as seen on tv
Senator
Photo above - 2008 "crisis" - ordinary people offer their suggestions
Not shown - 2023 SVB failure - Billionaires again plea for rescue.
Who is “Bill Ackman” and why is he IMMEDIATELY demanding that President Biden “rescue” Silicon Valley Bank - and his bro's?
In yesterday's episode of “Governments do the darndest things”, this writer pointed out that bank officials closed SVB at the end of the day. Just a couple of hours after telling millionaire customers to disband peacefully and stop expecting their money back.
In a “normal bank”, our deposits are federally insured up to $250,000. This crowd of unruly Wall Street Traders, Tech execs, and hedge fund operators were loaded to the gills with “collectors edition” SVB certificates of deposit in round denominations like $10 million. Which means these sharpies now lose $9,750,000 on their first $10 million CD. And the whole ball of wax on any other CDs they snapped up in a moment of greed.
That is, unless the federal government - with OUR dollars (yours and mine) does a 100% bailout and gives those millionaires back every dime. Even though that's NOT how federal bank rules work.
These poor millionaires are FOB – friends of Bill Ackman. He's got a personal fortune of around $4 billion. And, less than a day after SVB goes to its grave, Bill appears on TV warning that “we're all gonna die” if his BFF's are not bailed out.
President Biden's handlers haven't caught up with breaking news yet. They still are focused on Friday's “message of the day”. Something about the white house needs more time to evaluate when (if ever) Biden might "declassify" the Covid 19 stuff. (I will refrain from pointing out that Octo Joe is already up to eyeballs in classified docs controversies, okay?)
To be fair, I don't think Billionaire Bill actually got Biden on the phone to take his call. Hence, Mr. Ackman immediately pivots to appear on TV. He tries to pressure the president with public opinion. “We're all gonna die. Or at least the millionaires. Because the stock market is likely to go down. Billions needed to bail us all out. Thank you in advance, Mr. President, for doing the right thing.”
Enter, stage left: Janet Yellen, US Secretary of the Treasury. Her immediate supervisor is . .. President Biden!! Now JANET also goes on TV, and tells Mr. Ackerman: “Probably not”. (the SVB bailout).
I'd be perfectly content if this is the way it plays out. I'm sick and tired of government officials spewing pandemic handouts; doubling the national debt; rampant inflation, then soaring interest rates while trying to put out the inflation fire. I certainly DONT want Mrs. Yellen to spend hundreds of billions MORE of our money by bailing out the “billionaire boys club crypto/risky loan bank”.
But we all know this ISN'T how this story will end. Let's take a look back at how the 2008 thing played out.
Bank failures. Gummint officials and congress assuring us no bailouts would be needed. THEN, the 180 degree U-turn. Cash showered on Fannie Mae. Freddie Mac. Bear Stearns. AIG. General Motors. And of course all the usual suspects among the major banks and wall street brokerages.
We were told this golden shower HAD to happen. In order to save “our” 401K retirement accounts, our homes, our jobs . . .
This is exactly what Bill Ackman and his billionaire buddies are claiming this time too. We're all gonna die unless the federal government sets huge piles of cash on fire and gives them back all the money they deposited at SVB.
Okay. Here's where I take questions from the peanut gallery. You, in the back. Jumping up and down excitedly. I know what you're going to say: The 2008 bailouts “worked”.
I say that's bullshit. The stock market STILL crashed 40% - the most since the great depression. Millions and millions of people were evicted from their homes. Housing construction fell off a cliff. About the only jobs definitely saved were UAW union workers at GM, who were able to keep churning out Silverado pickups. While GM's execs brought us the hybrid “chevy volt” (which has been cancelled due to lack of interest). And the Chevy electric “bolt” which had a 100% recall due to spontaneous battery combustion. Experts agree – the “bolt” is the worst electric car you can buy. Nothing else comes close. Well, maybe GM's new electric "hummer", the world's largest and most ridiculous electric sport utility vehicle. Did you see the promo video of it towing 10 railroad cars? How can you possibly go to the mall without this???
Whatever Biden and Yellen do over the next few weeks isn't going to make much difference. Banks will continue to fail, if they have risky loans, or crypto exposure, or are funded with insanely expensive millionaire CD's. Stock indexes will go lower. Some people are going to lose their jobs. Some of them will also lose their homes.
There isn't enough money on planet earth to make sure nobody gets hurt. And I certainly don't want wall street traders and Silicon Valley wise guys at the front of the bailout line. Do you?
Congress, the regulatory agencies, and the white house don't appear to understand this.
Or maybe they actually do. Bailouts are ALWAYS an attempt to hold onto political power, aren't they?
Some people always “die” (financially). And if that HAS to happen, I'm just hoping it's the billionaires' boys club, not you and me.
Fun fact - Barrons, Forbes, MSN, CNBC, Yahoo Finance, Jim Cramer, and the Motley Fool all declared - within the past 2 weeks - that we are now in a "bull market". Great minds think alike, no?
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