A bank collapse ends in 'Succession' not recession

Plus: Israel protests, Binance lawsuit and more. [Bloomberg]( Follow Us [Get the newsletter]( This is Bloomberg Opinion Today, an ongoing game of Whac-A-Mole of Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - SVB [has a buyer](. - Israel [faces a test](. - Binance [gets sued](. - [AI armies]( vs. [VR armies](. Succession IRL While you were up late last night watching the Roy siblings [let a thousand sunflowers bloom]( on HBO’s Succession, a family affair with far higher stakes was unfolding in real time. After a series of negotiations with the FDIC, First Citizens BancShares Inc., a family-owned bank catering to clients in North and South Carolina, agreed to buy [Silicon Valley Bank]( after the worst bank run since 2008. All eyes are on the 125-year-old firm, which went from being a B-list bank (at best) to an A-lister overnight. It’s become the [Julia Fox]( of financial institutions: The new proud owner of SVB dates back three generations, to Robert Powell Holding, who started from [humble beginnings]( as an assistant cashier in 1918. Now, his grandson Frank Holding, Jr. is at the helm. At the end of 2022, First Citizens was the 30th-largest commercial bank in the US. With its purchase of SVB, it’s been catapulted into [the top 15](, according to our friends over in Bloomberg Intelligence. Matt Levine explains [the financial math]( around the deal, which he says is “sort of fascinating.” While this feels like a wholesome, humble tale of a family business getting into the big leagues, one wonders how, exactly, we got here — here being the place where [banks are buying other banks]( to restore confidence in banks in general. Tyler Cowen says bank failure, while traumatizing, is a [permanent fixture in our financial system](. “Any regulatory regime is a temporary patch, not a permanent solution. It is an ongoing game of Whac-A-Mole,” he writes. But the current iteration of that game is being [turbocharged by social media](, Isabelle Lee notes. Last week, Citigroup chief Jane Fraser [pointed out]( that all it took was a handful of [bad tweets]( for SVB to go “down much faster than has happened in history.” The speed of the SVB saga has made a lot of rational people wonder whether their local ATM could run out of cash in the imminent future. But Claudia Sahm says those worries wrongly overshadow a much more vulnerable population: [the unbanked](, who often “rely on alternative financial services like payday or auto title lenders and check cashers.” If First Citizens truly wants to put citizens first, it would be wise to consider not only how to make its bank safe for its new customers, but also how to be more inclusive. That’d be a family affair worth watching. Netanyahu’s Soggy Cereal Democracy in Israel is sort of like an off-brand cereal. [Fruit Spins]( may look like [Froot Loops](, but they’re absolutely not the real deal. Similarly, Israeli Prime Minister Benjamin Netanyahu may say his country is the Middle East’s only democracy, but [that’s not really the case, for a number of reasons](, Bobby Ghosh argues. Take checks and balances: In most democracies, there are checks, plural, and balances, plural — hence the name. But the Israeli state has one check, singular (the Supreme Court), and no balance at all. And Netanyahu’s ultra-conservative coalition, elected late last year, wants to put a chokehold on the Supreme Court through a new set of, ahem, “reforms.” Because of these proposals, Israel is [barreling headfirst into a constitutional crisis]( that could “split the security forces, roil the economy, and spark widespread violence in the streets,” Bloomberg’s editorial board writes. Israeli President Isaac Herzog went so far to put the possibility of civil war on the table. As a result of Netanyahu’s obvious ploy “to neuter the country’s judicial system,” large swaths of Israeli society have [taken to the streets](: This aerial view shows protesters gathering outside Israel's parliament in Jerusalem. Photographer: AFP In this regard, democracy is alive and well. The protests have not only been peaceful, but also extraordinarily productive, with the prime minister [deciding to pause consideration of the controversial changes](. But pausing the overhaul just delays the inevitable: “Netanyahu will likely return to it, whether for reasons of self-preservation, to forestall judicial action on the corruption charges against him,” or simply to keep his coalition together, Bobby notes. [Read the whole thing](. Evil VPNs If you go to another country and try and log into Netflix, chances are you’ll see some shows and movies you don’t recognize. That’s normal and makes sense — Netflix is available in 190 different countries. But if you go to Netflix’s help center online, there’s [a page]( about using a VPN (virtual private network) that will help you get catch up on your Australian prison drama, or whatever: This is an extremely simplified version of what Binance, the world’s largest crypto exchange, did with its VIP clients. You see, in the US, it’s illegal to run a crypto derivatives exchange without going through the Commodity Futures Trading Commission. It’s also illegal to let US customers trade on crypto derivatives exchanges abroad. In effect, people in the US can’t trade crypto derivatives, period — it’s a Netflix show that is not available in this country, essentially. But all the glitzy New York and Chicago high-frequency trading firms are Binance’s bread and butter. They’re the money makers! And so, instead of shooing them away, [Binance stealthily promoted a VPN workaround](: “A US trading firm that was 12% of Binance’s volume was getting locked out of Binance’s application programming interface — the direct connection to Binance’s matching engine that high-frequency trading firms need to trade algorithmically — because it had a US IP address. So Binance told it — not in writing! — to use a VPN to connect,” Matt Levine writes. The CFTC does not like this one bit! They’re [suing Binance and its CEO Changpeng Zhao](. Telltale Charts If you haven’t seen the AI-generated image of the pope in the puffer jacket that went viral over the weekend, stop reading this and [please look at this](. Parmy Olson says stunts that blur the lines between real and fake are [fooling a ton of people](, and it’s just the beginning. Although OpenAI has a leg up right now, some of Silicon Valley’s largest tech firms are hard at work [breeding their own AI armies](. Soon enough, Amazon’s Alexa and Apple’s Siri will probably be able to impersonate the pope, too. Although the artificial intelligence pipeline is hard at work, virtual reality — once the mecca of all things futuristic — [is on a road to nowhere](, Tim Culpan writes. Perhaps the only savior of the once-vaunted technology is none other than the US Army, which “believes that enhancing, rather than replacing, a soldier’s senses could give them the advantage.” Soldiers wearing clunky headsets may seem like a headache waiting to happen, but night-vision goggles have prevailed in the past. Maybe VR can do the same. Further Reading Peace is the last thing on Putin’s mind, and his [choice to station tactical nukes]( in Belarus is proof. — Andreas Kluth Make no mistake: [Russia and China have an alliance]( that’s fully committed to stopping the US. — Hal Brands China’s vast car market is getting [a much-needed tuneup](. — Anjani Trivedi Getting your iPhone repaired is beyond annoying. Maybe [a farmer can help](. — Adam Minter If Florida [bans sex education before sixth grade](, girls on the verge of puberty will be left in the dark. — Lisa Jarvis Japan’s [job security debate]( is a double-edged sword.  — Gearoid Reidy Kamala Harris [could learn from Mike Pence](. Yes, you read that right. — Stephen L. Carter ICYMI A Nashville woman killed six in a [school shooting](. [Disney]( is cutting some jobs. [Charles Schwab]( is showing cracks. Elon’s [blue check removal]( is coming, [maybe](. FOGLO (Fear of Getting Laid Off) is [changing the housing market](. Kickers RIP, [penmanship](. A Texas preacher’s [Ponzi scheme](. A company makes clothes to [hide from AI](. Why [the water bear]( is virtually indestructible. (h/t Scott Duke Kominers) Gwyneth Paltrow is [an alleged]( bunny-slope menace. Notes:  Please send night-vision goggles and feedback to Jessica Karl at jkarl9@bloomberg.net. [Sign up here]( and follow us on [Instagram](, [TikTok](, [Twitter]( and [Facebook](. 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