3046 - A Bailout By Another Name w/ Alexandra Scaggs

Sam and Emma host Alexandra Scaggs, reporter for the Financial Times, to discuss the recent turmoil surrounding the Silicon Valley Bank and Signature Bank. First, Sam and Emma run through updates on inflation, the FDIC’s upcoming bank auctions, EPA water regulations, SCOTUS taking on a massive Shadow Docket case on trans rights, and South Carolina lawmakers proposing a death penalty for abortions, before diving into the incestuous dealmaking behind SVB’s collapse. Alexandra Scaggs then joins as she walks Sam and Emma through the four central elements of Silicon Valley Bank’s collapse, starting by assessing the rollback of the Dodd-Frank capital checks on banks with under $250 Billion in assets, which allowed SVB, the 16th biggest bank in the US, to completely undercapitalize without any awareness from regulators or the Federal Reserve. Next, Alexandra looks to the behind-the-scene shenanigans at SVB that kept them below the $250 Billion threshold, before turning to their relationship with depositors, making outlandish deals to get their clients to deposit well above the FDIC $250k insurance threshold. Bringing these various elements together, Scaggs explores how rumors of SVB’s undercapitalization with the Fed’s constant interest hikes were then spread to depositors, who made these losses official with en masse withdrawals during last Friday’s bank run. Wrapping up the interview, Alexandra, Sam, and Emma tackle how endemic this particular failure was to the ideology of Silicon Valley, one that is grounded in cash-poor companies with promises of future profits, alongside the general culture of Big Tech. Sam, Emma, and the MR Crew also discuss the SVB collapse’s relationship to the US’ general failure of centralized planning.

And in the Fun Half: Emma and Sam talk with Sterber from Idaho about the various disturbing bills coming out of the state, Sam eases Hamza from Utica’s fears of a 2008-esque recession, and Newsmax brings on the post-Great-Recession gold hawks in the wake of SVB’s collapse. They also summarize the Supreme Court’s upcoming shadow docket case on trans civil rights, watch Judge Kyle Duncan throw an absolute hissy fit in front of Stanford students, and Cuomo turns to the anti-progressive AIPAC grift. Mike in Orange County expands on the culture of Venture Capitalism that led to the SVB collapse, and Amy from Nashville parses through the potential impact of various anti-trans bills coming out of Tennessee. Trump continues his spectacular anti-DeSantis rants, plus, your calls and IMs!

Check out Alexandra's work here: https://www.ft.com/alexandra-scaggs

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