The Young Turks - Easy Money

Episode Date: March 16, 2023

Bank of America won big from the Silicon Valley Bank collapse. More Perfect Union breaks down how egg companies hid behind bird flu and inflation to price gouge consumers. Major railroad merger goes forward, defying Biden antitrust push. Reproductive rights activists are bracing themselves for the outcome of a court case in Texas that could restrict the use of mifepristone, known as the "abortion pill," nationwide. Hosts: Ana Kasparian Hosted on Acast. See acast.com/privacy for more information. Learn more about your ad choices. Visit megaphone.fm/adchoices

You're listening to The Young Turks, the online news show. Make sure to follow and rate our show with not one, not two, not three, not four, but five stars. You're awesome. Thank you. On July 18th, get excited. This is big! For the summer's biggest adventure. I think I just smurf my pants. That's a little too excited.

Sorry. Smurfs. Only theaters July 18th. Woo! Get some! Thank you. Hi, everybody. Welcome to TYT. I'm your host, Anna Kasparian, and we're going to have a little bit of a different show today. John Iderola is off, so he will not be hosting the second hour in the bonus episode with me.

But I'm super excited to bring on a completely new co-host. His name is R.M. Brown. He's the host of the R.M. Brown show. And if you're not familiar with him, he puts out really great content, left-wing perspective, of course. But more importantly, he's really, really funny, incredibly talented. And I'm excited to have many conversations with him on all the various stories we have prepared for you guys in the second hour of this show. So obviously stick around for that. In the first hour, we're going to do an explainer on how the Federal Reserve played a role

in the House of Cards that is otherwise known as our economy, what they're appropriate. policy of quantitative easing has led to, there is some, in my opinion, pain to come as a result of that. But we'll talk about all of that in a little bit. We're also going to discuss what the latest chapter is among the far right in regard to stripping women of their reproductive rights. And we'll also talk about what the proposal is from lawmakers like Katie Porter and Senator Elizabeth Warren to respond to bank collapses, like the one that we just talked about this week with Silicon Valley Bank. But before we get to all of that, just want to encourage you guys to support the show by

liking and sharing the stream if you're watching us live. You can also become a member by going to t.yt.com slash join, or you can click on that join button if you're watching us on YouTube. All right, why don't we get started with what the right wing is up to when it comes to taking our rights away. It's used in more than half the abortions in the United States. So if he decides no, even in states where abortion is totally legal, they will not have access. Is that right?

The latest chapter of the right wing's fight against reproductive rights has to do with abortions that are done with the abortion pill. And now anti-abortion doctors are asking a Trump-appointed conservative. judge to undo the food and drug administration's approval of the drug that is used to terminate pregnancies. Now, they made that approval back in 2000, and the thing that's incredibly concerning about this is that while it will definitely have an impact on states that want to restrict abortions, if the religious groups get their way, if these conservative doctors get their way, it will have an impact on states where abortion is completely legal.

completely legal. And this is all done by design. Now, with that said, let's take a look at the next video where a reporter from the nation, her name is Amy Littlefield, explains in detail what this means for the future of reproductive rights in America should these conservative doctors get their way. It would have a catastrophic impact specifically in states where abortion is legal. I mean, we're talking about this hearing taking place in a state that's not even going to be impacted by it because abortion is already banned in Texas. And so this would reverberate across states like where I'm sitting in Massachusetts, New York, California, states where abortion is legal. The abortion pill, Mitha pristone, is the first of two drugs used in the

standard of care for medication abortion. And so what providers across the country have been preparing to do in preparation for this ruling is to start providing mesoprostol only. abortion. So medication abortion using only the second drug in the protocol. That still works, but it's less effective. It's about 88% effective, according to a recent study, versus up to 99% when it's used with Mithopristone. And it causes more intense suffering, more cramping, more prolonged bleeding. Yeah, more suffering, more pain, more prolonged bleeding. That's not the bug. That's the feature. Let's just be absolutely clear about that. the punishment is the whole point of the anti-abortion movement, of the individuals who feel

that they're entitled to tell women what they can and can't do with their bodies. It's about the punishment. It's about the pain. It's about retaliating toward women who have decided that, you know, they don't need to abide by certain conservative standards when it comes to the way that they live their lives. They don't have to have sex only for the purpose of reproducing, that it's all about punishment, it's all about control, the fact that women are going to suffer even more as a result of this potentially happening, this judge potentially scrapping the FDA's approval of the abortion pill. The whole point is to, of course, scare women, control women, punish women, plain and simple.

Now, we should learn a little more about the judge here because it is concerning that he is not only a Trump appointed conservative judge, based on his previous decisions, it is abundantly clear that he is also an activist judge. So who is this guy? Well, it's U.S. District Judge Matthew Kaksmarik, and he's a deeply conservative jurist with a proclivity for siding with plaintiffs looking to roll back reproductive and LGBTQ rights or block key Biden administration policies. In fact, the first hearing, the first hearing where he's going to hear arguments from both sides on this case happened today. But he actually took a pretty unusual step to conceal that information from the general public, probably because he was acutely aware of the fact that this case is going to draw condemnation from American citizens. There might be some protesters who show up.

So like the typical coward that he is, he has decided to essentially conceal the information about today being the first day that the hearings would take place. And, you know, as CNN reported, the judge held a private call last Friday with the case's lawyers and scheduled the hearing for today. The call was not publicly noticed on the case's docket, nor did the judge issue a public order announcing that Wednesday's hearing had been scheduled. the case is not under seal. So again, it's highly unusual for a judge to do this, but he did it because he doesn't

want to have to deal with anyone expressing their dissent, anyone even expressing their political speech, their displeasure at this nonsense. Now, the judge also told lawyers that he didn't want the hearing announced until last night in order to avoid disruptions, again, meaning protests. The judge also took the bench back in 2019, as I mentioned earlier, he was appointed by Donald Trump. Turns out that presidential elections do matter, especially when it comes to our judicial system, because presidents get to nominate whoever they want for federal judgeships, for the Supreme Court. So these are the chickens coming home to roost for all of us.

And for anyone who thought that it didn't matter if you elected Trump versus Hillary Clinton, well, here's one way where it did matter. Now, what kind of history does this judge have? Okay, he was appointed back in 2019. He unfortunately was confirmed by the Senate. And he is known for essentially making Texas, the state of Texas, where he's based, a legal graveyard for Joe Biden's policies, which is why conservatives, by the way, have decided to file their challenge against the FDA in the state of Texas. They did that purposely. knowing that they were going to deal with an incredibly friendly conservative judge. The group that brought the medication abortion lawsuit, the Alliance for Hippocratic Medicine,

incorporated in Amarillo a few months before they filed the suit, according to documents from the Texas Secretary of State's office. The judge here is the only federal district judge seated in Amarillo, in the Amarillo division of the U.S. District of Northern Texas. And he's definitely an activist judge. So his sister, for instance, her name is Jennifer Griffith. She detailed her brother's long history of being an anti-abortion advocate. And she also believes that fate, it was fate, that brought the abortion case before him. She says, quote, I feel like he's made for this.

He is exactly where he needs to be. I mean, lots of red flags. This is certainly foreshadowing when it comes to what he's. his decision is likely going to be on this. Now, he worked for a legal group that represented the religious right. That's another red flag. But let me give you more. The judge put on hold the Biden administration's attempt to end the so-called Remain in Mexico immigration program. He has overseen Texas cases challenging vaccine mandates, the gender identity guidance issued by the U.S. Equal Employment Opportunity Commission and the Biden administration's

limits of the use or on the use of COVID-19 relief funds for tax cuts. He challenged that. So he thought it was totally fine to take taxpayer money that was specifically allocated as emergency relief for COVID. I thought it was totally fine to take that and use it for tax cuts. Incredible. And he also blocked the Biden administration from enforcing new rules that sought to protect transgender Americans from discrimination in health care. So if you are someone who identifies as transgender, you need to get treatment, you need to get care, and a hospital or a particular doctor discriminates against you, this judge thinks that is totally fine. In other words, things don't look good when it comes to this case.

Now, the reporter from the nation that we heard from earlier argues that the FDA could just ignore this judge's decision on this case. I don't know how true that is. I don't know if the FDA is actually willing to do that. What I do know, without a shadow of a doubt, is that regardless of what abortion restriction laws pass in this country, regardless of which, you know, provisions, right-wingers find a way to get rid of, which avenues in which people can get safe abortions they get rid of. It doesn't matter. If a woman is desperate and needs to get an abortion, she will find a way

to do it. And this is likely going to push certain women, typically women who are living in poverty, who are particularly desperate in situations like this, to go through avenues that are much less safe, that put their lives at risk, meaning that more people will die as a result of the so-called pro-life advocates out there. In reality, they're not pro-life at all. There are now endless stories, a steady drip of stories, involving children dying as a result of various companies exploiting them while breaking child labor laws, by the way.

I mean, you're hearing stories about children getting injured at meatpacking plants. I don't hear a damn conservative, certainly not a single conservative doctor complaining about that because it's not about saving children. It's not about saving lives. They don't care at all. It's about power. It's about control. And it's about punishment.

The fact that women who might want to get a medical abortion through the abortion pill, the fact that they might not have the option anymore to use Mithapristone and can only rely on one of those abortion pills, which will make the abortion more complicated and more painful, they love that. They love the punishment. That is what this is about. Don't make a mistake and think that they're actually genuinely concerned about human lives here. Now let's move on. I did want to cover some updates to the Silicon Valley Bank collapse, including what some Democrats want to do in order to bolster regulations.

Welcome back, everyone. Thank you for being so patient with us. I think we figured out our technical issue. So without further ado, let's get to the next story. The bank executives did some of them exactly what you would expect. And that is they boosted their profits by loading up on risk. And they boosted their salaries. They boosted their bonuses all by taking on work.

risk and it worked great right up until the banks exploded. In the wake of the Silicon Valley bank collapse, some democratic lawmakers, including Senator Elizabeth Warren and Representative Katie Porter, are proposing legislation that would reverse the deregulation, the bipartisan bill that deregulated mid-sized banks like SVB back in 2018. Now we talked about that in great detail earlier this week. Trump was just jovial and incredibly excited to sign that bill, but make no mistake, it was a bipartisan effort. Because whether we're talking about Democrats or Republicans, the banking sector provides bribes to both parties. Legalized bribes, but bribes nonetheless. They're just considered okay under our system

because the Supreme Court has sanctioned them. But with that said, the banking regulations that I'm referring to have to do with the capital availability within a given bank. When deposit money into a bank, typically what a bank does is it takes that money and it invests it. And that's how they make most of their profits. Yes, they charge fees and they make a lot of money doing that as well. But one of the main ways that they make money is they will take depositor cash and they will invest it. Now, the 2008 economic collapse was a disaster. And under the regulations that passed after that, known as Dodd-Frank, it required banks to have a certain level of capital on hand. So should something happen to the economy, should there be

a bumpy road ahead, they will be prepared to provide the depositors money that they withdraw or want to withdraw from the bank, right? Now, in 2018, things changed. And things changed because Republicans, with the help of 17 Democratic lawmakers, supported loosening up Dodd-Frank regulations on the banking system. And they don't regret it, by the way. Those 17 Democrats, they were interviewed by Huffington Post, Huff Post, and they were very clear that they have no regrets. We'll get to their comments in a minute. You don't want to miss it. It is enraging to say the least. But let's get to some more details about the deregulation here. Okay. So thanks to those deregulatory efforts, regulations that applied to banks with $50 billion in assets no longer

applied. Okay. The threshold for the regulations suddenly only applied to banks that had $250 billion in assets or above. And so one of the banks that lobbied real hard for the deregarten regulation happened to be Silicon Valley Bank. Why? Well, the two banks that failed last week, Silicon Valley Bank and Signature Bank, had less than 250 billion in assets. So since they had 250 billion in assets or less than 250 billion in assets, the regulations didn't have to apply to them because of the deregulation that took place in 2018. Now, SVB, as we had reported to you earlier had engaged in some pretty intense lobbying to ensure that they would, you know, take advantage, be able to take advantage of some deregulation, touting SVB's deep understanding

of the markets it serves. Our strong risk management practices, Becker argued, that was the head of SVB. He's no longer the head. All of the executives have been fired. argued that his bank would soon reach $50 billion in assets, which under the law would trigger enhanced prudential standards, including more stringent regulations, stress tests, and capital requirements for his and other similarly sized banks. Becker insisted that $250 billion was a more appropriate threshold. So what ended up happening is the Federal Reserve starts raising interest rates, and it hits the tech sector hard. So the tech sector went from just swimming in the cash and actually

depositing a lot of money to suddenly needing to withdraw money. Now, SVB should have had the capital available, the liquidity available to provide the funds necessary for those withdrawals. But they didn't have that. Turns out, according to new reporting from the lever, the Federal Reserve also deregulated mid-sized banks like SVB, which allowed for them to invest some of that deposit or money in more risky bets like private equities. Now, what the amount was, how much of an impact that had on its collapse, we don't know yet. That analysis is still taking place. But there was the congressional deregulation, and then the Federal Reserve also took part

in deregulation as well. But getting back to what Congress did, you know, you know, You now have a situation in which a mid-sized bank, like Silicon Valley Bank, doesn't have the capital, doesn't have the liquidity to provide the funds for the withdrawals. And so the only thing that they can really do to raise capital is sell their bonds, their government bonds. But since interest rates went up, the value of those bonds went down, and they cashed in those bonds at a loss of about $1.8 million, which led to a panic, which led to a panic, which led

to a run on the bank, which led to its collapse. You guys get the point. Now, he did get his way. He lobbied hard in order to accomplish this deregulation, and Becker got his way. Fast forward to last week, SVB collapses, and Warren, I think, did a pretty good job in making it abundantly clear that deregulation is a problem here. And if we want to ensure that we don't have a banking system that's built on a house of cards, we need to reverse the deregulation that took place.

in 2018. And so get a load of the insane framing the CNBC host uses when talking to Senator Warren about this reversal of the deregulation. No question, there's going to be regulation out of this, and that's probably the right move. But do you really think it should be a one-size fits all policy where the smaller banks will be able to deal with the cost of regulation the same one, the same rules that the big banks have to face. Won't that make that very hard for them to compete? No, no, no. It's that banks above $50 billion will all have the same set of rules

in terms of having stress tests and just more stringent oversight. All the banks under $50 billion won't be touched by this change in regulation. They will still have the much lighter regulation that is appropriate. for banks that are not posing that kind of risk to the economy overall. I mean, if you thought that framing was bad, which I think it was, it's clear that in this case, like the CNBC host is like, I mean, do we, but do we really want to do this? Do we really want to apply the regulations that were in place before 2018? I mean, the poor, poor mid-sized banks. If you thought that was bad,

it's about to get worse. Let's watch. This is really about that portion of the change in the law back in 2018 that said we're going to lighten regulation for back. The new BMO ViPorter MasterCard is your ticket to more. More perks, more points, more flights, more of all the things you want in a travel rewards card, and then some. Get your ticket to more with the new BMO ViPorter MasterCard. Mastercard and get up to $2,400 in value in your first 13 months.

Terms and conditions apply. Visit bemo.com slash V-I. Porter to learn more. Thanks. Larger than $50 billion, the tranche between $50 billion and $250 billion. And I think we've just seen, that's too dangerous, too dangerous for our economy. And that's why we need to change the law. Even those are much smaller, though, than the bigger banks that are more than $2,000. And we've had a number of those CEOs on the shows in the last few days, Fifth Third, Schwab.

They do their own stress testing. Not everyone was behaving in a risk profile and a risk manner that Silicon Valley Bank was. I'm sorry. I taught school for many, many years. And I did not let my students do their own testing. But Senator Warren, the lion told me that it wouldn't eat me. So shouldn't we just believe the lion? I mean, what kind of stupid, naive thinking is that?

I mean, what the CNBC host is arguing in that framing there is, well, you know, some of these banks say that they, you know, they self-regulate. So if they're self-regulating, do we really need to? No, no, no, they're not self-regulating. That's the whole point. Banks are going to do what banks are honestly supposed to do. Just like with any business, they're going to want to maximize profits. And if that means investing deposit or money in risky investment vehicles, they're going to do it.

They're going to do it. And nothing makes it clear than what the banks did with money that was printed by the Federal Reserve. They were supposed to lend that money out to small businesses to stimulate the economy following the 2008 economic collapse. You want to know what they did? They took the money. They put it in their pockets. They took the money. They did their own investments and maximize their profits further.

That led to an explosion in inequality in this country. This is a CNBC host. Listen, here on this show, we're talking about policy that's not related to the economy. We talk about all sorts of news stories. We're not specialized in just talking about the markets, talking about banks. We do those stories. But CNBC, that's all they do, right? That's all they do.

And somehow this CNBC host is sitting there as SVB collapses, okay? As signature bank collapses, as Credit Suisse is now dealing with some big trouble. And she's like, I don't know, do we really need to regulate? Some of the banks told me, some of the banks told me that they'll self-regulate. But if you're wondering, like, how did this woman get hired? That's the reason why she got hired at CNBC, okay? because the only thing that matters is how are the markets doing? How's the stock market performing?

And the stock market for over a decade was incredibly bullish based on deregulation and the Federal Reserve pumping money into the economy, printing money, pumping it into banks, buying corporate debt, all sorts of nonsense that rigged the economic system to, to the advantage of the richest people in this country, the richest corporations in this country, and to the detriment of ordinary American workers. Now let's get back to the despicable Democrats who were asked by Huff Post about whether they regret deregulating, joining Republicans in deregulating the banking sector back in 2018. Well, Senator Tim Kane, who let me just remind you was Hillary Clinton.

running mate says no regrets, no regrets. He says this. The reason why I voted for that bill is that my community banks really needed it. Did they? Did they need it? What does that even mean? Then he argues that the regulations were hurting local communities and lending. In particular, rural and underserved communities to be less served. Okay, as Elizabeth Warren clearly and accurately stated, the previous legislation, the previous regulations applied to banks that had assets above $50 billion. So this argument that he needed to do the deregulation because the poor rural

communities and the smaller banks, I mean, they were just really struggling with this deregulation, it is a lie. He lied. That's what that was. It was a lie. Neoliberal corporate Democrat, doing what a neoliberal corporate Democrat does. Okay, plain right, doing right by his donors, by the bankers in this case. And again, to the detriment of the American people. You know, pretending to care about the rural community is laughable, is laughable. But Kane then pivoted to the possibility that the social media posts are what ends up spurring bank runs. You know, maybe we need to look at social media posts.

No, maybe we need to regulate the banking sector. Maybe we do that instead. Senator Michael Bennett from Colorado, also a Democrat, also said he didn't regret voting for easing regulations on banks, adding that, quote, we have to do the analysis now to see what actually happened at Silicon Valley Bank. Senator Tom Carper repeated that same pathetic line. I mean, I can't say I regret it until a proper analysis is done to see what caused it, you know. No, that's a cop out.

Deregulating the banking system is not what Democrats want to be known for. They think that they can do these votes and get away with it. No one will notice. But we notice. They want to pretend like they're so different from the corporate Republicans. But when push comes to shove, if you're funded by the same donors, you'll do right by those donors. That's what Tim Cain, Michael Bennett, you know, Tom Carper. That's what they all did.

Tom Carper also says this, quote, we should find out what went wrong. Why did it go wrong? How do we fix it? How do we make sure it doesn't happen again? Hey, Tom, why don't you resign? How about that? Maybe it's time we actually have some real representation for the American people instead of someone who's asking questions that a layman would ask about this situation.

And you'll notice a Democratic leadership, including President Joe Biden, is avoiding any mention of the 2018 deregulation because he knows that there were, you know, 17 Democrats who voted in favor of it. The other thing I want to just quickly mention is that Biden had no problem mentioning Trump's deregulation when it came to the rail industry. So it's not like he's afraid to call out. deregulation. But when you have Democrats playing a part in it, all of a sudden he can't use that line,

which is pretty pathetic. Now, the Johnny Come Lately members of the Democratic Party are saying that they're going to forego campaign contributions from Silicon Valley Bank. I'll give you a few examples. Chuck Schumer, for instance, received $2,700 from the bank's PAC in 2015, and $5,800 from CEO Greg Becker in June of 2021, which is the maximum donation allowed. Becker and other SVB executives have been purged in the government takeover of the failed bank. So now Schumer says that he's going to donate the money to charity.

Same with Maxine Waters. Representative Waters says that she will also get rid of the money that she was given. So she's a member of the House Financial Services Committee. she told Politico on Tuesday that she will return the $2,500 contribution she got from the bank's pack back in 2020 when she chaired that panel. It's not just about Silicon Valley Bank. It's about all the corruption. It's about all the bribes that these politicians take. And if they think that this is what will clear them of any wrongdoing, if this is what will

appease individuals who just want a government that does its job and protects the American people from the kind of corporate greed that we've been experiencing, that this is, this is nothing. This is nothing. Returning donations from a few years ago, it's a nice PR stunt, but do better. All right, well, let's move on to the Federal Reserve, because the Federal Reserve has played a huge role in the fragile nature of our banking system and our economy overall. And I think that there's going to be a lot more pain to come because this has been a long time coming, to be quite honest with you. It has to do with Fed policy that's been in the works for well over a decade at this point.

With the collapse of Silicon Valley Bank, there was a lot of attention paid to whether the FDIC should cover all depositors, including those who had more than $250,000 in the bank. Now, in the end, of course, the FDIC decided that it would cover everyone who had deposited, every company, every individual who had deposits in that bank, including those who deposited more than $250,000. But I think at least equal attention should be paid to some of the actions by the Federal Reserve and how their policies have created this House of Cards in our economy. I really do think that it's going to lead to more pain in the near future, and I want to

explain why and how. So the policy that I'm referring to by the Federal Reserve is known as quantitative easing. I've talked about it a few times on this show before. I want to do a more thorough explainer of it. It was first implemented following the 2008 economic crash under the Obama administration. The Federal Reserve was implemented or was implementing this easy money approach to the economy. And the whole idea was we need to stimulate the economy. We need to provide liquidity for the bank so they can loan money to small businesses,

which in their minds would stimulate the economy. So there's the fiscal policy they engaged in, like providing free money to banks with near zero interest rates. And then in addition to that, there's the Fed's monetary policy where the central bank did the quantitative easing. Now, quantitative easing is another way to provide liquidity to banks and the idea that with the idea that the banks will lend money, right? Now, in the next clip that you're about to watch, it explains exactly how it works.

And I'll clear it up a little more when we come back. Let's watch. The Fed began creating hundreds of billions of dollars to buy things like mortgage-backed securities and government bonds from banks and financial institutions. This was a $5 trillion market. This was the largest private bond market in the world. And the Fed had never once before bought a mortgage bond in its history. And basically in the fall of 2008, it announced that it would buy basically 25% of the entire market within 15 months. The financial sector had begun to stabilize, but there were early signs that not everything would go according to plan. The banking industry fat cats still aren't lending money. The big banks aren't lending. Despite the money the Fed was pouring into the banks,

they still weren't back to lending. The government's not doing anything to help small business, and the banks are sitting in their butts and they're still not lending money. Instead, they were taking a lot of the money and investing it themselves. They were taking the money that was created, printed by the Federal Reserve. And rather than doing what the Fed, I guess, thought it would do, which was incredibly naive, instead of lending the money to small businesses and stimulating the economy, the banks just took the money and they invested it themselves to maximize their profits. Because it's a bank. That's what banks do.

It's amazing to me that the Federal Reserve didn't see it coming. Now, just to clear things up, the way the Fed did this, again, was it created money and then it bought corporate bonds, meaning corporate debt. In this case, mortgage-backed securities. Remember, this is after the 2008 economic collapse. The mortgage-backed securities were the same mortgage-back securities that were filled with bad mortgages, basically fraudulent mortgages that people were defaulting on. because they really had no business getting a mortgage. They were qualified for mortgages they had no business qualifying for. But that was done on purpose.

The banks took those mortgages, packaged them up in what's known as mortgage-backed securities, which then get traded on the stock market, okay? Then they betted against those mortgage-back securities because they knew full well that those mortgage-backed securities were filled with bad loans, mortgages that people would be able to pay back. Okay. So the federal reserve is like, yo, we need to step in. We're lowering interest rates. That's part one. But then on top of that, we're going to buy that debt. We're going to buy the corporate bonds from the banks and they'll have liquidity. Suddenly, they'll have cash. And they're going to take that cash and they're going to lend it, right?

Except no, as I mentioned earlier, they didn't lend it. They did the opposite. Let's watch more. You were injecting money into the banks more than a trillion dollars worth at that point. And what were the banks doing with that money? The Fed's idea was the banks would be taking that money and lending it effectively at lower interest rates. What the banks were doing instead was that they were just investing in the same bonds that the Fed was buying. They were taking that money and they were turning around and buying the same mortgage-backed securities and other bonds. Why? Because the Fed had made very clear that its goal was to drive.

up the price of financial assets. And so Wall Street turned around and thought, why would I go through the effort of making a mortgage when I can just press a button and buy, you know, millions, if not billions of bonds and ride that trade has the price of those assets are very consciously being inflated by the Fed. By the end of 2009, the banks were back to making money and paying themselves record bonuses while the real economy lagged. Washington loaned the money, cut rate. So our thanks is they're going to stuff it in their pockets, even as many Americans are suffering from unemployment and reduced wages. I mean, so you guys can understand how someone like Donald Trump could end up being president

of the United States because the inequality that was driven by the Federal Reserve's monetary policy had a huge impact on inequality. And this all happened during the Obama. administration. So can you understand the rage ordinary Americans who had their homes foreclosed on, who were totally screwed over by these banks? The range they felt toward Obama as they saw the Federal Reserve under Obama's leadership pursue policies that favored the banks, that took care of the banks, that bailed out the banks, but left ordinary Americans to suffer. I can understand that anger, I can understand that rage. Now, why is this relevant today? Because the Federal Reserve is stepping in to ensure that the banking system doesn't collapse, yet again, following the

collapse of Silicon Valley Bank. This isn't getting any attention. Listen, we talked about the depositors, all of them getting covered by the FDIC. Everyone seems to be debating whether or not the depositor should be made whole. No, guys, we should talk about why it is that we have an unelected group of individuals known as the central bank, the federal reserve, manipulating our economy this way. And they're going to do it again, quantitative easing, in response to Silicon Valley Bank. They were doing quantitative tightening in recent months. Looks like they're going to reverse that.

Why do I say it? Well, let me give you the details. The Federal Reserve may need to end its quantitative tightening program early to preserve the amount of bank reserves in the financial. financial system while also maintaining its hawkish signaling on interest rates according to Citigroup Inc. Get a load of that. Oh, it looks like the Federal Reserve. I mean, if they don't want the banking system to collapse, they got to go back to quantitative easing. They got to stop that quantitative tightening. And the Wall Street Journal did report this earlier this week.

The central bank said that it would make additional funding available to banks through a new bank term funding program. That's quantitative easing. They rebranded it, but don't make a mistake. That is quantitative easing, which will offer loans of up to one year to banks that pledge U.S. Treasury securities, mortgage-backed securities, and other collateral. Up to $25 billion from the Treasury's exchange stabilization fund will backstop the Fed lending program. This part's super relevant. Many of those securities have fallen in value as

the Fed has raised interest rates. The terms would allow banks to borrow at 100 cents on the dollar for securities trading potentially well below that value, potentially putting, not potentially definitely putting the government at risk of losses incurred by banks. Critics said the move would essentially offer a backdoor subsidy to bank investors and management for. failing to properly manage interest rate risks. It's quantitative easing. They're going to do more of it. The Fed's new bank term funding program introduced over the weekend, again, it's quantitative

easing after the collapse of Silicon Valley Bank will create additional reserves in the financial system to avert funding stress. Additional reserves just means liquidity that again is provided by the federal reserve printing money and buying, you know, bonds from these banks. It's unbelievable. So the Federal Reserve creates this House of Cards by printing the money. It leads to this explosion in inequality because the banks take the money and they invest it and just get richer. And they're going to do more of it.

So this obviously, again, leads to an explosion of inequality. But what's also really interesting is our entire economy. now, well, I shouldn't say entire economy, the stock market in particular, assets in particular are now addicted to the printed money. I'll give you an example. Back in 2013, there was some talk of, all right, maybe we should engage in quantitative tightening. Our balance sheet is insane because we keep buying things like mortgage-backed securities and bonds. We need to ease off of this, starting to become a little bit of a problem. But the markets didn't react well. Let's watch. The Fed's quantitative easing set off what would become the longest bull run in the stock market's

history. Investors took the good news and well, they basically ran with it. By design, QE effectively lowered long-term interest rates, making safer investments like bonds less attractive and riskier investments like stocks more attractive. A lot more investors got bullish in the stock market. So the stock prices of those companies go up. But what's really happening? Nothing's changed. Nothing new has been invented. It's a sugar high.

It's like drinking a Coke instead of, you know, having a meat and potatoes meal. I was on the trade floor. I remember Chairman Bernanke saying that he would taper. First, we had to figure out, what does taper mean? And the minute people realized what taper meant, which is that the Fed would step back from buying all these securities. And even though the Fed said it's going to be gradual, it's going to be measured, the markets had a massive tantrum. The market's selling off after the Federal Reserve Chairman Ben Bernanke said that the central bank could start tapering its economy. It shows you how addicted the markets are. The markets went into a fit, became dysfunctional. It was known as the taper tantrum.

Well, we all know it. When Ben Bernanke talks or the Federal Reserve speaks, the markets listen. Markets are like little kids. They want candy, and the minute you try to take the candy away, they have a tantrum. They have a tantrum. Much like Donald Trump, who also had a tantrum when the Federal Reserve started engaging in tightening, we'll get to that in just a moment. But before we do, remember, the other thing that these banks are doing, the other thing that companies are doing is they're buying shares of their own stock, thus artificially inflating the value of those shares.

And so when you think about the stock market and how volatile it is, especially over the last year, a lot of that has to do with the fact that the value of those shares based on nothing other than market manipulation through easy money policies that were implemented by the Federal Reserve and have been in place since the crash of 2008. So when Janet Yellen was the head of the Federal Reserve, she's like, let's wrap this up. We got it. We got to do quantitative tightening. We have to. And then Trump came into office and things changed. Well, things went from just temporarily getting better when it came to Fed policy to going right back to taking care of the fat cats.

Let's watch. begun raising rates and reversing QE. They'd call it quantitative tightening, or QT. Powell took office eager to accelerate the effort. The really extraordinarily accommodative low interest rates that we needed when the economy was quite weak. We don't need those anymore. They're not appropriate anymore. Once again, the market threw a tantrum. The Dow closing down to more than 500 points today. A brutal week in the market. The Dow and the S&P now on track for their worst December since the Great Depression. The global financial system short circuits.

The decline will accelerate if J-PAL doesn't walk things back. It doesn't want things back. The president threw a tantrum too. I think the Fed has gone crazy. It's a correction that I think is caused by the Federal Reserve. If the Fed knew what it was doing, they would lower rate and they would stop quantitative tightening. I know that there are some right wingers who watch the show. I don't know if they watch because they like hate watching. It doesn't matter. But I just, I want to reason with you just momentarily.

And hopefully you hear me out. I don't care what your political ideology is. It doesn't matter if we're talking about Democrats or Republicans, okay? We have a system in place right now that consists of members in both parties. aiding and abetting the kinds of policies that have screwed us. You just heard Donald Trump himself. Pressure at that time Jerome Powell to do his bidding and to continue quantitative easing, which again just means printing money and providing liquidity to companies, to banks.

Knowing full well that they're not going to take that money and lend to ordinary people or to small businesses, that they're going to take that money and artificially inflate the value of their shares. They're going to take that money. Private equity firms, for instance, they took that money. They bought up entire neighborhoods of single family homes pricing you out of the housing market. We need to get out of this left versus right paradigm for a second, especially when it comes to economic issues and understand that both parties screw us. And by the way, Democrats too.

Like anyone who's like, oh, don't, don't pretend like Democrats and Republicans are the same. Corporate Democrats, corporate Republicans are the same. Quantitative easing started under the Obama administration. It continued through the Trump administration with Trump pressuring Jerome Powell, head of the Federal Reserve to keep it going. And guess what? The response to the coronavirus pandemic was to take quantitative easing and put it on overdrive. trillions of dollars pumped into our financial system by the Federal Reserve. This is all to say that what we see in our economy right now, the inequality, is not only

caused by the Federal Reserve, but the pain that is yet to come due to the inflation in assets is also caused by the Federal Reserve. Again, an unelected body of people. Okay, they have created a situation that is pretty terrifying because anything you see in the stock market is not based on productivity, it's not based on innovation, it's not based on companies doing great things and accomplishing great things, and as a result, attracting investors which would increase the value of their shares. None of that took place. The only thing that has happened is they have taken the Federal Reserve's cash, their easy money, and they've invested it in themselves to the detriment of the American people.

And pretty soon for the destruction of the stock market, you're going to see it. I guarantee it. We're starting to see banks collapse. We're starting to see the tip of the iceberg. Anyway, we got to take a break. I know I went real long with that, but I hope I did an okay job explaining how the Federal Reserve has played a role in all of this. We're going to take a break. And when we come back, we've got more news for you. I don't know what I'm going to cover next. I got to regroup.

So I'll see you then. story about why egg prices were so high. And every story, every argument that we heard had to do with avian flu. That birds had been infected with avian flu. It was having an impact on egg laying hens. And that was the explanation. Well, we need to do an update on that because it turns out that at least for some of the biggest egg producers, it was all a lie. grocery list staple for most Americans became a point of financial stress and confusion over the course of a single year. Between January 2022 and January 2023, the average price consumers were paying for a carton of egg shot up by 150%.

Now, how did that happen? And more importantly, why did that happen? New reporting indicates that some of the largest egg producers in the country just use the experience. of avian flu to jack up their prices, even when avian flu had no impact on their operations. So we have yet another example of corporations taking the inflation narrative and running with it, using it for their own advantage in order to maximize profits, and they brag about it to their shareholders. It is such an incredible story. Now, More Perfect Union looked into the profits of egg producers as the avian flu narrative was playing out. Let's watch. Dominant egg producers not only made up for lower supply and increased costs,

they profited often, big time. Just look at Cal Main Foods' gross profit margin. Gross profit margin measures how much money a company earned after accounting for production costs. Cal Maine foods more than quadrupled its gross profit margin after raising the price of its eggs. If Cal Maine fairly raised prices to offset inflation, and the avian flu, if gross profit margin would stay about the same. Weird, weird. So how does a company rake in massive profits if they have less supply to sell, right? And more importantly, do the price hikes really bode well with the lack of supply, right?

Like, can they actually explain it based on the impact that avian? flu had on their business operations. That's a better way of asking the question. Well, it turns out that Cal Maine's supply actually wasn't impacted by avian flu at all, at all. Don't believe me? Watch. Since Cal Maine Foods is the largest egg producer and distributor in the U.S., we're going to keep our focus there. Cal Maine's CEO Sherman Miller recently celebrated his company's record sales and net income for the second quarter of fiscal 2020. The company made over $300 million in the second half of 2022, while the price of eggs was skyrocketing. In the company's December earnings report, Cal Main's CEO attributed the company's record average selling prices for conventional eggs to a reduced supply related to the outbreak in the U.S. of highly pathogenic avian influenza.

In the same breath, CEO Sherman Miller says there have been no positive tests for this birth. flu at any of Calmain's owned or contracted production facilities as of December 28, 2022. So one of the largest egg producers in the country was telling shareholders like, ah, you know, avian flu is really screwing with the supply. We're doing real well, though. Look at our profits. Am I right? Also, avian flu has had no impact on us whatsoever, meaning let's just keep it real, guys.

They took the avian flu narrative and they used it as an excuse to jack up prices. Buy a lot, buy a lot. The egg industry, by the way, pretty sure most people don't know this because corporate media doesn't cover it. But here's the update. The egg industry experienced no substantial decline in egg production in the last quarter of 2022 compared to 2021, which shocked me. I couldn't believe it.

Because every story was about like, all these, if a farm finds one hen that test positive for avian flu, they have to get rid of all the hens, meaning they have to kill all of them. So I bought it. I got to be honest, I bought it. I'm like, this makes sense. This makes sense. I mean, that's going to limit supply. Except it turns out the hens that remained were actually producing more eggs than they usually do.

I think there should be a little bit of an investigation into that because why? How did that happen? Okay. So there was actually no substantial decline in egg production. The number of egg laying flocks on average only dropped 6% from the year prior according to the U.S. Department of Agriculture. And as I mentioned earlier, the egg laying hens that remained were producing eggs like crazy, which closed that 6% gap in the supply. Now, the bird flu outbreak for sure doesn't account for the 150.5% increase in the net average price for a dozen of Cal Maine's conventional eggs from one year to the next. I just really want to emphasize that. They weren't impacted, their supply wasn't impacted, but they raised prices to the tune

of 150% anyway. And what about other inflationary pressures, right? Because businesses are impacted by inflationary pressures as well. I mean, the cost of feed, I'm sure that took some part in the price increase, but to the tune of 150%. CalMaine's total farm production and feed costs in 2022 were just 22% higher than they were in 2021. So that still doesn't justify hiking prices to the tune of 150%. And then there's also the problem with the lack of competition in the egg industry. And it looks like major producers

were potentially withholding increased production. And there are some farming groups that are calling them out. So farm action, a farmer-led advocacy group, claims the real culprit is a collusive scheme among major egg producers to fix and gouge prices, the organization said in a letter to the Federal Trade Commission. Doing so has helped producers extract egregious profits reaching as high as 40 percent, according to the letter, which asks the FTC chair, Lena Khan, to investigate for potential profiteering and foul play. I would also encourage Chairman Bernie Sanders, who chairs an important committee. in the Senate to also look into this, potentially have some hearings about it, because I'd

love to learn more. I'd love to know how it is that egg producers, that clearly, based on the numbers, did not experience a sharp decline in their production, can justify hiking up prices to the tune of 150%. I think the American people deserve to know. And we should hear their answers. For now, though, we're going to take a brief break. And when we come back, our embrace, We'll be joining me for the second hour. Thanks for listening to the full episode of the Young Turks. Support our work, listen to ad-free, access members-only bonus content, and more by subscribing to Apple Podcasts at apple.com at t-y-t.

I'm your host, Shank Huger, and I'll see you soon. Thank you.