0:00

Thanks for listening to the time I'll review with Hugh

0:03

Hewitt podcast, bringing to you the best voices

0:05

on the storage initiatives that

0:06

matter. Helping make it all possible as

0:09

the generous partnership with the Pepperdine graduate

0:11

school of public policy. Here's another

0:13

piece I'll trust you

0:14

enjoy. We're gonna check-in instead

0:16

with my former Fox colleague who is

0:18

now my new Salem colleague,

0:21

she's the host of the Trish Reagan podcast

0:24

and strangely, Her name is

0:26

Trish

0:26

Regan. Trish, welcome back to America

0:28

first.

0:29

Hey. Great to see you as always, Sam.

0:31

Alright. So Lots

0:33

of contradictory reports. The

0:36

White House, the president, has said it was

0:38

Trump era regulations that

0:41

caused this. Barney Frank's

0:43

said he had nothing to do with it

0:45

despite being on the board of the signature

0:47

bank that went down. And then we've had

0:49

others. We played mister wonderful Kevin

0:51

O'Leary yesterday saying, This is

0:53

the poster child for stupid

0:56

business practices. Is it the printing

0:59

of money? Is it dumb board members?

1:01

What happened with SVB, with Signature,

1:04

and what does it mean for the

1:06

broader market dynamic?

1:08

Oh, what happened was government created

1:11

situation where it was free easy

1:13

money for way too long, way

1:15

too long, and they seemed

1:17

those in government to think everything would be

1:19

okay. So they kept communicating to

1:22

the markets and to their friends, many

1:25

of whom were at SVB. In fact,

1:27

one of the executives used to be at

1:29

San Francisco Fed, they could

1:31

say, oh, it's all under control. So

1:33

nothing to see here. Nothing to worry about. It's transitory.

1:36

Remember? And so consequently, the

1:38

bankers at SVB that were in

1:40

charge of managing risk, well,

1:42

they went out and they did what they thought would be

1:44

a normal thing to do. They bought a bunch treasury

1:47

bonds. Well, here's the problem with

1:49

that seb. Treasury bonds

1:51

when they were buying them, they were paying, like, one

1:53

percent for ten years.

1:56

And we all kinda knew or

1:58

at least I knew and I kept telling

2:01

you and thus you knew so your

2:03

viewers knew my listeners knew

2:06

interest rates are gonna have to go up at some point.

2:08

That was just the reality. The handwriting was on the

2:10

wall. But treasury treasury

2:12

treasury, I'm not an economist. I'm not a market

2:14

expert like you. But even I

2:16

knew that. I knew that the Fed would

2:18

have to raise rates again and again

2:20

and again, which makes the face value

2:23

of those bonds practically nuggetories. So

2:25

how does the board think, oh, free

2:28

money free money and and not realize

2:30

something like me.

2:31

Yeah. And economic, you know, novice,

2:34

you knew that. And I knew that.

2:37

And I mean, III think I remember complaining

2:39

to you. I was tearing my hair out

2:42

because I knew that, you knew

2:44

that. I think most average people knew

2:46

that, but the Fed sat there

2:48

with a straight face and told us

2:51

they thought they could manage a soft landing

2:53

and that inflation was only transitory

2:56

and it wouldn't stick. And I'm like, are

2:58

you people insane. I mean,

3:00

everything went through my head. I wondered if Jerome

3:02

Powell was just trying to keep his job. Right?

3:04

And Janet Gillens, she's trying keep her job. And now

3:06

suddenly, she's the world's biggest politician because

3:08

she's over at treasury doing Biden's

3:11

bidding. And all Biden wanted was

3:13

for the money spigot to stay open

3:15

and for the sugar high to continue. And I'm

3:17

looking at this going, it can't. It

3:20

can't. But you know what? They've we've had sugar

3:22

high for, like, fifteen years or twenty years.

3:24

I mean, the Fed has been doing this forever. So

3:26

there there were a group of people out

3:28

there. Shall we

3:31

say the deep state people are just the

3:33

super lefties that actually thought

3:35

there would be no problem. I mean, they actually

3:37

thought that So they wouldn't bought these bonds.

3:40

Right? Well, okay. You know, bonds

3:42

are usually a really safe investment even if

3:44

you're only getting one percent in ten years, you ought

3:46

to be able to trade them in. But what happens

3:49

if all of a sudden your entire client

3:51

base, which is all tech

3:53

companies, it's not like they had many actioning

3:56

companies or car companies or the

3:58

local nail salon. All these tech companies

4:01

suddenly need their money back because

4:03

there's this crunch. Right? Tech plummeted

4:06

in recent months. So they come

4:08

in and they try to get their money set. Well,

4:10

you've got all these bonds that aren't

4:13

good for ten years. Well,

4:15

you have to liquidate. You have to sell

4:17

them at a discount. And before you know it, you're selling

4:19

them at such a discount that the whole thing is

4:21

gonna go belly up. AND THAT'S

4:23

WHY YOU HAD THE FEDERAL RESERVE STEP

4:25

IN. NOW I'VE BEEN WATCHING THE HEARINGS

4:27

TODAY. ONE VERY, VERY DISTURBING THING

4:30

I heard was when senator

4:33

Langford asked Janet Mellon, well, would

4:35

you have done this if it was a small bank

4:37

in Oklahoma? And she

4:39

basically said no, not necessarily. Excuse

4:42

me, but I did hear the president of United

4:45

States. Did he not say on Monday that

4:47

everyone's money is secure. Yeah.

4:50

And the Fed did open this window

4:52

saying to any bank, including the little one

4:54

in Oklahoma, hey, if you have a problem,

4:56

just come to us, we'll give you a loan. So

4:59

it's very unclear if they're picking

5:01

winners and losers here granted it was the fifteenth

5:03

largest bank. They were worried about more

5:05

bank runs. But what I heard on

5:07

Monday was that they were backstopping the

5:10

entire system. And what I heard in

5:12

hearings today with something

5:14

quite different from Janet

5:15

Ellen. So what what does this mean?

5:17

If if you have the chief executive

5:20

unit actually rewriting legislation saying

5:22

we don't care about the FDIC, zero point two five

5:24

million cap, we'll cover everybody. And

5:27

then you have these you know,

5:29

musings or these rumblings that it's

5:31

the mom and pop banks that are going to

5:34

bear the brunt of this. Are

5:36

you concerned that this is more than just

5:38

three banks? What what is the long range

5:41

prognosis? Yes. I was

5:43

not CONCERNED UNTIL LITERALLY thirty

5:45

MINUTES AGO. WHEN I WATCH THE EXCHANGE

5:47

THERE BETWEEN SANDER Langford AND

5:49

JANET YELLEN and he pushed her and said, would

5:52

you be willing to do the same for an Oklahoma

5:54

bank? And she's like, well, and

5:56

she hemmed in hard, and there's all these various

5:59

conditions. And I'm like, wait. Second. You

6:01

did say on Monday, you did say on

6:03

Sunday night, you were opening this window, this

6:05

lending window, any bank that's in

6:07

trouble can come to you and get

6:09

alone. Well, if you're

6:12

not entirely willing to

6:14

do that for everyone, and again, this is happening

6:16

in real time. So you know,

6:18

keep keep that in mind. I just didn't like what

6:20

I heard. I wanted to hear emphatically that

6:23

they were backstopping the system, but

6:25

I did not hear that And so I

6:27

think the upshot is gonna be more

6:29

regional banks have

6:30

problems. They were naturally gonna have problems

6:32

anyway because they're held

6:34

to a different standard. It was

6:36

well intended at the time to kind of free

6:38

up some capital so that they could have

6:40

a shot at doing more diverse

6:43

things and yet

6:45

nobody thought a bank run would really

6:47

happen. So a lot of these smaller

6:50

regionals are effectively like a tier two.

6:52

Right? You get the tier one that are subject

6:54

to all kinds of regulation. And

6:56

then you get tier two over here, the

6:58

smaller ones that don't have the same

7:00

regulatory requirements. And as

7:02

such, when you know what hits

7:04

the fan, they might be more in

7:07

jeopardy. And if Janet Yellen and the rest

7:09

of them aren't willing Townhall the

7:11

smaller guys out

7:12

too, we got a big problem.

7:14

So you're advised in thirty seconds to the three

7:16

million list in three million list in three million list in the U. S. Bank,

7:19

I'm sorry. Like, this is this is gonna

7:21

be the reality. And you know what? It's

7:23

gonna really stink for small business

7:25

owners and for individuals because

7:28

there's something kinda special. I mean, I

7:30

when I was a kid, I got my little past book

7:32

savings, right, from Ports and Savings

7:34

Bank in New Hampshire. I know you know New Hampshire

7:36

well. And they knew my

7:38

name and you have a relationship

7:41

with your bank and there's something incredible

7:44

about that and we're gonna lose this as

7:46

a result of what's happening

7:48

now. That's my fear. Thanks for listening

7:51

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