![]() My Bloody Valentine's album Loveless (1991) is often seen as the genre's defining release other prominent shoegaze groups include Slowdive, Ride, Lush, Pale Saints, and Chapterhouse. The name comes from the heavy use of effects pedals, as the performers were often looking down at their pedals during concerts. It emerged in Ireland and the United Kingdom in the late 1980s among neo-psychedelic groups who usually stood motionless during live performances in a detached, non-confrontational state. Shoegaze (originally called shoegazing and sometimes conflated with " dream pop") is a subgenre of indie and alternative rock characterized by its ethereal mixture of obscured vocals, guitar distortion and effects, feedback, and overwhelming volume. By mid-2022, the Consumer Price Index rose by 9 percent year over year causing acute suffering for Americans, particularly the poor, who had to pay much more for the basic necessities of life.Music subgenre of indie and alternative rock Shoegaze ![]() But more ominously, the effects of inflation on consumer prices, which had been held in check for more than 15 years by a boom in cheap imports, finally arrived in earnest. This led to 2021, one of the most recklessly distorted years of market history where worthless companies and cryptocurrencies skyrocketed in value. The Fed put rates back at zero and injected $3 trillion of printed cash into the economy. In 2020 the COVID crisis caused Washington to unleash an even bigger wave of fiscal and monetary stimuli. But the modest hikes in 20 were sufficient to spark a mini crisis in the stock and bond markets and forced the Fed to abandon further tightening. Eventually the Fed had to raise rates from zero to counter the obvious distortions that had arisen. These twin streams of monetary and fiscal stimuli led to nearly a decade of unprecedented gains in stocks, bonds, and real estate. Tarullo: Was Silicon Valley Bank really too big to fail? ![]() That crash led the government to guarantee bank losses, and cut rates to zero. When it did, home prices fell, financial risk was exposed, and bankruptcies and bank runs soon followed. But the resulting housing bubble eventually led the Fed to raise rates sharply in 20. These ultra low rates succeeded in igniting a housing bubble, which was inflated even further when the federal government enacted a slate of new programs that made it easier for less qualified buyers to get mortgages. ![]() The seeds were sown in 20 when the Fed cut interest rates to 1 percent in order to ease the economic hangover that followed the collapse of the dotcom bubble. The crisis did not begin last week, or last year, or with the response to the COVID-19 pandemic. But if the Fed persists in raising rates to combat the highest inflation in two generations, it would only have been a matter of time before all financial institutions heavily invested in Treasury bonds would drop like flies. All banks, insurance companies, and pension funds hold them, they just didn’t need to sell them as urgently as SVB. But this time the risk was found in plain vanilla, general obligation US Treasury bonds (ironically considered the world’s safest asset). Risky assets were also the undoing at SVB. Fifteen years ago the banking system was pushed to the brink by its overindulgence in collateralized subprime mortgage bonds. ![]()
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