Regulators were warned in 2018 that the Silicon Valley Bank was the highest risk bank in the country, with more than 90% of their deposits NOT insured. In spite of that warning, regulators did absolutely nothing, leading to the recent collapse. Also, a police union executive has been arrested for running a massive drug smuggling operation out of her home for the past 8 years, sending drugs all over the country by disguising them as wedding gifts and candy. Mike Papantonio & Farron Cousins discuss more.
Transcript:
*This transcript was generated by a third-party transcription software company, so please excuse any typos.
Mike Papantonio: Regulators were warned in 2018 that Silicon Valley Bank was the highest risk bank in the country with more than 90% of their deposits not insured. In spite of that warning, regulators did nothing, nothing. Five years, five years they had to know this is a disaster. But they did nothing to stop this collapse. Right?
Farron Cousins: They were sitting on a document, these regulators, Congress, everybody who voted to deregulate that literally told them Silicon Valley Bank has the most uninsured deposits. So basically the highest risk out of every bank in the country, this one has screwed the pooch and it will screw up again. And they said, well, we’re gonna do it anyway.
Mike Papantonio: What information did they have, Farron? What were the important signs that say, okay, first of all, Trump leads the charge to undo Dodd-Frank. Okay. During his administration. Biden comes in office, has two years to fix it and doesn’t fix it at all. Not only doesn’t fix it, but doesn’t add new regulators to say, look, Dodd-Frank is not there to protect us. Dodd-Frank said that a bank needed to have $250 million worth of cushion. Now it was dropped to 50 million for mid-size banks. Trump did that. Biden did nothing about it. What’s your take?
Farron Cousins: And Silicon Valley Bank had 90% of their total deposits, so 90% of the so-called money held in this bank was uninsured, which meant they were most prone to having a run on the bank and running out of cash after, you know, 10% of the money had been withdrawn. They would be left with nothing. And then you have everyone else losing all of their money because it’s not FDIC regulated.
Mike Papantonio: Right. Okay. So here’s the problem. You have, say you have $50,000 in the bank. You say, well I’ve got insurance for 250,000. It doesn’t mean anything because it’s, once the bank goes, everybody goes. And there’s no way to get that. You’re not safe because of that $250,000. I don’t know why people think that. But in this situation you might ultimately get it back. But it’s gonna be a fight. And if you need that money to live, it’s gonna be a big fight. But listen, here’s, as I was looking at this story, I was thinking back to the story you and I did when there was a failure to prosecute after the bank burn down, two oh what, 2008, right?
Farron Cousins: Yeah.
Mike Papantonio: And there was no, nobody was prosecuted. I remember Obama ran on the ticket to where I’m gonna throw some people in jail, we’re gonna stop all this. He puts Eric Holder in charge of Attorney General. Nobody goes to prison. Nobody is even indicted. Whereas you can, you control, it’s almost like, it doesn’t make any sense. But you look at, back at with Ronald Reagan. Ronald Reagan of all people, he put, he indicts 800 bankers. Most of them go to prison for the SNL crisis. This is no different.
Farron Cousins: Yeah.
Mike Papantonio: What was happening there is the, it’s almost a reflection exactly. I’m interested to see what this administration does.
Farron Cousins: Yeah. Really. And that’s such a good thing and you and I have a brought that up in the past too. Like, as bad as Reagan was.
Mike Papantonio: Oh, he was terrible.
Farron Cousins: At least we got bankers in jail. It was big on the news. You had all these people in these nice suits walking out in handcuffs. And that’s what we have to have again, because guess what, you had a little time there where the banks weren’t doing all this illegal activity, doing all this risky gambling with our money, but time forgives. Clinton came in with his deregulation. Bush took it even further and it just has snowballed from there.
Mike Papantonio: Well, that’s right. I mean, when Clinton came in with his deregulation, that kind of opened the door, didn’t it?
Farron Cousins: Yeah, it did.
Mike Papantonio: But the point being is, as we look at this, we look at the burn down 2008 and all of these bankers say, well hell, you know, I made a lot of money. It was good. I got, you know, I got multimillion dollar bonuses. Some of these guys made a hundred million dollar bonuses during the burn down and after the burn down, not one of ’em was prosecuted. So if you are this bank, this California bank, you say, well, SVB, why wouldn’t I take a chance? Why? Because I’m not gonna go to jail. I know the Biden administration’s not gonna put me in jail. What’s your prediction? How many of ’em go to jail?
Farron Cousins: Oh, zero. And I mean, all the money’s basically just been given back to people. We know you lost it, but here’s your bailout. You get everything you need. And.
Mike Papantonio: How about the regulators? How many regulators get fired?
Farron Cousins: Oh zero. There will not be a single one. They’ll get promotions if anything.
Mike Papantonio: Promotions are more likely.
Mike Papantonio: A police union executive has been arrested for running a massive drug smuggling operation out of her home for the past eight years, sending drugs all over the country by disguising them as wedding gifts and candy. Wow. Okay. Pick the story up, please.
Farron Cousins: Yeah. This is a bit of a shock here. We’ve got this San Jose Police Union executive, you know, basically kind of at the top overseeing the entire police union for San Jose, California. Well, it turns out that for, you know, almost a decade at this point, she had been bringing drugs into the country and then acted as the distribution point sending them all over the country. So she was getting drugs from China according to the allegations, from China, from India, from all of these foreign countries, just having them shipped to her in the mail.
Mike Papantonio: Yeah. While, she’s using WhatsApp.
Farron Cousins: Yeah.
Mike Papantonio: I mean, she’s coordinating with WhatsApp and coordinating with the police, with the police’s own equipment.
Farron Cousins: Right. She’s using their computers.
Mike Papantonio: Eight years.
Farron Cousins: To set up her drug ring. And it all is happening under the nose of these police officers, like you said, for eight straight years. And then she finally gets popped and she says, oh, clearly it was my housekeeper that’s smuggling all these drugs and sending them from my home. But her methods are becoming more and more prevalent that we’re seeing with these drugs smugglers.
Mike Papantonio: That’s the story. That’s the story, isn’t it? I mean, the reason we’re doing this story is not because of that event that took place in California. There’s this real pervasive use of a lot of creative things that are being done. Talk about a few that we’ve already discussed.
Farron Cousins: Yeah. So she was disguising it as makeup. And what you do is you take, you know, a pack of makeup that has different powders and colors in it. You empty that out, you replace one or two of ’em with a powdered drug. That way somebody opens it up, it looks normal. She can, you know, well, not she, but you can bake it to look like candy. That is something that we see. You could.
Mike Papantonio: That’s, that was the wedding gift. It was candy.
Farron Cousins: Yeah. I’ve got you all of these lovely chocolates, but it’s actually just drugs. We’re seeing them put it in shampoo bottles. In lotion bottles. They’re liquefying drugs to be able to send them, get them in and out of the country. It truly is massive. The ingenuity of these drug smugglers. I mean, not to give them credit, but you kind of have to because the creativity is off the charts and we’re falling behind on being able to detect them.
Mike Papantonio: DEA doesn’t have a chance here. I mean, that’s the real story. They, they’re not funding the DEA. They’re not training the DEA. They’re not keeping up with times. We talked about one where they’re putting on, where tourists are bringing the drugs back in, the magnet story.
Farron Cousins: Yeah. Yeah. What the cartels down in Mexico have started doing is they’ll put a package of drugs with a giant magnet on top, cover it in mud on a road. The tourist will drive over it, the magnet sticks to the bottom of the car and most of the time, you know, it’s just your average everyday tourist, they’re able to get through with no problem on the border because the bottom of the package will also be caked in mud so that it looks like, oh, your undercarriage is dirty. You ran through mud. No problem. Keep going. So they’re using anyone as a mule that they can find, even people who don’t know they’re being used. And of course, that creates massive problems for these people when they get caught because they had no idea that they were bringing drugs into the country.
Mike Papantonio: This story tells me that the DEA is fighting a losing battle and somehow, if they’re serious about it, need to adjust.
Farron Cousins: Yeah.
