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Yellen: No Bailout for Silicon Valley Bank - The Monday AM Quickie 3/13/23

By Corey Pein —

I remember saying here some time ago that Everything Everywhere All At Once was the kind of movie that always gets snubbed come Oscars time, so I'm happy to be wrong. - Corey

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THE BIG NEWS

Yellen Says Failed Silicon Valley Bank Won't Get a Bailout

It remains unclear exactly what caused the sudden collapse late last week of Silicon Valley Bank, a Santa Clara, California institution that catered to tech investors, startups, and, as it happens, thousands of wineries. House Republicans and Fox News would have you believe it was because "they were one of the most woke banks." That would certainly come as a surprise to Silicon Valley Bank's Washington, D.C., lobbyists; as the Intercept reports, two of them "previously served as senior staffers for House Speaker Kevin McCarthy, who himself pushed for the repeal of significant pieces of the landmark Wall Street reform legislation known as Dodd-Frank." Politico reports that whatever the facts may be, battle "lines are already being drawn over what caused SVB's stunning demise.

Progressives and some investors are blaming the Federal Reserve for its rapid interest rate hikes, which have burdened many lenders. Democrats say Republican-led deregulation of banks removed critical safeguards. Others say regulators failed to spot red flags in the bank’s investment portfolio and customer base. Many blame SVB itself. ...
The current evidence suggests the bank would not have failed if the depositors hadn't panicked."

Treasury Secretary Janet L. Yellen yesterday addressed fears of contagion and further bank runs, saying that the banking system is "safe and well capitalized" -- unlike in the financial crisis that preceded the Great Recession of 2008. "Let me be clear that during the financial crisis, there were investors and owners of systemic large banks that were bailed out," Yellen said, "and the reforms that have been put in place means we are not going to do that again."

Yellen's comments will come as a disappointment to the companies and investors who had money in the bank and have been asking for a full bailout, above the $250,000 depositors are guaranteed by the Federal Deposit Insurance corporation, which took over Silicon Valley Bank on Friday. Ironically, the failure of the tech industry's favorite bank actually underscored the relative merits of the traditional regulated financial system compared to Silicon Valley's preferred alternative: cryptocurrencies. As one investor told the New York Times: "If this was an unregulated crypto bank, then the money could just disappear."

Biden Tacks Right, Frustrating Democratic Base

The Washington Post reports that Congressional progressives are concerned about recent White House personnel changes and other signs President Joe Biden is moving rightward in preparation for his 2024 reelection campaign. Police reform and immigration are two areas where liberal and left-leaning Democrats are increasingly frustrated with the Biden administration's direction. "Nobody on the Republican side is ever going to say, 'Thank you, Joe Biden for being so tough on immigration or crime or anything else,'" Congressional Progressive Caucus Chair Pramila Jayapal says. "So that is not the right approach." In related news, Politico reports that Biden is likely to approve the massive Willow oil drilling project in Alaska over the objections of environmental groups. One Sunrise Movement organizer calls the news "a huge disappointment" that "makes it even harder for us to convince young people that they need to vote."

Saudi-Iran Deal Could Bring Welcome End to Yemen War

On Friday, Saudi Arabia and Iran reestablished diplomatic contact after a seven-year freeze, in what the Associated Press calls a "major diplomatic breakthrough" mediated by China. Iran and Saudi Arabia have been backing different side's in Yemen's civil war, and Iran's United Nations mission said yesterday that the diplomatic thaw will help that war come to an end. But not everyone is pleased. Per the New York Times, some "Washington-based policy experts framed the Chinese involvement as a challenge to waning American dominance in the Middle East." Leave it to the Beltway foreign policy Blob to express concern that peace might break out in Middle East.

QUICKEST QUICKIES

  • Lula Seeks to Ensure Civilian Control of Military Leftist Brazilian President Luiz Inácio Lula da Silva has replaced many officers appointed by his fascist predecessor, Jair Bolsonaro, with civilians, and his party is seeking constitutional changes to limit the military's influence. via the Associated Press.
  • Texas Man Sues Ex-Wife's Friends for Supplying Her Abortion Pills Marcus Silva's wrongful death and conspiracy lawsuit uses text messages between his wife and three of her friends as evidence they violated the state's abortion ban. via NBC News.
  • Yanis Varoufakis Attacked By Suspected 'Thugs for Hire' The left-wing former Greek finance minister had his nose broken in a "brazen fascist attack" while eating dinner in central Athens. via Politico.
  • BBC Soccer Presenter Puts Focus on Cruel Tory Asylum Policies The British state broadcaster was forced to cancel weekend sports programming after presenters and players rallied to support "Match of the Day" host Gary Lineker, who was suspended after comparing the government to Nazi Germany over its new asylum policies. via the Washington Post and the AP.

SOME NUMBER

$161 billion

That's how much profit Saudi Aramco, the state-owned oil company, recorded last year, a 46 percent increase over the preceding year. According to the Guardian, it's the largest profit ever reported by an oil company.

ON THE SHOW TODAY

3/13: Sam and Emma host Will Sommer, politics reporter for the Daily Beast, to discuss his recent book Trust The Plan: The Rise of QAnon and the Conspiracy That Unhinged America.

DON'T MISS MR CLIPS

Nikki Haley Nukes Her Own Presidential Campaign on Fox

"We have to be realistic" apparently means pandering to GOP donors over voters.

France RISES UP Against Macron's Pension Austerity

The retirement age increase passed the French senate despite massive protests.

PARTING WORDS

"Once a government, using the tools of democracy, in order to destroy it from within, and ends up acting in a blatantly illegitimate matter, it is not just the right of citizens, it is, in my judgment, the obligation of citizens to turn unfortunately toward civil disobedience."

-- Former Israeli prime minister Ehud Barak speaking to CNN about how people in that country should respond to Prime Minister Benjamin Netanyahu's moves to establish "a de-facto dictatorship." Half a million Israelis hit the streets yesterday.

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