Charles Payne deconstructs the ‘master excuse’ Trump’s deregulation led to the collapse of the Silicon Valley bank
FOX Business host Charles Payne joined “Life, Liberty & Levin” to analyze the breakdown Silicon Valley Bank and the ensuing bailouts from the Biden administration to FDIC depositors.
Paine rejected the theory that former President Donald Trump’s actions toward lax regulations to ease pressure on community banks had anything to do with it. SVB breakdown.
Instead, he said, it was an institution that catered largely to wealthier American investors that made unwise and long-term investment decisions in Treasury bills and other instruments themselves.
“The last big financial crisis we went through, a lot of rules were set and they were stressful rules — they were very strict,” Payne said. “We have banks for a reason. Banks, we want to lend money. Well, it was very tough and very stressful on the little banks, and they couldn’t lend money.”
“Why is there a community bank if it can’t lend money to the community?”
Payne explained that Trump recognized this problem and recommended that Congress revise the policy so that these regulations and rules apply only to banks with more than $250 billion in deposits, which he noted also received generous bipartisan support at the time.
“So this has nothing to do with what’s happening now – absolutely zero,” he said. “It’s another one of those major excuses.”
“genesis” Instead SVB collapse It starts with President Biden, according to Payne, who notes that Biden has printed trillions of dollars and “rained it down on this economy, ostensibly to fight COVID — wink of an eye.”
The inflation that followed became the purview of Chairman Jay Powell and the Federal Reserve, he said, adding that Powell was trying to slow the economy to put out the inflationary fire.
“It raises interest rates, and if it does, it changes the dynamics of the investment world,” he said. “On the side, we have…the absolute elite on the West Coast. In fact, they have their own modern Roman Empire in Silicon Valley.”
Paine argued that they made so much money from the Fed’s behavior along with stimulus that they “went crazy and took advantage of it in 2020.”
So now instead of $50 billion, [SVB] “They had almost $200 billion in it… what are they doing with that money? They don’t lend it out. They’ve never been a money-lending bank. They’re in the richest zip code in America. They start investing, they start doing really stupid things with this, including Last year’s bond load.
Payne noted that the bond market experienced one of its worst years in history in 2021, which shattered bank balance sheets.
“On paper, they had losses, couldn’t meet their obligations, and so they were bailed out, not the bank. Technically, the bank was allowed to go out of business. Technically, Silicon Valley was bailed out again after tearing apart the American public for the past 20 years.” With exaggerated initial public offerings and so-called SPACs.”
“So now we’ve created a banking crisis, and everyone is looking around to see who’s next.”