The Silicon Valley Bank Failure, Courtesy of the Capitol Hill Whorehouse.
Bankers’ Contributions to Congress Paid for a Relaxation of Regulations Designed to Reduce the Risk of Banking Crises
By
David Gottfried
Most of the time, the media is like a hyper-active five-year-old. It flits from one shiny news story to another, without rhyme or reason, as its rudder makes it run after anything that is sugary, sexual or scandalous.
When the media covers economic matters, it really does a terrible job of reporting the news, and very often, the shallow and sometimes downright warped reporting makes the bad guys look like good guys and vice versa.
For example, you may recall that the 2008-2009 Great Recession was precipitated by the sub prime realty crisis. Because of bad reporting, many people got the dumb idea that the recession was caused because too many poor people, who could not pay their debts, bought homes. Indeed, I heard one liberal but very uninformed black woman say that the crisis was the fault of poor black people who could not pay their debts.
In fact, people in the know realize that the culprits, for the most part, were on Wall Street. Various financial institutions, in particular Goldman Sachs, bought credit default swaps. Essentially, Goldman and its peers engaged in a form of short-selling, or betting, in which they bet that the price of subprime mortgage derivatives would plummet. Then, to make the derivatives plummet, their confederates routinely changed the terms of mortgage contracts to increase interest payments and demand expedited payments. Defaults soared, and the princely thieves of Wall Street made fresh billions.
In any event, I hope people realize that the problems with Silicon Valley bank were, in part, instigated by Donald Trump and his confederates in the form of Clintonian Corporate Democrats.
Very simply, during the Trump administration, legislation was passed which limited Barrack Obama’s legislation to prevent another financial crisis akin to the 2008 debacle. The Trumpers, and their allies in the Democratic Party, deemed that “smaller” banks, or banks valued at less than 250 billion dollars, would not have to comply with the rules passed during Obama’s tenure.
The President of Silicon Bank, Mr. Greg Becker, testified, before Congress, that because of “SVB’s deep understanding of the markets it serves” and “its strong risk management practices” it should not have to comply with regulations designed to lessen the risk of bank failures.
However, why and how did Becker get the idea that SBV had “strong risk management practices.” In fact, SVB’s portfolio might have seemed pretty dumb to even an undergraduate majoring in economics. SVB had a huge chunk of money in bonds. When interest rates go up (And they have been going up), the price of bonds, bought at a time when interest rates were lower, go down as buyers want to buy bonds yielding a higher rate. That, in large measure, is why SVB failed.
In the Senate, the legislation to exempt “smaller banks” from regulations was passed with the support of 50 Republicans and 17 Democrats. One of those 17 sniveling turncoat Democrats was Mr. Mark Warner, the senior Senator from Virginia.
Why did Mark Warner, Hillary Clinton’s Senatorial boy toy, vote to exempt SVB from regulations ? Perhaps its because Greg Becker, the president of SVB, held a fundraiser for Mark Warner at Becker’s luxurious Menlo Park, California home. Perhaps its also because SVB’s political action committee gave thousands of dollars to Mark Warner’s campaigns. (Footnote 1)
So, the next time you deign to attack me and my friends for loving people like Bernie Sanders and Elizabeth Warren just remember we have very good reasons for our staunch and committed beliefs. Very simply, we understand the salient truths of our political system. Most pols don’t give a damn about principles or even ideology. They are only interested in their own personal advancement and riches. They are bought and sold like pretty whores in a sultry saloon.
I hate the Trumpers for desecrating the Capital on January 6, 2021. But I don’t love the Capital. It ain’t nothing but a whorehouse.
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Footnote 1: I derived information, regarding contributions from SVB to Mark Warner, from a periodical known as the “The Lever,” more specifically from an article published on March 10, 2023 and authored by Rebecca Burns, David Sirota, Julia Rock & Andrew Perez.