March 16, 2023 - Human Events Daily - Jack Posobiec
26:28
EPISODE 420: THE SILICON VALLEY CONTAGION IS SPREADING WITH RICHARD BARIS
On today’s episode of Human Events Daily with Jack Posobiec, Richard Baris, also known as The People's Pundit, joins as a guest to discuss the recent banking collapse of Silicon Valley Bank. The conversation covers three main topics: the spread of the Silicon Valley contagion, the potential role of wokeness in the bank's demise, and the bipartisan hypocrisy on fiscal policy. The discussion provides in-depth analysis and insights into the potential impact of the banking collapse on the broader...
Ladies and gentlemen, welcome aboard today's edition of Human Events Daily, powered by Turning Point USA.
Today is March 16th, 2023.
Anno Domini.
We've got a massive show today because, folks, the Silicon Valley contagion is spreading, exactly as we knew and told you that it was going to.
We've got with us here Richard Barris, the People's Pundit.
But first, I want to show you a clip of what is happening out there.
Let's get into it.
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*music* Wow.
Thank you so much.
Wow, how do I follow that?
I am absolutely devastated, amazed, enthralled, totally unexpected, but most of all humbled.
Humbled because there's so many amazing people here that I know have made such a difference between LGBTQI, PSSA, IL, so many identities.
And I know that everyone here is making such a difference to make the world a more inclusive place.
Thank you so much.
I guess who I'd like to nominate this to is to my lovely wife, to my lovely children, to my lovely Credit Suisse Ally Working Group.
Before I talk about the Central Bank stepping in with this $54 billion lifeline, let's mention the Saudi National Bank because The SNB, the Saudi National Bank, is an anchor investor now in Credit Suisse and bought into the bank as part of last year's major restructuring announcement.
I think that the banking sector worldwide is going to be under some pressure until there is some clarity with regard to liquidity concerns and in Europe with regards to both counterparty risk in these large banks and net interest rate margin.
And one of the things that's happening in the European banks, and I was in Europe all last week, is that the net interest margins that the European banks earn on deposits is shrinking.
Bloomberg is reporting that First Republic Bank, ticker FRC, is said to weigh options, including a sale.
Stocks up 10% after hours, but it fell big time again today.
I don't know if this has surprised anybody, Andrew, but you wonder if it's true.
Well, this is exactly what I was talking about.
To be honest with you, this was exactly what I was just talking about, which is we're going to be seeing First Republic, I think, either in a merger situation or a major kind of capital raise situation in the next week or two.
I'm actually surprised that unlike what we saw in 2008, behind the scenes, that we are not having government officials literally press on banks like First Republic Bank and some of the others that appear at least There's even any uncertainty about them to get their houses in order and get their houses in order almost immediately.
Look, you hear them out there.
The contagion is spreading, ladies and gentlemen.
And we don't know yet what the Biden administration or anyone is planning to do to fix this, because apparently groups like Credit Suisse and some of these other ones are putting wokeness and putting all of these insane ideas at the start of their business, at the front of their business, instead of actually paying attention to how to run a bank.
Well, somebody who's going to come in who's been very, very vocal about this.
Folks, we've got Richard Barris here, the People's Pundit.
the People's Pundit, excuse me, the People's Pundit, that could be your new thing, man.
People's Pundit, Richard Barris, tell us what's actually going on right now on the street. - Yeah, just to let you know, I mean, it could be the parrot, because that's what I try to do, which is just give a voice to people who don't have one in the media.
Jack, you know, I listen with my job and I try to relay what I think most Americans are thinking.
But, you know, I think what's going on now, even overnight with the Fed reassuring people that there'll be about two trillion in liquidity loans or loans for liquidity, you know, the fundamental problem is still there.
And just so people put this in context, We did not have back-to-back bank failures like this, where you have SVB, Silicon Valley Bank, which was the second largest bank failure by asset in American history.
It's the 16th largest, but the second biggest bank failure.
And then two days later, the third biggest failure.
Even during the Great Recession, we weren't seeing, you know, basically concerns that led to this.
And there's a reason for that.
And at the core of it, Jack, is We've had this mindset in corporate America and in government now for a while, and it really does.
It prioritizes box checking over competence, it prioritizes fanaticism over realism, and you want the world to be a certain way, but at the end of the day, you still will have to be held or be subject to those rules.
This system doesn't have anybody taking responsibility, so we keep seeing these mistakes over and over again.
It really is, and Richard Bookstaber called it.
It really is a demon of our own design.
I think the woke stuff is one separate conversation that the media wants to kind of joke about, but then there's the other very serious conversation, which is that this came from inflation.
If people have to understand how inflation wreaked havoc on the bond market and treasuries, which everybody thinks is a safe haven, has not been a safe haven for equities markets when they're volatile and other markets are volatile.
Investors, institutions, they all run to the safety of treasuries.
And with SVG and others, they could not do that because they bought them at a different value.
And when they went to go sell them, they were greatly devalued because of inflation.
And it just wasn't enough to meet their obligations when people were taking out withdrawals.
So this problem is not over.
This is indicative of a very, very serious problem.
And you know, there's two parts to it.
There's the monetary policy, the fiscal policy, Jack, and then there's the culture in all of this.
And that's what everybody wants to kind of joke and sweep under the rug.
But, you know, basically You know, the circus is in charge, Jack.
There's no adults in the room, and it's everybody wanting to see the world the way they want it to be, instead of how it is.
So, in a nutshell, where does this end?
You know, I think, sadly, the media is probably going to try to just like, you know, hand in mouth this one, where they're not going to want it.
There was a fact check in the New York Times.
Let me back up for a second.
There was a fact check in the New York Times today, which I wrote about on my locals page, because they did acknowledge issues with the bond market and some role that that played in the fall, you know, of SVB and others.
That came after them.
But what they didn't want to do was talk about this greater issue of wokeism in corporate America.
They simply wanted you to think in a very narrow lens about whether or not specific individual loans that SVB made to environmental projects, community projects, those are the term they use, were not solvent, were not good bets, basically.
And they run to experts.
They got Professor Goldstein at the University of Pennsylvania in the Wharton School.
And he basically said, well, that's not right.
There's no evidence of this.
And it's really a word salad because on one hand, he's saying he's making a definitive authoritative statement.
No, this didn't play a role.
They didn't make bad bets because of their ideology.
And in the second sentence, immediately to follow, it was basically, I'm saying this and you should believe me.
However, we just don't have any evidence of it yet.
So the truth is we don't know about all of their individual investments right now and how sound they were.
What we know is that rumors kill on Wall Street, especially when they're true.
And they had issues beneath the surface.
And those bonds, unfortunately for them, were just not valued at the same rate, Jack, that they expected them to be when they bought them for security.
And this will be a problem, not just for SVB, not just from Signature Bank.
And as far as this issue of responsibility, Signature's a great example.
Barney Frank sat on the board of directors for a reason.
That is a signal to the rest of Wall Street, and that's a signal to other people that you want backing your business, that we have Mr. Bailout on our board of directors.
Don't worry if anything bad happens to us.
Barney Frank is the guy who knows how to handle it.
Remember him from TARP.
So that's the message they're sending when they put these people, you know, in the loop and we're all just playing musical chairs with the same characters who did it last time.
All right, we'll be right back.
Next segment here, Richard Barris, not the people's parrot, but actually the people's pundit.
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patreon.com slash bozo All right, ladies and gentlemen, back here at Human Events Daily with the People's Pundit Richard Barras.
Now, Richard, there was a piece in the New York Times that came out today.
You responded to this.
They said it was a fact check.
They were going to fact check you to say that it's actually not wokeness.
Fact check all of us.
They say it's not wokeness that played a role in the demise of SVB.
And I also, by the way, wanted to point out That there are people who say, well, the conservatives, they talk about wokeness, but they can't define it.
They won't explain what it is.
I'll explain very quickly.
Wokeness is, at its heart, a conspiracy theory.
It is a conspiracy theory that disparate impact, disparate outcomes in society, in the world, are the result of racism, bigotry, and oppression.
That these are the only factors and the most, what we call of course, systemic factors that lead to disparate outcomes.
And people who believe in wokeness, they're actually woke truthers, will then turn to try to shape society through money, through advancement, through the handing of titles and awards to people based on their identities, whatever they identify as that day of the week or that time of day.
Maybe depending on what weather it is out, that that's how they try to shape reality rather than understanding reality for what it is.
But Rich, let me get into your piece because the New York Times says that no, no, no, that's not what's going on at all.
Yeah, and they want you to think, and I started to touch on this, but let me explain this a little bit more detail.
They want you to think that if you blame or you're one of the people like us who are criticizing woke-ism or wokeness for these failures, what they want you to focus on is whether or not they issued bad loans to bad investments or, you know, they made bad bets in environmental groups and community projects that are going out on these Crusades, Jack, because they believe exactly what you just, you articulated it perfectly.
But it really is more than that.
And by the way, we don't know the answer to that, which in their fact check, again, they ran to Professor Goldstein at the University of Pennsylvania, and he was happy to play a word salad for them.
But what he said is there's no evidence yet of any bad loans or any bad bets like that.
He made a definitive statement without really, without, with acknowledging That he doesn't know that yet.
He doesn't have all of the facts.
But my point is a bigger point, that it's this mindset that has led to the bad policy that created these current calamitous conditions that made it just perfectly right for bank failures.
This is what leads to inflation.
When you have this mindset, Jack, then you really think that you could print money, hand over fist, increase the supply of money in the system and not have inflation as a consequence.
You can continue to spend ridiculous amounts of money on a pandemic that is now endemic, stuff all of your ideological goodies into that bill, trillions of dollars we don't have, debt through the roof, and it doesn't have inflation consequences, and on and on and on.
And what I'm saying is you really have two different arguments.
One, we're going to find out in the future, and we're going to know for sure whether they were, you know, Putting bad, you know, chasing bad ideas with good money like Barack Obama did with Solyndra and other projects all throughout his administration.
We're going to find that out.
But that's not the core of it anyway.
The core is they trade box checking for competence.
You know, they trade these fantasies for reality.
And this is obviously going to have a consequence.
It's the same reason why Congress thinks they can continue to spend You know, the Fed thinks that they can continue to print money and that they don't have to raise interest rates and somehow inflation is going to come down all by itself.
They live in a fantasy world.
And then they created these conditions for these failures.
But what I want to ask you as well, because I caught your show on on Monday, you were on fire.
I actually thought that you were going to grab a guitar and start stabbing those amplifiers behind you.
You were so fired up on Monday because it was the sense that we were hearing the same exact refrain over and over that we have to bail these out.
We have to bail out the system.
It's like George W. Bush coming out and saying we've got to abandon free market principles to save the free market system.
No, what you've done is create a zombie market.
You've created a zombie market with zombie companies that are being artificially kept alive through these bailouts again and again and these financial instruments.
The people, the American people, by the way, are always going to have to foot the bill on this.
But it doesn't matter because if you're the one sitting next to the money printer, you're the one who's being taken care of.
Jack, they're taking away consequences from the system.
Consequences, when we lose, right?
When we make a bad bet or we lose or we fail at something, hopefully, you know, we looked, you know, into ourselves and, you know, whether you're individually or you're running a company and you try to better yourself from that failure.
When you take away those consequences, you're taking away incentive to do the right thing.
You're taking away your fiduciary responsibility to the shareholders that you have in that company.
I mean, you're basically telling people they can continue to make the same mistake Over and over again, because it doesn't matter, we're forever going to protect you.
But here's the real kicker with that.
That's only for them.
For the rest of us, we have to deal with the consequences of their actions while they're insulated from them.
The raising of the FDIC insurance from $100,000 to $250,000 because of the Great Recession was supposed to protect the little guy, not Mitt Romney's friends.
And what they're doing, or taking the premiums, essentially what it is, taking a premium for that insurance, That was meant to protect you, your money market account, or maybe a small business you have so you can make payroll.
That's what that was supposed to protect.
And they're giving it to the big guys to make sure that they, you know, that they're going to come out of this thing on the other end.
And again, what happens with this?
We just see the reshuffling of the deck.
Barney Frank never faced any responsibility for what he did in his role in the financial crisis in 07 and 08.
Well, guess where he was when all of this happened?
Signature Bank.
And again, one more time, folks, he's on the board, not because he's an expert.
He's on the board as a signal to other people that we have Mr. Bailout.
He has the connections.
He has the relationships.
We're a safe bet because we got Barney Frank and he's going to get us bailed out if we need it.
That's what they're telling.
And everyone gets that bailout, Jack, except for you and I and the rest of middle America.
Well, and it's the perfect thing.
And then, of course, the politicians will come out, and you hear this from the right, we have a break coming up, but I want to get into this afterwards, because conservative politicians will even try to defend this by saying, oh, we're upholding the system, we're keeping the system going.
But then when the American people come up to them and say, excuse me, we've got a problem because I can't drink the water in my town because you poured hazardous chemicals in it, or you say, hey, I've got Ladies and gentlemen, the dollar just hit a seven-month low, and we all saw what happened with the crypto market last year.
We see what's happening in banking and stocks right now.
Well, how are you going to say fiscal responsibility to the American people when they see what's going on for them and their buddies from K Street to Wall Street?
Stay right tuned.
Human Events Daily coming back.
Ladies and gentlemen, the dollar just hit a seven month low and we all saw what happened with the crypto market last year.
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And we're back here, Jack Prosobiec, Human Events Daily.
We've got Richard Barris from the People's Pundit.
Richard, why is it that conservatives and some of these establishment conservative types We'll sit up there and say, it's okay for our friends to get a bailout, but not you, not the American people, not the families, not the homeowners, not you guys.
You guys are all going to go underwater, because you know, by the way, this is coming to the housing market next.
I'm sorry, but it's just very obvious that the housing market, after Silicon Valley, look, when you have an interest rate height, you can see this throughout history, zero hedge, and everyone said this is not, you know, it's like a Jack Posobiec ism, I'm not trying to take credit for it.
But every time you have an interest rate hike, something blows up.
And you know what usually blows up first?
The thing that's the fakest out there.
The biggest bubbles are the ones that blow up first.
This was something that President Trump talked about in the debates in 2016 when he was targeting who?
Janet Yellen, because he said the Fed is playing politics.
They're doing this to prop up her candidacy.
They're doing it to prop up Barack Obama.
We saw what happened.
So yeah, Silicon Valley is going to go first, but you know what's next?
But Rich, what I want to ask you, because you do so much work in the public opinion sector, why is it then that the American people turn away from these establishment types like a Mitt Romney, like a Paul Ryan, when they see what's going on for their buddies, but then they turn around and told, no, but you have to be fiscally responsible?
Yeah, hypocrisy.
It makes them look inauthentic.
It makes them look corrupt.
And they just have this deep distrust.
These are people who looked into the camera on Fox News and other shows and claimed, Jack, you know, they were against TARP.
That was the wrong thing to do.
Or even if they were for it at the time, never again.
Right.
You know, and by the way, they'll preach to you about paying back your student loans or they'll preach to you about credit card debt.
But again, they never have these, you know, the American people just look at them and say, because they don't bear this responsibility, they just look at them and say, how dare you?
You know, like, who are you?
When you have to walk in my shoes, then you can you can lecture me over it.
But, you know, the bottom line is it just makes them look inauthentic.
You know, they're just politicians have an authenticity problem with the American people.
Very few have been able in the last 10, 20 years to make Americans feel like they truly understand their issues, understand their problems, and understand whether or not they care about them.
You know, we're getting into the silly season, and unfortunately, we're just going to see a lot of shilling.
People, you know, that will tell you two years ago, four years ago, ten years ago, that TARP was the worst thing, you know, domestically, the Congress ever did.
And yet, you know, simply because their preferred candidate may benefit from it, they have a different point of view.
We have to stop all that.
We really do.
Silly season or no silly season, when it comes to the economy, we have to be much more consistent than that.
And Americans can see right through it.
If we keep doing this, even the word TARP, right?
Temporary assistance.
Temporary.
It's all temporary.
It's always temporary.
Yeah, but if it's temporary every time, then that's not temporary.
That's permanent.
You've created a new system.
Kevin O'Leary from Shark Tank, of all places, he came out and he said, Biden just nationalized the banking system.
He just came out and essentially said that every deposit unlimited is protected by the federal government.
Any bank goes under, it's not going to go under.
They might ship the decks around, but now suddenly everything's out there.
What does that do to your system when you've got people now saying that everything is going to be backstopped by the federal government, which is still the taxpayer at the end of the day?
At some point, are we ever going to actually pump the brakes on this?
Yeah, that's like Robert Higgs, you know, the crisis and Leviathan.
I mean, he nailed it with that.
Everything's temporary.
And the goal is really, of course, it's not.
They just they sell it like that to you.
And then at the end of the day, I think Kevin's right.
This was, you know, always the goal was the goal in 08 through 2010.
No, I just got, you know, somebody pumped the brakes for a decade or so.
You can't move that quick with that kind of change, Jack.
You know that.
You got to inch into it.
There's a major problem with that, though.
There's just not enough money for that.
There isn't.
If we were still enjoying the peace dividend, had a surplus, You know, did not have 30 trillion in debt, then maybe that would be viable.
But because we're in such a terrible position, again, people really need to understand the corner that the Fed has packed themselves in here.
So looking at the federal government to save the financial industry is not a great bet because the Fed is a one trick pony when it comes to rampant inflation.
And, you know, they'll make Americans suffer for a while to help their friends in the bank, Jack, because that's the Fed's choice right now.
Continue to try to combat inflation or risk bank failures with your friends and putting your friends in a bad spot, which then you'll have to argue again you'll need to bail out, which they will.
But the problem with that is Americans are used to a certain lifestyle, so they can only keep that up for so long, Jack.
They're not going to pay, you know, $20 for a carton of eggs forever without serious problems or without serious grievances, and things will get ugly.
So, you know, I understand Kevin's concern.
I actually think that is the goal.
However, it's not a feasible one.
It's not sustainable.
It's about as sustainable as the rest of this whole entire house of cards was.
You know, you knock one over, it all comes tumbling down.
The U.S.
government is not in a position that it was even 10 years ago, let alone 20 years ago.
Uh, you know, we're, we're not, uh, solving ourselves, you know, to go in and look.
We've got about a minute, about a minute left, but I just have to say it, you know, what happens when governments start to become unstable, when they start printing money, like crazy, you know, what governments start doing, they start becoming desperate.
And that is when you get into provocations.
That's when you start doing things out of desperation.
Wars start after situations like this.
We saw it in the 1930s.
We saw it again in the Cold War a number of times where it almost flared up.
And now we see what's going on with Ukraine, with China.
I think there's a lot of people now looking at this situation saying, hold on a second, because they're looking at that as a way to increase the production, increase spending, but actually something we're not going to be able to afford it and it's going to tear this country apart.
Rich, where can people go to follow you, to pay attention to your work and watch your show?
Yeah, the best place to go, Jack, is Locals, peoplespundit.locals.com, or peoplespundit on YouTube, or peoplespundit on Rumble, and peoplespundit on Getter.
But again, the central hub is Locals, peoplespundit.locals.com.
People can follow there, the article I just put up about this, and then also the polling that we do.
Everyone can follow along and learn all about it on Locals.
Folks, you've gotta go follow Rich.
Rich, you gotta get a parrot, by the way.
That's gonna be your new mascot for the website, apparently, the People's Parrot with Richard Parris.
Folks, ladies and gentlemen, thank you so much for joining us here today, Human Events Daily.
