If You Owe A Bank $100 That's Your Problem, If You Owe The Bank $100 Mllion That's Their Problem. But If

Anthropic is going to end up owing the Banks $10 Billion, I expect it may become everybody's problem.

Fintech Blueprint:  AI: Banks scramble to lend $10B to Anthropic

Anthropic is asking Wall Street for more than $10B of credit.

Reuters reported that Anthropic is arranging a revolving credit facility expected to exceed $10B ahead of its IPO. The largest banks have reportedly been asked to commit around $1.25B each, second-tier banks around $1B, and others $750MM or less.

What could possibly go wrong?  

Justin You Schmuck: 1984 is Not Supposed To Be A How-To Manual

So it looks like Canada under Trudeau is going all Total Surveillance / Total Control State so fast the banks are having issues.

The Emergencies Act, formerly the War Powers Act has only been invoked twice in Canadian history:  Once under Pierre E. Trudeau in the FLQ crisis in 1970 when Quebec Marxist Separatists committed about 200 bombings,  kidnapped British trade commissioner James Cross and kidnapped and murdered of Quebec cabinet minister Pierre Laporte.  

 Now twenty-two years it is being invoked by his son against peaceful protestors who blow truck horns, blockade traffic, have dances and parties with bouncy-houses and then clean up the area where they've been leaving it cleaner than how they found it.

In short, Trudeau fils is miffed that he wasn't the one shutting down business and movement of Canadians this time.

Using the EA against peaceful protestors is kinda like using a nuclear bomb to swat a fly, and not what it was designed for, but this is what happens when you elect a substitute teacher based on his having some looks that women find attractive and his father's last name.

It's gonna be one heckuva precedent for the next time left-wing demonstrators want to march or protest against a conservative government in Canada, just saying. 

It also appears Justin and friends are messing with the Canadian banking system, trying to seize money or freeze the funds of the trucker protestors. 

There's absolutely no way that's going to go sideways.

No chance of it harming the Canadian banking system,  as people realize what was once a solid, safe, sable and well maintained financial system can have their funds seized or frozen upon government whim, which was just demonstrated when the Big 5 major Canadian banks went offline last night and this morning.

No chance of this leading to actual bloodshed as Ottawa police threaten to take truckers' kids and kill their dogs.

So, anyone still in the mood for an all-digital currency?  or giving governments this kind of power?

That's One Heckuva Security Hole In The Banking System

According to at least one person at Chase security, the ACH pulls were not a result of a breach in my online banking. Now since I;m still not getting a straight answer as to what exactly happened, I’m taking this with a big grain of salt.

Instead, apparently all it takes to pull money from your account via an ACH or online bill pay pull is someone knowing your routing and account and perhaos the name on the account and that's all it takes.

This seems rather nuts that someone can drain your account with just that information and without any authorization from the account itself. As you might imagine, I had no idea this was even possible.

Even better, I try to arrange for an ACH block on withdrawals from the IOLTA account to ensure such a thing never happens again. After all, funds never should leave an IOLTA by ACH - it's either payment for services and thus moved to the operating account once earned, or returned to the client via a check when the representation is over so every cent in that account can be tracked.

Chase has an ACH withdrawal blocking ability, but, well, apparently the IOLTA account isn't one of the preferred types of accounts eligible for such an ACH blocking service. No kidding. One would think a trust account holding other people's money would be given the highest level of security. Not so much. I think finding and then switching to a bank that offers such a service - as a default no less- would be the prudent way to go.

So in short, your bank accounts are just one check away from some neer-do -well (that's putting it politely) taking one of your checks and using the routing and account info on it to illegally pull money form your accounts without your permission.

That seems like one hellacious security hole big enough to drive a wheelbarrow of money through. Oh wait, yes it is indeed one hellacious security hole big enough to drive a wheelbarrow of money through. Dammit.

As Borepatch often says: "Security isn't an afterthought; it isn't thought of at all."

Many Canadian Banknotes Going Bye-Bye After December 31.

2020 has been quite a year.  In addition to everything else. it's a mark of an end of an era as it will lead for the first time to the end of many Canadian banknotes as legal tender.

The Bank of Canada: Upcoming changes to legal tender status for older bank notes

The Canadian government effective January1, 2021 is pulling the legal tender states of the  $1, $2, $25, $500 and $1,000 notes.

The 1,000 dollar note was such a pretty rose color:

Never had one myself, but saw someone once deposit them ahead of me when I was in line, and I was rather impressed when he coolly deposited a stack of them having never seen them before.

This puts my "In Case of Financial Emergency, Break Glass" plan in jeopardy:

All the notes will, at least for now, not lose their value. But, holders will not be able to spend them anywhere they wish, but will need to tender them to the Bank of Canada or other banks that may accept them to get them changed into legal tender.

While Not Violating The Letter Of The PPP Law, It Sure As Heck Destroyed Its Spirit

One of the reasons both the PPP and the Economic Injury Disaster Loan ran out of funds, is the program was too underfunded to begin with to deal with the scope of the problem slamming small businesses in this country, and Nancy Pelosi's refusal to extend them once this became obvious to the politicians without her unrelated priorities being met.

The second reason is because the system got played. For Example - Restaurant Business: While small operations struggle, chains land PPP loans

Why? Well banks certainly found it easier to administer and fund a single large loan to one borrower rather than many small ones, so that's what they focused on. After all, while the loans are guaranteed, they're only going to make about 1% on the transaction, so why work to process thousands of small loans when you can write one big check?

Many banks serving small businesses didn't even get their processing systems up to process small business applications when the program had funds - I'm looking at you Comerica.

So yep, my clients needing 50k which could keep their payrolls and businesses just afloat enough to survive this are told there's no funds available and they are out of options to survive at this point - and they still have to pay their quarterly payroll taxes now, not to mention the rent which is still due.

Meanwhile, the Kennedy Center got a bailout of $25 million specially designated for them outside of the PPP/EIDL program - and laid off most of their workforce, and chain restaurants were able to game the system and got $10-$20 million a piece.

US Regulators Considering Exempting Sovereign Debt From the Volcker Rule

From Bloomberg:

U.S. banking regulators are exploring whether they can exempt sovereign debt from the Dodd-Frank ban on proprietary trading after foreign governments complained that the rule could raise borrowing costs and impede the flow of capital, a person familiar with the talks said.

Five regulatory agencies are taking public comments on a proposed version of the so-called Volcker rule, which was included in the 2010 financial regulatory overhaul to ban deposit-taking banks from trading with their own money.

While foreign government bonds would fall under the rule as proposed, U.S. government debt would be exempt. Officials from Canada, Japan, and the United Kingdom have sent letters to the Treasury Department and regulators saying the measure would harm their ability to raise money
. . . . .
Granting an exemption may have to overcome skepticism in Congress in the midst of the European debt crisis and the probe of MF Global Holdings Ltd (MFGLQ)., which collapsed after making a $6.3 billion bet on European government bonds.

The Volcker Rule is designed (not perfectly mind you but still) to restrict United States banks from making certain kinds of speculative investments that do not benefit their customers and to prevent banks from engaging in high-risk speculation creating an unacceptable level of systemic risk.

Now regulators are strongly considering exempting what has been shown to be quite shaky sovereign debt from the rule and thus open US Banks to some very real system-wide risk.

What could possibly go wrong?

In the wake of Federal banking reform to help defaulters, fees go up for all. Who knew?

Who indeed? Its not like this wasn't a predicted consequence of reducing charges on those who don't pay their credit card bills on time or overdraft their accounts.

The Detroit Free Press: Banks hit customers with higher fees -- and more of them

Well, Prof Todd Zywicki of the Volokh Conspiracy certainly did. He gets one free "I told you so" to everyone that claimed it wouldn't happen. However, that doesn't make the increased fees any more palatable.

As usual with this administration, and Democrats in general, the responsible are stuck with the increased costs and those who are irresponsible are relieved of, or get reduced, consequences for their actions as everyone pays for their failings.

Update: A similar and thoughtful post from The Blogprof: Thank a Democrat: Banks hit customers with higher fees -- and more of them because of increased government regulations