All Episodes
Previous Next
March 16, 2023 - Rudy Giuliani
38:30
The Silicon Valley Bank Collapse Explained | March 15th 2023 | Ep 317
| Copy link to current segment

Time Text
Hello, this is Rudy Giuliani back with another episode of Rudy's Common Sense.
Today, we're going to talk about, I guess, what everybody is talking about, and it's the failure of America's 17th largest bank that went under in a weekend, followed by another major bank, a signature bank that went under like that.
And now everybody's, you know, doing the blame game about it.
Although Unlike the crisis in 2008, unlike the situation during the pandemic, pandemic probably being easier to explain, this one is very, very simple as to why it happened.
And the 2008 situation was years and years of investing in these complex mortgages attached to mortgages,
attached to mortgages, attached to mortgages that were made into securities.
And the mortgages looked like they were a lot more valuable and then underneath and on the bottom,
never checked out were useless mortgages that as soon as the market turned, boom,
went under and it went on for years.
And it was based on the Clinton admonition that everybody should have a home.
And the theory was that everybody should have a home whether they can afford it or not.
And then America tried to have everybody have a home, whether they could afford it or not, and almost went bankrupt.
One of the reasons for it.
The Dodd-Frank law, which I opposed vehemently, was a recipe for future disasters, untold disasters, because it completely changed banking and started to move it toward a state control model, or better yet, a communist model.
Noted at the time is the fact that Karl Marx has any number of chapters on how to change the banking system.
Bonnie Frank and his people who filled with skullduggery were doing exactly that.
It should be noted, for example, that the press is very, very circumspect about the fact that Barney Frank is on the board of one of these two banks that went under.
Thank you, Barney, for now, after ruining our banking system, ruining the bank that I did business with, Signature Bank.
If I had known you were on the board, I'd have taken my money out of there a long time ago, because I'd have figured a bank that you were part of was going to go under.
Not a bad bet.
So let's see if we can figure out the cause of this, because it's easy.
This is not rocket science, this is not economic science, this is not debatable, this is not disputable.
It's very simple why these two banks, in particular the first one, CVB, Silicon Valley Bank, by just saying it you'll know why it went under, right?
It went under.
Let's give you a Two or three simple reasons.
OK.
Starting at the beginning of the Biden administration, we began spending money like money.
You could pull money off trees, I think my mother used to say, crazy Democrats thought.
Or you just pulled it out of the air.
Oh, we can spend all we want.
We had already spent a fortune, a literal fortune, trillions.
Trump did.
On the pandemic.
Probably way more than he normally would have, but for the crisis that occurred, which we may turn out in future years, was a somewhat exaggerated crisis.
Somewhat exaggerated.
I think we may find out a lot more than that.
But in any event, I did not oppose that spending, nor did anyone.
It was completely bipartisan.
It probably was too much.
And had it stopped there, we would have had some problems with it.
It would have had some inflationary pressure.
I mean, whether you're spending money on the pandemic or on something else, it's going to have an impact.
Every action has an equal and opposite reaction.
That's a law of nature and a law of economics.
Unfortunately, the people that do our thinking for us now are not the people that we should be thinking for.
We should be thinking for ourselves.
We should be thinking for others.
We should be thinking for ourselves.
We should be thinking for others.
We should be thinking for ourselves.
We should be thinking for ourselves.
It was ruined by the pandemic.
Uh-uh.
I want you to take a look at the three months of October, November, December, and January, the last four months of Trump in office.
The economy had already recovered like that.
They thought it was going to take two years.
And of course, you know, the president always speaks in hyperbole and stuff like that.
So maybe that, I mean, I was amazed at how fast the economy came back.
I knew it would.
I knew the economy would come back.
Because it was the pandemic that affected it.
No basic problems in the economy.
We went into the pandemic with the strongest economy we had in 50 years.
And we came out of it moving toward an even stronger economy.
Because we were fundamentally sound.
And then along came the communists.
Otherwise known as the Progressive Democrats, sometimes called Democrats, the Party of Slavery.
Otherwise known as Joe Biden, and we don't know what Joe Biden is, neither does he.
And he begins reversing everything Trump did, whether it was good or bad.
We're energy independent, a source of great strength from a national security point of view, a source of great strength from an economic point of view.
He changes that on day one.
Immediately a major hit to our economy, as well as our position vis-a-vis China and Russia.
Then he begins spending trillions and trillions and trillions.
It could be more spending, it depends on how you evaluate the dollar, than we did on the Second World War.
Probably a little less.
And we were spending it, we originally said, on infrastructure.
We haven't built a bridge.
Or a tunnel.
Or a road.
It wasn't infrastructure.
We were seeing the beginning of 1984 doublespeak.
Stalin doublespeak.
Spending on human infrastructure.
What does that mean?
That means welfare.
That means I pay you money not to work.
That means I extend more and more health insurance way beyond what you need.
That means I make it actually profitable for you not to work than to work.
We still have 10% gap in our workforce of people who are not returning.
And we still have a problem in our economy where people can't find workers, even though we have high wages.
Because we have trained people, Biden did, not to work.
Because we made it more profitable to work than not to work.
We extended welfare to proportions that, you know, like up and middle class welfare.
Instead of putting a work requirement in like I did when I became mayor of New York City, remember Workfare?
It was an encouragement not to work.
That was the ruination, the beginning of the ruination of our unique American economy.
And they went at it right away, the communists did.
Now, are they all communists?
No.
Are they all acting like communists?
Yes.
That spending had a massive inflationary effect on us.
But there's a second problem with that spending that you have to understand.
This is going to be very, very, uh, uh, uh, important in the future.
And it's not going to be hard to understand.
It could be really simple.
And it may sound strange when I first say this, let's say I spend a trillion dollars as the president, right?
And I spend it on building up our military.
That is a, Spending that will incentivize our economy.
It will spread out into the economy and it will create a massive collateral effects and it will grow our economy.
Now, the proof of that?
Oh, liberals hate this.
Roosevelt did not solve the depression.
The depression was worse after Eight years of Roosevelt than it was at the beginning of Roosevelt.
All of his New Deal, all of that great, happy, happy talk, happy stuff, made us a dependent country, and more people were out of work, unemployment was higher, and more people were in great poverty.
What got us out of the Depression?
There's no doubt about this, no one would disagree.
Spending on the war, beginning with Lend-Lease for Great Britain.
The minute we, the beginning we, Revved up the massive engine of the American economy, unmatched anywhere in the history of the world.
In five years, we built the greatest military, the biggest military, not only for us.
We built it for Great Britain.
We built it for Russia.
We built it for the world.
And we put people to work.
Lots of people to work.
And they put people to work.
So the people who went to build the ships got jobs.
The people who went to build the ships had to have lunch every day.
It grew the restaurant industry that took care of them.
They had to have more clothes.
It built the clothing industry.
They had to have more vehicles, bring material there.
They needed more steel.
They needed more... You get it, right?
It had an energizing effect on an economy That got people working.
Now, contrast that with Biden spending.
Not a single productive dollar.
Some of it necessary to offset the impact of the pandemic, much of it unnecessary.
But paying people more money not to work?
That's not only not productive, it's counterproductive.
The spending not only created inflation, it didn't create a concomitant rise in the economy, the productivity of the economy.
In fact, it declined in that.
So inflation gets even worse.
Then, mistake number two, I mean, I'm going to end up not being able to count them.
Mistake number two is everyone knew it would create inflation.
All you had to do is take a college economics 101 course, which I'm sure Biden either didn't take or failed, and cheated his way through.
But the impact of that original spending was to immediately create inflation, although
there was no one who agreed with this, including Democrat economists, that this will necessarily
cause inflation.
So when inflation first showed up, the stupidest thing in the world you could say is it was transitory.
It was predictable, even by Larry Summers.
What did Biden say?
Predictable.
What did the Fed do?
Not pay attention to it.
Now that's terrible.
Because the Fed had become a complete political whore of the Biden administration.
Every person on that Fed, including Janet, our useless Secretary of the Treasury, who should be fired immediately for this bank failure, never disagreed with him, never went ahead and executed Fed policy independent, they knew from the moment the spending Went over a couple of trillion that we were going to have inflation.
And that's when they should have started raising interest rates.
A year before they did.
Slowly.
Because you're going to see that this bank went under because they had to raise interest rates when it was almost too late, too fast, and too high.
Now this bank, which was really some kind of a woke Equity, social agency, not a bank, trying to solve climate change rather than preserve wealth or even income for its customers.
This bank would have had at least a little more of an opportunity to anticipate that it shouldn't be so heavily invested in long-term mortgages.
Counting on the fact that interest rates were not going to go up.
I mean, they they missed a whole year of warning.
Then all of a sudden.
Biden, Biden has never admitted, I think, that this inflation, but it became obvious that our half a brain president was wrong.
And then the Fed had to act and it had to act very, very quickly and had to act very dramatically.
And it had a big impact.
But not on banks that were prudently run, but on banks that were not banks, but were woke institutions like SVB and Signature.
The SVB board is made up of people who probably think that it's worth losing lots of money to fight climate change, particularly if Biden's going to give you the money back.
So that, I mean, basically what they did was they invested, over-invested by massive amounts.
They over-invested in long-term mortgages.
Over-invested by, based on peer banks.
I'm trying to get the exact number.
I think about two to one.
In other words, the average bank would have had about... Okay, here it is.
So, SVB Bank, its investment portfolio was 57% of its total assets.
That's more than twice peer average.
That would be only 24.
A prudent bank, its investment portfolio would be about 24%.
Now, that doesn't even tell the whole story, because a lot of those investments were in very, very long-term bonds, which means if your customers want their money back, you've got to sell them at a discount.
And if the interest rates change, As dramatically as they did, you've got a Ponzi scheme going on.
Now, should they have known that?
Of course they should have known it!
And if they didn't know it, the idiotic Fed in San Francisco should have known it, and the moron who runs it should have known it, who they want to put on the Fed, because she's a Bidenista who's in favor of solving climate change.
May I just digress for a moment?
Who's gonna solve climate change?
Somebody's gonna stop climate from changing?
Do you know how stupid that term is?
Climate change?
That climate change is gonna ruin the world?
The climate changes, you know, every three months.
Even in negligible ways in certain climates.
It's not climate change.
That's a euphemism.
Again, a lie.
It's global warming.
Now, you're worried about global warming.
Stop it.
Stop it.
Calm down.
According to Gore, we would have been gone in 2010.
We would have been flooded by now.
These people are I don't know, let them have their sick little religion on their own.
Don't let them ruin a great country like America with this craziness.
Of course we should be careful about the environment.
But of course we shouldn't ruin our economy and destroy our country over this myth.
Which is lie upon lie upon lie upon lie upon lie upon lie.
Where you are dismissed and censored if you disagree with them, and you're right and they're wrong.
So these people have 57% of their assets in investments.
Most banks, 24%.
But they have them in investments that you can't liquidate easily, quickly, or profitably once interest rates go up.
And for two years they should have been anticipating that interest rates were going to go up.
The board of the bank should be sued for gross negligence.
There's not an idiot in America who didn't know that interest rates were going to go up.
And the overseer The San Francisco Fed should be fired!
Out!
57%.
Don't you look at the books of the bank?
Oh no, these are all 95% Biden donors.
This bank intentionally decided not to hedge It's interest rate risk.
It's an intentional decision, an irresponsible, intentional decision that the CEO, Greg Becker, should be held personally accountable for.
He was a board member of the San Francisco Fed, which is another reason why the Fed should be held accountable for this.
Also, Mr. Becker should be investigated because he sold $3.6 million in stock several days before the bank collapsed.
Mr. Becker, if you told everybody to be calm, why'd you sell the stock?
Huh?
You tell everybody else to be calm and you sell your stock?
We got you figured out, pal.
Who did you contribute to?
I used to investigate people for stuff like that.
But you're in San Francisco where you got a family that became millionaires or billionaires on insider trading, the Pelosi family.
So I guess that's, you know, de rigueur.
Now, what was the real hedge of the SVB?
The real hedge of the SVB was to kiss up to the Biden administration.
They put $5 billion in sustainable finance and carbon neutral operations to support a healthier planet.
They could have used that $5 billion to save people.
Oh, and then they have all kinds of cross-functional working groups.
Sustainable finance groups that monitor progress of SVB Regarding its climate commitment and its operational climate group.
It had a greenhouse gas reduction initiative.
I don't see anything here about risk management.
Oh, by the way, they didn't have a risk manager for eight months, but they were worried about, oh, the diversity of their workforce, how much they were saving, the climate, were they involved too much in greenhouse gases?
Should they have, they wanted a looser risk limit.
Imagine if they had looser risk limits.
And then they had a big, Then they would have big critiques of, you know, not being sensitive enough to all of the issues that had everything to do with political philosophy and nothing to do with making money.
And then along comes the run on the bank.
The money's not there.
They got to go sell these bonds at an amount that bankrupts the bank.
And to show you how bad it is, I mean, the first option when this happens is you try to get another bank to buy this bank.
You try a private solution, not a government solution.
Nobody would buy this bank.
Nobody would buy this bank.
Because this is a creature of our green agenda.
This is a creature of the Bidenistas.
This is a creature of Marxism.
This is a monster, this bank.
It's a monster which, if allowed to continue and grow, will destroy our economy and render us a state economy.
Pocahontas is doing dances of glee tonight because this is a big step toward a government-controlled banking system where, when they want your money, they can just reach in and take it like they did in the Soviet Union and like they do in China.
Mark my words.
These people are communists.
They either know it or they don't, but they're acting exactly like they are and they're playing into the hands of China.
Now, here's the outrage.
The outrage is that by federal law, All of our deposits are insured, all of us, all of us Americans, theoretically we don't have specially privileged Americans, at least we didn't until the Bionistas came along, right?
Now we have two classes, like the Communist Party and the deplorables.
So our deposits are insured, you all know this, by about $250,000, up to $250,000.
So if you have $250,000 in a bank and the bank goes under, you get $250,000.
If you have more than that, you actually, there is a fund by which you will get some percentage.
It's going to depend on recoveries and everything else, but it's not guaranteed.
That's a federal law.
So Biden, in a stroke of a second, decided that this was a special exception.
That this bank failure created systemic risk to the entire system.
Nonsense!
17th largest bank going under?
Yeah, it was going to create systemic risk for 95% of the people who voted for him.
It wasn't going to create systemic risk for you.
This wasn't going to affect some other bank if they go under.
Some very rich people will not be quite as rich.
He comes along and insures everything.
And he uses a fund that's really a rainy day fund from the Fed, because the Fed's become totally politicized now.
And the way that fund works is that fund is contributed to by all the member banks.
And when it's depleted, the member banks put the money back in.
That means your bank.
That means this money is going to come from you.
Now you say, well, it's going to come from banks.
That's what all these lying Democrats are saying on television.
It's going to come from banks, banks, banks, banks.
Banks are you!
Banks don't have their own, they don't make their own money.
Biden makes his own money.
So maybe you're in a bank that isn't woke.
Maybe you're in a bank that's operated on sensible, intelligent, adult, long-term principles of investment should be made based on profit.
And we'll worry about political, social, and religious things separate from that.
But your bank is going to have to pay for this, even though they did not make the unwise decisions that this bank did.
They're gonna have to pay for this.
They're gonna have to pay for the fact that this bank put 57% of its assets in investments when most other banks only put 24% in investments, and would never have put them in investments that were this rigid if they weren't a bunch of politicians, wolfsters, and crooks.
Now, I can't go into as much detail, nor do I have the time right now, with Signature Bank, and I do have to make an admission that I was a customer of Signature Bank, still am actually in a small way, for quite some time.
I think all of them, maybe not all.
I had my corporate accounts at Signature Bank.
I had a very good relationship with Signature Bank.
For reasons that I became very, I really started to like this banker at another bank.
I'd rather not give away my bank if I don't have to.
I decided to move over some of my accounts about two months ago.
None of these reasons, I wish I was smart enough to see all this.
So most of my money is out of Signature Bank, and I think whatever we have in there is less than even the 250 that is legitimately insured, because I'd really feel bad if I got this special treatment, because I'm not a Democrat, so I'm not entitled to it.
And they probably would find out I was, and they'd probably exempt me from it.
So here's what I've got to tell you, and we'll go into more detail about this, but I just wanted to give you the overview to get beyond all the garbage, because this is what we try to do, right?
Isn't that what we try to do with Common Sense?
We try to get you the information that the liars don't give you, and they are growing and growing and growing.
And as I have warned you from the beginning of this podcast until now, we're not on the road to communism.
We're pretty much there.
They get control of the banks.
Do I have control of the schools and the media?
What are we going to have left?
This is an action that could also possibly be illegal.
The Congress sets the $250,000 limit on insurance.
Where does the president come along saying, I'm going to give you more?
Where does that authority come from?
The President of the United States is a limited officer.
He's limited to the powers given to him by the Constitution.
One of those powers is not to just give away money.
The money has to be legislated and authorized by the Congress.
So I don't know if people shouldn't sue and try to stop this.
This is an outrage because it is going to lead to more and more and more of this.
Signature Bank, we'll get to that in the next segment, hopefully.
Get into a little more detail on it.
I'm not sure.
I'm not sure that they I'm not sure it's the same reason, I'm pretty sure it isn't.
I do have to say, not facetiously, that if I knew that Bonnie Frank was on the board of that bank, I'd have taken my money out a long time ago.
I don't understand why anybody would put money into a bank with a guy who has absolutely no understanding
of the American economic system and seems to hate it.
I would have, if you told me he was on the board of a bank, I would have told you,
let's make a bet the bank is gonna go under.
And I would have won a little money today, but I don't bet.
In any event, I want you to understand that all these people stick together, these communists.
We have to stick together.
I mean that.
We have to start thinking about economics.
We have to take a look at banks.
Let's take a look and make sure that they're soundly invested in principles that are based on the best of American capitalism.
In other words, real simple, that I want my fiduciaries, the people who are handling my money, I want them to be making decisions based on what's the most profitable.
Then I'll make decisions on what social issues I want to support.
So you make the profit.
That's all you think about.
And then if I want to invest in something crazy like ending climate change, I'll invest in that.
Or if I want to invest in stopping abortion, I'll invest in stopping abortion.
But you don't get to decide that for me.
That's how we're becoming a state-dominated communist country.
I think you understand that.
So why don't you look for companies that kind of share our principles.
MyPillows.
Come on.
Let's buy something from, just as a token of our objection to this, let's buy something from Mike, huh?
Let's go to mypillows.com slash Rudy.
Let's get that new 2.0 pillow, improved pillow.
I got all the other ones.
I'm getting the new ones.
I probably have oversold the slippers because I love them.
I gave them out as Christmas gifts.
Everybody who got them is pleased as punch.
And then, you know, there's so much more in the catalog there, and nobody does more for us.
than my friend Mike.
So you go to mypillows.com, Rudy.
You'll help Mike, you'll help me, you'll help our cause.
And you know I devote all my time, just about, to fighting censorship, wokeness, and the communist oppression that they're bringing down on this country.
We're gonna beat them.
Because we're on the side of right.
And we're on the side that believes in God.
They're on the side that wants to do away with God, which they've effectively done in the public square.
That's another one that's going to take a lot of work.
But right now we're going to concentrate on the economic part.
We've got others to think about as well.
I want to conclude with just one quote.
From somebody very responsible for the condition of San Francisco, very responsible for the CEO's inside of trade, because she became a multimillionaire and billionaire inside of trading with her and her husband.
And it's a little bit off point, but you will see that it is very much on point.
And it's going to tie together two things.
It's going to tie together two things that It's going to tie together these two things right here.
Let me find her.
Where is she?
Where did she go?
Come back to me.
Come back to me.
Let's just take a short break.
We'll have to edit this.
I've got to find it.
I had it right here.
I thought I had it.
Is that today?
Oh, here it is. OK. OK, so let's conclude with a statement that will tie together two
things, because we got to you know, you got to be thinking about more than one thing at
time otherwise these people are going to ruin us.
I want you to listen to the queen of insider trading, who made a fortune by getting inside information, making sure that the laws didn't apply to her and her husband, And let's listen to her because she's going to tell you something about this crisis and about America that you've got to hear.
But here's the thing.
You can't just go after China with a cudgel.
You have to say we have to live on this planet together.
How can we work together to save the planet from climate change?
They're essential in that discussion.
How can we try to work together?
With them on issues where we can find common ground.
Oh, I think one more time.
But here's the thing.
You can't just go after China with a cudgel.
You have to say we have to live on this planet together.
How can we work together to save the planet from climate change?
They're essential in that discussion.
Okay, if they're essential in a discussion about our national security, if they're essential that we make compromises with a country that has announced that by 2048 it wants to be the leading country in the world, a country that has built a navy twice larger than ours, a country that has announced that it is building its army so it's impenetrable, A country that has created military issues and problems all throughout the region.
And a country that no doubt wants to supplant the United States as the leading country in the world.
A country that is the cause of millions of people who died from COVID and has been allowed to get away with it.
If we have to submit And compromise with them over climate change?
Or then don't we have to do the same with our banks and our woke policies?
Isn't climate change our main priority?
Not the safety, the security, and the economic well-being of America.
That's the reason for this collapse.
What you heard from Nancy Pelosi.
The Green Agenda has taken over like a monster.
And right behind it is communism and the redistribution of wealth.
So, we'll be back in a few days with more on this and the other things that are being hidden from you so they can destroy our country because we're going to stop them.
▲
Export Selection