Everyday Freethought

Here is the dividend income report for April, 2023.

The monthly dividend income came out to $206.73. The yearly income total for 2023 through the end of the month was $2591.69.

The income for April, 2022 was $265.84, and the yearly income for 2022 through the end of April was $2397.58.

Today the big story is another bank failure: JPMorgan Chase took over the assets of California-based First Republic bank. This is the fourth mid-sized bank that has failed in a month.

Of the four that failed this year, three of them (Silicon Valley Bank, Signature Bank and now First Republic Bank) had assets of between $50 billion and $250 billion. The Dodd-Frank Act passed in 2010, and stipulated that banks with more than $50B in assets had to undergo more frequent stress tests and keep higher levels of cash reserves on hand. The Economic Growth, Regulatory Relief, and Consumer Protection Act (aka EGRRCPA) passed in 2017 raised that level to $250B. Executives from at least one of these failed banks lobbied for the regulations to be lifted, and they got what they wanted. We do not know what would have happened if Dodd-Frank had not been altered, but I have no problem pointing out that three of these four failed banks might not have failed if the regulations were left unaltered.

A lot of people love to say that regulation can slow businesses down. But when de-regulated firms fail, those same people get quiet. I think slow is better than bankrupt, despite what the self-proclaimed “party of business” says.

There is an article on Daily Kos encouraging people to pull their money out of the big banks. I used to have accounts with Chase. There were advantages to having an account with a bank that had offices everywhere, but Chase seemed to keep making headlines for wrong-doing, sort of like Wells Fargo a few years ago. I moved my accounts to a bank based in Texas. So far it has worked out okay for me.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each April from the beginning of my records through 2023:

Here are the securities and the income amounts for April, 2023:

• Vanguard Total Bond Market ETF: $190.24
• Vanguard Total International Bond ETF: $16.49

Big Jim says it is better to try to get rich slowly than to try to do it quickly.

Painting by Vicente López Portaña (1772 – 1850); image from Wikimedia, image assumed to be under public domain.

Here is the dividend income report for March, 2023.

The monthly dividend income came out to $2089.76. The yearly income total for 2023 through the end of the month was $2384.96.

The income for March, 2022 was $1833.54, and the yearly income for 2022 through the end of March was $2131.74.

A lot happened in March. There were the first big bank failures since the Great Recession. Three banks all beginning with the letter “S” went under in about a week: Silvergate Bank, Silicon Valley Bank (SVB), and Signature Bank.

Two of them (Silvegate and Signature) were involved in corrupt-o-currency. SVB was the bank for the tech bros, who pushed corrupt-o-currency. SVB was the biggest and caused the most concern. I do not think we can say that corrupt-o-currency by itself caused the failures, but it did not help. If Silvergate and Signature had not gotten involved in corrupt-o-currency, they might still be around. They might have made other mistakes. But Silvergate seems to have gone all-in: They became the on-off ramp between corrupt-o-currency and real money, they started the process to make a stable coin, and they marketed themselves as a bank for companies involved with corrupt-o-currency nonsense (people need to stop calling corrupt-o-currency an “industry”). The failure of Silvergate caused a lot of people to worry about SVB.

SVB did not market itself to corrupt-o-currency clowns as much as the other two, but it was the go-to bank for tech bros. They lobbied to get Dodd-Frank regulations loosened, which happened in 2018. It raised the level of bank assets that would trigger higher liquidity reserve levels and more frequent stress tests. SVB was just under the new amount. (Silvergate’s assets were under the previous, lower amount; both SVB and Signature were above the old amount and under the new amount, so became exempt from Dodd-Frank.) Also they lost a lot of money in the Treasury market: they bought long-dated government bonds while interest rates were rising. Rising interest rates sounds like the sort of thing that a bank should know how deal deal. Especially if they had a Chief Risk Officer while rates were going up.

Signature Bank also marketed itself to companies in the corrupt-o-currency nonsense.

SVB got the most attention. Partially because a lot of tech bros who usually want the gubb-ment out of their lives were screaming for bailout. And telling the world that they were really, really important to the economy. This caused a lot of backlash, both for the hypocrisy of “BigGov is good only when I need something, and bad when you need something”, and for the fact that this group has an affect on our economy, culture and politics despite not doing anything for anyone else’s benefit.

Accelerator YCombinator wrote a letter asking for bailout and overstating Silicon Valley’s importance to the economy (discussion on Hacker News). Just as this Slate article (archive here, HN discussion here) states: What has Silicon Valley done for the world? What do they have to show for all the money they have gotten? The past decade has been trying to get around labor regulations (Uber, Taskrabbit, Airbnb) and blockchain/web3/corrupt-o-currency. I was listening to an episode of the Risky Business podcast from 2015 or 2016, and there was a story about a US general worried that the US was going to fall behind technologically. This general pointed out that Silicon Valley firms spent about four or five times as much on R&D as the biggest defense contractors. The hosts joked that they could not think of anything that had come out of Google that was interesting for years.

We have had low interest rates for years. Instead of doing something about climate change or water desalinization, it has been garbage. Here is a comment on another article in HN that got flagged, but one that I agree with:

“Because by god it’s fucking funny for literally anyone that isn’t a US tech bro. We’ve all watched a massive bubble form, with shitty-ass Bluetooth connected dog feeders that are meant to change the world get 150 millions in series A, watch as tech bros whose only qualifications are being born in the right place and an online class on React make half a million a year and gloat about how easy it is to make money in tech, trying to teach lessons to the entire world about running their 50 queries/sec on a K8S cluster on AWS and overall, very much enjoying the financial illiteracy of pretty much their entire sector.

So, yes, it’s pretty fucking funny when it blows up in their face. But I’m not too worried about the actually talented people. Sure, they might spend a bit of time in uncertain conditions (actually, no, with those salaries, you’re straight up a danger to yourself if you don’t already have a multiple year long cushion), but overall, they’ll bounce back.

EDIT: Additionally, these overpaid employees will still get their money, and a good bunch of them will go back to praising the startup life. Founders will have to live through the horrors of becoming employees again after they’ve blown their VC’s money. VCs will continue to blow billions on dog collars and online SaaS offerings for renting dogs, and shoot in eachother’s legs as much as they can instead of being useful contributions to society. Don’t ask Peter Thiel why all of his companies pulled out of SVB and why he massively contributed to the run.

There was an opinion piece in the Wall Street Journal that had a few points I actually agree with (archive here, HN discussion here). The first is about Dodd-Frank: These standards brought greater stability to the sector, but also higher expenses and lower profits. Bank leaders weren’t pleased and soon began lobbying to mitigate the legislation’s impact on their operations. SVB’s CEO Greg Becker was an early objector who argued that subjecting his midsize bank to the full range of Dodd-Frank requirements “would stifle our ability to provide credit to our clients.” It turns out they were right this time about regulations getting in their way. They were able to tank themselves.

Here is a later paragraph: Not all regulations are “burdensome.” Some are essential to prevent bad things from happening, as in this case. Congress and the Fed should rethink their decision to exempt key parts of the financial system from the discipline of oversight. Whenever executives complain that regulations are burdensome and would slow the growth of the economy, I always think of something Ken Lewis said around the time of the Great Recession: in one year (I think it was 2007), the investment banking division of Bank of America lost as much in that year as it made in three prior years combined. Maybe regulation will slow down the growth, but then maybe that slow growth won’t get wiped out in far less time than it took to happen.

Here are a few thought from the Status Kuo newsletter on Substack (article here, archive here):

But this is capitalism. Why can’t we just let rich VCs and their portfolio companies eat their losses?

We could, of course. But the trade-off is that we might create the very kind of uncertainty that is harmful to stable growth and financial sector health. Depositors need assurances so they don’t pull their funds out of other banks in a panic.

First off, I honestly do not understand why the VC firms themselves could not have given their portfolio companies money to tide them over. Handing out money is what VC firms do. WRT uncertainty: What is wrong with uncertainty? If anyone expresses resentment towards rich people or the self-proclaimed captains of industry, they say they deserve their wealth because they took risks. They acted despite uncertainty. But when they want something, or the future starts looking dicey, suddenly “uncertainty” is a reason for not acting. Or giving their portfolio companies more money.

From the same article: Did deregulation contribute to the collapse?

This is something that will be fought over by the parties over the coming weeks. There are indications that the kinds of regulations, including so-called “stress testing” for smaller regional banks, that would have surfaced problems and kept this from happening were eliminated by the Trump administration in 2018. But there were also Democrats, including Sen. Joe Manchin, who pushed for that deregulation, so the political narrative isn’t so cut-and-dried here.

Actually, it is pretty cut and dried here. There are more Republicans against regulation than Democrats. Look up the votes for the repeal of Glass-Steagall. Yes, some Democrats in the House voted for it, but almost no Republicans voted against it. And the difference in the Senate vote was even starker. Yes, some Democrats voted for de-regulation, but not all. And back in 2008 when the economy went off the rails, the two parties reacted differently. A lot of Democrats who were pro-regulation rethought their stance. We saw people like Elizabeth Warren and Bernie Sanders gain prominence. On the Republican side, the reactions were conspiracy theories and saying we need to keep give MORE money to the wealthy.

People need to stop saying the two parties as the same. Maybe Democrats are not perfect, but the Republicans are just insane. A lot of people will not criticize Republicans until Democrats are perfect. Expecting people who want to make things better to always be perfect has just made things worse. People need to get mad at what the Republicans are doing. Stop blaming Democrats for what Republicans do. Stop waiting for Democrats to be perfect while Republicans get worse. Both sides are not the same.

There are two quotes that are appropriate here:

• Every five to ten years, people forget there is a recession every five to ten years.
• The point of deregulation is to remind us why we have regulation.

There will probably be more corrupt-o-currency nonsense in next month’s report.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each March from the beginning of my records through 2023:

Here are the securities and the income amounts for March, 2023:

• Global X S&P 500 Covered Call ETF: $51.51
• Vanguard Total Bond Market ETF: $170.51
• Vanguard Total International Bond ETF: $13.52
• SPDR S&P Dividend ETF: $794.47
• SPDR Dow Jones REIT ETF: $94.99
• SPDR Dow Jones REIT ETF: $189.13
• SPDR S&P Global Dividend ETF: $456.61
• Global X S&P 500 Covered Call ETF: $50.86
• Vanguard Utilities ETF: $268.16

Big Jim would rather be Captain Obvious than a major asshole or generally clueless.

Painting by Giovanni Antonio Guardi (1699 -1760); image from Wikimedia, image assumed to be under public domain.

Here is the dividend income report for February, 2023.

The monthly dividend income came out to $196.67. The yearly income total for 2023 through the end of the month was $295.20.

The income for February, 2022 was $224.92, and the yearly income for 2022 through the end of February was $298.20.

I have not talked too much about corrupt-o-currency in the past few dividend income reports. I was going to opine some more, but a lot happened. A few banks that were into corrupt-o-currency went under. One of them (Silicon Valley Bank) lobbied for regulations to be loosened. And when it was looking shaky, all the glibertarian tech bros wanted the government they always regard as incompetent and a nuisance to bail them out.

Per the quote that is misattributed to Lenin, there are decades when weeks happen, and weeks when decades happen. Just like Michel on Gilmore Girls, the glibertarians and corrupt-o-currency bros have been so stupid lately I cannot keep up.

I might have more to say next month.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each February from 2012 through 2023:

Here are the securities and the income amounts for February, 2023:

• Vanguard Total Bond Market ETF: $182.27
• Vanguard Total International Bond ETF: $14.40

Big Jim says Christian theocracies would not be any more fun than Muslim theocracies.

Painting of the garden of Gethsemane by Sebastiano Conca (1680 – 1764); image from Wikimedia; image assumed to be under public domain.

Here is the dividend income report for January, 2023.

The monthly dividend income came out to $98.53. The yearly income total for 2023 through the end of the month was $98.53. This is the only month the math is this easy.

The income for January, 2022 was $73.28, and the yearly income for 2022 through the end of January was $73.28.

First month and I am already beating the prior year by 20%.

This is the seventh month that my twelve-month moving average was above $1,000.

The only security to pay out in January was the Global X S&P 500 Covered Call ETF. There were two payments, since the payment for December always gets paid in January. That fund usually has four months in a year where the fund has a record date in one month, but pays in the next month.

I have been studying for a certification for work. It is looking more likely I will be leaving my employer soon. Right now I do not have another position lined up, so I will have to live on savings. I could probably get by for three years on my savings. My Roth 401k would go into my Roth IRA, and my dividend income will go up by a lot.

I logged onto the Social Security website, and if I understood the graph correctly, even if I had no income between now and when I turn 62, I could get $1600/month. I do plan on working more, so that is the worst-case scenario. All I have to do is survive until then.

Here is a table with the year-to-date amounts, the monthly amounts, and the three- and twelve-month moving averages for each January from 2012 through 2023:

Here are the securities and the income amounts for January, 2023:

• Global X S&P 500 Covered Call ETF: $47.29
• Global X S&P 500 Covered Call ETF: $51.24

Big Jim has a principle of never touching the principal.

Painting of Godfrey of Bouillon at Mount Sinai by Federico de Madrazo y Kuntz (1815-1894); image from Wikimedia; image assumed to be under public domain.