Generally some topic comes top of mind each week that I want to learn more about or share in my message. This week I have been deluged with an atmospheric river of thoughts. I won’t share all of them with you. Let me start with, how great is March Madness. I filled out my bracket and already have more losers than winners.  I had Arizona going to the final two against my sentimental favorite Gonzaga. It seems impossible that Arizona could lose in round 1 to Princeton, I should have estimated that it was just very unlikely. Can the Zags get to another final two, the odds are not in their favor. The chance that I could get all the games correct, are 1 in 9,223,372 x 10 to the fourth, if you just flip a coin. If you know a little bit about the game and teams you odds improve to 1 to 120.2 billion. The best verified bracketed correctly picked the first 49 games in 2019. What are the odds?

When it rains it pours as the 1914 Morton Salt logo reminds us. In their case, it meant even in humid weather the salt flowed smoothly from their product. In California this winter it means continuous flooding. As the climate has warmed, a normal climate phenomenon has gone off the rails—in concert with observed Pacific Ocean warming. These water storms are not just happening in our American West but across the globe. I fear we have taken our eye off the global warming focus needed to keep the earth’s temperature at a controllable level.  The Biden administration, who I generally applaud, authorized ConocoPhillips to extract 600 million barrels of oil from Federal lands in Alaska. Maybe naming it the Willow project makes it less of an added threat to global warming. Clean energy is making headway across the Globe but there is much to do to get to zero emissions from last year’s record 40 billion metric tons of carbon emitted. 

Banking took the spotlight this week. SVB experienced a run on the bank as depositors rushed to get their cash out of the bank. No bank carries sufficient cash to honor all deposits in the bank. A bank is required to have a liquidity plan to meet extreme shocks to the interest rates to allow them to expect fluctuations in asset value and prepare for them. Well most banks live within those rules because they make business sense. Role backs to Dodd Frank in 2018, eased guidance and regulations for certain large banks, SVB and their subsidiaries most notably. Rates went up significantly and the bond portfolio values drop as rates increase. Forced to sell those bonds to meet demands, they have lost significant value and did not provide the needed liquidity. A bank failure, that should not have happened.  You can assign blame as you want, however, management knows better, the Board should have been engaged, where were the external auditors, and the  regulators see a quarterly financial report and could have called for action. I guess we will find out more of the details. As a Board member of a community Bank, I am shocked a sophisticated financial institution is the victim of its own practices. They put the entire industry at risk. 

Is anyone else sick of reading about Donald Trump. Seriously, the man is not mentally together. Those who look to him for leadership may be well advised to seek counseling.

I will try to regain my focus by next week.  The Leprechaun’s go crazy in March as well. Happy St Patrick’s Day.  

Enjoy the warming weather.  Mike