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The Federal Reserve lent an initial $11.9 billion to U.S. banks under financial duress through a new emergency program meant to stop bank runs.

U.S. stocks could see increasingly wild swings in the coming days as option contracts tied to trillions of dollars in securities are set to expire on Friday, removing a buffer that some say has helped to keep the S&P 500 index from breaking out of a tight trading range.

For three years now, the debate over the origins of the coronavirus pandemic has ping-ponged between two big ideas: that SARS-CoV-2 spilled into human populations directly from a wild-animal source, and that the pathogen leaked from a lab. Through a swirl of data obfuscation by Chinese authorities and politicalization within the United States, and rampant speculation from all corners of the world, many scientists have stood by the notion that this outbreak—like most others—had purely natural roots. But that hypothesis has been missing a key piece of proof: genetic evidence from the Huanan Seafood Wholesale Market in Wuhan, China, showing that the virus had infected creatures for sale there.

This week, an international team of virologists, genomicists, and evolutionary biologists may have finally found crucial data to help fill that knowledge gap. A new analysis of genetic sequences collected from the market shows that raccoon dogs being illegally sold at the venue could have been carrying and possibly shedding the virus at the end of 2019. It’s some of the strongest support yet, experts told me, that the pandemic began when SARS-CoV-2 hopped from animals into humans, rather than in an accident among scientists experimenting with viruses.

“This really strengthens the case for a natural origin,” says Seema Lakdawala, a virologist at Emory University who wasn’t involved in the research. Angela Rasmussen, a virologist involved in the research, told me, “This is a really strong indication that animals at the market were infected. There’s really no other explanation that makes any sense.”

The findings won’t fully silence the entrenched voices on either side of the origins debate. But the new analysis may offer some of the clearest and most compelling evidence that the world will ever get in support of an animal origin for the virus that, in just over three years, has killed nearly 7 million people worldwide.

[Read: The lab leak will haunt us forever]

The genetic sequences were pulled out of swabs taken in and near market stalls around the pandemic’s start. They represent the first bits of raw data that researchers outside of China’s academic institutions and their direct collaborators have had access to. Late last week, the data were quietly posted by researchers affiliated with the country’s Center for Disease Control and Prevention, on an open-access genomic database called GISAID. By almost pure happenstance, scientists in Europe, North America, and Australia spotted the sequences, downloaded them, and began an analysis.

The samples were already known to be positive for the coronavirus, and had been scrutinized before by the same group of Chinese researchers who uploaded the data to GISAID. But that prior analysis, released as a preprint publication in February 2022, asserted that “no animal host of SARS-CoV-2 can be deduced.” Any motes of coronavirus at the market, the study suggested, had most likely been chauffeured in by infected humans, rather than wild creatures for sale.

The new analysis, led by Kristian Andersen, Edward Holmes, and Michael Worobey—three prominent researchers who have been looking into the virus’s roots—shows that that may not be the case. Within about half a day of downloading the data from GISAID, the trio and their collaborators discovered that several market samples that tested positive for SARS-CoV-2 were also coming back chock-full of animal genetic material—much of which was a match for the common raccoon dog. Because of how the samples were gathered, and because viruses can’t persist by themselves in the environment, the scientists think that their findings could indicate the presence of a coronavirus-infected raccoon dog in the spots where the swabs were taken. Unlike many of the other points of discussion that have been volleyed about in the origins debate, the genetic data are “tangible,” Alex Crits-Christoph, a computational biologist and one of the scientists who worked on the new analysis, told me. “And this is the species that everyone has been talking about.”

Finding the genetic material of virus and mammal so closely co-mingled—enough to be extracted out of a single swab—isn’t perfect proof, Lakdawala told me. “It’s an important step; I’m not going to diminish that,” she said. Still, the evidence falls short of, say, isolating SARS-CoV-2 from a free-ranging raccoon dog or, even better, uncovering a viral sample swabbed from a mammal for sale at Huanan from the time of the outbreak’s onset. That would be the virological equivalent of catching a culprit red-handed. But “you can never go back in time and capture those animals,” says Gigi Gronvall, a senior scholar at the Johns Hopkins Center for Health Security. And to researchers’ knowledge, “raccoon dogs were not tested at the market and had likely been removed prior to the authorities coming in,” Andersen wrote to me in an email. He underscored that the findings, although an important addition, are not “direct evidence of infected raccoon dogs at the market.”

Still, the findings don’t stand alone. “Do I believe there were infected animals at the market? Yes, I do,” Andersen told me. “Does this new data add to that evidence base? Yes.” The new analysis builds on extensive previous research that points to the market as the source of the earliest major outbreak of SARS-CoV-2: Many of the earliest known COVID-19 cases of the pandemic were clustered roughly in the market’s vicinity. And the virus’s genetic material was found in many samples swabbed from carts and animal-processing equipment at the venue, as well as parts of nearby infrastructure, such as storehouses, sewage wells, and water drains. Raccoon dogs, creatures commonly bred for sale in China, are also already known to be one of many mammal species that can easily catch and spread the coronavirus. All of this left one main hole in the puzzle to fill: clear-cut evidence that raccoon dogs and the virus were in the exact same spot at the market, close enough that the creatures might have been infected and, possibly, infectious. That’s what the new analysis provides. Think of it as finding the DNA of an investigation’s main suspect at the scene of the crime.

The findings don’t rule out the possibility that other animals may have been carrying SARS-CoV-2 at Huanan. Raccoon dogs, if they were infected, may not even be the creatures who passed the pathogen on to us. Which means the search for the virus’s many wild hosts will need to plod on. “Do we know the intermediate host was raccoon dogs? No,” Andersen wrote to me, using the term for an animal that can ferry a pathogen between other species. “Is it high up on my list of potential hosts? Yes, but it’s definitely not the only one.”

On Tuesday, the researchers presented their findings at a hastily scheduled meeting of the World Health Organization’s Scientific Advisory Group for the Origins of Novel Pathogens, which was also attended by several of the Chinese researchers responsible for the original analysis, according to multiple researchers who were not present but were briefed about it before and after by multiple people who were there. Shortly after the meeting, the Chinese team’s preprint went into review at a Nature Research journal—suggesting that a new version was being prepared for publication. (I reached out to the WHO for comment and will update this story when I have more information.)

At this point, it’s still unclear why the sequences were posted to GISAID last week. They also vanished from the database shortly after appearing, without explanation. When I emailed George Gao, the former China CDC director-general and the lead author on the original Chinese analysis, asking for his team’s rationale, I didn’t immediately receive a response. Given what was in the GISAID data, it does seem that raccoon dogs could have been introduced into and clarified the origins narrative far sooner—at least a year ago, and likely more.

China has, for years, been keen on pushing the narrative that the pandemic didn’t start within its borders. In early 2020, a Chinese official suggested that the novel coronavirus may have emerged from a U.S. Army lab in Maryland. The notion that a dangerous virus sprang out from wet-market mammals echoed the beginnings of the SARS-CoV-1 epidemic two decades ago—and this time, officials immediately shut down the Huanan market, and vehemently pushed back against assertions that live animals being sold illegally in the country were to blame; a WHO investigation in March 2021 took the same line. “No verified reports of live mammals being sold around 2019 were found,” the report stated. But just three months later, in June 2021, a team of researchers published a study documenting tens of thousands of mammals for sale in wet markets in Wuhan between 2017 and late 2019, including at Huanan. The animals were kept in largely illegal, cramped, and unhygienic settings—conditions conducive to viral transmission—and among them were more than 1,000 raccoon dogs. Holmes himself had been at the market in 2014 and snapped a photo at Stall 29, clearly showing a raccoon dog in a cage; another set of images from the venue, captured by a local in December 2019 and later shared on Weibo, caught the animals on film as well—right around the time that the first recorded SARS-CoV-2 infections in humans occurred.

And yet, Chinese researchers maintained their stance. As Jon Cohen reported for Science magazine last year, scientists from several of China’s largest academic institutions posted a preprint in September 2021 concluding that a massive nationwide survey of bats—the likeliest original source of the coronavirus before it jumped into an intermediate host, such as raccoon dogs, and then into us—had turned up no relatives of SARS-CoV-2. The implication, the team behind the paper asserted, was that relatives of the coronavirus were “extremely rare” in the region, making it unlikely that the pandemic had started there. The findings directly contradicted others showing that cousins of SARS-CoV-2 were indeed circulating in China’s bats. (Local bats have also been found to harbor viruses related to SARS-CoV-1.)

The original Chinese analysis of the Huanan market swabs, from February 2022, also stuck with China’s party line on the pandemic. One of the report’s graphs suggested that viral material at the market had been mixed up with genetic material of multiple animal species—a data trail that should have led to further inquiry or conclusions, but that the Chinese researchers appear to have ignored. Their report noted only humans as being linked to SARS-CoV-2, stating that its findings “highly” suggested that any viral material at the market came from people (at least one of whom, presumably, picked it up elsewhere and ferried it into the venue). The Huanan market, the study’s authors wrote, “might have acted as an amplifier” for the epidemic. But “more work involving international coordination” would be needed to suss out the “real origins of SARS-CoV-2.”

The wording of that report baffled many scientists in Europe, North America, and Australia, several of whom had, almost exactly 24 hours after the release of the China CDC preprint, published early versions of their own studies, concluding that the Huanan market was the pandemic’s probable epicenter—and that SARS-CoV-2 might have made its hop into humans from the venue twice at the end of 2019. Itching to get their hands on China CDC’s raw data, some of the researchers took to regularly trawling GISAID, occasionally at odd hours—the only reason that Florence Débarre, an evolutionary biologist at the French National Centre for Scientific Research, spotted the sequences pinging onto the server late last Thursday night with no warning or fanfare.

Within hours of downloading the data and starting their own analysis, the researchers found their suspicions confirmed. Several surfaces in and around one stall at the market, including a cart and a defeathering machine, produced virus-positive samples that also contained genetic material from raccoon dogs—in a couple of cases, at higher concentrations than of human genomes. It was Stall 29—the same spot where Holmes had snapped the photo of the raccoon dog, nearly a decade before.

Slam-dunk evidence for a raccoon-dog host—or another animal—could still emerge. In the hunt for the wild source of MERS, another coronavirus that caused a deadly outbreak in 2012, researchers were eventually able to identify the pathogen in camels, which are thought to have caught their initial infection from bats—and which still harbor the virus today; a similar story has played out for Nipah virus, which hopscotched from bats to pigs to us.

[Read: Bird flu leaves the world with an existential choice]

Proof of that caliber, though, may never turn up for SARS-CoV-2. (Nailing wild origins is rarely simple: Despite a years-long search, the wild host for Ebola still has not been definitively pinpointed.) Which leaves just enough ambiguity to keep debate about the pandemic’s origins running, potentially indefinitely. Skeptics will likely be eager to poke holes in the team’s new findings—pointing out, for instance, that it’s technically possible for genetic material from viruses and animals to end up sloshed together in the environment even if an infection didn’t take place. Maybe an infected human visited the market and inadvertently deposited viral RNA near an animal’s crate.

But an infected animal, with no third-party contamination, still seems by far the most plausible explanation for the samples’ genetic contents, several experts told me; other scenarios require contortions of logic and, more important, additional proof. Even prior to the reveal of the new data, Gronvall told me, “I think the evidence is actually more sturdy for COVID than it is for many others.” The strength of the data might even, in at least one way, best what’s available for SARS-CoV-1: Although scientists have isolated SARS-CoV-1-like viruses from a wet-market-traded mammal host, the palm civet, those samples were taken months after the outbreak began—and the viral variants found weren’t exactly identical to the ones in human patients. The versions of SARS-CoV-2 tugged out of several Huanan-market samples, meanwhile, are a dead ringer for the ones that sickened humans with COVID early on.

The debate over SARS-CoV-2’s origins has raged for nearly as long as the pandemic itself—outlasting lockdowns, widespread masking, even the first version of the COVID vaccines. And as long as there is murkiness to cling to, it may never fully resolve. While evidence for an animal spillover has mounted over time, so too have questions about the possibility that the virus escaped from a laboratory. When President Joe Biden asked the U.S. intelligence community to review the matter, four government agencies and the National Intelligence Council pointed to a natural origin, while two others guessed that it was a lab leak. (None of these assessments were made with high confidence; a bill passed in both the House and the Senate would, 90 days after it becomes a law, require the Biden administration to declassify underlying intelligence.)

If this new level of scientific evidence does conclusively tip the origins debate toward the animal route, it will be, in one way, a major letdown. It will mean that SARS-CoV-2 breached our borders because we once again mismanaged our relationship with wildlife—that we failed to prevent this epidemic for the same reason we failed, and could fail again, to prevent so many of the rest.

Nitya Capital is reportedly looking to sell about 40% of its multifamily portfolio because rate hikes are making its floating-rate debt a lot more expense.

Rebecca Gordon: Singing the “Bourgeois Blues”

On my way home from the doctor’s office, I regularly pass the New York apartment building where I grew up. I would invariably stop, stare, and feel an overwhelming desire to visit the place I hadn’t seen in perhaps 60 years. The street door hadn’t changed a bit.

A few months ago, on a whim, I looked for the buzzer to apartment 6D, pressed it, and a woman’s voice answered. I promptly said, “Hi, I’m Tom Engelhardt. I grew up in the apartment you now live in and was wondering whether you’d let me see it again.” To my amazement — yes, this is New York City! — she promptly buzzed me in and I found myself riding to the 6th floor on the barely updated gate elevator I used as a kid. Ours was, I must tell you, a remarkable apartment. Even to get to it, you had to step out of the elevator, walk down a short corridor out onto a covered but open catwalk (where you can still see the roofs of New York around you), and then down another corridor.

So many years later, I did just that and, when the present resident of 6D let me in, felt overwhelmed with memories as I saw the staircase to the second floor where my old bedroom was, the living room with the remarkable skylight under which my mother drew her caricatures, and even the little porch beyond it. And yes, it sounds, I know, like quite a place, which it was (and remains). Today, fully renovated, it’s undoubtedly a wildly expensive coop or condo, but, in 1946, when my parents got that duplex apartment, just after my father left the Air Force in the wake of World War II, it was rent-controlled and cheap as hell. (Lucky for them as, in the 1950s when I was a kid, they were eternally short on cash.) But no surprise then either. After all, at the time, all of New York was rent-controlled and veterans stood a reasonable chance of getting a fine apartment they could actually afford.

As in much of the country now, rent control in New York is largely a thing of the past as rents here have all too literally gone through the roof, with even studio apartments soaring toward $4,000 a month. As Bloomberg News reports, there’s never been a worse time to rent in the big city. More than three bedrooms will cost you an average of $9,592 per month. And yes, that’s to rent, not buy! Imagine that! Once upon a time, that apartment of mine was something like $190 per month! And with that in mind, let TomDispatch regular Rebecca Gordon fill you in on rent madness in twenty-first-century America. Tom

Don’t Try to Find a Home in Washington, D.C. Or Pretty Much Anywhere Else If You’re a Renter

In 1937, the American folklorist Alan Lomax invited Louisiana folksinger Huddie Ledbetter (better known as Lead Belly) to record some of his songs for the Library of Congress in Washington, D.C. Lead Belly and his wife Martha searched in vain for a place to spend a few nights nearby. But they were Black and no hotel would give them shelter, nor would any Black landlord let them in, because they were accompanied by Lomax, who was white. A white friend of Lomax’s finally agreed to put them up, although his landlord screamed abuse at him and threatened to call the police.

In response to this encounter with D.C.’s Jim Crow laws, Lead Belly wrote a song, “The Bourgeois Blues,” recounting his and Martha’s humiliation and warning Blacks to avoid the capital if they were looking for a place to live. The chorus goes,

Lord, in a bourgeois town
It’s a bourgeois town
I got the bourgeois blues
Gonna spread the news all around

And one verse adds,

I want to tell all the colored people to listen to me
Don’t ever try to get a home in Washington, D.C.
‘Cause it’s a bourgeois town

Such affronts, Lead Belly sang, occurred in the “home of the brave, land of the free,” where he didn’t want “to be mistreated by no bourgeoisie.”

There are music scholars who believe that Lead Belly didn’t really understand what “bourgeois” meant. They claim Lomax, later accused of being a Communist “fellow traveler,” provided him with that addition to his vocabulary and he simply understood it as a synonym for “racist.” Personally, I think that, in a few deft verses, Lead Belly managed to show how racism and class stratification merged to make it all but impossible to find a home in Washington, as in so many other places in America.

Still a Bourgeois Town

In the late 1970s, after a period of unemployment, my mother got a job for a year in Washington. We’d lived there while I was growing up, but she hadn’t been back for almost a decade. She was a white middle-class professional and it was still hell finding an affordable place to rent. (She’d been without a job for more than a year.) It would be some time before credit ratings would be formalized, thanks to the financial corporation FICO, producing a model of a standardized credit score for anyone. But her prospective landlords had other ways of checking on her creditworthiness. That she was a divorced woman with no rental history and no recent jobs didn’t make things easy.

Still, she had her sense of humor. One day during that search, she mailed me an old 45 rpm recording of Lead Belly’s “Bourgeois Blues.” It seemed to perfectly catch her frustrated efforts to escape a friend’s guest room before she wore out her welcome.

I was reminded of that record recently when I read about the travails of Maxwell Alejandro Frost, a new Democratic congressman from Orlando, Florida. Born in 1996, he’s the youngest member of the House of Representatives. He quit his full-time job to campaign for Congress, supporting himself by driving an Uber. When he tried to find a home in Washington, his application for a studio apartment was rejected because of a bad credit score. As Frost tweeted:

Just applied to an apartment in DC where I told the guy that my credit was really bad. He said I’d be fine. Got denied, lost the apartment, and the application fee. This ain’t meant for people who don’t already have money.

Nor, as Lead Belly might have added, for people like Frost who are Black.

Washington, D.C., it seems, remains a “bourgeois” town.

The True Costs of Renting

Suppose you want to rent a place to live. What will you need to have put aside just to move in? This depends not only on the monthly rent, but on other fees and upfront payments in the place where you plan to live. And, of course, your credit score.

Application fee: One part of Frost’s story caught my attention: he had to forfeit his “application fee” for an apartment he didn’t get. If, like me, you haven’t rented a house or apartment in a while you might not even know about such fees. They’re meant to cover the cost of a background check on the applicant. You might expect them to be rolled into the rent, but in a seller’s (or renter’s) market, there’s no risk to landlords in making them extra.

Frost’s fee was $50 for one application. (These fees tend to top out around $75.) Not so bad, right? Until you grasp that many potential renters find themselves filing multiple applications — 10 isn’t unheard of — simply to find one place to rent, so you’re potentially talking about hundreds of dollars in fees. California, my own state, is among the few that regulate application fees. The maximum rises to match inflation. In December 2022, that max was $59.67. Some states set a lower maximum, and some don’t regulate the fees at all.

Move-in fees: If you haven’t rented in a while, this one may take you by surprise. Unlike a security deposit, move-in fees are nonrefundable. They’e supposed to cover the costs of preparing a place for a new tenant — everything from installing new locks to replacing appliances and painting. Once subsumed in the monthly rent, today these costs are often passed on directly to renters. Nationally, they average between 30% and 50% of a month’s rent.

In June 2022, the median rent for an apartment in the United States crossed the $2,000 threshold for the first time, which means the median move-in fee now ranges from $600 to $1,000.

First and last months’ rent: This upfront cost should be familiar to anyone who’s ever rented. Landlords almost always require two months’ rent upfront and hold on to the last month’s rent to ensure that a tenant can’t skip out without paying. Because landlords can invest the money they’re holding (and tenants can’t invest what they’ve forked over to landlords), in recent years, most states have required landlords to pay interest on the tenant’s funds.

Security deposit: Unlike the move-in fee, a security deposit — often a month’s rent — is refundable if tenants leave a place in good condition. Its ostensible purpose: to reimburse the landlord for future cleaning and repair costs that exceed normal wear-and-tear. (But wait! Isn’t that what the non-refundable move-in fee should do?)

Other fees: If you’re renting a condo, you may have to cover the owner’s monthly Home Owner Association fees. In some cases, you’ll also pay for a utility’s hookup like gas or electricity.

So, how much will you have to pay to set foot in that apartment? Well, if you’re like Nuala Bishari, a San Francisco Chronicle reporter who recently tried to rent a house in nearby Oakland, California, you’ll need to set aside almost $10,000. If you’re not sure how you could possibly put that kind of money together, the credit score company Experian has some advice for you:

First, “calculate your odds.” Find out how many other people are applying for the unit you’re interested in and, if the competition is stiff, “consider looking elsewhere.” (As if you haven’t done that already!)

Then tighten your belt. “Reducing extraneous expenses,” it observes, “is an easy way to save.” Stop going out to eat, for instance, and look for free family activities. If that’s not enough, it’s time to “get serious about cost cutting.” Their brilliant suggestions include:

• “Cut back on utility use. [Wait! I thought I was supposed to cook more at home. Never mind. I’ll just sit here in the dark.]
• Carpool to work instead of driving. [I take the bus, but maybe I should start walking.]
• Switch to a budget grocery store and look for coupons and sales. [Right! No more Whole Paycheck for me!]
• Join a buy-nothing group.”

Such “advice” to people desperate to find housing would be amusing if it weren’t so desperately insulting.

Rent Is Unaffordable for More Than Half the Country

Suppose you’ve managed to get together your up-front costs. What can you expect to pay each month? The federal Department of Housing and Urban Development considers housing affordable when rent takes no more than 30% of an individual’s or family’s monthly income. Human Rights Watch (!) reported in December 2022 that the Census Bureau’s 2021 Annual Community Survey revealed a little over half of all renters are spending more than 30% of their income that way — and in many cases, significantly more.

It tells you something that Human Rights Watch is concerned about housing costs in this country. The National Low Income Housing Coalition (NLIHC) put its data in perspective through what it calls a “Housing Wage”: the hourly rate you’d need to make working 40 hours a week to afford to rent a place in a specific area. For many Americans, housing, they report, is simply “out of reach.”

In 2022, a full-time worker needs to earn an hourly wage of $25.82 on average to afford a modest, two-bedroom rental home in the U.S. This Housing Wage for a two-bedroom home is $18.57 higher than the federal minimum wage of $7.25. In 11 states and the District of Columbia, the two-bedroom Housing Wage is more than $25.00 per hour. A full-time worker needs to earn an hourly wage of $21.25 on average in order to afford a modest one-bedroom rental home in the U.S.

Unfortunately, many people don’t earn $21.25 an hour, which is why they hold two or three jobs, or add Uber or Door Dash shifts to their other work. It’s hardest for minimum wage workers. As the NLIHC observes, “In no state can a person working full-time at the prevailing federal, state, or county minimum wage afford a two-bedroom apartment at the [fair market rate].” Furthermore, “in only 274 counties out of more than 3,000 nationwide can a full-time worker earning the minimum wage afford a one-bedroom rental home at the [fair market rate].”

For people living at or below the poverty line, the situation is even direr, which is why so many end up unhoused, whether by couch-surfing among friends and family or pitching a tent on the street.

In the coming months, the situation is only expected to worsen now that pandemic-era eviction moratoriums and the $46.5 billion federal Emergency Rental Assistance Program are expiring. According to the Pew Research Center, those programs prevented more than a million people from being evicted.

It Wasn’t Always This Way

People have always experienced poverty, but in the United States, the poor have not always gone without housing. Yes, they lived in tenements or, if they were men down on their luck, in single-room occupancy hotels. And yes, the conditions were often horrible, but at least they spent their nights indoors.

Indeed, the routine presence of significant populations of the urban unhoused on this country’s city streets goes back only about four decades. When I moved to the San Francisco Bay Area in 1982, there was a community of about 400 people living in or near People’s Park in Berkeley. Known as the Berkeley Beggars, they were considered a complete oddity, a hangover of burnt-out hippies from the 1960s.

During President Ronald Reagan’s administration, however, a number of factors combined to create a semi-permanent class of the unhoused in this country: high-interest rates implemented by the Federal Reserve’s inflation fight drove up the cost of mortgages; a corruption scandal destroyed many savings and loan institutions from which middle-income people had long secured home mortgages; labor unions came under sustained attack, even by the federal government; and real wages (adjusted for inflation) plateaued.

Declaring that government was the problem, not the solution, Reagan began a four-decade-long Republican quest to dismantle the New Deal social-safety net implemented under President Franklin Delano Roosevelt and supplemented under President Lyndon Johnson. Reagan savaged poverty-reduction programs like Food Stamps and Medicaid, while throwing more than 300,000 people with disabilities off Social Security. Democrat Bill Clinton followed up, joining with Republicans to weaken Aid to Families with Dependent Children (“welfare”).

A decade earlier, scandal-ridden state asylums for the mentally ill began to be shut down all over the country. In the late 1960s, Reagan had led that effort in California when he was governor. While hundreds of thousands were freed from a form of incarceration, they also instantly lost their housing. (On a personal note, this is why, in 1990, my mother found herself living in unsupervised subsidized housing for a population of frail elderly and recently de-institutionalized people with mental illnesses. This wasn’t a good combination.)

By the turn of the century, a permanent cohort of people without housing had come to seem a natural part of American life.

And It Doesn’t Have to Be Like This Forever

There is no single solution to the growing problem of unaffordable housing, but with political will and organizing action at the local, state, and federal levels it could be dealt with. In addition to the obvious — building more housing — here are a few modest suggestions:

At the state and local level:

• Raise minimum wages to reflect the prevailing cost of living.
• Remove zoning restrictions on the construction of multifamily buildings.
• Pass rent-control ordinances, so rents rise no faster than the consumer price index.
• Pass limits on up-front rental and move-in fees.
• Pass legislation to prevent no-cause evictions.
• Pass legislation, as California has already done, to allow renters to report their on-time rent payments to credit bureaus, allowing them to boost their credit scores without borrowing money.

At the federal level:

• Raise the federal minimum wage, which, even in this era of inflation, has been stuck at $7.25 an hour since 2009.
• Increase funding for SNAP, the present food-stamp program (whose pandemic-era increases have just expired).
• Increase federal funding for public housing.
• Provide universal healthcare, ideally in the form of Medicare for all.
• Increase “Section 8” housing subsidies for low-income renters.
• Raise taxes on the wealthy to fund such changes.
• Finally, shift part — say one-third — of the bloated “defense” budget (up $80 billion from last year to $858 billion in 2023) to programs that actually contribute to national security — the daily financial security of the people who live in this nation.

Then maybe the next time we send new people to Congress, all of them will be able to find a home in Washington, D.C.

Southeast Dekalb County, Georgia—Belkis Terán raised her arms wide to welcome the rain now pounding hard over the newly thatched pavilion in the parking lot of the “Weelaunee People’s Park,” a space once known to residents of Atlanta and Southeast DeKalb County as Intrenchment Creek Park.

Long before settlers dubbed the South branch of the Ocmulgee River here as simply the “South River,” the Mvskoke tribe, who were forcibly relocated from this area to Oklahoma during the Trail of Tears in the 1830s, called the river Weelaunee, the tribal word for “green/brown/yellow water.” More recently, the forested watershed has been called “the lungs of Atlanta” for its role in sequestering carbon emissions and providing the greatest amount of tree canopy shade of any urban area in the country.

Now, almost 200 years later, Mvskoke spiritual leaders have returned to their homelands once again to stand beside Terán, who flew here from Panama, as she eulogized her son, Manuel Esteban Paez Terán. To most witnessing the vigil, Esteban Paez Terán was known by their chosen “forest name” of “Tortuguita” (“Tort” for short), intended in part to shield their identity from ever-present state surveillance of their efforts to protect the Weelaunee’s sweetgum and boxelder trees. While the name, meaning “little turtle,” has helped shield their legacy, it ultimately couldn’t protect their life.

Police shot and killed Tortuguita in their tent on January 18 during a violent raid on a distributed encampment here that has sought to blockade construction of what “Forest Defenders” like Tort have dubbed “Cop City,” an 85-acre, $90 million police militarization and training complex spearheaded by the Atlanta Police Foundation (APF). If built, the compound would be one of the largest police training facilities in the country, featuring several shooting ranges, a helicopter landing base, an area for explosives training, and an entire mock city for officers to game out tactics to suppress protests and uprisings.

Belkis Terán, mother of slain Forest Defender Tortuguita, spreads the activist’s ashes at the site of their police-perpetrated murder in the Weelaunee Forest in Southeast DeKalb County on March 12, 2023. Photo by Candice Bernd via Trtuhout.

“This [land] is sacred because we make it sacred,” Belkis Terán told huddled-together Forest Defenders after sprinkling Tort’s ashes at the site of the activist’s killing. “We hope that the government understands that. Shame for them if they don’t understand that, but we declare this land sacred. It’s already been declared for a long time. I’m just continuing [to pass] the torch.”

In contrast to its tumultuous start, Sunday’s vigil and ceremony provided a somber and heartfelt close to the fifth “week of action” against the planned training compound local organizers and Forest Defenders here have hosted since they first learned of the plan in 2021.

“This [land] is sacred because we make it sacred. We hope that the government understands that. Shame for them if they don’t understand that, but we declare this land sacred. It’s already been declared for a long time. I’m just continuing [to pass] the torch.”

Belkis Terán, mother of slain forest defender tortuguita

The Terán family laid Tort to rest in the woods they gave their life to defend, becoming the first environmental activist to be killed on U.S. soil while protesting. The ceremony was held a day before the family briefed the public on the results of an independent autopsy commissioned by family showing the Forest Defender had bullet-exit wounds in both hands. The autopsy determined Tort had been sitting “crossed-legged, with the left leg partially over the right leg,” with their palms up and facing inward when they were killed by a Georgia State Patrol SWAT team, who are not required to wear body cameras.

The Georgia Bureau of Investigation initially said Tortuguita was killed after allegedly firing a gun and injuring a Georgia state trooper. The independent autopsy showed Tort was shot at least 14 times by multiple handguns and shotguns. While the report indicated that it was impossible to tell whether Tort had been holding a firearm at the time of the shooting, it determined that Tort’s body did not show evidence of gunpowder soot or residue that would be consistent with their firing a weapon at officers. Still, the report noted the “unlikely” possibility that such evidence may have been from the body during the first autopsy.

The autopsy’s findings add to questions already raised by body-worn camera video released by the Atlanta Police Department (APD) from a unit of officers who were not directly involved in the shooting. The video shows officers in the initial moments after the shooting suggesting that the Georgia state trooper Tort allegedly shot was instead shot by friendly fire — something Forest Defenders alleged from the beginning.

Tortuguita’s parents, Belkis Terán and Joel Paez, carefully prepare the slain activist’s ashes prior to being spread throughout the Weelaunee Forest on March 12, 2023. Photo by Candice Bernd via Truthout.

For those who have vowed to remain dug in here, Tort’s remains add a deeply meaningful layer to the intentional space this community of decentralized activists has built together over the past two years.

In the camp’s photo-restricted central hub, called the “living room,” you’ll find them singing folk songs, giving poetry sessions and doing impromptu comedy routines in between morning and evening meetings. Elsewhere in the woods, you can find them planting fruit and nut trees, doing yoga and building new infrastructure, even as police helicopters circle above the treetops.

Activists say the camp is maintaining a defensive posture in the face of ever-increasing police repression in both the forest and downtown Atlanta, including a March 5 mass arrest that swept up 23 people attending a music festival on felony domestic terrorism charges carrying up to 35 years in prison.

Unprecedented Repression

During the week of action’s opening weekend on March 5, a subset of activists allegedly broke off from a large field in the park hosting a protest-themed music festival and set equipment at a Cop City construction site on fire. Some also allegedly hurled fireworks and Molotovs at police. Law enforcement, failing to apprehend specific individuals at the site itself, indiscriminately targeted the music festival, pouring into the field, campgrounds and parking lot with weapons drawn. They issued commands, chased people down and threatened to shoot and arrest festival attendees, according to Truthout contributor Frances Madeson, who was on the scene.

The police detained 35 festivalgoers and charged 23 with domestic terrorism, the majority of whom, organizers say, were targeted with the charges simply for being from out of state. Just two people were from Georgia, including one legal observer with the Southern Poverty Law Center who was the only person to be granted bond by a local judge.

The March 5 mass arrest touched off an unparalleled wave of police repression throughout the following week in downtown Atlanta and Southeast DeKalb County, where the park and proposed Cop City site are located. Police deliberately targeted First Amendment-protected activity by activists, legal observers and journalists — including me.

On March 10, I followed and documented a group of about a dozen activists in downtown Atlanta as they demonstrated at local offices of organizations connected to Cop City or officials empowered to stop the project. The group, led by veteran direct action organizer Lisa Fithian, visited and attempted to get meetings at the offices of Atlanta Beltline, on whose board sits Atlanta Mayor Andre Dickens; BoardWalk Consulting, which advises the Atlanta Police Foundation; and the Atlanta Hawks, whose owner, Tony Ressler, donated at least $1 million to the APF.

Direct action trainer and activist Lisa Fithian watches an Atlanta Police Department vehicle circle her and a small group of protesters as they visited offices of Cop City donors and supporters in downtown Atlanta, Georgia, on March 10, 2023. Photo by Candice Bernd via Truthout.

An extremely disproportionate police presence stalked the traveling protest at each of the stops, with at least two full vans of police and constantly circling APD vehicles hounding the group’s every move. The group then headed to the Peachtree Center, which houses the Atlanta Regional Center where Mvskoke leaders attempted to deliver an eviction notice to Mayor Dickens on March 8. At least five APD officers followed the group into the center. At that point, the group decided to disperse.

I left with a group of six people. Three folks broke off from us, but police continued to stalk me and two others as we made our way back to the car. We passed what appeared to be a plain-clothes police officer with an ear piece who flashed an “OK” hand sign at us, a well-known white supremacist hate symbol. A full van-load of police pulled up alongside us and even impeded traffic while we stopped to huddle about our predicament.

We proceeded to the car. Several APD vehicles followed our vehicle as we attempted to leave downtown. They stopped us. I documented what happened next on a Twitter thread and livestream. My friend was ticketed for allegedly not maintaining her lane and for her physical license being expired (though the license was technically renewed). That we were let go I can only attribute to the thread and livestream going semi-viral during the stop itself.

Three Atlanta Police Department vehicles circle a group of a dozen activists protesting at the local offices of Cop City donors and supporters in downtown Atlanta, Georgia, on March 10, 2023. Photo by Candice Bernd via Truthout.

Our experience was just a small taste of the heavy-handed repression against First Amendment-protected activity throughout last week. On March 11, police raided the six-acre property of the Lakewood Environmental Arts Foundation (LEAF), a nonprofit community food-distribution center based out of the owner’s house. The LEAF property had been serving as a welcome center and medic hub during the week of action, and the organization’s property was used as a secondary encampment site for activists who obtained permission.

APD and Homeland Security officers entered the property with AR-15s and detained at least 22 people. They reportedly refused to provide an arrest warrant, saying it was offsite. One person was arrested for an outstanding parking ticket, demonstrating the state’s desperation to snatch up anyone associated with the “Stop Cop City” movement. Officers ruthlessly ransacked infrastructure at the LEAF encampment site, disrupting medic operations.

Earlier in the week, another small group of about 15 people gathered downtown to hand out flyers explaining their opposition to the proposed police training center. Police responded with more than 50 officers and a SWAT team.

Forest Defender “Taylor” described their experience being detained by police on the morning of March 7 after they and another activist hung a “Stop Cop City” banner on an overpass in Atlanta. The two were stopped by an APD officer who told them someone had called in a suicide attempt. (The activists had scaled a tall fence on the overpass in order to hang the banner.)

The cop, Taylor said, hadn’t looked at the banner, and the encounter was deescalated until a second officer showed up and read the banner. That officer then returned to their car and got on the radio, Taylor told Truthout. Soon, four more APD vehicles arrived. The cops huddled and then told the Forest Defenders that they were being detained but not arrested. The police ordered the two activists to turn off their phones, Taylor said, and told them they were to be searched and brought to a local precinct for an interview with Homeland Security.

Banners at the site of a former tree-sit in the Weelaunee Forest in Southeast DeKalb County, Georgia. Photo by Candice Bernd via Truthout.

Taylor said the two were at the precinct in separate interrogation rooms for about four hours. When police came into their interrogation room, Taylor said an officer was intentionally vague about which specific police agency they worked for, telling Taylor only that they were “Georgia police.”

“I can’t be sure that it was actually Homeland Security that talked to us, and that they weren’t just some state-level investigators. But, for sure, the cop that told us we were being detained said Homeland Security wanted to talk to us,” they said. Taylor refused to answer officers’ questions and had to sign a document confirming their noncooperation.

“My impression is, if the banner we were hanging had been about a separate issue unrelated to Cop City or police violence — if it had been about abortion access, for instance, or something that’s political but not about the cops — I have a lot of doubt that they would have made an incident out of it.”

Forest Defender “Taylor” 

Later, another officer came into the room with a personal cellphone and closely photographed Taylor from every possible angle, they said. Police then released them with a traffic citation for creating hazardous conditions in a roadway. “My impression is, if the banner we were hanging had been about a separate issue unrelated to Cop City or police violence — if it had been about abortion access, for instance, or something that’s political but not about the cops — I have a lot of doubt that they would have made an incident out of it,” Taylor said.

Even with all the repressive tactics being thrown at activists, legal observers and journalists last week, Forest Defenders say they are more worried about what might be coming down the pipe this week — especially as activists and journalists who traveled to Atlanta for the March 4-11 week of action depart.

Police have cracked down against organizers after previous weeks of action, activists say, and some fear rumors that prosecutors are planning on releasing indictments charging them as a “criminal organization” under Racketeer Influenced and Corrupt Organizations (RICO) Act statutes could manifest this week, adding salt on the wound of the 41 total domestic terrorism charges faced by “Stop Cop City” activists and festival bystanders after March 5.

Challenging Police Narratives

Back in the Weelaunee Forest, activists are maintaining a sense of joy and community even while adapting to new levels of repression and an atmosphere of understandable apprehension in the wake of violent police raids and arrests. On my first visit to the “living room,” one Forest Defender I met explained that they couldn’t sit down for an interview because they were currently on watch, scouting for possible signs of police entering the woods as others chatted and mingled around a communal fire.

As Forest Defender “Jo” puts it, one of the main challenges for the encamped movement is mitigating fear and paranoia in an atmosphere where domestic terrorism charges and potential RICO charges are being employed as a means of intimidation. They told Truthout that Forest Defenders are talking through the importance of nuance when reporting back to the camp about police movements, for instance.

“If you’re reporting on police activity, don’t just be like, ‘Police in the parking lot.’ Is there one cop outside the parking lot? Yeah, we’re not incredibly worried. Are there 30? We’re a little more concerned,” Jo said. “Once people have an analysis about what different kinds of police presence and repression mean, and how they fit into the overarching political situation, then you can make confident decisions and know who to contact for support. So there’s a lot of that work that happens beforehand.”

Civil rights and racial justice activists speak outside a heavily guarded, boarded-up building that houses the Atlanta Police Foundation on March 9, 2023. Photo by Candice Bernd via Truthout.

While Forest Defenders work to maintain necessary operational security and mitigate internal narratives that might drive unnecessary fear, they’re simultaneously working against external, police-driven narratives that seek to divide the movement between Atlanta-based organizers and so-called “outside agitators” police are deliberately targeting with the label of “domestic terrorist.”

The struggle against Cop City, organizers say, is not just a struggle local to the Atlanta area: 43 percent of the training center’s trainees would be from out of state, according to documents shared with the Atlanta Community Press Collective from an open records request. Moreover, Jo noted that police are using their failures to justify an expansion of police infrastructure across the country, pointing to an effort by the Texas Department of Public Safety to justify the approval of a new statewide “active-shooter” law enforcement academy on the basis of the failed police intervention in the Uvalde school shooting.

“If you want to produce an ‘outside-agitators’ narrative, you separate people by their residency and arrest the people who are from out of town, which implies that the movement is not local.”

Forest Defender “Jo” 

“[The police] are trying to really push this ‘outside agitator’ narrative, but because it doesn’t reflect reality, like many things police say, it has to be produced,” Jo tells Truthout. “So, how do you determine who’s part of a movement except to start arresting people? If you want to produce an ‘outside-agitators’ narrative, you separate people by their residency and arrest the people who are from out of town, which implies that the movement is not local.”

The same goes, Jo says, for attempts to divide the movement based on tactic, with narratives that attempt to separate so-called “peaceful” protesters from those who engage in nonviolent property destruction. Jo cited a September 2021 demonstration in the park that didn’t involve direct action tactics but still resulted in arrests.

“In law enforcement’s effort to create this wedge, they also undo their own narrative,” they said. “Forest Defenders actually want peace. We want to do yoga in the forest. We want to cook for each other and clean together and do poetry readings.”

A Walk in Weelaunee

Rejecting the false divide between local and nonlocal activists, Atlanta-based Forest Defender “Morgan” told Truthout they have helped to set up much of the camp infrastructure that now supports activists of all stripes and backgrounds working in the Weelaunee Forest. They spent at least one night occupying a tree platform between the “living room” and the open field where the music festival was held before police tore the platforms down during previous raids.

Morgan walked me down to the creek which separates park land from the Old Atlanta Prison Farm, a complex of farms sold in a land lottery to a chattel slave plantation where the planned police compound is being built. The site became a city-operated prison and dairy farm where incarcerated people were forced to grow crops and raise livestock to feed the populations of other city prisons from about 1920 to 1989, according to the Atlanta Community Press Collective. Today, the area continues to host a shooting range, juvenile detention facility and the Helms state prison. Gunshots from the shooting range echo across the park at regular intervals.

What still remains of a satellite camp formerly known as “Space Camp” in the Weelaunee Forest in Southeast DeKalb County, Georgia. Police raided the encampment on December 13, slashing water storage containers and ransacking camp infrastructure. Photo by Candice Bernd via Truthout.

Forest Defenders say this history of the land, which includes the Mvskoke people’s forced removal in the 19th century, sheds important light on Cop City’s intersecting social and environmental injustices: Not only is the Weelaunee Forest and watershed one of Atlanta’s most important defenses in the face of the worsening climate crisis, it’s also long been the site of racist displacement, enslavement and carceral subjugation.

We continued walking along the creek until we got close to the site of the other, much less publicized development project currently threatening the forest: In 2020, the widely loathed private developer and former owner of Blackhall Studios, Ryan Millsap, made a deal with DeKalb County to swap 40 acres of park land here for another piece of land nearby. That deal is on hold due to a local environmental group’s lawsuit, but Forest Defenders told Truthout Millsap was personally present when contractors working on his behalf tore up the park’s paved parking lot and destroyed the original gazebo structure there. Activists recently rebuilt a larger structure that became the first site of Tort’s vigil.

Forest Defenders constructed a new, larger pavilion after contractors working for private developer Ryan Millsap destroyed the paved parking lot and former gazebo at the Weelaunee People’s Park entrance in Southeast DeKalb County, Georgia. Photo by Candice Bernd via Truthout.

Morgan told Truthout that, as a local Forest Defender, they feel betrayed by city officials in regard to both development projects. They criticized city and county leaders who claim to care about alleviating the pressures of gentrification in an area that has one of the widest income inequality gaps in the country. They condemned the Atlanta City Council for overriding as much as 70 percent of 1,100 constituents who expressed opposition to the compound during the approval process for the project in 2021. Black working-class communities who live near the proposed site in unincorporated DeKalb County also vocally oppose the project.

“I think the elected officials have completely ignored our voices and are choosing to follow corporate donations that are influencing the APF.”

Atlanta-based Forest Defender “Morgan” 

“I think the elected officials have completely ignored our voices and are choosing to follow corporate donations that are influencing the APF,” Morgan told Truthout.

Another inflection point in the struggle may come as early as next month, when the DeKalb County Zoning Board of Appeals could rule on the merits of an appeal of the project’s land disturbance permit by a member of its own advisory committee. The appeal argues the county improperly issued the permit because the project’s construction would violate the Clean Water Act. The Board is set to have a hearing on the issue April 12, and has 60 days to issue a ruling.

“What’s happening here will help determine the terrain for struggles to come. It will help define both what’s possible and what future repression will look like because law enforcement agencies and the courts are … trying to figure out how they can stop movements, and we have to fight on all fronts,” Jo said.

*All Forest Defenders are referred to with pseudonyms and “they/them” pronouns in order to protect their identity amid heavy police surveillance and repression of the “Stop Cop City” movement.

The Next Bomb to Go Off in the Banking Crisis Will Be Derivatives

By Pam Martens and Russ Martens: March 16, 2023 ~ U.S. Treasury Secretary Janet Yellen finds herself in a very dubious position. Under the Dodd-Frank financial reform legislation of 2010, the U.S. Treasury Secretary was given increased powers to oversee financial stability in the U.S. banking system. This increase in power came in response to the 2008 financial crisis – the worst financial collapse since the Great Depression. The legislation made the Treasury Secretary the Chair of the newly created Financial Stability Oversight Council (F-SOC), whose meetings include the heads of all of the federal agencies that supervise banks and trading on Wall Street. The legislation also required the Treasury Secretary’s authorization before the Federal Reserve could create any more of those $29 trillion emergency bailout programs for the mega banks – which had tethered themselves to casino trading on Wall Street since the repeal of the Glass-Steagall Act in 1999. … Continue reading →

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From Axios to the New York Times, Republicans make their presence felt in newsrooms

As I write, US regional banks stock and bond prices are diving.  And a major international Swiss bank, Credit Suisse, is close to bankruptcy.  A financial crisis not seen since the global financial crash of 2008 appears to be unfolding.  What will be the response of the monetary and financial authorities?

Back in 1928, the then US treasury secretary and banker Andrew Mellon pushed for higher interest rates in order to control inflation and credit fuelled stock market speculation.  At his bequest, the Federal Reserve Board began raising interest rates and in August 1929 the Fed banged up the rate to a new high.  Just two months later in October 1929, the New York Stock Exchange suffered the worst crash in its history in what was called “Black Tuesday“.  History repeats.

In 1929 Mellon was undeterred.  He advised the then president Hoover to “liquidate labor, liquidate stocks, liquidate farmers, liquidate real estate… it will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up from less competent people.” Additionally, he advocated the weeding out of “weak” banks as a harsh but necessary prerequisite to the recovery of the banking system. This “weeding out” would be accomplished through refusing to lend cash to banks (taking loans and other investments as collateral) and by refusing to put more cash in circulation.  The Great Depression of the 1930s followed a major banking crash.

In 2008, when the global financial crash unfolded, at first the authorities aimed at something similar.  They allowed investment bank Bear Stearns to go under.  But then came another, Lehman Bros.  The Federal Reserve dithered and finally decided not to save it with a bailout of credit.  What followed was an almighty crash in stocks and other financial assets and a deep recession, the Great Recession.  Fed chair Ben Bernanke at the time was supposedly a scholar of the Great Depression of the 1930s and yet he agreed for the bank to fail.  Subsequently, he recognized that as ‘lender of last resort, the job of the Fed was to avoid such collapses, particularly for those banks that are ‘too big to fail’ which would only spread the busts across the whole financial system.

It’s clear that now governments and monetary authorities want to avoid ‘liquidate, liquidate’ and the Lehmans crash, even if such a policy would clear away the ‘dead wood’ and “rotteness of the system” for a new day.  Politically, it would be disastrous for governments presiding over yet another banking collapse; and economically, it would probably trigger a new and deep slump.  So it’s better to ‘print more money’ to bail out the banks’ depositors and bond holders and avert financial contagion – the banking system being so interconnected. 

That’s what the authorities eventually did in 2008-9 and that it what they will do this time too.  Officials were initially unsure about rescuing Silicon Valley Bank. They quickly changed their minds after signs of nascent bank runs across the US.  Interviews with officials involved or close to the discussions paint a picture of a frenzied 72 hours.  Credit Suisse too is likely to get similar financial support.

There are supporters of Mellon’s approach today and they still have a point.  Ken Griffin, founder of a large hedge fund Citadel, told the Financial Times that the US government should not have intervened to protect all SVB depositors.  He went on: “The US is supposed to be a capitalist economy, and that’s breaking down before our eyes…There’s been a loss of financial discipline with the government bailing out depositors in full.” Griffin added.  We can’t have “moral hazard,” he said. “Losses to depositors would have been immaterial, and it would have driven home the point that risk management is essential.”

Moral hazard is a term used to describe when banks and companies reckon that they can always get money or credit from somewhere including the government.  So if they make reckless speculations that go wrong, it does not matter.  They will get bailed out.  As Mellon might have put it: it’s immoral. 

The other side of the argument is that banks that get into trouble should not mean that those who deposit their cash with them should not lose it through no fault of their own.  So governments must intervene to save the depositors.  And they too have a point.  As another hedge fund billionaire, Bill Ackman, put it when the SVB collapse emerged, the Federal Deposit Insurance Corporation must “explicitly guarantee all deposits now” because “our economy will not function nor our community and regional banking system”.  Mark Cuban expressed frustration with the FDIC insurance cap that guarantees up to $250,000 in a bank account as being “too low”; he also insisted the Federal Reserve buy up all of SVB’s assets and liabilities. Rep. Eric Swalwell, a California Democrat, joined the chorus, tweeting that “We must make sure all deposits exceeding the FDIC $250k limit are honored.”

The irony here is that those demanding bailouts now are the very venture capitalists who usually stand firmly for the ‘free market and no government intervention’.  Another bailout supporter is one Sacks, a longtime associate of investor Peter Thiel, who fervently believes in ‘free markets’ and in ‘capitalism’. But it was Thiel’s Founders Fund that helped kick off the bank run that sank SVB in the first place.

FT columnist Martin Wolf explained the dilemma.  “Banks fail. When they do, those who stand to lose scream for a state rescue.”  The dilemma is that “if the threatened costs are big enough, they will succeed. This is how, crisis by crisis, we have created a banking sector that is in theory private, but in practice a ward of the state. The latter in turn attempts to curb the desire of shareholders and management to exploit the safety nets they enjoy. The result is a system that is essential to the functioning of the market economy but does not operate in accordance with its rules.”  So it’s moral hazard because the alternative is Armageddon.  As Wolf concludes: “it’s a mess.”

So what’s the solution offered to avoid these continual banking messes?  Liberal economist Joseph Stiglitz tells us that “SVB represents more than the failure of a single bank. It is emblematic of deep failures in the conduct of both regulatory and monetary policy. Like the 2008 crisis, it was predictable and predicted.” But having told us that regulation was not working, Stiglitz argues that what we need is more and stricter regulation! “We need stricter regulation, to ensure that all banks are safe.”  Well, how’s that worked up to now?

Nobody has anything to say for public ownership of the banks; nothing about making banking a public service and not a vast sector of reckless speculation for profit. SVB collapsed because its owners bet on rising government bond prices and low interest rates to boost their profits. But it went pear-shaped and now other bank customers will pay for this in increased fees and losses for the Federal Reserve – and there will lees funding of productive investment to pay for yet another banking mess.

This is what I said 13 years ago: “The answer to avoiding another financial collapse is not just more regulation (even if it was not watered down as the Basel III rules have been). Bankers will find new ways of losing our money by gambling with it to make profits for their capitalist owners. In the financial crisis of 2008-9, it was the purchase of ‘subprime mortgages’ wrapped up into weird financial packages called mortgage backed securities and collateralised debt obligations, hidden off the balance sheets of the banks, which nobody, including the banks, understood. Next time it will be something else. In the desperate search for profit and greed, there are no Promethean bounds on financial trickery.”

Let us return to the dilemma of choosing between ‘moral hazard’ and ‘liquidation’.  As Mellon said, by liquidating the failures, even if it means a slump, that is a necessary process for capitalism.  It’s a process of ‘creative destruction,’ as 1930s economist Joseph Schumpeter described it.  Liquidation and the destruction of capital values (along with mass unemployment) can lay the basis for a ‘leaner and fitter’ capitalism able to renew itself for more exploitation and accumulation based on higher profitability for those that survive the destruction.

But times have changed.  It has become increasingly difficult for the strategists of capital: the monetary authorities and governments to consider liquidation.  Instead ‘moral hazard’ is only option to avoid a major slump and political disaster for incumbent governments.  But bailouts and a new wound of liquidity injections would not only completely reverse the vain attempts of the monetary authorities to control still high inflation rates.  It also means the continuation of low profitability, low investment and productivity growth in economies unable to escape from their zombie state.  Just more long depression.

Credit Suisse stock had its largest one-day selloff to date on Wednesday.

NurPhoto/Getty Images

• JPMorgan Asset Management’s CIO predicts more pain ahead for the banking sector and the economy.
• Turmoil at Credit Suisse is just the “tip of the iceberg,” JPMorgan’s Bob Michele told Bloomberg.
• Michele says a recession is “inevitable” as panic ripples through markets. 

JPMorgan Asset Management Chief Investment Officer says the contagion that’s gripped the global banking sector has just begun as turmoil erupts at Credit Suisse on the heels of the largest US bank failure since 2008. 

“You’re going to get those long and variable, cumulative and lagged impacts hitting the market further. I think this is the tip of the iceberg,” Bob Michele said on Bloomberg TV Wednesday.

Michele added: “I think there’s a lot more consolidation to come, a lot more pain yet to come.”

Credit Suisse shares shed as much as 30% on Wednesday as waning investor confidence in the bank ws sparked by one of the bank’s largest shareholders stating that it would not lend any further financial support. Shares of Credit Suisse endured their largest single-day selloff Wednesday. 

The volatility follows the collapse of Silicon Valley Bank, the second-largest US bank failure ever. Add that that the closure of Signature Bank by regulators and the wind down of Silvergate Bank, and investors are bracing for a full-blown crisis in the sector. 

The JPMorgan exec says a recession is “inevitable” as panic ripples through the banking world, adding that the Federal Reserve will mostly likely pause interest rate hikes on concerns that the economy may be too fragile to handle even higher interest rates. 

The market will go through a “washing out process” in the coming months, Michele says, adding that “we expect more problems.”