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6 things you NEED to know about the Silicon Valley Bank collapse

March 15, 2023
NurPhoto / Contributor | Getty Images
Katarina Bradford

Silicon Valley Bank's collapse is sparking traumatic memories of the 2008 financial crash. Should we be worried SVB is signaling a similar economic catastrophe, or is everyone overreacting to the media's hype? Glenn told his listeners to be "healthily terrified." This event is sure to have ripple effects throughout the economy, but the more you are informed about it, the more you can prepare. Here are 6 things you need to know about Silicon Valley Bank's crash—explained in simple words.

1. The short answer to what happened: SVB didn't have enough money to pay its depositors.

Remember the scene from It's a Wonderful Life when all of the residents make a run on George Bailey's bank demanding their money? Fortunately for them, their money was in the altruistic hands of George Bailey, who used his honeymoon savings to give the depositors the money they demanded.

Silicon Valley Bank's depositors weren't so lucky.

In short, the depositors made a run on Silicon Valley Bank, demanding the withdrawal of their money. But SVB simply didn't have the liquid money available to give their depositors, causing regulators to shut down the bank shortly afterward.

2. It all started with COVID...

Why didn't SVB have enough money for its depositors? To explain this, we have to go back to the pandemic era.

The pandemic saw a rapid decrease in spending and a massive increase in bank deposits. Due to the uncertainty of the future and lockdowns limiting ways to spend money on recreational activities, like restaurants, bars, and other outlets, many Americans stocked up money in their accounts. In fact, SVB's deposits doubled in 2021 alone, bringing in more money than they could lend out to their clients.

To make a return on their available cash, SVB wanted to invest it, as many banks do. Since they had reached their lending limit, they decided to invest it in U.S. Treasury Securities, which are the government's means of funding itself without using taxation (in a nutshell). These are considered "ultra-safe" investments because they are backed by the "full faith and credit of the federal government."

Unlike other forms of investments, investing in Treasuries means the government will do everything within its legal power to pay back the money used to fund itself. In other words, it is typically very safe... so what happened?

3. Then came the magic cocktail—record-high inflation and rising interest rates...

Interest rates ruined the typically "ultra-safe" investment. Due to 40-year record-high inflation, the Fed lifted rates eight times by a total of 4.25 percentage points in 2022, raising interest rates from 0.25 percent to 4.375 percent. This means the value of U.S. Treasuries investments plummeted rapidly. SVB reported that it lost $1.8 billion due to the decreased value of its Treasuries investments after a year of rising interest rates.

This raises the following question: why didn't SVB just weather the storm and wait for interest rates to decrease? There are two issues with this. The first is that, with so many of their assets held up in Treasuries investments, SVB still wouldn't have enough liquid assets to give their depositors during the bank run.

The second issue is that Treasuries investments have a ten-year limit. In 2021 during the Trump administration, interest rates were at an all-time low of 0.125 percent.

The record-fast increase of interest rates in 2022 caused very little chance for rates to go back down to their historic 2021 lows within ten years for banks to make their money back on their investments.

To avoid this, SVB planned to sell their investments at a loss and re-purchase Treasuries investments at the decreased value, giving them an extra ten years to bet on decreased interest rates in the future.

But people caught on to SVB's plan and didn't want to ride with the risk.

4. Account holders withdrew their money... FAST.

As aforementioned, SVP lost $1.8 billion when it sold its depleted Treasuries investments. While they were betting on being able to re-purchase the devalued securities, hoping that they would go up in value in the future with lowered interest rates, investors were worried about the risk.

Once they made the announcement of their $1.8 billion loss, their stocks began to drop, and venture capitalists warned the companies they invest in to pull out of SVB. This had a snowball effect, leading to a "bank run" of depositors demanding to withdraw their money from their SVB accounts.

This led to the perfect storm: SVB's investment losses coupled with the influx of withdrawals were so immense that regulators had to step in and shut the bank down to protect depositors. The government currently "running" SVB, for all practical purposes, is the Federal Deposit Insurance Corporation (FDIC). The FDIC closed SVB on Friday and reopened the bank on Monday, March 13th as the Deposit Insurance Bank of Santa Clara.

5. Some people may lose their money. 

Banks insure accounts with $250,000 or less with FDIC insurance. That means, in cases of bank failure, exactly like this one, the FDIC covers all accounts less than $250,000. The FDIC said SVB customers who had less than $250,000 in their accounts will have access to all of their money when the bank reopens. Since it reopened this week, they should have access to their funds.

However, many of SVB's depositors had more than $250,000 in their accounts—it is Silicon Valley after all. Therefore, their accounts were not covered by FDIC insurance. Will they get their money back? There is a chance that they will not.

It is unclear how much SVB currently has to cover uninsured deposits. It is likely not enough. The FDIC has issued a "Receiver's Certificate" to the uninsured account holders with the amount in their account that is not covered by FDIC insurance.

The FDIC said it will pay some of the uninsured deposits by next week by liquidating any additional assets held by SVB. However, if the liquidated assets are not enough, many of SVB's uninsured account holders could lose their money for good.

6. Is this 2008 all over again?

SVB's collapse was the largest bank failure since 2008, when Washington Mutual failed with $307 billion in assets. Its failure, along with the collapse of the Lehman Brother's investment bank, triggered the worst financial crisis since the Great Depression. Are we in danger of repeating 2008?

Some argue that we are not in danger of another economic catastrophe, simply because SVB holds less than 1 percent of the nation's assets. However, as Glenn warns, there is a danger of banks repeating the same mistakes as SVP.

SVP wasn't the only bank to use its surplus deposits to invest in U.S. Treasuries, which means that other banks are wrestling with the depleted value of their securities investments due to rising interest rates.

Bank of America, for example, lost $109 billion in their securities investments due to rising interest rates, the most among its peers—and Bank of America is no small fish in the ocean of assets.

Other major banks recorded other massive losses in their securities investments due to rising interest rates. JP Morgan Chase lost $36 billion, Wells Fargo lost $41 billion, Citigroup lost $25 billion, and Goldman Sachs lost $1 billion. If the little banks collapse, will they get the same effort and attention from the federal government as the "big guys?"

The critic may argue that these are still small values given the incredibly large amount of assets held in banks nationwide. However, this is missing the point. Major banks have majorly invested in securities since the pandemic-era skyrocketing rate of deposits. Now those investments are depleted in value.

They can either sell those investments at a loss, or they can wait and hope that they will recover over time. However, if those investments are no longer liquid, what happens when their depositors come knocking? Will they have enough liquid assets to cover a massive bank run? These are the lingering questions that our banks need to address.

As Glenn says, this will impact you—it is only a matter of time. What will you do to prepare?

Is the U.N. plotting to control 30% of U.S. land by 2030?

Bloomberg / Contributor | Getty Images

A reliable conservative senator faces cancellation for listening to voters. But the real threat to public lands comes from the last president’s backdoor globalist agenda.

Something ugly is unfolding on social media, and most people aren’t seeing it clearly. Sen. Mike Lee (R-Utah) — one of the most constitutionally grounded conservatives in Washington — is under fire for a housing provision he first proposed in 2022.

You wouldn’t know that from scrolling through X. According to the latest online frenzy, Lee wants to sell off national parks, bulldoze public lands, gut hunting and fishing rights, and hand America’s wilderness to Amazon, BlackRock, and the Chinese Communist Party. None of that is true.

Lee’s bill would have protected against the massive land-grab that’s already under way — courtesy of the Biden administration.

I covered this last month. Since then, the backlash has grown into something like a political witch hunt — not just from the left but from the right. Even Donald Trump Jr., someone I typically agree with, has attacked Lee’s proposal. He’s not alone.

Time to look at the facts the media refuses to cover about Lee’s federal land plan.

What Lee actually proposed

Over the weekend, Lee announced that he would withdraw the federal land sale provision from his housing bill. He said the decision was in response to “a tremendous amount of misinformation — and in some cases, outright lies,” but also acknowledged that many Americans brought forward sincere, thoughtful concerns.

Because of the strict rules surrounding the budget reconciliation process, Lee couldn’t secure legally enforceable protections to ensure that the land would be made available “only to American families — not to China, not to BlackRock, and not to any foreign interests.” Without those safeguards, he chose to walk it back.

That’s not selling out. That’s leadership.

It's what the legislative process is supposed to look like: A senator proposes a bill, the people respond, and the lawmaker listens. That was once known as representative democracy. These days, it gets you labeled a globalist sellout.

The Biden land-grab

To many Americans, “public land” brings to mind open spaces for hunting, fishing, hiking, and recreation. But that’s not what Sen. Mike Lee’s bill targeted.

His proposal would have protected against the real land-grab already under way — the one pushed by the Biden administration.

In 2021, Biden launched a plan to “conserve” 30% of America’s lands and waters by 2030. This effort follows the United Nations-backed “30 by 30” initiative, which seeks to place one-third of all land and water under government control.

Ask yourself: Is the U.N. focused on preserving your right to hunt and fish? Or are radical environmentalists exploiting climate fears to restrict your access to American land?

  Smith Collection/Gado / Contributor | Getty Images

As it stands, the federal government already owns 640 million acres — nearly one-third of the entire country. At this rate, the government will hit that 30% benchmark with ease. But it doesn’t end there. The next phase is already in play: the “50 by 50” agenda.

That brings me to a piece of legislation most Americans haven’t even heard of: the Sustains Act.

Passed in 2023, the law allows the federal government to accept private funding from organizations, such as BlackRock or the Bill Gates Foundation, to support “conservation programs.” In practice, the law enables wealthy elites to buy influence over how American land is used and managed.

Moreover, the government doesn’t even need the landowner’s permission to declare that your property contributes to “pollination,” or “photosynthesis,” or “air quality” — and then regulate it accordingly. You could wake up one morning and find out that the land you own no longer belongs to you in any meaningful sense.

Where was the outrage then? Where were the online crusaders when private capital and federal bureaucrats teamed up to quietly erode private property rights across America?

American families pay the price

The real danger isn’t in Mike Lee’s attempt to offer more housing near population centers — land that would be limited, clarified, and safeguarded in the final bill. The real threat is the creeping partnership between unelected global elites and our own government, a partnership designed to consolidate land, control rural development, and keep Americans penned in so-called “15-minute cities.”

BlackRock buying entire neighborhoods and pricing out regular families isn’t by accident. It’s part of a larger strategy to centralize populations into manageable zones, where cars are unnecessary, rural living is unaffordable, and every facet of life is tracked, regulated, and optimized.

That’s the real agenda. And it’s already happening , and Mike Lee’s bill would have been an effort to ensure that you — not BlackRock, not China — get first dibs.

I live in a town of 451 people. Even here, in the middle of nowhere, housing is unaffordable. The American dream of owning a patch of land is slipping away, not because of one proposal from a constitutional conservative, but because global powers and their political allies are already devouring it.

Divide and conquer

This controversy isn’t really about Mike Lee. It’s about whether we, as a nation, are still capable of having honest debates about public policy — or whether the online mob now controls the narrative. It’s about whether conservatives will focus on facts or fall into the trap of friendly fire and circular firing squads.

More importantly, it’s about whether we’ll recognize the real land-grab happening in our country — and have the courage to fight back before it’s too late.


This article originally appeared on TheBlaze.com.

URGENT: FIVE steps to CONTROL AI before it's too late!

MANAURE QUINTERO / Contributor | Getty Images

By now, many of us are familiar with AI and its potential benefits and threats. However, unless you're a tech tycoon, it can feel like you have little influence over the future of artificial intelligence.

For years, Glenn has warned about the dangers of rapidly developing AI technologies that have taken the world by storm.

He acknowledges their significant benefits but emphasizes the need to establish proper boundaries and ethics now, while we still have control. But since most people aren’t Silicon Valley tech leaders making the decisions, how can they help keep AI in check?

Recently, Glenn interviewed Tristan Harris, a tech ethicist deeply concerned about the potential harm of unchecked AI, to discuss its societal implications. Harris highlighted a concerning new piece of legislation proposed by Texas Senator Ted Cruz. This legislation proposes a state-level moratorium on AI regulation, meaning only the federal government could regulate AI. Harris noted that there’s currently no Federal plan for regulating AI. Until the federal government establishes a plan, tech companies would have nearly free rein with their AI. And we all know how slowly the federal government moves.

  

This is where you come in. Tristan Harris shared with Glenn the top five actions you should urge your representatives to take regarding AI, including opposing the moratorium until a concrete plan is in place. Now is your chance to influence the future of AI. Contact your senator and congressman today and share these five crucial steps they must take to keep AI in check:

Ban engagement-optimized AI companions for kids

Create legislation that will prevent AI from being designed to maximize addiction, sexualization, flattery, and attachment disorders, and to protect young people’s mental health and ability to form real-life friendships.

Establish basic liability laws

Companies need to be held accountable when their products cause real-world harm.

Pass increased whistleblower protections

Protect concerned technologists working inside the AI labs from facing untenable pressures and threats that prevent them from warning the public when the AI rollout is unsafe or crosses dangerous red lines.

Prevent AI from having legal rights

Enact laws so AIs don’t have protected speech or have their own bank accounts, making sure our legal system works for human interests over AI interests.

Oppose the state moratorium on AI 

Call your congressman or Senator Cruz’s office, and demand they oppose the state moratorium on AI without a plan for how we will set guardrails for this technology.

Glenn: Only Trump dared to deliver on decades of empty promises

Tasos Katopodis / Stringer | Getty Images

The Islamic regime has been killing Americans since 1979. Now Trump’s response proves we’re no longer playing defense — we’re finally hitting back.

The United States has taken direct military action against Iran’s nuclear program. Whatever you think of the strike, it’s over. It’s happened. And now, we have to predict what happens next. I want to help you understand the gravity of this situation: what happened, what it means, and what might come next. To that end, we need to begin with a little history.

Since 1979, Iran has been at war with us — even if we refused to call it that.

We are either on the verge of a remarkable strategic victory or a devastating global escalation. Time will tell.

It began with the hostage crisis, when 66 Americans were seized and 52 were held for over a year by the radical Islamic regime. Four years later, 17 more Americans were murdered in the U.S. Embassy bombing in Beirut, followed by 241 Marines in the Beirut barracks bombing.

Then came the Khobar Towers bombing in 1996, which killed 19 more U.S. airmen. Iran had its fingerprints all over it.

In Iraq and Afghanistan, Iranian-backed proxies killed hundreds of American soldiers. From 2001 to 2020 in Afghanistan and 2003 to 2011 in Iraq, Iran supplied IEDs and tactical support.

The Iranians have plotted assassinations and kidnappings on U.S. soil — in 2011, 2021, and again in 2024 — and yet we’ve never really responded.

The precedent for U.S. retaliation has always been present, but no president has chosen to pull the trigger until this past weekend. President Donald Trump struck decisively. And what our military pulled off this weekend was nothing short of extraordinary.

Operation Midnight Hammer

The strike was reportedly called Operation Midnight Hammer. It involved as many as 175 U.S. aircraft, including 12 B-2 stealth bombers — out of just 19 in our entire arsenal. Those bombers are among the most complex machines in the world, and they were kept mission-ready by some of the finest mechanics on the planet.

   USAF / Handout | Getty Images

To throw off Iranian radar and intelligence, some bombers flew west toward Guam — classic misdirection. The rest flew east, toward the real targets.

As the B-2s approached Iranian airspace, U.S. submarines launched dozens of Tomahawk missiles at Iran’s fortified nuclear facilities. Minutes later, the bombers dropped 14 MOPs — massive ordnance penetrators — each designed to drill deep into the earth and destroy underground bunkers. These bombs are the size of an F-16 and cost millions of dollars apiece. They are so accurate, I’ve been told they can hit the top of a soda can from 15,000 feet.

They were built for this mission — and we’ve been rehearsing this run for 15 years.

If the satellite imagery is accurate — and if what my sources tell me is true — the targeted nuclear sites were utterly destroyed. We’ll likely rely on the Israelis to confirm that on the ground.

This was a master class in strategy, execution, and deterrence. And it proved that only the United States could carry out a strike like this. I am very proud of our military, what we are capable of doing, and what we can accomplish.

What comes next

We don’t yet know how Iran will respond, but many of the possibilities are troubling. The Iranians could target U.S. forces across the Middle East. On Monday, Tehran launched 20 missiles at U.S. bases in Qatar, Syria, and Kuwait, to no effect. God forbid, they could also unleash Hezbollah or other terrorist proxies to strike here at home — and they just might.

Iran has also threatened to shut down the Strait of Hormuz — the artery through which nearly a fifth of the world’s oil flows. On Sunday, Iran’s parliament voted to begin the process. If the Supreme Council and the ayatollah give the go-ahead, we could see oil prices spike to $150 or even $200 a barrel.

That would be catastrophic.

The 2008 financial collapse was pushed over the edge when oil hit $130. Western economies — including ours — simply cannot sustain oil above $120 for long. If this conflict escalates and the Strait is closed, the global economy could unravel.

The strike also raises questions about regime stability. Will it spark an uprising, or will the Islamic regime respond with a brutal crackdown on dissidents?

Early signs aren’t hopeful. Reports suggest hundreds of arrests over the weekend and at least one dissident executed on charges of spying for Israel. The regime’s infamous morality police, the Gasht-e Ershad, are back on the streets. Every phone, every vehicle — monitored. The U.S. embassy in Qatar issued a shelter-in-place warning for Americans.

Russia and China both condemned the strike. On Monday, a senior Iranian official flew to Moscow to meet with Vladimir Putin. That meeting should alarm anyone paying attention. Their alliance continues to deepen — and that’s a serious concern.

Now we pray

We are either on the verge of a remarkable strategic victory or a devastating global escalation. Time will tell. But either way, President Trump didn’t start this. He inherited it — and he took decisive action.

The difference is, he did what they all said they would do. He didn’t send pallets of cash in the dead of night. He didn’t sign another failed treaty.

He acted. Now, we pray. For peace, for wisdom, and for the strength to meet whatever comes next.


This article originally appeared on TheBlaze.com.

Globalize the Intifada? Why Mamdani’s plan spells DOOM for America

Bloomberg / Contributor | Getty Images

If New Yorkers hand City Hall to Zohran Mamdani, they’re not voting for change. They’re opening the door to an alliance of socialism, Islamism, and chaos.

It only took 25 years for New York City to go from the resilient, flag-waving pride following the 9/11 attacks to a political fever dream. To quote Michael Malice, “I'm old enough to remember when New Yorkers endured 9/11 instead of voting for it.”

Malice is talking about Zohran Mamdani, a Democratic Socialist assemblyman from Queens now eyeing the mayor’s office. Mamdani, a 33-year-old state representative emerging from relative political obscurity, is now receiving substantial funding for his mayoral campaign from the Council on American-Islamic Relations.

CAIR has a long and concerning history, including being born out of the Muslim Brotherhood and named an unindicted co-conspirator in the Holy Land Foundation terror funding case. Why would the group have dropped $100,000 into a PAC backing Mamdani’s campaign?

Mamdani blends political Islam with Marxist economics — two ideologies that have left tens of millions dead in the 20th century alone.

Perhaps CAIR has a vested interest in Mamdani’s call to “globalize the intifada.” That’s not a call for peaceful protest. Intifada refers to historic uprisings of Muslims against what they call the “Israeli occupation of Palestine.” Suicide bombings and street violence are part of the playbook. So when Mamdani says he wants to “globalize” that, who exactly is the enemy in this global scenario? Because it sure sounds like he's saying America is the new Israel, and anyone who supports Western democracy is the new Zionist.

Mamdani tried to clean up his language by citing the U.S. Holocaust Memorial Museum, which once used “intifada” in an Arabic-language article to describe the Warsaw Ghetto Uprising. So now he’s comparing Palestinians to Jewish victims of the Nazis? If that doesn’t twist your stomach into knots, you’re not paying attention.

If you’re “globalizing” an intifada, and positioning Israel — and now America — as the Nazis, that’s not a cry for human rights. That’s a call for chaos and violence.

Rising Islamism

But hey, this is New York. Faculty members at Columbia University — where Mamdani’s own father once worked — signed a letter defending students who supported Hamas after October 7. They also contributed to Mamdani’s mayoral campaign. And his father? He blamed Ronald Reagan and the religious right for inspiring Islamic terrorism, as if the roots of 9/11 grew in Washington, not the caves of Tora Bora.

   Bloomberg / Contributor | Getty Images

 

This isn’t about Islam as a faith. We should distinguish between Islam and Islamism. Islam is a religion followed peacefully by millions. Islamism is something entirely different — an ideology that seeks to merge mosque and state, impose Sharia law, and destroy secular liberal democracies from within. Islamism isn’t about prayer and fasting. It’s about power.

Criticizing Islamism is not Islamophobia. It is not an attack on peaceful Muslims. In fact, Muslims are often its first victims.

Islamism is misogynistic, theocratic, violent, and supremacist. It’s hostile to free speech, religious pluralism, gay rights, secularism — even to moderate Muslims. Yet somehow, the progressive left — the same left that claims to fight for feminism, LGBTQ rights, and free expression — finds itself defending candidates like Mamdani. You can’t make this stuff up.

Blending the worst ideologies

And if that weren’t enough, Mamdani also identifies as a Democratic Socialist. He blends political Islam with Marxist economics — two ideologies that have left tens of millions dead in the 20th century alone. But don’t worry, New York. I’m sure this time socialism will totally work. Just like it always didn’t.

If you’re a business owner, a parent, a person who’s saved anything, or just someone who values sanity: Get out. I’m serious. If Mamdani becomes mayor, as seems likely, then New York City will become a case study in what happens when you marry ideological extremism with political power. And it won’t be pretty.

This is about more than one mayoral race. It’s about the future of Western liberalism. It’s about drawing a bright line between faith and fanaticism, between healthy pluralism and authoritarian dogma.

Call out radicalism

We must call out political Islam the same way we call out white nationalism or any other supremacist ideology. When someone chants “globalize the intifada,” that should send a chill down your spine — whether you’re Jewish, Christian, Muslim, atheist, or anything in between.

The left may try to shame you into silence with words like “Islamophobia,” but the record is worn out. The grooves are shallow. The American people see what’s happening. And we’re not buying it.

This article originally appeared on TheBlaze.com.