The People s Pundit, Richard Barris, joins us to talk about the latest in the Silicon Valley contagion, and what it means for the rest of the financial sector. We also hear from Andrew Yang, CEO of JP Morgan Chase, and Jack Dorsey, CEO at Goldman Sachs.
00:00:00.000Well, ladies and gentlemen, welcome aboard. Today's edition of Human Events Daily powered by Turning Point USA. Today is March 16th, 2023. Anno Dominate. 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.
00:00:27.520I want to take a second to remind you to sign up for the Poso Daily Brief. It is completely free. It'll be one email that's sent to you every day. You can stop the endless scrolling, trying to find out what's going on in your world. We will have this delivered directly to you totally for free. Go to humanevents.com slash Poso. Sign up today. It's called the Poso Daily Brief. Read what I read for show prep. You will not regret it. Humanevents.com slash Poso. Totally free. The Poso Daily Brief.
00:01:06.520Wow. How do I follow that? I am absolutely devastated, amazed, enthralled, totally unexpected, but most of all humbled.
00:01:17.040Humbled because there's so many amazing people here that I know have made such a difference between LGBTQIPSSAIL.
00:01:24.520So many identities. And I know that everyone here is making such a difference to make the world a more inclusive place.
00:01:33.020Thank 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.
00:01:41.080Before 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.
00:02:03.840I think that the banking sector worldwide is going to be under some pressure until there is some clarity with regards to liquidity concerns and in Europe with regards to both counterparty risk in these large banks and net interest rate margin.
00:02:20.700And 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.
00:02:30.460Bloomberg is reporting that First Republic Bank, ticker FRC, is said to weigh options, including a sale.
00:02:37.980Stocks up 10 percent after hours, but it fell big time again today.
00:02:41.380I don't I don't know if this is anybody a surprise to anybody, Andrew, but but you wonder, well, if it's true, will they find them?
00:02:47.220To 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.
00:03:01.120I'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 First First Republic Bank and some of the others that appear at least have there's even any uncertainty about them to get their houses in order and get their houses in order almost immediately.
00:03:21.100Look, 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.
00:03:47.580Well, 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 parrot, the people's pundit, excuse me, the people's parrot, that could be your new thing, man.
00:03:57.580People's pundit, Richard Barris, tell us what's actually going on right now on the street.
00:04:03.500Yeah, 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.
00:04:10.880You know, I listen with my job and I try to relay what I think most Americans are thinking.
00:04:16.140But, 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.
00:04:28.860And 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.
00:04:43.260It's the 16 largest, but the second biggest bank failure.
00:04:46.400And then two days later, the third biggest failure.
00:04:49.280Even during the Great Recession, we weren't seeing, you know, basically concerns that led to this.
00:05:31.020It really is a demon of our own design.
00:05:33.160But, you know, I think the woke stuff is one separate conversation that the media wants to kind of joke about.
00:05:38.680But then there's the other very serious conversation, which is that this came from inflation.
00:05:44.540If 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 equity.
00:05:54.580Equities markets when they're in volatile and other markets are volatile.
00:05:58.300Investors, institutions, they all run to the safety of treasuries.
00:06:02.220And with SVG and others, they could not do that because they bought them at a different value.
00:06:07.920And when they went to go sell them, they were greatly devalued because of inflation.
00:06:12.080And it just wasn't enough to meet their obligations when people were taking out withdrawals.
00:06:37.840And it's everybody wanting to, you know, see the world the way they want it to be instead of how it is.
00:06:43.780So, you know, in a nutshell, you know, where does this end?
00:06:48.880You know, I think, sadly, the media is probably going to try to just like, you know, hand and mouth this one where they're not going to want it.
00:06:57.900There was a fact check in The New York Times.
00:07:00.580There was a fact check in The New York Times today, which I wrote about on my locals page,
00:07:04.540because 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.
00:07:14.220But what they didn't want to do was talk about this greater issue of wokeism in corporate America.
00:07:19.840They simply wanted you to think in a very narrow lens about whether or not specific individual loans that SVB made to environmental projects, community project.
00:07:54.700They didn't make bad bets because of their ideology.
00:07:57.400And in the second sentence, immediately to follow, it was basically, I'm saying this and you should believe me.
00:08:04.980However, we just don't have any evidence of it yet.
00:08:07.960So the truth is, we don't know about all of their individual investments right now and how sound they were.
00:08:13.920What we know is that rumors kill on Wall Street, especially when they're true.
00:08:18.080And they had issues beneath the surface.
00:08:20.860And 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.
00:08:27.660And this will be a problem, not just for SVB, not just from Signature Bank.
00:08:32.500And as far as this issue of responsibility, Signature's a great example.
00:08:36.480Barney Frank sat on the board of directors for a reason.
00:08:39.620That is a signal to the rest of Wall Street.
00:08:42.140And that's a signal to other people that you want backing your business that we have Mr. Bailout on our board of directors.
00:08:49.220Don't worry if anything bad happens to us.
00:08:52.100Barney Frank is the guy who knows how to handle it.
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00:10:30.260They were going to fact check you to say that it's actually not wokeness.
00:10:33.740Fact check all of us that say it's not wokeness that played a role in the demise of SVB.
00:10:40.080And 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.
00:10:50.340Wokeness is, at its heart, a conspiracy theory.
00:10:54.260It is a conspiracy theory that disparate impact, disparate outcomes in society, in the world, are the result of racism, bigotry, and oppression.
00:11:07.480That these are the only factors and the most, what we call, of course, systemic factors that lead to disparate outcomes.
00:11:16.060And 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.
00:11:35.980Maybe depending on what weather it is out, that that's how they try to shape reality rather than understanding reality for what it is.
00:11:44.540But 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.
00:11:50.380Yeah, and they want you to think, and I started to touch on this, but let me explain this a little bit more detail.
00:11:54.980They want you to think that if you blame or you're one of the people like us who are criticizing wokeism or wokeness for these failures, what they want you to focus on is whether or not they issued bad loans to bad investments.
00:12:09.460Or, 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.
00:12:20.620But 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.
00:12:32.700But what he said is there's no evidence yet of any bad loans or any bad bets like that.
00:12:39.080He he made a definitive statement without really without with acknowledging that he doesn't know that yet.
00:12:45.100He 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.
00:12:58.500This 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.
00:13:10.020You 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.
00:13:19.980We don't have debt through the roof and it doesn't have inflation consequences and on and on and on.
00:13:26.300And what I'm saying is you're 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.
00:13:37.160Like 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.
00:13:45.240The core is they trade box checking for competence. You know, they trade these these fantasies for reality.
00:13:54.420And this is obviously going to have a consequence. It's the same reason why Congress thinks they can continue to spend.
00:14:01.460You 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.
00:14:08.480They live in a fantasy world. And then they created these conditions for these failures.
00:14:12.880But what I want to ask you as well, because I caught your show on on Monday, you were on fire.
00:14:19.560I actually thought that you were going to grab a guitar and start stabbing those amplifiers behind you.
00:14:24.520You 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.
00:14:34.060We 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.
00:14:42.200No, 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.
00:14:55.620And these financial instruments, the people, the American people, by the way, are always going to have to foot the bill on this.
00:15:01.020But 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.
00:15:07.420Jack, they're taking away consequences from the system.
00:15:10.720Consequences, when we lose, right, when we make a bad bet or we lose or we fail at something, hopefully, you know, we looked at, 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.
00:15:25.680When you take away those consequences, you're taking away incentive to do the right thing.
00:15:30.660You're taking away your fiduciary responsibility to the shareholders that you have in that company.
00:15:36.440I mean, you're basically telling people they can continue to make the same mistake over and over again because it doesn't matter.
00:15:42.840We're we're forever going to protect you. But here's the here's the real kicker with that.
00:15:47.220That'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.
00:15:55.480The raising of the FDIC insurance from one hundred thousand to two hundred and fifty because of the Great Recession was supposed to protect the little guy, not Mitt Romney's friends.
00:16:04.840And what they're doing are taking the premiums.
00:16:06.760Essentially, what 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?
00:16:15.600That'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.
00:16:23.700And again, what happens with this? We just see the reshuffling of the deck.
00:16:28.340Barney Frank never faced any responsibility for what he did in his role in the financial crisis in 07 and 08.
00:16:35.780Well, guess where he was when all of this happened? Signature bank.
00:16:39.100And again, one more time, folks, he's on the board, not because he's an expert.
00:16:43.300He's on the board as a signal to other people that we have Mr. Bailout.
00:16:47.400He has the connections. He has the relationships.
00:16:50.060We're a safe bet because we got Barney Frank and he's going to get us bailed out if we need it.
00:16:54.660That's what they're telling. And everyone gets that bailout, Jack, except for you and I and the rest of middle America.
00:17:00.900Well, and it's it's the perfect thing. And then, of course, the politicians will come out and you hear this from the right.
00:17:05.360We 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.
00:17:14.220We'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.
00:17:25.260Or you say, hey, I've got this crippling debt from from this area, that area.
00:17:30.000They say, oh, no, you need to learn fiscal responsibility.
00:17:32.260Well, 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?
00:17:41.580Stay right tuned. Human Events Daily. Come back.
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00:19:16.840We've got Richard Barris from the People's Fund.
00:19:19.180Richard, why is it that conservatives and some of these establishment conservative types will sit up there and say it's OK for our friends to get a bailout, but not you, not the American people, not the families, not the homeowners, not you guys.
00:19:36.280You guys are all going to go underwater because, you know, by the way, this is coming to the housing market next.
00:19:40.480I'm sorry, but it's just very obvious that the housing market after Silicon Valley, look, when you have an interest rate hike, you can see this throughout history, zero hedge.
00:19:48.580And everyone said this is not, you know, like a Jack Posobiec is.
00:20:16.640So, yeah, Silicon Valley is going to go first.
00:20:18.800But, you know, what's next is housing.
00:20:20.640But but, Rich, what I want to ask you, because you do so much work in 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?
00:20:36.680But then they turn around and told, no, but you have to be fiscally responsible.
00:21:00.000You 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.
00:21:06.060But 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?
00:21:14.560You know, like, who are you when you have to walk in my shoes?
00:21:18.320Then you can you can lecture me over it.
00:21:21.080But, you know, the bottom line is it just makes them look inauthentic.
00:21:25.040You know, they're just politicians have an authenticity problem with the American people.
00:21:29.260Very 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.
00:21:40.140You know, we're getting into the silly season.
00:21:42.080And unfortunately, we're just going to see a lot of shilling people are, you know, that will tell you two years ago, four years ago, 10 years ago.
00:21:49.060You know, that TARP was the worst thing, you know, the domestically the Congress ever did.
00:21:54.480And yet, you know, simply because their preferred candidate may benefit from it, they have a different point of view.
00:22:04.120When it comes to the economy, we have to be much more consistent than that.
00:22:07.700And Americans, I think you're right, because.
00:22:09.900If we keep doing this and we keep even the word TARP, right, temporary assistance, temporary, it's temporary, it's all temporary, it's always temporary.
00:22:18.660Yeah, but it's if it's temporary every time, then that's not temporary, that's permanent.
00:22:25.520Kevin O'Leary from from Shark Tank, of all places, he came out and he said, Biden just nationalized the banking system.
00:22:30.780He just came out and essentially said that every deposit unlimited is protected by the federal government.
00:22:36.700Any bank goes under, it's not going to go under.
00:22:38.680They might ship the, you know, they might ship the decks around.
00:22:41.340But now suddenly everything's out there.
00:22:42.880What 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?
00:22:51.660At some point, are we ever going to actually pump the brakes on this?
00:22:56.480Yeah, that's like Robert Higgs, you know, the crisis and Leviathan.
00:23:03.340And the goal is really, of course, it's not.
00:23:05.860They just they sell it like that to you.
00:23:08.680And then at the end of the day, I think Kevin's right.
00:23:12.020This was, you know, always the goal was the goal in in 08 through 2010.
00:23:18.140No, I just got, you know, somebody pumped the brakes for for a decade or so.
00:23:22.320You can't move that quick with that kind of change.
00:23:24.600Jack, you know that you got to inch into it.
00:23:26.840There's a major problem with that, though.
00:23:28.900There's just not enough money for that.
00:23:30.380There isn't if one 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.
00:23:41.640But because we're in such a terrible position, again, people really need to understand the corner that the Fed has packed themselves in here.
00:23:49.700So 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.
00:23:59.160And, 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.
00:24:06.680Continue 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.
00:24:13.720You'll need to bail out, which they will.
00:24:16.880But the problem with that is Americans are used to a certain lifestyle, so they can only keep that up for so long.
00:24:24.260Jack, they're not going to pay, you know, $20 for a carton of eggs forever without serious problems or without serious grievances.
00:25:25.040We saw it again in the Cold War a number of times where it almost flared up.
00:25:28.900And now we see what's going on with Ukraine, with China.
00:25:31.600I 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.
00:25:41.680But actually, it's something we're not going to be able to afford it.
00:25:44.720And it's going to tear this country apart.
00:25:46.320Rich, where can people go to follow you, to pay attention to your work and watch your show?
00:25:49.380Yeah, the best place to go, Jack, is Locals, peoplespundent.locals.com.
00:25:55.080But we're peoplespundent on YouTube, or peoplespundent on Rumble, and peoplespundent on Getter.
00:26:00.580But again, the central hub is Locals, peoplespundent.locals.com.
00:26:05.780The article I just put up about this and then also the polling that we do, you know, everyone can follow along and learn all about it on Locals.