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 that a major asshole or generally clueless.
Painting by Giovanni Antonio Guardi (1699 -1760); image from Wikimedia, image assumed to be under public domain.