Valuetainment - March 23, 2023


Silicon Valley Bank Crash Explained - Why Some Hate Crybaby Capitalists

Topics
crybaby capitalists
Hosted by
Patrick Bet-David
Mentioned
Bernie Sanders Jerome Powell O.J. Simpson Jamie Dimon
My Kids Made Their First $20 - Lesson For Every Entrepreneur A Father Son Conflict To Be Aware Of

Episode Stats


Length

6 minutes

Words per minute

246.25

Word count

1,643

Sentence count

144

Harmful content

Toxicity

7

sentences flagged


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

Silicon Valley Bank, the 16th biggest bank in the US, goes under and people are making a run on the bank. Some are calling for the FDIC to step in and bail them out. Others are asking for the government to step up and take care of the depositors. Is this like AIG?

Transcript

Transcript generated with Whisper (turbo).
Toxicity classifications generated with s-nlp/roberta_toxicity_classifier .
Topics generated with Qwen2.5-3B-Instruct.
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.220 Silicon Valley Bank, 16 biggest bank in America with over $200 billion in assets, goes belly
00:00:04.880 up with people making a run on the bank.
00:00:06.960 Everybody's panicking.
00:00:07.760 What's going to happen if this goes on to other banks?
00:00:09.680 One side of the aisle is saying, we got to bail them out.
00:00:11.840 We can't let them go now.
00:00:12.820 These are billionaires.
00:00:13.520 Oh yeah, you want to have capitalism for the rest of us, but socialism for the rich.
00:00:16.940 This is exactly why Bernie Sanders was right.
00:00:19.060 They're doing the same thing they did to AIG.
00:00:20.720 No, it's very different.
00:00:21.580 How is it different?
00:00:22.220 Lots of questions.
00:00:23.160 We're going to cover all of that in today's show.
00:00:30.000 So if you get value from the video, give it a thumbs up and subscribe to the channel.
00:00:36.540 To fully understand what's going on with this, you have to put a different lens on to understand
00:00:39.680 different people's perspective.
00:00:40.840 Meaning, when Benghazi happened, most people have forgotten about Benghazi.
00:00:44.080 The only people that are still thinking about Benghazi on a regular basis are those who lost
00:00:48.260 a family member.
00:00:49.100 One of the four family members are thinking about it till today.
00:00:51.260 Why?
00:00:51.980 Because it was a direct impact of pain to you.
00:00:55.540 Silicon Valley Bank, there's different people there.
00:00:57.280 Those who work for Silicon Valley as an employee, well, they're going to take a hit.
00:01:01.220 Those who own shares in Silicon Valley Bank, they were owners.
00:01:04.520 They're going to take a hit.
00:01:05.280 There are those that have $250,000 or less with Silicon Valley Bank.
00:01:08.820 They'll be protected by FDIC.
00:01:10.000 But then there's those that have over $250,000.
00:01:12.560 They're not protected by the FDIC.
00:01:14.020 And then outside of that, you have those who have their business accounts with them that
00:01:17.180 are trying to make payroll.
00:01:18.600 They don't know how to make payroll.
00:01:20.120 Next thing you know, all these employees at these startups are sitting there saying, how am I
00:01:22.900 going to pay my salary?
00:01:23.860 And last but not least, they're outsiders.
00:01:25.220 Me and you, you ain't got shares.
00:01:27.340 I ain't got shares.
00:01:27.920 If you don't, we're kind of sitting here saying, they should do this and they should do that.
00:01:31.180 But you got to look at it from different people's lens.
00:01:32.740 Now, having said that, let's get right into it.
00:01:34.140 So what is the biggest fear of people saying, we got to go bail them out?
00:01:37.020 And what is the people on this side saying, this is just like AIG?
00:01:39.640 Here's the difference.
00:01:40.300 In 2008, the government bailed out the company AIG.
00:01:45.220 In 2023, FDIC is bailing out.
00:01:48.840 They're calling it a backstop.
00:01:50.080 They're bailing out the depositors, not the company.
00:01:53.180 The company's being bought out, different divisions of it, different people are buying.
00:01:56.020 The UK division, I think, was bought by HSBC for a pound, one pound, not a billion pounds,
00:02:00.620 one pound.
00:02:01.280 Apollo's buying the loan debt.
00:02:02.480 This guy's buying this, that guy's buying this.
00:02:04.060 And at the same time, they're doing that.
00:02:05.240 So the bailout isn't for the company to still be around because the CEO, the CFO, those guys
00:02:10.900 mismanaged the bank.
00:02:12.220 As a matter of fact, the CEO, he goes to Europe to go get a trip for Bank of the Year Award or
00:02:16.660 something like that, while Forbes Magazine calls them one of the best banks of the year
00:02:20.980 and they retweet it five days before they go belly up.
00:02:23.700 Then he comes back, realizes what's going on, takes three and a half million dollars or
00:02:27.120 so of his stocks and sells it.
00:02:29.040 Then the CMO sells it.
00:02:30.240 All the CFO sells it.
00:02:31.480 They're selling shares knowing this company is going to go bankrupt.
00:02:33.820 And they're giving bonuses out 12 days before the company going bankrupt.
00:02:37.180 They know this is coming.
00:02:38.180 That's called front running.
00:02:39.220 The Fed's going to go do something about that.
00:02:40.720 The government's going to do something about that.
00:02:42.200 They should be held accountable.
00:02:43.680 But the depositors know.
00:02:45.340 Now, there's some people that say, taxpayers are not going to pay anything for that.
00:02:48.300 You're going to be paying for something for that.
00:02:50.220 The FDIC doesn't print money to pay things out.
00:02:52.420 And if they do, you and I are still paying for it.
00:02:54.320 So no, that is coming from us to pay for that.
00:02:56.920 The problem is the following.
00:02:58.460 This is the part that everybody has to be thinking about.
00:03:00.060 The FDIC today, if you looked at their balance sheet, they have roughly $125 billion
00:03:05.060 in their account.
00:03:06.680 $125 billion.
00:03:07.700 Do you know how much money they're trying to insure with that $125 billion?
00:03:10.800 You ready?
00:03:11.120 $9.9 trillion of deposits.
00:03:14.420 Did you hear me?
00:03:15.080 They got $125 billion to protect $9.9 trillion of deposits.
00:03:21.360 So what's the fear?
00:03:22.320 If FDIC goes and says, we're going to go above the usual $250 billion and we're going to build
00:03:27.460 these other depositors out and we're going to take care of them, what becomes a problem?
00:03:31.720 If all of a sudden Jerome Powell increases rates and other banks can't make their payments
00:03:36.260 on their bond and there's a run on different banks, what happens all of a sudden?
00:03:40.340 The 27 regional banks that we have, now it's 26 because one of them is SV Bank.
00:03:44.600 The 2,250 community banks that we have in cities of $50,000 or less, everybody's going
00:03:49.400 to start panicking saying, hey babe, we got to take the money out.
00:03:51.780 We got to go to a big bank.
00:03:52.780 Let's go to Chase.
00:03:53.440 As a matter of fact, just in the last week, Jamie Dimon, CEO of Chase, you know what they
00:03:56.220 did?
00:03:56.420 They got nearly $2 billion of clients that were with Silicon Valley Bank.
00:04:00.000 Why?
00:04:00.200 Because their brokers kept calling, calling, calling.
00:04:01.840 That's capitalism.
00:04:02.880 Competition.
00:04:03.160 That's when the fear becomes from having all these different banks to go into five, then
00:04:06.280 you and I don't have a lot of competition, we lose.
00:04:08.180 That's the people who are saying, let's bail out the depositors.
00:04:11.740 But if they do it once, maybe twice, maybe three times, they can't do it if this happens
00:04:15.140 to five, 10 other banks.
00:04:16.200 Then they have to go back to printing of money again, which is going back to the mistakes
00:04:20.400 we made in 08, which is quantitative easing.
00:04:22.300 That's what they're trying to prevent from happening.
00:04:24.160 Having said that, where does capitalism get a black eye?
00:04:26.460 A couple of different places.
00:04:27.340 Crony capitalism, which you need politicians to help you.
00:04:29.580 There's a monopoly where you control a production of a product, monopsony, which is when you
00:04:34.680 are controlling the buyer of a product.
00:04:36.720 You're like the only guy that buys a product and you have control over it.
00:04:39.940 I'm the only guy that buys it.
00:04:40.900 You can't get the product.
00:04:41.640 So you can bully all the other people that want to get it.
00:04:43.500 That's a form of a monopoly.
00:04:44.680 Then sometimes the inherited wealth folks are getting, oh, I can't believe you got your
00:04:47.900 money.
00:04:48.120 You didn't have to earn 40.
00:04:48.920 You don't have to do this.
00:04:49.600 It doesn't matter.
00:04:50.240 Their parents worked hard and they want to pass it down to their kids.
00:04:52.680 You ought to do the same to pass the money to your kids as well.
00:04:55.040 There's nothing wrong with that.
00:04:56.120 But there's one part that deserves criticism.
00:04:59.660 And here's where it is.
00:05:00.800 The fourth foundation of capitalism.
00:05:02.760 This is what it is.
00:05:03.600 It's a freedom to buy, freedom to sell, freedom to try and freedom to fail.
00:05:07.800 There are crybaby capitalists who want to take the risk to make a lot of money, but they
00:05:13.200 don't want to fail.
00:05:14.020 You can't do that.
00:05:14.800 So you want to put all your money into this investment or a opportunity and you want it
00:05:19.100 to go to whatever the amount is. 0.96
00:05:20.620 But if all of a sudden, God forbid, shit hits the fan, you want to make sure the government 0.99
00:05:23.820 comes and bells you out. 0.99
00:05:24.660 Now, those capitalists, I call the crybaby capitalists, those are the ones that make
00:05:29.080 the other capitalists who do it the right way get criticism.
00:05:32.820 FYI, this isn't only in a place like this.
00:05:35.040 This happens to a lot of different people.
00:05:36.580 The same way O.J. Simpson got a lot of hate when people said, we all know this guy's guilty.
00:05:40.480 A lot of people in America think he was guilty.
00:05:42.280 How the hell does this happen?
00:05:43.260 It's just because he's a celebrity.
00:05:44.680 Some people were right.
00:05:45.640 It happened because he was a celebrity.
00:05:47.000 Some people may say he could afford better attorneys.
00:05:49.060 Some people say, if it was an average person who did this, you know he'd be going to jail
00:05:52.020 for a life.
00:05:52.480 How can this happen to O.J.?
00:05:53.480 These are all valid questions to be asking.
00:05:56.640 But when an event like this happens with Silicon Valley Bank, rather than jumping out there 0.99
00:06:00.920 and saying, let's do another Occupy Wall Street, capitalists suck, billionaires suck, da-da-da-da-da-da-da. 1.00
00:06:05.580 For every one stupid thing a capitalist does, they've done 99 other things, such as the 1.00
00:06:11.040 platform you're holding your hand in right now to watch this video, your phone, and the 0.99
00:06:14.460 service, and the company with the phone, and all the other stuff, all of that was started
00:06:17.540 by a capitalist.
00:06:18.340 All the equipment here was started by a capitalist.
00:06:20.780 There's a lot of good capitalists too.
00:06:22.560 But every once in a while, they do horrible things, just like everybody else.
00:06:25.460 That doesn't mean we should judge them as all the other 99% of capitalists that do the
00:06:29.800 right thing.
00:06:30.140 If you got value from this video, give it a thumbs up and subscribe to the channel.
00:06:33.240 I also did a video, I think five years ago, titled 10 Reasons Why I Love Capitalism.
00:06:36.820 If you've never seen it, click here to watch it.
00:06:39.020 Take care, everybody.
00:06:39.820 Bye-bye, bye-bye.