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Speaker 1: Hey, guys, ready or not? Twenty twenty four is here,

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Speaker 1: and we here at Breaking Points, are already thinking of

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Speaker 1: ways we can up our game for this critical election.

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Speaker 1: Breakingpoints dot Com. Good morning, everybody, Happy Monday. We have

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Speaker 1: an amazing show of everybody today. What do we have Crystal?

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Speaker 1: Indeed we do. Boy oh boy, do we have a

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Speaker 1: show for you this bank bailout Monday. We're going to

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Speaker 1: go deep on what exactly is going on in our

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Speaker 1: financial system, the government's reaction for President Biden is expected

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Speaker 1: to speak today. There is a lot to talk about there,

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Speaker 1: so we are going to cover that extensively. A couple

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Speaker 1: other stories we want to make sure to touch on

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Speaker 1: this show to Norfolk Southern an effort by a couple

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Speaker 1: of senators by Parson Fashion to try to hold them

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Speaker 1: to account, and also some notable comments from former Vice

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Speaker 1: President Mike Pence finally kind of saying what he really thinks,

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Speaker 1: I guess about Trump, and in the most cringed possible setting.

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Speaker 1: So we'll break all of that down for you. But

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Speaker 1: before we get to any of that big news we

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Speaker 1: announced last week, we're really excited about our video full

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Speaker 1: show in video now available on Spotify for premium subs.

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Speaker 1: That's right. So, I know a lot of you have

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Speaker 1: had questions, so to spare the customer service inbox, we're

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Speaker 1: going to go through it here. Log into your super

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Speaker 1: It will ask you to log in and voila. You

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Speaker 1: within there. I know a lot of you have been

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Speaker 1: really appreciated. I know that we have a big audience

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Speaker 1: there on Spotify. So now for people who are driving

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Speaker 1: you're driving, but maybe a red light if you're interested

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Speaker 1: in what we're throwing up there on the screen. This

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Speaker 1: is a specific example. Somebody told me about how much

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Speaker 1: they loved it. Here you go, We've got the video there.

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Speaker 1: I think you guys will enjoy it. You can speed

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Speaker 1: It took a lot of work for our team and

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Speaker 1: for Supercasts, so thank you guys so much, and thank

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Speaker 1: you for everybody who has signed up. And of course,

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Speaker 1: premium subscriber and then follow these steps that Soccer just

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Speaker 1: laid out. And to be honest with you, I mean,

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Speaker 1: we were really excited about getting the video on Spotify,

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Speaker 1: but I'm not sure that I knew how much you

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Speaker 1: guys would be excited about it. So thank you for

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Speaker 1: the tremendous feedback. It looks really great, So super psyched

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Speaker 1: to be able to offer that to you all. That's right,

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Speaker 1: and for all the new improvements coming to the show,

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Speaker 1: it's going to even look even better than on the

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Speaker 1: Spotify screen. Indeed, Okay, all right, let's start with the

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Speaker 1: totally not a bailout. Bailout. Let's put this up there

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Speaker 1: on the screen. I did that breaking news segment for

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Speaker 1: you guys. On Friday, just to get everybody up to

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Speaker 1: speed with FDIC and California regulators took over Silicon Viley Bank.

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Speaker 1: Lots of speculation all over the weekend, massive calls and

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Speaker 1: pressure on the financial system to pursue a bailout of

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Speaker 1: depositors and lo and behold. Sunday evening, Secretary Yellen, the

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Speaker 1: Chairman of the Federal Reserve, and the head of the

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Speaker 1: FDIC come out with this statement. Secretary Yellen has approved

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Speaker 1: actions enabling the FDIC to complete its resolution of Silicon

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Speaker 1: Valley Bank, Santa Clara, California in a manner that fully

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Speaker 1: protects all depositors. Depositors without access to all of their

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Speaker 1: money starting on Monday, March thirteenth. No losses associated with

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Speaker 1: the resolution of Silicon Valley Bank will be borne by

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Speaker 1: the taxpayer. So let's take a step back and just remember.

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Speaker 1: So Silicon Valley Bank goes into federal ownership on Friday,

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Speaker 1: they completely start to administer the bank. They begin to

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Speaker 1: pursue a variety of options. One of them is a

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Speaker 1: for sale where another company is going to come in

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Speaker 1: and buy Silicon Valley Bank and fulfill the depositors. Apparently

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Speaker 1: there were some indications that PNC was attempting to buy

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Speaker 1: the bank, but they decided to pull out at the

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Speaker 1: last minute. So then what ends up happening is that

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Speaker 1: the FDIC, despite the fact that they only ensured deposits

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Speaker 1: up to two hundred and fifty thousand dollars, invoke something

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Speaker 1: called the systemic risk exception. The systemic risk exception allows

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Speaker 1: the FDIC to protect the deposits of all depositors even

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Speaker 1: over that of two hundred and fifty thousand, of which

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Speaker 1: some at least ninety percent or so of the deposits

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Speaker 1: in Silicon Valley Bank were This was the bank, as

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Speaker 1: I had mentioned in that segment, that processes at least

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Speaker 1: up to fifty percent of the bank accounts, or almost

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Speaker 1: all tech startups in the United States. A tremendous amount

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Speaker 1: of tech wealth was concentrated. My personal favorite example is

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Speaker 1: that Roku, a multi billion dollar company, had a single

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Speaker 1: checking account with four hundred and fifty seven million dollars

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Speaker 1: in the account, which, let me just say pause on

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Speaker 1: that one. That is absolutely morocle. Oh it's nuts. That is,

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Speaker 1: I mean that CEO should be fired instantaneously because it

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Speaker 1: doesn't take a financial guru to know that you are

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Speaker 1: only insured up to two hundred and fifty thousand dollars.

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Speaker 1: So they placed a half a billion dollar bet effectively

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Speaker 1: on the idea that the government would come in and

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Speaker 1: bail them out, would say ultimately worth out. Well, here's

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Speaker 1: what's the crazy part of it, which is now basically

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Speaker 1: we've set a standard for We'll also talk about the

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Speaker 1: other bank that's been put into ownership of federal regulators

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Speaker 1: and is going through later on that has more to

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Speaker 1: do with crypto. It's an interesting example, but the systemic

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Speaker 1: risk option was invoked for that bank as well. Is insane. Oh,

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Speaker 1: it's also crazy. And I look, I'm not saying I

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Speaker 1: don't feel for people who have their deposits in the bay,

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Speaker 1: especially if you've got tech startup and you got to

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Speaker 1: make payroll, and I know that it's very, very dicey

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Speaker 1: and it's very stressful. So I have total sympathy with

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Speaker 1: those folks. But we got to take a step above

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Speaker 1: and look at the total financial system. Per David Sirota,

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Speaker 1: we have nine trillion dollars in deposits and banks across

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Speaker 1: the United States that are over the threshold that are

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Speaker 1: completely uninsured. We have now set the precedent that if

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Speaker 1: a bank fails, your deposits are totally good to go. Okay,

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Speaker 1: I mean, I'm kind of actually okay with that. But

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Speaker 1: but and this is the big butt. Then the banks

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Speaker 1: the so are getting to use our money, our deposits

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Speaker 1: to take loans and to make a lot of profits.

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Speaker 1: But then when they fail, the deposits are backed by

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Speaker 1: the FEDS. So how does that work? So you either

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Speaker 1: have a private bank with the attendant risk of having

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Speaker 1: a private bank, or you have a public bank. I'm

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Speaker 1: not even necessarily saying I support a public bank, but

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Speaker 1: maybe the option or something like that. I don't want

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Speaker 1: federal control of all money. But the entire point of

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Speaker 1: having a private banking system was the idea that there

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Speaker 1: is some attendant risk with the FDIC that's going to

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Speaker 1: ensure you up to two hundred and fifty thousand dollars.

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Speaker 1: So this has really blown the cap off of the

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Speaker 1: idea that this is a private industry really in any way.

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Speaker 1: And I don't know why these people are allowed to

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Speaker 1: make millions and millions of dollars if their deposits, which

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Speaker 1: is the fundamental part of all of their wealth and

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Speaker 1: their balance sheet, is going to be totally insured by

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Speaker 1: the federal government. That's right. Yeah, then I think that's

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Speaker 1: an incredibly key point. Whatever you think about this bailout,

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Speaker 1: and don't let anyone gaslight it into thinking that this

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Speaker 1: is not a bailout, and not just of SVB, and

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Speaker 1: not just of First Republic, which is the other bank

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Speaker 1: that failed, but of the entire banking system. So two

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Speaker 1: things you need to recognize. Number One, Asaga was just

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Speaker 1: laying out, this defacto indicates to every bank in the

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Speaker 1: entire country that even though they've only been paying into

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Speaker 1: the fdi C to ensure two hundred and fifty thousand

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Speaker 1: dollars deposits, de facto they actually have insurance on one

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Speaker 1: hundred percent of deposits. Now, the powers that be here,

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Speaker 1: our central bankers, are saying, oh, no taxpayer dollars are

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Speaker 1: on the line. Okay, maybe not technically for Silicon Valley Bank,

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Speaker 1: But who do you think is backstopping that entire insurance

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Speaker 1: system when the banks have not been paying in sufficient

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Speaker 1: funds to actually ensure the entirety of the deposits. Who

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Speaker 1: do you think is on the hook for that? That's

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Speaker 1: number one. Number Two, in some way ways, the least

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Speaker 1: important thing they did was to backstop these particular deposits,

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Speaker 1: because in addition to that, they also announced new lending

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Speaker 1: availability for banks across the country. And not only that,

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Speaker 1: but the reason that Silicon Valley Bank failed, one of

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Speaker 1: the reasons is because they held a lot of their

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Speaker 1: assets in long term treasury bonds. As the FED has

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Speaker 1: lifted interest rates, that has caused the value of those

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Speaker 1: bonds to decline. So they were suffering losses in terms

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Speaker 1: of their assets. And we're going to show you in

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Speaker 1: a moment how they were sort of an outlier in

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Speaker 1: terms of in terms of this particular use of their assets.

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Speaker 1: That also they were consolidated in one particular industry, which

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Speaker 1: also was very sensitive to FED interest rates. That's the

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Speaker 1: reason that this bank ultimately collapsed. Okay, so they had

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Speaker 1: to take losses on those assets. The FED is now

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Speaker 1: saying that if you hold similar assets that have declined

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Speaker 1: in value, they're not going to force you to take losses.

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Speaker 1: They're going to pretend that those assets are still valued

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Speaker 1: at what you purchase them for. That is effectively a

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Speaker 1: gigantic giveaway, not just to SVB, but to the entire

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Speaker 1: banking system. And again, the idea that oh, this is

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Speaker 1: just taxpayers have nothing to do with this. All of

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Speaker 1: this is based on the fact that this is backed

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Speaker 1: by the US government, which is backed by the US taxpayer.

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Speaker 1: So you have two things that have happened here that

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Speaker 1: are incredibly significant in ways that I struggle to completely

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Speaker 1: wrap my head around. Number one is, as we said,

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Speaker 1: the one hundred percent of deposits now apparently ensured by

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Speaker 1: you and me and the federal government. Okay, that's number one.

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Speaker 1: Number Two, this idea that these two banks which just

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Speaker 1: failed are quote unquote systemically important. This is insane. It's ludicrous,

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Speaker 1: especially this cryptobank that just went. This is not a

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Speaker 1: large bank. Well, that's what really starts the questioning. Enough,

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Speaker 1: any bank that fails is out bailed out. So the

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Speaker 1: precedent that is set here is every bank is too

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Speaker 1: big to fail. So okay, if that's where we are,

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Speaker 1: we need to have an entire rethink of our banking system.

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Speaker 1: To your point, Sager, that reflects the fact that ultimately

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Speaker 1: the US taxpayer is on the hook for all of

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Speaker 1: these banks and for all of these deposits. And you know,

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Speaker 1: there's a lot of talk about, okay, is it a

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Speaker 1: bail out or not, and these depositors or they didn't

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Speaker 1: do anything wrong, they deserve to be bailed out. Okay,

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Speaker 1: that's fine. We have definitely bailed out the executives and

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Speaker 1: shareholders of every other bank in the country, especially ones

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Speaker 1: that had similar risk profiles as what this bank ultimate.

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Speaker 1: So let's go even to this even deeper. Let's go

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Speaker 1: put this up there on the screen. Our friend Jeff

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Speaker 1: Stein asked this to a Treasury official. He says, aren't

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Speaker 1: you exposing the US taxpayers not just uninsured deposits that

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Speaker 1: need to be guaranteed, but for trillions more throughout the

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Speaker 1: banks in the country. Quote. I think we will right

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Speaker 1: now focused on addressing the current issue and stabilizing the

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Speaker 1: banking system, assuring uninsured depositors that they will be made.

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Speaker 1: But I do think we'll be looking back and reassess

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Speaker 1: and assess their whether any change should be made. I

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Speaker 1: want to emphasize again this is funded by fees on banks.

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Speaker 1: But here's the problem with that. There's only one hundred

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Speaker 1: and twenty six billion in the FDIC account to quote

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Speaker 1: unquote bail out the depositors of all of this. That's

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Speaker 1: barely enough to cover the uninsured deposits in Silicon Valley Bank.

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Speaker 1: To take it even further, Crystal and why it's a

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Speaker 1: de facto tax on all of us. If the banks

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Speaker 1: have to start paying more into the FDIC right now,

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Speaker 1: that one hundred and twenty six billion, they have to

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Speaker 1: get up to nine trillion to eventually ensure all of this.

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Speaker 1: You ever heard of a bank that's going to voluntarily

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Speaker 1: pay more money. Who's do you think is going to

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Speaker 1: be paying those fees? It's customers. We're the ones who's

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Speaker 1: you know already bank account bank accounts. They'll charge you

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Speaker 1: for it if you have a low enough deposit guarantee you.

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Speaker 1: If they have to increase the amount they're paying to

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Speaker 1: the FDIC, every single one of us are the ones

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Speaker 1: who are going to be paying for it through all

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Speaker 1: these bs banking fees increase on annual fees on your

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Speaker 1: credit Oh, they're going to charge you for a debit

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Speaker 1: card now, Oh you want some checks, that'll be like

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Speaker 1: nine hundred dollars, some outrageou stuff. They will never pay

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Speaker 1: it voluntarily. There's no possible way that you could ever

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Speaker 1: in fact, that Silicon Valley Bank. And this is more

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Speaker 1: reporting from lever News, who by the Way has done

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Speaker 1: some of the best reporting on all of this, and

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Speaker 1: especially as they do following the money in terms of

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Speaker 1: corruption in politics. Silicon Valley Bank was lobbying against increasing

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Speaker 1: the fees that banks have to pay into the FDIC, saying, oh,

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Speaker 1: there's no risk here, there's no problem, very low risk,

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Speaker 1: so don't need to worry about it. We saw how

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Speaker 1: that ultimately worked out. There's one other thing that I

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Speaker 1: really want to bring up here, because I think there

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Speaker 1: is a notion out there that if the federal government

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Speaker 1: didn't step in that these depositors at Silicon Valley Bank

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Speaker 1: would have lost everything. It would have been wiped down,

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Speaker 1: everything above two hundred and fifty thousand dollars. But there

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Speaker 1: is in fact a process in place that is supposed

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Speaker 1: to be followed in such a situation, which is okay,

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Speaker 1: first two hundred fifty thousand dollars ensured, no problem, everybody's

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Speaker 1: clear on that, and then the rest of the deos

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Speaker 1: our backstop by the assets of the bank, So the

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Speaker 1: federal government sells off the assets and then makes depositors

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Speaker 1: as whole as possible. Based on what we know publicly available,

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Speaker 1: that would have caused probably like a ten percent haircut,

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Speaker 1: you still would have likely had people getting somewhere around

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Speaker 1: ninety percent of their deposits. Now, the argument that was

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Speaker 1: made in quite strident terms over the weekend, in particular

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Speaker 1: by a lot of people in Silicon Valley who have

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Speaker 1: skin in the game, is that you can't just let

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Speaker 1: depositors take a haircut. You can't let the normal process

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Speaker 1: play out, because there's going to be a bank run.

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Speaker 1: It's going to be a catastrophe across the system, and

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Speaker 1: so we have to act now to make sure they

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Speaker 1: get one hundred percent of their money right away on Monday,

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Speaker 1: to forestall that possibility. I think that's possible, But I

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Speaker 1: also think that regulators were released swayed by the fact

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Speaker 1: that you had a lot of influential people very loudly

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Speaker 1: proclaiming in certain terms that there was going to be

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Speaker 1: a bank run, and that scared them away from allowing

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Speaker 1: the door process to play out and force them to

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Speaker 1: levy this absurdity that these were both systemically important banks

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Speaker 1: and again effectively codify within the you know, within our

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Speaker 1: country that literally every single bank is now considered systemically

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Speaker 1: important ie too big defense. So let's put the third

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Speaker 1: one up there on the screen. This is an important

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Speaker 1: piece by Matt Levine, how the startup bank had a

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Speaker 1: startup bank run. One of the problems for Silicon Valley

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Speaker 1: Bank is his customers had too much cash and now

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Speaker 1: they simply don't. What he's referring to is that startups

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Speaker 1: that were cash flush kept their bank accounts very high

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Speaker 1: in their balances throughout twenty twenty one. Then throughout twenty

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Speaker 1: twenty two, as federal rates began to rise and they

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Speaker 1: had to begin pulling cash out to cover a lot

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Speaker 1: of expenses. Because they were unable to raise even more money,

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Speaker 1: they began to withdraw. Now, as the withdrawals continue, as

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Speaker 1: I said, Silicon Valley Bank, or as you laid out,

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Speaker 1: Silicon Valley Bank had a lot of treasuries today had

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Speaker 1: to sell many of those treasuries at a loss in

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Speaker 1: order to cover many of the deposits there were getting done.

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Speaker 1: All of this cascades to the point where it's a

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Speaker 1: very shaky procedure. Then they have an announce a new

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Speaker 1: equity raise in order to try and pump cash into

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Speaker 1: the bank. That is what really triggered a lot of

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Speaker 1: people to say, oh, clearly, there's some bad stuff going

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Speaker 1: on here. And then on top of that, you had

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Speaker 1: kind of group chats and other very influential people in

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Speaker 1: Silicon Valley getting a hold of this understanding that this

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Speaker 1: was going to happen, and within I think about a

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Speaker 1: twenty four hour period, almost forty two billion dollars were

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Speaker 1: withdrawn from the bank. That enough was just able to

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Speaker 1: completely collapse it because they didn't have the attendant cash

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Speaker 1: that was available to them. Let's go ahead and put

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Speaker 1: the next one up there. Friend Kevin Russ actually did

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Speaker 1: a good write up here in the New York Times,

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Speaker 1: and really what he talks about is that this is

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Speaker 1: the first online bank run in that the rumors around

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Speaker 1: the insolvency of Silicon Valley Bank spread so quickly. It's

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Speaker 1: part of the reason why you had that forty two

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Speaker 1: billion dollars within a single day that was withdrawn and

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Speaker 1: why the FEDS had to step in so quickly and

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Speaker 1: not even be able to broker some sort of deal.

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Speaker 1: So this was a bank just so deeply entrenched in

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Speaker 1: Silicon Valley it's almost difficult to comprehend. I mean, they

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Speaker 1: had all sorts of complex financial instruments that don't make

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Speaker 1: sense for any other bank except for one that focuses

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Speaker 1: on tech, and that's great in the boom times, it's

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Speaker 1: bad in the bad times. And what have we learned

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Speaker 1: right now? We just actually had hot jobs numbers. But

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Speaker 1: tech is disproportionately having a lot of problems, especially with

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Speaker 1: the demise of cheap money. And I think that the

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Speaker 1: concentration of so many cozy banking relationships, with Roku being

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Speaker 1: a good example, having some checking account with four hundred

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Speaker 1: and fifty million dollars, he may not even have the

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Speaker 1: most amount in the checking There might be people in

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Speaker 1: there with like a billion dollar balance, which is nuts.

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Speaker 1: I mean, anybody who has anything to do with this

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Speaker 1: business would tell you that that's outrageous. Part of the

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Speaker 1: reason why, though, is that Silicon Valley Bank had such

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Speaker 1: a long relationship with many of these people that they

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Speaker 1: felt a deep amount of loyalty and in some cases

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Speaker 1: were signing them into exclusive lock ups where if they

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Speaker 1: got venture debt through Silicon Valley Bank, they had to

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Speaker 1: keep their checking account there, they had to do their

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Speaker 1: mortgage there. There was it's basically like a vertically integrated

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Speaker 1: tech bank, which again disproportionately exposes it. And you know,

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Speaker 1: whenever you look at their balance sheet. Let's go to

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Speaker 1: a four here, please. This is a really interesting one

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Speaker 1: that was actually put together by some financial analysts. You

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Speaker 1: can just see clearly the higher risk deposit base. Those

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Speaker 1: who are just watching the US Bank to loan, the

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Speaker 1: US Bank loan to deposit ratio, those who are looking

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Speaker 1: in the top right, look at every single other bank,

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Speaker 1: and then look at Silicon Valley Bank, well over the

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Speaker 1: one hundred percent mark, right in the higher risk deposit

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Speaker 1: base zone for nearly one hundred and ten percent of

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Speaker 1: their loan to deposit ratio. So already they had a

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Speaker 1: very high loan to deposit ratio. And then at the

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Speaker 1: same time, whenever you look at Silicon Valley Bank, they

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Speaker 1: had a very high impact of unrealized security losses on

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Speaker 1: their capital ratios because so much of their assets were

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Speaker 1: held in private markets where you had just a decimation

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Speaker 1: of values. So there's a lot, a lot going on, Yeah,

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Speaker 1: a lot. That just shows you that, as you said, already,

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Speaker 1: we showed you they have a high loan to deposit ratio.

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Speaker 1: Their treasuries. I think in terms of their assets they

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Speaker 1: had seventeen percent more in treasuries than any other bank

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Speaker 1: in the United States. So already. Basically you just have

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Speaker 1: bad executives that are at the top. You know. Actually,

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Speaker 1: some people who work at Silicon Valley Bank spoke to

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Speaker 1: some people around them, and many of them were outraged

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Speaker 1: at leadership who really didn't tell them what was going on.

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Speaker 1: They announced that raise, which effectively collapsed it. They had

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Speaker 1: no idea. Now they're possibly out of a job. So

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Speaker 1: there are people at the bank itself who are really

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Speaker 1: upset senior management. The FDIC says they're gone, but look,

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Speaker 1: really the question is is like, are these people going

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Speaker 1: to making money because they say the taxpayers will bear

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Speaker 1: none of the losses. I don't want to see a

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Speaker 1: single one of these people who is getting the bonuses

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Speaker 1: that AIG got in the middle of their bailout, and

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Speaker 1: there's no guarantee on that right now. Zero. Well, and

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Speaker 1: we'll show you the numbers on this, but a bunch

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Speaker 1: of management were cashing out and selling their stock in

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Speaker 1: recent weeks. Oh and by the way, they announced bonuses

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Speaker 1: literally on the day that the government took over the

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Speaker 1: bank as well for their employees and executives, So you

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Speaker 1: know they they're going to be okay, I think is

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Speaker 1: the bottom line here, Even though they're the party line

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Speaker 1: from the government is that they quote unquote wiped down.

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Speaker 1: And again, really important to keep in mind, we're not

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Speaker 1: just talking about backstopping the depositors of these two banks here,

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Speaker 1: that's one thing. We're also talking about a whole new

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Speaker 1: federal reserve lending facility using basically souped up and fake

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Speaker 1: asset prices as collateral allowing this. So this is a

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Speaker 1: massive injection into the economy that has huge ramifications and also,

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Speaker 1: by the way, stage sort of stands directly at odds

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Speaker 1: with the direction of monetary policy tightening that the FED

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Speaker 1: has been engaged in. And that's a whole other piece

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Speaker 1: that we could get into. But you know, the expectation

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Speaker 1: was that the FED was going to hike rates another

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Speaker 1: zo point five percent, so that's a very significant raise. Well,

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Speaker 1: now you're going in the opposite direction, injecting funds into

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Speaker 1: the economy and you know, rescuing these particular workers who

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Speaker 1: involved with these particular bank while your overall policy has

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Speaker 1: been crushing workers and trying to trigger recession in terms

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Speaker 1: of the labor market. So they also had their hand

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Speaker 1: forced and are now directly at odds with themselves in

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Speaker 1: terms of the direction of policy. There's one other you know,

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Speaker 1: there's there's a lot more we could say about this,

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Speaker 1: but I also think it's really important to point to

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Speaker 1: the fact that, you know, this is a striking example

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Speaker 1: of how the tech economy is in a wildly different

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Speaker 1: place than a lot of the rest of the economy

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Speaker 1: in the job market. That's number one and number two,

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Speaker 1: it's always incredible when there's a crisis that impacts wealthy

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Speaker 1: and influential people, somehow they always have the mechanisms in

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Speaker 1: place to quickly act. They don't have to wait and

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Speaker 1: beg the parliamentarian or kiss Joe Mansions toes or whatever.

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Speaker 1: They don't have to do anything. They just have They

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Speaker 1: figure it out, They figure out the facilities, They make

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Speaker 1: up bullshit rationalizations like oh they were systemically important, okay, whatever,

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Speaker 1: and somehow they're able to come through with all the

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Speaker 1: cash in the world that they possibly need to backstop

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Speaker 1: the system. When it's wealthy and influential people whose lives

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Speaker 1: and money are at stake, I think it's important to

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Speaker 1: note that effectively, you know, I saw tweet this morning.

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Speaker 1: It's like democracy at this point basically means rule by

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Speaker 1: judges and central bankers. And I think that's really you know,

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Speaker 1: it's really quite apparent. So we've set up a system

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Speaker 1: that reacts incredibly quickly and incredibly effectively when it is

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Speaker 1: the wealthy whose interests are at stake. For everybody else,

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Speaker 1: you got to haggle, you got to go through Congress,

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Speaker 1: and ultimately nothing ever happens. Right, And so let's go

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Speaker 1: to the second part here. It literally only took an

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00:21:57,800 --> 00:22:01,080
Speaker 1: hour for all of the leading people in the US

433
00:22:01,359 --> 00:22:05,640
Speaker 1: policymakers to just start or influential economic thinkers start calling

434
00:22:05,640 --> 00:22:07,240
Speaker 1: for Baila, let's put this up there on the screen.

435
00:22:07,560 --> 00:22:11,920
Speaker 1: This was less than an hour after SVB failure. Larry

436
00:22:11,960 --> 00:22:15,399
Speaker 1: Sommers calls for all depositors at Silicon Valley Bank to

437
00:22:15,480 --> 00:22:19,800
Speaker 1: get bailed out one hundred percent. It's just it's like

438
00:22:19,840 --> 00:22:22,440
Speaker 1: you can't even make it up. Immediately after, let's go

439
00:22:22,520 --> 00:22:24,399
Speaker 1: and put this up there, he said, this now is

440
00:22:24,440 --> 00:22:28,040
Speaker 1: not the time for about moral hazard, right, Okay, which

441
00:22:28,080 --> 00:22:30,760
Speaker 1: is our right. I mean, now, in fact, is the

442
00:22:30,760 --> 00:22:32,760
Speaker 1: time for a discussion about moral hazard, because you've just

443
00:22:32,840 --> 00:22:36,560
Speaker 1: told banks that their deposits are covered by insurance they

444
00:22:36,560 --> 00:22:39,920
Speaker 1: didn't pay for, and that their risky behavior is going

445
00:22:39,960 --> 00:22:42,639
Speaker 1: to be always and forever backed up by the FED.

446
00:22:43,119 --> 00:22:45,240
Speaker 1: So I think this is actually a really critical time

447
00:22:45,240 --> 00:22:48,320
Speaker 1: for a conversation about moral Hazzard absolutely and Mitt Romney,

448
00:22:48,359 --> 00:22:51,280
Speaker 1: the famous let Detroit Go Bankrupt doesn't have the same

449
00:22:51,480 --> 00:22:54,879
Speaker 1: theory for Silicon Valley. He says, Silicon Valley bank shareholders

450
00:22:54,880 --> 00:22:57,320
Speaker 1: and executives lose it all as they should depositors in

451
00:22:57,359 --> 00:23:00,280
Speaker 1: good faith. However, should recover have access to depositor to

452
00:23:00,280 --> 00:23:03,600
Speaker 1: meet their payrolls, pay their suppliers and to prevent contagion. Again,

453
00:23:03,640 --> 00:23:06,359
Speaker 1: you can sympathize with that, and I absolutely do, but

454
00:23:06,400 --> 00:23:08,960
Speaker 1: then you have to have the correct mechanisms in place

455
00:23:09,000 --> 00:23:10,320
Speaker 1: to make sure that all of us are not going

456
00:23:10,359 --> 00:23:12,480
Speaker 1: to be paying more of these bank fees and that

457
00:23:12,560 --> 00:23:14,920
Speaker 1: the government and the taxpayers are not the ones who're

458
00:23:14,960 --> 00:23:18,640
Speaker 1: actually backstopping the entire financial system when their sound business

459
00:23:18,640 --> 00:23:22,320
Speaker 1: practice is supposed to be the check on it. And then, personally,

460
00:23:22,600 --> 00:23:24,879
Speaker 1: my favorite producer Griffin found this one. Put this up

461
00:23:24,920 --> 00:23:28,320
Speaker 1: there on the screen from Ryan Mawi works in climate

462
00:23:28,600 --> 00:23:32,359
Speaker 1: He says, with the implosion of SBB, the planet could

463
00:23:32,400 --> 00:23:36,600
Speaker 1: literally be at stake. Fifteen hundred companies in climate tech

464
00:23:36,840 --> 00:23:39,639
Speaker 1: were venture backed at the bank and he goes on

465
00:23:39,720 --> 00:23:41,520
Speaker 1: to make a case that if we don't bail out

466
00:23:41,520 --> 00:23:44,440
Speaker 1: the bank, that we're actually going to destroy and hurt

467
00:23:44,720 --> 00:23:47,639
Speaker 1: the Silicon Valley, We're going to destroy and hurt the

468
00:23:47,720 --> 00:23:51,960
Speaker 1: planet because those climate tech companies are so vitally important.

469
00:23:51,960 --> 00:23:54,520
Speaker 1: And then finally Mark Cuban go ahead and put this

470
00:23:54,600 --> 00:23:57,639
Speaker 1: up there. He called on the Fed to actually step

471
00:23:57,680 --> 00:24:01,360
Speaker 1: in and buy the bank debt to end the run.

472
00:24:01,520 --> 00:24:04,000
Speaker 1: So all of these people who have, as you said,

473
00:24:04,040 --> 00:24:06,359
Speaker 1: skin in the game. By the way, Bill Ackman was

474
00:24:06,440 --> 00:24:10,800
Speaker 1: also the billionaire investor, was also immediately calling for quote

475
00:24:10,840 --> 00:24:14,640
Speaker 1: a highly deludedive government bailout of Silicon Valley Bank, all

476
00:24:14,680 --> 00:24:18,320
Speaker 1: making the case in terms of contagion that's happening across

477
00:24:18,359 --> 00:24:21,640
Speaker 1: the economy. But you know, first of all, it's I'm

478
00:24:21,760 --> 00:24:25,480
Speaker 1: curious still about whether the contagion actually was real by

479
00:24:25,520 --> 00:24:28,240
Speaker 1: many respects. If you think about it this way, there

480
00:24:28,280 --> 00:24:30,399
Speaker 1: has been all these tech layoffs, right, it has an

481
00:24:30,400 --> 00:24:32,639
Speaker 1: impacted the jobs number of the economy literally at all.

482
00:24:33,200 --> 00:24:36,240
Speaker 1: Like if you think about like the Google layoffs in totality,

483
00:24:36,440 --> 00:24:39,880
Speaker 1: they don't even equal like a factory in Alabama if

484
00:24:39,960 --> 00:24:42,080
Speaker 1: one of those were to go out of business. So

485
00:24:42,600 --> 00:24:47,760
Speaker 1: tech is one of those like high cash producing industries

486
00:24:47,960 --> 00:24:50,800
Speaker 1: very important to GDP as a whole, but in terms

487
00:24:50,800 --> 00:24:54,040
Speaker 1: of workforce it is not even close. In terms of

488
00:24:54,080 --> 00:24:58,480
Speaker 1: punching it that way, Treasury indicated that there were several

489
00:24:58,520 --> 00:25:01,880
Speaker 1: other banks was their work that had a similar risk profile.

490
00:25:02,119 --> 00:25:05,240
Speaker 1: But you know, we showed you some charts that indicated

491
00:25:05,440 --> 00:25:08,400
Speaker 1: SVB was actually quite an outlier here. Now we did

492
00:25:08,440 --> 00:25:11,960
Speaker 1: have prior to SVB collapsing, we also had silver Gate,

493
00:25:12,000 --> 00:25:16,720
Speaker 1: which is a small crypto focus bank that collapsed. Then

494
00:25:16,760 --> 00:25:19,400
Speaker 1: you have SVB, then you have this other small ish

495
00:25:19,560 --> 00:25:23,200
Speaker 1: crypto related bank that also collapsed. So you can see

496
00:25:23,240 --> 00:25:27,080
Speaker 1: it's very concentrated. We should have learned, they should have

497
00:25:27,160 --> 00:25:30,240
Speaker 1: learned decades ago that having your eggs in one basket

498
00:25:30,280 --> 00:25:33,000
Speaker 1: industry wise is very risky business practice to start with.

499
00:25:33,280 --> 00:25:35,440
Speaker 1: And then they also in the case of SVB, really

500
00:25:35,840 --> 00:25:38,200
Speaker 1: upped the ante in terms of their interest rate risk

501
00:25:38,480 --> 00:25:41,560
Speaker 1: by putting their assets also in these long term treasury bunds.

502
00:25:41,800 --> 00:25:44,800
Speaker 1: But I am skeptical of the case that was being

503
00:25:44,840 --> 00:25:48,800
Speaker 1: made in again very loud and over the top terms

504
00:25:49,200 --> 00:25:51,639
Speaker 1: by a lot of influential people on social media, some

505
00:25:51,680 --> 00:25:54,080
Speaker 1: of whom we just showed you, like Mark Cuban and

506
00:25:54,119 --> 00:25:56,520
Speaker 1: others that there would one hundred percent be a bank

507
00:25:56,600 --> 00:25:59,480
Speaker 1: run on Monday if we did not act, because again

508
00:26:00,080 --> 00:26:03,200
Speaker 1: a lot of the commentary ignored the fact that there

509
00:26:03,240 --> 00:26:06,439
Speaker 1: is a process in place, There is an existing process

510
00:26:06,680 --> 00:26:09,840
Speaker 1: for dealing with banks when they are in solvement insolvent,

511
00:26:09,920 --> 00:26:13,879
Speaker 1: and it does not lead to depositors losing all of

512
00:26:13,920 --> 00:26:16,600
Speaker 1: their cash over two hundred and fifty thousand dollars. They

513
00:26:16,720 --> 00:26:20,119
Speaker 1: likely would have taken perhaps about a ten percent haircut.

514
00:26:20,480 --> 00:26:23,520
Speaker 1: So in order to you know, one hundred percent backs

515
00:26:23,600 --> 00:26:27,520
Speaker 1: up these depositors, they have effectively, they have effectively deemed

516
00:26:27,560 --> 00:26:29,920
Speaker 1: every single bank in the country too big to fail,

517
00:26:30,160 --> 00:26:33,040
Speaker 1: which is a gigantic shift. Well, I don't know if

518
00:26:33,040 --> 00:26:35,560
Speaker 1: it's a shift in policy, but it's a recognition that

519
00:26:35,560 --> 00:26:38,080
Speaker 1: that's the reality of our banking system and that requires

520
00:26:38,080 --> 00:26:40,359
Speaker 1: a dramatic overhaul of the way we're approaching this. One

521
00:26:40,400 --> 00:26:42,320
Speaker 1: other thing in terms of like the climate tech piece,

522
00:26:42,320 --> 00:26:44,360
Speaker 1: which again goes back to the fact, you know, he's

523
00:26:44,400 --> 00:26:46,440
Speaker 1: acting like, oh, all of these what one hundred percent fail?

524
00:26:46,800 --> 00:26:50,080
Speaker 1: That is alarmist and it is just false. In addition,

525
00:26:50,680 --> 00:26:54,840
Speaker 1: there are few people, a few banking clienteles in the

526
00:26:54,880 --> 00:26:58,520
Speaker 1: world that would be as well positioned to withstand having

527
00:26:58,600 --> 00:27:02,000
Speaker 1: a cash crunch for a show time period than these individuals,

528
00:27:02,040 --> 00:27:05,080
Speaker 1: many of them who were backed by wealthy venture capitalists,

529
00:27:05,160 --> 00:27:07,480
Speaker 1: who were some of the same voices who were demanding

530
00:27:07,520 --> 00:27:10,960
Speaker 1: the bail out over the weekend, Well, if they felt

531
00:27:11,000 --> 00:27:14,840
Speaker 1: these companies were so promising, so important, etc. I didn't

532
00:27:14,880 --> 00:27:19,360
Speaker 1: see them marshaling their wealthy resources in order to provide

533
00:27:19,520 --> 00:27:22,439
Speaker 1: bridge loans and backstop the losses and make sure that

534
00:27:22,520 --> 00:27:25,359
Speaker 1: these employees weren't hurt. Seemed to be a lot fewer

535
00:27:25,400 --> 00:27:29,520
Speaker 1: Libertarians in Silicon Valley than there were just maybe two

536
00:27:29,560 --> 00:27:32,880
Speaker 1: weeks ago. So they weren't, you know, bootstrapping and coming

537
00:27:32,920 --> 00:27:36,560
Speaker 1: together to make sure that this industry and their companies

538
00:27:36,560 --> 00:27:39,639
Speaker 1: that they've invested in make it through this time. Instead,

539
00:27:39,760 --> 00:27:42,520
Speaker 1: they just started screaming and demanding that the government, which

540
00:27:42,520 --> 00:27:45,120
Speaker 1: again they're saying no taxpayer dollars. But I think we've

541
00:27:45,119 --> 00:27:47,440
Speaker 1: explained the way that ultimately we're all on the hook

542
00:27:47,480 --> 00:27:50,439
Speaker 1: for this, but demanding that the government come to their

543
00:27:50,480 --> 00:27:53,120
Speaker 1: rescue in this instance, yes, exactly right. And finally, let's

544
00:27:53,160 --> 00:27:55,720
Speaker 1: go to the let's go to the really good part here,

545
00:27:55,760 --> 00:27:58,119
Speaker 1: which I really enjoy, which is on top of all

546
00:27:58,119 --> 00:28:00,200
Speaker 1: of this, and this shows you why the systemic risk

547
00:28:00,400 --> 00:28:02,840
Speaker 1: thing being invoked here is now the precedent for all time.

548
00:28:03,119 --> 00:28:05,120
Speaker 1: A bank you probably have never even heard of. Let's

549
00:28:05,119 --> 00:28:07,399
Speaker 1: put it up there on the screen. The crypto friendly

550
00:28:07,520 --> 00:28:10,760
Speaker 1: signature bank has now been shut down by regulators that

551
00:28:10,920 --> 00:28:14,640
Speaker 1: was announced on Sunday in the systemic risk exception, which

552
00:28:14,680 --> 00:28:17,680
Speaker 1: is also going to make all of their depositors completely

553
00:28:17,720 --> 00:28:20,719
Speaker 1: hole by the Treasury Department. Well, this is a perfect

554
00:28:20,800 --> 00:28:25,160
Speaker 1: example of a bank where you had a cozy relationship

555
00:28:25,359 --> 00:28:28,560
Speaker 1: with regulators and with former Congressman, one of them being

556
00:28:28,920 --> 00:28:33,560
Speaker 1: throw this up there, mister Barney Frank, the classic Dodd

557
00:28:33,720 --> 00:28:38,400
Speaker 1: Frank Bill author himself, the chairman of the House Financial

558
00:28:38,440 --> 00:28:42,640
Speaker 1: Services Committee, the so called hero of the people, getting

559
00:28:42,680 --> 00:28:45,920
Speaker 1: paid some one million dollars to sit on the bank.

560
00:28:46,120 --> 00:28:48,720
Speaker 1: And then when you consider also what this bank was

561
00:28:48,760 --> 00:28:52,640
Speaker 1: doing and how exactly facilitated this loss is crystal. Let's

562
00:28:52,640 --> 00:28:54,760
Speaker 1: go ahead and put this up there. Signature Bank being

563
00:28:54,760 --> 00:28:58,000
Speaker 1: closed by New York state authorities and also invoking the

564
00:28:58,600 --> 00:29:01,760
Speaker 1: systemic risk except and is having the FEDS come in

565
00:29:01,800 --> 00:29:07,760
Speaker 1: and backstop them, largely because large again, largely because this

566
00:29:08,000 --> 00:29:11,479
Speaker 1: bank was widely exposed to many of the losses in

567
00:29:11,520 --> 00:29:14,800
Speaker 1: the crypto industry, and much of their assets and balance

568
00:29:14,840 --> 00:29:18,800
Speaker 1: sheet in terms of their deposits, they were unable to

569
00:29:18,880 --> 00:29:22,040
Speaker 1: fulfill them because of such a wide loss. This wasn't

570
00:29:22,080 --> 00:29:25,560
Speaker 1: even the Treasury Department. This was a large bank that

571
00:29:25,720 --> 00:29:29,200
Speaker 1: was basically all in on the crypto industry and then

572
00:29:29,240 --> 00:29:31,680
Speaker 1: got itself to the point where its assets were almost

573
00:29:31,720 --> 00:29:35,440
Speaker 1: completely and totally wiped out, and with that wipeout, unable

574
00:29:35,480 --> 00:29:38,320
Speaker 1: to fill their deposits, and the FEDS step in and

575
00:29:38,440 --> 00:29:41,920
Speaker 1: basically make all of their depositors whole. And this is

576
00:29:42,040 --> 00:29:46,240
Speaker 1: total malfeasance on the behalf of the signal. Alleged malfeasance

577
00:29:46,240 --> 00:29:48,320
Speaker 1: by the way, for the lawyers who are out there.

578
00:29:48,360 --> 00:29:51,000
Speaker 1: But at the very least, let's call it what mismanagement.

579
00:29:51,160 --> 00:29:53,760
Speaker 1: Let's call it mismanagement to go all in and backstop

580
00:29:53,800 --> 00:29:57,560
Speaker 1: the crypto industry, make yourself so holy and totally exposed,

581
00:29:57,880 --> 00:30:00,880
Speaker 1: unable to fulfill your deposits, and then, because you know

582
00:30:01,080 --> 00:30:04,440
Speaker 1: what's the old what's like, you privatize the gain, socialize

583
00:30:04,480 --> 00:30:07,880
Speaker 1: the risks. Now the FDI see is the one who's

584
00:30:07,880 --> 00:30:10,400
Speaker 1: paying all these people's deposits. I saw somebody who was

585
00:30:10,440 --> 00:30:13,000
Speaker 1: like libertarian on the way up, socialist on the way down.

586
00:30:13,160 --> 00:30:16,040
Speaker 1: It's like, wow, that is really well said. Well, and

587
00:30:16,080 --> 00:30:20,400
Speaker 1: it's incredible with Barney Frank. Okay, so he's famously the

588
00:30:20,440 --> 00:30:23,640
Speaker 1: author of Dodd Frank financial Reform, which in my opinion,

589
00:30:23,840 --> 00:30:26,000
Speaker 1: was an improvement, did not go far enough. But okay,

590
00:30:26,480 --> 00:30:30,800
Speaker 1: then he immediately leaves Congress cashes in in variety of ways,

591
00:30:30,800 --> 00:30:33,080
Speaker 1: one of which is serving on the board of this bank,

592
00:30:33,160 --> 00:30:36,040
Speaker 1: Signature Bank, which has now gone belly up. And in

593
00:30:36,080 --> 00:30:38,800
Speaker 1: his position now as a board member of this bank,

594
00:30:39,320 --> 00:30:43,040
Speaker 1: he actually went and lobbied for them to roll back

595
00:30:43,280 --> 00:30:46,560
Speaker 1: some of the very regulations that he helped you auther

596
00:30:46,760 --> 00:30:50,520
Speaker 1: and put in place. So it's just could not find

597
00:30:50,640 --> 00:30:54,680
Speaker 1: a more perfect example of the disgusting nature of the

598
00:30:54,920 --> 00:31:01,160
Speaker 1: American political system ultimately, and the idea that listen, maybe

599
00:31:01,440 --> 00:31:05,640
Speaker 1: maybe you could have a big leaf of truth to

600
00:31:05,720 --> 00:31:10,200
Speaker 1: the idea that SVB was systemically important. I think that's absurd,

601
00:31:10,240 --> 00:31:12,760
Speaker 1: but okay, maybe you could make that case with regional banks,

602
00:31:12,800 --> 00:31:14,920
Speaker 1: especially in the state of California. But there's no making

603
00:31:14,920 --> 00:31:18,440
Speaker 1: that case on this on this one, absolutely not. And

604
00:31:18,480 --> 00:31:20,960
Speaker 1: so even a Silicon Valley bank is getting all the

605
00:31:21,000 --> 00:31:25,320
Speaker 1: headlines about their depositors being backstopped. The very same provisions

606
00:31:25,360 --> 00:31:30,720
Speaker 1: apply to Signature Bank as well, under this same guys

607
00:31:30,800 --> 00:31:35,680
Speaker 1: and fake nonsense that they're systemically important. And that's why

608
00:31:35,720 --> 00:31:38,680
Speaker 1: it's so important to understand what this means, not just

609
00:31:38,760 --> 00:31:42,480
Speaker 1: for this moment, but going forward. The US government has

610
00:31:42,480 --> 00:31:45,920
Speaker 1: said we are backstopping one hundred percent of deposits at

611
00:31:45,960 --> 00:31:49,440
Speaker 1: these banks and effectively, de facto, as Jeff Stein pointed out,

612
00:31:49,520 --> 00:31:52,920
Speaker 1: at all others. And if we are deeming Signature Bank

613
00:31:53,000 --> 00:31:55,880
Speaker 1: too big to fail, every bank in the country is

614
00:31:55,920 --> 00:31:58,880
Speaker 1: effectively too big to fail. We have got to think

615
00:31:58,920 --> 00:32:03,160
Speaker 1: about what this means or our entire banking system. And

616
00:32:03,440 --> 00:32:08,240
Speaker 1: the direction like this direction as exists right now is

617
00:32:08,320 --> 00:32:11,560
Speaker 1: completely insane. That the public is on the hook for

618
00:32:11,720 --> 00:32:15,640
Speaker 1: literally everything, and then the gains are all concentrated in

619
00:32:15,680 --> 00:32:18,520
Speaker 1: the handful of a few wealthy executives in shaffold profits

620
00:32:18,520 --> 00:32:21,040
Speaker 1: and of bonuses. That's where all of this is going

621
00:32:21,080 --> 00:32:22,240
Speaker 1: to lie. Why don't we go and tell the people

622
00:32:22,280 --> 00:32:24,120
Speaker 1: about the bonuses. Yeah, so let's take a look at

623
00:32:24,120 --> 00:32:26,120
Speaker 1: this gun. Put this up on the screen. So we

624
00:32:26,200 --> 00:32:29,560
Speaker 1: have this idea that oh, they you know, they didn't

625
00:32:30,160 --> 00:32:34,080
Speaker 1: They're not able to cash in the shareholders and executives

626
00:32:34,080 --> 00:32:38,720
Speaker 1: are completely wiped down. Okay, well, well, well before the collapse,

627
00:32:38,760 --> 00:32:43,000
Speaker 1: it turns out executives were selling shares and at quite

628
00:32:43,400 --> 00:32:46,959
Speaker 1: a rapid clip. Here this is from Unusual Wales. It's

629
00:32:46,960 --> 00:32:48,960
Speaker 1: actually in response to that Mitt Romney tweet that we

630
00:32:49,040 --> 00:32:51,400
Speaker 1: put up before, and they submit this may interest you.

631
00:32:51,440 --> 00:32:54,240
Speaker 1: Before the collapse, executives sold shares. Gregory Becker, the CEO,

632
00:32:54,360 --> 00:32:57,640
Speaker 1: sold eleven percent of his shares on February twenty seventh.

633
00:32:57,920 --> 00:33:01,280
Speaker 1: Michael Zucker, who was their general count, sold nineteen percent,

634
00:33:01,400 --> 00:33:05,080
Speaker 1: Daniel Beck the CFO, thirty two percent, Michelle Draper the

635
00:33:05,120 --> 00:33:08,840
Speaker 1: CMO twenty five percent. So when you hear people saying,

636
00:33:08,840 --> 00:33:13,000
Speaker 1: well they got the executive's management got completely wiped down, Well,

637
00:33:13,640 --> 00:33:16,960
Speaker 1: they took their gains and lock them in before the

638
00:33:17,000 --> 00:33:20,360
Speaker 1: thing collapsed, so they're going to be just fine. Not

639
00:33:20,400 --> 00:33:22,080
Speaker 1: only that, put this next piece up on the screen

640
00:33:22,080 --> 00:33:29,800
Speaker 1: from CNBC. Silicon Valley Bank employees received bonuses literally hours

641
00:33:30,480 --> 00:33:33,920
Speaker 1: before the government takeover. Now I've seen a lot of

642
00:33:33,920 --> 00:33:35,800
Speaker 1: people say, oh wow, this was for work that they

643
00:33:35,840 --> 00:33:38,640
Speaker 1: did in twenty twenty two, et cetera. Okay, come on,

644
00:33:39,280 --> 00:33:44,200
Speaker 1: hours before the government takes over, you're doling out cash bonuses,

645
00:33:44,280 --> 00:33:47,080
Speaker 1: which again could be going to those depositors to help

646
00:33:47,120 --> 00:33:51,200
Speaker 1: make them whole. No, okay, got one more for you though,

647
00:33:51,240 --> 00:33:53,760
Speaker 1: And we had David Serota do a piece on this

648
00:33:53,840 --> 00:33:55,880
Speaker 1: over the weekend because I thought it was so important.

649
00:33:55,880 --> 00:33:57,840
Speaker 1: But I want to make sure that we highlight this

650
00:33:57,880 --> 00:34:00,600
Speaker 1: for you as well, because this is a key a

651
00:34:00,680 --> 00:34:03,120
Speaker 1: part of the story as anything else. Put this up

652
00:34:03,160 --> 00:34:08,520
Speaker 1: on the screen. Silicon Valley Bank, their chief, actually pressed

653
00:34:08,640 --> 00:34:14,120
Speaker 1: lawmakers to weaken bank risk regulations. This was under the

654
00:34:14,160 --> 00:34:17,760
Speaker 1: Trump administration. You had I think every Republican and something

655
00:34:17,800 --> 00:34:21,239
Speaker 1: like sixty or seventeen Democrats, twelve sixty, I've got the

656
00:34:21,320 --> 00:34:24,040
Speaker 1: numbers here, let me see vote for this as well.

657
00:34:24,320 --> 00:34:27,600
Speaker 1: But effectively, the head of Silicon Valley Bank, one of

658
00:34:27,600 --> 00:34:30,239
Speaker 1: the guys who just cashed in on his shares before

659
00:34:30,239 --> 00:34:33,840
Speaker 1: the bank collapsed, he went and pushed legislators to exempt

660
00:34:33,880 --> 00:34:37,279
Speaker 1: more banks, including his own, from new regulations that were

661
00:34:37,320 --> 00:34:40,320
Speaker 1: passed under Dodd Frank in reaction to the two thousand

662
00:34:40,320 --> 00:34:44,319
Speaker 1: and eight financial crisis. And by the way, it was successful.

663
00:34:44,719 --> 00:34:48,319
Speaker 1: So the fact that they got these regulations loosened meant

664
00:34:48,320 --> 00:34:50,799
Speaker 1: that they were not subject to the same level of

665
00:34:50,840 --> 00:34:55,440
Speaker 1: stress tests that they would have been otherwise. He argued

666
00:34:55,520 --> 00:34:59,279
Speaker 1: that svb's deep understanding of the markets that they serve

667
00:34:59,400 --> 00:35:05,879
Speaker 1: and the strong risk management practices would lead to them

668
00:35:05,920 --> 00:35:10,040
Speaker 1: being just fine. They said, without changing the regulations, SVB

669
00:35:10,120 --> 00:35:14,000
Speaker 1: would need to divert significant resources providing financing to job

670
00:35:14,040 --> 00:35:17,320
Speaker 1: creating companies and innovation economy to complying with enhanced prudential

671
00:35:17,400 --> 00:35:22,560
Speaker 1: standards and other requirements. Quote. Given the low risk profile

672
00:35:22,800 --> 00:35:25,319
Speaker 1: of our activities and business model, such a result would

673
00:35:25,320 --> 00:35:28,200
Speaker 1: stifer stifle our ability to provide credit to our clients

674
00:35:28,200 --> 00:35:32,960
Speaker 1: without any meaningful corresponding reduction in risk. So he argued,

675
00:35:33,719 --> 00:35:37,240
Speaker 1: we're totally risk free. We've got deep knowledge of this industry.

676
00:35:37,320 --> 00:35:39,800
Speaker 1: We're good to go. We don't need all these stress tests.

677
00:35:39,840 --> 00:35:43,400
Speaker 1: It was successful supported here with fifty Republicans and seventeen Democrats,

678
00:35:43,840 --> 00:35:47,279
Speaker 1: and they faced because of that, fewer stress tests and

679
00:35:47,360 --> 00:35:50,680
Speaker 1: other regulations than they otherwise would have been required to face. Yeah,

680
00:35:50,680 --> 00:35:52,480
Speaker 1: so they weren't even on the Trouble bank list. So

681
00:35:52,520 --> 00:35:55,239
Speaker 1: the FDIC didn't have full visibility into their books. Not

682
00:35:55,280 --> 00:35:57,759
Speaker 1: only that, but the SVB CEO was actually on the

683
00:35:57,760 --> 00:36:00,640
Speaker 1: board of the Federal Reserve Bank of San Francis. He

684
00:36:00,719 --> 00:36:03,840
Speaker 1: had to resign after the immediate collapse of his own bank.

685
00:36:04,080 --> 00:36:07,480
Speaker 1: This was a deeply connected person. I'm rereading the Too

686
00:36:07,480 --> 00:36:10,080
Speaker 1: Big to Fail book right now by Andrew Ross Sorkin,

687
00:36:10,120 --> 00:36:11,919
Speaker 1: written I think it was written in two thousand and nine,

688
00:36:11,960 --> 00:36:14,080
Speaker 1: just a recap of everything that happened in two thousand

689
00:36:14,080 --> 00:36:15,799
Speaker 1: and eight. And it's like in all rhymes, it's all

690
00:36:15,840 --> 00:36:18,319
Speaker 1: the same, Like, all these guys were deeply interconnected. They

691
00:36:18,320 --> 00:36:21,360
Speaker 1: had the cell phones of Hank Paulson and of Tim Geithner,

692
00:36:21,400 --> 00:36:25,160
Speaker 1: and the financial system stepped in immediately to broker deals

693
00:36:25,160 --> 00:36:28,160
Speaker 1: to save them. In their view they were saving the economy,

694
00:36:28,160 --> 00:36:30,560
Speaker 1: and many people's view they were saving themselves and saving

695
00:36:30,600 --> 00:36:33,319
Speaker 1: their bonuses and four to one gays. But here's the thing, Like,

696
00:36:33,640 --> 00:36:35,480
Speaker 1: at the end of the day, the idea that these

697
00:36:35,480 --> 00:36:37,680
Speaker 1: people were able to dole out and in some cases

698
00:36:37,719 --> 00:36:39,759
Speaker 1: we're talking here about one hundred and forty thousand dollars

699
00:36:39,800 --> 00:36:43,319
Speaker 1: in bonuses per employee, some twenty thousand dollars bonuses for

700
00:36:43,520 --> 00:36:46,560
Speaker 1: lower level. Who knows what the management was given. Now

701
00:36:46,800 --> 00:36:48,560
Speaker 1: was it given in cash or in stock? If it

702
00:36:48,600 --> 00:36:50,440
Speaker 1: was given in cash, every single one of those things

703
00:36:50,520 --> 00:36:53,520
Speaker 1: needs to get paid back. Sorry, I mean it's impossible.

704
00:36:53,560 --> 00:36:55,480
Speaker 1: The idea that you can just be doling out cash

705
00:36:55,719 --> 00:36:58,840
Speaker 1: at the end. That's like the story of Bernie Madoff,

706
00:36:59,000 --> 00:37:02,000
Speaker 1: who was giving out hundred million dollar bonuses on the

707
00:37:02,120 --> 00:37:04,600
Speaker 1: very last day before he was about to turn himself

708
00:37:04,600 --> 00:37:06,120
Speaker 1: into the fence because he wanted to make sure he

709
00:37:06,160 --> 00:37:08,520
Speaker 1: could dispel all this cash before he was going to

710
00:37:08,560 --> 00:37:11,560
Speaker 1: go into jail. All of their behavior lines up. You're

711
00:37:11,600 --> 00:37:13,840
Speaker 1: really going to tell me the twenty twenty two bonus

712
00:37:13,960 --> 00:37:17,200
Speaker 1: had to be processed on the very day of the failure.

713
00:37:17,280 --> 00:37:19,200
Speaker 1: You're really going to sit here and say that you

714
00:37:19,360 --> 00:37:21,719
Speaker 1: didn't know that the bank was in serious trouble when

715
00:37:21,719 --> 00:37:23,919
Speaker 1: you were selling up to thirty two percent of all

716
00:37:23,960 --> 00:37:27,160
Speaker 1: your stockholdings in the company, because that's the vast majority

717
00:37:27,400 --> 00:37:30,280
Speaker 1: of your comp that's harder in cash which was pocketed

718
00:37:30,320 --> 00:37:34,399
Speaker 1: from investors into your pocket, of which you then are

719
00:37:34,440 --> 00:37:36,640
Speaker 1: now saying, oh woe is me? Was I had no

720
00:37:36,760 --> 00:37:39,879
Speaker 1: idea that it was all coming. This is corruption, pure

721
00:37:39,920 --> 00:37:42,759
Speaker 1: and simple. The FDIC example you gave is a good one,

722
00:37:42,800 --> 00:37:44,680
Speaker 1: and I just think you know also in the future,

723
00:37:44,760 --> 00:37:46,960
Speaker 1: this is going to be the main fight. Sure the

724
00:37:47,000 --> 00:37:49,040
Speaker 1: FDIC rate can go up for the banks. I don't

725
00:37:49,040 --> 00:37:51,480
Speaker 1: even think that's a bad thing, but they cannot raise

726
00:37:51,560 --> 00:37:54,279
Speaker 1: rates on the rest of us. And also, if you

727
00:37:54,320 --> 00:37:56,719
Speaker 1: think about it, with a liquidity crunch, now that is

728
00:37:56,719 --> 00:37:59,600
Speaker 1: happening here. We've got a debt ceiling crisis which is looming.

729
00:37:59,640 --> 00:38:02,960
Speaker 1: Our economy is in serious trouble right now in terms

730
00:38:02,960 --> 00:38:05,600
Speaker 1: of getting probably closer to a debt ceiling crunch, just

731
00:38:05,640 --> 00:38:07,840
Speaker 1: because of how much money this might say if taxpayer

732
00:38:07,840 --> 00:38:10,480
Speaker 1: dollars do go on the hook. And second, I mean

733
00:38:10,520 --> 00:38:13,400
Speaker 1: the procarity right now with the financial system already, with

734
00:38:13,440 --> 00:38:16,560
Speaker 1: the lead up to this debt crisis, this has put

735
00:38:16,600 --> 00:38:18,279
Speaker 1: us in a much worse spot. There was a lot

736
00:38:18,320 --> 00:38:21,040
Speaker 1: of theorizing that I saw on Twitter that oh, this

737
00:38:21,160 --> 00:38:23,640
Speaker 1: all just became political because of the name of the

738
00:38:23,680 --> 00:38:25,880
Speaker 1: bank in Silicon Valley has become this kind of like

739
00:38:25,880 --> 00:38:28,719
Speaker 1: boogeyman whatever. If this had been called Farmer's Bank, it

740
00:38:28,760 --> 00:38:31,200
Speaker 1: would have been no problem. I think it is the

741
00:38:31,520 --> 00:38:35,760
Speaker 1: polar opposite, the fact that you had so many wealthy

742
00:38:35,920 --> 00:38:40,520
Speaker 1: and well connected individuals tied into both parties, tied into

743
00:38:40,560 --> 00:38:43,919
Speaker 1: deeply into the financial banking system. Some of the most

744
00:38:43,920 --> 00:38:46,880
Speaker 1: powerful people in the country and really in the world,

745
00:38:47,480 --> 00:38:52,080
Speaker 1: that led them to react way faster, and it allowed

746
00:38:52,120 --> 00:38:54,480
Speaker 1: them to be persuaded that, oh, they have to do

747
00:38:54,520 --> 00:38:56,920
Speaker 1: this and they have to backstop the entire system or

748
00:38:56,920 --> 00:38:59,880
Speaker 1: else there's going to be complete calamity. I have not

749
00:39:00,120 --> 00:39:03,280
Speaker 1: been persuaded of that case. And this is also the

750
00:39:03,320 --> 00:39:05,839
Speaker 1: siren song that they always sing, that oh, we have

751
00:39:05,920 --> 00:39:08,360
Speaker 1: to do the bailounce because there's no other choice otherwise

752
00:39:08,400 --> 00:39:11,719
Speaker 1: there's going to be complete economic calamity. So I'm a

753
00:39:11,760 --> 00:39:14,799
Speaker 1: little bit skeptical of that case being made, given that

754
00:39:14,840 --> 00:39:17,320
Speaker 1: we have seen it before in the past to people's

755
00:39:17,320 --> 00:39:22,840
Speaker 1: individual and personal benefit. Yeah, I think you are exactly correct.

756
00:39:23,360 --> 00:39:25,760
Speaker 1: All right. We have a great journalist to break down

757
00:39:25,880 --> 00:39:28,520
Speaker 1: what he thinks of exactly what the federal government is

758
00:39:28,560 --> 00:39:31,640
Speaker 1: doing and explain it in playing terms. And also he

759
00:39:31,680 --> 00:39:34,239
Speaker 1: has a great piece, as Matthew Zeitlin, that we're going

760
00:39:34,280 --> 00:39:36,480
Speaker 1: to bring in with grid News. It's a great piece

761
00:39:36,520 --> 00:39:39,600
Speaker 1: explaining how exactly we got here, what the promise of

762
00:39:39,640 --> 00:39:42,480
Speaker 1: Dodd Frank financial reform was, and how it is that

763
00:39:42,600 --> 00:39:45,640
Speaker 1: now we're what fifteen years down the road, and we're

764
00:39:45,640 --> 00:39:48,800
Speaker 1: doing a bailounce once again. So how did that ultimately fail?

765
00:39:48,840 --> 00:39:51,279
Speaker 1: So let's get to it. Matthew Ziland, thanks for joining us.

766
00:39:51,440 --> 00:39:53,719
Speaker 1: Good see man, thanks for having me. Good morning. Yeah.

767
00:39:53,760 --> 00:39:57,000
Speaker 1: Of course, so we did our best to explain what

768
00:39:57,120 --> 00:39:59,719
Speaker 1: action the US government is taking, but I would love

769
00:39:59,760 --> 00:40:02,520
Speaker 1: for you to just explain in the plain as terms

770
00:40:02,560 --> 00:40:07,040
Speaker 1: possible what has just been decided. Yeah. So there's two

771
00:40:07,040 --> 00:40:10,360
Speaker 1: parts of this. The first is that any deposit holder

772
00:40:10,480 --> 00:40:13,760
Speaker 1: in Signature Bank or Silicon Valley Bank as of this morning,

773
00:40:14,120 --> 00:40:16,759
Speaker 1: has full access to any amount of money they deposited

774
00:40:17,160 --> 00:40:20,080
Speaker 1: in those two institutions, even if it's above two hundred

775
00:40:20,080 --> 00:40:23,600
Speaker 1: and fifty thousand dollars, which is the FDIC insurance limit.

776
00:40:24,440 --> 00:40:25,960
Speaker 1: There is like a lot of doubt about this over

777
00:40:25,960 --> 00:40:28,319
Speaker 1: the weekend, but that is now totally. It's like those

778
00:40:28,320 --> 00:40:31,120
Speaker 1: money claims are good. You have access to any money

779
00:40:31,120 --> 00:40:33,680
Speaker 1: over two and fifty thousand dollars. The second thing is

780
00:40:33,800 --> 00:40:37,640
Speaker 1: arguably more expansive, but a little harder to understand. Any

781
00:40:37,719 --> 00:40:42,880
Speaker 1: bank now can go to the FED and host assets

782
00:40:42,960 --> 00:40:46,319
Speaker 1: they have, you know, Treasury bonds and agency mortgage backed

783
00:40:46,320 --> 00:40:50,560
Speaker 1: securities and get money back. It's a lending operation. It's

784
00:40:50,640 --> 00:40:54,000
Speaker 1: essentially a way to take their current long term assets

785
00:40:54,120 --> 00:40:57,279
Speaker 1: and over temporarily for a year or so, turn them

786
00:40:57,280 --> 00:40:59,759
Speaker 1: into cash. The idea here is that if any bank

787
00:40:59,840 --> 00:41:04,759
Speaker 1: is coming under pressure from depositors asking for withdrawals, they

788
00:41:04,800 --> 00:41:07,480
Speaker 1: can have more liquidity, which means that they have more

789
00:41:07,520 --> 00:41:10,920
Speaker 1: cash at hand to process of the withdrawals. But obviously

790
00:41:11,000 --> 00:41:13,480
Speaker 1: the idea here is to make it seem like banks

791
00:41:13,520 --> 00:41:16,640
Speaker 1: that are solvent today will still be solved tomorrow, and

792
00:41:16,680 --> 00:41:19,239
Speaker 1: that if you're a depositor, you don't have to get

793
00:41:19,280 --> 00:41:24,680
Speaker 1: panicky like what happened with Silicon Valley Bank last week. Right,

794
00:41:24,760 --> 00:41:26,560
Speaker 1: And so, Matthew, one of the things we've been talking

795
00:41:26,600 --> 00:41:29,799
Speaker 1: about is that this sets a tremendous precedent now for

796
00:41:29,920 --> 00:41:33,680
Speaker 1: basically all banks in the United States. They now effectively

797
00:41:33,960 --> 00:41:37,080
Speaker 1: the US government is guaranteeing the deposits of all nine

798
00:41:37,160 --> 00:41:40,359
Speaker 1: trillion dollars in banks across the US. What does that

799
00:41:40,480 --> 00:41:43,200
Speaker 1: mean for the banking system as a whole? What are

800
00:41:43,239 --> 00:41:47,920
Speaker 1: the perverse incentives? The moral hazard if you wish so

801
00:41:48,120 --> 00:41:50,919
Speaker 1: this The main thing this does is that any role

802
00:41:51,120 --> 00:41:55,840
Speaker 1: that depositors have in ensuring bank safety and soundness and

803
00:41:55,880 --> 00:41:59,040
Speaker 1: security has been wiped out pretty much. What the government

804
00:41:59,080 --> 00:42:03,319
Speaker 1: here is saying is that all depositors are like they

805
00:42:03,360 --> 00:42:06,640
Speaker 1: have insured deposits, even though the system is only only

806
00:42:06,760 --> 00:42:11,120
Speaker 1: funds itself for insurance these premium claims that banks have

807
00:42:11,200 --> 00:42:14,360
Speaker 1: to pay the FDIC for deposits up to two hundred

808
00:42:14,360 --> 00:42:16,960
Speaker 1: fifty thousand dollars. So that's like a really big deal.

809
00:42:17,000 --> 00:42:21,520
Speaker 1: And the second thing is that the government is essentially

810
00:42:21,560 --> 00:42:23,360
Speaker 1: saying that if you're solvent today, like you're going to

811
00:42:23,400 --> 00:42:28,000
Speaker 1: be solvent tomorrow. And that's a even though the federal

812
00:42:28,000 --> 00:42:30,520
Speaker 1: government won't be necessarily quote unquote like spending money on

813
00:42:30,600 --> 00:42:33,440
Speaker 1: these lending operations, in all likelihood, it is like a

814
00:42:33,480 --> 00:42:37,319
Speaker 1: massive subsidy to the kind of regional banking sector. So

815
00:42:37,360 --> 00:42:39,480
Speaker 1: it is a big deal because the banks have not

816
00:42:39,520 --> 00:42:41,399
Speaker 1: had to give anything up in exchange for this. There's

817
00:42:41,440 --> 00:42:45,440
Speaker 1: no added regulation or anything like that. I mean, typically

818
00:42:45,440 --> 00:42:46,960
Speaker 1: that's the deal. It's like, if you want to offer

819
00:42:47,040 --> 00:42:52,000
Speaker 1: FDIC insured deposits, you get overseen supervised by the FDIC,

820
00:42:52,719 --> 00:42:55,160
Speaker 1: and like that level of protection has like really gone up,

821
00:42:55,200 --> 00:42:57,600
Speaker 1: but the kind of the obligations that banks have to

822
00:42:57,680 --> 00:43:00,960
Speaker 1: the system as a whole has not gone up in turn. Yeah,

823
00:43:01,040 --> 00:43:02,840
Speaker 1: talk about that piece a little bit more. Let's go

824
00:43:02,840 --> 00:43:05,480
Speaker 1: ahead and put this tweet that Matthew had up on

825
00:43:05,520 --> 00:43:09,520
Speaker 1: the screen, because as you were pointing to. They have

826
00:43:09,920 --> 00:43:14,480
Speaker 1: paid into the FDIC to this insurance fund with funds

827
00:43:14,480 --> 00:43:18,040
Speaker 1: sufficient to ensure two hundred and fifty thousand dollars first

828
00:43:18,040 --> 00:43:21,040
Speaker 1: two hundred and fifty thousand dollars of their deposits. But

829
00:43:21,160 --> 00:43:24,080
Speaker 1: they actually when the FDICE right here hiked its assessment

830
00:43:24,120 --> 00:43:26,520
Speaker 1: rate for the Deposit Insurance Fund last year, bank trade

831
00:43:26,560 --> 00:43:29,319
Speaker 1: groups opposed it, saying that it was quote a preemptive

832
00:43:29,400 --> 00:43:34,800
Speaker 1: strike against a non existent threat. Clearly they were incorrect

833
00:43:34,800 --> 00:43:37,160
Speaker 1: about that. Now my understanding is the FDIC went ahead

834
00:43:37,160 --> 00:43:41,640
Speaker 1: and hiked its assessment rate anyway. However, it's nowhere near

835
00:43:41,719 --> 00:43:44,880
Speaker 1: sufficient what they've been paying in in order to backstep

836
00:43:45,040 --> 00:43:49,000
Speaker 1: all of the uninsured deposits across the country. So I

837
00:43:49,080 --> 00:43:50,800
Speaker 1: know that the government is going in great lengths. Is

838
00:43:50,840 --> 00:43:53,000
Speaker 1: how the taxpayer's funds aren't on the hook? Like this

839
00:43:53,040 --> 00:43:56,080
Speaker 1: is completely funded by Wall Street payments, et cetera. But

840
00:43:56,160 --> 00:44:00,960
Speaker 1: if we're to facto backstopping the entirety of the banking

841
00:44:01,000 --> 00:44:04,120
Speaker 1: system and all the deposit is held therein, doesn't it

842
00:44:04,239 --> 00:44:07,239
Speaker 1: you know, sort of begger belief to imagine that taxpayer

843
00:44:07,239 --> 00:44:10,080
Speaker 1: funds are not at least sort of on the hook,

844
00:44:10,160 --> 00:44:14,479
Speaker 1: even if they may not be directly spent in any way. Yeah,

845
00:44:14,560 --> 00:44:16,719
Speaker 1: I mean I think sometimes just like looking at kind

846
00:44:16,719 --> 00:44:18,800
Speaker 1: of the flow of funds from you know, the treasury

847
00:44:19,120 --> 00:44:21,640
Speaker 1: to the banks doesn't really capture the value of what's

848
00:44:21,680 --> 00:44:26,200
Speaker 1: been transacted here. I mean, like, this is obviously very

849
00:44:26,280 --> 00:44:29,320
Speaker 1: very valuable to banks and bank depositors, even if literally

850
00:44:29,360 --> 00:44:33,160
Speaker 1: no money is actually spent, Like the deposit fund could

851
00:44:33,200 --> 00:44:35,400
Speaker 1: be stay at one hundred and twenty five billion dollars,

852
00:44:35,840 --> 00:44:37,759
Speaker 1: and yet they're a huge amount of value has been

853
00:44:37,760 --> 00:44:41,160
Speaker 1: given over to depositors. You have to remember our lenders

854
00:44:41,600 --> 00:44:43,920
Speaker 1: to banks and then the banks themselves, which are now

855
00:44:43,960 --> 00:44:47,120
Speaker 1: in a kind of more secure situation. So I think

856
00:44:47,160 --> 00:44:49,799
Speaker 1: what's happening here is that after two thousand and eight,

857
00:44:50,360 --> 00:44:52,920
Speaker 1: there was a huge political backlash to bailouts, and the

858
00:44:52,960 --> 00:44:55,040
Speaker 1: way that was captured in the post two thousand and

859
00:44:55,040 --> 00:44:58,680
Speaker 1: eight laws and in what regulators want to do is

860
00:44:58,719 --> 00:45:01,080
Speaker 1: that they never wanted be in a sit situation where

861
00:45:01,080 --> 00:45:05,400
Speaker 1: they're seen as be giving taxpayer money directly to insolvent

862
00:45:05,560 --> 00:45:10,480
Speaker 1: institutions or lending huge lending facilities to insolvent institutions. So

863
00:45:10,600 --> 00:45:13,200
Speaker 1: what I think we saw Sunday night was a two

864
00:45:13,239 --> 00:45:16,359
Speaker 1: thousand and eight style action, but kind of drawn within

865
00:45:16,400 --> 00:45:22,040
Speaker 1: the lines of what regulators interpreted made the public angry about,

866
00:45:22,160 --> 00:45:25,960
Speaker 1: you know, things like TAR and support for AIG and

867
00:45:26,000 --> 00:45:28,080
Speaker 1: support for things like City Group and stuff where they

868
00:45:28,080 --> 00:45:33,000
Speaker 1: felt like they're rescuing failed or failing institutions, and the

869
00:45:33,080 --> 00:45:38,400
Speaker 1: management wasn't treated harshly enough. Shareholders still survive. So if

870
00:45:38,400 --> 00:45:40,080
Speaker 1: you look at it from kind of the government perspective,

871
00:45:40,080 --> 00:45:43,600
Speaker 1: what they're saying is, look, the SVB shareholders went to zero,

872
00:45:43,920 --> 00:45:47,279
Speaker 1: their management has gotten fired. The tax payer's not really

873
00:45:47,280 --> 00:45:49,600
Speaker 1: the taxpayer money on the line because it's raised from

874
00:45:49,640 --> 00:45:52,680
Speaker 1: the banks, but you know a huge amount of value

875
00:45:52,680 --> 00:45:56,719
Speaker 1: has been transferred to the entire banking sector from ultimately

876
00:45:56,960 --> 00:45:59,359
Speaker 1: the public, even if it's not so much public money,

877
00:45:59,360 --> 00:46:01,799
Speaker 1: but it's kind of like public authority that comes from

878
00:46:01,880 --> 00:46:05,400
Speaker 1: all of us to them. So yeah, it's like this,

879
00:46:05,880 --> 00:46:07,239
Speaker 1: whether or not it's a bailout, it's kind of a

880
00:46:07,280 --> 00:46:10,839
Speaker 1: semantic issue, but it's like a huge amount of support. Right,

881
00:46:11,000 --> 00:46:15,120
Speaker 1: it's obviously a bailout. Andrew Ross bailout, right, So let's

882
00:46:15,120 --> 00:46:16,520
Speaker 1: go ahead and put this up there on the screen.

883
00:46:16,560 --> 00:46:18,480
Speaker 1: You wrote a good piece how two thousand and eight

884
00:46:18,520 --> 00:46:21,319
Speaker 1: reforms did and didn't prepare us for the Silicon Valley

885
00:46:21,360 --> 00:46:23,120
Speaker 1: Bank collapse? Can you just roll through that? I think

886
00:46:23,120 --> 00:46:24,920
Speaker 1: a lot of us, I especially, did have questions. I

887
00:46:25,000 --> 00:46:27,399
Speaker 1: was like, hey, when I'm breaking new segment here, I said,

888
00:46:27,400 --> 00:46:29,359
Speaker 1: this is going to be a big test for Dodd

889
00:46:29,360 --> 00:46:31,279
Speaker 1: Frank as I understand it. They weren't even on the

890
00:46:31,320 --> 00:46:34,960
Speaker 1: troubled bank list. So how did regulators miss this? How

891
00:46:34,960 --> 00:46:39,000
Speaker 1: did the Dodd Frank architecture respond? Yeah, so this is

892
00:46:39,040 --> 00:46:42,320
Speaker 1: really important. Almost as soon as Dodd Frank was passed

893
00:46:42,360 --> 00:46:44,160
Speaker 1: in twenty ten and kind of the rules were written

894
00:46:44,200 --> 00:46:47,320
Speaker 1: over the next few years, banks of around Silicon Valley

895
00:46:47,320 --> 00:46:49,800
Speaker 1: Bank size, So these be like large regional banks that

896
00:46:49,840 --> 00:46:52,680
Speaker 1: are still substantially smaller than JP Morgan's of the world.

897
00:46:53,760 --> 00:46:56,479
Speaker 1: These are banks around fifty billion to two hundred fifty

898
00:46:56,480 --> 00:46:58,839
Speaker 1: billion dollars in assets, and at the time Silicon Valley

899
00:46:58,840 --> 00:47:02,040
Speaker 1: Bank had forty billion, and now they had last week

900
00:47:02,040 --> 00:47:04,879
Speaker 1: over two hundred billion. But they were arguing, is that

901
00:47:05,080 --> 00:47:07,680
Speaker 1: all these rules that were implemented on the largest banks

902
00:47:07,920 --> 00:47:11,400
Speaker 1: to make them kind of more resilient to crisis and

903
00:47:11,440 --> 00:47:13,520
Speaker 1: then make it so that if they failed, they had

904
00:47:13,520 --> 00:47:16,640
Speaker 1: this kind of special process such that the entire system

905
00:47:16,680 --> 00:47:20,480
Speaker 1: wouldn't collapse around them. Those rules were being applied to

906
00:47:20,560 --> 00:47:24,560
Speaker 1: this size of bank, and they were very, very angry

907
00:47:24,600 --> 00:47:26,680
Speaker 1: about it. And the argument they were making is that

908
00:47:27,040 --> 00:47:29,520
Speaker 1: they were lower risk institutions and you're too big to

909
00:47:29,520 --> 00:47:32,160
Speaker 1: fail banks, and two that they could be resolved through

910
00:47:32,200 --> 00:47:35,200
Speaker 1: the normal FDIC process. I mean, the CEO of Silicon

911
00:47:35,280 --> 00:47:37,720
Speaker 1: Valley Bank, when the bank was one fifth the size

912
00:47:37,719 --> 00:47:40,840
Speaker 1: as it was last week, was saying, was testifying to

913
00:47:40,880 --> 00:47:45,280
Speaker 1: Congress to this effect. Regional banks are quite powerful because

914
00:47:45,320 --> 00:47:49,440
Speaker 1: they're kind of locally rooted, and so legislators really listened

915
00:47:49,440 --> 00:47:52,440
Speaker 1: to them anyway. So in twenty eighteen, the Trump administration,

916
00:47:52,560 --> 00:47:56,120
Speaker 1: with a support of a smattering of moderate Democrats, passes

917
00:47:56,160 --> 00:47:58,839
Speaker 1: this rollback partial rollback of dot frank where it's really

918
00:47:58,880 --> 00:48:02,360
Speaker 1: aimed at kind of the Silicon Valle Bank and smaller institutions.

919
00:48:02,880 --> 00:48:04,839
Speaker 1: And a big thing that they did was say that

920
00:48:04,880 --> 00:48:08,080
Speaker 1: they didn't necessarily need to maintain this thing called liquidity

921
00:48:08,080 --> 00:48:13,000
Speaker 1: coverage ratio, basically maintaining kind of high quality liquid assets,

922
00:48:13,000 --> 00:48:15,320
Speaker 1: stuff that can be turned into cash super duper quickly

923
00:48:15,800 --> 00:48:18,440
Speaker 1: in case there's like a bank run going on, more

924
00:48:18,560 --> 00:48:20,759
Speaker 1: or less, and that they didn't have to do as

925
00:48:20,840 --> 00:48:24,200
Speaker 1: much planning for their failure. Now, whether those rules would

926
00:48:24,200 --> 00:48:27,000
Speaker 1: have prevented this like full on run on a bank

927
00:48:27,000 --> 00:48:30,320
Speaker 1: that we saw last week is questionable. But the central

928
00:48:30,360 --> 00:48:35,240
Speaker 1: intuition behind this deregulation that these banks were less risky

929
00:48:35,640 --> 00:48:37,799
Speaker 1: than the JP Morgans of the world, and that their

930
00:48:37,840 --> 00:48:41,560
Speaker 1: failure could be resolved. So the normal FDIC process turns

931
00:48:41,600 --> 00:48:45,719
Speaker 1: out to have been completely wrong. Got it. I think

932
00:48:45,719 --> 00:48:47,960
Speaker 1: that's very well said. Let me add this is an

933
00:48:48,000 --> 00:48:50,919
Speaker 1: impossible question to answer, but I would love to hear

934
00:48:51,000 --> 00:48:54,280
Speaker 1: you news on it. What if they did just follow

935
00:48:54,360 --> 00:48:58,720
Speaker 1: the normal process for resolving the situation, which is okay,

936
00:48:58,719 --> 00:49:01,760
Speaker 1: two hundred and fifty thousand dollars ensured backstop by the FDICE.

937
00:49:02,120 --> 00:49:04,839
Speaker 1: You could get that on Monday, no problem. The rest

938
00:49:04,880 --> 00:49:06,880
Speaker 1: of the assets of the bank are sold off and

939
00:49:07,040 --> 00:49:09,840
Speaker 1: used to make depositors as whole as possible. Then back

940
00:49:09,880 --> 00:49:12,560
Speaker 1: of the envelope calculations I saw was that they'd probably

941
00:49:12,560 --> 00:49:14,680
Speaker 1: take like a ten percent haircut. They'd get about ninety

942
00:49:14,719 --> 00:49:17,360
Speaker 1: percent of their funds, even the ones that were uninshored.

943
00:49:18,120 --> 00:49:21,319
Speaker 1: If we went that alternative path, what do you think

944
00:49:21,440 --> 00:49:26,319
Speaker 1: would have happened. I think there would have been a

945
00:49:26,360 --> 00:49:30,280
Speaker 1: lot of There's two issues. One is that the worry

946
00:49:30,400 --> 00:49:32,359
Speaker 1: was that there would be companies that had payroll issues

947
00:49:32,400 --> 00:49:34,319
Speaker 1: because they were using Silicon Valley Bank as like a

948
00:49:34,360 --> 00:49:37,279
Speaker 1: transacting bank just to kind of move money from their

949
00:49:37,280 --> 00:49:41,560
Speaker 1: business to their customers and clients and stuff. Now I

950
00:49:41,600 --> 00:49:43,880
Speaker 1: don't know that would have really happened, because if everyone

951
00:49:43,920 --> 00:49:47,000
Speaker 1: was getting fifty percent on Monday or Tuesday, they probably

952
00:49:47,040 --> 00:49:50,279
Speaker 1: could have made it work. The worry was that other

953
00:49:50,440 --> 00:49:52,440
Speaker 1: banks that had a similar kind of risk profile the

954
00:49:52,520 --> 00:49:55,759
Speaker 1: Silicon Valley Bank would also be under tremendous pressure that

955
00:49:55,760 --> 00:49:59,600
Speaker 1: people would withdraw from them and then put their money

956
00:49:59,600 --> 00:50:02,080
Speaker 1: into kind of bigger, safer banks, the JP Morgan's of

957
00:50:02,520 --> 00:50:04,360
Speaker 1: the world, and it kind of be this cascade of

958
00:50:04,760 --> 00:50:07,759
Speaker 1: bank runs. The issue is that, like it's just so

959
00:50:07,840 --> 00:50:10,120
Speaker 1: hard to know whether or not that would have happened,

960
00:50:10,880 --> 00:50:13,439
Speaker 1: but it was definitely a worry. I think what's really

961
00:50:13,440 --> 00:50:17,719
Speaker 1: interesting is that it seems like the federal regulator sorry

962
00:50:17,719 --> 00:50:20,120
Speaker 1: about that, we're not able to find a buyer for

963
00:50:20,160 --> 00:50:22,279
Speaker 1: the bank, which is ideally what they try to do

964
00:50:22,560 --> 00:50:26,160
Speaker 1: is that over the weekend they find someone to take

965
00:50:26,200 --> 00:50:28,720
Speaker 1: over the whole thing. This would happened with Washington Mutual

966
00:50:29,080 --> 00:50:30,520
Speaker 1: when it failed in two thousand and eight. It was

967
00:50:30,520 --> 00:50:32,360
Speaker 1: a three hundred billion dollar bank. But they're able to

968
00:50:32,440 --> 00:50:34,799
Speaker 1: kind of tie it up with JP Morgan that did

969
00:50:34,840 --> 00:50:36,520
Speaker 1: not really seem to be in the offing over the

970
00:50:36,560 --> 00:50:38,160
Speaker 1: weekend or else they would have done it because it's

971
00:50:38,200 --> 00:50:40,799
Speaker 1: kind of the easiest way to do this. It does

972
00:50:40,840 --> 00:50:43,400
Speaker 1: think indicate that there is kind of more pressure on

973
00:50:43,400 --> 00:50:48,680
Speaker 1: the system than in a typical bank failure situation. And finally, Matthew,

974
00:50:48,719 --> 00:50:51,560
Speaker 1: I'd love to get from you, you know, based on

975
00:50:52,160 --> 00:50:54,759
Speaker 1: the actions that the government just took in this non

976
00:50:54,760 --> 00:50:58,840
Speaker 1: bailout bail out, we have effectively not only backstop the

977
00:50:59,000 --> 00:51:02,280
Speaker 1: entirety of you know, posits insured and uninsured across the country,

978
00:51:03,040 --> 00:51:06,759
Speaker 1: we also have effectively, especially with you know, including Signature Bank,

979
00:51:06,800 --> 00:51:09,400
Speaker 1: and this effectively deemed all banks too big to fail.

980
00:51:09,960 --> 00:51:13,920
Speaker 1: How should that be reflected in a different policy approach?

981
00:51:14,400 --> 00:51:16,320
Speaker 1: Because I think the thing you pointed out at the beginning,

982
00:51:16,360 --> 00:51:19,959
Speaker 1: which is so important is that they're being given tremendous

983
00:51:20,040 --> 00:51:24,359
Speaker 1: value and not being asked to change anything at this point.

984
00:51:24,360 --> 00:51:26,200
Speaker 1: Now we expect President Biden speak today, We'll see what

985
00:51:26,280 --> 00:51:30,200
Speaker 1: he has to say, But how should our banking architecture

986
00:51:30,320 --> 00:51:35,000
Speaker 1: reflect this new reality. I think the first thing that

987
00:51:35,040 --> 00:51:36,759
Speaker 1: we'll see happen is that there's going to be a

988
00:51:36,760 --> 00:51:39,560
Speaker 1: big push to kind of re examine this twenty eighteen

989
00:51:39,680 --> 00:51:43,680
Speaker 1: dot Frank rollback, and this idea that these medium sized

990
00:51:43,680 --> 00:51:47,040
Speaker 1: banks are not systemic threats is obviously just not true.

991
00:51:47,080 --> 00:51:49,200
Speaker 1: We've kind of done a dry run of this and

992
00:51:49,600 --> 00:51:51,839
Speaker 1: we found out they are. And then I think we're

993
00:51:51,840 --> 00:51:54,120
Speaker 1: going to see bigger questions where a world in which

994
00:51:54,719 --> 00:51:57,640
Speaker 1: deposits are assumed to kind of always be safe. And

995
00:51:57,680 --> 00:52:00,760
Speaker 1: then it's like, what is the role of a banking

996
00:52:00,800 --> 00:52:04,040
Speaker 1: institution because they're essentially getting this subsidy from the government,

997
00:52:04,080 --> 00:52:07,319
Speaker 1: not so much in being kind of this extraordinary action

998
00:52:07,360 --> 00:52:09,160
Speaker 1: that happened in the weekend, but like they're getting the

999
00:52:09,239 --> 00:52:13,560
Speaker 1: right to essentially create money money like claims, and that

1000
00:52:13,560 --> 00:52:16,799
Speaker 1: they're getting this indefinite subsidy in order to do so.

1001
00:52:16,840 --> 00:52:19,640
Speaker 1: And I think it's really opened people up this idea

1002
00:52:19,719 --> 00:52:24,359
Speaker 1: that like, why can't the government do this to some extent? Now,

1003
00:52:24,400 --> 00:52:26,280
Speaker 1: Are we going to get some kind of postal banking

1004
00:52:26,840 --> 00:52:31,080
Speaker 1: or kind of basic fed banking for everyone overnight? No,

1005
00:52:31,320 --> 00:52:33,279
Speaker 1: But I think it's really kind of opened people up

1006
00:52:33,320 --> 00:52:36,640
Speaker 1: to the possibilities that, you know, the government and the

1007
00:52:36,640 --> 00:52:39,799
Speaker 1: banking system are really kind of completely entangled with each other.

1008
00:52:39,840 --> 00:52:43,640
Speaker 1: It's a very very basic level. And then once you

1009
00:52:43,719 --> 00:52:46,680
Speaker 1: realize that, it kind of opens up the field of possibilities.

1010
00:52:46,800 --> 00:52:49,879
Speaker 1: So people will be talking about this. Whether it turns

1011
00:52:49,880 --> 00:52:52,680
Speaker 1: into legislation is obviously very hard to tell. Yeah, I mean,

1012
00:52:52,719 --> 00:52:55,840
Speaker 1: if the taxpayer is ultimately in the US government, ultimately

1013
00:52:55,880 --> 00:52:58,480
Speaker 1: one hundred percent on the hook, why are they getting

1014
00:52:58,520 --> 00:53:01,920
Speaker 1: to benefit from all the games. Well, the taxpayer is

1015
00:53:01,960 --> 00:53:04,680
Speaker 1: backstopping all the losses. It ends up being a sort

1016
00:53:04,680 --> 00:53:08,479
Speaker 1: of an insane situation that's just been revealed. Yep, absolutely, Matt,

1017
00:53:08,520 --> 00:53:10,600
Speaker 1: it was really nice talking to you. Go ahead and

1018
00:53:10,680 --> 00:53:12,200
Speaker 1: check out. We'll put a link to his Twitter and

1019
00:53:12,280 --> 00:53:14,720
Speaker 1: to link to the story and all that in the description.

1020
00:53:14,880 --> 00:53:17,600
Speaker 1: Appreciate you joining us, man, Thank you, thanks so much.

1021
00:53:17,680 --> 00:53:20,160
Speaker 1: Had a great time too, pleasure you man. At the

1022
00:53:20,160 --> 00:53:21,759
Speaker 1: same time, we're not going to take our eye off

1023
00:53:21,760 --> 00:53:24,480
Speaker 1: of a very important story. Norfolk Southern the CEO was

1024
00:53:24,560 --> 00:53:27,680
Speaker 1: called to testify before the Senate and gave some totally

1025
00:53:27,719 --> 00:53:30,440
Speaker 1: ridiculous answers. It was at the same time that that

1026
00:53:30,640 --> 00:53:35,000
Speaker 1: bipartisan railway safety bill is now being considered before the

1027
00:53:35,040 --> 00:53:38,680
Speaker 1: bigger chamber. So as we can recall, it was endorsed

1028
00:53:38,719 --> 00:53:42,920
Speaker 1: by bipartison members, both by the Ohio delegation the Pennsylvania delegation,

1029
00:53:43,239 --> 00:53:46,359
Speaker 1: as well as some other Republican senators. Now the bill

1030
00:53:46,360 --> 00:53:48,520
Speaker 1: has been endorsed by President Biden, it remains to be

1031
00:53:48,560 --> 00:53:51,520
Speaker 1: seen whether it can garner enough Republican support. And it

1032
00:53:51,560 --> 00:53:53,880
Speaker 1: was in that vein that Senator of jd Vance of

1033
00:53:53,960 --> 00:53:59,080
Speaker 1: Ohio actually gave testimony geared specifically towards Republicans who had

1034
00:53:59,120 --> 00:54:03,160
Speaker 1: the idea that regulating Norfolk Southern even more might violate

1035
00:54:03,200 --> 00:54:05,879
Speaker 1: free market principles. Here's what he had to say. Now,

1036
00:54:05,960 --> 00:54:09,319
Speaker 1: we are faced with a choice with this legislation and

1037
00:54:09,360 --> 00:54:12,359
Speaker 1: how we respond to this crisis. Do we do the

1038
00:54:12,400 --> 00:54:15,799
Speaker 1: bidding of a massive industry that is in bed with

1039
00:54:15,920 --> 00:54:18,200
Speaker 1: big government, or do we do the bidding of the

1040
00:54:18,239 --> 00:54:20,920
Speaker 1: people who elected us to the Senate into the Congress

1041
00:54:20,960 --> 00:54:23,440
Speaker 1: in the first place. I believe that we are the

1042
00:54:23,480 --> 00:54:26,279
Speaker 1: party of working people. But it's time to be the

1043
00:54:26,320 --> 00:54:29,360
Speaker 1: party of working people. We have a choice. Are we

1044
00:54:29,600 --> 00:54:32,719
Speaker 1: for big business and big government or are we for

1045
00:54:32,760 --> 00:54:35,480
Speaker 1: the people of East Palestine. It's a time for choosing,

1046
00:54:35,600 --> 00:54:37,840
Speaker 1: Let's make the right one. So there were a couple

1047
00:54:37,840 --> 00:54:40,840
Speaker 1: of important things that he fit said there time for choosing.

1048
00:54:41,239 --> 00:54:42,799
Speaker 1: For most people are not going to know, but it's

1049
00:54:42,840 --> 00:54:45,799
Speaker 1: a very famous actually Ronald Reagan's speech that he gave

1050
00:54:45,880 --> 00:54:48,200
Speaker 1: I believe it was like nineteen sixty four. It was

1051
00:54:48,239 --> 00:54:49,799
Speaker 1: after the Bury I think he was during the Barry

1052
00:54:49,800 --> 00:54:52,360
Speaker 1: Goldwater run, and he said, this is a time for choosing, like,

1053
00:54:52,400 --> 00:54:54,879
Speaker 1: are we going to be mealy mouthed Eisenhower Republicans are

1054
00:54:54,880 --> 00:54:57,160
Speaker 1: going to be hardcore Goldwater. So that was kind of

1055
00:54:57,160 --> 00:54:59,080
Speaker 1: an interesting for people who know that was a real

1056
00:54:59,080 --> 00:55:01,920
Speaker 1: turn of phrase. The second part, which is very important,

1057
00:55:02,000 --> 00:55:05,040
Speaker 1: was that that was geared specifically towards going after the

1058
00:55:05,239 --> 00:55:09,560
Speaker 1: people who justify cronyism under free market concerns, as the

1059
00:55:09,760 --> 00:55:12,160
Speaker 1: you know what's his name, Troy Nolzy's the House Transportation

1060
00:55:12,239 --> 00:55:16,040
Speaker 1: Committee ranking member for or believe, the chairman the Republican side,

1061
00:55:16,040 --> 00:55:17,719
Speaker 1: who said, well, hold on a second, we don't know

1062
00:55:17,760 --> 00:55:20,239
Speaker 1: if we need more regulation here, and as you know

1063
00:55:20,280 --> 00:55:23,040
Speaker 1: he pointed out in his testimony, he's like, we bailed

1064
00:55:23,080 --> 00:55:27,000
Speaker 1: out their union support, we have deregulated this industry. It

1065
00:55:27,120 --> 00:55:31,560
Speaker 1: is one of the most in bed industries outside of

1066
00:55:31,600 --> 00:55:36,600
Speaker 1: like aviation and apparently banking at the government is totally

1067
00:55:36,640 --> 00:55:38,799
Speaker 1: involved in So the idea that we don't get to

1068
00:55:38,880 --> 00:55:43,759
Speaker 1: set proper safety standards is outrageous. Of course we do. Yeah, well,

1069
00:55:43,800 --> 00:55:47,279
Speaker 1: it's been quite a month in terms of recognizing the

1070
00:55:47,320 --> 00:55:53,000
Speaker 1: importance of intelligent regulation and the detriment of political capture

1071
00:55:53,040 --> 00:55:56,759
Speaker 1: and corruption. And you know, I was skeptical of jd

1072
00:55:56,880 --> 00:55:59,759
Speaker 1: Vance's initial comments. Took a while to comma on these.

1073
00:55:59,760 --> 00:56:02,000
Speaker 1: Palace Astini went on Tucker and he was more fixated

1074
00:56:02,040 --> 00:56:05,239
Speaker 1: on like, oh, this is about wokesm etc. In terms

1075
00:56:05,280 --> 00:56:07,120
Speaker 1: of the bill, in terms of what he's saying here,

1076
00:56:07,360 --> 00:56:09,560
Speaker 1: this is right on the money, and it's very exciting.

1077
00:56:09,600 --> 00:56:11,880
Speaker 1: It's very encouraging to think that there could be this

1078
00:56:12,000 --> 00:56:15,560
Speaker 1: kind of bipartisan collaboration. This could have implications for the

1079
00:56:15,600 --> 00:56:18,520
Speaker 1: banking system as well as we move forward and say, Okay,

1080
00:56:18,760 --> 00:56:20,840
Speaker 1: what is this new world that we live in, what

1081
00:56:20,880 --> 00:56:23,080
Speaker 1: does it look like? And what should it look like? Hey,

1082
00:56:23,160 --> 00:56:25,600
Speaker 1: is there a role here for someone who's willing to

1083
00:56:25,600 --> 00:56:29,399
Speaker 1: speak these kinds of truths to partner with Democrats, even

1084
00:56:29,480 --> 00:56:32,080
Speaker 1: if it is in a limited way as it has

1085
00:56:32,120 --> 00:56:34,960
Speaker 1: been thus far. So it's really interesting to see. And

1086
00:56:35,040 --> 00:56:37,759
Speaker 1: there's a real fight brewing within the Republican Party over

1087
00:56:37,800 --> 00:56:41,319
Speaker 1: whether they can actually stand for a different approach on

1088
00:56:41,480 --> 00:56:45,120
Speaker 1: economics or whether it just all ultimately collapses into culture

1089
00:56:45,160 --> 00:56:47,680
Speaker 1: war as it has been mostly over the past number

1090
00:56:47,719 --> 00:56:49,360
Speaker 1: of years. I would hope not. I mean the fact

1091
00:56:49,360 --> 00:56:52,800
Speaker 1: though that Senator Fetterman, well you know whoever his staff

1092
00:56:52,960 --> 00:56:56,800
Speaker 1: signed on that. You had the Democratic members from Pennsylvania,

1093
00:56:57,200 --> 00:57:00,920
Speaker 1: the Bob Casey sign on that shared Brown. I mean,

1094
00:57:00,920 --> 00:57:03,560
Speaker 1: these are serious people who are interested in it. The

1095
00:57:03,719 --> 00:57:06,879
Speaker 1: President Biden endorsing the legislative you don't see that all

1096
00:57:06,920 --> 00:57:10,160
Speaker 1: that often. Yeah, and especially once spearheaded. The real question

1097
00:57:10,320 --> 00:57:14,120
Speaker 1: again is going to be those Republican lawmakers. But then

1098
00:57:14,280 --> 00:57:18,640
Speaker 1: the secondary question is are these actual CEOs, these executives

1099
00:57:18,680 --> 00:57:20,880
Speaker 1: of people responsible to this? Are they going to pay

1100
00:57:21,240 --> 00:57:23,280
Speaker 1: and are they actually going to get held responsible here?

1101
00:57:23,280 --> 00:57:25,440
Speaker 1: Because who By the way, it's been what more than

1102
00:57:25,480 --> 00:57:28,680
Speaker 1: a month now almost into derailment. What is going on?

1103
00:57:28,760 --> 00:57:30,880
Speaker 1: I mean, do we know what the toxic levels are

1104
00:57:31,280 --> 00:57:34,040
Speaker 1: and water? Are people dead or not? I mean, can

1105
00:57:34,080 --> 00:57:39,000
Speaker 1: we can we trace like poisoning of these pets now officially?

1106
00:57:39,280 --> 00:57:41,440
Speaker 1: Like you know, just think about what look look at

1107
00:57:41,440 --> 00:57:42,960
Speaker 1: what happened with the banking system, and look at this,

1108
00:57:43,080 --> 00:57:46,600
Speaker 1: like these people totally almost basically forgotten by financial media

1109
00:57:46,640 --> 00:57:49,400
Speaker 1: and many others. Yeah, listen, I tweeted this little save

1110
00:57:49,480 --> 00:57:53,280
Speaker 1: here as well. Whatever you think of the SVB bailout,

1111
00:57:53,880 --> 00:57:58,440
Speaker 1: it took a weekend for effectively wealthy venture capitalists to

1112
00:57:58,520 --> 00:58:02,360
Speaker 1: get their insta bailout from the government, and people in

1113
00:58:02,400 --> 00:58:05,600
Speaker 1: East Palestine still do not have a real answer about

1114
00:58:05,600 --> 00:58:08,240
Speaker 1: whether they and their kids have been poisoned, whether they're

1115
00:58:08,240 --> 00:58:11,120
Speaker 1: going to face elevated cancer risk down the road, whether

1116
00:58:11,120 --> 00:58:13,439
Speaker 1: they can go back to their homes, their homes which

1117
00:58:13,560 --> 00:58:16,680
Speaker 1: values of which are now completely decimated. No bailout for

1118
00:58:16,720 --> 00:58:20,000
Speaker 1: them on the way. So it shows you once again,

1119
00:58:20,640 --> 00:58:24,480
Speaker 1: when the government wants to act, and when it involves wealthy,

1120
00:58:24,520 --> 00:58:27,160
Speaker 1: influential people, well, hey, it just takes a weekend and

1121
00:58:27,160 --> 00:58:30,360
Speaker 1: we've got, you know, trillions of dollars effectively backstopping the

1122
00:58:30,520 --> 00:58:33,480
Speaker 1: entire system. When it comes to people who are less

1123
00:58:33,680 --> 00:58:37,640
Speaker 1: politically important, less connected, less well off, well, you know,

1124
00:58:37,720 --> 00:58:39,480
Speaker 1: it's a month down the road and the best that

1125
00:58:39,520 --> 00:58:42,920
Speaker 1: they've done, and this is outrageous to me. They are

1126
00:58:43,000 --> 00:58:45,320
Speaker 1: now finally the phased like, oh maybe we should test

1127
00:58:45,400 --> 00:58:49,480
Speaker 1: for dioxids, which are incredibly toxic and linger and have

1128
00:58:49,800 --> 00:58:53,280
Speaker 1: known incredibly detrimental impacts. They're finally now testing for it,

1129
00:58:53,600 --> 00:58:58,040
Speaker 1: but they're still asking Norfolk Southern to spearhead the testing

1130
00:58:58,520 --> 00:59:02,880
Speaker 1: the polluters themselves. It's it's absolute insand I just I

1131
00:59:02,920 --> 00:59:07,160
Speaker 1: can't even wrap my head around it. So it's a

1132
00:59:07,280 --> 00:59:11,880
Speaker 1: clear contrast in response and in care and concern from

1133
00:59:12,280 --> 00:59:15,520
Speaker 1: our government on really on both sides of Aisle towards

1134
00:59:15,560 --> 00:59:18,120
Speaker 1: you know, the way the banking sector was handled and

1135
00:59:18,160 --> 00:59:21,400
Speaker 1: the way these people in East Palestine have been dealt with. Yeah,

1136
00:59:21,520 --> 00:59:25,040
Speaker 1: I think you're very right. Senator Bernie Sanders also shredded

1137
00:59:25,040 --> 00:59:28,040
Speaker 1: the CEO in testimony, did a great job. Let's take

1138
00:59:28,040 --> 00:59:32,560
Speaker 1: a listen. Norfolk Southern provided ten billion dollars in stock

1139
00:59:32,640 --> 00:59:36,520
Speaker 1: buybacks recently. Can you tell the American people and your

1140
00:59:36,520 --> 00:59:39,040
Speaker 1: employees right now that are in order to improve morale

1141
00:59:39,360 --> 00:59:42,160
Speaker 1: in your workforce, that you will guarantee at least seven

1142
00:59:42,240 --> 00:59:46,200
Speaker 1: paid six days to the fifteen thousand workers you employed, Senator,

1143
00:59:46,200 --> 00:59:49,360
Speaker 1: With our latest agreement with our employees, which included a

1144
00:59:49,480 --> 00:59:53,200
Speaker 1: historic twenty four percent wage increase and access to premium

1145
00:59:53,240 --> 00:59:57,080
Speaker 1: healthcare benefits, we immediately pivoted to talking to each of

1146
00:59:57,080 --> 00:59:59,680
Speaker 1: our local I want, I've been deeply involved. I introduced

1147
00:59:59,680 --> 01:00:01,840
Speaker 1: the mens then on the floor. I know the issue, Senator.

1148
01:00:01,880 --> 01:00:04,800
Speaker 1: I share your focus on our employees. I will commit

1149
01:00:05,080 --> 01:00:08,080
Speaker 1: to continuing to discuss with them important quality of life

1150
01:00:08,120 --> 01:00:12,360
Speaker 1: issues with our local craft colleagues. But all do respect.

1151
01:00:12,400 --> 01:00:15,920
Speaker 1: You sound like a politician. He is the sure the

1152
01:00:16,120 --> 01:00:19,880
Speaker 1: will not say that he will increase paid sickly. This,

1153
01:00:19,960 --> 01:00:22,400
Speaker 1: of course was the central issue in terms of a

1154
01:00:22,520 --> 01:00:26,000
Speaker 1: real workers threatening strike that was ultimately crushed by Biden

1155
01:00:26,160 --> 01:00:29,680
Speaker 1: and the Democrats and in combination with the Republicans. So

1156
01:00:30,560 --> 01:00:33,880
Speaker 1: you know, senator standards still saying, hey, listen, you all

1157
01:00:33,960 --> 01:00:38,160
Speaker 1: are profitable beyond belief. You have plenty of money floating

1158
01:00:38,200 --> 01:00:40,720
Speaker 1: around to dole out to your executives and to your

1159
01:00:40,800 --> 01:00:43,480
Speaker 1: shareholders through stock buybacks, which by the way, should be

1160
01:00:43,560 --> 01:00:48,160
Speaker 1: banned and illegal. How about you use this opportunity to

1161
01:00:48,280 --> 01:00:51,960
Speaker 1: provide seven paid sick days to your workers? Is that

1162
01:00:51,960 --> 01:00:54,240
Speaker 1: too much to ask? And of course the CEO has

1163
01:00:54,440 --> 01:00:56,840
Speaker 1: nothing to say, will not comment to it. And I

1164
01:00:56,880 --> 01:01:00,320
Speaker 1: think this one is just like the banking system. So

1165
01:01:00,520 --> 01:01:02,919
Speaker 1: corporate corruption a real key theme of the show here,

1166
01:01:03,120 --> 01:01:05,640
Speaker 1: and I just I can't help but look at this

1167
01:01:05,840 --> 01:01:09,800
Speaker 1: and also know one thing that that bill already it

1168
01:01:09,840 --> 01:01:12,600
Speaker 1: faces a very difficult climb up, like are you really

1169
01:01:12,640 --> 01:01:14,880
Speaker 1: going to be able to get nine Republicans. We've only

1170
01:01:14,920 --> 01:01:17,440
Speaker 1: got four that as signed on right now. President Biden

1171
01:01:17,560 --> 01:01:20,080
Speaker 1: endorsing the bill frankly problems makes it more difficult because

1172
01:01:20,080 --> 01:01:22,240
Speaker 1: now there's oh, we're sending up against Biden woke big

1173
01:01:22,240 --> 01:01:24,800
Speaker 1: government trying to regulate the railroad, and then same thing

1174
01:01:24,840 --> 01:01:27,520
Speaker 1: on Norfolk Southern. I mean, they're not even getting pressed

1175
01:01:27,560 --> 01:01:30,160
Speaker 1: on the stock buyback issue. It's like with the banks.

1176
01:01:30,480 --> 01:01:33,480
Speaker 1: I have zero confidence that any follow on regulation will

1177
01:01:33,520 --> 01:01:36,600
Speaker 1: actually occur to stop this type of behavior, and that

1178
01:01:36,760 --> 01:01:40,760
Speaker 1: will not transfer the increased FDIC fees to every single

1179
01:01:40,760 --> 01:01:43,120
Speaker 1: one of us. They will continue to operate, not only

1180
01:01:43,200 --> 01:01:46,440
Speaker 1: business as usual. Business is better because now the losses

1181
01:01:46,440 --> 01:01:49,520
Speaker 1: on your balance sheet are backstopped and guaranteed by the FED.

1182
01:01:49,920 --> 01:01:52,920
Speaker 1: The increase in the rates, it doesn't affect them. It

1183
01:01:52,960 --> 01:01:55,960
Speaker 1: only affects you and I and our customers and the

1184
01:01:55,960 --> 01:01:58,560
Speaker 1: people who watch our show. Blue collar people out there

1185
01:01:58,560 --> 01:02:01,640
Speaker 1: getting fired right now, oh, because the Fed is raising

1186
01:02:01,680 --> 01:02:04,480
Speaker 1: rates and their companies can't afford to employ them. That's

1187
01:02:04,560 --> 01:02:08,240
Speaker 1: the next part, Like only us, those who are merely

1188
01:02:09,000 --> 01:02:11,600
Speaker 1: not in the very very top of the system. We're

1189
01:02:11,680 --> 01:02:13,680
Speaker 1: all the ones who get to pay the price for

1190
01:02:13,800 --> 01:02:16,240
Speaker 1: all of these big policies, but when they fail, they

1191
01:02:16,240 --> 01:02:18,680
Speaker 1: get to pay themselves bonuses. He appears before the sending

1192
01:02:18,760 --> 01:02:21,040
Speaker 1: quote sounds like a politician. I I mean, look if

1193
01:02:21,040 --> 01:02:22,520
Speaker 1: the guy the fact that Guy Stone even has his

1194
01:02:22,600 --> 01:02:26,160
Speaker 1: job is crazy in this environment. Yeah, so, I don't know,

1195
01:02:26,720 --> 01:02:29,160
Speaker 1: I feel just discussed on days like this. The FED

1196
01:02:29,200 --> 01:02:32,120
Speaker 1: piece is so critical to underscore because it really does

1197
01:02:32,200 --> 01:02:37,000
Speaker 1: reveal everything. They have had a stated overt policy at

1198
01:02:37,040 --> 01:02:40,840
Speaker 1: the FED of crushing the labor market, increasing unemployment and

1199
01:02:40,880 --> 01:02:45,480
Speaker 1: slowing wage gains. Okay, their explicit policy is to kill jobs.

1200
01:02:45,600 --> 01:02:47,560
Speaker 1: That is the policy of the interest rate hikes, which

1201
01:02:47,600 --> 01:02:50,040
Speaker 1: has not been very successful in terms of dealing with inflation,

1202
01:02:50,120 --> 01:02:51,960
Speaker 1: which is what we actually want them to deal with.

1203
01:02:52,320 --> 01:02:55,000
Speaker 1: But they're explicit policy is we want to kill jobs here.

1204
01:02:55,520 --> 01:02:59,440
Speaker 1: But the minute there were concerns about job loss in

1205
01:02:59,480 --> 01:03:03,959
Speaker 1: Silicon with these venture backed companies, then they spring into action.

1206
01:03:04,640 --> 01:03:08,280
Speaker 1: It just shows you. It just shows you who matters,

1207
01:03:08,320 --> 01:03:11,080
Speaker 1: who they care about, and who doesn't. And the difference

1208
01:03:11,120 --> 01:03:14,320
Speaker 1: between the response with Norfolk Southern and with East Palestine

1209
01:03:14,600 --> 01:03:17,160
Speaker 1: versus the response in the banking system also shows you

1210
01:03:17,400 --> 01:03:20,520
Speaker 1: who counts, who matters, who they can marshal resources for,

1211
01:03:20,640 --> 01:03:23,560
Speaker 1: who they can leap into quick and agile action for,

1212
01:03:24,080 --> 01:03:27,200
Speaker 1: and who is facing a month down the road can't

1213
01:03:27,200 --> 01:03:29,880
Speaker 1: even get a straight answer about test can't get health

1214
01:03:30,120 --> 01:03:33,480
Speaker 1: real health care, and you have no bail out on

1215
01:03:33,520 --> 01:03:36,320
Speaker 1: the way for them in terms of their homes and

1216
01:03:36,360 --> 01:03:39,680
Speaker 1: their businesses and any potential medical bills down the road.

1217
01:03:39,880 --> 01:03:43,920
Speaker 1: So it really is a disgraceful and revealing moment for

1218
01:03:44,000 --> 01:03:46,880
Speaker 1: our country about the way that all of this works.

1219
01:03:47,920 --> 01:03:51,160
Speaker 1: At the same yeah, at the same time, we wanted

1220
01:03:51,200 --> 01:03:54,240
Speaker 1: to cover these some interesting comments from former Vice President

1221
01:03:54,320 --> 01:03:57,320
Speaker 1: Mike Pence. Of course, famously, on January sixth, you had

1222
01:03:57,400 --> 01:04:00,760
Speaker 1: people who were in the Capitol who were channing Mike Pence.

1223
01:04:01,320 --> 01:04:05,000
Speaker 1: He was a focus of a lot of ire because theoretically,

1224
01:04:05,080 --> 01:04:07,200
Speaker 1: the idea that took hold the maggot bas is that

1225
01:04:07,240 --> 01:04:11,000
Speaker 1: he could individually stop the electoral count and he can

1226
01:04:11,080 --> 01:04:13,920
Speaker 1: sort of throw things towards Donald Trump. Now, he certainly

1227
01:04:13,920 --> 01:04:16,120
Speaker 1: didn't feel that he had that authority, and most people

1228
01:04:16,120 --> 01:04:18,000
Speaker 1: don't think that he had that authority. But anyway, that's

1229
01:04:18,000 --> 01:04:21,440
Speaker 1: how he becomes the center of attention. On January sixth, finally,

1230
01:04:21,680 --> 01:04:25,400
Speaker 1: at the Gridiron Dinner, which is like the most swampy

1231
01:04:25,600 --> 01:04:29,360
Speaker 1: insidery thing of all time, he made some fairly strong

1232
01:04:29,400 --> 01:04:32,800
Speaker 1: comments about his former friend and colleague there, Donald Trump.

1233
01:04:32,840 --> 01:04:35,560
Speaker 1: Let's go and put this up on the screen. Here's

1234
01:04:35,600 --> 01:04:39,080
Speaker 1: the media headline, and says angry Mike Pence blast Tucker

1235
01:04:39,120 --> 01:04:43,640
Speaker 1: Carlson's January sixth revision, levels Trump for endangering his family

1236
01:04:43,720 --> 01:04:47,840
Speaker 1: and says history will hold Donald Trump accountable. Let me

1237
01:04:47,880 --> 01:04:51,680
Speaker 1: read you specifically, the comments that are reported here can't

1238
01:04:51,720 --> 01:04:55,760
Speaker 1: There is no video allowed inside of this swampy clubby dinner,

1239
01:04:56,040 --> 01:04:58,920
Speaker 1: but there are a lot of reporters there, so specific

1240
01:04:59,280 --> 01:05:03,240
Speaker 1: comments definitely make their way out. He said in regards

1241
01:05:03,280 --> 01:05:06,959
Speaker 1: to Tucker Carlson's portrayal of January sixth. Quote, tauris don't

1242
01:05:06,960 --> 01:05:09,680
Speaker 1: injure one hundred and forty police officers by sightseeing tourus,

1243
01:05:09,760 --> 01:05:11,440
Speaker 1: don't break down doors to get to the speaker of

1244
01:05:11,440 --> 01:05:14,640
Speaker 1: the House or voice threats against public officials. The American

1245
01:05:14,680 --> 01:05:16,320
Speaker 1: people have a right to know what took place at

1246
01:05:16,320 --> 01:05:18,640
Speaker 1: their capital on January sixth. I expect members of Fourth

1247
01:05:18,800 --> 01:05:21,480
Speaker 1: Estate to continue to do their job. He said, make

1248
01:05:21,560 --> 01:05:24,640
Speaker 1: no mistake about it. What happened that day was a disgrace,

1249
01:05:24,680 --> 01:05:27,360
Speaker 1: and it mocks decency to portray it in any other way.

1250
01:05:27,400 --> 01:05:29,000
Speaker 1: So that was sort of in response to the Tucker

1251
01:05:29,040 --> 01:05:34,000
Speaker 1: Carlson portrayal of events. He also said about the president,

1252
01:05:34,120 --> 01:05:36,920
Speaker 1: former president, I was not afraid, but I was angry.

1253
01:05:37,120 --> 01:05:40,520
Speaker 1: President Trump was wrong. I had no right to overturn

1254
01:05:40,640 --> 01:05:44,240
Speaker 1: the election, and his reckless words endangered my family and

1255
01:05:44,360 --> 01:05:47,200
Speaker 1: everyone at the Capitol that day. He goes on to say,

1256
01:05:47,240 --> 01:05:50,680
Speaker 1: I know that history will hold Donald Trump accountable. What

1257
01:05:50,720 --> 01:05:53,480
Speaker 1: did you make of him making these comments, the timing,

1258
01:05:54,080 --> 01:05:56,760
Speaker 1: the venue. I'm not saying he's wrong, I'm just like,

1259
01:05:56,800 --> 01:06:00,280
Speaker 1: do you actually have any political sense whatsoever? A why

1260
01:06:00,360 --> 01:06:04,959
Speaker 1: would you choose the Gridiron dinner to place to criticize Trump?

1261
01:06:05,080 --> 01:06:09,240
Speaker 1: The literal peak of the swamp. This is the closed door,

1262
01:06:10,360 --> 01:06:14,080
Speaker 1: white tie and tails dinner that anybody who's anybody in

1263
01:06:14,200 --> 01:06:17,320
Speaker 1: Washington goes to. I saw some of the highlights on Instagram.

1264
01:06:17,720 --> 01:06:19,880
Speaker 1: General Millie and all those you know, the generals and

1265
01:06:19,880 --> 01:06:22,360
Speaker 1: all those other people are all congregated with the TV

1266
01:06:22,480 --> 01:06:25,280
Speaker 1: news hosts that are all together at the same time,

1267
01:06:25,400 --> 01:06:27,800
Speaker 1: in terms of what he's laying out, this is not

1268
01:06:27,880 --> 01:06:30,800
Speaker 1: a popular view in the Republican Party. Now, it might

1269
01:06:30,840 --> 01:06:34,000
Speaker 1: be a popular view in the general election, but you

1270
01:06:34,120 --> 01:06:36,720
Speaker 1: need to win a Republican primary first. So I just

1271
01:06:36,760 --> 01:06:39,240
Speaker 1: don't know what his angle is like. Once again, his

1272
01:06:39,360 --> 01:06:42,200
Speaker 1: only real path, I guess, is to shore up the

1273
01:06:42,240 --> 01:06:45,080
Speaker 1: evangelicals and then get all of the anti Trump vote

1274
01:06:45,120 --> 01:06:47,720
Speaker 1: behind him. That's why consistently has some seven percent or

1275
01:06:47,720 --> 01:06:51,600
Speaker 1: so of the Republican electorate backhand. But we've already gone

1276
01:06:51,640 --> 01:06:54,920
Speaker 1: through a cycle where GOP primary voters by and large

1277
01:06:54,960 --> 01:06:58,040
Speaker 1: backstop the steal candidates and those who have the Tucker

1278
01:06:58,160 --> 01:07:00,440
Speaker 1: view of January sixth than those who have the Mike

1279
01:07:00,440 --> 01:07:03,760
Speaker 1: Pence view. So you're intentionally putting yourself on the side

1280
01:07:03,800 --> 01:07:07,360
Speaker 1: where you have the most competition the vig rodmswami's Nikki Haley,

1281
01:07:07,640 --> 01:07:10,840
Speaker 1: Tim Scott, all these other candidates. So what is the

1282
01:07:10,880 --> 01:07:13,919
Speaker 1: political calculus behind doing this? Now, if you just think it,

1283
01:07:14,040 --> 01:07:17,600
Speaker 1: that's fine, totally fine, But then don't delude yourself into

1284
01:07:17,600 --> 01:07:20,400
Speaker 1: thinking this is a viable path to the GOP nomination.

1285
01:07:20,720 --> 01:07:24,800
Speaker 1: That was my takeaway from it. Yeah, I certainly agree

1286
01:07:24,800 --> 01:07:27,760
Speaker 1: with all of his comments here, no doubt about it.

1287
01:07:27,800 --> 01:07:30,120
Speaker 1: But it's like it's a little late, buddy, Yeah, I know,

1288
01:07:30,240 --> 01:07:32,000
Speaker 1: you know, the case is kind of already even you've

1289
01:07:32,040 --> 01:07:34,959
Speaker 1: allowed the cake to be baked on the Republican side

1290
01:07:35,040 --> 01:07:38,120
Speaker 1: about their the Bass view of January sixth, the Bass

1291
01:07:38,160 --> 01:07:40,800
Speaker 1: view of stop the Deal, the basis view of you

1292
01:07:40,880 --> 01:07:46,120
Speaker 1: even and your actions on that day, And so, I mean,

1293
01:07:46,280 --> 01:07:49,880
Speaker 1: the only thing I can Maybe it's just not political calculus,

1294
01:07:49,920 --> 01:07:51,760
Speaker 1: Maybe he just wanted to say what he actually thought,

1295
01:07:51,840 --> 01:07:54,920
Speaker 1: but it is, you know, it would have been more useful,

1296
01:07:55,080 --> 01:07:57,520
Speaker 1: like right after the fact. And at the time there

1297
01:07:57,560 --> 01:08:00,680
Speaker 1: was a little bit of dabbling from Republicans Minch McConnell

1298
01:08:00,720 --> 01:08:03,440
Speaker 1: and others decrying the events of that day. There was

1299
01:08:03,480 --> 01:08:05,080
Speaker 1: a little bit of a thought about maybe this is

1300
01:08:05,120 --> 01:08:07,760
Speaker 1: our chance to get rid of Trump. But ultimately everybody's

1301
01:08:07,800 --> 01:08:10,920
Speaker 1: too afraid to actually have any sort of like collective

1302
01:08:10,920 --> 01:08:13,800
Speaker 1: action to move on from this guy, and so you

1303
01:08:13,960 --> 01:08:17,080
Speaker 1: end up with week effectively weak attempts like this that

1304
01:08:17,160 --> 01:08:20,280
Speaker 1: are going to do nothing in terms of dislodging Trump,

1305
01:08:20,520 --> 01:08:22,760
Speaker 1: but are certainly going to make it more difficult for

1306
01:08:22,840 --> 01:08:24,920
Speaker 1: Mike Pence to be successful in Republican primary. Not that

1307
01:08:24,960 --> 01:08:26,280
Speaker 1: I thought he was going to be successful in the

1308
01:08:26,280 --> 01:08:29,680
Speaker 1: Republican primary anyway. So it's sort of without consequence in

1309
01:08:29,720 --> 01:08:31,720
Speaker 1: that regard. Yeah, it's just like what are what are

1310
01:08:31,720 --> 01:08:33,839
Speaker 1: exactly are we doing here? Are we running for president?

1311
01:08:33,960 --> 01:08:36,680
Speaker 1: Or are we moralizing? Because you know, that's just not

1312
01:08:36,720 --> 01:08:38,600
Speaker 1: how it's going to work at the end of the

1313
01:08:38,680 --> 01:08:41,600
Speaker 1: day for you and Pence in general. This is his

1314
01:08:41,760 --> 01:08:44,760
Speaker 1: you know, latest blast against Trump. But here's the name.

1315
01:08:44,840 --> 01:08:47,280
Speaker 1: He still can't even say his name. He still doesn't

1316
01:08:47,280 --> 01:08:49,720
Speaker 1: say his name. Yeah, he just says he will be

1317
01:08:49,960 --> 01:08:52,439
Speaker 1: held account. What does that even mean? Say it? Make

1318
01:08:52,520 --> 01:08:54,360
Speaker 1: the case I stood buy him for four years. He

1319
01:08:54,479 --> 01:08:57,160
Speaker 1: betrayed me, He's a coward, say something like that. That's

1320
01:08:57,160 --> 01:08:59,639
Speaker 1: actually a strong point. And who's going to hold him antible?

1321
01:08:59,640 --> 01:09:01,280
Speaker 1: Because it's sure as hell doesn't feel like it's going

1322
01:09:01,320 --> 01:09:04,240
Speaker 1: to be You feel like history, what is it? Like?

1323
01:09:04,280 --> 01:09:07,320
Speaker 1: What what does that mean? It doesn't really mean anything.

1324
01:09:07,360 --> 01:09:12,000
Speaker 1: And so it's it's a very squishy, belated, half hearted

1325
01:09:12,160 --> 01:09:15,680
Speaker 1: attempt to draw some blood here. And you know, and

1326
01:09:15,720 --> 01:09:17,760
Speaker 1: then when you look at like the issue set that

1327
01:09:17,840 --> 01:09:20,880
Speaker 1: Mike Pence has staked down in opposition to Trump, would like, oh,

1328
01:09:20,960 --> 01:09:23,000
Speaker 1: Trump is going to protect so security and I want

1329
01:09:23,000 --> 01:09:25,600
Speaker 1: to privatize it. Okay, you know Trump won't do a

1330
01:09:25,680 --> 01:09:29,200
Speaker 1: national abortion band, but I will. All right, good luck, Okay,

1331
01:09:29,280 --> 01:09:30,920
Speaker 1: It's like, well, you're actually making a pretty good case

1332
01:09:30,960 --> 01:09:36,160
Speaker 1: for Trump. So all right, Crystal, what are taking to

1333
01:09:36,200 --> 01:09:39,120
Speaker 1: look at? Well, Guys, today we have extensively covered the

1334
01:09:39,120 --> 01:09:42,200
Speaker 1: collapse of Silicon Valley Bank. We talked about the concentrated

1335
01:09:42,320 --> 01:09:44,400
Speaker 1: risk that they took on. We talked about the calls

1336
01:09:44,400 --> 01:09:48,439
Speaker 1: for bailouts, the potential contagion, and crucially, the political corruption

1337
01:09:48,560 --> 01:09:51,800
Speaker 1: and capture that led to that bank winning looser regulations

1338
01:09:51,880 --> 01:09:54,680
Speaker 1: during the Trump years. But for some this isn't a

1339
01:09:54,720 --> 01:09:57,560
Speaker 1: story about money and power. It's about something else altogether,

1340
01:09:57,920 --> 01:10:02,080
Speaker 1: the dreaded all encompassing. So I don't have any specific

1341
01:10:02,120 --> 01:10:05,840
Speaker 1: information about any Florida bank similar to Silicon Valley Bank,

1342
01:10:05,880 --> 01:10:09,080
Speaker 1: and hopefully that remains the case. You know, Maria just

1343
01:10:09,280 --> 01:10:12,400
Speaker 1: appears to me, I mean, this bank, they're so concerned

1344
01:10:12,439 --> 01:10:16,640
Speaker 1: with DEI and politics and all kinds of stuff. I

1345
01:10:16,640 --> 01:10:20,280
Speaker 1: think that really diverted from them focusing on their core mission.

1346
01:10:21,000 --> 01:10:23,639
Speaker 1: Total nonsense. Ron DeSantis was not the only one, though,

1347
01:10:24,200 --> 01:10:28,160
Speaker 1: Donald Trump Junior tweeted quote SVB is what happens when

1348
01:10:28,200 --> 01:10:31,400
Speaker 1: you push a leftist, woke ideology and have that take

1349
01:10:31,479 --> 01:10:34,720
Speaker 1: precedent over common sense business practices, this won't be the

1350
01:10:34,800 --> 01:10:37,080
Speaker 1: last failure of this nature, so long as people are

1351
01:10:37,120 --> 01:10:39,920
Speaker 1: rewarded for pushing this bs. Of course, that's a very

1352
01:10:39,960 --> 01:10:44,080
Speaker 1: convenient take, since the deregulation pushed by industry, including SVB,

1353
01:10:44,680 --> 01:10:46,640
Speaker 1: was signed into law by his dad, and that is

1354
01:10:46,680 --> 01:10:49,120
Speaker 1: a huge part of this story. Now, the Daily Mail

1355
01:10:49,160 --> 01:10:50,920
Speaker 1: and the New York Posts are both running with this

1356
01:10:51,040 --> 01:10:53,559
Speaker 1: wokeism narrative. Though. Here's the New York Post. They say,

1357
01:10:53,800 --> 01:10:58,000
Speaker 1: while Silicon Valley Bank collapsed, top executive pushed woke programs.

1358
01:10:58,400 --> 01:11:00,800
Speaker 1: Apparently there was some lady involved in risk management at

1359
01:11:00,800 --> 01:11:04,559
Speaker 1: the bank's UK branch could engage in some classic corporate

1360
01:11:04,600 --> 01:11:07,200
Speaker 1: virtue signaling, like launching a pride campaign a blog that

1361
01:11:07,240 --> 01:11:10,360
Speaker 1: had an LGBTQ focus. What does that have to do

1362
01:11:10,439 --> 01:11:12,920
Speaker 1: with the stunning collapse of the bank and the subsequent

1363
01:11:12,960 --> 01:11:16,759
Speaker 1: debates on balance and the subsequent actual balance. Absolutely nothing.

1364
01:11:17,200 --> 01:11:20,080
Speaker 1: This alleged woke person did not force the bank to

1365
01:11:20,120 --> 01:11:22,559
Speaker 1: lobby Congress on reducing stress tests. They didn't cause the

1366
01:11:22,560 --> 01:11:25,160
Speaker 1: FED to hike rates, popping the Silicon Valley bubble. Their

1367
01:11:25,200 --> 01:11:28,280
Speaker 1: Pride Month festivities had nothing to do with foolishly putting

1368
01:11:28,280 --> 01:11:31,200
Speaker 1: the bulk of the bank's cash into interrastraight sensitive treasuries.

1369
01:11:31,439 --> 01:11:33,840
Speaker 1: Their blog posts did not create the Silicon Valley herd

1370
01:11:33,840 --> 01:11:36,960
Speaker 1: mentality which sparked a bank run. The presence or lack

1371
01:11:37,080 --> 01:11:41,920
Speaker 1: of wocism is an irrelevant sideshow here, but plenty will

1372
01:11:41,960 --> 01:11:45,479
Speaker 1: fall hook line and sinker for this laughable distraction because

1373
01:11:45,479 --> 01:11:48,479
Speaker 1: for some entirely too online people, led by a cadre

1374
01:11:48,520 --> 01:11:51,599
Speaker 1: of right wing media and political elites, opposition of wokeism

1375
01:11:51,640 --> 01:11:56,000
Speaker 1: has become an all consuming, all encompassing worldview, blotting out

1376
01:11:56,200 --> 01:12:00,880
Speaker 1: any other potential political understanding. Anti woke brand lead to

1377
01:12:01,000 --> 01:12:04,320
Speaker 1: at least as goofy and authoritarian and approach to politics

1378
01:12:04,360 --> 01:12:08,400
Speaker 1: as woke brainworms do. Anti Wochism is goofy, and that

1379
01:12:08,439 --> 01:12:10,080
Speaker 1: it would lead you to look at a train crash

1380
01:12:10,120 --> 01:12:12,280
Speaker 1: and cover up caused by corporate greed and instead fixate

1381
01:12:12,320 --> 01:12:14,920
Speaker 1: on some dumb comments about white construction crews, or to

1382
01:12:14,960 --> 01:12:18,200
Speaker 1: look at a bank crash caused by deregulation and corruption

1383
01:12:18,479 --> 01:12:20,759
Speaker 1: and think it has anything to do with some stupid

1384
01:12:20,840 --> 01:12:25,080
Speaker 1: Pride Month celebration. Anti Wochism is authoritarian in that it

1385
01:12:25,120 --> 01:12:27,439
Speaker 1: paints everything as either good or evil. This black and

1386
01:12:27,439 --> 01:12:30,000
Speaker 1: white view of the world, complete with existential warnings that

1387
01:12:30,080 --> 01:12:34,080
Speaker 1: then justifies illiberal tactics things like banning books, curriculum, and

1388
01:12:34,120 --> 01:12:37,760
Speaker 1: public artistic expression. Now, I consider myself to be an

1389
01:12:37,760 --> 01:12:41,200
Speaker 1: opponent of wocism. I have called out cancelations of people

1390
01:12:41,280 --> 01:12:43,519
Speaker 1: I profoundly disagree with. I've stood up for the rights

1391
01:12:43,560 --> 01:12:46,639
Speaker 1: of comedians to make edgy or even offensive jokes. I've

1392
01:12:46,640 --> 01:12:49,720
Speaker 1: decried the hollow identity politics that sells racial diversity and

1393
01:12:49,760 --> 01:12:53,240
Speaker 1: elite circles as a panacea for working class Americans. I've

1394
01:12:53,240 --> 01:12:56,120
Speaker 1: opposed the oppression Olympics type of politics that has human

1395
01:12:56,160 --> 01:12:59,880
Speaker 1: beings vuying for victimhood points based on immutable personal characteristics.

1396
01:13:00,280 --> 01:13:03,240
Speaker 1: And I have to cried these sixteen to nineteen Robin

1397
01:13:03,280 --> 01:13:06,360
Speaker 1: Dangelo grifter types who push an ideology that is so

1398
01:13:06,479 --> 01:13:10,200
Speaker 1: woke it's actually racist, arguing things like math is white supremacist,

1399
01:13:10,360 --> 01:13:13,320
Speaker 1: and selling then or diversity courses which don't accomplish anything

1400
01:13:13,400 --> 01:13:16,320
Speaker 1: except making a handful of so called anti racist consultants

1401
01:13:16,600 --> 01:13:21,719
Speaker 1: wildly rich. But the answer to that authoritarian trend among

1402
01:13:21,760 --> 01:13:24,760
Speaker 1: liberals and left liberals is not an equal and opposite

1403
01:13:24,840 --> 01:13:28,120
Speaker 1: myopic authoritarianism on the right. Yet that is in fact

1404
01:13:28,160 --> 01:13:31,320
Speaker 1: the direction which has now been fully embraced by plenty.

1405
01:13:31,800 --> 01:13:35,040
Speaker 1: The goofy distraction. Anti woke mode is most clearly demonstrated

1406
01:13:35,120 --> 01:13:38,880
Speaker 1: by presidential candidate Vivic Ramaswami. He has launched his bid

1407
01:13:38,920 --> 01:13:41,280
Speaker 1: based on his claim to being the CEO of anti

1408
01:13:41,400 --> 01:13:44,960
Speaker 1: woke Now. The fundamental un seriousness of the ideology is

1409
01:13:45,000 --> 01:13:48,599
Speaker 1: demonstrated by the mess that is Vivik's platform. When Sovereign

1410
01:13:48,640 --> 01:13:51,519
Speaker 1: Marshall interviewed him about his key policy priorities, he didn't

1411
01:13:51,520 --> 01:13:55,960
Speaker 1: focus on jobs, healthcare, corruption. Instead, he named checked ending,

1412
01:13:55,960 --> 01:13:59,519
Speaker 1: affirmative action in federal government hiring, and a vague program

1413
01:13:59,560 --> 01:14:02,640
Speaker 1: a building national identity. Now, however you feel about it,

1414
01:14:02,680 --> 01:14:05,679
Speaker 1: firmative action ending it isn't going to solve our core

1415
01:14:05,720 --> 01:14:08,240
Speaker 1: problems in the same way that instituting it did not

1416
01:14:08,400 --> 01:14:11,479
Speaker 1: solve our core problems. And people can't buy a house

1417
01:14:11,560 --> 01:14:16,120
Speaker 1: or afford their prescriptions on national identity. The authoritarian anti

1418
01:14:16,120 --> 01:14:18,960
Speaker 1: woke mode is most clearly demonstrated by Rond de Santis.

1419
01:14:19,080 --> 01:14:21,400
Speaker 1: He too is hoping to use anti wokeness to launch

1420
01:14:21,479 --> 01:14:25,160
Speaker 1: him into the presidency. According to Pan America, thousands of

1421
01:14:25,200 --> 01:14:28,639
Speaker 1: books were banned across thirty two states this school year,

1422
01:14:28,960 --> 01:14:32,200
Speaker 1: and Florida, led by Rondo Stantis, led the way now

1423
01:14:32,280 --> 01:14:34,920
Speaker 1: to Santis also banned the teaching of certain concepts in school,

1424
01:14:35,000 --> 01:14:37,760
Speaker 1: pushed to limit tenure for professors, and is working to

1425
01:14:37,800 --> 01:14:41,599
Speaker 1: mandate Western civilization courses in public colleges. So, rather than

1426
01:14:41,720 --> 01:14:45,040
Speaker 1: embracing openness, debate, and tolerance, he's actually using the force

1427
01:14:45,080 --> 01:14:48,839
Speaker 1: of government to silence ideological opponents and mandate the teaching

1428
01:14:48,960 --> 01:14:51,759
Speaker 1: of his own preferred ideology. And to make the direction

1429
01:14:51,840 --> 01:14:55,679
Speaker 1: completely clear, he also passed a law that limits protest. Now,

1430
01:14:55,720 --> 01:14:58,280
Speaker 1: there is, of course a need to counter wokeism. I

1431
01:14:58,320 --> 01:15:01,320
Speaker 1: am on board with that. But the opposite of wocism

1432
01:15:01,560 --> 01:15:04,719
Speaker 1: is tolerance. It's open debate. It's an embrace of real

1433
01:15:04,760 --> 01:15:08,439
Speaker 1: democracy that devolves power from elites to the American people.

1434
01:15:08,800 --> 01:15:11,479
Speaker 1: It would consistently decry censorship rather than just when it

1435
01:15:11,479 --> 01:15:14,880
Speaker 1: happens to one's ideological allies. It would value nuance and

1436
01:15:14,960 --> 01:15:18,160
Speaker 1: solidarity among the population rather than the vicious politics of

1437
01:15:18,160 --> 01:15:22,519
Speaker 1: personal destruction embodied by wocust cries of racist and anti

1438
01:15:22,640 --> 01:15:26,520
Speaker 1: wocist cries of groomor it would shift consciousness from individual

1439
01:15:26,600 --> 01:15:30,080
Speaker 1: villains to systems that we can work together to perform

1440
01:15:30,160 --> 01:15:32,479
Speaker 1: and change. And it would certainly not counter a woke

1441
01:15:32,560 --> 01:15:36,120
Speaker 1: cult with a new anti woke cult. But wocism and

1442
01:15:36,160 --> 01:15:39,000
Speaker 1: anti wochism are what I would call anti politics because

1443
01:15:39,000 --> 01:15:42,559
Speaker 1: they keep their adherents focused on individual level grievances about

1444
01:15:42,560 --> 01:15:44,960
Speaker 1: the ideology or personal traits of this executive or that

1445
01:15:45,040 --> 01:15:48,000
Speaker 1: executive versus the type of collective problems which we can

1446
01:15:48,000 --> 01:15:52,040
Speaker 1: actually deal with through small, de democratic politics. They keep

1447
01:15:52,080 --> 01:15:54,519
Speaker 1: us all fighting online about who's good and who's bad.

1448
01:15:54,680 --> 01:15:57,320
Speaker 1: We feel like we're doing politics, but we aren't not really,

1449
01:15:57,640 --> 01:16:00,719
Speaker 1: because there are no real society level solutions in woke

1450
01:16:00,920 --> 01:16:04,599
Speaker 1: or anti woke fundamentalism. It's only an endless power struggle

1451
01:16:04,640 --> 01:16:09,639
Speaker 1: against your ideological adversaries. If America is an irredeemably racist country,

1452
01:16:09,800 --> 01:16:13,120
Speaker 1: there's no political cure, and progress can only be one

1453
01:16:13,160 --> 01:16:16,639
Speaker 1: through pushing irredeemably racist people out of the public square.

1454
01:16:17,040 --> 01:16:19,600
Speaker 1: And if the woke mind virus is destroying America and

1455
01:16:19,680 --> 01:16:22,519
Speaker 1: liberals are irredeemably woke, well then you may just see

1456
01:16:22,560 --> 01:16:26,120
Speaker 1: Marjorie Taylor green suggestion of a literal secession via national

1457
01:16:26,160 --> 01:16:30,920
Speaker 1: divorce as the only possible workable solution. Note how all

1458
01:16:30,960 --> 01:16:34,760
Speaker 1: of this is unbelievably convenient for those who benefit from

1459
01:16:34,760 --> 01:16:38,160
Speaker 1: the current disgusting status quo. Nothing could be better for

1460
01:16:38,240 --> 01:16:41,840
Speaker 1: Wall Street crooks, corporate price gougers, and corrupt politicians if

1461
01:16:41,880 --> 01:16:45,120
Speaker 1: the whole nation is squabbling over some window dressing diversity

1462
01:16:45,120 --> 01:16:48,720
Speaker 1: initiative or their phony esg environmental commitments. Oh no, don't

1463
01:16:48,760 --> 01:16:51,960
Speaker 1: make me put short term stock prices above my bullshit greenwashing.

1464
01:16:52,000 --> 01:16:54,240
Speaker 1: That'd be terrible. Whatever will we do if we have

1465
01:16:54,320 --> 01:16:56,760
Speaker 1: to take the meaningless Black Lives Matter banner down from

1466
01:16:56,760 --> 01:16:59,760
Speaker 1: our website homepage, all while they pass another corporate tax

1467
01:16:59,800 --> 01:17:04,880
Speaker 1: cut and deregulate another key industry. Bottom line here, wokeism

1468
01:17:05,040 --> 01:17:09,040
Speaker 1: and anti wokeism now deeply confuse our politics because they

1469
01:17:09,040 --> 01:17:12,360
Speaker 1: are divisive politics. That's okay, but they have the divisions

1470
01:17:12,479 --> 01:17:16,240
Speaker 1: all wrong. They put neighbor against neighbor, community against community,

1471
01:17:16,439 --> 01:17:18,880
Speaker 1: when we should all be banding together to fight against

1472
01:17:18,920 --> 01:17:22,880
Speaker 1: the elites of hijacked our democracy. That is the real

1473
01:17:22,880 --> 01:17:26,759
Speaker 1: way to fight the so called woke mind virus. Sager,

1474
01:17:27,080 --> 01:17:28,640
Speaker 1: I thought I was going to lose my mind what

1475
01:17:28,720 --> 01:17:30,519
Speaker 1: I say, and if you want to hear my reaction

1476
01:17:30,680 --> 01:17:34,200
Speaker 1: to Crystal's Monologue become a premium subscriber today at breakingpoints

1477
01:17:34,280 --> 01:17:39,200
Speaker 1: dot Com. All right, Tiger were looking at well. If

1478
01:17:39,240 --> 01:17:41,000
Speaker 1: you had asked me three years ago, in the middle

1479
01:17:41,000 --> 01:17:43,759
Speaker 1: of lockdown, whether we're still debating the origin of COVID,

1480
01:17:43,840 --> 01:17:45,920
Speaker 1: I would have said that you were nuts. Clearly it

1481
01:17:45,960 --> 01:17:48,679
Speaker 1: would have been settled. And yet March of twenty twenty

1482
01:17:48,680 --> 01:17:51,240
Speaker 1: three may go down as one of the most significant

1483
01:17:51,280 --> 01:17:54,080
Speaker 1: times in COVID history as when the truth actually began

1484
01:17:54,160 --> 01:17:56,599
Speaker 1: to come to light. For nearly two years, a stalemate

1485
01:17:56,640 --> 01:17:58,880
Speaker 1: was reached where people who were banned from social media

1486
01:17:58,920 --> 01:18:01,880
Speaker 1: for the lab leak theory had their accounts restored. The

1487
01:18:01,960 --> 01:18:04,680
Speaker 1: media basically ignored the reams of evidence and emails that

1488
01:18:04,760 --> 01:18:07,120
Speaker 1: showed a full scale cover up by doctor Fauci, by

1489
01:18:07,120 --> 01:18:10,200
Speaker 1: Peter Dazak, the NIH and the scientific community of lab Leak,

1490
01:18:10,320 --> 01:18:12,720
Speaker 1: and it seemed that we would all just quote never know.

1491
01:18:13,120 --> 01:18:15,720
Speaker 1: But then the Republicans actually won a slight majority in

1492
01:18:15,720 --> 01:18:18,599
Speaker 1: the House of Representatives, things began to shift. The GOP

1493
01:18:18,680 --> 01:18:20,559
Speaker 1: had made it known it wasn't going to drop its

1494
01:18:20,600 --> 01:18:23,360
Speaker 1: investigation on doctor Fauchi in the origin of COVID. Thus,

1495
01:18:23,400 --> 01:18:26,760
Speaker 1: the intelligence community began to prepare documents they knew inevitably

1496
01:18:26,760 --> 01:18:29,519
Speaker 1: would be subpoena LO and behold, it turned out that

1497
01:18:29,600 --> 01:18:32,519
Speaker 1: for literally months, the Energy Department in the FBI were

1498
01:18:32,560 --> 01:18:35,960
Speaker 1: sitting on direct intelligence assessments that COVID did in fact

1499
01:18:36,040 --> 01:18:39,360
Speaker 1: leak from the lab. This was extraordinary and yet met

1500
01:18:39,400 --> 01:18:41,600
Speaker 1: with the typical treatment by the media. Oh it was

1501
01:18:41,680 --> 01:18:45,439
Speaker 1: only low confidence. Oh, but other intelligence agencies don't agree,

1502
01:18:45,560 --> 01:18:48,880
Speaker 1: as if all intel agencies are created equally. Again, it's

1503
01:18:48,880 --> 01:18:51,320
Speaker 1: worth noting that the Energy Department people who came up

1504
01:18:51,320 --> 01:18:54,200
Speaker 1: to this conclusion are the only ones tasked with actual

1505
01:18:54,280 --> 01:18:58,160
Speaker 1: lab safety. Perhaps even more unsurprising, the recent revelations have

1506
01:18:58,240 --> 01:19:01,080
Speaker 1: caused a supposedly retired doctor Feans Fauchi to come out

1507
01:19:01,080 --> 01:19:04,040
Speaker 1: of hiding to defend his reputation and his life's work,

1508
01:19:04,320 --> 01:19:07,760
Speaker 1: gain of function research. Fauci, we need to remember, was

1509
01:19:07,800 --> 01:19:11,240
Speaker 1: a chief proponent of gain of function research at the NIH.

1510
01:19:11,360 --> 01:19:14,920
Speaker 1: He personally overturned the Obama ban on gain of function.

1511
01:19:15,080 --> 01:19:17,720
Speaker 1: He funneled millions of dollars to his pet projects, to

1512
01:19:17,800 --> 01:19:20,639
Speaker 1: scientists across the United States, and to the Wuhan Lab

1513
01:19:20,800 --> 01:19:23,679
Speaker 1: to not only continue it, but expand gain of function.

1514
01:19:23,880 --> 01:19:26,880
Speaker 1: After the pandemic, the lab leak itself, is not just

1515
01:19:26,920 --> 01:19:29,840
Speaker 1: about how COVID started, as important as that is, It's

1516
01:19:29,840 --> 01:19:34,040
Speaker 1: about protecting his scientific legacy, the idea that scientists can

1517
01:19:34,040 --> 01:19:37,240
Speaker 1: play god, that they can bioengineer viruses and engineer the

1518
01:19:37,280 --> 01:19:40,240
Speaker 1: cures for future pandemics. But as doctor Redfield laid out

1519
01:19:40,240 --> 01:19:43,240
Speaker 1: the former CDC director in his most recent testimony, gain

1520
01:19:43,280 --> 01:19:45,720
Speaker 1: of function has never, to his knowledge, been used to

1521
01:19:45,760 --> 01:19:49,080
Speaker 1: stop a pandemic. Instead, it most likely is the one

1522
01:19:49,080 --> 01:19:52,120
Speaker 1: that started that one of the worst pandemics in modern history.

1523
01:19:52,240 --> 01:19:55,680
Speaker 1: Let's take a listen again, So one other path of

1524
01:19:55,760 --> 01:19:58,479
Speaker 1: questioning for you, doctor Rifflin. Proponents of this research claim

1525
01:19:58,520 --> 01:20:01,440
Speaker 1: it may result in vaccines or maybe even stop a pandemic.

1526
01:20:02,280 --> 01:20:04,400
Speaker 1: Doctor Redfield, has Gain of Function created any life saving

1527
01:20:04,439 --> 01:20:07,280
Speaker 1: vaccines or therapeutics to your knowledge? Not to my knowledge,

1528
01:20:07,680 --> 01:20:12,000
Speaker 1: has gain of Function stopped a pandemic in your opinion? Now,

1529
01:20:12,040 --> 01:20:13,679
Speaker 1: in the contrary, I think it probably caused the greatest

1530
01:20:13,680 --> 01:20:16,240
Speaker 1: pandemic or world of scene. Do you find any tangible

1531
01:20:16,240 --> 01:20:19,920
Speaker 1: benefits to Gain of function research at this time? I

1532
01:20:19,960 --> 01:20:21,760
Speaker 1: personally don't, but I do want to stress I think

1533
01:20:21,760 --> 01:20:24,320
Speaker 1: the men and women that supported are people of good

1534
01:20:24,360 --> 01:20:26,880
Speaker 1: faith because they truly believe it's going to lead to

1535
01:20:26,920 --> 01:20:29,960
Speaker 1: a potential benefit. I disagree with that assessment. This, more

1536
01:20:30,000 --> 01:20:31,880
Speaker 1: than anything, was what Fauci could not stand, and his

1537
01:20:31,920 --> 01:20:35,200
Speaker 1: full fledged media campaign immediately kicked into high gear. He

1538
01:20:35,240 --> 01:20:37,080
Speaker 1: played the game where he went on Fox to pretend

1539
01:20:37,120 --> 01:20:39,160
Speaker 1: he was going to get asked real questions, but picked

1540
01:20:39,200 --> 01:20:42,320
Speaker 1: host Neil Cavudo, who, I guess. Let's just say I've

1541
01:20:42,360 --> 01:20:45,080
Speaker 1: been very sympathetic to the Fauci throughout his tenure on Fox.

1542
01:20:45,280 --> 01:20:47,519
Speaker 1: Let's take a listen to that interview. Take me out

1543
01:20:47,520 --> 01:20:50,080
Speaker 1: of the picture, Neil, and look at a whole array

1544
01:20:50,479 --> 01:20:54,280
Speaker 1: of virologists and scientists to do research that's absolutely critical

1545
01:20:54,680 --> 01:20:57,400
Speaker 1: for the health of the country. Some of that involves

1546
01:20:57,560 --> 01:21:01,080
Speaker 1: manipulating organisms. You want to call it gay function. It

1547
01:21:01,160 --> 01:21:03,280
Speaker 1: really is not in many respects, but when it is,

1548
01:21:03,320 --> 01:21:06,240
Speaker 1: it needs to be very well regulated. If you shut

1549
01:21:06,240 --> 01:21:09,640
Speaker 1: off all gain of function research, did you get the

1550
01:21:09,680 --> 01:21:12,120
Speaker 1: flu shot to see and Neil, if you did, and

1551
01:21:12,160 --> 01:21:15,280
Speaker 1: you got it from an influenza vaccine, that was gain

1552
01:21:15,320 --> 01:21:19,280
Speaker 1: of function that made that influenza vaccine. That is what

1553
01:21:19,320 --> 01:21:22,240
Speaker 1: it's all about. The entire thing is about protecting the

1554
01:21:22,280 --> 01:21:26,000
Speaker 1: scientific funding mechanism he created with his cronies and labs

1555
01:21:26,000 --> 01:21:29,799
Speaker 1: across his country. Conveniently, is also used by big farmer companies,

1556
01:21:29,840 --> 01:21:32,719
Speaker 1: like he said, to create flu vaccines and other vaccines

1557
01:21:32,720 --> 01:21:35,840
Speaker 1: that are routinely taken by millions across this country. Maybe

1558
01:21:35,840 --> 01:21:38,960
Speaker 1: it's right, maybe it's wrong. Something we have learned on equivocy.

1559
01:21:39,000 --> 01:21:41,280
Speaker 1: Though from all this, you cannot trust them. You have

1560
01:21:41,320 --> 01:21:44,759
Speaker 1: to distrust, verify, look at the data that you've just verified,

1561
01:21:44,760 --> 01:21:46,880
Speaker 1: and then verify it's the real data, to make sure

1562
01:21:46,880 --> 01:21:49,400
Speaker 1: that what they're telling you is real and the real crescendo, though,

1563
01:21:49,400 --> 01:21:51,679
Speaker 1: of the Fauci media campaign, came in his second home

1564
01:21:51,840 --> 01:21:54,799
Speaker 1: CNN shim Acosta show on this weekend. Let's take a listen.

1565
01:21:54,920 --> 01:21:57,880
Speaker 1: We've seen Elon Musk tweet that his pronouns he's the

1566
01:21:57,920 --> 01:22:00,960
Speaker 1: owner of Twitter, that his pronouns are prosecuted. Fauci, others

1567
01:22:01,000 --> 01:22:03,320
Speaker 1: and the GOP have talked about arresting you and prosecuting

1568
01:22:03,360 --> 01:22:06,840
Speaker 1: you for your handling of COVID. What's your response to that,

1569
01:22:07,080 --> 01:22:09,160
Speaker 1: your response to Musk and what has that been like

1570
01:22:09,200 --> 01:22:14,040
Speaker 1: for your family? Well, I mean, there's no response to that. Craziness, Jim,

1571
01:22:14,080 --> 01:22:17,160
Speaker 1: I mean, prosecute me for what? What are they talking about?

1572
01:22:17,680 --> 01:22:19,160
Speaker 1: I mean, I wish I could figure out what the

1573
01:22:19,200 --> 01:22:21,479
Speaker 1: heck they were talking about. I think they're just going

1574
01:22:21,520 --> 01:22:24,639
Speaker 1: off the deep end. That's the answer to your first question.

1575
01:22:24,720 --> 01:22:27,280
Speaker 1: It doesn't make any sense to say something like that,

1576
01:22:27,320 --> 01:22:30,160
Speaker 1: and it actually is irresponsible. Of course, it's going to

1577
01:22:30,240 --> 01:22:34,040
Speaker 1: have a difficult effect and a deleterious effect on my family.

1578
01:22:34,080 --> 01:22:35,720
Speaker 1: I mean, they don't like to have me getting death

1579
01:22:35,720 --> 01:22:38,240
Speaker 1: threats all the time. Every time somebody gets up and

1580
01:22:38,280 --> 01:22:43,719
Speaker 1: spouts some nonsense that's misinformation, disinformation and outright lies, somebody

1581
01:22:43,720 --> 01:22:46,200
Speaker 1: somewhere decides they want to do harm to me and

1582
01:22:46,400 --> 01:22:49,280
Speaker 1: or my family. As always, Acosta is too low IQ

1583
01:22:49,479 --> 01:22:52,000
Speaker 1: to ask real question, and Fauci plays the lowest card,

1584
01:22:52,040 --> 01:22:55,320
Speaker 1: conflating criticism of him with the safety of his family. Now,

1585
01:22:55,320 --> 01:22:57,679
Speaker 1: of course, if crazy people want to actually attack Fauci,

1586
01:22:57,920 --> 01:23:00,920
Speaker 1: that's bad, but you can't blame press him for questions

1587
01:23:00,960 --> 01:23:03,600
Speaker 1: on one of the most significant events of the century

1588
01:23:03,920 --> 01:23:07,479
Speaker 1: on attacks on him. As for prosecuting, last time I checked,

1589
01:23:07,560 --> 01:23:10,640
Speaker 1: lying to Congress under oath is actually a crime, And

1590
01:23:10,680 --> 01:23:13,800
Speaker 1: if you recall his myriad exchanges under oath with Rand Paul,

1591
01:23:13,960 --> 01:23:16,519
Speaker 1: he pretty much is dead to rights a liar in

1592
01:23:16,560 --> 01:23:19,479
Speaker 1: trying to say he never funded gain of function research

1593
01:23:19,640 --> 01:23:22,639
Speaker 1: at the Wuhan Lab or anywhere. This is the ultimate canard.

1594
01:23:22,880 --> 01:23:25,639
Speaker 1: He never funded gain of function research at the Wuhan Lab.

1595
01:23:25,840 --> 01:23:27,680
Speaker 1: But as he says on Fox, but did you know

1596
01:23:27,720 --> 01:23:29,920
Speaker 1: the gain of function is vital for the flu shot?

1597
01:23:30,200 --> 01:23:32,920
Speaker 1: Which is it? Do you defend it or not? He

1598
01:23:32,960 --> 01:23:34,960
Speaker 1: won't say it, and he'll never take an interview that,

1599
01:23:35,000 --> 01:23:37,320
Speaker 1: it seems where somebody knows the difference or even the

1600
01:23:37,360 --> 01:23:39,519
Speaker 1: time to really get into the weeds on that question.

1601
01:23:39,800 --> 01:23:41,840
Speaker 1: But shouldn't mistake that as well as about you not

1602
01:23:41,880 --> 01:23:44,080
Speaker 1: being on the defensive. As you saw with his most

1603
01:23:44,080 --> 01:23:47,519
Speaker 1: recent appearance on Anderson Cooper, the Energy Department's conclusion has

1604
01:23:47,520 --> 01:23:50,200
Speaker 1: actually forced even them to ask him about it. The

1605
01:23:50,320 --> 01:23:53,360
Speaker 1: more actual raw information that comes to light, like the

1606
01:23:53,400 --> 01:23:55,840
Speaker 1: emails that show he prompted the initial cover up and

1607
01:23:55,880 --> 01:23:58,320
Speaker 1: the intel agencies coming to the conclusion it was a lably,

1608
01:23:58,520 --> 01:24:01,640
Speaker 1: he has to answer questions. He is now using the

1609
01:24:01,760 --> 01:24:03,960
Speaker 1: years of false capital that he built up during the

1610
01:24:04,000 --> 01:24:07,280
Speaker 1: pandemic to do what any ego maniac like him wants.

1611
01:24:07,439 --> 01:24:09,960
Speaker 1: He wants to die a hero, lionized by the press,

1612
01:24:10,080 --> 01:24:13,000
Speaker 1: a savior when he may be the pandemic's biggest villain.

1613
01:24:13,120 --> 01:24:16,360
Speaker 1: Christ'll actually the House of Representatives just voted yesterday, and

1614
01:24:16,479 --> 01:24:19,160
Speaker 1: if you want to hear my reaction to Sagre's monologue,

1615
01:24:19,200 --> 01:24:25,360
Speaker 1: become a premium subscriber today at Breakingpoints dot Com. Thank

1616
01:24:25,400 --> 01:24:27,679
Speaker 1: you so much, guys for watching. Really appreciated it. Shout

1617
01:24:27,720 --> 01:24:29,600
Speaker 1: out to everybody's signing up to taking advantage of the

1618
01:24:29,640 --> 01:24:31,760
Speaker 1: new Spotify Full Show. I know a lot of you

1619
01:24:31,800 --> 01:24:34,000
Speaker 1: are liking it. If you need the instructions again, just

1620
01:24:34,040 --> 01:24:36,160
Speaker 1: go to the top of the show existing Premium members,

1621
01:24:36,160 --> 01:24:38,280
Speaker 1: and I laid out exactly what you need to do.

1622
01:24:38,520 --> 01:24:40,240
Speaker 1: Send us an email if you still can't figure it out,

1623
01:24:40,240 --> 01:24:42,559
Speaker 1: and we'll get everything sorted for you. Otherwise, we'll see

1624
01:24:42,560 --> 01:25:00,519
Speaker 1: you all tomorrow at