Monday, March 13, 2023

Last Call For The End Of A Taxing Explanation

As expected, new House Republican Oversight Committee chair Rep. James Comer has tossed the investigation into Trump's taxes with no explanation as to why, in favor of issuing multiple subpoenas for Hunter Biden's business associates instead. Ranking Democratic member Rep. Jamie Raskin is letting everyone know what Comer is trying to hide.
Rep. Jamie Raskin, the top Democrat on the House Oversight Committee, says Republican chairman Rep. James Comer has abandoned efforts to get the financial documents of former President Donald Trump while quietly digging into the finances of the current president's son.

In a letter to Comer released on Monday, Raskin, D-Md., said it had come to his attention that the Kentucky Republican had coordinated with Trump's lawyers in an effort to block the committee from receiving documents from Mazars USA, the president's former accounting firm.

Raskin argued Comer's alleged decision to halt the execution of the production of documents was hypocritical because he had also issued a subpoena related to an investigation into President Joe Biden's son Hunter.

"You appear to have engaged in these efforts to prevent the production of evidence of former President Trump’s misconduct during his time in office while simultaneously issuing an invasive and overbroad subpoena to private individuals as part of an investigation targeting the business dealings of family members of President Biden who have never held public office," Raskin said.

Comer's office denied working with Trump's lawyers.

Raskin alluded to documents that the committee received from Mazars under the Democratic majority last fall that revealed authoritarian governments like China and Saudi Arabia spent hundreds of dollars at Trump-owned properties while he was president.

"In the face of mounting evidence that foreign governments sought to influence the Trump Administration by playing to President Trump’s financial interests, you and President Trump’s representatives appear to have acted in coordination to bury evidence of such misconduct," said Raskin.

Raskin said he learned that Trump attorney Patrick Strawbridge wrote to Mazars in January stating that it was his understanding that the committee, now under Republican control, had no interest in completing the production of documents under the original subpoena. "When counsel for Mazars sought clarification, Mr. Strawbridge confirmed that this direction had been provided to him, twice, by the Acting General Counsel of the House of Representatives, in his capacity as counsel to the Committee," Raskin said. 
So yes, the SCOTUS gambit here worked. The Roberts Court made the determination that the House Oversight Committee could have Trump's tax returns, but wasted two years in doing so. As such, Comer is dropping the investigation.
But it means that Hunter Biden's tax information -- and Joe Biden's, eventually -- will be fast-tracked for Comer's abuse later on.  Count on that.

Orange Meltdown, Con't

Donald Trump's legal team is smart enough to talk Trump out of testifying before Manhattan DA Alvin Bragg's grand jury convened to investigate the Stormy Daniel hush money scandal as Bragg's decision to charge him looms.
Former President Donald Trump has "no plans" to participate in a Manhattan grand jury investigation into a hush money payment to porn star Stormy Daniels, Trump attorney Joe Tacopina told George Stephanopoulos Monday on ABC's Good Morning America.

"We have no plans on participating in that proceeding," Tacopina said. "Decision needs to be made still. There's been no deadline set, so we'll wait and see."

The Manhattan district attorney's office has been investigating whether Trump falsified business records in connection with a $130,000 payment Trump's former attorney Michael Cohen made to Daniels before the 2016 election, which prosecutors allege was to keep her from talking about a long-denied affair, sources familiar with the matter have told ABC News.

Cohen was scheduled to testify before the grand jury on Monday, ABC News previously reported.

The DA's office informed Trump last week of his right to testify before a grand jury in the probe, a possible signal that the DA is moving toward a charging decision.

Tacopina said another Trump attorney, Susan Necheles, who is leading the case, has met with prosecutors.

Asked if he expects an indictment for Trump, Tacopina said, "I expect justice to prevail. If that's the case, George, there shouldn't be an indictment."
Me, I'll believe Bragg or any DA or federal prosecutor will announce an indictment against Donald Trump when I actually see it done. Jack Smith is running out of tiem, if not running out the clock, and Fani Willis will be removed from office by Georgia Republicans if she dares to follow through, so that leaves Bragg as the best shot at an indictment right now.
We'll see.


The Revenge Of 2008, Con't

A lot has happened over the last 48 hours pertaining to not one but two more crypto venture capital banks collapsing over the weekend and the fate of some $300 billion in deposits.

Federal regulators announced on Sunday that another bank had been closed and that the government would ensure that all depositors of Silicon Valley Bank — which failed Friday — would be paid back in full as Washington rushed to keep fallout from the collapse of the large institution from sweeping through the financial system.

The Federal Reserve, Treasury and Federal Deposit Insurance Corporation announced in a joint statement that “depositors will have access to all of their money starting Monday, March 13.” In an attempt to assuage concerns about who would bear the costs, the agencies said that “no losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.”

The agencies also said that they would make whole depositors at Signature Bank, which the government disclosed was shut down on Sunday by New York bank regulators. The state officials said the move came “in light of market events, monitoring market trends, and collaborating closely with other state and federal regulators” to protect consumers and the financial system.

President Biden said on Sunday evening that the actions were taken at his direction and that he would deliver remarks about the banking system on Monday morning.

“I am pleased that they reached a prompt solution that protects American workers and small businesses, and keeps our financial system safe,” Mr. Biden said in a statement. “The solution also ensures that taxpayer dollars are not put at risk.”

He added: “I am firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.”

The collapse of Signature marks the third significant bank failure within a week. Silvergate, a California-based bank that made loans to cryptocurrency companies, announced last Wednesday that it would cease operations and liquidate its assets.

Amid the wreckage, the Fed also announced that it would set up an emergency lending program, with approval from the Treasury, to funnel funding to eligible banks and help ensure that they are able to “meet the needs of all their depositors.” 
Now why does Signature Bank of New York sound familiar? Oh, because it had some very famous New York clientele. 

Signature was a commercial bank with private client offices in New York, Connecticut, California, Nevada and North Carolina, and had nine national business lines including commercial real estate and digital asset banking.

As of September, almost a quarter of its deposits came from the cryptocurrency sector, but the bank announced in December that it would shrink its crypto-related deposits by $8 billion.

Signature Bank announced in February that its chief executive officer, Joseph DePaolo, would transition into a senior adviser role in 2023 and would be succeeded by the bank’s chief operating officer, Eric Howell. DePaolo has served as president and CEO since Signature's inception in 2001.

The bank had a long-standing relationship with former President Donald Trump and his family, providing Trump and his business with checking accounts and financing several of the family's ventures. Signature Bank cut ties with Trump in 2021 following the deadly Jan. 6 riots on Capitol Hill, and urged Trump to resign.

Yep. This used to be Donald Trump's bank. It cut ties with Trump after January 6th, but let's imagine what kind of bank it had to be in order to do business with Trump in the first place, and to do so throughout his term in office. 

Treasury Secretary Janet Yellen isn't about to bail out Silicon Valley Bank, and the only question now is if the political pressure grows quickly and powerfully enough to force her hand.
Treasury Secretary Janet Yellen said Sunday that the federal government would not bail out Silicon Valley Bank, but is working to help depositors who are concerned about their money.

The Federal Deposit Insurance Corporation insures deposits up to $250,000, but many of the companies and wealthy people who used the bank — known for its relationships with technology startups and venture capital — had more than that amount in their account. There are fears that some workers across the country won’t receive their paychecks.

Yellen, in an interview with CBS’ “Face the Nation,” provided few details on the government’s next steps. But she emphasized that the situation was much different from the financial crisis almost 15 years ago, which led to bank bailouts to protect the industry.

“We’re not going to do that again,” she said. “But we are concerned about depositors, and we’re focused on trying to meet their needs.”

With Wall Street rattled, Yellen tried to reassure Americans that there will be no domino effect after the collapse of Silicon Valley Bank.

“The American banking system is really safe and well capitalized,” she said. “It’s resilient.”

Silicon Valley Bank is the nation’s 16th-largest bank. It was the second biggest bank failure in U.S. history after the collapse of Washington Mutual in 2008. The bank served mostly technology workers and venture capital-backed companies, including some of the industry’s best-known brands.
Meanwhile, SVB's assets are being unwound and the newly created National Bank of Santa Clara will begin operating on Monday.  We'll see if the Trump regime weakened FDIC powers enough to cause problems today, but I'm thinking that Yellen will hold firm for now.

Besides, she's doing the opposite of what Larry Summers wants, and that's good enough for me.

But all this depends on the FDIC finding a buyer for the bank's assets, and nobody has stepped up to play ball yet.

Federal authorities are seriously considering safeguarding all uninsured deposits at Silicon Valley Bank, weighing an extraordinary intervention to prevent what they fear would be a panic in the U.S. financial system, according to three people with knowledge of the matter, who spoke on the condition of anonymity to describe private deliberations.

Officials at the Treasury Department, Federal Reserve, and Federal Deposit Insurance Corporation discussed the idea this weekend, the people said, with only hours to go before financial markets opened in Asia. White House officials have also studied the idea, per two separate people familiar with those discussions.

The plan would be among the potential policy responses if the government is unable to find a buyer for the failed bank. The FDIC began an auction process for SVB on Saturday and hoped to identify a winning bidder Sunday afternoon, with final bids expected by 2 p.m. Eastern time, according to two people familiar with the matter.

Selling SVB to a healthy institution remains the preferred solution, officials have told members of Congress. Most bank failures are resolved that way and enable depositors to avoid losing any money.

In calls with federal banking regulators late Saturday and Sunday, Democrats said they were “praying for a buyer,” said Rep. Brad Sherman (D-Calif.), a member of the House Financial Services Committee. “Big buyer, small buyer, fat buyer, skinny buyer — we need a buyer,” he said. “If they have a bunch of buyers, I would argue you take the best offer,” he said, noting then they can “quibble about which offer to take.”

Although the FDIC insures bank deposits up to $250,000, a provision in federal banking law may give them the authority to protect the uninsured deposits as well if they conclude that failing to do so would pose a systemic risk to the broader financial system, the people said. In that event, uninsured deposits could be backstopped by an insurance fund, paid into regularly by U.S. banks.
The techbros who spent years lobbying for faster, looser capital requirements because "People learned their lesson 15 years ago" are the first people warning that unless these same techbros get back every dime of their billions that they will have no choice but to help collapse more banks until Yellen surrenders.
That's the real problem, and everyone knows it.

As far as the bailout of rich depositors and corporations went, late Sunday, Yellen gave in.

Banking regulators devised a plan Sunday to backstop depositors with money at Silicon Valley Bank, a critical step in stemming a feared systemic panic brought on by the collapse of the tech-focused institution.

Depositors at both failed SVB and Signature Bank in New York, which was shuttered Sunday over similar systemic contagion fears, will have full access to their deposits as part of multiple moves that officials approved over the weekend. Signature had been a popular funding source for cryptocurrency companies.

Those with money at the bank will have full access starting Monday.

The Treasury Department designated both SVB and Signature as systemic risks, giving it authority to unwind both institutions in a way that it said “fully protects all depositors.” The FDIC’s deposit insurance fund will be used to cover depositors, many of whom were uninsured due to the $250,000 cap on guaranteed deposits.

Along with that move, the Federal Reserve also said it is creating a new Bank Term Funding Program aimed at safeguarding institutions affected by the market instability of the SVB failure.

A joint statement from the various regulators involved said there would be no bailouts and no taxpayer costs associated with any of the new plans. Shareholders and some unsecured creditors will not be protected and will lose all of their investments.

“Today we are taking decisive actions to protect the U.S. economy by strengthening public confidence in our banking system,” said a joint statement from Federal Reserve Chair Jerome Powell, Treasury Secretary Janet Yellen and FDIC Chair Martin Gruenberg.

So the investors are losers as they should be, but not the cryptobros who had their unsecured deposits in the bank. They're going to get billions back. Lobbyists during the Trump years begged for less oversight and to take greater risks with tech billions. Supposedly this will all be covered by the FDIC as systemic risk. That's the bailout.

But a quarter-trillion plus doesn't go belly up without consequences. Signature Bank is going to bring the total to well over $300 billion. Maybe this all stops Monday.

US President Joe Biden on Monday addressed the nation after the collapses of Silicon Valley Bank and Signature Bank, and said, "Americans can have confidence that the banking system is safe."

"Your deposits will be there when you need them. Small businesses across the country that have deposit accounts at these banks can breathe easier knowing they'll be able to pay their workers and pay their bills," he said in his Monday address.
Which is the right message, but why did this bank run happen in the first place?

The run was sparked by a letter that Silicon Valley Bank Chief Executive Officer Greg Becker sent to shareholders Wednesday. The bank had suffered a $1.8 billion loss on the sale of US treasuries and mortgage-backed securities and outlined a plan to raise $2.25 billion of capital to shore up its finances.

Customers immediately tried to pull their money, including many of the venture-capital firms the bank had cultivated over decades. Peter Thiel’s Founders Fund, Coatue Management, Union Square Ventures and Founder Collective all advised their startups to pull their cash from the bank, people familiar with the matter said.

The withdrawals initiated by depositors and investors amounted to $42 billion on Thursday alone, according to the regulator. Despite being in sound financial condition prior to Thursday, the California watchdog said the run “caused the bank to be incapable of paying its obligations as they come due,” and it was now insolvent.

The bank was then closed by the California DFPI and placed into FDIC receivership, marking the biggest failure of a US bank since the financial crisis.

They pulled their money on purpose to collapse the bank and to force the Biden administration to give them 100% of any losses back, and they collapsed SVB because otherwise they were going to have to pay up for their risky mortgage investments.

This was deliberate sabotage, the fiduciary equivalent of burning down a building to collect the insurance, so these donors turned a $1.8 billion loss that would have shut down one techbro startup and made the rest of Silicon Valley suddenly aware of being on the hook for their own bad investments into a $42 billion bank run that wiped out their creditors and assured that the feds would pay them back for any losses, with the threat of economic destruction if they didn't.

Because if these assholes can collapse one bank in order to avoid losses, they can do it to anyone.

The game is now fully on.
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