Why Is It Wednesday? Systemic Corruption, Media Blanket, the IMF and a Bretton Woods Moment

There are cycles in everything.

To every thing there is a season, and a time to every purpose under the heaven

Ecclesiastes 3:1

The above quote is from the Old Testament. Boomers may recall the verse as part of the Byrds 1965 hit "Turn, Turn, Turn."

(Not to belabor the point, but Ecclesiastes is one of the more poignant and instructive books of the Bible. Consider its opening verses (Ecc. 1:2-4):
Vanity of vanities, saith the Preacher, vanity of vanities; all is vanity.
What profit hath a man of all his labour which he taketh under the sun?
One generation passeth away, and another generation cometh: but the earth abideth for ever.)

Economics is full of cyclical examples, as is farming (plant, grow, harvest, dormancy), as are our lives. We work Monday through Friday and take weekends off. We shower in the morning, take rest in the evening, and so forth.

But, why is it always Wednesday? What is at the root of Wednesday in the cyclical patterns of life and economics? Here at Money Daily Wednesday's have generally become the day in which all the angst and frustration and truth and evidence is released. Money doesn't matter. Stocks up or down seem to be of little importance. There are bigger issues and they usually come to light on Wednesdays. So be it.

Today is no different.

About three weeks ago, Michael Burry, the founder and lead investor of Scion Asset Management made famous by the book and movie, "The Big Short" stopped tweeting. His last tweet included this:

"Tweeting and getting in the news lately apparently has caused the SEC to pay us a visit,"

Since then, silence from Mr. Burry, one of the most honest and insightful investors of this era. Let's leave that as food for thought for now.

Shortly after Burry's last tweet (around March 16 or 17), Archegos Capital blows up (here's a timeline, oddly enough on Yahoo! Sports, not Finance) as leveraged investments trigger margin calls on varios media companies, among them, ViacomCBS (VIAC). Since peaking at $100 a share on March 22, shares have been more than halved, the current price is hovering around $44.

That rapid descent in the share price of ViacomCBS is kind of strange, being that the company has had positive earnings with blowout results, beating consensus estimates the past four quarters. Apparently, the company was issuing stock and the sale didn't go well at all. ViacomCBS's stock had fallen 9% on Tuesday as the company marketed the offerings and by Wednesday, after it priced, the stock was down 30% from Monday's high.

Well, maybe that $100 a share price on the exchanges was just a little bit inflated.

At the same time, other Archegos companies were deflating. From March 23 to March 26, Tencent Music Entertainment (TME) dropped nearly in half. Baidu, Inc. (BIDU) also got whacked. Goldman Sachs and Morgan Stanley, backers of Archegos, got out early. other banks, specifically, Nomura ($2 billion in losses) and Credit Suisse, got burned as Archegos went belly up.

Supposedly, on Friday, the 26th, Goldman Sachs sold more than $10.5 billion of shares in ViacomCBS, Baidu Inc and Tencent Music Entertainment Group, among others. Morgan Stanley offloaded $8 billion worth of shares. Deutsche Bank sold $4 billion of shares related to the Archegos swaps in a private deal on Friday, according to "a source."

Obviously, there was some risk partitioning and loss-sharing among these banks. Those stocks had been falling for days. Deutsche Bank has been on the verge of bankruptcy for most of the past decade. Another painful loss could have tipped over the bank and maybe the global financial system, again.

Credit Suisse (CS) is on its knees, having taken a $4.7 billion loss on Archegos and a similar meltdown earlier, Greensill Capital. They fired two executives in relation to the bad trades. Boo-hoo. They'll get millions in severance pay and retire to private islands.

Meanwhile, the banks are not exactly scions of English language usage. Goldman Sachs says their losses are "not material" while Credit Suisse is said to be "well below the standard we have expected." How much did Goldman lose? $40 million, half a billion? More? Peons and muppets will never know. The standards to which Credit Suisse is "expected" are losing only $2 billion in a quarter, perhaps.

Funds blowing up. Banks running for cover. Media in the dark. Sounds all too familiar, doesn't it? People like Michael Burry can't be allowed to comment on such matters. Too dangerous.

Naturally, the media doesn't delve into these matters with any kind of objective journalism or investigation.

Then there's the personification of systemic corruption, Janet Yellen, as acting Secretary of the Treasury, who hates Bitcoin, favors a global minimum corporate tax, and just gave the IMF the green light on increasing reserves (SDRs) by $650 billion, a move which some estimate will cost the United States some $180 billion, though Yellen insists the deal will be a "wash."

Yellen is meeting with finance leaders from various G20 nations this week as the IMF and World Bank conduct their annual meetings. She called the meetings a "Bretton Woods" moment, referencing the 1944 conference which made the US dollar the world's reserve currency. Ironically, the conference and meetings are taking place in Argentina, the epicenter of credit defaults for decades.

Something big is about to come down and it's not likely to be good news for developed nations, though the media will paint the picture in vastly different shades and colors.

Why not? After all, it's Wednesday.

*Post #3011

Here's Max Keiser and Stacy Herbert discussing Archegos, margin calls and Contracts for Difference (CFD). Lawrence Lepard is Max's guest in the second half of the show.

At the Close, Tuesday, April 6, 2021:
Dow: 33,430.24, -96.95 (-0.29%)
NASDAQ: 13,698.38, -7.21 (-0.05%)
S&P 500: 4,073.94, -3.97 (-0.10%)
NYSE: 15,877.96, +7.62 (+0.05%)