America Faces No Greater Threat Than Joe Biden and the Democrat Party. Their Assault to Our Borders Is As Great As Their Assault to Free Speech and Free Elections
Wednesday, March 15, 2023
DOES ANYONE BELIEVE THIS CRAP? THE DOJ WILL INVESTIGATE SILICON VALLEY BANKS WITH OBAMA, CLINTON AND PELOSI ON THE BOARD? SERIOUSLY? BUT WILL NOT INVESTIGATE THE BIDEN CRIME FAMILIES GLOBAL BANKS WIRE TRANSFERS OF SHADY MONEY?????
U.S. banks have flagged over 150 SARs from Hunter and James Biden that included “large” amounts of money flagged for further review.Accordingto a 2020 Senate report, SARs “often contain evidence of potential criminal activities, such as money laundering and fraud.”
Don't Call It a 'Bailout': No One Is Buying the White House Spin on Silicon Valley Bank
The White House is adamant that the government money spent to prop up Silicon Valley Bank didn't amount to a "bailout," but very few economists, lawmakers, and political commentators appear to be buying the administration's argument.
White House press secretary Karine Jean-Pierre said on Monday that "this is not a bailout," and President Joe Biden during his morning remarks that same day insisted that "no losses will be borne by the taxpayers." But Biden appears to be on an island with that interpretation of the federal government's extraordinary actions, which protected all of the bank's depositors.
Financial journalists Sebastian Mallaby of the Washington Post, Andrew Ross Sorkin of the New York Times, and Emily Stewart of Vox all categorized the government actions as a bailout. Two economists interviewed by NPR said the same.
And lawmakers from both sides of the aisle agreed on something for once: Biden's actions constituted a bailout. Sen. Bernie Sanders (I., Vt.) released a statement that said, "Now is not the time for U.S. taxpayers to bail out Silicon Valley Bank," while Sen. Cynthia Lummis (R., Wyo.) said in a Monday interview the Biden administration's "bailout" could "encourage risky behaviors by similar institutions down the road."
The White House's word games reportedly stem from concerns about optics. Politico reported on Monday that Biden was initially hesitant to order anything that "could be labeled a taxpayer-funded bailout," recalling the political firestorm Washington faced in 2009 following the passage of the Emergency Economic Stabilization Act and Troubled Asset Relief Program (TARP), which provided loans and liquidity to financial institutions at the height of the Great Recession.
But following pleas from advisers, and reportedly California governor Gavin Newsom (D.), Biden, in the words of one economist, decided to set "a crazy precedent." Under the federal government's emergency program, all of Silicon Valley Bank and Signature Bank's depositors will have complete access to their deposits—even those above the $250,000 insurance limit covered by the FDIC. The Federal Reserve also created an emergency lending program—backed by taxpayer funds and unmentioned during Biden's Monday remarks—to keep other financial institutions afloat should they run low on cash.
Richard Squire, a Fordham University law professor and banking expert, told NPR that "the venture capital firms and the startups are being bailed out. There is no doubt about that."
Biden's "rescue" is "like if you pay a bond for someone to get out of jail, rescuing someone when they're in trouble," he added. "If you don't want to use the b-word, that is fine, but that is what is happening here."
"If your definition [of a bailout] is government intervention to prevent private losses, then this is certainly a bailout," Neil Barofsky, who oversaw TARP under both the Bush and Obama administrations, told NPR.
Critics say the federal government's actions set a precedent that depositors, particularly wealthy ones, will pay even less attention about where they store their money, also known as a "moral hazard." An insurance limit exists for a reason, critics allege, and dispersing with it during a panic raises questions over the purpose of the insurance policy.
In short, Silicon Valley Bank and Signature Bank—and potentially other institutions, if they draw from the Fed's emergency program—were bailed out. Without the federal government's intervention, those banks would have entered some form of bankruptcy, and depositors with funds above the FDIC insurance limit, mostly venture capitalists and tech firms in the case of Silicon Valley Bank, would have likely taken some losses when the banks' customers were sold to another institution.
Biden's assertion that "no losses will be borne by the taxpayers" is specious as well. Aside from the Federal Reserve's emergency lending system, Americans will be on the hook for the FDIC's actions. Most states require federal insurance for banks to operate, which they pay through fees to a federal insurance company. Those costs are ultimately borne by depositors or those who do business with the vast majority of banks, both of which are taxpayers. Moreover, the FDIC will need to recuperate the funds it used to make depositors whole.
The FDIC's deposit insurance fund is roughly $130 billion, far less than the $22 trillion deposited in all U.S. banks. Roughly 42 percent of deposits in the United States are covered by insurance. Should the FDIC's fund run out, it would be up to the Department of Treasury—i.e., taxpayers—to make up the difference.
California governor Gavin Newsom (D.) helped persuade President Joe Biden to bail out Silicon Valley Bank and was one of the first politicians to praise the move. His assistance comes years after the failed bank began lobbying California's government and donating to Newsom's wife.
Newsom helped convince Biden during a Saturday meeting that a bailout was necessary. In 2021, Silicon Valley Bank quietly gave $100,000 to Jennifer Siebel Newsom's California Partners Project as it was gearing up to lobby the state's university, pension, and teachers' retirement systems. The gift was the California's bank's largest contribution to any California entity that year.
It seems to have been a wise investment. Newsom issued a statement hours after the White House announced its bailout decision, lauding the Biden administration for acting "swiftly and decisively to protect the American economy" and praising the bailout as having "profoundly positive impacts on California." While what came of the bank's California lobbying campaign is unclear, both the state workers' and teachers' pensions are invested in the Silicon Valley Bank to the tune of $67 million and $11 million respectively, according to spokesmen.
Silicon Valley Bank and the Newsoms were a perfect match. California's first couple has come under fire for their ethically dubious relationships with donors, who have a habit of donating to one of Siebel Newsom's nonprofits whenever they need something from her husband's office. And the bank, which collapsed last week after announcing it did not have enough cash to cover withdrawals, has a history of making large financial donations to potential political allies.
The same year the bank donated to Siebel Newsom, its CEO, Greg Becker, maxed out campaign contributions to Senate Majority Leader Chuck Schumer (D., N.Y.). He also maxed out contributions to Sen. Mark Warner (D., Va.).
These are just a few instances of the Democratic-leaning bank's habit of donating to powerful Democratic politicians. Employees of the collapsed financial institution have given over $100,000 to Democrats since 2016, including more than $39,000 to Biden's presidential campaign, financial disclosures show. In that same window, the firm's employees gave just around $7,000 to Republicans.
Newsom is not the only recipient of Silicon Valley Bank donations to support Biden's bailout. Warner, now a member of the Senate Banking Committee, on Sunday issued a statement commending the Biden administration's move. Schumer on Monday issued a joint statement with House Minority Leader Hakeem Jeffries (D., N.Y.) praising the Biden administration for taking "swift action to safeguard depositors and maintain confidence in the banking system."
California Rep. Ro Khanna (D.), who took $500 from Becker in 2018, was a vocal proponent of the Biden administration's bailout. Silicon Valley Bank employees have also given $550 since 2016 to the Lincoln Project, the scandal-plagued "Never Trump" PAC.
Newsom personally solicited the donation to his wife's nonprofit through a California program that allows public officials to raise funds from corporate backers for their favored charities. Silicon Valley Bank executive John China sits on the board of Siebel Newsom's California Partners Project, which pressures corporations to appoint women to their boards.
California leaders are eager to rescue the Silicon Valley Bank's wealthiest depositors, as the state's top 1 percent of earners pay nearly half of its taxes. If the bank's biggest customers lose millions and write off those losses, California's budget—already facing a major deficit—could suffer a major blow.
Before its collapse Friday, wokesterism surrounded Silicon Valley Bank like a miasma.
The wokesterly attentiveness didn't per se destroy that mid-sized bank, given that most banks play these games and the big ones are very loud about it.
As I noted earlier, Johns Hopkins University professor of economics, Steve Hanke, put his finger on the problem more precisely in an email:
[T]he real SVB issue was terrible banking and risk management that resulted in a massive duration mismatch between SVB's liabilities (read: deposits) and its assets (read: long-dated bonds). The mismatch was stupidly not hedged. SVB was a poorly run bank, a disaster waiting to happen. Any regulator worth his salt should have seen this coming long ago.
Apparently, they didn't know how to run a bank. They failed to understand their unique risk profile, they failed to plan for it through hedging their risk, which could have been done, and they failed to even hire a risk manager for most of 2022. They just did woke stuff, virtue-signaling for the political crowd, and donated to Democrats.
Now it comes to light from the Daily Mail that they really didn't know much about banking at all:
Just one member of Silicon Valley Bank's board of directors had a career in investment banking, while the others were major Democratic donors, it has been revealed.
Tom King, 63, was appointed to the board in September after previously serving as the CEO of investment banking at Barclay's. He has had 35 years of experience in investment banking.
But he is the only one on the board with a career in the financial industry, while others are a former Obama administration employee, a prolific contributor to former House Speaker Nancy Pelosi and even a Hillary Clinton mega-donor who prayed at a Shinto shrine when Donald Trump won the 2016 presidential election.
The board is now being investigated by federal authorities after it failed to prevent the bank from going under while it was investing clients' money in risky low-interest government bonds and securities.
Now it's pretty obvious what the results of that was. Just one of them knew how to bank. No wonder they couldn't manage the bank. They had a merit problem in their top management, with characters hired for their political connections. One of them, Mary J. Miller, was an actual Obama administration official.
Leftists of this sort are convinced they know how to command and run the United States, they know what's best for us, they know more, so they must have felt it was a piddly matter to run a bank with a complex risk profile of startup investors with large deposits who could pull that money in hours if there was a panic. Well, there was, and the bank saw $46 billion of its $200 billion-and-some deposit base withdrawn in just one day. Nobody planned for that because there were woker things to think about and political skids to grease.
Well, now we see the results of that. The bank has gone bust and is in a federal receivership.
What this tells us is that a lot of top talent among the Democrat elites aren't so full of merit at all, given that they know nothing about running a real-world enterprise, yet are fool enough to think they do. And that boards that bring on these characters are just as stupid because they're bringing in people who know nothing about their industry, filling their boards with people with lots of degrees and fancy resumes and political connections, but absolutely no knowledge about running a bank. They do it, of course, on the disturbing premise that they can always get Joe Biden to sign off on a bailout for them, no need to learn to stand on their own two feet.
How many other banks do this zero-merit hiring for their boards and beyond?
I've noticed this happening in the Silicon Valley as well, in this piece I wrote about the zero-merit Meena Harris, the money-hungry niece of Kamala Harris, who had high positions at Uber, Slack and Facebook, yet whose 'merit' wasn't tech but self-promotion -- selling t-shirts and posing for Instagram "influencer" photoshoots. She was only valuable to any of those tech baronies because of her ties to Kamala Harris. There seem to be a lot of those. Tech companies are brimming with former Obama operatives who weren't hired for their tech-knowhow, yet hold the highest positions.
It shows how far we have fallen in competitiveness. Political incompetents sit at the top levels of banks and tech companies in Silicon Valley now, their political prowess more important than their tech or banking prowess. When it matters, they show how useless they are in running the operations, but how handy they are for a bailout. That's a pretty sorry model for any industry.
Several Silicon Valley Bank (SVB) board of directors have donated thousands of dollars or have direct ties to prominent Democrat politicians like Hillary Clinton, former President Barack Obama, and Rep. Nancy Pelosi (D-CA).
Federal investigators are now looking into the role the board may have played in the bank’s abrupt collapse, as the board members failed to prevent its failure.
Although there are 12 board members, several are under scrutiny for their donations and connections to Democrat politicians.
For example, director Kate Mitchell is a Clinton mega-donor who prayed at a shrine after Clinton’s 2016 loss to former President Donald Trump.
“I prayed for me and us to get beyond our grieving and shock and to figure out how to engage and listen to what happened and come back together,” Mitchell said.
Mitchell also donated $50,000 to Clinton’s victory fund, the New York Postreported.
Next on the list of Democrat donor SVB board members is Garen K. Staglin, who owns a vineyard less than 15 minutes from the Pelosi family’s Napa Valley estate.
He gave the Biden Victory Fund $10,000 in 2020, sent $54,000 to Clinton’s Hillary Victory Fund in 2016 (on top of $25,000 the previous year), backed Obama with $35,800 in 2011 and gave the Democratic National Committee $10,000 last year.
Some board members also donated to political action committees for Democrat Senate Leader Chuck Schumer (D-NY) and Sen. Mark Warner (D-VA), who sits on the Senate Banking Committee, the Post reported.
Another SVB board member with ties to prominent Democrats is Mary J. Miller, who served as Obama’s domestic finance undersecretary at the Treasury Department for two years.
As the Postnoted, the “only real banker” on the Silicon Valley Bank board is Tom King, the board’s newest director. King brings 35 years of experience in investment banking to the board, having spent years at Citigroup and Barclays.
The Post also reported that the Democrat donations were part of SVB’s business model. “Everyone knew it was the go-to bank for woke CEOs,” one source told the outlet. “They knew they were aligned politically. The companies SVB loaned money to all had a woke agenda.”
The collapse of Silicon Valley Bank (SVB) has triggered two federal investigations, one by the Department of Justice (DOJ) and the other by the Securities and Exchange Commission (SEC), according to a Wall Street Journal report.
The Wall Street Journalreported Tuesday that “people familiar with the matter” had indicated both the DOJ and the SEC were conducting separate investigations in the aftermath of the bank’s collapse, noting it is a common practice for authorities to “open investigations after financial institutions or public companies suffer big, unexpected losses.”
Both investigations are reportedly looking into sales of SVB stock by management just “days before the bank failed,” with DOJ “fraud prosecutors in Washington and San Francisco” having taken an interest in the case, per the Journal.
Last week, the institution suffered a “massive run on the ban” after depositors “withdrew $42 billion, leaving the bank with a negative cash balance of $958 million,” forcing the bank to enter a Federal Deposit Insurance Corporation (FDIC) receivership.
A worker (center) tells people that the Silicon Valley Bank (SVB) headquarters is closed on March 10, 2023, in Santa Clara, California. (Justin Sullivan/Getty Images)
The Associated Press noted SVB was once the 16th-largest bank in the United States and a major financial hub of the technology sector. Its fall into insolvency was the second-largest bank failure in American history.
The Journal noted investigations are in their “preliminary phases and may not lead to charges or allegations of wrongdoing.”
he FDIC announced in a statement “All insured depositors will have full access to their insured deposits no later than Monday morning.” However, uninsured depositors, those whose accounts held funds in excess of the $250,000 coverage cap, “would receive a receivership certificate for the remaining amount of their uninsured funds.”
The statement noted that at the end of 2022, the bank held $175.4 billion in customer deposits but “the amount of deposits in excess of the insurance limits was undetermined” at the time the bank closed.
The uncertainty around when and whether companies will be able to access uninsured funds has sent ripples through the technology ecosystem and the broader economy.
A March 12 statement by SEC chair Gary Gensler read:
In times of increased volatility and uncertainty, we at the SEC are particularly focused on monitoring for market stability and identifying and prosecuting any form of misconduct that might threaten investors, capital formation, or the markets more broadly. Without speaking to any individual entity or person, we will investigate and bring enforcement actions if we find violations of the federal securities laws.
Federal Reserve Chair Jerome Powell announced Monday the central bank will pursue a “thorough, transparent, and swift review” of the San Francisco Federal Reserve Bank’s oversight of SVB.
You can follow Michael Foster on Twitter at @realmfoster.
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