Houston – We Have a Serious Problem in Biden Administration

We have a MAJOR problem with this Biden Administration. It is so radically left, it is now endangering the entire economy, not just the banking system. Biden lied to the public claiming there were no buyers for the Silicon Valley Bank. In fact, in London, HSBC immediately stepped forward to strike a deal for SVB in London. Why was HSBC buying SVB’s overseas operation but Biden claimed there were “no buyers” for SVB in the USA? When I was told that it made no sense. Something was not panning out with the regulators who typically call in other banks immediately and work out their shot-gun weddings. I know, I got one of those calls from the Japanese government to buy a brokerage house in Tokyo when the French bank Palace went bust.

When Biden tried to reassure Americans that the banking system was safe and not to worry, the professionals just in their gut had a raw feeling of distrust. The Markets took a nose-dive on Monday and many bank stocks plunged with some down 60% or even more. I found it unbelievable that there was nobody in the wings looking to buy up this bank. The Federal Deposit Insurance Corp. said it couldn’t find a private buyer for SVB when HSBC was buying up SVB quickly in London.

The rumors began to circulate that what was really taking place was that the FDIC Chairman Martin Gruenberg rejected deals. Rather, there were actually talks of covering just the $250,000 and screwing the rest. The uninsured depositors were about 85%. Then there were the cross-bank obligations that exist in any such deal the Biden Administration wasn’t acknowledging. Take Mr. Biden’s pledge that “no losses will be borne by the taxpayers.” He actually said: “the money will come from the fees that banks pay into the Deposit Insurance Fund.” The fees paid by banks would NEVER cover 85% of deposits that were not insured.

It became obvious that if the FDIC let the bank fail and 85% of the deposits would lose everything, including Oprah Winfrey, it would set off a monumental banking crisis nationwide. I could not scream that loud enough from the top of every roof in Washington. Sources say that since SVB was in California, the hopelessly leftist state, the lines lit up in Washington as the Democratic donors began to wail loudly and that forced the FDIC on Sunday to announce it would cover uninsured deposits at SVB and Signature Bank under its “systemic risk” exception. The “guy” to pull that off was most likely not common sense, but Democratic insiders and they saw their donation evaporate in the middle of the night.

Biden had also claimed that:

“Investors in the banks will not be protected. They knowingly took a risk and when the risk didn’t pay off, investors lose their money. That’s how capitalism works.”

What I know is that where most sophisticated banks hedge their interest rate risk but in the case of SVB and Signature, they apparently believed the leftist vision that inflation would subside and the Fed would not continue to raise rates. These are clearly political fools who are so indoctrinated into the leftist regime, that they know nothing about central banks. Inflation began rising from January 2020. Why did the Fed wait until 2022 to begin raising rates?

Simply because the Fed KNOWS the most significant fact in driving inflation historically is ALWAYS war! Remember WWI, WWII, Korean War, & Vietnam? As soon as the Ukraine War began, that is when the Fed raised rates and there is NO WAY Powell will ever even mention war because he cannot criticize this insane Biden Administration.

The Fed will not publically criticize the administration or Congress which controls the fiscal policy. This Ukrainian War has been instigated by the Neocons, directed by the Neocons who have infiltrated the Biden Administration, and now are fully in control of US foreign policy acting unconstitutionally. They have waged this war against Russia with no end in sight, and no intention of ever engaging in any peace negotiations, and should be called before Congress and held accountable for the FIRST TIME in more than 30 years of endless wars.

As always, Biden blamed the bank panic on the Trump Administration for modifying some 2010 Dodd-Frank Act rules, which was a 2018 bipartisan banking law. That simply raised the threshold for systemically important financial institution (Sifi) classification to $250 billion from $50 billion in assets. That was not Trump’s personal position. That revision would not have prevented the failures of SVB or Signature. Dodd-Frank encouraged banks to load up on these assets, which were especially sensitive to the rapid rise in interest rates. Yet somehow regulators failed to monitor this interest-rate duration risk. But everything that ever goes wrong is always Trump’s fault right down to the migration crisis and global warming. Biden never takes responsibility for anything.

We have a REALLY very serious problem inside the Biden Administration. It is a radical LEFTIST administration that is so intent on dividing the country rich v poor that is now threatening the entire economy. The markets are revealing that we have problems with bank balance sheets and/or income statements that run much deeper for there is a duration risk unaccounted for in the face of another Neocon endless war. For the FDIC to even entertain coving only the minimum and to decline to allow a larger bank to acquire SVB in a shotgun wedding because that would allow rich banks to get bigger, meaning we have a serious infiltration of radical leftist agenda in the Biden Administration that can bring down everything.

The White House’s response to such a financial panic was to do nothing, blame Trump, and screw depositors. This is undermining confidence in the government, which would never have been expected with such a degree of incompetence.

This will be yet another Biden scandal but one that destroys the long-term viability of the United States. Personally, nobody could have predicted such a level of complete incompetence would have ever seized the White House. To reject bids for SVB was stupid, and a complete reversal of fiscal responsibility.

 

The post Houston – We Have a Serious Problem in Biden Administration first appeared on Armstrong Economics.

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