Preparing For Financial Armageddon - Transcripts

Because things are not fine. All is well. As it turns out, there are very serious systemic risks to the banking system in the United States. That's not me saying that. That is Moody's now saying that. And Moody's is late to the game because Moody's was assessing that Silicon Valley Bank was doing fine like a month ago. Well, now they're like, Ah, guys, I'm noticing some problems. According to CNBC, in a harsh blow to an already reeling sector, Moody's investor service cut its view on the entire banking system to negative from stable. Ah, that's not good. The firm, part of the big three rating services, said Monday it was making the move in light of key bank failures that prompted regulators to step in on Sunday with a dramatic rescue plan for depositors and other institutions impacted by the crisis. Moody said in a report, quote, we've changed to negative from stable our outlook on the U.S. banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank, Silvergate Bank and Signature Bank and the failures of SVP and SNY.

That move followed action late on Monday when Moody's warned it either was downgrading or placing on review for downgrade to seven individual institutions. Now that is important because it could impact credit ratings and borrowing costs for the entire sector, which would mean that it would be harder for these banks to come up with liquidity, which would be a real problem. Because the banks can't come up with liquidity. And how exactly do they plan to bailout their depositors if the depositors all come calling at the same time as the economy sinks into the mayor. The Federal Reserve has now established a facility to ensure that institutions hit with liquidity problems but have access to cash. But as we'll discuss in a moment, This actually creates a massive problem for the Federal Reserve, which is simultaneously injecting huge amounts of money into the economy or promising to do so, like trillions more dollars. At the same time, it is supposedly attempting to quash inflation. Meanwhile, Credit Suisse has now reported that it has material weaknesses in its financial reporting, which is always a great sign. Credit Suisse said it had found material weaknesses in that financial reporting over the past two years because of ineffective internal controls, according to the Wall Street Journal, the latest setback in its efforts to move past a series of costly blunders. The Bank's management concluded that the controls were not effective, Credit Suisse said in its annual report. The weaknesses meant controls around 2021 financial reporting also were not effective. Despite the lapses, Credit Suisse said its financial statements fairly presented all material respects.

The Group's consolidated financial condition, but Credit Suisse had to delay its annual report last week because of last-minute questions from the SEC around earlier cash flow statements, which the Bank had revised in its 2021 annual report for both 2019 and 2020. The heads of the Bank said that their results for 2022 and the previous years were unaffected by the finding, but this is scaring a lot of people. The bank's stock fell about 4% early on Tuesday before recovering to trade flat, having hit a new low Monday on concerns about its financial prospects. Credit Suisse had raised $4 billion in new shares last year. It's cutting 9,000 jobs and spinning off its investment bank, and that has not stabilized the situation. So Credit Suisse could be in serious trouble, according to the UK Daily Mail. Robert Kiyosaki has warned that the problem is the bond market and the credit Suisse is the most vulnerable because any investment firm that is heavily invested in bonds that are about two years old is in serious trouble. That's what we found out from Silicon Valley Bank. Just to quickly review, Silicon Valley Bank had a giant influx of depositor cash. They didn't know what to do with it, so they spent it all on government bonds, figuring, okay, that's really stable. That's not going to go anywhere. Only one problem.

It's pretty stable if you hold it until maturity, if you have to cash out those bonds early, meaning you have to sell them on the open market. And meanwhile, the interest rates have increased. The price that you paid for the bonds is now higher than the price at which you can sell the bonds and start to bleed money, which is exactly what happened with SVP. Well, the problem is there are a huge number of major financial institutions that did the same thing as SVP to a more or less extent. And they did so because, as always, there is a sort of group think that does take place in financial circles, as it does in political circles, a group thinks that suggests that when a carousel is going round and round and round, that it will just keep continuing to turn. There will be no point at which the ride stops. The game of musical chairs never ends until the very moment that it ends. And then it turns out that somebody doesn't have a chair. On Tuesday morning Credit Suisse published its annual report that revealed an $8 billion loss for 2022. The bank had been due to publish the report last Thursday. It was sent back to review its books by the SEC. Other Wall Street experts right now are urging caution and calmness.

But again, I'm finding that a little bit hard to buy given that a month ago, they were all saying that SBB was in good shape. That was really not a problem. Meanwhile, Wells Fargo has now filed for a $9.5 billion mixed-shelf offering. A mixed-shelf offering is basically a quick way of raising cash. It allows them to offer a bunch of securities, a basket of securities all at once. It could include debt securities, warrants, units, and purchase contracts. Presumably, that is a way for them to raise a bunch of money in case, again, depositors come calling. So the question is, are we about to experience more banks failing because of those increasing interest rates? Now, the government, of course, is suggesting that it's a lack of regulation that led to this problem. That, of course, is not the truth. There's little to no evidence to suggest that if Dodd-Frank had been on the books in the form that it was in 2018, that this would have prevented the collapse of SVP. That was a strategic problem with SBB.

They decided to invest in bonds. The price of the bonds went down. It's as simple as that. It had nothing to do with reporting requirements. It really had very little to do with the strictures that were put on mid-sized banks in the earlier version of Dodd-Frank. You know who says that? The guy who wrote the bill, Barney Frank, and who happened to be on the board of Signature Bank, which is the other bank that went bankrupt. Even he was saying, yeah, now, if my bill had been in place, it wouldn't have stopped anything at all. As always, whenever the government creates a failure, their next move is to blame the general markets, to blame the capitalist free enterprise markets, even though it was they who created the incentive structure in the first place, and then step in with more regulatory power. This is always the stupid game. You pervert market incentives like you did with the real estate market from 2000 to 2007, 2008. Then when failure ensues, you say, well, I guess capitalism failed.

The government has to step in. It's a beautiful way for corporatism, which is the merger between government and big business, to continue its predations against the free market, which is really what's happening right here. We'll get to more on that in just one second. First, I need to talk to you about Daily Wire's most trusted privacy partner and our premier sponsor of this show, ExpressVPN. Well, it's one thing we have learned in our society. Trust very few people. Why exactly would you trust the big tech bros? Why would you trust them to keep your data safe? Especially when they've made pretty clear that they're giving you free services because they wish to monetize your data. Why would you trust them when it comes to whether they're going to protect you from government that is requesting your data from them, for example. Well, you shouldn't. This is why I use ExpressVPN.

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It wasn't that it created this, and then it wasn't the attendant interest rate increases that had to come because inflation was a natural consequence of spending that much money. And then people bet wrong on the Federal Government. It wasn't that. It was that they need a few more, they need more power. If you can give them more power, that's probably better. The Federal Reserve is now rethinking a number of its own rules related to mid-size banks, following the collapse of two lenders, according to the Wall Street Journal, potentially extending restrictions that currently apply only to the biggest Wall Street firms. A raft of tougher capital and liquidity requirements are under review, as well as steps to beef up annual stress tests that assess banks' ability to weather a hypothetical recession, according to a person familiar with the latest thinking among U.S. regulators. Those rules would target firms with between $100 billion and $250 billion in assets. And again, that is the suggestion that if there just been more government oversight, this wouldn't have happened in the first place. But that wasn't the problem. The problem, again, is that they invested in what they thought were solid assets.

Bonds are like — if you go to textbooks, solid assets, U.S. government bonds are typically seen as the most solid asset. But again, that is if you hold them until maturity. If you don't realize your loss. I've told the story on the show a bunch of times before. In 2007, 2008, Warren Buffett, on the books. He had lost like billions of dollars on the books because, you know, he had stocks. And the stocks went down in price, and then they said, oh, he lost billions of dollars. They went to him, they said, How do you feel about losing billions of dollars? He said, lose an dime. I haven't sold any of those stocks until a loss is realized. And it's not a loss.

Well, that's true. But the problem is that if you have to go liquid immediately, and you have to liquidate all your assets, well, then you're going to have to realize that loss. And that's precisely what happened with SBB. They were not marking down their assets to market prices because they weren't intending on selling those assets. and then everybody all at once decided to go get their money from the bank and they had to fill in that gap. So the notion that that's going to be fixed by the Federal Reserve doing more oversight is really quite ridiculous. The bigger problem right now for the Federal Reserve is the simple fact that they are now at war with themselves. So as Bloomberg is pointing out, the Federal Reserve may need to end its quantitative tightening program early to preserve the amount of bank reserves in the financial system while also maintaining its hawkish signaling on interest rates, according to Citigroup. So right now the inflation rate, as we'll discuss in a second, was like 6%. It came out that it's at 6%, but the truth is that the inflation rate is actually increasing in certain areas of the economy. It's decreasing in certain areas, it's increasing in certain others. The inflation is still really bad, systemically, in the economy, especially because when you look at the year-on-year inflation rate, which is what that 6% is, you have to add that on top of what the inflation rate was like a year before.

And a year ago before that, It was like a seven or eight percent interest rate, I mean, inflation rate. So if you look over the course of the last couple of years, you're looking at double digit inflation increases. But one of the things you have to do in order to fight inflation is to suck money out of the economy, right? That is why you increase the interest rates. You make it harder to achieve liquidity. Well, what exactly would you call it when you announce to the world that you are going to set up a fund, a giant slush fund to deposit for depositor backstop? When you're talking about in the banks across the United States, there are unsecured deposits amounting to like seven or eight trillion dollars, like trillions and trillions of dollars in unsecured investitures into deposits into the banks, right? Any deposit technically that you put in your bank that is above $250,000 is not insured, right? It is not covered by the by the FDIC. There are trillions of dollars worth of investments there. And now the federal government has announced for SVP and you would imagine it now applies broadly that they're going to fill in every deposit everywhere, which is in fact a form of quantitative easing. It is a form of the federal reserve just blowing money into the system, obviously, because now all the risk reward is gone.

It doesn't matter what the risk is. You are still going to get your money out. So you may as well put your money with the people who are promising the highest return. That's not according to me. That's according to Citigroup. As Citigroup sees it, the bank's new bank term funding program introduced over the weekend after the collapse of Silicon Valley Bank will create additional reserves in the financial system to avert funding stress. Essentially, that risk is being seen as a form of quantitative easing, right? Quantitative easing was the fancy name for inflation. We're just injecting money into the economy at a time when the Fed has engaged in a major effort to do just the opposite. Since mid-2022, it's been unwinding as massive pile of treasury and mortgage-backed securities aiming to ultimately remove trillions of dollars of excess liquidity from the financial system. The new facility is quantitative easing in another name. Assets will grow on the Fed balance sheet, which will increase reserves, said city strategist Jabbar Zemafei, Jason Williams, and Alejandro Vasquez Plata.

Although technically they're not buying securities, reserves will grow, which is obviously true. This is a form of quantitative easing. They're injecting liquidity into the economy at a time when they're trying to also remove liquidity from the economy. And this is the problem that you create for yourself when you create an inflationary problem. And that inflationary problem has real consequences, not on how people are living, how people are spending. And then in an attempt to jack down the inflationary, jack up the interest rates, that has a bunch of side effects. One, older bonds become worth a lot less money. That was SVE's story. Two, you're going to actually increase the interest rate on the American national debt, which creates significantly more problems in terms of repaying that national debt over time. You've made the debt significantly worse. Debt repayment gets a lot worse because now you're paying that debt at an interest rate of 6% or 7%, as opposed to an interest rate of, say, 2% or 0%. And then you have a third problem, which is you are injecting money, this new program, which is saying we're going to backstop every deposit in the United States, means that you have created a slush fund of liquidity at a time when you're trying to pull liquidity out of the market.

So the Fed is now stuck between a rock and a hard place. As Bloomberg says, as part of its move to combat soaring inflation and withdraw the unprecedented policy accommodation unleashed amid the pandemic, the Fed ramped up its so-called quantitative tightening to full speed in September. But for the Fed, an overarching concern is that it avoids pulling back too far on liquidity in the financial system as it tightens policy, creating strains in the markets where banks fund themselves. Bank deposit have fallen since the Fed started its hiking cycle a year ago, spurring customers to shift cash to higher yielding instruments, which has forced institutions to increase rates on offerings like certificates of deposit, more in line with treasury bills and money markets to stem the exodus. So they've got quantitative tightening at the same time that they're pursuing a form of quantitative easing to prevent these banks from melting down. Well, none of that is going to work out particularly well. None of that is going to solve the problem. Well, speaking of problems that need to be solved, okay, let's say that some emergency arises and you can't actually get out to the pharmacy, there's a hurricane. And now the pharmacy is closed because there's a hurricane outside. And God forbid your kid needs an antibiotic of some sort. You don't have it on hand. What do you do?

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So while there are indicators that inflation could be kind of slowing in certain areas of the economy, the answer is not really. So the question is, what exactly is the Fed going to do? So people have been suggesting the Fed has been easing its program of interest rate increases, which, again, they're probably going to have to do that anyway, if they don't wish to destroy many more banks. If all these banks have bought bonds, and those bonds are now essentially worthless because the Fed keeps raising the interest rates, well, at a certain point, they are going to either have to prevent those banks from collapsing by refusing to raise the interest rates, which means inflation becomes persistent, or they have to continue to raise the interest rates. And if a few banks go bust, then a few banks go bust. That is the choice that they have right now. Also, they've completely blown out their own credibility. First, they created the inflationary problem saying it wasn't going to be persistent. Then it was persistent. Then they raised the interest rates in order to fight that. They're raising it at half a percentage point every time. And then they lowered that to 0.25 percentage points every time.

And now they may have to reverse that and do 0.5. So it's a mess out there. And everybody knows that it is a mess. John Hatzia, chief economist at Goldman Sachs, as we think Fed officials would be reluctant to take the risk that monetary policy actions could work at cross purposes with financial stability policy by worsening banks' balance sheet problems and undermining confidence. So in other words, they think that in order to avoid bank collapse, they're going to slow the interest rate increases. If they do that, inflation is going to remain really, really high. Hot core inflation, according to the Wall Street Journal, prices rose 5.2% over the last three months and the annualized rate has run well above economists' expectations and further highlights the tension between the Fed's financial stability and price stability goals. This is why the Federal Reserve should not be in charge of the American economy to the extent that it is. As the Wall Street Journal points out, the real problem here is that as long as central bank policy is bad, if monetary policy is bad, assets that you thought were secure are simply not secure. And so for all those who are saying that the crisis is over, I just have a question. What would make you think so? What has happened that makes you think that the crisis is over?

Yeah, I mean, sure, you're going to be able to get your deposits out of the banks. Also, that is going to create persistently high inflation, because again, it's injecting money into the economy. Also, the Federal Reserve is now reluctant to raise those interest rates because they're afraid that it'll dump the economy. So that rock inflation and that hard place, depression, those two things are now squeezing in on the Federal Reserve. So should you feel really good about things right now? I have a hard time believing it. It doesn't matter to Joe Biden. Joe Biden continues to push forward with his idea of a $7 trillion budget, because why the hell not? We may as well throw some more gasoline on the fire. Here was Joe Biden yesterday after having supposedly solved our fiscal problems in the middle of questions about whether Credit Suisse is about to go under. The President of the United States went out there and started muttering

It's just a certainty. It is a certainty that if a bank goes under, the federal government is going to find a way to bail out the bank and to, quote, unquote, decrease risk. And when they decrease risk, you have to understand when the federal government decreases risk to a certain bank failing, they're not decreasing the risk. They are redistributing the risk. You are paying for it. And so before the risk was discreet, it existed in a particular institution that had made bad moves. And there were people who had put their money in those institutions because those institutions have been lying and claiming high rates of return, and instead of that risk now existing where it should be with the people who made the decisions. Now, the risk is going to be redistributed across the entire economy. Because again, the idea is that if we don't we distribute the risk over the entire economy, then the institution fails. And if that institution fails, there will be bleed over to other institutions. Now, nobody's ever tried the counter-positive, right? Nobody's ever tried the idea of, what if the bank fails?

What if we just let SVP go under? And what if, in order to buy SVP, it goes into bankruptcy proceedings or something, What if somebody comes in or a group of companies come in, and they refill back in the depositor losses. They come in and they say, listen, we're gonna buy it up. We're gonna buy it up on the cheap. Still, we see how you blew this right here, and we're going to restructure this thing, and we're going to, yes, make the depositors whole. Why was that not even trying? Apparently, they were thinking about it on Sunday, and then the Biden administration was like, no, we're not even gonna do this. We're not even gonna do an auction for S.V.B., we're just gonna shut this thing down, and the federal government is gonna come in and we're gonna put our stamp of approval on what we're doing, so Joe Biden, apparently can claim that he saved the American economy. Well, all this is just creating a massive set of perverse incentives for future banks. Because if you are a banker now, you're like, I'm gonna tell my depositors that I can get them a 10% rate of return. And you know what, if I can't, if it turns out I can't. You know, all that happens is I lose my job and they all get paid off by the federal government anyway.

So I'm playing with house money, basically. That is the perception. And that's going to make the economy a lot more risky, believe it or not, because there will come a point in which the federal government does not have the ability to simply fill in every gap beyond which even if the federal government does fill in the gaps, obviously there's only a couple of ways of doing that. And one of them is inflation and quantitative easing. And well, if all of this is enough to make it lose some sleep, you should recognize that one way to actually gain sleep is to have a good set of sheets on your bed. You don't think about your sheets too much, right. Very often you're just like, okay, whatever's in the closet, you throw it on the bed. Fine, good enough. And then you find yourself in the middle of the night and the sheets have pulled off the mattress and you're sweating and it's really uncomfortable. What you need is the world's best sheets and those are bull and branches. I know of what I speak because we took all of our other sheets and we threw them out. That's how gooduba and branch is.

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Well, you're seeing more and more major investors point them out. Carl Icahn, who of course is a major investor worth some more between $17 and $25 billion. He pointed out on CNBC yesterday that the economic system is breaking down

Apparently they pledged in the summer of 2020 in the middle of the George Floyd debacle to increase their commitment to diversity, equity and inclusion in the workplace. And they also pledged to donate tens of millions of dollars to left wing social justice causes. Now, is that what caused their bankruptcy? No, it just means that they were loose with their cash and they were loose with their cash because money was easy. Money was super easy. It's fun to watch Senate Democrats now going at each other over all of this. According to Politico, five years to the day after Senate Democrats clashed bitterly over Donald Trump's bank deregulation, the failure of two banks is reigniting the old tension. President Biden on Monday criticized the former president's loosening of bank regulations under Dodd-Frank. Biden didn't mention his own party played a significant role. Elizabeth Warren, of course, was blaming other Democrats for having loosened the regulations. Senator Michael Bennett of Colorado said, no, I voted for the bill because it was bipartisan compromise. Like it says nothing to do with Dodd-Frank.

What this has to do with is if you keep incentivizing people to make bad decisions, bad decisions get made. And then, of course, many people cheer on the bad decision making. So for example, Gavin Newsom, the ridiculous governor of California, French Laundrie Newsom, the rules don't apply to him, which is probably why, according to The Intercept on Monday, California governor Gavin Newsom praised the Biden administration's decision to bail out Silicon Valley banks clients after the bank was taken over by the FDIC. Newsom said that the White House, quote, acted swiftly and decisively to protect the American economy and strengthen public confidence in our banking system. Newsom did not mention that that act also protected his own companies if they held over $250,000 in deposits. There are three separate wineries owned by Newsom for clients of SVBs. So oops, that's that's a little awkward for a politician. No, listen, all of this just spells more economic chaos in the future, either through economic stagnation or through bank meltdowns or through continued inflation or through a combo of kind of all three, which means that it's time for Joe Biden to misdirect. That dude has got to misdirect because if you are looking at the state of the economy and you are fearing a meltdown and banks are starting to bust, then you got to do something. So Joe Biden is going back to that old stalwart gun control. Yes, he's going to go back to gun control and then he's going to tell stories about it. Yeah, did you ever wear a Kevlar vest?

We're gonna do that routine again. So on Tuesday, he signed an executive order he said was aimed at reducing gun violence, including changes that could increase the number of gun buyers subjected to background checks. He said his executive actions were designed to move the US as close to universal background checks as possible. Under the new order, the Justice Department must clarify the definition of being engaged in the business of selling firearms. Currently, a federal background check applies if you are a business that sells firearms on the regular. If however, you are not engaged in the business, right? You're like a person and you sell a gun to your friend and a federal background check does not apply by federal law. Now there are certain places in the country where you still have to get a background check. California is one of those places, I believe. The president is urging the FTC to produce a public report examining how manufacturers market guns. He's trying to open up liability for the gun manufacturers. Again, is any of this going to stop any level of violence with guns in the United States?

Absolutely not. There is no evidence any of this will work, but it's an attempt to misdirect. And so Joe Biden is going to misdirect, he's going to go to the gun issue to avoid talking about the economy. When he's asked about the economy, he just jets out that door. When I say jets, I mean, he walks very slowly and carefully, so that he doesn't fall over out the door. But, he has to misdirect to something. Gun control is his big one. He loves the gun control nonsense.

The news is not good for him. And so he then released what I think is one of the oddest tweets I've ever seen from a president of the United States. We'll get to that in just one moment first. You may have noticed the economy is really not looking amazing these days. And so if you've been running a business for the past few years, and you're like, man, I could use a bit of a break. And maybe you ought to look back at your old tax returns because you might've overpaid your taxes, believe it or not. And this is why you should check out Innovation Refunds. Innovation Refunds makes it easy to apply for the Employee Retention Credit, or ERC. All you have to do is go to getrefunds.com. You can get started in less than eight minutes, see if your business qualifies for ERC assistance. Your business may be eligible for a payroll tax rebate of up to 26 grand per employee kept on payroll during COVID-19. Innovation Refunds has already helped clients claim over $3 billion in payroll tax refunds through the ERC.

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He is joined by a group of esteemed scholars and me to discuss one of the most seminal books in the Bible. Episode 10 is streaming right now on Daily Wire Plus. It's an extreme deep dive into one of the most important books in the history of humanity. Just listen to this clip between Dennis Prager and Jordan.

It's free to enter. So if you're into March Madness, now's the time. You have to be 18 years or older to participate and win. Please see our complete terms and conditions at DailyWire.com. You can follow the link to sign up for the group. Create a bracket. It's available all at Crane and Company Social Media Accounts. Head on over right now. Sign up for your chance to win the one grand. Well, as we say, Joe Biden has to distract from what is happening in the economy right now because things are starting to get very, very ugly. And again, there are not a lot of options on the table. Either the Federal Reserve is gonna have to increase inflation or they're gonna have to increase the possibility of bank bust and recession and possible depression.

There is no third option there. Those are the only options that are on the table. And so Joe Biden has to distract. And so yesterday he released what is one of the oddest tweets I've seen from a president of the United States. That's saying a lot, because Donald Trump used to tweet a lot. Joe Biden put out a tweet. The tweet was a tweet of a small child. I'm not kidding. It was a tweet from, it was a letter from a small child. And it said, it's so cute because it's all misspelled and there's erasures and all this stuff. It says, dear, President Biden, I just wanted to tell something, not fair to ladies. Men are getting more money underlined than girls, than is spelled T-H-E-N.

I think you should fix this, since you're the president, Y-O-U-R, the president. Even I'm a child. And I think we should do something from Charlotte. Okay, so first of all, congrats to Charlotte's mom on getting her letter retweeted by President Biden. No one who spells that poorly has those kinds of thoughts, unless they're injected by the parent. And you're like, my son, he spells better than that. He's sick. So I assume this kid's like five, maybe, and writing that letter to the president. And Joe Biden, being a cynical elderly gentleman, he tweets out, Charlotte, I couldn't agree more. Women lose thousands of dollars each year and hundreds of thousands over a lifetime because of gender and racial wage gaps. I'm committed to building an economy where my daughters have the same rights and opportunities as my sons. Well, yeah, he should probably build an economy where his daughter is also able to knock up a stripper and then abandon the child and or snort Parmesan cheese off the carpets and be called the smartest person he knows.

I mean, equity, folks, equity. But the president of the United States tweeting out a letter from a small child filled with misspellings in order to promote the notion that women are paid less on average than men is, I hate this one in politics so much. It's so stupid. They know, well, even a child can see it. Even a child knows. First of all, children, they're stupid. Just gonna tell you right now, I got three of them. They're smart for children and they are stupid for adults because they are children. The notion that we should take our political lead from small children who can't spell, right? And be like, you need to be fairer to women, Mr. President. All children in politics should be treated the way that Dianne Feinstein treated a group of children who came to harass her about environmentalism.

So the rule always in the media is if Democrats botched things beyond all reckoning and then Republicans notice then the real stories that Republicans have pounced. Now let me just make clear to you, the pouncing is never the story. Right? The story is the story. The pouncing is never the story unless there is an obvious strategy to avoid a particular thing in favor of this other thing, right? Then it's really not about the pouncing so much as it is about the thing that they are ignoring, right? So if for example, there is a situation in which political observers should clearly be paying attention to issue a, and instead of doing that, they pay attention to issue b that's not the stories in the pouncing on issue b, the story is they're ignoring issue a but that's not really what's going on here. What's going on here is bad things are happening. Republicans are noticing and so the New York Times says that the pouncing has occurred for the second time in two months. News events have revealed how the responses of the two major political parties distinguish their leaders and how the conservative media serves as an echo chamber even for the most improbable arguments. Yes, the real problem here is that people on the right are pointing to woke banks now Listen, I've said on the show so I think that the wokeness of these particular banks is the reason for their collapse No, I think that their bad decision-making is the reason for their particular collapse But the fact that the New York Times thinks the story is the is the pouncing is is really kind of incredible meanwhile Speaking of a story where people seem to be ignoring the actual story I've noticed that everybody on the right side of the aisle who is running for president is now very angry at Ron de santis for his answer to to Tucker Carlson on Ukraine. So, you'll recall that DeSantis suggested that the United States did not have a vital interest in the situation in Ukraine, arguing that it was a territorial dispute between Russia and Ukraine at this point.

Now, you can make the argument, I think, that what is happening between Russia and Ukraine now has become sort of a territorial dispute, meaning that everybody acknowledges, including the Biden administration, that the chances that Ukraine pushes Russia fully out of the Donbass and Crimea, unlikely, which means that we are now having a dispute over where to draw the lines in Donbass and Crimea. It was not a territorial dispute when Russia invaded Ukraine full on and tried to take Kyiv, right? That was just an invasion. When you're talking about places that have been held by Russia since 2014, and when there's a full acknowledgement that there will, in fact, be a settlement in which a line is drawn that is going to be west of the normal Ukraine-Russia border, and that is going to be north of the Black Sea, you're immediately talking about a territorial dispute. So, that's not actually wrong. As far as whether it is a vital American national security interest, I think that what DeSantis presumably was trying to avoid was the blowback from saying that it is a vital interest, but does it actually change policy? And there are lots of foreign policy things that we do that are not, quote, unquote, vital interests, right? They aren't like top priority, they're second or third priority, like policy with regard to Philippines. Is that like a vital national security interest? Probably not. Is this something that's important enough for us to worry about? Sure, I mean, that sort of stuff happens all the time.

And so, the real answer is that DeSantis was mushing it. Okay, when you look at the actual answer that DeSantis gave, it was kind of a mush-mouth answer, which is not politically stupid considering that the Republican Party itself is pretty split on these lines. Now, what is fascinating is to see the response to DeSantis. I think DeSantis's response was significantly less interesting than the response to it. So, Nikki Haley is going after DeSantis. She said, President Trump is right when he says Governor DeSantis is copying him first in his style, then on entitlement reform, now on Ukraine. I have a different style than President Trump. And while I agree with him on most policies, I do not on those. Republicans deserve a choice, not an echo. So what I first noticed here about Nikki, and again, I like Nikki, I agree with her on a lot of things, but one of the things that I noticed about what Nikki is doing is that Nikki is not attacking Trump. So if the idea here is that DeSantis is copying Trump, is the sin the copying or is the sin the position? If the sin is the position, wouldn't you go after, you know, the titular leader of the Republican Party, the front runner by nearly every major primary poll?

Are we just gonna do the same thing that we did back in 2016? You can see it materializing. We're gonna do the same thing we did back in 2016. Everybody attempts to avoid hitting Trump, and instead they hit each other. So obviously, listen, if Nikki wanted to attack the isolationist position on Ukraine, Trump is more overtly isolationist on Ukraine than DeSantis is by a fairly large margin. She's not attacking Trump. She's attacking DeSantis, because presumably the political game here is, if you can drive DeSantis down with potential supporters, then she picks up that support, and she's assuming that no one is gonna drop off of Trump, who's already on Trump. Okay, but is she really attacking DeSantis position, or is she really attacking where DeSantis is in the primaries, right? This is all politicking. And it's not just Nikki Haley who's doing this. Obviously you see Chris Christie doing the same thing. I don't know why Chris Christie thinks he's a thing.

Fetch is not gonna be a thing. You can try to make it a thing, it is not going to be a thing. So Chris Christie has been ripping into DeSantis as well. Lindsey Graham is now suggesting to those who believe that Russia's unprovoked and barbaric invasion of Ukraine is not a priority for the United States. You're missing a lot. And then he suggests that we ought to get significantly more aggressive with regards to Ukraine. Chris Christie said, DeSantis sounds like Neville Chamberlain talking about when Germany had designs on Czechoslovakia. Does he sound like that though? I'm pretty sure that he does not, since he has not called for a full-scale withdrawal of all American support to Ukraine. I mean, that's really the question, right? That's the question that should be put to all of these people. What are you suggesting in terms of actual policy?

Forget about the vital interest question. Should the United States withdraw all financial support from Ukraine? Or how much support should continue to be provided to Ukraine? Because my guess is pretty much all of these candidates up to and including Trump would say enough support has to be provided to Ukraine to prevent them from losing against Russia, which is basically what Biden is providing right now. So all this seems like a tempest and a Teapot to me, to be perfectly honest with you, because nobody's actually taking the hard Lindsey Graham position, which would be, we need to fund Ukraine to the point where they can push Russia back to its own borders. We need to give them whatever they need in order to do that and that will force Russia to the table. Lindsey Graham's like the only person who's articulating that position publicly because nobody else is willing to take that position because they think it's too dangerous. And one of the reasons they think it's too dangerous because the possibility of Russian-American conflict does bear the possibility, however slim, of a nuclear exchange. That possibility went up some way yesterday when a Russian jet collided with U.S. drone over the Black Sea, according to the Wall Street Journal. A Russian jet struck a U.S. spy drone over the Black Sea, knocked it out of the sky on Tuesday.

It was one of the first military confrontations directly between the two nation's forces since the war in Ukraine began more than a year ago. So the U.S. and Russia are operating on the margins of the conflict zone. Apparently, two Russian SU-27 jet fighters and the U.S. MQ-9 surveillance drone originating from Romania flew near one another for about 30 minutes in international airspace. And in an incident that lasted a matter of seconds at about 7 a.m., one of the Russian jet fighters flew past the drone, dumped fuel on it, and then pulled away. And then the second jet sought to do the same, but instead ended up colliding with the drone. The collision knocked off a piece of the MQ-9, and its operators guided it down to the water. The U.S. has not recovered the wreckage as of yet. The Pentagon said that this was a juvenile incident, but it was an accidental move by the Russian pilots. That would not exactly be a shock.

Obviously, Russia has no interest in provoking direct American confrontation in this particular war. But here's the bottom line. There is effectively no broad taste in the United States, including for folks on the left, for direct conflict with Russia. So the question is, what risk are you willing to take in order to promote Ukraine's interests? And how far do those interests coincide with American interests? That seems to be a more complex question than the questions that we normally ask about foreign policy. OK, meanwhile, in the most hilarious story of the day, this is just a great story. So Wellesley College is a female college, right? It proclaims itself as a place for, quote, women will make a difference in the world. Its celebrated alum include Hillary Clinton, Madeleine Albright, and Nora Efron. So they put up for a referendum on Tuesday, whether trans men should be able to attend Wellesley College. Now you'll recall by the logic of the transgender movement that trans men are men.

Trans men are men. Clappy emojis, right? Trans men are men. Snap it. OK, so there's only one problem with this. If trans men are men, they should not go to women's colleges. But Wellesley College voted. Its students supported a referendum that polarized the campus, went straight to the heart of Wellesley's identity as women's college. The referendum called for opening admissions to all non binary and transgender applicants, including trans men. Currently, the college allows admission to anyone who lives and consistently identifies as a woman. The referendum also called for making the college's communications more gender inclusive. For example, using the word students or alum instead of women.

So I have a question. Apparently. This means that men who identify as women can go to Wellesley. And women who identify as men can go to Wellesley. So what we are now acknowledging is that the only people who cannot go too well as Lee are men who identify as men so if you're a man you say you're a lady or lady if you're a lady and you say you're a man you're still a lady and if you're a lady who says you're a lady or lady but if you're a man who says a man verboten this is what makes you a man so I think somewhere along the line you guys lost the logic again it's it's hysterical to me that they literally cannot define woman and so they are trapped into the mutually exclusive position of women who that men who identify as men are still women, and men who identify as women are also women. It is a mutually exclusive message, it does not apply. Again, if trans women are women, and trans men are men, then trans men should not be allowed into a women's college. In a message to campus last week, the head of Wellesley described it as, quote, a woman's college that admits cis, trans, and non predecessor students all consistently identify as women. But now they're changing that student until the sit-in said that this is bad. The student newspaper's editorial board wrote, we disapprove and entirely disagree with the president. So this makes Wellesley ripe for a lawsuit, ripe for a lawsuit. The next man who decides to identify as a man is going to have a hell of a lawsuit on his hands when he applies to Wellesley.

And it's gonna be hilarious, because he's going to say, listen, I'm a man who identifies as a man, but trans men are also men. So Wellesley is open to men. So they are discriminating on the basis of immutable characteristics. This is a violation of Title IX, and I am here for it, man. It is going to be delicious. I love that story. It is so great. Wokeness eating itself. Wokeness defined as identity politics before merit, on a general level. Okay, time for some things I like, and then some things I hate. So I have some excellent things I like today, like really quality chef's kiss things I like today. So we begin with the Ocendaro brothers.

You remember them? So you may not remember their names, but they were the heroes of the Juicy Sommelier saga. There were two brothers hired by Juicy to supposedly beat him up on the streets of Chicago at 2 a.m. in the middle of a polar vortex after he got a Subway sandwich to pour bleach on him and yell, this is MAGA country. And then he went back to his apartment and claimed that he was a victim of a racist and homophobic hate crime, as it turns out from two of his black trainer friends. And all of that came out, and Juicy has been duly humiliated. He still claims, of course, that none of this happened. Well, now Fox Nation, this is one of the better things I've seen from Fox Nation, actually. They released a Fox News original in which they asked the Ocendaro brothers to relive the crucial incident with Juicy Sommelier, with Jussie Smollett, and it is grand. It is just glorious. Here we go.

So we waited here for about, what? Four minutes? Four minutes? Four minutes? But it felt like forever. Because it was cold as balls. So I saw him out the corner of my eye, and I was like, OK, that's him. Let's go. Gotta go get this empire. F***, yeah, that's him. That's him, is that him? That's that neck.

10 out of 10, their life must be just riveting. It must be fascinating, fascinating stuff. OK, I have another amazing thing I like today. I love this story. It's so good. So New York, New Jersey is a pit. It is one of the worst places in America. It is the armpit of of civilization. It's a terrible, terrible place in New York. If you have to fly into Newark, I pity you. I've had to stay the night in New York, which is essentially the equivalent of maybe Dante's like fifth circle of hell. It's a bad, bad place.

Anyway, Newark being a terrible place also has terrible leadership. Large coincidence there. Well, its leadership is so smart that they made a sister city agreement with a with a country called Kailasa, and they worked hard to make it happen. In fact, they had an entire press conference. It's supposed to be an Indian jurisdiction, not like Native American, like Indian Indian jurisdiction, a small country, an emerging Hindu area called Kailasa. Here is the news coverage of what happened next because awesome sauce. Love it.

But that is just spectacular stuff. So Newark being run amazingly well, like really well done Newark. And to the people of Newark, you guys are voting for the best. I mean, I just got to say your mayor, Ross, he must be amazing at his job and his team must be incredible, like you should probably give them control over the massive Newark City budget. You probably should. I mean, what could go wrong? What could go wrong? Newark has a budget in the billions of dollars. So probably you should have these people run it because they look like really competent is what I'm thinking. Just keep Newark, it keeps getting better and better. Life in Newark on that upward trajectory. It's just, yeah, it's going great.

Maybe Kailasa will invade and take over Newark and improve its lot, perhaps.

I'm concerned I'll diminish the opportunities for more women. So she's acknowledging that there just aren't enough women who deserve to be winning awards. And so if you get rid of the genders, then fewer women will win awards. But she wants it anyway, because why not? That's the really important thing. So, you know, fine, go for it. My answer, fine, go for it. I'd love to see it. Wokena should eat itself. Under all circumstances, Wokena should eat itself. And she's not the only one promoting this. Isaac Butler has a piece in the New York Times saying, the best acting Oscar goes to a man and a woman.

Why? Well, because, you know, for all of human history, these were a dichotomous aspect of the human species, men and women. And they typically had very different parts because men and women are very, very different. I know that these are like breaking news concepts to modernity, but men and women, different, very different. And so women's parts tend to be different than men's parts. But we're going to obliterate all of that now. So, I agree, I agree. Since everyone has Androgynous, we should have men playing women's parts and women playing men parts and everybody's non-binary, whatever. Then sure get rid of the categories too, and we'll see how it works out for the ladies. The patriarchy, man. The patriarchy is always clever and they win yet again. All right, you guys, the rest of the show is continuing right now.

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