How Hindenburg failed Hindenburg

Kolkata: Over the pages of history, Hindenburgs have had the habit of failing its origins. Most recently proven by the crash of SVB Bank, when the New York-based research firm was too busy being nosy on other shores.

Before the top-of-mind present, let me dwell on the uncanny aspects over time, especially in the 1930s. In 1933, President Paul Von Hindenburg failed not just Germany but the entirety of civilisation by awarding dictatorial rights to Adolf Hitler, suitably befuddled by Nazi treachery. In 1937, the airship Hindenburg crashed close to New York City, ironically, and this not only ended Germany’s aviation ambitions but also ensured that the aircraft and not the airship will fly in the future.

In the context of the current times, the Hindenburg episode is possible of comparable dimensions. Nate Anderson, founder of Hindenburg Research focuses on forensic enquiries and is influenced deeply by Perry Mason and Pinkertons, more than the stalwarts in the finance business. He thrives on bearing what by now is an obsolete white man’s burden, finding fault in emerging geographies while truthfully being scathing on sensitively selected matters in the USA. Which, for whatever reasons, did not quite include SVB Bank in this case.

Also read: Everything you need to know about Silicon Valley Bank collapse⁠⁠⁠⁠⁠⁠⁠

But these guys earn suitable to delight in ousting founders, as in the case of Nikola where Executive Chairman Trevor Milton, in the context of questionable practices, during an imminent deal with General Motors. NASDAQ delisted WINS Finance, another on the radar, while Genius Brands' share price nosedived from almost $7 to 1.5 dollar, as part of prophetic predictions. Then they attacked China Metal Resources Utilisation, calling it a ‘zombie company’ and the holier-than-thou Ernst and Young withdrew as auditors, and what a glorious outcome that must have been.

Not that I am alive in serious business affairs, but a cursory glance reveals that at home, the company steers clear of the big fish and instead, focuses on softer targets with potentially catastrophic impact. This may actually be a smart marketing strategy or perhaps, simply a sincere acknowledgement that they don’t want to upset any major domestic gravy train.  This is why it chose to ignore the second largest banking failure in the history of the USA and the largest since 2008, a troika of collapse in a week that includes Silvergate and Signature Bank.

Just before its collapse, SVB Bank held assets worth $209 billion and deposits worth $175 billion, a notch lower than the scorecard of Washington Mutual Bank which collapsed in 2008. The 16th largest bank in the USA, it catered largely to a set of venture capitalists, tech firms and startups, an uncertain sector most certainly but that is not a sufficient alibi. Around 10,000 small businesses that trusted SVB will not be able to meet payroll obligations and around 100,000 jobs are likely to get impacted. Not exactly a trifling matter but certainly something that eluded the erudite grasp, or should I say, deepest desires of Hindenburg Research.

In fact, there are remarkable similarities between the ambitions of SVB Bank and Hindenburg Research, although grossly different intents. The Silicon Valley Bank ( SVB) was famously called the ‘ Financial Partner of the Innovation Economy’ while the analysts can well be termed as the ‘Disruption partners of the Stable Economy’, pardon my coinage, where troublemaking is the stock in trade as is the hunger of instant media gratification. While the bank fell due to the liquidity crisis, fuelled by management shortcomings and larger economic factors, there was certainly no clear evidence of a wicked agenda. Unlike Hindenburg Research, which operates on a seamless agenda to destroy equilibriums, on flimsy textbook information which is usually just a convenient part of factual reality.

On the subject of whistleblowing, which Hindenburg Research seems to be doing from an outsourced perspective, there are a few leanings I must share. The greatest instances of corporate crimes being unearthed, and indeed the smallest, invariably come from woke insiders and never ever from the speculative journalist. Perhaps, the only exception would be the Watergate Scandal, where Bernstein and Woodward were from The Washington Post, but even this would not be possible without the tacit information from ‘Deep Throat’, the legendary insider informer who passed the necessary dope on untapped phone lines. Only in 2005, 32 years after Nixon’s resignation did the world come to know that this pseudonym belonged to Mark Fell, an Associate Director of the FBI, and somebody who was dutifully in the know.

Much later Time Magazine awarded the Person of The Year sobriquet to the whistleblowers. Americans Sherron Watkins, Cynthia Cooper and FBI Special Agent Colleen Rowley. about financial fraud on Enron and WorldCom and the failures before 9/11. The Hollywood creation ‘The Whistleblower’ was modelled on Jeffrey Wigand, an insider of the industry and this pattern has been replicated in every possible scam in the world, Insiders in cahoots with motivated outsiders ( for the truth) lead to a  culture of expose and the only other credible candidates are Governmental authorities, whose access to critical data permits the exposition of potential disasters.

Companies like Hindenburg Research operate on hype coated in a batter of substances, which disintegrates rather rapidly. The data that points to disorder is usually anecdotal and not verified, while the impressions are invariably subjective and motivated. Motivated not because they necessarily hate the group they are after but because it seems to make ample business sense to choose a monetizable foe.

Some US shenanigans may be marginally more truthful but they have limited consumption appetite, unlike an assault on a prime business entity of a rapidly dominant global economy. The TRP ratings will naturally soar and If I may humbly submit, the personal net worth of Nate Anderson may also suitably swell, but that of course must be a minor matter for such ardent revolutionaries.

Over time, Hindenburgs have failed Hindenburgs and indeed the nation they emerge from and I have shared two ancient instances. Nate Anderson must be given sufficient credit for continuing this (in)glorious tradition by not casting his famously scathing glare on matters closest to home. Or maybe, the damning glare is actually an opportunistic stare, designed to provoke cash-earning eyeballs and not ethical cleansing.