Cup of Joe – March 14, 2023

“The failures of Silicon Valley Bank and Signature Bank are putting new scrutiny on a 2018 law that rolled back some banking regulations, with some Democrats calling to restore those rules as the federal government steps in to protect depositors,” NBC News reports.

“Plans announced Sunday to fully reimburse deposits made in the collapsed Silicon Valley Bank and the shuttered Signature Bank will rely on Wall Street and large financial institutions — not taxpayers — to foot the bill,” CNBC reports.

USA Today: Regulators offer plan to “ensure U.S. banking system continues to perform its vital roles.”

“U.S. regulators on Sunday shut down New York-based Signature Bank, a big lender in the crypto industry, in a bid to prevent the spreading banking crisis,” CNBC reports. “The banking regulators said depositors at Signature Bank will have full access to their deposits, a similar move to ensure depositors at the failed Silicon Valley Bank
will get their money back.”

Wall Street Journal: “Officials took the extraordinary step of designating SVB and Signature Bank as a systemic risk to the financial system, which gives regulators flexibility to guarantee uninsured deposits. The Federal Reserve and the Treasury Department also used emergency lending authorities to establish a new facility to help meet demands for withdrawals.”

“First Republic Bank said it has shored up its finances with additional funding from the Federal Reserve and JPMorgan Chase,” the Wall Street Journal reports.

“The fresh funding gives the bank, which was under pressure following the collapse of SVB Financial Corp. last week, $70 billion in unused liquidity. That doesn’t include money First Republic is eligible to borrow through a new Fed lending facility designed to help banks meet withdrawals.”

“The sudden collapse of Silicon Valley Bank has set the stage for the latest fight over the role of the federal government in the financial sector, with Republican 2024 presidential hopefuls threatening to make any hint of a taxpayer-funded bailout a campaign issue,” the Wall Street Journal reports.

“The subject’s clout and staying power will likely depend heavily on whether regulators are able to successfully shield the banking system from wider fallout, and by how losses are dealt with for depositors with holdings above the Federal Deposit Insurance Corp.’s $250,000-protection limits.”

John Ellis: “The 2008 financial crisis was the predicate to Donald Trump’s rise in American politics. Washington bailing out Silicon Valley is an issue that can turbo-charge his campaign for the presidency. And everyone knows it.”

“As the fallout of the collapse of Silicon Valley Bank continued to spread over the weekend, it became clear that some of the worst casualties were companies developing solutions for the climate crisis,” the New York Times reports.

“The bank, the largest to fail since 2008, worked with more than 1,550 technology firms that are creating solar, hydrogen and battery storage projects. According to its website, the bank issued them billions in loans.”

“Community solar projects appear to be especially hard hit.”

Bloomberg notes “that all the containment measures taken so far won’t solve the core problem of some banks” — that rising interest rates are hurting their balance sheets.

Ben Thompson has a fantastic explainer of what actually happened to cause Silicon Valley Bank to fail last week.

Key takeaway: “Silicon Valley Bank has been technically insolvent for months: the company had more assets than liabilities, but a huge chunk of those assets could not be liquidated without taking a major loss.”

The International Criminal Court intends to open two war crimes cases tied to the Russian invasion of Ukraine and will seek arrest warrants for several people, the New York Times reports.

Associated Press: “From the Treasury Department to the Justice Department, U.S. officials will focus on efforts to legally liquidate the property of Russian oligarchs, expand financial penalties on those who facilitate the evasion of sanctions, and close loopholes in the law that allow oligarchs to use shell companies to move through the U.S. financial system.”

Washington Post: “McCarthy and Jeffries have been driven to establish a truce of sorts this year, working to maintain a cordial relationship out of respect for the House as a functioning institution, according to nearly a dozen close confidants and lawmakers, some of whom spoke on the condition of anonymity to discuss the relationship candidly. The rough start of the congressional term has since given way to a series of olive branches.”

“But the nascent relationship will be tested by the imminent, and already partisan, fight over the debt ceiling and government funding later this year. Both men have foreshadowed the clash, with Jeffries blasting ‘the irresponsible effort by extreme MAGA Republicans’ to hold the economy hostage, and McCarthy blaming Democrats for exploding the debt and refusing to negotiate.”

Daily Beast: “In order to tackle some of the most essential issues Congress is facing this term—let alone produce any sort of legislative accomplishment that Republicans could run on next year—McCarthy will need to strike bipartisan deals.”

“But there are plenty of Republicans who think ‘bipartisan deals’ are exactly the sort of words that may cost Republicans the majority, while other GOP lawmakers think ideological purity at the expense of actual achievements is the recipe for disaster.”

“The Biden administration gave formal approval Monday for a huge oil drilling project in Alaska known as Willow, despite widespread opposition because of its likely environmental and climate impacts,” the New York Times reports.

“President Biden on Monday will announce sweeping protections for more than 16 million acres of land and water in Alaska, as he prepares to approve a massive oil drilling project that has drawn intense criticism from climate activists and young voters,” the Washington Post reports.

“The president will declare the Arctic Ocean off limits to oil and gas leasing, the Interior Department announced Sunday. The department will also write new regulations protecting nearly 13 million acres in the National Petroleum Reserve in Alaska, the nation’s largest piece of public land, including ecologically sensitive areas that provide habitat for thousands of caribou and shorebirds.”

“Donald Trump’s former lawyer and fixer Michael Cohen is poised to testify Monday before a Manhattan grand jury investigating hush-money payments he arranged and made on the former president’s behalf,” the AP reports.

Donald Trump’s lawyer told ABC News the former president has “no plans” to participate in a Manhattan grand jury investigation into a hush money payment to porn star Stormy Daniels.

“President Joe Biden is set to meet with two of America’s closest allies to announce that Australia will purchase U.S.-manufactured, nuclear-powered attack submarines to modernize its fleet, amid growing concerns about China’s influence in the Indo-Pacific region,” the AP reports.

“Biden is traveling Monday to San Diego, where he will meet Australian Prime Minister Anthony Albanese and U.K. Prime Minister Rishi Sunak for talks on the 18-month-old nuclear partnership known by the acronym AUKUS.”

Sunak told NBC News that a more assertive China poses a “systemic challenge” to the global order.

“As Rupert Murdoch’s Fox Corporation battles to contain the Dominion lawsuit scandal that has engulfed its top executives and stars, another crisis is building in the wings that has the potential to cause further turbulence for the media empire,” The Guardian reports.

“Smartmatic USA Corporation’s lawsuit against Fox News has attracted only a fraction of the attention garnered by the legal action of Dominion Voting Systems. Yet both firms are suing Fox for defamation related to its coverage of Donald Trump’s stolen-election lie, and both pose a serious threat to Fox’s finances and reputation.”

Washington Post: “The emails and text messages involving Shah offer a particularly vivid example of the pattern, demonstrating how elements of Fox, the Republican Party and the then-president’s own staffers spent years accommodating some of Trump’s worst impulses and amplifying some of his lies. When it came to the baseless election fraud narrative — including that counting dead voters had lifted the Democrats to victory — many of these people were aware of the likely falsity of the allegations but were unwilling to anger Trump or his supporters by clearly stating so publicly.”

“Shah is also a reminder of how Trump’s operation had become fused to the nation’s most watched conservative news channel, whose coverage had helped fuel his rise before his 2016 election. Shah was part of a long line of Trump underlings who passed back and forth between Trump’s orbit and Fox’s on- and off-air ranks.”

Wall Street Journal: “When Arab leaders met Xi Jinping at a regional summit in Riyadh last December, the Chinese head of state pitched an unprecedented idea: a high-level gathering of Gulf Arab monarchs and Iranian officials in Beijing in 2023, people familiar with the plan said. Days later, Tehran signed on as well.”

“By Friday, China had brokered a deal to restore relations between Iran and Saudi Arabia, which had gone seven years without ties. The broader summit between Iran and the six-nation Gulf Cooperation Council, which hasn’t previously been reported, is on track for later this year, the people said.”

Wall Street Journal: “Mr. Xi’s diplomatic initiative shows that Beijing sees a central role for itself as a new power broker in the Middle East, a strategic region where the U.S. has been the most influential outside player for decades. No longer focused exclusively on energy and trade flows, China’s foray into the region’s politics signals a new chapter in competition between Beijing and Washington.”

“Prosecutors on Sunday rejected the notion that newly public footage of Jacob Chansley — known as the QAnon Shaman — accompanied by police in the Capitol undercuts his criminal conduct on Jan. 6, 2021,” Politico reports.

“In their first response since Fox News’ Tucker Carlson aired the footage — supplied to him by Speaker Kevin McCarthy — prosecutors indicated that Carlson aired footage only from a four-minute period toward the end of Chansley’s hourlong trip through the Capitol, omitting the most incriminating aspects of his conduct.”

Speaker Kevin McCarthy (R-CA) said Sunday that he will “slowly roll out” hours of surveillance footage from the Jan. 6 Capitol riot to “every individual news agency,” Axios reports.

“Nicaragua ’s government said Sunday it has proposed suspending relations with the Vatican days after Pope Francis reportedly compared President Daniel Ortega’s administration to a communist or Nazi dictatorship amid a crackdown on the Catholic Church in the Central American country,” the AP reports.

Rep. Nancy Mace (R-SC) said that raising the retirement age for future Social Security beneficiaries should be “on the table” as long as it doesn’t affect “anybody that’s heading into retirement right now,” CNN reports.

Axios: Why some in the GOP are floating upping retirement age for some Americans.

Associated Press: “Democrats are expected to bring a sweeping 11-bill gun safety package before the Michigan Legislature this week.”

“Responding to two mass school shootings in 15 months, the party’s leaders say it is only the beginning of gun reform in the state.”

“Vice President Kamala Harris will spend a week in Africa at the end of March as the United States deepens its outreach to the continent amid global competition, notably with China,” the AP reports.

“Harris’ plans follow visits by first lady Jill Biden and Treasury Secretary Janet Yellen. Secretary of State Antony Blinken is going this week, and President Joe Biden is expected to travel to Africa later this year.”

Politico: “The broader shift to more populist policies, like the ‘Buy American’ campaign also championed by Trump, could drive up the cost of production for companies — and consumers — at a time when the Federal Reserve is jacking up interest rates to bring down record-high inflation.”

“And companies themselves fear a chilling effect on their operations from both Democrats seeking to toughen regulations and from Republicans ready to rip any firm that adopts progressive policies on climate and a range of social issues.”

Delaware politics from a liberal, progressive and Democratic perspective. Keep Delaware Blue.

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