as it increased diversity and invested in sustainability startups
• But for eight months last year, the bank did not have a chief risk operator
• At the time, it was investing clients' money in low-interest government bonds and securities that saw their value fall when interest rates rose

Now, many are slamming the financial institution for focusing too much on woke policies and not enough on its investments.

It said in its 2022 ESG Report that the bank strives to 'create a more just, equitable and sustainable world.'

Among the initiatives included in that report are a 'commitment to provide at least $5billion by 2027 in loans, investments and other financing to support clients' sustainability business.

'SVB's Sustainable Finance Commitment aims to support companies that are working to decarbonize the energy and infrastructure industries and hasten the transition to a sustainable, low-carbon, net zero emissions economy,' the report states. <Source>

And it is about to get worse as the regime dissolves or dilutes fiduciary responsibilities in favor of those pursuing a progressive communist democrat “woke” agenda…

House fails to override Biden veto of bill targeting ESG investing in pensions

The House failed Thursday to override President Biden’s first veto, delivering a blow to critics of so-called ESG investing who tried to scuttle a Labor Department rule that allows retirement plan managers to consider factors like climate change and social justice politics in their investment decisions.

Republicans failed to muster the two-thirds majority needed to override Mr. Biden’s veto of that bill that would have prevented 401(k) fiduciaries from engaging in environmental, social and corporate governance investing — or ESG — that critics have denounced as “woke” capitalism.

The House voted 219-200, with Rep. Jared Golden of Maine being the lone Democrat to break ranks and side with every Republican — a similar result to when the chamber last month first passed the measure.

Due to the failed vote, the Senate will not vote to override Mr. Biden’s veto, sparing vulnerable Democrats in the upper chamber from having to buck the president again.

The Senate passed the anti-ESG measure 50-46 earlier this month with bipartisan support, thanks to Democratic senators facing difficult reelection paths next year: Jon Tester of Montana and Joe Manchin III of West Virginia. <Source>

 This is a clear demonstration that this is about elections and electability and not protecting senior citizens and other investors from the regime’s tyrannical predations.

Bottom line…

Without the protection of fiduciary responsibilities and the ability to pursue legal remedies, our money can be pissed away by progressive communist democrats with zero concern for the depositors and investors.

We are so screwed.

-- Steve