Morning Wire - First Republic Takeover & Media Trust Poll | 5.2.23

Episode Date: May 2, 2023

First Republic Bank has now been officially taken over by JP Morgan Chase, the U.S. The Supreme Court is under increasing fire, and a new polling from the Associated Press shows that America’s trust in news media continues to spiral downward. Get the facts first with Morning Wire.  Birch Gold: Text "WIRE" to 989898 for your no-cost, no-obligation information kit. Genucel: 70% off Most Popular Package + FREE Shipping + Free Spa Essentials https://genucel.com/WIRE  Black Rifle Coffee: Get 10% off your first order or Coffee Club subscription with code WIRE: https://www.blackriflecoffee.com/ Learn more about your ad choices. Visit podcastchoices.com/adchoices

After being seized by the government amid default, First Republic Bank has now been officially taken over by J.P. Morgan Chase. How will the takeover affect the economy, and can we expect interest rates to tick up even higher? I'm Georgia Howe with Daily Wire editor-in-chief John Bickley. It's Tuesday, May 2nd, and this is Morning Wire. The U.S. Supreme Court is under increasing fire. Why are critics calling to restrict the court, and how are the justices responding? And new polling from the Associated Press shows that America's trust in news media continues to spiral downward. We break down some of the coverage decisions that led to the public's shift in confidence. Thanks for waking up with Morning Wire. Stay tuned. We have the news you need to know.

On Monday, J.P. Morgan Chase agreed to take over First Republic Bank, the fledgling institution, which collapsed in March amid widespread turmoil in the banking industry. Here with the details of the massive deal and what it means. for the economy more broadly is Daily Wire Senior Editor Cabot Phillips. So, Cabot, what's the latest on this bank collapse? Well, it's hard to overstate the scale of this purchase and the ramifications it could have for the banking industry. Remember, back in March, first republic collapsed after a run on the bank saw depositors

withdraw $100 billion in the span of just a few days. That sparked widespread panic among regional and mid-sized banks around the country. After the collapse, federal regulators seized the bank and began sourcing for a buyer, and they found one. On Monday, J.P. Morgan Chase agreed to purchase the bank and assume all $92 billion worth of deposits, both insured and uninsured. The deal will also give them control of most of First Republic's assets, which include another $200 billion worth of loans and securities. As part of the purchase, J.P. Morgan will also share First Republic's financial losses with the FDIC, which is offering $50 billion

in financing of its own. Now, it's worth noting, while First Republic customers will recoup their losses, investors in the bank will be out of luck, as they're sharing. shareholders will be wiped out as a result of the purchase. Now, what does this mean for the economy as a whole? So the big thing is that it offers some form of stability to the banking industry at a time of peril. Over the last two months, we've seen three of the four largest bank collapses in U.S. history. For context, those three banks alone held more than half a trillion dollars in assets. That's more than all 25 banks that collapsed in the 08 crisis combined.

So there was legitimate concern that First Republic and SVB could create a domino effect as people lost faith in their banks and began withdrawing funds. So this purchase could help stop the bleeding and reassure depositors at other banks that their money is safe. The deal also means that J.P. Morgan, which was already the country's largest bank, just got even bigger. They've now got $2.4 trillion in total deposits. The bank's chief executive Jamie Diamond issued a statement Monday saying, quote, our government invited us and others to step up, and we did. On Monday, all 84 of First Republic's branches across eight states reopened as J.P. Morgan branches, then customers once again had access to their deposits in full.

What about interest rates? Are we expecting more banks to fall if they go any higher? According to the Fed, they're confident that First Republic was the last domino to fall and that banks are secure. With that in mind, Fed officials are meeting tomorrow to decide their next move, and they are expected to raise rates again, though after that it's expected that they'll pause or begin to taper off. For context, we've seen the fastest rate-raising period in four decades over the last year,

and another hike would bring us to the highest rates in 16 years. Remember, the Fed is raising rates in an attempt to cool the economy down, raise unemployment, and hopefully slow inflation. So it sounds like those moves from the Fed could very well contribute to a recession. What's the latest there? We've been hearing about a recession for a while. Yeah, it's important to note that by the technical definition of the word, we already entered a recession last year when there were two consecutive quarters of negative GDP growth,

though there was disagreement among economists and lawmakers over whether that was a real recession. There's little disagreement, though, that our economy is still heading towards. recession in the near future. The majority of economists say it will come within the next 12 months, though many believe it will be more shallow and short-term than recessions in the past. And one more concerning sign I want to add on, it's worth tracking. That's the value of the dollar. Since September, it's fallen 8.6 percent. And Golden Sachs announced this week that their analysts believe the dollar is still overvalued by as much as 15 percent. After a decade-long surge in the dollar's value, high inflation and efforts from foreign governments to quote decouple from the dollar

and embrace other currencies have left its value sinking. That is good news for other countries as it makes the cost of business lower for them when the dollar is less valuable. But that's bad news for our economy. Right, a concerning development for sure. Cabot, thanks for reporting. Anytime.

That was Daily Wire senior editor, Cabot Phillips. Coming up, the Supreme Court caught up in more controversy. U.S. Supreme Court Justice Samuel Alito says he believes he knows who leaked a draft opinion indicating the overturning of Roe v. Wade last year. Alito's theory comes after weeks of critics questioning the court's legitimacy, as well as allegations made specifically about Justice Clarence Thomas. Here to discuss is Daily Wire reporter Amanda Prest to Giacomo. So Amanda, let's start with the update about the Dobbs leak.

What did Alito say about that? Well, Alito spoke pretty candidly to the Wall Street Journal about the leak and about broader attacks on the court's legitimacy. Let me first say that Alito suggested he'd rather not speak publicly about this as his general precedent, but is doing it. so because there are practically no defenders of the court and individual justices anymore. So specifically on this leak, Alito says he believes he knows who leaked the draft but said there's not sufficient evidence to reveal the leaker's identity. He claims the leak made the justices, and this is a direct quote, targets of assassination, and that it was intended in his view to intimidate the court into changing its decision in the abortion case. Keep in mind,

Alito was a justice who authored the opinion in Dobbs v. Jackson Women's Health, which overturned Roe. Alito noted that the leak created an atmosphere of suspicion and distrust among the nine justices, and he said they worked through that, but emphasized that it was really damaging. Clarence Thomas has also been in the headlines. What's he being accused of, and what kind of merit do those accusations have? Well, Thomas is accused of accepting lavish vacations and using the private jet of Texas real estate billionaire Harlan Crow and not disclosing it. There was also a property deal from Crow that wasn't disclosed by Thomas. Thomas has said in his statement that guidance from his colleagues and others in the judiciary

indicated that he didn't have to disclose personal hospitality from close friends who didn't have business before the court. So therefore, he didn't report it. Now, we've seen reports that business relating to Crow actually was before the Supreme Court and that Thomas didn't recuse himself. What do we know about that? Right. So in the mid-2000s, the court heard a dispute that involved metric holdings. A corporate disclosure statement attached to the filing says, Trammell Crow residential company is the corporate parent of metric holdings. Crow has said his family at the time had a non-controlling interest in the company. A spokesperson for the family claims they didn't know about the case,

and some legal experts have noted Crow's name does not appear in the caption of the case. So it's possible Thomas may not have known there was any connection to the Crow family. Some reporting and editorials at the Wall Street Journal have fiercely backed up Thomas, who they say is being unfairly targeted. They noted the court's rules at the time did not require Thomas to disclose gifts of personal hospitality, noting that new rules which would require such disclosure took effect just in March. You mentioned that there was also a property purchase between Crow and Thomas. What do we know about the details of that?

Yeah, there was. So Crow bought Thomas' childhood home and two adjacent empty lots for about $130,000 from Thomas in 2014. Crow says he wants to convert the property into a museum. Thomas has said he didn't disclose this because he lost money on the deal, but now plans on amending his financial disclosure forms to reflect the 2014 transaction. Reporters have noted that Thomas's mother still lives at the property and doesn't pay rent. Now, all of this together has actually led to calls for impeachment, correct? Yeah, correct. In addition to pretty relentless criticism from the mainstream media and Democrats,

New York Representative Alexandra Ocasio-Cortez has explicitly called for Thomas's impeachment. Here she is in an interview at CNN. Justice Thomas has been on the court for 30 years. And so to say what he is admitting in his statement in an attempt to defend himself is that he began this relationship with a billionaire and receiving these sorts of gifts after he was appointed to the Supreme Court of the United States. I think that that in and of itself indicates a very, very serious. problem. However, in a rare unanimous statement, all nine justices sent a letter pushing back on

attempts from Senate Democrats to implement new ethics oversight measures, saying they already voluntarily abide by these codes. In the same letter, Justice Alito said he will not appear to give testimony requested by Senator Dick Durbin. All right. Well, Amanda, thanks so much for reporting. Thanks for having me. That was Daily Wire reporter Amanda Presti Giacomo. New polling shows that trust in the news media is continuing to plummet among a Americans, and that they're increasingly turning to alternative sources for their news. The new data from the Associated Press paints a bleak picture of the public's perception of the journalism industry. Here to discuss the trend is Daily Wire contributor David Marcus.

Dave, we've discussed similar polls here in the past, but what does this new polling show and is this problem growing worse? Morning. There's nothing to cheer about in these numbers for the legacy press. Some of the standout lowlights include the fact that three-quarters of U.S. adults say the news media is increasing political polarization and very nearly half hold little or no trust in the ability of the media to fairly and accurately report the news. Ironically, the poll was released to coincide with World Press Freedom Day, but if the numbers are correct, it appears very few people will be raising a toast to journalism in celebration of it. And maybe more like pouring one out for the press.

Now, just in the past few months, there have been a slew of stories casting the news media in a poor light. Can you walk us through a few of these stories that might contribute to this distrust? How long do you got? We've seen Joe Biden holding a cheat sheet just last week that happened to predict almost the exact question asked by an LA Times reporter.

There have been stunning revelations about government actions revealed in the Twitter files that the mainstream media is just barely basically zero coverage at all from legacy outlet. We saw the canceling of Tucker Carlson's show one of the very few that was critical of the war in Ukraine celebrated by a major Pentagon official and a sitting U.S. Congresswoman Alexandria Ocasio-Cortez. Finally, we're learning that Secretary of State Anthony Blinken appears to have played a major

role in crafting false statements from intelligence officials about the origins of Hunter Biden's laptop. The media's attempt to suppress that story was already one of the biggest journalistic scandals we've seen in decades. needless to say, this close interplay between the state and news media, it's troubling to many Americans. Right. Let's zero in on this Blinken incident for a moment because over the weekend, Senator Ron Johnson accused the cabinet member of lying to Congress about his interactions with the president's son. What's he alleging? Johnson did not mince words calling Blinken's 2020 testimony that he had never emailed Hunter Biden a bold-faced lie in light of the revelation of just such emails from 20. So this is while Biden the Younger was on the board of Ukrainian energy concern Burisma,

and he apparently wanted what he called advice from Blinken. Obviously the problem here is that the closer the relationship between Hunter Biden and Blinken, the more it appears that the secretary's involvement in pushing the false Russian propaganda story about the laptop was politically motivated and not simply done out of national security fears. Yeah. Could this lingering distrust contribute to, further movement away from traditional legacy media to more online or social media-driven news options? The AP sure thinks so and warns that such a trend could further polarize the nation. But there are others who argue that this kind of decentralization of news media is exactly what can save it. At Twitter, Elon Musk clearly seems to be championing the rise of what he calls citizen journalism,

which is why he gave the Twitter files to independent journalists. In general, new forms and models of news delivery, are challenging the old war forces, and maybe, just maybe, that pressure can make everyone better. We certainly think so here. David, thanks for joining us. Thanks for having me. That was Daily Wire contributor, David Marcus. Thanks for waking up with us. We'll be back later this afternoon with more news you need to know.