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Speaker 1: Breakingpoints dot Com. Good morning, everybody, Happy Tuesday. We have
Speaker 1: an amazing show for everybody today. What do we have, Christal, indeed,
Speaker 1: we do lots to get to this morning. We have
Speaker 1: the very latest in terms of the SVB bail. I'm
Speaker 1: including comments from President Biden and exactly what happened in
Speaker 1: the markets yesterday. So we'll break all of that down
Speaker 1: for you wheels. To have David Daan on to talk
Speaker 1: about his analysis of everything that is happening. Incredibly sharp
Speaker 1: financial so excited to speak with him. We have some
Speaker 1: news regarding China, both brokering a deal between Saudi Araubia
Speaker 1: and Iran, but also speaking with Zelenski and of course
Speaker 1: with Russia. And this is a huge, huge deal. So
Speaker 1: we'll break all of that down for you. Interesting clip
Speaker 1: coming out of the View and interesting reporting coming out
Speaker 1: of the Democratic Party. They are very upset. They want
Speaker 1: people to shut up about the problems they have with
Speaker 1: Kamala Harris. They are getting very concerned because you may
Speaker 1: not know this, but Joe Biden is eighty years old,
Speaker 1: and they're very concerned that. You know, if people don't
Speaker 1: love Kamala Harris and they realize that she's number two
Speaker 1: on the ticket and she's a heartbeat away from the presidency,
Speaker 1: that could be a problem for them. Also, have some
Speaker 1: polling regarding lab leak. Public did not buy the media
Speaker 1: spin job on that particular issue. So all of that,
Speaker 1: plus we have Matt Tyeb in the show today. Doo Yeah,
Speaker 1: Matt tayve so called journalists. He'll be responding to Congress
Speaker 1: and we'll actually talk about the content of the Twitter file,
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Speaker 1: make it all good to go. Let's start with the
Speaker 1: Silicon Valley bailout. So President Biden speaking yesterday to try
Speaker 1: and calm the markets and assure everybody everything is just
Speaker 1: aokay despite the bailout. Here's what he had to say today.
Speaker 1: Thanks to the quick action of my administration over the
Speaker 1: past few days, America is going to have confidence that
Speaker 1: the banking system is safe. Your deposits will be there
Speaker 1: when you need them. Small businesses across the country. The
Speaker 1: deposit accounts that these banks can breed easier, and knowing
Speaker 1: they'll be able to pay their workers and pay their bills,
Speaker 1: and their hard working employees can breathe easier as well.
Speaker 1: So anytime a politician has to say the banking system
Speaker 1: is sound and it's safe, you should probably start to
Speaker 1: ask some questions about what the hell is going on. Unfortunately,
Speaker 1: Wall Street did not take the president's warning to heat
Speaker 1: let's go and put this up there on the screen.
Speaker 1: Absolutely stunning day in the treasury markets. The two year
Speaker 1: treasury yield posted the biggest three day decline since the
Speaker 1: aftermath of the nineteen eighty seven stock crash, CNBC writing here,
Speaker 1: Investors swarmed in the government bonds on Monday after the
Speaker 1: collapse of the bank, sending treasury yields tumbling. The yield
Speaker 1: was last trading at four percent, down fifty nine basis points,
Speaker 1: the largest three day crash since October of twenty second
Speaker 1: October twenty second, nineteen eighty seven, when it fell a
Speaker 1: comparable one hundred and seventeen basis points, otherwise known as
Speaker 1: Black Monday. So one of the worst days in stock
Speaker 1: market history. But you know, there's an irony here because
Speaker 1: part of how Silicon Valley Bank got into trouble is
Speaker 1: they were holding all of these long term treasuries and
Speaker 1: now with this huge market movement, this may have been
Speaker 1: enough to pump up the value of their long term
Speaker 1: drudgeries and make them solvent. But anyway, so that will
Speaker 1: be helpful to other banks that are potentially in similar situations.
Speaker 1: But yeah, that's what wellly, you can almost not make
Speaker 1: it up. The major point being though, that this was
Speaker 1: a absolute bloodbath of a day for everybody in the
Speaker 1: regional bank sector. We had the first Republic CEO go
Speaker 1: CNBC to tell everyone that no, it's actually fine. Many
Speaker 1: depositors aren't leaving despite the fact that their stock got
Speaker 1: absolutely massively hammered. Here's what he had to say. Just
Speaker 1: spoke with with Jim Herbert. He's the CEO of First
Speaker 1: Republic and I asked him what are the outflows today?
Speaker 1: And he said, it's business as usual. Now, remember I'm
Speaker 1: speaking to the CEO. That does not mean Jim Kramer
Speaker 1: says this business as usual, that they're not that much,
Speaker 1: that they're that not that many liquidations above two fifty million,
Speaker 1: two and fifty thousand. It's pretty much the same as
Speaker 1: you would expect. The JP Morgan funding is working trying
Speaker 1: to make it so this situation is stable, all right.
Speaker 1: So despite his assurances, Crystal, let's put this up there
Speaker 1: on the screen, First Republic Bank dropped sixty percent in
Speaker 1: stock value in a single day, leading the decline in
Speaker 1: bank stocks. Despite the government backstop of SVB, they had
Speaker 1: to raise its unused liquidity to seventy billion dollars again
Speaker 1: then being able to tap the new FED facility. And
Speaker 1: I think that is where we need to focus some
Speaker 1: of our analysis, more of the bailout, right, because it's important.
Speaker 1: We're going to do an entire thing on the Federal Reserve.
Speaker 1: But to tie these two things together, even with the
Speaker 1: extraordinary actions of covering, effectively setting the precedent that from
Speaker 1: here on out, all banks are too big to fail,
Speaker 1: All banks deposits are now effectively covered by the FDIC.
Speaker 1: We're going to see how much more these banks have
Speaker 1: to pay for the FDIC, and we're also going to
Speaker 1: see how much more customer fees all of us are
Speaker 1: going to have to pay in order to make Yeah,
Speaker 1: once again, if you think those banks are the ones
Speaker 1: absorbing the cost, then you're an idiot. So somebody's going
Speaker 1: to pay for it. It's almost certainly going to be
Speaker 1: us in addition to all of these tax payer You know,
Speaker 1: it may not be actual appropriated funds, but let's just say,
Speaker 1: like having the Federal Reserve backstop all of the treasuries
Speaker 1: on the balance sheet of every bank in the United States,
Speaker 1: that's just an extraordinary gift. I mean, basically, imagine if
Speaker 1: you had a loss on your balance sheet that was
Speaker 1: declining and then the government just came in and said
Speaker 1: we'll redeal it. Though at the original value of that
Speaker 1: that'd being real nice for any of us in the
Speaker 1: small business world. But if you happen to the grass
Speaker 1: station or a restaurant. You're screwed. If you're open to
Speaker 1: own a bank. Oh you're all good. Now, if we
Speaker 1: tried to do that, that would be accounting fraud. Yeah,
Speaker 1: it would be accounting broad And yeah, I mean, I
Speaker 1: think it's important to remind everyone of just what is
Speaker 1: entailed in this bailout. Effectively, because they are backing up
Speaker 1: one hundred percent of the deposits both at SBB and
Speaker 1: at Signature Bank de facto, that means every deposit in
Speaker 1: the entire country, insured or uninsured, is backstop by the FDIC.
Speaker 1: And in addition, and this is perhaps the even more
Speaker 1: significant gift, is they're creating a new lending facility at
Speaker 1: the FED so that banks can borrow against collateral, including
Speaker 1: some of that collateral that has declined in value. They're
Speaker 1: just going to pretend that it didn't decline in value.
Speaker 1: So huge change to the banking system without and this
Speaker 1: is in a way makes it worse than two thousand
Speaker 1: and eight. In two thousand and eight, at least there
Speaker 1: was some pain extracted from industry in terms of Dodd
Speaker 1: Frank's financial reform. Now, I think we're learning in real
Speaker 1: time that Dodd Frank didn't go far enough, and especially
Speaker 1: now that we see some of those regulations being rolled back,
Speaker 1: but there was at least new guardrails put on the
Speaker 1: banking sector. Here they're getting a free lunch and they're
Speaker 1: not being asked for anything. I mean, I don't hear
Speaker 1: Biden really, you know, calling for Congress to put anything
Speaker 1: on his desk. Of course, there are some members, Elizabeth
Speaker 1: Warren in particular, who are calling for a rollback of
Speaker 1: that deregulation that happened under the Trump administration. But will
Speaker 1: that get anywhere when you have a Republican House. I
Speaker 1: you know, I'm skeptical at best that anything will happen
Speaker 1: on the regulatory front. So they're getting this bailout, they're
Speaker 1: getting a massive gift from the US federal government, and
Speaker 1: they're not being asked for anything in exchange. So I
Speaker 1: think it's really important to remember that. Let me also say,
Speaker 1: in terms of Biden, there's some new reporting this morning.
Speaker 1: You know, I don't know if this is really true
Speaker 1: or not, but the reporting suggests that he really had
Speaker 1: to have his arm twisted in order to do this
Speaker 1: bailout because he didn't like the two thousand and eight
Speaker 1: bailouts whatever. And at the beginning of the weekend he
Speaker 1: really didn't want to go down this path, but effectively,
Speaker 1: like you know, Treasure Janiet, Yellen and Powell kind of
Speaker 1: talked him into going forward with this bailout. So you
Speaker 1: can see in his comments he goes to great pains
Speaker 1: to position this as like a populist player, we're just
Speaker 1: backstopping small businesses, etc. But ultimately they're lying about what
Speaker 1: this really means. They're lying about the extent of it,
Speaker 1: they're lying about the idea that it's not a bailout.
Speaker 1: All of this is very, very misleading in terms of
Speaker 1: what has actually just happened. So our guest yesterday, Matthew'siland,
Speaker 1: actually had a great point, and I'll read his tweet here.
Speaker 1: Quote the no taxpayer money just gives you intight into
Speaker 1: how legalistic and literal that the government now is. The
Speaker 1: thrust of dog Frank and just the general vibe was
Speaker 1: that what happened in eight should be avoided after the bailouts.
Speaker 1: So the Feds are very carefully just not doing literal
Speaker 1: two thousand and eight all over again. You can't actually
Speaker 1: pass a law that says don't do anything wacky with
Speaker 1: banks again, So the Feds will stay within the lines
Speaker 1: that Congress has drawn. But what Congress is drawn is
Speaker 1: by giving this extraordinary authority to the FDIC and also
Speaker 1: with the Federal Reserve and its expanded powers to basically say, oh, well,
Speaker 1: it's not an appropriated, congressionally passed, taxpayer funded bailout. Yet
Speaker 1: the Fed is backstopping the balance sheet of every single
Speaker 1: bank in the entire United States. And also we just
Speaker 1: set an insane and extraordinary standard that all deposits in
Speaker 1: the US are now covered by the FDIC. Hmm. Once again,
Speaker 1: the FDIC has only what one hundred billion or so
Speaker 1: in it. There's nine trillion dollars worth of banks that
Speaker 1: are not bank deposits that are not insured currently by FDIIC.
Speaker 1: So who is going to make up the difference, and
Speaker 1: who's full faith and credit and legitimacy is backing it?
Speaker 1: The taxpayer. So much of this is just you know,
Speaker 1: as you said, it's semantic. We tried to do it,
Speaker 1: it'd be tag, it'd be accounting fraud. When they get
Speaker 1: to do it, it's because the Feds are backing them.
Speaker 1: And if the Feds are backing you, then it's a bailout.
Speaker 1: You know, I'm re reading I've said yesterday too big
Speaker 1: to fail. And one thing that comes through is many
Speaker 1: of these deals that happened at the time, you know
Speaker 1: JP Morgan or somebody buy bear Stearns, or Barclays buying
Speaker 1: parts of Lehman. All of this. It was all orchestrated
Speaker 1: by Hank Paulson and by Timothy Geithner. Now you can
Speaker 1: maybe say it's not a bailout because one bank bought another.
Speaker 1: They never would have done it if the Treasury Secretary
Speaker 1: wasn't like, hey, you're going to buy this bank, and
Speaker 1: you're gonna do it because I'm telling you to do so.
Speaker 1: In many explicit cases in the private conversations, the bankers
Speaker 1: were saying, I would never do this if Hank did
Speaker 1: not tell me to do it. So that's called a bailout.
Speaker 1: If the Treasury Secretary is basically ordering the senior most
Speaker 1: people in the financial system to take actions they would
Speaker 1: not have otherwise done by giving them the legitimacy the
Speaker 1: backing of the federal government, well that is in one
Speaker 1: sense a taxpayer funded initiative, because one of the ways
Speaker 1: that we would do it was by guaranteeing their loans
Speaker 1: or giving them the legitimates are saying, oh, well, we'll
Speaker 1: give you preferential financing on this part of the deal.
Speaker 1: Of course, that is backed by the government, which by
Speaker 1: definition is you know, the representation of the people and
Speaker 1: of all the taxpayers. So so much of what we're
Speaker 1: doing here is just semantic games and it's driving me crazy.
Speaker 1: The way they want to wiggle out of this, yeah,
Speaker 1: I agree. And the way that they are gaslighting the
Speaker 1: public means that they're trying to tamp down any sort
Speaker 1: of populist revolts in reaction to this, which look politically,
Speaker 1: I understand why they wouldn't want to do that. But
Speaker 1: because they are trying to tamp down that public pressure,
Speaker 1: it makes it much less likely that the bank reform
Speaker 1: that really needs to happen obviously, after this whole debacle
Speaker 1: really needs to happen, is less likely to actually come
Speaker 1: to pass. So that's the unfortunate situation that we're in now.
Speaker 1: I mean, they have with these effectively three actions that
Speaker 1: they've taken, they have really transformed how banks are going
Speaker 1: to see themselves, how banks are going to see like
Speaker 1: the you know view, what type of risky behavior they
Speaker 1: can engage in. They have sort of revolutionized the banking
Speaker 1: sector in a really bad way without putting ten guard
Speaker 1: rails on the industry. So it is kind of a
Speaker 1: worst of all world's situation now in terms of the
Speaker 1: market moves yesterday, so a lot of regional bank stocks,
Speaker 1: as you pointed out, sober, you know, like fell off
Speaker 1: a cliff. But there's no indication that the big fear
Speaker 1: that you know, there was a lot of Silicon Valley
Speaker 1: carping vound and fear mongering about over the weekend was oh,
Speaker 1: there's going to be this huge flight of depositors from
Speaker 1: the regional banks to the big players. That's why we
Speaker 1: have to do this. We have to forestall any sort
Speaker 1: of a bank run. And it's possible that the actions
Speaker 1: they took worked and so you know, they cut off
Speaker 1: the potential of a bank run. That may be the case,
Speaker 1: but it is worth noting that even as you had
Speaker 1: and what they described as an investor bank run, so
Speaker 1: investors fleeing these stocks, you didn't actually see any movement
Speaker 1: really that we know about massive movement in terms of
Speaker 1: depositors pulling their funds and moving them to the big banks.
Speaker 1: So again, maybe that's because the actions worked, or maybe
Speaker 1: it's because a bank run was not actually going to
Speaker 1: happen here and people in Silicon Valley were just looking
Speaker 1: out for their own interesting. There aint no way to know,
Speaker 1: but what we do know is that an extraordinary line
Speaker 1: has been passed and now we're just living in another
Speaker 1: new bank reality, just like we were in two thousand
Speaker 1: and nine after the eight bailout. So let's go to
Speaker 1: the second part here. This is important as well, and
Speaker 1: that we've been trying to make people understand the extent
Speaker 1: of covering just the deposits is in some sense the
Speaker 1: least like the least objectionable part of the bailout. Let's
Speaker 1: go ahead and put this up there on the screen.
Speaker 1: So the given this new Federal Reserve bailout, the big
Speaker 1: four US banks have now gotten a two hundred and
Speaker 1: ten billion dollar federal bailout. How because the Fed's new
Speaker 1: facility allows banks to borrow against the negative collateral value
Speaker 1: that it shown here at par instead of at market value.
Speaker 1: So once again they are able to borrow at par
Speaker 1: on their securities and assets instead of the losses that
Speaker 1: they rightfully should take on assets that they bought purely
Speaker 1: in order to increase the amount of capital to cover
Speaker 1: their deposits. That is a bailout. There's no other way
Speaker 1: to describe it. Effectively. The Federal Reserve is saying you
Speaker 1: do not have to account your business in the same
Speaker 1: way that every other business on the planet has to,
Speaker 1: because you're too big to fail. That is the I mean,
Speaker 1: the greatest gift once you know that we can try
Speaker 1: and expound is when the Feds and specifically the Federal
Speaker 1: Reserve here are allowing these accounting gimmicks to take place
Speaker 1: at all of these banks. They now operate fundamentally different
Speaker 1: than any other business in the entire country, with a
Speaker 1: massive advantage and gift. And there is no current there
Speaker 1: is no current regulation, there is no current law crystal
Speaker 1: that they cannot use this to this tremendous advantage and
Speaker 1: they can't pay themselves out bonuses tomorrow. They could pay
Speaker 1: themselves out bonuses in three months. The ability to survive
Speaker 1: is everything in business. So if you survive this and
Speaker 1: then you start making tremendous profits, you think they're going
Speaker 1: to pay any of this back, like you think they're
Speaker 1: going to pay some sort of fine or anything. If
Speaker 1: anything there's going to pass on the FDICS for FDIC
Speaker 1: fees to all of us customers, and then they will
Speaker 1: increase even more of their profits and they're gonna either
Speaker 1: pay dividends out or they're going to buy back their
Speaker 1: own shares, or they're going to pay themselves out big bases. Yeah,
Speaker 1: this is bullshit, Like when you really think about it, Yeah,
Speaker 1: that's that's right. I mean, I think Zeitelin said it
Speaker 1: really well yesterday when I said, sometimes you can get
Speaker 1: lost in the semantics of like, Okay, what's the taxpayer dollar,
Speaker 1: where are they going, who's funding it, et cetera. The
Speaker 1: bottom line is a gigantic benefit and gift has been
Speaker 1: given to the entire banking sector in a way that,
Speaker 1: you know, we never see the machinery of the federal
Speaker 1: government jump to when it's the interest of working class
Speaker 1: people that are on the line. So not only do
Speaker 1: you have the speed of action, not only do you
Speaker 1: have a sort of shakunaw overwhelming force of the action,
Speaker 1: but you have all of the machinery in place to
Speaker 1: make sure that these wealthy, well connected individuals are always
Speaker 1: taken care of at a moment's notice. And I think
Speaker 1: that is just incredibly clear from what we've seen and
Speaker 1: the speed with which we've seen it, you know, if
Speaker 1: there was even a whiff of a potential problem for
Speaker 1: these individuals, Biden was convinced over one weekend to take
Speaker 1: dramatic action, turning the banking system really on its head,
Speaker 1: and again not demanding a single thing in return. So
Speaker 1: that is the bottom line here. The other piece of this,
Speaker 1: and let's go out and put this next piece up
Speaker 1: on the screen from the Wall Street Journal. All right,
Speaker 1: So the FED had been engaging in this policy of
Speaker 1: monetary policy tightening, hiking interest rates with the stated explicit
Speaker 1: goal of crushing wages and spiking unemployment. Okay. Now, let's
Speaker 1: keep in mind that the actions that the Fed and
Speaker 1: the President just took were in the opposite direction when
Speaker 1: it was the jobs of a certain group of Silicon
Speaker 1: Valley entrepreneurs and their employees. Well, then they had to
Speaker 1: make sure there were no job losses. But the overall
Speaker 1: policy remains, we need higher unemployment and we need lower wages. Okay,
Speaker 1: So they are getting ready to decide what they're going
Speaker 1: to do in terms of a rate hike, rate decrease,
Speaker 1: or keeping things the same. The Wall Street Journal headline
Speaker 1: here is fed's magical accounting might save banks, but doom
Speaker 1: rate increases. They go on to say, there are plenty
Speaker 1: of lessons for investors in the collapse of SVB and
Speaker 1: other banks. So now there's a big question about Okay, Well,
Speaker 1: so this entire bailout is, you know, goes in the
Speaker 1: direction of monetor very easing. So it's the polar opposite
Speaker 1: direction of what the FED has been trying to do
Speaker 1: in terms of getting inflation under control. Although we've discussed
Speaker 1: on this program at nauseum how the FED hiking rates
Speaker 1: is an incredibly blunt tool that doesn't have any guarantee
Speaker 1: of success at even getting inflation under control is going
Speaker 1: to be very painful for a lot of people, especially
Speaker 1: if they spark a recession and low and pull. Thus
Speaker 1: far their moves have not actually gotten inflation under control,
Speaker 1: and you know, we still stand that risk of a recession.
Speaker 1: So what are they going to do now? The analysis
Speaker 1: seems to be kind of all over the map. I've
Speaker 1: seen some people even saying, oh, maybe they're going to
Speaker 1: actually not only stay in the same place in terms
Speaker 1: of rates, maybe they're actually going to go in the
Speaker 1: polar opposite direction because they're worried about banks and their
Speaker 1: financial soundness. Maybe they're going to continue on the path
Speaker 1: of rate hikes even though this is like directly at
Speaker 1: odds with these other actions that they just took. Maybe
Speaker 1: they're going to just keep rates where they are right
Speaker 1: now and see what happens. So it's really pretty up
Speaker 1: in the air now of what the FED is going
Speaker 1: to decide to do. Yeah, I think you're right, Crystal,
Speaker 1: and that was let's go and put this one up
Speaker 1: on the screen right now. The market still expects the
Speaker 1: FED to go through with rate hikes, but the fact
Speaker 1: that the question is even in their minds over here
Speaker 1: also shows you how fundamentally unfair the system is. Whenever
Speaker 1: the rates start to go up and threaten the balance
Speaker 1: sheets of the big banks and the too big to
Speaker 1: fail institutions, then we're allowed to rethink the policy. Right
Speaker 1: Whenever small businesses like Hours and across the country are
Speaker 1: getting crushed by rate increases and can't take any loans
Speaker 1: if they want them. When all of the viewers of
Speaker 1: our show are literally unable to buy a house because
Speaker 1: the mortgage rates are at the worst part time that
Speaker 1: they've been in like fifty years. When you consider both
Speaker 1: the price increase, the housing market is a disaster. Whenever
Speaker 1: everything is slowing, unemployment is happening, or at least is
Speaker 1: happening to the extent that they want it to, or
Speaker 1: you know, even increasing rates because they want the jobs
Speaker 1: numbers to go down. It's not a question. This is
Speaker 1: the only thing that makes them pause and think, yeah,
Speaker 1: maybe maybe that we won't increase the rates. I think
Speaker 1: you're right, though, I mean, I don't know. I do
Speaker 1: feel like they're probably going to increase just simply because
Speaker 1: of what the jobs numbers were yesterday, but they may
Speaker 1: not go as far as they originally were going to
Speaker 1: before this crisis began. Maybe that's twenty five basis points
Speaker 1: instead of fifty basis points. That seems to be what
Speaker 1: the market is kind of pricing in. But you know,
Speaker 1: I think the important point is the one you made Sagur,
Speaker 1: that you know, they are actively trying to cause unemployment
Speaker 1: nationwide with their policy. But then when it's this one
Speaker 1: group that's well connected and has some very loud and
Speaker 1: influential voices to advocate for their interests, then they do
Speaker 1: a U turn and go in the polar opposite direction. Yeah,
Speaker 1: there you go. So, look, system is rigged. I guess
Speaker 1: that's a common theme of the show. Yeah, trying to
Speaker 1: explain exactly. I know it can get complicated with the
Speaker 1: jargon and all of that, but just take away the
Speaker 1: very basic lesson. It's like they get special tools and
Speaker 1: accounting that are granted for them that you know, other
Speaker 1: business on the planet ats and specifically no other workers
Speaker 1: concern is ever even factored into their minds. And that's
Speaker 1: the basics of it. And we're not asking them for
Speaker 1: anything in return. Nothing. We're not tight as of now,
Speaker 1: not tightening, regulate, nothing, nothing. They just get a bailout
Speaker 1: and that's that all right, guys, We want to dig
Speaker 1: in deeper on this same topic with David Dyan. He's
Speaker 1: of course executive editor of the American Prospect, fantastic financial
Speaker 1: analyst and journalist. Want to get his take on everything
Speaker 1: that's happening. So let's get to it. David, greats to you,
Speaker 1: good see you. Yeah, So let's go and put David's
Speaker 1: piece up on the screen here. What he has been
Speaker 1: writing phenomenal work as always, The headline is the Silicon
Speaker 1: Valley Bank bailout did not need to happen. The debate
Speaker 1: over protecting all deposits in a blink looks past the
Speaker 1: incompetence that got us here. So I would love you
Speaker 1: to break down the thesis of this piece, but also
Speaker 1: just give us your reaction to the fairly extraordinary measures
Speaker 1: that were taken by the US government. Yeah, so this
Speaker 1: is absolutely a bailout. It's a bailout of your responsible
Speaker 1: banks that did not prepare themselves for what has now
Speaker 1: been a year of interest rate changes and did not
Speaker 1: take the steps necessary to protect the severe risk of
Speaker 1: short term deposits in their facilities. Silicon Valley Bank has
Speaker 1: essentially no regular customers. It's a bank that serves founders
Speaker 1: and startup companies. The normal bank maybe has forty to
Speaker 1: fifty percent of deposits over the FDICS two hundred and
Speaker 1: fifty thousand dollars limit. Silicon Valley Bank had ninety five percent.
Speaker 1: So you have to have some stability in how you're
Speaker 1: using those deposits because you have this continuous risk of
Speaker 1: deposits fleeing and you not having enough money to take
Speaker 1: care of it. And they put all their money into
Speaker 1: long dated government which are generally fairly safe but have
Speaker 1: interest rate risk and the interest rate risk is that
Speaker 1: if you have to pull out that money right away
Speaker 1: and interest rates are high, they're going to be worth
Speaker 1: less than the face value. And that's exactly what happened.
Speaker 1: And if Silicon Valley Bank was in a regime that
Speaker 1: was tightly regulated in kind of the experience of larger banks,
Speaker 1: and of course Silicon Valley Bank was the sixteenth largest
Speaker 1: bank by assets in the United States, but it did
Speaker 1: not have the same kind of stringent regulation, particularly around liquidity,
Speaker 1: which was the entire problem here as big banks. Because
Speaker 1: SVB lobbied for and received in twenty eighteen essentially a
Speaker 1: deregulation of its bank and similar banks of its size. So, David,
Speaker 1: can you just explain maybe even further here about the
Speaker 1: existing regulations and about the way that this would have
Speaker 1: gone down without the extraordinary interference here by the US government. Right, So,
Speaker 1: when we had dot frank in twenty ten, that created
Speaker 1: a regime where all banks above fifty billion were in
Speaker 1: assets were subject to enhanced regulatory standards that means higher
Speaker 1: liquidity and capital requirements, in other words, absorbing losses exactly
Speaker 1: the kind of losses that we saw here with respect
Speaker 1: to these outflow of deposits, and you know, bigger stress tests,
Speaker 1: more stress tests, just tighter supervision. Generally. In twenty eighteen,
Speaker 1: Republicans decided that they wanted to weaken these regulations. They
Speaker 1: did it in the name of relief for community banks,
Speaker 1: and they smuggled in a change to the enhanced regulatory
Speaker 1: standards from fifty billion to two hundred and fifty billion.
Speaker 1: These are and in a very exhaustive piece in the intercept,
Speaker 1: we call these the stadium banks. This is what some
Speaker 1: individuals in Congress were calling them. That means that these
Speaker 1: are this is a gift for banks that aren't big
Speaker 1: enough to be JP Morgan Chase or Bank of America,
Speaker 1: but they are big enough to have naming rights to
Speaker 1: a stadium, you know, BB and T Field, you know. Anyway,
Speaker 1: So not only were Republicans interested in this because it
Speaker 1: was just Republicans as would die in the Senate, but
Speaker 1: several Democrats on the Senate Banking Committee decided to join
Speaker 1: in on this process. They went around Charrett Brown, who
Speaker 1: was the chair of the Senate Banking or the ranking
Speaker 1: Democrat at that time on the Senate Banking Committee. I'll
Speaker 1: give you the names. It was Joe Donnelly and heidiha Camp,
Speaker 1: who are no longer there and are both lobbyists now,
Speaker 1: and John Tester and Mark Warner, and those four in
Speaker 1: conjunction with Republicans on the Senate Banking Committee, wrote this bill,
Speaker 1: and the key section did what I just talked about,
Speaker 1: which was the enhanced regulatory Standards, moving that threshold from
Speaker 1: fifty billion to two hundred and fifty billion. The second
Speaker 1: thing that it did is it changed one word in
Speaker 1: the US Code. It changed a word from may to shall,
Speaker 1: and this was called the tailoring rule. And this changing
Speaker 1: it from may to shall made it so that the
Speaker 1: Federal Reserve, instead of having the option to tailor rules
Speaker 1: to the size of particular banks, said that they shall
Speaker 1: do that, in other words, a directive to tailor the rules.
Speaker 1: And this changed those rules even further. It gave the
Speaker 1: green light to the Federal Reserve to deregulate and weaken
Speaker 1: standards even more. And they took that opportunity and did it.
Speaker 1: In twenty nineteen, Lale Brainerd, who is now the head
Speaker 1: of the National Economic Council, was the only dissenting vote,
Speaker 1: and she said, this is going to increase risk, this
Speaker 1: is going to create the more propensity for potential bank
Speaker 1: runs and financial crises. Of course, Senator Elizabeth Warren when
Speaker 1: this bill passed said the same thing. Katie Porter, who
Speaker 1: was not yet in Congress, told me this bill should
Speaker 1: get zero votes. At the time, it was very clear
Speaker 1: to people paying attention that if you deregulate this part
Speaker 1: of the sector, and particularly if you change that threshold
Speaker 1: from fifty to two two hundred and fifty billion, the
Speaker 1: limit to how much growth a bank is going to
Speaker 1: want to do suddenly jumps up, and it's going to
Speaker 1: create a lot of consolidation in the system. That's exactly
Speaker 1: what happened. Silicon Valley Bank and many other medium sized,
Speaker 1: large regional banks started eating up all the other community
Speaker 1: banks to get bigger at a great point, and this
Speaker 1: created this very consolidation that the bill was supposed to prevent.
Speaker 1: Because the bill was allegedly because it was supposed to
Speaker 1: be about saving community banks, it actually eight community banks.
Speaker 1: It created this situation where these large regionals got way big,
Speaker 1: way quick, and couldn't handle the risk that came along
Speaker 1: with getting bigger. Well, and there's a great irony in
Speaker 1: the actions that the government just took because at that
Speaker 1: time you know, the CEO of Silicon Valley Bank was
Speaker 1: effectively lobbying Congress to say, we are not a systemic
Speaker 1: risk to the system. And then what has happened with
Speaker 1: this bailout is that they have deemed them a systemic
Speaker 1: risk to the system, and not just Silicon Valley Bank,
Speaker 1: but also Signature Bank, which is a much smaller player
Speaker 1: with a sort of crypto aligned and disgustingly with Barney Frank,
Speaker 1: who wrote the Dodd Frank regulations and you know famously
Speaker 1: sits on the board. Then, as in his position now
Speaker 1: as a board member of this bank, actually went and
Speaker 1: lobbied to roll back the very regulations that he helped
Speaker 1: to craft. Yeah, in twenty eighteen, he was right on
Speaker 1: the front lines lobbying for this on behalf of Signature Bank,
Speaker 1: you might say. And of course they grew big time
Speaker 1: in size. They were in this between fifty and two
Speaker 1: fifty position, and then they failed. You're absolutely right. They
Speaker 1: had to deem a systemic race. So that was the
Speaker 1: only way to get around the rules in Dodd Frank,
Speaker 1: which said we're not going to do bailouts anymore. The
Speaker 1: only way that they could do it is by the
Speaker 1: FDIC triggering a systemic risk exemption. And so the very
Speaker 1: banks who said, don't worry about us under two hundred
Speaker 1: and fifty billion not a systemic risk. Meanwhile, we knew,
Speaker 1: you know, Indiemac was under two hundred and fifty billion.
Speaker 1: Continental Illinois in the nineteen eighties was under two hundred
Speaker 1: and fifty billion. These types of banks have historically triggered
Speaker 1: systemic risk. But you know, the Democrats and Republicans who
Speaker 1: aligned on this bill bought what Silicon Valley Bank and
Speaker 1: these other banks were selling, which is, we're not a risk,
Speaker 1: let us grow. They did it. They deregulated, these banks grew,
Speaker 1: and what do you know, they completely failed. David, let
Speaker 1: me just play Devil's advocate for a moment, because I
Speaker 1: think there are a lot of, you know, good faith
Speaker 1: people who are making the argument like, look, these depositors
Speaker 1: in Silicon Valley Bank, they didn't do anything wrong. It's
Speaker 1: not their fault that the bank was taking on this risk.
Speaker 1: Reasonable to expect individual depositors to be vetting the practices
Speaker 1: of the bank when even the FED was caught unawares
Speaker 1: that there was risky behavior going on here. And furthermore,
Speaker 1: if you don't backstop the depositors and perhaps take some
Speaker 1: of the other actions that were taken in terms of
Speaker 1: creating this new lending facility and allowing them to keep
Speaker 1: their collateral at the original value that they purchased it at.
Speaker 1: Without that, we could have a bank run, because now
Speaker 1: you're going to have all these depositors flee the quote
Speaker 1: unquote stadium banks and go to the JP Morgan Chases
Speaker 1: of the world. So you're effectively just going to end
Speaker 1: up with, you know, not only a bank run and
Speaker 1: financial chaos, but you're also going to make the bigger
Speaker 1: banks even bigger. What do you say to those who
Speaker 1: believe that and have been arguing in that direction, these
Speaker 1: depositors did do something wrong. Roku had four hundred and
Speaker 1: eighty seven million dollars in one bank. That is the
Speaker 1: dumbest risk management I've ever heard in my entire life.
Speaker 1: Are very simple steps that companies take to ensure that
Speaker 1: their money, which is invariably sometimes over two hundred and
Speaker 1: fifty thousand dollars, is protected from all, you know, bank
Speaker 1: risk and limitations like that. It's on the bank to
Speaker 1: make those options available, and those options were available at
Speaker 1: Silicon Valley Bank, although they were somewhat hidden and not
Speaker 1: used very often. But there's things ensured cash sweep, there's
Speaker 1: cash management accounts that essentially cuts up your amount of
Speaker 1: money that you have in your bank and puts them
Speaker 1: in a reciprocal fashion in hundreds of banks that are
Speaker 1: in this network and make sure that you know, if
Speaker 1: there's a failure in one, you can still get access
Speaker 1: your money. It's a simple risk management strategy that practically
Speaker 1: every company on Earth except the big brains in Silicon
Speaker 1: Valley use. And you have people like Jason Calcanus out
Speaker 1: there now saying, oh, we're going to get so much
Speaker 1: innovation because now we're going to come up with digital
Speaker 1: strategies to to you know, get around the two hundred
Speaker 1: and fifty thousand dollars limit. That's like Uber reinventing the bus.
Speaker 1: These guys are idiots. They're complete morons that think that
Speaker 1: nobody else is as smart as them to come up
Speaker 1: with these strategies. In fact, these are extremely common strategies
Speaker 1: used for decades, and when they realized they didn't have it,
Speaker 1: then they started this digital bank run, which then had
Speaker 1: this threat to move to other parts of the system
Speaker 1: and led to this extraordinary Federal Reserve bailout that is
Speaker 1: going on with not just your right to point out
Speaker 1: it's not just that they're essentially making infinite deposit insurance
Speaker 1: for every bank in America and every depositor in America.
Speaker 1: It's this thing about opening this lending facility that says,
Speaker 1: give us all your assets, even if they've gone down
Speaker 1: in value, will pretend that they're worth what they've used
Speaker 1: to be worth. That is again all kinds of risk
Speaker 1: management in banks that we've seen for decades, and it's
Speaker 1: going to create massive amounts of risk to pool. This
Speaker 1: is a bigger problem than what was actually dealt with here,
Speaker 1: and it's going to get much worse. Yeah. I think
Speaker 1: that's really well said. I mean, because the fat is
Speaker 1: basically said to the entire banking chapter, don't worry about risk.
Speaker 1: American people will cover it. We'll take on the risk.
Speaker 1: You just keep making your profits. David, thank you so
Speaker 1: much for breaking all of us down for us. I
Speaker 1: really appreciate it. Extraordinary news on the international scene at
Speaker 1: the same time, so President She and China making major
Speaker 1: diplomatic overtures across the world that are both upstaging the
Speaker 1: US and really just showing us increasingly on a day
Speaker 1: by day slow basis of really what a return to
Speaker 1: multipolarity is going to look like. So let's go ahead
Speaker 1: and put this up there on the screen. Shishinping is
Speaker 1: now announcing a plan to speak with President Zelenski for
Speaker 1: the first time since the Ukraine War broke out. This
Speaker 1: is going to follow the Chinese leaders meeting with Russia's
Speaker 1: President Vladimir Putin next week, making China one of the
Speaker 1: major interlocrators currently between Moscow and between Ukraine. This was
Speaker 1: previously a role that France had taken. There were some
Speaker 1: indications that maybe the Indians would step in into it,
Speaker 1: but with China stepping in, it is an extraordinary moment
Speaker 1: for a couple of reasons. Number one, almost nobody actually
Speaker 1: maintains relations with both countries. But two, this would be
Speaker 1: a huge step in their Beijing's basically current want to
Speaker 1: be the international peace meeker. We're going to talk a
Speaker 1: little bit about the peace deal that they've broken with
Speaker 1: Iran and Saudi Arabe, or at least restoring of diplomatic relations.
Speaker 1: Is not necessarily a peace deal, but to think about
Speaker 1: what level of legitimacy that would bestow upon them on
Speaker 1: the world stage is actually extraordinary. And there was a
Speaker 1: really interesting moment that happened yesterday. There's an Atlantic Council fellow.
Speaker 1: For those who don't know, the Atlantic Council's kind of
Speaker 1: like as Neo lib as it gets protecting the Atlantic Alliance.
Speaker 1: It is the heartbeat of the plot. That's a great
Speaker 1: way to put it. As foreign policy establishment thinking goes like,
Speaker 1: that's where it is. And it was a scholar there
Speaker 1: who is very much of that mind, and she's like, Hey,
Speaker 1: I'm in India. I don't think we in the West
Speaker 1: really understand how little the European and US rhetoric about
Speaker 1: autocracy versus democracy is not landing at all in South Asia.
Speaker 1: She was like, here in India, they don't want to
Speaker 1: hear it. They don't care. A huge portion of the
Speaker 1: global South that we've talked to, spanning for Lula to
Speaker 1: people in Japan, South Korea and elsewhere, are like, I
Speaker 1: don't want to hear all your talk about democracy. And
Speaker 1: you know, even the Indians were like, listen, we're not
Speaker 1: saying that what happened is good, but you know, you
Speaker 1: guys expanded NATO and these things. So the point is
Speaker 1: that they're willing to look at both sides very equally.
Speaker 1: They see it very differently. And when we covered that
Speaker 1: poll that showed that basically only the US, even Europe
Speaker 1: wasn't really buying the like it's democracy versus authoritarianism, even
Speaker 1: they felt like, Okay, this is more about national interest
Speaker 1: And certainly the rest of the world does not view
Speaker 1: this conflict in the way it has been framed to
Speaker 1: the American peapure. China is exploiting that void by basically
Speaker 1: embracing a real politic view of everything, and this is
Speaker 1: to their benefit for variety of reasons. Number one, of course,
Speaker 1: they are currently on the verge of making a decision
Speaker 1: on whether to send lethal aid to Russia basically to
Speaker 1: help them fight the war in Ukraine. It would be
Speaker 1: a major development for them to do so. It would
Speaker 1: definitely open up and change a lot of the Russian
Speaker 1: supply problems that they have, and it certainly would have
Speaker 1: some impact there on the battlefield. But they're doing it
Speaker 1: at the same time that they are also have been
Speaker 1: facing international condemnation. Remember also that China's approval reading worldwide
Speaker 1: dropped dramatically because of COVID. Everybody blames them for COVID rightfully,
Speaker 1: I think in my opinion. We'll cover our poll later
Speaker 1: in the show about everyone thinks it. Basically a super
Speaker 1: majority of Americans are like, yeah, it's a lap leak,
Speaker 1: and that's in America. That's probably low compared to the
Speaker 1: rest of the world, where they're like obviously, it's so
Speaker 1: they need to try and shore up their international support. Second,
Speaker 1: they want to define the world in their way. Why
Speaker 1: because then if there was ever a major showdown over Taiwan,
Speaker 1: they would have a lot more international capital built up
Speaker 1: in the diplomatic system than they currently have right now. So, look,
Speaker 1: the call has not yet been announced. I do think
Speaker 1: it will happen for a very specific reason. Let's go
Speaker 1: and put this next one up there on the screen.
Speaker 1: It's because the Chinese proposed a piece plan about a
Speaker 1: couple of weeks ago on the first anniversary of the
Speaker 1: Russian invasion of Ukraine. Effectively, the plan Wohild just freeze
Speaker 1: the battlefield where it is right now with some negotiation
Speaker 1: over parts of eastern Ukraine and would bring the two
Speaker 1: sides together. The Chinese, you know, they like to frame
Speaker 1: everything in terms of mutual respect, and by that really
Speaker 1: they mean their definitions, but they say, quote, all parties
Speaker 1: must stay rational and exercise restraint, avoid fanning the flames,
Speaker 1: aggravating tensions, prevent the crisis from deteriorating further or spiraling
Speaker 1: out of control. They want to step in and cast
Speaker 1: themselves as the peacemaker. What was also very important is
Speaker 1: despite the fact that Zelenski, anytime somebody like Elon is like, Hey,
Speaker 1: I'm not so sure about this, maybe we should have
Speaker 1: a peace plan, he actually responded very positively to it.
Speaker 1: You know why, because he knows that if he were
Speaker 1: to reject it out of hand completely, the Chinese would
Speaker 1: be like, okay, well, if you're not even willing to
Speaker 1: negotiate it all, then we're just going to send weapons
Speaker 1: to Russia and then you guys will be defeated holistically
Speaker 1: on the battlefield. So the point is is that they
Speaker 1: actually put Zelenski in a bind and have gotten him
Speaker 1: to a point where he has said, I am willing
Speaker 1: to discuss this with the Chinese. So he opened up
Speaker 1: that ground saying I want to speak to President she.
Speaker 1: A lot of people in the West were like, Zelenski's
Speaker 1: calling GI's bluff. I'm like, is it a bluff? Because
Speaker 1: maybe they actually do want to broker this. It would
Speaker 1: be the diplomatic coup of the century. If they were
Speaker 1: to bring this conflict to an end, it would upstage
Speaker 1: and humiliate the United States. It would make a Chinese
Speaker 1: takeover of Taiwan ten times more possible, because just in
Speaker 1: terms of the legitimacy, in terms of the allies that
Speaker 1: they would get through that, in terms of the way
Speaker 1: that Asia would start to look at the conflict, and
Speaker 1: let's be honest, global public opinion wise, they would be
Speaker 1: striking at the core of what most people want, not
Speaker 1: necessarily here in America, although increasingly I think more so,
Speaker 1: but specifically all across the world of people who are like,
Speaker 1: I'm not buying this US framing of this conflict. I
Speaker 1: think it's very very positive. If China wants to play
Speaker 1: the role of peacemaker. God knows that somebody needs to,
Speaker 1: and the US has absolutely abdicated their ability and desire
Speaker 1: to play that role from early in this conflict when
Speaker 1: they decided that our interests were in continuing the war
Speaker 1: in order to be a check on Russia, rather than
Speaker 1: trying to push the parties to the negotiating table to
Speaker 1: bring the conflict to a close and end what has
Speaker 1: been an absolutely devastating war, certainly first and foremost for
Speaker 1: the Ukrainian people, but also for the world in terms
Speaker 1: of energy prices, in terms of food prices, in terms
Speaker 1: of global instability. So I absolutely welcome this role for China.
Speaker 1: I hope they are approaching it in good faith. I
Speaker 1: think the fact that there is any receptiveness on the
Speaker 1: side of Zelenski is incredibly noteworthy because it was interesting saga.
Speaker 1: When the peace plan from China quote unquote was first
Speaker 1: introduced to announce etc. The official response from Ukraine was
Speaker 1: very dismissive, but when Zelenski himself was asked about it,
Speaker 1: he was actually much more receptive. Now NATO, on the
Speaker 1: other hand, is not impressed. They say China doesn't have
Speaker 1: much credibility. This is the NATO Secretary General. China doesn't
Speaker 1: have much credibility because they've not been able to condemn
Speaker 1: the legal invasion of Ukraine. But in fact, the China
Speaker 1: is on the verge potentially of taking some more aggressive
Speaker 1: and clear cut steps to back Russia. At that point
Speaker 1: their ability to play any sort of peacemaker role is
Speaker 1: going to be dead. But they haven't done that. Yet,
Speaker 1: and in fact, the fact that they have kept a
Speaker 1: good relationship with Russia and haven't totally killed their relationship
Speaker 1: with Ukraine actually enables them to occupy this space. So
Speaker 1: I think it's actually kind of the polar opposite of
Speaker 1: what the NATO Secretary General has said here. Yes, it
Speaker 1: was an illegal invasion of Ukraine. We're not afraid of
Speaker 1: saying that here, But the fact that China hasn't said
Speaker 1: that and hasn't really pissed off the Russians in that
Speaker 1: way actually gives them a chance to be useful here.
Speaker 1: It's important to keep in mind as well, prior to
Speaker 1: the war, China was actually Ukrainan's biggest trading part, so
Speaker 1: it's not like there isn't any relationship there. There are
Speaker 1: deep and long standing important ties, economic ties, which also
Speaker 1: underscores that the way China has approached approached their foreign
Speaker 1: policy or their approach to imperialism you might say, has
Speaker 1: been less through we're going to put faces everywhere, We're
Speaker 1: going to enforce it with military might, and more through
Speaker 1: economic ties and cooperation in using those ties as a
Speaker 1: form of leverage and coercion. So you know, certainly they
Speaker 1: have a lot that they can work with here in
Speaker 1: terms of those ties with Ukraine and obviously with Russia.
Speaker 1: And the reason why this is part of a bigger
Speaker 1: campaign is let's put this next one up there on
Speaker 1: the screen. Our friend Tree Deparsi talking about how Saudi
Speaker 1: and Iran normalization of relations is a huge deal, not
Speaker 1: just because of the positive repercussions they could have in
Speaker 1: the region from Lebanon to yen In, but because it
Speaker 1: was mediated by China and not the United States. As
Speaker 1: he lays out here, Saudi and Iran tensons have had
Speaker 1: ups and downs in the last forty years, but this
Speaker 1: is the first time they've ever agreed to lower the
Speaker 1: temperature through Chinese mediation. By not taking sides, China immerged
Speaker 1: as a player that can resolve disputes rather than merely
Speaker 1: just sell weapons. Unfortunately, the US has adopted an approach
Speaker 1: to the region that has disabled it from being a
Speaker 1: credible mediator. Too often, Washington will just take sides in
Speaker 1: conflicts become a co belligerent, as in Yemen, which then
Speaker 1: reduces its ability to play the role of peacemaker. While
Speaker 1: many in Washington view China's emerging role as a mediator
Speaker 1: as a threat, the reality is that more of a
Speaker 1: stable Middle East where Iranians aren't at each other's throats
Speaker 1: and Saudis, also benefits the United States. So I definitely
Speaker 1: think he is right. And the reason though that I'm
Speaker 1: trying to take a step back is listen, all states,
Speaker 1: I am a real poplit like, all states are doing
Speaker 1: things for self interested purposes. All what the Chinese want
Speaker 1: is hegemony over East Asia and specifically to unite China
Speaker 1: and Taiwan, and everything that they are doing is setting
Speaker 1: the ground to try and make that happen. I think
Speaker 1: that would be a catastrophe for the US economy and
Speaker 1: for US relations in Asia, which I think is the
Speaker 1: most important region in the entire world. Hence why I'm
Speaker 1: broadly opposed to much of our aid both to Ukraine
Speaker 1: and to our role across the Atlantic Ocean, because I
Speaker 1: think Europe is a dying society slowing GDP not going
Speaker 1: to be important nearly as much so as it is
Speaker 1: one hundred years as opposed to the Asia Pacific, and
Speaker 1: so everything that they are doing is basically trying to
Speaker 1: replicate what we did all through nineteen forty five and onward,
Speaker 1: broking these peace deals, you know, and recreating the type
Speaker 1: of diplomacy. Listen, we didn't do it for benevolent reasons either.
Speaker 1: We did it also to expand the American economic empire.
Speaker 1: That's the exact same reason that they want to do it.
Speaker 1: And so watching this really what it is is it
Speaker 1: shows to me how foolish the neolib view that the
Speaker 1: Biden administration, the Atlantic worship that they have had both
Speaker 1: of NATO and of aid to Ukraine, and the tremendous
Speaker 1: danger and opening that they have left us to by
Speaker 1: abandoning all pretense of realism in any of this conflict.
Speaker 1: And so to watch this happen, I mean, multipolarity was
Speaker 1: not a joke. It actually led to a lot of
Speaker 1: wars across the world. I'm not necessarily saying that unipolarity
Speaker 1: doesn't have its downsize either, but we shouldn't close our
Speaker 1: eyes as to what like a new more unstable world
Speaker 1: is going to look like. And you know, in this case,
Speaker 1: it can be positive, but it can also be their negative. Well,
Speaker 1: I mean, we've played ourselves, is the bottom line. I
Speaker 1: think Treata's part point here is really critical that we
Speaker 1: are belligerents in terms of the Ukraine War. We're co
Speaker 1: belligerents in terms of Yemen. So of course that complicates
Speaker 1: and disrupts our ability to serve as a credible peacemaker
Speaker 1: in either of these regions and in any of these conflicts.
Speaker 1: So what he ends with here is that Washington should
Speaker 1: avoid a scenario where regional players view America as an
Speaker 1: entrenched war maker and China as a flexible peacemaker. And
Speaker 1: that is exactly the direction that we're headed in. I know,
Speaker 1: another thing is so embarrassing. We have spent billions of
Speaker 1: hundreds of billions on Saudi Arabia. Hey did this in
Speaker 1: the full knowledge that it would make Biden and that
Speaker 1: America look like a fool, like a second rate power.
Speaker 1: What are we doing supporting these people? They're just beyond
Speaker 1: their barbaric society. Why are we doing this for any
Speaker 1: positive reasons? What are we getting out of them? We
Speaker 1: are selling them weapons? Well, they flip us the bird.
Speaker 1: It's like, you know, in Iraq. You know, look, we
Speaker 1: spent what five trillion dollars in Iraq? They turned around
Speaker 1: and signed a deal with an economic deal with the Chinese.
Speaker 1: It's like, you can't even make this stuff up. In
Speaker 1: terms of the level of support that we've provided to them,
Speaker 1: and they'll stab you in the front. They don't even care.
Speaker 1: And it's one of those where I can't blame them.
Speaker 1: I probably do the same thing if I had such
Speaker 1: a foolish person who was willing to give you so
Speaker 1: much money and then also not actually bring any of
Speaker 1: its real power to bear for our own interests and
Speaker 1: just basically to take in for a ride in terms
Speaker 1: of lobbyists. So look, bottom line, this is a big deal.
Speaker 1: This is a very big deal, and if it does develop,
Speaker 1: it will represent a major sea change in international relations. Absolutely, absolutely. Okay,
Speaker 1: let's turn to some domestic politics here. The Democratic administration
Speaker 1: and other Democratic elites are getting very concerned about the
Speaker 1: public's negative impression of Vice President Kamala Harris because there's
Speaker 1: an election coming up and Joe Biden is expected to
Speaker 1: run with Kamala Harris on the ticket again, and they
Speaker 1: are realizing that the fact that you've got a dude
Speaker 1: who's the president of the United States who would be
Speaker 1: eighty six years old by the end of the next term, well,
Speaker 1: that makes the vice presidential position even more important than
Speaker 1: it normally is, because while look, the vice president's always
Speaker 1: a heartbeat away from the presidency. When you're talking about
Speaker 1: the heartbeat of an eighty plus year old man, it
Speaker 1: becomes a kind of a different deal in terms of
Speaker 1: the actuarial tables. So the initial issues started between Democrats
Speaker 1: sort of the Biden administration, Kamala Harris in particular, with
Speaker 1: some comments that Elizabeth Warren made. We actually covered them
Speaker 1: at the time on a radio show where she was
Speaker 1: asked whether Kamala Harris should be the vice presidential nominee
Speaker 1: and kind ahead take a listen to that. I really
Speaker 1: want to defer to what makes Biden comfortable on his team.
Speaker 1: I've known Kamala for a long time. I like Kamala.
Speaker 1: I knew her back when she was when she was
Speaker 1: an Attorney general and I was still teaching, and we
Speaker 1: worked on the housing crisis together, so we go way back.
Speaker 1: But they need they have to be a team. In
Speaker 1: my senses, they are. I don't mean that by suggesting
Speaker 1: I think there are any problems. I think they are.
Speaker 1: So yeah, very interesting. She's like, Oh, they need to
Speaker 1: be a team. I'm not saying they're not a team,
Speaker 1: but just saying like he needs to be comfortable. Okay,
Speaker 1: So Kamala was very upset about this apparently put this
Speaker 1: next piece up on the screen. According to CNN, they
Speaker 1: have a long article here about the worries about Kamala Harris.
Speaker 1: Elizabeth Warren called Kamala twice to apologize after those comments
Speaker 1: she made on whether Biden to keep Harris's VP. Harris
Speaker 1: has not called back. But they go on in this
Speaker 1: article from CNN to talk about the fact that Democratic
Speaker 1: elites just want everybody to shut up about their concerns
Speaker 1: and complaints about Kamala Harris. They want commentators to stop
Speaker 1: talking about it. They want, certainly this issue that came
Speaker 1: up with Elizabeth Warren, they want her to shut her
Speaker 1: mouth about it. What they say is that it's the
Speaker 1: latest in a long string of snubs to a vice
Speaker 1: president who they say has never gotten this respect or
Speaker 1: support she deserves. They also contend multiple Democratic leaders they say,
Speaker 1: contend that if people don't start feeling more positive about
Speaker 1: the next person in the line of succession, they might
Speaker 1: turn away from the ticket entirely. So they're urging allies
Speaker 1: to stop the Harris pylon, if only for Biden's sake,
Speaker 1: or for Democrat's sake or the party's future. So basically,
Speaker 1: keep your mouth shut, don't be honest about the problems here,
Speaker 1: because we're sticking with Kamala and it's really important that
Speaker 1: the American people are somehow persuaded that it would be
Speaker 1: all finding good if she ended up as president of
Speaker 1: the United States. Good luck with that. She has such
Speaker 1: a thin skin for letting something like that get underneath,
Speaker 1: like what is wrong with you? And look, I just
Speaker 1: think it underscores. Only people who are fundamentally weak act
Speaker 1: like this. People who have real holds over the party,
Speaker 1: real constituencies, real operations, and real chances of the presidency,
Speaker 1: they don't behave in this way because they have a
Speaker 1: real power base. Because she is such a media creation. Literally,
Speaker 1: she is almost like a product of the conspiracy of silence.
Speaker 1: Everyone knows she's a terrible politician. Everyone knows that she
Speaker 1: is the least popular vice president in modern history, more
Speaker 1: so than Biden. And she doesn't even do anything, and
Speaker 1: yet no one can say it, mostly because of racial
Speaker 1: politics and because she's a woman, because of basically media enforcers,
Speaker 1: and then the weaponization of identity politics. It's like the
Speaker 1: Hillary factor almost times twenty. I never thought I would
Speaker 1: live to see a national politician who was worse than
Speaker 1: Hillary come to the stage. But if we've been delivered, yeah,
Speaker 1: that's what we've been delivered. Yeah, it is incredible. And
Speaker 1: I mean, listen, the reason Kamala Harris is Vice President
Speaker 1: of the United States, in spite of the fact that
Speaker 1: she couldn't even make it to the primaries, to have
Speaker 1: a single voter cast a vote for her in twenty
Speaker 1: twenty is because James Cliburn basically said, you will pick
Speaker 1: a black woman, and you know, she ends up on
Speaker 1: the list. Actually, Jill Biden did not want her there.
Speaker 1: Joe should have listen to Jill. Sure, but it was
Speaker 1: obvious to everyone that, you know, whatever you think of
Speaker 1: her record, which there's a lot to say about that
Speaker 1: as well, just on the level of political talent, she
Speaker 1: just didn't have it. And to try to deny that
Speaker 1: obvious reality to the American people, I mean, it's just
Speaker 1: not going to work. But this whole CNN article handringing
Speaker 1: about the situation they find themselves in. It's funny because
Speaker 1: they're saying, oh, there's this this pile on on Kamala Harris.
Speaker 1: It's quite the opposite. There's been so little critical coverage.
Speaker 1: Cham Laiir is to be honest with you. I mean,
Speaker 1: she really has been protected from the beginning in a
Speaker 1: lot of ways. It's just that it's really apparent that
Speaker 1: you know, this is going to be a political issue
Speaker 1: for Biden and the ticket moving forward in twenty twenty
Speaker 1: four and definitely impacts his electability. There's no doubt about it.
Speaker 1: Even if you think he's great and did a great job,
Speaker 1: you got to ask yourself who's next in line? And
Speaker 1: the answer is very troubling. And then you know, for
Speaker 1: whatever reason he didn't run or he was unable to run,
Speaker 1: then you have an even bigger problem because she's the
Speaker 1: one who you've said by making her vice president is
Speaker 1: next in line, and they know they have a real
Speaker 1: political issue with her. So this all great clip to
Speaker 1: show you from view. Ladies discussing all of this, the
Speaker 1: CNN report, the Elizabeth Warren comments, etc. Their takes are
Speaker 1: just amazing. Take a listen. I feel like the Biden
Speaker 1: West wing isn't necessarily setting her up for success by
Speaker 1: giving her things that she can go out and champion
Speaker 1: at a time when voters I get this age like
Speaker 1: age is not the most important thing, but you are
Speaker 1: if you're electing someone who's an eighty two year old
Speaker 1: in twenty twenty four. You need to believe that the
Speaker 1: vice president is able and willing the next day to
Speaker 1: be the president. And I think there's some concern about
Speaker 1: just the lack of a policy accomplishment that she's made
Speaker 1: as vice I'm surprised if there's concern. I think it
Speaker 1: has a lot to do with this. She's a black woman.
Speaker 1: Black women get everything done. We've saved this country democracy first. Amazing,
Speaker 1: But what specifically, but whoa like where shall I start?
Speaker 1: I mean, she was in the Senate of pre me.
Speaker 1: Of course, she's the Inflation Reduction Act. I mean she's
Speaker 1: the face of Rovy Way. I mean, Solist goes on
Speaker 1: and on. I'd like to ask you what what operations?
Speaker 1: What dependable? Put his lips firmly on the butt of
Speaker 1: Donald Trump and still is fighting a subpoena to testify
Speaker 1: against Trump. I mean, when Pence finds the cohonas to
Speaker 1: do something, then I think we can think about how
Speaker 1: vice presidential it does feel a little. It's so funny
Speaker 1: because Alyssa Farra there, her critique, her like pushback on
Speaker 1: the view is like so mild and mellow, like oh,
Speaker 1: I just think maybe like she could have done a
Speaker 1: little bit more. And then Sonny immediately pulls the Trump
Speaker 1: card of you're basically implying she's a racist, right, You're
Speaker 1: only saying that because she's a black woman, So that's
Speaker 1: number one. And then Alyssa's like, okay, well, just like,
Speaker 1: tell me some policy accomplishments. Where do I start? And
Speaker 1: she can pull up like one or two things, and
Speaker 1: then she names things that she had nothing to do
Speaker 1: with Production Act, which Kamala Harris had zero to do with.
Speaker 1: And being the faith of Roe versus Wade, what is that?
Speaker 1: That means nothing? That absolutely means nothing. And also, Sager,
Speaker 1: you were reminded from that comment of one of our
Speaker 1: personal show favorite moments of the incredibly effective job that
Speaker 1: Kamala Harris did representing the administration's interest when it came
Speaker 1: to the issue of abortion. Take a listen to this.
Speaker 1: I think that, to be very honest with you, I
Speaker 1: do believe that we should have rightly believed, but we
Speaker 1: certainly believed that certain issues are just settled, certain issues
Speaker 1: are just settled. Clearly we're not. No, that's right, And
Speaker 1: that's why I do believe that we are living sadly
Speaker 1: in real unsettled times. So that was her response to
Speaker 1: a question face of words, Roby Wade, Hey, shit, had
Speaker 1: they maybe done something the Democratic Party when knew had
Speaker 1: a supermajority under Obama? And that was the gobbledygook answer
Speaker 1: that she was able to offer. It's just such race
Speaker 1: baiting BS to say that any criticism of her is
Speaker 1: because she is a black woman. If anything, the only
Speaker 1: reason that she is a national office is because she
Speaker 1: is a black woman. That's a conflating criticism of that
Speaker 1: is outrageous when really they're the ones who played the
Speaker 1: race card from the beginning, So it's outrageous. Second, yeah,
Speaker 1: as you could see in that clip with Alyssa, she's very,
Speaker 1: very trapidly even pushing. Of course, they could literally the
Speaker 1: only quote unquote right person they could find as somebody
Speaker 1: who's like kissing the ass of CNN has denounced Trump
Speaker 1: at every turn. And look, I'm not saying that that
Speaker 1: isn't a valid point, but I'm saying like that does
Speaker 1: not represent conservatism in the United States literally in any way.
Speaker 1: I don't even also claim to do that, but I'm
Speaker 1: saying that is literally what her job is supposed to
Speaker 1: be on. I also like how when Sonny struggles to
Speaker 1: articulate what Kamala has provided in the office of the
Speaker 1: Vice Presidency, the next rhetorical trick she pulls is going, well,
Speaker 1: what about Mike Pence because she knows that the view
Speaker 1: audience will like, that's an easy rhetorical victory for her
Speaker 1: to be Like, and Mike Pence was out there kissing
Speaker 1: Donald Trump's button, It's like, okay, true, what does that
Speaker 1: have to do with Kamala Harris? But you know, she
Speaker 1: knows that that's a good way to get the audience
Speaker 1: on her side since she's struggling to actually defend her
Speaker 1: record in office. And look, let's be honest, vice presidents,
Speaker 1: you know they don't typically do a lot. Biden was
Speaker 1: actually more impactful when he was vice president because he
Speaker 1: had all those relationships with the Senate. Obama hated doing
Speaker 1: like that kind of retail politics. Jo Biden obviously loves
Speaker 1: doing that kind of retail politics. So you could actually
Speaker 1: make a case, okay, he actually mattered in terms of
Speaker 1: trying to work with probably going to strike a deal,
Speaker 1: et cetera with Kamlin. You know, the thing that you
Speaker 1: would hope for with her is that she would be
Speaker 1: a competent spokesperson in these various interests, in representing the
Speaker 1: administration and their positions. That's really the one job she
Speaker 1: actually has as vice president, and it happens to be
Speaker 1: a job that she is incredibly poorly suited to because
Speaker 1: she's just not quick on her feet. In these interviews,
Speaker 1: she's always trying to she's she's always trying to just
Speaker 1: like recite what was in the briefing book without having
Speaker 1: actually spend any time with the briefing book. Marshall always
Speaker 1: makes the point she's really trying to like west wing
Speaker 1: it and say something profound every time, when really you
Speaker 1: should just be like answering the question directly and straight
Speaker 1: so anyway you know they want, and the it went
Speaker 1: on with what's her name? Anna Navarro was like, I
Speaker 1: don't know what's wrong with Democrats. They just need to
Speaker 1: be quiet about this criticimicism because you're giving Republicans talking points,
Speaker 1: which also completely drives me crazy because you can't just
Speaker 1: lie to people and deny reality because you're terrified about
Speaker 1: what Republicans might say. Republicans already have They're going to
Speaker 1: have talking points no matter what you do, So you
Speaker 1: only undermine your own credibility when you are straightforward with
Speaker 1: the American people about what you actually think. There's a
Speaker 1: phrase I just remembered called the biggest tree of low expectations. Yeah,
Speaker 1: and I think that is really what's happening here, is
Speaker 1: that we have such low expectations of her that it's
Speaker 1: literally bigoted, so that you're conflating the criticism when what
Speaker 1: we really expect is a competent vice president and that's it.
Speaker 1: So to say that we're not allowed to criticize her
Speaker 1: or the criticism of her for her bad, obviously bad
Speaker 1: performance is in some way racial, is itself injecting something
Speaker 1: that has nothing to do with her actual job. Well,
Speaker 1: I have a perfect example for you. After Hillary Clinton
Speaker 1: lost against Donald Trump, there were a lot of people
Speaker 1: who said it was because of sexist Yes, the country
Speaker 1: was too sexist to elect a female president, And that
Speaker 1: is an incredibly I mean, listen, I'm not denying the
Speaker 1: reality of racism or sexism, far from it. But when
Speaker 1: that is the narrative that you go with when there
Speaker 1: were so many other obvious failings of Hillary Clinton, well
Speaker 1: what does that tell Democratic voters the next time around?
Speaker 1: And this came up in the runs of people like
Speaker 1: Elizabeth Warren and Kamala Harris and others. You know, I
Speaker 1: really might like you, or I might like your policy,
Speaker 1: but I my number one priority is electability, and I
Speaker 1: was just told with Hillary Clinton that a woman can't win.
Speaker 1: So you end up when that's your only analysis and
Speaker 1: when you throw it up as a smoke screen for
Speaker 1: every single thing, even when there are clearly other obvious
Speaker 1: issues going on. What you're doing is you're telling other
Speaker 1: young women or other young black women that they don't
Speaker 1: have a chance, and you're telling voters that they shouldn't
Speaker 1: back these people in primary because ultimately the electorate is
Speaker 1: too racist and too sexist for them to have a shot.
Speaker 1: So if you care about winning, I guess you just
Speaker 1: got to stick with the old white guys. Very good point.
Speaker 1: It really is hopeful. Note though, in terms of the media,
Speaker 1: so apparently the American public, not Democrats, not Republicans, not independence,
Speaker 1: but the media spin with regard to the origins of
Speaker 1: the pandemic. It's going to put this up on the screen.
Speaker 1: This is really quite love fascinating. This is an economist
Speaker 1: you go of poll they found that they asked people Okay,
Speaker 1: what do you think was COVID origin natural or was
Speaker 1: it a lableak? Sixty six percent super majority of Americans
Speaker 1: said they lean toward lableak. That includes four percent of Democrats,
Speaker 1: so a majority of Democrats versus only twenty five percent
Speaker 1: who say they lean towards natural. That other twenty one
Speaker 1: percent say they're not sure. So fifty four percent of
Speaker 1: Democrats they lean lab leak, sixty two percent of independence
Speaker 1: and eighty six percent of Republicans. So there are some
Speaker 1: part differences there which you would expect. But even among Democrats,
Speaker 1: which you know almost entirely consume news media that for
Speaker 1: years was telling them not only was laud leak wrong,
Speaker 1: definitively wrong, but it was also racist to even consider it.
Speaker 1: They didn't really listen to their media purveyors of choice,
Speaker 1: and I find that to be an incredibly beautiful and
Speaker 1: encouraging thing. Ultimately, Oh I love this. This is kind
Speaker 1: of like the Kennedy assassination thing. Yeah, where everyone's like,
Speaker 1: here's the official story, all of that, and by nineteen
Speaker 1: seventy five they're like, yeah, I just don't believe a
Speaker 1: literal word of what I think. It was a complete
Speaker 1: conspiracy and you know the crazy part when you dig
Speaker 1: into this is many Democrats even are willing to buy
Speaker 1: that it was a deliberate leak of the virus. Some
Speaker 1: thirty five percent say it was actually deliberately leaked in
Speaker 1: some sort of bioweapon. And so geez. That is you
Speaker 1: are seeing the level of suspicion that Americans have here
Speaker 1: about whether COVID was leaked from the lab and whether
Speaker 1: even it was intentionally leaked from the lab. So I
Speaker 1: think that that just really encapsulates everything where you can
Speaker 1: have as much media propaganda as you want. Americans are
Speaker 1: not stupid. It's been almost two and a half years
Speaker 1: now that polling has indicated that at least half of
Speaker 1: the country has always thought this was the lab leak.
Speaker 1: It just turns out that half is was never represented
Speaker 1: on television, and now you have a supermajority people. It's
Speaker 1: like the John Stewart bit. He's like, you're telling me
Speaker 1: that the lab where they happened to study this is
Speaker 1: the place where the pandemic happened. It's common sense, people,
Speaker 1: It's just straight up common sense. All the spin, all
Speaker 1: the actually foreig intellagencies would have nothing to do with
Speaker 1: labs all disagree. They're not buying any of this crap.
Speaker 1: They know what's true and they know what's not. All
Speaker 1: you had to do is lay out the circumstantial case,
Speaker 1: and then the reams of evidence on top of that,
Speaker 1: and then the testimony of the former CDC director and
Speaker 1: then all of the cover up, and it just confirms
Speaker 1: everything that they knew from day one. Yeah, sometimes ordinary
Speaker 1: people have a lot more common sense than these supposed
Speaker 1: experts and elites that get trotted out on cable news.
Speaker 1: But you know, it's just really encouraging to see a
Speaker 1: level of skepticism even among you know, sort of the
Speaker 1: Democratic base and liberals who had their own ideas about this,
Speaker 1: even as you know, all of their media outlets were
Speaker 1: pushing one particular narrative, and even as they're, you know,
Speaker 1: someone who they could still consider like a hero of
Speaker 1: the pandemic continues to be on the other side of
Speaker 1: the debate, they're still able to look at it and
Speaker 1: be like, you know what, I'm taking off my partisan hat,
Speaker 1: I'm taking off my like I Love Fauci T shirt,
Speaker 1: and I am going with what is like common sense
Speaker 1: to me and what appears to be the most likely
Speaker 1: explanation here. It's also, in my view, another sign of
Speaker 1: the decline in trust, much deserved decline in trust among
Speaker 1: the you know, traditional mainstream corporate press. I think that
Speaker 1: is also a really good thing, because you know, if
Speaker 1: you are going to disrupt the status quo in any
Speaker 1: meaningful way, you're going to need a bulk of the
Speaker 1: population to be free thinking and to reject the lines
Speaker 1: that they are at least to question the lines that
Speaker 1: are being pushed to them from mainstream press. So I
Speaker 1: see that as nothing but a positive development. Absolutely. My
Speaker 1: only fear with this is, you know, with a lot
Speaker 1: of these democrats, because if you also were to be like, well,
Speaker 1: what do you think about you like, very positively and unfortunately,
Speaker 1: I think that the explanation for lablink and for the
Speaker 1: cover up is deeply convoluted. As much as I would
Speaker 1: love for it not to be, it's difficult to convey
Speaker 1: to someone who is not already deeply skeptical. Now millions
Speaker 1: of people are they watch the show. We can see
Speaker 1: that in terms of the level of interest. But imagine
Speaker 1: you got to explain to a layman EcoHealth Alliance and
Speaker 1: back coronavirus research gain a function that is the disconnect
Speaker 1: where it's like it's kind of like a rack. Everyone's like,
Speaker 1: well bush led about WMS. It's like, yeah, that is
Speaker 1: broadly true, but then the actual specifics of it. To
Speaker 1: try and explain the mechanics of Joseph Wilson and your
Speaker 1: yellow cake and Valerie Plume and then that was in
Speaker 1: its own scandal and own it just starts to become
Speaker 1: too much in people's eyes glaze over, and ultimately they
Speaker 1: rely on that because that's the way that they never
Speaker 1: actually get held accountable for these broad crimes, which are
Speaker 1: immense and which are terrible. So I just wish and
Speaker 1: hope that if we can try and start a campaign
Speaker 1: to really get people to get fully sped up on
Speaker 1: the actual details of this, there would be even more
Speaker 1: of a level of outreach and there might actually be
Speaker 1: some accountability too. And look, let's say, let's put Fauci aside.
Speaker 1: I don't think you'll ever go to jail, even though
Speaker 1: I think you should. Let's at least ban and put
Speaker 1: new limitations on game function, like that would be the
Speaker 1: ultimate factory. I don't think you need a lot of details,
Speaker 1: and like intimate knowledge of the original conference call and
Speaker 1: the letter and how it all went down to just
Speaker 1: get on a really basic level, this research caused a pandemic.
Speaker 1: We should curb the research or likely or potentially caused
Speaker 1: a pandemic for the YouTube misinformation sensors. So maybe we
Speaker 1: should do about that. That's a really simple and straightforward
Speaker 1: and common sense direction that I think people would be
Speaker 1: very and I think are very receptive too. Yeah, I
Speaker 1: think that's well said. All right, tycho, what are you
Speaker 1: looking at? Well, if you're like me, you're probably incredibly
Speaker 1: annoyed at the proliferation on Twitter, Instagram, and presumably on
Speaker 1: TikTok of tips on how to get rich. Seemingly every
Speaker 1: person who has ever started a business is out there
Speaker 1: with threads on how to optimize your taxes, how to
Speaker 1: get into the storage business, how to start a drop
Speaker 1: shipping company, how to maximize your NFTs, how to get
Speaker 1: into reats. I could literally go on forever. Much of
Speaker 1: this is a scam, but clearly the supply is there
Speaker 1: to meet the demand. At the heart of these schemes
Speaker 1: is the idea that you can, through sheer force of will,
Speaker 1: become rich and financially free in this country, and it
Speaker 1: is certainly true to a limited extent. In fact, I
Speaker 1: was stunned at a recent New York Times survey of
Speaker 1: income tax data that showed a massive portion of the
Speaker 1: people who make over one point five to eight million
Speaker 1: dollars a year in this country are car dealers and
Speaker 1: mechanics shop owners. Small business owners very much have the
Speaker 1: chance at striking it modestly rich in this country. In
Speaker 1: many ways, that is the American dream. But to really
Speaker 1: strike it rich, to really become a whale generational wealth,
Speaker 1: an entirely different skill set is now required, and unfortunately
Speaker 1: it has almost nothing to do with actually creating value
Speaker 1: for anyone in America. I couldn't help but be struck
Speaker 1: in watching this everything go down at Silicon Valley Bank.
Speaker 1: We have executives at this bank who cashed out millions
Speaker 1: of dollars in their own stock before the collapse. They
Speaker 1: gave themselves bonuses hours before the Feds took it over
Speaker 1: and they were insolvent. It hit me that these thread posters,
Speaker 1: they've got it all wrong. The way to really become
Speaker 1: rich in America is apparently star to regional bank, make
Speaker 1: dumb bets and gambles, run your business badly, pay yourself
Speaker 1: a bonus then have the government backstop your customer deposits
Speaker 1: while you laugh all the way to Aspen. Really consider
Speaker 1: the precedent that we have set, which we expounded on yesterday.
Speaker 1: All cash deposits in all banks are now backstopped by
Speaker 1: the government. Okay, but then why do these bank executives
Speaker 1: get to use our hard earned money to trade loan
Speaker 1: out to bet on investments when they pay us fractions
Speaker 1: of the penny on the dollar in interest and paying
Speaker 1: themselves big bonuses. Now, I have long said, to some controversy,
Speaker 1: we would be better off if people became billionaires in
Speaker 1: this country the way that Elon Musk and Bezos did,
Speaker 1: because at least that requires creating world changing companies. Today
Speaker 1: it almost has nothing to do with that. Consider the
Speaker 1: Forbes Billionaire List and the newest editions that are US citizens.
Speaker 1: Fifty as of April of twenty twenty two were added
Speaker 1: to the list. What do you think the single most
Speaker 1: common occupation of these new editions was, to a t,
Speaker 1: almost every single one of them was finance, including and
Speaker 1: I'm not joking who they shouted out, Gary Wang, vice
Speaker 1: president of FTX. I guess he's no longer on the list.
Speaker 1: But the rest of them. The most common occupation of
Speaker 1: these new billionaires was almost all the same, some derivative
Speaker 1: of finance, private equity, fintech, investment, banking, venture capital. Of
Speaker 1: the additions was Bill Gates's ex wife after her divorce settlement.
Speaker 1: The rest were a sprinkling of genuine entrepreneurs and then
Speaker 1: some real estate guys who are effectively as big sharks
Speaker 1: as the financiers in many ways, the industrialists like Musk
Speaker 1: and Bezos. That we focus on having the biggest fortune,
Speaker 1: it misses the fact that the most common way today
Speaker 1: to become filthy rich is not to start anything. It's
Speaker 1: financial engineering, shorting stocks, buying companies, gutting them offshoring, selling
Speaker 1: for parts, squeezing stock value, or in the case of
Speaker 1: the FTX guy, being a literal fraudster. And by the way,
Speaker 1: that was just the new billionaire's list. A comprehensive review
Speaker 1: of the Forbes four hundred list found that the most
Speaker 1: common occupation in developed nations for billionaires is finance, and
Speaker 1: if you lower the threshold down to mere multimillionaires, it
Speaker 1: remains just as common. Basically above small business owners. The
Speaker 1: only real way to get really rich in this country
Speaker 1: is to get some way involved in the financial industry.
Speaker 1: If you compare this to other countries, we are the
Speaker 1: standout dramatically. Chinese billionaires and Indian billionaires, Russian billionaires. They
Speaker 1: are disproportionately concentrated in manufacturing, retail, textile, and industry. Now, granted,
Speaker 1: many of them are oligarchs with connections to the state,
Speaker 1: but the point stands that their raw wealth is creation
Speaker 1: coming from hard assets. Ours is just games on a spreadsheet. Yes,
Speaker 1: I know I am simplifying this significantly. No, I am
Speaker 1: not saying these businesses have no place whatsoever or in
Speaker 1: our economy, but do you really believe that it should
Speaker 1: be number one? Worse, seemingly, our entire tax code is
Speaker 1: actually geared around protecting this very type of wealth. Once
Speaker 1: you have generated significant net worth, effective tax rate drops dramatically.
Speaker 1: Even amongst billionaires, your ability to avoid income tax is
Speaker 1: on a graduated scale. No single group of American billionaires
Speaker 1: enjoys more benefits than those in finance, including but not
Speaker 1: limited to, capital gains taxes, the carried interest loophole, and
Speaker 1: the ability to borrow against the value of stock to
Speaker 1: effectively have zero income. Take financial billionaires like Michael Bloomberg
Speaker 1: and Warren Buffett, for example, both have an effective lifetime
Speaker 1: tax rate of less than one point five percent. Buffets
Speaker 1: is actually zero point one percent. It is difficult to
Speaker 1: comprehend how much the entire system is designed almost entirely
Speaker 1: for their benefit. Meanwhile, if you're one of those successful
Speaker 1: small businesses owners that I mentioned, even with all the
Speaker 1: depreciation in the world, you are likely paying one of
Speaker 1: the highest effective tax rates in the United States. Maybe
Speaker 1: it's just me, but that's ass backwards. Businesses that are
Speaker 1: parts of the community are effectively penalized for earning cash,
Speaker 1: while the people who ostensibly manage that cash for you
Speaker 1: take leverage bets on the market, they make a killing,
Speaker 1: and they pay nothing. I already know nothing is going
Speaker 1: to change in the immediate term, but it is important
Speaker 1: to keep this in your mind, what things really should
Speaker 1: look like should the time ever come that we can
Speaker 1: ever actually do something about this. You know, this is
Speaker 1: a point, Crystal, I've always tried to make, and I
Speaker 1: just wanted to revisit it. And if you want to
Speaker 1: hear my reaction to Sagre's monologue, become a premium subscriber
Speaker 1: today at Breakingpoints dot Com. Crystal, what are you taking
Speaker 1: a look at? Well, guys, As we've been covering here,
Speaker 1: when things got dicey for wealthy venture capitalists, their friends,
Speaker 1: and their portfolio companies, the government leapt into action. After
Speaker 1: Silicon Valley Bank collapsed. It only took the government a
Speaker 1: single weekend to guarantee all depositors would be made one
Speaker 1: hundred percent whole, but that was really just the start.
Speaker 1: They also opened up an entirely new lending facility to
Speaker 1: make sure that all banks have liquidity, and will even
Speaker 1: allow banks to use as collateral for those cheap loans
Speaker 1: assets that have lost billions in value. Now, these actions
Speaker 1: not only benefits Silicon Valley Bank depositors and Signature Bank depositors,
Speaker 1: but the entire banking system. Every bank executive and shareholder
Speaker 1: with a shaky ballot sheet just got a massive bailout.
Speaker 1: Every wealthy person in America with more than two hundred
Speaker 1: and fifty thousand dollars in the bank they just got
Speaker 1: to guarantee that all their deposits are safe, even though
Speaker 1: their institutions did not pay enough insurance to actually cover
Speaker 1: all of those deposits. All banks are now effectively too
Speaker 1: big to fail and all deposits are now effectively insured,
Speaker 1: and as much as they want to claim this says
Speaker 1: no impact on the American taxpayer. Were the ones who
Speaker 1: are backstopping this new revolutionary banking status quo. Even if
Speaker 1: you just consider one piece of the bailout, the Fed's
Speaker 1: decision to allow banks to borrow against negative collateral value,
Speaker 1: this amounts to many billions of dollars in value conferred
Speaker 1: to one sector of the economy from the US government. Now,
Speaker 1: I cannot help but contrast this shock gunnav response from
Speaker 1: the federal government with a response to another crisis that
Speaker 1: we have spent a lot of time covering here, the
Speaker 1: Norfolk Southern train catastrophe in East Palestine, Ohio. Both crashes
Speaker 1: at cor were created by corporate greed and political capture.
Speaker 1: Case of Silicon Valley Bank, their CEO successfully argued for
Speaker 1: a light regulatory touch, exempting the bank from struss tests
Speaker 1: that might have kept it from going belly up. Seventeen
Speaker 1: Democrats joined with fifty Republicans to usher these changes through
Speaker 1: Congress during the Trump administration. Now, in the case of
Speaker 1: Norfolk Southern Railroad, interests had their way with the Obama
Speaker 1: administration when they successfully limited the scope of new safety REGs.
Speaker 1: The Trump administration went even further, rolling back several of
Speaker 1: those Obama era provisions, and the Biden administration maintained the
Speaker 1: status quo and then sided with the rail bosses over
Speaker 1: their workers on safety and on working conditions. But in
Speaker 1: one situation, the victims were wealthy and well connected, and
Speaker 1: the other the victims were working class people in a
Speaker 1: part of the country that the fancy people abandoned a
Speaker 1: long time ago. Now, I'm not saying the train crash
Speaker 1: in the bank crash are one hundred percent analogous. That'd
Speaker 1: be ridiculous. One big and important difference is that in
Speaker 1: the case of SVB, there was a possibility of financial
Speaker 1: contagion spreading to banks across the country. I tend to
Speaker 1: think these fares were a bit overblown, but it was
Speaker 1: certainly a real possibility, especially with a bunch of influential
Speaker 1: people running around hair on fire, basically willing one into existence. Now,
Speaker 1: with the Norfolk Southern train derailment, the fact of this
Speaker 1: one derailment was not going to trigger an onslaught of derailments.
Speaker 1: There was no contagion risk. So it is different in
Speaker 1: that it was not going to trigger cascading effects, although
Speaker 1: if you look at the safety stats, we already have
Speaker 1: a nationwide epidemic of trained derailments, which should be treated
Speaker 1: as a crisis. But both crashes have to do with
Speaker 1: the lives and the livelihoods of American citizens, and evaluating
Speaker 1: the responses, what you come away with is a pretty
Speaker 1: clear message about who our government is set up to serve.
Speaker 1: Who gets a bailout and who gets a raft of
Speaker 1: excuses for why we can't do anything, Who gets socialism,
Speaker 1: and who gets that good old fashioned, rugged individualism. So
Speaker 1: let's do a little thought experiment. What would it actually
Speaker 1: look like if East Palestine, Ohio got the Silicon Valley treatment.
Speaker 1: The first critical aspect of the government response to Silicon
Speaker 1: Valley was speed. It took mere days to marshal a
Speaker 1: major response and announced groundbreaking new policy, leaving depositors concerned
Speaker 1: about these bank accounts for only a single weekend. On
Speaker 1: the other hand, the Norfolk Southern train derailed on February third.
Speaker 1: It has been six weeks now since that happened, and
Speaker 1: still the community is lacking in the most basic of answers.
Speaker 1: Just last week, the EPA finally ordered soil to be
Speaker 1: tested for toxic dioxians, a glaring oversight given the risk
Speaker 1: of these chemicals and concerns of health experts, and outrageously
Speaker 1: that testing is being conducted by Norfolk Southern itself, the
Speaker 1: very company that caused the catastrophe and which has every
Speaker 1: incentive to cover up potential problems. I have zero doubt
Speaker 1: that a wealthy community would have expected and received full air,
Speaker 1: water and soil testing conducted immediately before anyone was told
Speaker 1: that it was safe for them to come home. Now,
Speaker 1: with Silicon Valley Bank, a key concern was the ability
Speaker 1: of business owners who had accounts of the bank to
Speaker 1: continue their operations and not miss a payroll. The government
Speaker 1: immediately stepped in to guarantee that those deposits would be
Speaker 1: made one hundred percent whole. What would it look like
Speaker 1: for East Palestine residents to be made one hundred percent whole. Well,
Speaker 1: they may not have owned fancy tech startups, but plenty
Speaker 1: of small businesses which have undoubtedly now been destroyed by
Speaker 1: the fact that their town has become synonymous with a
Speaker 1: massive industrial accident. Their home values have been decimated overnight.
Speaker 1: Any idea that perhaps they should move out of a
Speaker 1: potentially toxic town is being crushed by the fact that
Speaker 1: whatever they sunk into building wealth by a home ownership
Speaker 1: has now been completely wiped out. Medical bills are mounting
Speaker 1: for some who are continuing to report symptoms ranging from
Speaker 1: dizziness to skin rashes to vomiting blood. Making East Palestine
Speaker 1: one hundred percent would involve a cash infusion to make
Speaker 1: up the losses of their assets from homes to businesses,
Speaker 1: funds to relocate if they desire to do so. It
Speaker 1: would mean a Medicare for All guarantee that would eliminate
Speaker 1: current and future medical bills. By the way, there's a
Speaker 1: provision in Obamacare that could be invoked as secure universal
Speaker 1: health care for this town. It just requires the government
Speaker 1: to admit there is a public emergency, something they are
Speaker 1: ultimately loathed to do. Even this would not make the
Speaker 1: residents of the town one hundred percent whole when you
Speaker 1: consider the stress and potential health impacts and splintering of
Speaker 1: a deeply rooted community, but at least it would be
Speaker 1: a start. The government's actions with regards Silicon Valley Bank,
Speaker 1: they went far beyond just that one bank. They create
Speaker 1: a whole new program in an attempt to make sure
Speaker 1: no other banks or depositors suffered any losses. What would
Speaker 1: this look like in the case of industrial accidents like
Speaker 1: what happened in these palaesty It would mean expanding any
Speaker 1: programs that benefited that one Ohio community to cover any
Speaker 1: community impacted by a derailment or chemical spill. It would
Speaker 1: mean creating dedicated mechanisms like what exists within the FED,
Speaker 1: where funding can go out immediately without having a weight
Speaker 1: around for Congress to get their acts together, which they
Speaker 1: never do. And that's really the key difference between banks
Speaker 1: and ordinary people. We have an elaborate architecture in place
Speaker 1: that can spring into action the instant. There is a
Speaker 1: whiff of trouble for big business and for banks, but
Speaker 1: all of the mechanisms which are meant to help and
Speaker 1: protect ordinary people, they are decruppit or inadequate, non existent,
Speaker 1: or broken. So instead of an actual government response to suffering,
Speaker 1: you get Pete Boudhajid writing a strongly worded letter to
Speaker 1: rail bosses and Trump flying in to hand out branded
Speaker 1: water bottles and McChicken sandwiches. Imagine if in response to
Speaker 1: these bank failures, Janet Yellen just wrote a letter asking
Speaker 1: the banking industry to please do better, and Obama flew
Speaker 1: to California to hand out copies of his latest Netflix
Speaker 1: series or something like that. Now, there is one unfortunate
Speaker 1: commonality between these two crashes. Neither incident is likely to
Speaker 1: lead to the regulatory reform which would prevent future similar
Speaker 1: crises from recurring. With Silicon Valley, the government is treating
Speaker 1: the symptoms. With these Palestine, the government is telling suffering
Speaker 1: residents that the symptoms are all in their heads. In
Speaker 1: neither case is Congress likely to actually tackle prevention, because
Speaker 1: that would require taking industry head on, which is hard,
Speaker 1: versus giving them bailance, which is so easy. All I'm
Speaker 1: saying in the Masters of the Universe, who converted from
Speaker 1: mind random marks in the course of forty eight hours,
Speaker 1: is that you're so socialism for the rich would go
Speaker 1: down a whole lot easier if it came through with
Speaker 1: a little bit of socialism for the rest of the
Speaker 1: country when they really really need it. And I have
Speaker 1: been struck by the contrast. And if you want to
Speaker 1: hear my reaction to Crystal's monologue, become a premium subscriber
Speaker 1: today at Breakingpoints dot Com. Matt Tayebi who went scorched
Speaker 1: Earth in Congress, and Congress did their best to try
Speaker 1: to discredit him. So he's joining us now. We're very
Speaker 1: excited to welcome him back to the show. Matt tayebe
Speaker 1: so called journalists, welcome back. Oh it's great, man. We
Speaker 1: were absolutely outraged on your behalf, even though you handled
Speaker 1: yourself with great applump I love, I will say, uh yeah,
Speaker 1: I hope it helped out, and I'm sure many of
Speaker 1: our audience was very much with you. Matt. We wanted
Speaker 1: to just have you on to talk about the actual
Speaker 1: content of what you were testifying before in Congress, because
Speaker 1: apparently many of these Democratic members were not actually interested
Speaker 1: in that. Wow, that's new. I'm not even sure I'm
Speaker 1: prepared for this interview because I haven't had one of those. No,
Speaker 1: the content is is I would say shocking. You know
Speaker 1: the Twitter files. Originally, when we did the first couple
Speaker 1: of threads on them, they seemed like it was a
Speaker 1: pretty limited topic that you know, we're looking first at
Speaker 1: the Hunter Biden story. I was hoping to answer a
Speaker 1: pretty small question about whether or not the DHS or
Speaker 1: the FBI was in any way contacting these companies with recommendations,
Speaker 1: and then about I would say a month into the process,
Speaker 1: we discovered that not only was there a very formal
Speaker 1: system of transmitting sort of mass transmitting those requests, but
Speaker 1: that there was a deeper layer of it where the
Speaker 1: government was connected to all these NGOs that were also
Speaker 1: sending huge numbers of requests of these companies. So yeah,
Speaker 1: it's a very serious, I think deep problem, and I
Speaker 1: wish we had gotten an opportunity to talk about it more. Yes, well,
Speaker 1: it's one of these, and there's one of many issues
Speaker 1: where the partisan coding of it, first of all is bizarre,
Speaker 1: but also it completely misses the point because no one
Speaker 1: is argo this only happens under democratic administrations. No to
Speaker 1: the contrary, I mean a lot of what you revealed
Speaker 1: was happening during the Trump administration. So it speaks to
Speaker 1: a deeper collaboration between what some might call the deep
Speaker 1: state and these incredibly powerful tech companies. Can you just
Speaker 1: help people understand what you find as a journalist and
Speaker 1: as an American citizen so troubling about some of these interactions. Well,
Speaker 1: the First Amendment expressly prohibits the government from getting involved
Speaker 1: in barring speech, and what we see here as they're
Speaker 1: trying to do and end around in a number of ways.
Speaker 1: First by sending very carefully worded letters to these companies,
Speaker 1: you know, for your consideration only, we believe that these
Speaker 1: accounts may violate your terms of service, or they will
Speaker 1: they will send something like you know, of course you
Speaker 1: will only remove accounts at your own soul discretion. But
Speaker 1: you know, here's a list of three thousand accounts that
Speaker 1: we think our foreign thread actors are potential foreign thread actors. Right,
Speaker 1: So that's deeply troubling, but crystal to your point. You know,
Speaker 1: one of the people that I talked to about this
Speaker 1: is had a really interesting way to describe this phenomenon,
Speaker 1: saying that it was counter terrorism the counter populism, because
Speaker 1: what we had was the war and terror machinery. You
Speaker 1: kind of ran out of gas after the ISIS problems
Speaker 1: started to recede, and the money still needed to be spent,
Speaker 1: so they just reconfigured the mission to anti disinformation. And
Speaker 1: the problem with that is that the reason the Republicans
Speaker 1: are more interested in that is that in the United States,
Speaker 1: the bigger threat to the establishment populism wise, is the
Speaker 1: right wing. But in the Twitter files you see they're
Speaker 1: very worried about the left in Europe, in Africa and
Speaker 1: South America. So I think that's a misconception. As you say,
Speaker 1: the right left coding of this has been an obstacle. Yeah,
Speaker 1: it's really troubling. And one of the things that I
Speaker 1: was driven mad by was the also partisan coding in
Speaker 1: the hearing itself, where they both wanted to say censorship
Speaker 1: wasn't happening and that when it was, it was good.
Speaker 1: So they were like, no, no no, no, actually, there's a
Speaker 1: real bias here in protecting it. And so the censorship
Speaker 1: it wasn't happening as Tybee was saying it was, but
Speaker 1: when it did happen, it was in the defense quote
Speaker 1: unquote really of good information and reality. It's the right
Speaker 1: wing or whatever and taking the parts and coding out
Speaker 1: of it. I mean, one of the things that you
Speaker 1: unveiled here with the Twitter files was how much time
Speaker 1: and man hours are spent on censoring absolute bullshit, as
Speaker 1: in like like small accounts with no following that are
Speaker 1: supposedly either rush spreading, disincarmation, making some bad joke, and
Speaker 1: we're like, how is it your job to go through
Speaker 1: and comb through six follower accounts and then flag it
Speaker 1: and try to get those taken down. Was there any
Speaker 1: interest in that, apparently from any of these people at
Speaker 1: the hearing. No, And that's that's an interesting point because
Speaker 1: you know, there's satire is one of the big problems
Speaker 1: for AI. It doesn't know how to handle things that
Speaker 1: are jokes clearly to a human being, but a computer
Speaker 1: doesn't understand that. So all it sees, for instance, is
Speaker 1: they there is a an account Peter Douche I think,
Speaker 1: is what he calls himself, and he was making these
Speaker 1: sort of fake Biden videos where the tongue was really
Speaker 1: long and it was clearly a joke. But there was
Speaker 1: this hole back and forth between like the you know,
Speaker 1: the Democratic Party or the campaign representative and a Twitter's
Speaker 1: government liaison about whether or not they should ban this,
Speaker 1: and this is taking up lots and lots of time.
Speaker 1: Stuff like this is all over the Twitter files, you know,
Speaker 1: jokes by who is Mike Huckabee made a joke. Oh,
Speaker 1: I guess I should get my dead parents to vote now, right,
Speaker 1: Like it's a joke, clearly, right. I mean, look, maybe
Speaker 1: he's a jerk to say it, but but they they
Speaker 1: had a long discussion about it. They sort of pre
Speaker 1: gave him a strike for saying that, and that is
Speaker 1: a huge part of the problem too, is that they're
Speaker 1: trying to apply machine learning to human conversation and you
Speaker 1: can't do it really Yeah, and that's going to be,
Speaker 1: you know, continue to be a really important problem. You
Speaker 1: know that I wish we were thinking harder about as
Speaker 1: we move forward. You know, have you thought much about
Speaker 1: solutions because I think a lot of folks on the right,
Speaker 1: like they kind of put their faith in Elon that
Speaker 1: this would be like free speech Panaceo once he took
Speaker 1: over the platform. It's a sort of libertarian view, right
Speaker 1: of like, oh, if we have a new startup that
Speaker 1: is like Twitter but different, or if we have the
Speaker 1: right you know, free pro free speech billionaire owner of Twitter,
Speaker 1: then maybe things will be different. But ultimately the incentra
Speaker 1: structure is still the same. They're still really controlled by
Speaker 1: what advertisers are going to be comfortable with in terms
Speaker 1: of their speech valance. So have you thought about what
Speaker 1: some more workable intelligent solutions might look like? Yeah, I mean,
Speaker 1: those are those are lofty questions that they're very very
Speaker 1: difficult that I would say, my primary h my first
Speaker 1: concern is that we get the government out of the
Speaker 1: business of organizing some kind of pan platform censorship processing system,
Speaker 1: because there's some evidence that they've already done that and
Speaker 1: created a a processing system that works between the companies
Speaker 1: and that is publicly funded, so that that would be
Speaker 1: very troubling if that existed. I think the libertarian point
Speaker 1: of view on this that that has a little bit
Speaker 1: of merit. In my point of view, is this idea
Speaker 1: that if there was no organized government system, then there
Speaker 1: would at least compete, and there would be some platforms
Speaker 1: that would do that less than others, maybe, right, and
Speaker 1: you wouldn't have this universal cooperation which is what we
Speaker 1: saw in the Twitter files. However, I don't know. I mean,
Speaker 1: you're absolutely right. The incentives are what they are. People
Speaker 1: are always going to do this if they have the
Speaker 1: power to do it, and that's a problem because distribution
Speaker 1: is now so concentrated that even you know, shows like
Speaker 1: yours writing like mine, even though it's on email like,
Speaker 1: it's always going to be subject to these distributors. Yeah,
Speaker 1: and that was one where I you know, to bring
Speaker 1: this up. But one of the worst parts to me
Speaker 1: was when Debbie Wasserman Schaltz attacked you when you like
Speaker 1: from the idea that you might have made money by
Speaker 1: doing your job, when they have no questions about you know,
Speaker 1: corporate media whenever they get aligned with some major advertiser,
Speaker 1: and they happen to take that line. Oh that's totally fine,
Speaker 1: But can you just talk about why. I think at
Speaker 1: least it was a big moment for independent journalism, regardless
Speaker 1: of really what the attack was or not, to have
Speaker 1: these sitting up there, to have these revelations, to be
Speaker 1: at the center of the story, even for the people
Speaker 1: in Congress to kind of show their true colors on this.
Speaker 1: You know, in some ways it was a disgusting attack.
Speaker 1: But like I said, actually in our video defending you,
Speaker 1: I was like, you know, this just shows you that
Speaker 1: they have to attack the character whenever they can actually
Speaker 1: attack the content. So to me, it was almost like
Speaker 1: a we've arrived time moment. Yeah. I mean, it's funny.
Speaker 1: We've found a float chart that these Stanford Internet Observatory
Speaker 1: put out that talked about all the different stakeholders in
Speaker 1: the content review process, and it was something like government companies, NGOs,
Speaker 1: and media and it showed all the content flowing back
Speaker 1: and forth reports both going to media and from media
Speaker 1: to these NGOs. But what that showed is that they
Speaker 1: view the media, especially the traditional corporate media, as part
Speaker 1: of this system, which makes them inherently trustworthy, which I
Speaker 1: think is why people it was all independent journalists were
Speaker 1: chosen to do this project because there's an inherent trust
Speaker 1: problem now with the corporate press. So look, the press
Speaker 1: is supposed to adopt a separate adversarial posture to all
Speaker 1: of these institutions, and if they're viewed as partners, they
Speaker 1: can't be trusted. And so I think that was an
Speaker 1: important point. I think that's one of the main things
Speaker 1: that this project has achieved. Oh I hope so too,
Speaker 1: as we always say, go ahead and support Matt's work.
Speaker 1: We got a link down in the description. Really appreciate
Speaker 1: you joining us and breaking it down. I know it
Speaker 1: was an annoying moment, I'm sure, but overall I think
Speaker 1: it worked out to your benefit. Thanks so much, Sober Crystal,
Speaker 1: take care to be Matt good see. Thank you guys
Speaker 1: so much for watching. Really appreciate it as always, if
Speaker 1: you can. We've got the new Spotify full show out there.
Speaker 1: I know a lot of people are really loving that
Speaker 1: just for premium members. You can subscribe Breakingpoints dot com,
Speaker 1: support the show, get the full show on Spotify video audio.
Speaker 1: All at the same time. People are absolutely loving it,
Speaker 1: so enjoy people. We'll see you guys on Thursday. We've
Speaker 1: got a great Counterpoints show for you guys tomorrow