March 15, 2023 • 36 mins
Are we heading for a major economic catastrophe? Financier Carl Icahn: The system is breaking down, major problems in economy, inflation has been the downfall of great empires. Elizabeth Warren blames Trump deregulation for SVB failure. Biden says he's determined to ban assault weapons -- and you can't sue the gun industry, which is a lie. Enforcing the law at the southern border; do they really want to? Buck answers a VIP email question.
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Episode Transcript
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Speaker 1 (00:00):
Welcome to today's edition of The Clay Travis and Buck
Sexton Show podcast. Welcome to the Wednesday edition of The
Clay Travis and Buck Sexton Show. This is Buck solo
today because our main man, Clay Travis is on a
wonderful vacation in Italy with the family, so I was
(00:20):
having a good time. We got a lot of news
to get to my friends. The Dow took a five
hundred point die today, as the banks are looking shaky
at that. I gotta tell you, I don't think we
are we are out of the woods. I don't even
think we're near the beginning of the end. As Churchill said,
(00:40):
we may be near the end of the beginning. We've
got Biden doing what exactly with all this in the background.
A Russian fighter jet collided yesterday with the US drone
over the Black Sea. A lot of people talking about
how we're gonna confront Russia over this. I don't know.
(01:01):
We're given a hundred billion dollars a year to Russia's
enemy in a war. I mean, I think I think
that's enough of a confrontation. I don't think we could
do much over the drone. We shall discuss that though
a conundrum for Wellesley College. You know, Welles leads the
alma mater of Hillary Clinton, among others. Wellesley College trying
(01:24):
to figure out the critical question Matt Walsh course asked
it so eloquently and importantly in his documentary What is
a Woman? Wellesley does not really have a very good
answer right now because the students want transwomen as in
men to be allowed into Wellesley. So that's causing some issues.
(01:47):
We will certainly discuss that a high school in Vermont,
speaking of gender issues, didn't want it's girls to compete
against a team that had a male, a boy on
the team, and now they're banned from the entire athletic
conference in Vermont. We'll discuss that. And something's come out
(02:08):
about what's going on with fentonel and Mexican pharmacies that
we definitely need to speak about. We've got our friends
Stephen Miller, formerly senior advising the Trump White House, really
the architect of Trump border policy. He'll be with us
at one Eastern today, so or I should Yes, that's right,
So that's in about an hour or so. He'll be
(02:29):
with us. So we got a lot to get into.
But I have to start with where are we on
the meltdown of the economy? Is it going to happen
or not? I hope it does not, and that somehow
we're able to watch and applaud as the people in
charge are raising rates just well enough and fast enough
(02:53):
to tame inflation without sending us into a recession? Is
it even really possible? I guess we're gonna find out. Meanwhile,
though Daily Mail is this headline s ANDP cuts First
Republic to junk status, sends the New York Stock Exchange
into a frenzy. America's big four banks are dropping a
(03:18):
little bit in share price. Wells Fargo down four point
eight percent, City Group down four point nine percent. Credit
Suisse is looking like it's in some real trouble thirty
percent massive, massive Swiss bank is looking rough right now,
thirty percent down, all in the wake of the SVB collapse.
(03:41):
So has this all been handled? No? Do we know
what's going to happen? No, we do not. But there
are some people out there who tend to be tend
to be very prescient and have been right when it
counts about the economy because they have to make money,
(04:02):
because they have shareholders or investors in the case of
your hedge funds, who expect there to be the upside
of being right, not the downside of oh I almost
got it right and then losing people money. Carl Icon,
he is a very famous financial figure. He's out there
(04:22):
telling everybody he's a he's a financier. Man. That would
be cool. Now, that's like the next level. You know,
financier is like being called the mogul. You know, you're
you're a Hollywood mogul. You're a big deal if you're
a financier, because it's French, it's fancy, you know. Carl
Icon says, the system is breaking down and we got
a big problem. Play three. A system is breaking down,
(04:45):
and that we absolutely have a major problem in our
economy today. And I'm not going to a pride on
whether or not jabelle out of back or something like that.
But if you can't have the country feeling it doesn't matter.
If they say it doesn't matter, because I could spend
a lot of the money to want you could do
(05:05):
whatever you want because the governmental bail. Yeah, so we
got we got a couple of problems here that have
not been solved by the actions on the banks. And
again I'm focusing in on this. There's other things we're
gonna get to today. We're going to make sure that
every day you're here, you're getting all the most important news,
of course, but this affects everything else. I mean, this
(05:27):
is the one issue right now that is entirely short
of nuclear war breaking out with Russia. This is the
thing that you can avoid, no matter who you are,
where you are in this country, really anywhere in the world,
the possibility of a major catastrophe in the US economy. Now,
I don't think it would be the end of the
(05:49):
US economy. I'm not a catastrophist overall, But what does
it look like if you see a who knows, Actually,
I was gonna say, if you were to see a
massive dropping the stock market? Or are we just going
to see inflation continue until we get to a point
of real stagflation where you have rising inflation. We've had
(06:10):
this before, right, rising inflation and low or negative GDP
growth and high unemployment. Stagflation is ugly. Stagflation grinds away
at the day to day sense you have that you
can get ahead and things are going to get better.
(06:33):
It almost forces the entirety of of everybody involved in
the US economy into a perpetual bad mood, and even
some despondency people are going to be really concerned. Stagflation
stinks persistently high inflation with high unemployment and a stagnant
demand for within a country's economy. So low growth, low product,
(07:00):
high inflation. And what you see here is how can
we try to avoid As I've said, the bill coming
to let's just do a quick recap. And there were people,
there were some of us who were warning about this
all along. This ties directly to our COVID response, directly
(07:21):
to the Biden administrations reckless spending as well. I know
the COVID response started under Trump. There was way too
much money spent. We should never have locked down the
whole P p P program. Think about it. If you
could just pay workers to stay home, send them money,
with no attendant productivity, not making the products, not providing
(07:41):
the services, why wouldn't we just do that all the time.
Obviously there as calls and effect here. You know, you
squeeze the balloon at one side and the air gets
pushed to another. Something happened when we were doing this,
and it took a while for the bill to come do.
But that's where we are right now. And you have
(08:02):
these banks and the whole banking system based on lending
and being able to get back a percentage that has effectively,
by the very low interest rates pushed by the FED,
that has been minimized at best. So what have they
been doing? Where have they been going? And where are
we going to look next to find that there's some
(08:22):
massive unforeseen liability that creates a cascading financial hole that
brings down a whole lot of other stuff around it.
Inflation itself, by the way, is enough to do tremendous damage.
It has been doing damage. We're all paying right now
the dollars that you have worked for that have been
(08:43):
sitting in your bank account for the last well however
many years now. But the dollars that you have been
working for every month are worth less sitting in your
bank account, as you know. So saving is punished, spending
is rewarded. That's a really bad system. You add on
top of that, speculation is rewarded for the banks. And
(09:08):
now we know we are in a day facto backstopping
of all accounts held in all US banks. That is
the message that has been sent. No one will say. Otherwise,
if some because of some other bank were to fail,
and it could very well happen in the days and
weeks ahead, the same argument's going to be made, Oh
my gosh, you have to get bailed out the depositors.
(09:30):
It's not their fault. Well, whose fault is it? This
is what you really start to get to it. I
don't mean that it is the depositors fault, but someone's
got to be held at fault if they're not. You
know what happens more of this, and everybody who sees
this for what it is understands that the likely outcome
is more recklessness until people who do it feel pain.
(09:53):
And unfortunately, as we all know from two thousand and eight,
the most reckless people didn't really feel very much pain
at all. The banks that were on the precipice of
destroying the entire global economy, creating a massive credit freeze,
and god knows what would have followed that. But back
to inflation again, Carl Icon Financier telling everybody that if
(10:16):
you look at history, inflation has been the destruction of
many societies. Play for Yeah, I don't think it's the
last few days that necessarily I think we have some
major problems that our economy. I think Powell really has
to raise interest rate sooner or later. I can't talk
(10:39):
about next week or even next month, but inflation is
the worst thing an economy can have, and I think
people underrate that. If you look in history, every in
gemony has been destroyed by inflation or almost everyone. Let
me just go back to Rome. Here's what ends up
happening a central government. The bureaucracy becomes too powerful, is unaccountable,
(11:06):
and the people who think that they're dealing with a
representative government I'm talking about now, whether it's a republic
or some form of democratic rule, it just turns into
an arms race for who spends the money better because
you can't win against the other side. You can't win
saying there is no Santa Claus. So now everybody has
to say there is a Santa Claus. Everybody has to
(11:27):
promise the free lunch. What does that look like. I
think it looks like thirty one trillion dollars in debt,
give or take. You know. The Republican Party right now,
no one's talking about this, but the truth is you
cannot even get elected within the Republican Party at least.
This is the belief talking about any kind of entitlement reform,
(11:48):
raising the retirement age, anything like that, totally people don't
want to hear it, totally opposed to it. Okay, well,
so now we're just on the train to see how
far it goes and where it ends. You know, that's it,
because there's no political will to take the medicine. Nobody
wants to hear that this is all going to come
to a stop at some point. So how do you
(12:09):
stay in power? How do you beat the other guy? Well,
you say, oh, it's it's just the rich that are
causing the problems. It's just the oppressors in our society
that are the issue. Here. We have endless money to
pay for everything. We have modern monetary theory we can apply,
and we've basically been running an experiment in modern monetary theory.
(12:29):
We just don't call it that because when you're spending
six trillion dollars during COVID to tell people not to work,
and then you're wondering what's going to happen, and then
Biden comes in and spends another two trillion and then
another couple trillion on top of that, and wanted to
spend five trillion, What do we think was going to
happen here? And you know, when Icon discusses inflation, this
(12:52):
is a tax on all of us. Everyone has to
understand that this is especially for those who are who
do not have assets, because assets tend to get inflated
during these bubble periods. So you know, if you own
a lot of stock, if you own a lot of
real estate, you know you do fine, and you're already wealthy,
so you can afford it. You know, who can afford
the tax of inflation the least people that are just
(13:14):
trying to make ends meet. But the moment that you
try to say, hold on a second, we have to
stop the spending from the government. It's too much. It's
causing the inflation that is destroying your life savings and
making it harder for you to make ends meet. You
know what ends up happening The demagogues win. They say,
see they're just in the pocket of the fat cats.
(13:34):
And whatever happened to the Tea Party. You remember that
we had this whole movement, a massive grassroots movement that
delivered a stunning victory in the House in twenty ten.
It was all about debt and spending. Now we sit
here and we say, maybe the people in charge can
fix it. Maybe Powell can turn a circle into a square,
maybe he can turn lead into gold the old alchemy example.
(14:00):
The answer is obviously no, he can't. So everyone's just
going to sit and wait and wonder as we grind
slowly toward a recession, how we got into this place
when really we've known all along, and we can either
hold the people in charge accountable and come up with
new ways of thinking and new approaches, or we just
keep running through the same cycle. And I'm of the
(14:22):
mind that we're probably just going to do that. We
just hope that it's not that bad this time. Biden's
in charge, everybody, How does that make you feel? The
Biden team is handling this. You know, you've heard us
talk about how huge asset managers names you know, are
using your retirement funds to further their esg agenda. You
don't need people playing politics with your retirement funds. You
(14:44):
want solid investments and maximize returns for your retirement. State
treasurers across the nation sent a message to stop playing
politics with pension funds by divesting five billion from some
of these companies. Twenty five states are suing to block
this nonsense of climate activism from endangering your hard earned funds.
Republicans on Capitol Hill just passed a bill blocking a
(15:06):
Biden administration from allowing these companies from using your money
to further their ESG agenda. Conservatives in the House and
send it have your back, but President Biden threatens to
view any bill that blocks ESG madness. These huge firms
have a fiduciary duty to maximize returns. They should be
held accountable for playing politics with pensions and doing it
(15:27):
without your consent. To learn how Consumers Research is protecting
all of us from these woke investment firms, go to
consumers Research dot org. That's consumers research dot org helping
you separate truth from fiction every single weekday to Clay
Travis and Buck Sexton Show. There's another narrative out there
(15:48):
that you should certainly be aware of. When it comes
to the banking collapse a last week, the bank that
collapsed SVB, a couple of banks actually signature as well.
There's the reality, the economic reality of a government that
spends recklessly and then debases the currency through inflation, and
(16:11):
then we all pay for it. Anyway, there's that, or
there's the cholarship of Warren. Elizabeth Warren, she's out there.
She has some ideas here that Congress is actually responsible
for this because it is Congress, and I'm sure Trump too.
It's oh, everything now is Trump's fault, because you know
(16:33):
he was a Republican and he was president. Here she
is play six. What we have is a problem that
starts with Congress by opening the door to weaker regulations,
then goes to the regulators that very much weakened those regulations,
and then to the executives who thought that you could
run a bank like any other business and that they
(16:54):
could load up on risk in order to improve profitability
for the shareholders and boost their own. Our recent bonuses,
we have to shut that down. Shutting that down starts
with Congress tightening up regulations. To begin with, Elizabeth Warren
is always going to say it's a problem of regulation
because she wants to be the one who sets the rules.
(17:17):
She and Democrats like her want to be in charge.
The real problem here is the government spends too much money.
The problem is that the people in charge, meaning Congress
and the White House, think that they can spend whatever
they want to spend, and there's no real downside because
no matter what happens to the economy, no matter what
happens to your life savings, they're still in charge, and
(17:40):
that is all that matters. They are bribing the public
with the public's money and hoping you don't figure it out.
That is the fundamental problem. It's not that there's some
Dodd Frank regulation that you know on page seven, sub
paragraph three that didn't It's just nonsense. You own a
small business, you may qualify for a tax refund from
(18:03):
the IRS, part of a little known program called the
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(18:26):
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(18:48):
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dot Com again. That website is getrefunds dot Com. Elizabeth
Warren wants to regulate the banks even more, as if
that's going to stop any of this stuff that we
(19:09):
see happening here. I know people like to believe if
only the rules are set a certain way, well, you
can either let the banks chase profits and deal with
the downside of poor decision making, or you can let
the banks do whatever they want and bail them out.
But adjusting the regulations here or there isn't going to
(19:32):
stop this stuff, haven't we kind of figured that out? Right? Oh,
if only there was. What is the regulation that is
going to be in place that would prevent what we
see from happening right now? Remember, the fundamental problems are
artificially low interest rates, inflation, and a lending system that
is based upon yield based upon people being able to
(19:53):
make money anyway, Regulation is always the answer, because what
is regulation. It is people in a position of authority
telling you what you can do. You see this mentality
around the issue of all things financial. You also see
it when it comes to guns, obviously, because here's here's
(20:13):
the thing. We all know that there is a problem
in this country right now with violence. But the problem
with violence does not come from law abiding gun owners,
right See, this is the disconnect. The people that are
doing the violence are criminals who break the laws on
guns on a whole range of other things too. But
(20:36):
so what do democrats do, Well, we just need more
regulations around guns. Let's not deal with the fundamental issue,
which would be much more appropriately addressed with putting people
who break the law in prison, putting people who are
violent away for a long time. That would actually help
the violence problem. No, Instead, let's go after people who
(21:02):
are law biding gun owners, who have someone like me,
I own an a R fifteen, I'm a bad person
according to Democrats. Right. Biden here says he is determined,
determined to ban assault weapons, and he's gonna do everything
in his power to take it there. He's gonna do
(21:24):
everything he can to make sure that that happens. Do
we have clip ten guys play universal background checks, eliminate
gun manufacturing community from my ability, And I'm determined once
again to ban assaul weapons and high capacity magazine. Determined
(21:48):
to ban assault weapons. What will that do? Well, if
you actually look at any honest study that show first
of all assault weapons, modern sporting rifle, whatever, you know,
we get into it with these terminology back and forth.
People say, well, Buck, there's no such thing as an
assault rifle, and I have to say, well, look, I
mean in California, unfortunately, now there is because they codify
(22:11):
these things. They say an assault rifle is, and they
make it a law. So you know, depends on where
you are. But yeah, of course it's the big scary
guns that they don't like law right, it's oh my gosh,
which account for I think it's less than two percent
of actual violence in the United States involving a firearm.
(22:34):
So they're going after a tiny, tiny sliver of the
problem and doing something that will do nothing to address
that tiny sliver of the problem. And they wonder why
we want to ignore them. I mean, you may have noticed,
by the way, on a different issue. But what was
this This is just a couple of days ago. I
(22:54):
think it was Greta Thunberg. This is on climate change
has deleted. People figured this out in twenty eighteen when
she was I don't know, sixteen or something, and the
whole world was listening to her. Deleted a tweet saying
that climate change would wipe out all of humanity and
unless we stop using fossil fuels by twenty twenty three.
(23:16):
Perhaps the most famous, sorry Al Gore, the most famous
climate change zealot in the world right now, is on
the record saying not just crazy stuff, crazy stuff that
isn't true. But you see, there's a very similar mentality
about dealing with firearms and guns. I can sit here
and try to explain to a Democrat like Biden, who,
(23:37):
by the way, Biden, this is just this is for
the base. This is for the Democrat base. It's not
about violence. You have to fundamentally understand that as well.
It's not about stopping gun violence. It's actually not what
they're doing. Democrats want to ban assault rifles, as Biden
just said, because it is a thumb in the eye
(23:58):
of their conservative political opponents. Biden doesn't want to ban
AAR fifteens and similar rifles because he really thinks that
that's going to Well, how is that going to stop
all the illegal gang banger violence in major American cities
(24:18):
where they're shooting each other with pistols. How is that
going to stop any of it? Which is ninety seven
percent of the gun of the you know, homicides. I'm
not talking about even suicides. But it's the gangs as
we know, it's gang members, it's people engage in crime,
it's it's armed robbery, it's home invasion. They're using pistols.
(24:39):
So this addresses none of that, which goes to my point.
This isn't ultimately about. This is a twenty twenty four
move for Biden. Even just saying this, he also wants
to go after gun manufacturers. Here he is saying something
that is just not only is it somewhat untrue, it
(24:59):
is it is in the complete opposite direction of the truth.
Play clip eleven. Second thing it does an executive order
ramps up or efforts to hold the gun industry accountable.
It's the only outfit you can't sue these days. Okay,
the President of the United States just said you can't
sue the gun industry. That's a lie and the reality,
(25:22):
the truth is that the gun industry is the only
industry that anybody knows of or can think of, where
the illegal use of otherwise lawful and even constitutionally protected
products is somehow the fault the liability of the manufacturer.
Right if you have a person who runs out with
(25:43):
a a chef knife and stab six people. This stuff happens,
as we know. There are mass murders where it's just
the person has a knife. There have been terrorist attacks
where it's just a person with a knife. You know,
no one thinks they're gonna go out there and you're
gonna see a huge law suit against the Japanese or
German high end steel manufacturer of that knife. Because that's crazy.
(26:08):
We understand that's that's insane. So why is it that
gun manufacturer should be held liable for somebody who you have?
I mean, and by the way, I know that whatever
I say, the number I get yelled at for by
people who are like, not numbers too low buck, I'm like, okay,
but you know you've got three hundred million guns in circulation,
give or take, in the country. Firearms. That's it. That
(26:30):
is just an estimate. It's probably more. And you have
what sixty million, sixty million homes I think where there's
a firearm right now, something like that. Maybe it's eighty million.
That's a lot of people. There's a lot of people,
and I'm one of them. So I see here and
I say, how is this making anybody safer? It's not
(26:51):
meant to make anybody safer, That's what you have to understand.
It's meant to make lifestyle lives on the coasts and
in Chicago. And you know if you they're blue enclaves
in between fuel not just good about themselves because they
don't touch the icky yucky guns, but to feel like
they're watching their politician, Joe Biden do something that is
(27:15):
meant to just be a slap in the face of
people that believe in the Second Amendment. That's the joy
they really get from it, because it's impossible to make
a serious argument this is going to stop anyone from
getting shot anywhere based on regulatory changes or executive order
or whatever. No honest person would be able to sit
down and they wouldn't be able to withstand the counter argument,
(27:37):
which is why there never is an opportunity to debate
this stuff publicly. So then why does Joe Biden do it?
Because it is meant to be slapping you in the
face for the amusement of his leftist donors and lib voters.
And that's the whole point, that's the whole reality of it.
Once you understand that that it's really about gun owners
(27:59):
and using this as a cultural wedge and an issue
with which to malign them for the amusement of libs
and everything else, actually makes a whole lot of sense.
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on the podcast Clay and Buck podcast Deep Dives, more contents,
more common sense. Find the guys on the iHeart app
or wherever you get your podcasts. Welcome back to Clay
in Buck. Come up. In the next hour, we have
Stephen Miller of the Trump White formerly of the Trump
White House, joining us talk about the border. You know
(29:45):
there's an app for that. When it comes to illegal immigration,
there's an app. Now, there was a hearing this morning
where they addressed this up on Capitol Hill. We'll discuss this.
There's even more stuff and it's all bad going on
at the U. Mexico border than people who are paying
pretty close attention realize. It's the layers of this mess.
(30:08):
It just goes deeper and deeper. And Democrats, it's not
that they are incapable of fixing it, they have no
interest in fixing it. It's important to understand the major
difference there. They don't want this to stop until they
are held to account by the voters in a massive
(30:30):
electoral landslide where immigration illegal immigration is a central issue.
They will not stop what's going on. And even then,
it looked if they decided to stop it, it it wouldn't
be easy. At this point, I know people might want
to they might argue with me on that, but the
cartels are so sophisticated, there's so much money already, the
(30:52):
human trafficking networks are so well established that you could
you could be serious about enforcing the law. The border
college not get a lot better, Don't get me wrong,
but you know it would be like a city. Let's
say you have a city that has a crime problem.
It's out of control because you cut the police force
(31:13):
in half, and all of a sudden you had district
attorneys who didn't enforce the law. No one's getting prosecuted. Okay,
that's gonna make things really bad. But even if you
turn around, you know, even if you put out the
bat signal and Batman shows up, so to speak, and
you start cleaning things up, you still got a fight
on your hands. And the southern border is such a
(31:35):
mess and will continue to be even if you had
serious people in charge, and we have with the Biden regime,
deeply unserious people in charge, as you know. Eight hundred
two two two eight two if you want to chat
on the phone lines. Also our VIP email inbox. The
(31:56):
team reads them every day. They send them to us
every day. You got to become a VIP subscriber at
Clayanbuck dot com. He'll check out the site. A lot
of fun stuff there. You can also always listen streaming
to the show there. But Tom writes in can you
address how the president has the authority to arbitrarily increase
the FDIC amount to include all deposits. Okay, Tom, this
(32:18):
is important. The president hasn't done that. It is not
the case that officially all deposits of all amounts at
all banks are backstop by the federal government. So that's
a perception that maybe out there, and we talk about
how when we say de facto right, well, you're you're
(32:38):
raising gonna be a d jure, which you know it
would be an official backstopping of all deposits by the
federal government. That's not really where we are. What has
happened is that we ran an experiment here where a
bank was in failure after a bank run could not
meet the demands of depositors. Was Now there's also argument
(33:01):
you didn't hear a lot about this, that a private
bank could have come in and bought them. And this
gets a bit into the complexities of the system, the
the the bank in question SVB, and I know that
a lot of woke, crazy d EI stuff whenever. But
the real systemic problem is what I've been talking about,
which is interest rates, inflation, and you know, the debt,
(33:23):
the the bill coming due, right, I mean, that's that's
essentially what we're all grappling with right now. Too much
government spending and what happens when you have that. But
they they own these treasury bonds, that the bond is
a promise to pay back the full amount unless the
bond fails. And if US treasury bonds fail, I mean
(33:45):
you you better be ready for you better have your
you know your your shelter, handy, and you better have plenty. Uh,
you're on your own, buddy. We're in civilizational collapse if
treasury bonds fail. Pretty much so the treasury bond. Let's
say you buy. By the way, there are people I'm
not a finance guy. I'm just a guy who reads
all day so we can tell you worthwhile things on
(34:07):
the show. So there are people in this audience who
know this and much great. Probably have some guys who
trade a lot of T bills listening right now. But
the basics of it, I have bought and sold bonds,
so I have been a bond I wouldn't say a
bond trader, but you know I've I've played in the
bond mark in the past. If if you have a
T bond and you put ten thousand dollars in it,
at the end of the bond, you get the full
(34:28):
amount of money back. These banks invested in what are
still considered very safe, so to speak, investments with treasury bonds.
But the coupon on them had changed the percentage that
you get along the term of the bond. And because
interest rates had risen the bonds were trading, I shouldn't
(34:50):
say the coupon had changed the rate see bondmath. It's
hard the way that the bonds were trading change because
of the rise in interest rates overall, and so the
bonds were worth less. And when the bonds are worth less,
if you have to sell them to deal with they
run on your bank from depositors, then you're selling them
(35:12):
at a loss currently, even though eventually it would be
the full value. I think I've explained this correctly. And
so it's really a time issue, not an asset value issue.
And so a bank could have come in and bought SVB,
but instead FDIC and the regulators and they shut it
down or they jumped in. There's an argument over what
(35:34):
was the right thing there that maybe a bigger bank
could have said, no, no, we'll buy SVB and we'll
handle this within the private sector. That all said, the
backstopping of all accounts is not official. The FDIC. The
you know, the FDIC came in and is paying for
the depositors in this case with a fund, effectively a
(35:57):
fee that banks have paid into a fund, and you
know they're moving money around on the balance sheet to
make this bank hole. But if you bailed out SVB
when it failed, why wouldn't you bail out any other bank?
If the argument is depositors cannot be held at fault
no matter how reckless a bank is beyond the FDIC limits,
(36:20):
then that has to be the argument for any bank,
right And so that's why there's this perception that all
of your accounts are now essentially FDIC covered. They're not,
and we may find out the hardway at some point
how much they are not. But that's so it's a
perception issue versus a real change in how the banking
(36:43):
limits have been. That's my understanding of it. I think
I pretty much did that. I want to go. But
let's talk about national security, things that I've worked in
for many years, and the border, something I know quite
well with Stephen Miller. We'll get to that in a
couple of minutes.
Welcome to today's edition of The Clay Travis and Buck
Sexton Show podcast. Welcome to the Wednesday edition of The
Clay Travis and Buck Sexton Show. This is Buck solo
today because our main man, Clay Travis is on a
wonderful vacation in Italy with the family, so I was
(00:20):
having a good time. We got a lot of news
to get to my friends. The Dow took a five
hundred point die today, as the banks are looking shaky
at that. I gotta tell you, I don't think we
are we are out of the woods. I don't even
think we're near the beginning of the end. As Churchill said,
(00:40):
we may be near the end of the beginning. We've
got Biden doing what exactly with all this in the background.
A Russian fighter jet collided yesterday with the US drone
over the Black Sea. A lot of people talking about
how we're gonna confront Russia over this. I don't know.
(01:01):
We're given a hundred billion dollars a year to Russia's
enemy in a war. I mean, I think I think
that's enough of a confrontation. I don't think we could
do much over the drone. We shall discuss that though
a conundrum for Wellesley College. You know, Welles leads the
alma mater of Hillary Clinton, among others. Wellesley College trying
(01:24):
to figure out the critical question Matt Walsh course asked
it so eloquently and importantly in his documentary What is
a Woman? Wellesley does not really have a very good
answer right now because the students want transwomen as in
men to be allowed into Wellesley. So that's causing some issues.
(01:47):
We will certainly discuss that a high school in Vermont,
speaking of gender issues, didn't want it's girls to compete
against a team that had a male, a boy on
the team, and now they're banned from the entire athletic
conference in Vermont. We'll discuss that. And something's come out
(02:08):
about what's going on with fentonel and Mexican pharmacies that
we definitely need to speak about. We've got our friends
Stephen Miller, formerly senior advising the Trump White House, really
the architect of Trump border policy. He'll be with us
at one Eastern today, so or I should Yes, that's right,
So that's in about an hour or so. He'll be
(02:29):
with us. So we got a lot to get into.
But I have to start with where are we on
the meltdown of the economy? Is it going to happen
or not? I hope it does not, and that somehow
we're able to watch and applaud as the people in
charge are raising rates just well enough and fast enough
(02:53):
to tame inflation without sending us into a recession? Is
it even really possible? I guess we're gonna find out. Meanwhile,
though Daily Mail is this headline s ANDP cuts First
Republic to junk status, sends the New York Stock Exchange
into a frenzy. America's big four banks are dropping a
(03:18):
little bit in share price. Wells Fargo down four point
eight percent, City Group down four point nine percent. Credit
Suisse is looking like it's in some real trouble thirty
percent massive, massive Swiss bank is looking rough right now,
thirty percent down, all in the wake of the SVB collapse.
(03:41):
So has this all been handled? No? Do we know
what's going to happen? No, we do not. But there
are some people out there who tend to be tend
to be very prescient and have been right when it
counts about the economy because they have to make money,
(04:02):
because they have shareholders or investors in the case of
your hedge funds, who expect there to be the upside
of being right, not the downside of oh I almost
got it right and then losing people money. Carl Icon,
he is a very famous financial figure. He's out there
(04:22):
telling everybody he's a he's a financier. Man. That would
be cool. Now, that's like the next level. You know,
financier is like being called the mogul. You know, you're
you're a Hollywood mogul. You're a big deal if you're
a financier, because it's French, it's fancy, you know. Carl
Icon says, the system is breaking down and we got
a big problem. Play three. A system is breaking down,
(04:45):
and that we absolutely have a major problem in our
economy today. And I'm not going to a pride on
whether or not jabelle out of back or something like that.
But if you can't have the country feeling it doesn't matter.
If they say it doesn't matter, because I could spend
a lot of the money to want you could do
(05:05):
whatever you want because the governmental bail. Yeah, so we
got we got a couple of problems here that have
not been solved by the actions on the banks. And
again I'm focusing in on this. There's other things we're
gonna get to today. We're going to make sure that
every day you're here, you're getting all the most important news,
of course, but this affects everything else. I mean, this
(05:27):
is the one issue right now that is entirely short
of nuclear war breaking out with Russia. This is the
thing that you can avoid, no matter who you are,
where you are in this country, really anywhere in the world,
the possibility of a major catastrophe in the US economy. Now,
I don't think it would be the end of the
(05:49):
US economy. I'm not a catastrophist overall, But what does
it look like if you see a who knows, Actually,
I was gonna say, if you were to see a
massive dropping the stock market? Or are we just going
to see inflation continue until we get to a point
of real stagflation where you have rising inflation. We've had
(06:10):
this before, right, rising inflation and low or negative GDP
growth and high unemployment. Stagflation is ugly. Stagflation grinds away
at the day to day sense you have that you
can get ahead and things are going to get better.
(06:33):
It almost forces the entirety of of everybody involved in
the US economy into a perpetual bad mood, and even
some despondency people are going to be really concerned. Stagflation
stinks persistently high inflation with high unemployment and a stagnant
demand for within a country's economy. So low growth, low product,
(07:00):
high inflation. And what you see here is how can
we try to avoid As I've said, the bill coming
to let's just do a quick recap. And there were people,
there were some of us who were warning about this
all along. This ties directly to our COVID response, directly
(07:21):
to the Biden administrations reckless spending as well. I know
the COVID response started under Trump. There was way too
much money spent. We should never have locked down the
whole P p P program. Think about it. If you
could just pay workers to stay home, send them money,
with no attendant productivity, not making the products, not providing
(07:41):
the services, why wouldn't we just do that all the time.
Obviously there as calls and effect here. You know, you
squeeze the balloon at one side and the air gets
pushed to another. Something happened when we were doing this,
and it took a while for the bill to come do.
But that's where we are right now. And you have
(08:02):
these banks and the whole banking system based on lending
and being able to get back a percentage that has effectively,
by the very low interest rates pushed by the FED,
that has been minimized at best. So what have they
been doing? Where have they been going? And where are
we going to look next to find that there's some
(08:22):
massive unforeseen liability that creates a cascading financial hole that
brings down a whole lot of other stuff around it.
Inflation itself, by the way, is enough to do tremendous damage.
It has been doing damage. We're all paying right now
the dollars that you have worked for that have been
(08:43):
sitting in your bank account for the last well however
many years now. But the dollars that you have been
working for every month are worth less sitting in your
bank account, as you know. So saving is punished, spending
is rewarded. That's a really bad system. You add on
top of that, speculation is rewarded for the banks. And
(09:08):
now we know we are in a day facto backstopping
of all accounts held in all US banks. That is
the message that has been sent. No one will say. Otherwise,
if some because of some other bank were to fail,
and it could very well happen in the days and
weeks ahead, the same argument's going to be made, Oh
my gosh, you have to get bailed out the depositors.
(09:30):
It's not their fault. Well, whose fault is it? This
is what you really start to get to it. I
don't mean that it is the depositors fault, but someone's
got to be held at fault if they're not. You
know what happens more of this, and everybody who sees
this for what it is understands that the likely outcome
is more recklessness until people who do it feel pain.
(09:53):
And unfortunately, as we all know from two thousand and eight,
the most reckless people didn't really feel very much pain
at all. The banks that were on the precipice of
destroying the entire global economy, creating a massive credit freeze,
and god knows what would have followed that. But back
to inflation again, Carl Icon Financier telling everybody that if
(10:16):
you look at history, inflation has been the destruction of
many societies. Play for Yeah, I don't think it's the
last few days that necessarily I think we have some
major problems that our economy. I think Powell really has
to raise interest rate sooner or later. I can't talk
(10:39):
about next week or even next month, but inflation is
the worst thing an economy can have, and I think
people underrate that. If you look in history, every in
gemony has been destroyed by inflation or almost everyone. Let
me just go back to Rome. Here's what ends up
happening a central government. The bureaucracy becomes too powerful, is unaccountable,
(11:06):
and the people who think that they're dealing with a
representative government I'm talking about now, whether it's a republic
or some form of democratic rule, it just turns into
an arms race for who spends the money better because
you can't win against the other side. You can't win
saying there is no Santa Claus. So now everybody has
to say there is a Santa Claus. Everybody has to
(11:27):
promise the free lunch. What does that look like. I
think it looks like thirty one trillion dollars in debt,
give or take. You know. The Republican Party right now,
no one's talking about this, but the truth is you
cannot even get elected within the Republican Party at least.
This is the belief talking about any kind of entitlement reform,
(11:48):
raising the retirement age, anything like that, totally people don't
want to hear it, totally opposed to it. Okay, well,
so now we're just on the train to see how
far it goes and where it ends. You know, that's it,
because there's no political will to take the medicine. Nobody
wants to hear that this is all going to come
to a stop at some point. So how do you
(12:09):
stay in power? How do you beat the other guy? Well,
you say, oh, it's it's just the rich that are
causing the problems. It's just the oppressors in our society
that are the issue. Here. We have endless money to
pay for everything. We have modern monetary theory we can apply,
and we've basically been running an experiment in modern monetary theory.
(12:29):
We just don't call it that because when you're spending
six trillion dollars during COVID to tell people not to work,
and then you're wondering what's going to happen, and then
Biden comes in and spends another two trillion and then
another couple trillion on top of that, and wanted to
spend five trillion, What do we think was going to
happen here? And you know, when Icon discusses inflation, this
(12:52):
is a tax on all of us. Everyone has to
understand that this is especially for those who are who
do not have assets, because assets tend to get inflated
during these bubble periods. So you know, if you own
a lot of stock, if you own a lot of
real estate, you know you do fine, and you're already wealthy,
so you can afford it. You know, who can afford
the tax of inflation the least people that are just
(13:14):
trying to make ends meet. But the moment that you
try to say, hold on a second, we have to
stop the spending from the government. It's too much. It's
causing the inflation that is destroying your life savings and
making it harder for you to make ends meet. You
know what ends up happening The demagogues win. They say,
see they're just in the pocket of the fat cats.
(13:34):
And whatever happened to the Tea Party. You remember that
we had this whole movement, a massive grassroots movement that
delivered a stunning victory in the House in twenty ten.
It was all about debt and spending. Now we sit
here and we say, maybe the people in charge can
fix it. Maybe Powell can turn a circle into a square,
maybe he can turn lead into gold the old alchemy example.
(14:00):
The answer is obviously no, he can't. So everyone's just
going to sit and wait and wonder as we grind
slowly toward a recession, how we got into this place
when really we've known all along, and we can either
hold the people in charge accountable and come up with
new ways of thinking and new approaches, or we just
keep running through the same cycle. And I'm of the
(14:22):
mind that we're probably just going to do that. We
just hope that it's not that bad this time. Biden's
in charge, everybody, How does that make you feel? The
Biden team is handling this. You know, you've heard us
talk about how huge asset managers names you know, are
using your retirement funds to further their esg agenda. You
don't need people playing politics with your retirement funds. You
(14:44):
want solid investments and maximize returns for your retirement. State
treasurers across the nation sent a message to stop playing
politics with pension funds by divesting five billion from some
of these companies. Twenty five states are suing to block
this nonsense of climate activism from endangering your hard earned funds.
Republicans on Capitol Hill just passed a bill blocking a
(15:06):
Biden administration from allowing these companies from using your money
to further their ESG agenda. Conservatives in the House and
send it have your back, but President Biden threatens to
view any bill that blocks ESG madness. These huge firms
have a fiduciary duty to maximize returns. They should be
held accountable for playing politics with pensions and doing it
(15:27):
without your consent. To learn how Consumers Research is protecting
all of us from these woke investment firms, go to
consumers Research dot org. That's consumers research dot org helping
you separate truth from fiction every single weekday to Clay
Travis and Buck Sexton Show. There's another narrative out there
(15:48):
that you should certainly be aware of. When it comes
to the banking collapse a last week, the bank that
collapsed SVB, a couple of banks actually signature as well.
There's the reality, the economic reality of a government that
spends recklessly and then debases the currency through inflation, and
(16:11):
then we all pay for it. Anyway, there's that, or
there's the cholarship of Warren. Elizabeth Warren, she's out there.
She has some ideas here that Congress is actually responsible
for this because it is Congress, and I'm sure Trump too.
It's oh, everything now is Trump's fault, because you know
(16:33):
he was a Republican and he was president. Here she
is play six. What we have is a problem that
starts with Congress by opening the door to weaker regulations,
then goes to the regulators that very much weakened those regulations,
and then to the executives who thought that you could
run a bank like any other business and that they
(16:54):
could load up on risk in order to improve profitability
for the shareholders and boost their own. Our recent bonuses,
we have to shut that down. Shutting that down starts
with Congress tightening up regulations. To begin with, Elizabeth Warren
is always going to say it's a problem of regulation
because she wants to be the one who sets the rules.
(17:17):
She and Democrats like her want to be in charge.
The real problem here is the government spends too much money.
The problem is that the people in charge, meaning Congress
and the White House, think that they can spend whatever
they want to spend, and there's no real downside because
no matter what happens to the economy, no matter what
happens to your life savings, they're still in charge, and
(17:40):
that is all that matters. They are bribing the public
with the public's money and hoping you don't figure it out.
That is the fundamental problem. It's not that there's some
Dodd Frank regulation that you know on page seven, sub
paragraph three that didn't It's just nonsense. You own a
small business, you may qualify for a tax refund from
(18:03):
the IRS, part of a little known program called the
Employee Retention Credit or ARC. The experts at getrefunds dot
com have been making sense of this complicated tax refund program,
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(18:26):
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(18:48):
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dot Com again. That website is getrefunds dot Com. Elizabeth
Warren wants to regulate the banks even more, as if
that's going to stop any of this stuff that we
(19:09):
see happening here. I know people like to believe if
only the rules are set a certain way, well, you
can either let the banks chase profits and deal with
the downside of poor decision making, or you can let
the banks do whatever they want and bail them out.
But adjusting the regulations here or there isn't going to
(19:32):
stop this stuff, haven't we kind of figured that out? Right? Oh,
if only there was. What is the regulation that is
going to be in place that would prevent what we
see from happening right now? Remember, the fundamental problems are
artificially low interest rates, inflation, and a lending system that
is based upon yield based upon people being able to
(19:53):
make money anyway, Regulation is always the answer, because what
is regulation. It is people in a position of authority
telling you what you can do. You see this mentality
around the issue of all things financial. You also see
it when it comes to guns, obviously, because here's here's
(20:13):
the thing. We all know that there is a problem
in this country right now with violence. But the problem
with violence does not come from law abiding gun owners,
right See, this is the disconnect. The people that are
doing the violence are criminals who break the laws on
guns on a whole range of other things too. But
(20:36):
so what do democrats do, Well, we just need more
regulations around guns. Let's not deal with the fundamental issue,
which would be much more appropriately addressed with putting people
who break the law in prison, putting people who are
violent away for a long time. That would actually help
the violence problem. No, Instead, let's go after people who
(21:02):
are law biding gun owners, who have someone like me,
I own an a R fifteen, I'm a bad person
according to Democrats. Right. Biden here says he is determined,
determined to ban assault weapons, and he's gonna do everything
in his power to take it there. He's gonna do
(21:24):
everything he can to make sure that that happens. Do
we have clip ten guys play universal background checks, eliminate
gun manufacturing community from my ability, And I'm determined once
again to ban assaul weapons and high capacity magazine. Determined
(21:48):
to ban assault weapons. What will that do? Well, if
you actually look at any honest study that show first
of all assault weapons, modern sporting rifle, whatever, you know,
we get into it with these terminology back and forth.
People say, well, Buck, there's no such thing as an
assault rifle, and I have to say, well, look, I
mean in California, unfortunately, now there is because they codify
(22:11):
these things. They say an assault rifle is, and they
make it a law. So you know, depends on where
you are. But yeah, of course it's the big scary
guns that they don't like law right, it's oh my gosh,
which account for I think it's less than two percent
of actual violence in the United States involving a firearm.
(22:34):
So they're going after a tiny, tiny sliver of the
problem and doing something that will do nothing to address
that tiny sliver of the problem. And they wonder why
we want to ignore them. I mean, you may have noticed,
by the way, on a different issue. But what was
this This is just a couple of days ago. I
(22:54):
think it was Greta Thunberg. This is on climate change
has deleted. People figured this out in twenty eighteen when
she was I don't know, sixteen or something, and the
whole world was listening to her. Deleted a tweet saying
that climate change would wipe out all of humanity and
unless we stop using fossil fuels by twenty twenty three.
(23:16):
Perhaps the most famous, sorry Al Gore, the most famous
climate change zealot in the world right now, is on
the record saying not just crazy stuff, crazy stuff that
isn't true. But you see, there's a very similar mentality
about dealing with firearms and guns. I can sit here
and try to explain to a Democrat like Biden, who,
(23:37):
by the way, Biden, this is just this is for
the base. This is for the Democrat base. It's not
about violence. You have to fundamentally understand that as well.
It's not about stopping gun violence. It's actually not what
they're doing. Democrats want to ban assault rifles, as Biden
just said, because it is a thumb in the eye
(23:58):
of their conservative political opponents. Biden doesn't want to ban
AAR fifteens and similar rifles because he really thinks that
that's going to Well, how is that going to stop
all the illegal gang banger violence in major American cities
(24:18):
where they're shooting each other with pistols. How is that
going to stop any of it? Which is ninety seven
percent of the gun of the you know, homicides. I'm
not talking about even suicides. But it's the gangs as
we know, it's gang members, it's people engage in crime,
it's it's armed robbery, it's home invasion. They're using pistols.
(24:39):
So this addresses none of that, which goes to my point.
This isn't ultimately about. This is a twenty twenty four
move for Biden. Even just saying this, he also wants
to go after gun manufacturers. Here he is saying something
that is just not only is it somewhat untrue, it
(24:59):
is it is in the complete opposite direction of the truth.
Play clip eleven. Second thing it does an executive order
ramps up or efforts to hold the gun industry accountable.
It's the only outfit you can't sue these days. Okay,
the President of the United States just said you can't
sue the gun industry. That's a lie and the reality,
(25:22):
the truth is that the gun industry is the only
industry that anybody knows of or can think of, where
the illegal use of otherwise lawful and even constitutionally protected
products is somehow the fault the liability of the manufacturer.
Right if you have a person who runs out with
(25:43):
a a chef knife and stab six people. This stuff happens,
as we know. There are mass murders where it's just
the person has a knife. There have been terrorist attacks
where it's just a person with a knife. You know,
no one thinks they're gonna go out there and you're
gonna see a huge law suit against the Japanese or
German high end steel manufacturer of that knife. Because that's crazy.
(26:08):
We understand that's that's insane. So why is it that
gun manufacturer should be held liable for somebody who you have?
I mean, and by the way, I know that whatever
I say, the number I get yelled at for by
people who are like, not numbers too low buck, I'm like, okay,
but you know you've got three hundred million guns in circulation,
give or take, in the country. Firearms. That's it. That
(26:30):
is just an estimate. It's probably more. And you have
what sixty million, sixty million homes I think where there's
a firearm right now, something like that. Maybe it's eighty million.
That's a lot of people. There's a lot of people,
and I'm one of them. So I see here and
I say, how is this making anybody safer? It's not
(26:51):
meant to make anybody safer, That's what you have to understand.
It's meant to make lifestyle lives on the coasts and
in Chicago. And you know if you they're blue enclaves
in between fuel not just good about themselves because they
don't touch the icky yucky guns, but to feel like
they're watching their politician, Joe Biden do something that is
(27:15):
meant to just be a slap in the face of
people that believe in the Second Amendment. That's the joy
they really get from it, because it's impossible to make
a serious argument this is going to stop anyone from
getting shot anywhere based on regulatory changes or executive order
or whatever. No honest person would be able to sit
down and they wouldn't be able to withstand the counter argument,
(27:37):
which is why there never is an opportunity to debate
this stuff publicly. So then why does Joe Biden do it?
Because it is meant to be slapping you in the
face for the amusement of his leftist donors and lib voters.
And that's the whole point, that's the whole reality of it.
Once you understand that that it's really about gun owners
(27:59):
and using this as a cultural wedge and an issue
with which to malign them for the amusement of libs
and everything else, actually makes a whole lot of sense.
Oh man, I need to get a good night's sleep,
and you know why I usually do get a good
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(29:23):
on the podcast Clay and Buck podcast Deep Dives, more contents,
more common sense. Find the guys on the iHeart app
or wherever you get your podcasts. Welcome back to Clay
in Buck. Come up. In the next hour, we have
Stephen Miller of the Trump White formerly of the Trump
White House, joining us talk about the border. You know
(29:45):
there's an app for that. When it comes to illegal immigration,
there's an app. Now, there was a hearing this morning
where they addressed this up on Capitol Hill. We'll discuss this.
There's even more stuff and it's all bad going on
at the U. Mexico border than people who are paying
pretty close attention realize. It's the layers of this mess.
(30:08):
It just goes deeper and deeper. And Democrats, it's not
that they are incapable of fixing it, they have no
interest in fixing it. It's important to understand the major
difference there. They don't want this to stop until they
are held to account by the voters in a massive
(30:30):
electoral landslide where immigration illegal immigration is a central issue.
They will not stop what's going on. And even then,
it looked if they decided to stop it, it it wouldn't
be easy. At this point, I know people might want
to they might argue with me on that, but the
cartels are so sophisticated, there's so much money already, the
(30:52):
human trafficking networks are so well established that you could
you could be serious about enforcing the law. The border
college not get a lot better, Don't get me wrong,
but you know it would be like a city. Let's
say you have a city that has a crime problem.
It's out of control because you cut the police force
(31:13):
in half, and all of a sudden you had district
attorneys who didn't enforce the law. No one's getting prosecuted. Okay,
that's gonna make things really bad. But even if you
turn around, you know, even if you put out the
bat signal and Batman shows up, so to speak, and
you start cleaning things up, you still got a fight
on your hands. And the southern border is such a
(31:35):
mess and will continue to be even if you had
serious people in charge, and we have with the Biden regime,
deeply unserious people in charge, as you know. Eight hundred
two two two eight two if you want to chat
on the phone lines. Also our VIP email inbox. The
(31:56):
team reads them every day. They send them to us
every day. You got to become a VIP subscriber at
Clayanbuck dot com. He'll check out the site. A lot
of fun stuff there. You can also always listen streaming
to the show there. But Tom writes in can you
address how the president has the authority to arbitrarily increase
the FDIC amount to include all deposits. Okay, Tom, this
(32:18):
is important. The president hasn't done that. It is not
the case that officially all deposits of all amounts at
all banks are backstop by the federal government. So that's
a perception that maybe out there, and we talk about
how when we say de facto right, well, you're you're
(32:38):
raising gonna be a d jure, which you know it
would be an official backstopping of all deposits by the
federal government. That's not really where we are. What has
happened is that we ran an experiment here where a
bank was in failure after a bank run could not
meet the demands of depositors. Was Now there's also argument
(33:01):
you didn't hear a lot about this, that a private
bank could have come in and bought them. And this
gets a bit into the complexities of the system, the
the the bank in question SVB, and I know that
a lot of woke, crazy d EI stuff whenever. But
the real systemic problem is what I've been talking about,
which is interest rates, inflation, and you know, the debt,
(33:23):
the the bill coming due, right, I mean, that's that's
essentially what we're all grappling with right now. Too much
government spending and what happens when you have that. But
they they own these treasury bonds, that the bond is
a promise to pay back the full amount unless the
bond fails. And if US treasury bonds fail, I mean
(33:45):
you you better be ready for you better have your
you know your your shelter, handy, and you better have plenty. Uh,
you're on your own, buddy. We're in civilizational collapse if
treasury bonds fail. Pretty much so the treasury bond. Let's
say you buy. By the way, there are people I'm
not a finance guy. I'm just a guy who reads
all day so we can tell you worthwhile things on
(34:07):
the show. So there are people in this audience who
know this and much great. Probably have some guys who
trade a lot of T bills listening right now. But
the basics of it, I have bought and sold bonds,
so I have been a bond I wouldn't say a
bond trader, but you know I've I've played in the
bond mark in the past. If if you have a
T bond and you put ten thousand dollars in it,
at the end of the bond, you get the full
(34:28):
amount of money back. These banks invested in what are
still considered very safe, so to speak, investments with treasury bonds.
But the coupon on them had changed the percentage that
you get along the term of the bond. And because
interest rates had risen the bonds were trading, I shouldn't
(34:50):
say the coupon had changed the rate see bondmath. It's
hard the way that the bonds were trading change because
of the rise in interest rates overall, and so the
bonds were worth less. And when the bonds are worth less,
if you have to sell them to deal with they
run on your bank from depositors, then you're selling them
(35:12):
at a loss currently, even though eventually it would be
the full value. I think I've explained this correctly. And
so it's really a time issue, not an asset value issue.
And so a bank could have come in and bought SVB,
but instead FDIC and the regulators and they shut it
down or they jumped in. There's an argument over what
(35:34):
was the right thing there that maybe a bigger bank
could have said, no, no, we'll buy SVB and we'll
handle this within the private sector. That all said, the
backstopping of all accounts is not official. The FDIC. The
you know, the FDIC came in and is paying for
the depositors in this case with a fund, effectively a
(35:57):
fee that banks have paid into a fund, and you
know they're moving money around on the balance sheet to
make this bank hole. But if you bailed out SVB
when it failed, why wouldn't you bail out any other bank?
If the argument is depositors cannot be held at fault
no matter how reckless a bank is beyond the FDIC limits,
(36:20):
then that has to be the argument for any bank,
right And so that's why there's this perception that all
of your accounts are now essentially FDIC covered. They're not,
and we may find out the hardway at some point
how much they are not. But that's so it's a
perception issue versus a real change in how the banking
(36:43):
limits have been. That's my understanding of it. I think
I pretty much did that. I want to go. But
let's talk about national security, things that I've worked in
for many years, and the border, something I know quite
well with Stephen Miller. We'll get to that in a
couple of minutes.
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