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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.

Silicon Valley Bank Crash Explained - Why Some Hate Crybaby Capitalists

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