One of Silicon Valley’s Top Banks Fails; Assets Are Seized

Wire Editor
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One of Silicon Valley’s Top Banks Fails; Assets Are Seized

(Headline USA) Regulators rushed Friday to seize the assets of one of Silicon Valley’s top banks, marking the largest failure of a U.S. financial institution since the height of the financial crisis almost 15 years ago.

Silicon Valley Bank, the nation’s 16th-largest bank, failed after depositors hurried to withdraw money this week amid anxiety over the bank’s health. It was the second biggest bank failure in U.S. history after the collapse of Washington Mutual in 2008.

The bank served mostly technology workers and venture capital-backed companies, including some of the industry’s best-known brands.

“This is an extinction-level event for startups,” said Garry Tan, CEO of Y Combinator, a startup incubator that launched Airbnb, DoorDash and Dropbox and has referred hundreds of entrepreneurs to the bank.

“I literally have been hearing from hundreds of our founders asking for help on how they can get through this. They are asking, ‘Do I have to furlough my workers?’”

Nearly half of the U.S. technology and health care companies that went public last year after getting early funding from venture capital firms were Silicon Valley Bank customers, according to the bank’s website.

The bank also boasted of its connections to leading tech companies such as Shopify, ZipRecruiter and one of the top venture capital firms, Andreesson Horowitz.

Tan estimated that nearly one-third of Y Combinator’s startups will not be able to make payroll at some point in the next month if they cannot access their money.

Internet TV provider Roku was among casualties of the bank collapse. It said in a regulatory filing Friday that about 26% of its cash — $487 million — was deposited at Silicon Valley Bank.

Roku said its deposits with SVB were largely uninsured and it didn’t know “to what extent” it would be able to recover them.

As part of the seizure, California bank regulators and the FDIC transferred the bank’s assets to a newly created institution — the Deposit Insurance Bank of Santa Clara. The new bank will start paying out insured deposits on Monday. Then the FDIC and California regulators plan to sell off the rest of the assets to make other depositors whole.

There was unease in the banking sector all week, with shares tumbling by double digits. Then news of Silicon Valley Bank’s distress pushed shares of almost all financial institutions even lower Friday.

The failure arrived with incredible speed. Some industry analysts suggested Friday that the bank was still a good company and a wise investment. Meanwhile, Silicon Valley Bank executives were trying to raise capital and find additional investors. However, trading in the bank’s shares was halted before stock market’s opening bell due to extreme volatility.

Shortly before noon, the FDIC moved to shutter the bank. Notably, the agency did not wait until the close of business, which is the typical approach. The FDIC could not immediately find a buyer for the bank’s assets, signaling how fast depositors cashed out.

At the time of its failure, Silicon Valley Bank, which is based in Santa Clara, California, had $209 billion in total assets, the FDIC said. It was unclear how many of its deposits were above the $250,000 insurance limit, but previous regulatory reports showed that lots of accounts exceeded that amount.

The bank announced plans Thursday to raise up to $1.75 billion in order to strengthen its capital position. That sent investors scurrying and shares plunged 60%. They tumbled lower still Friday before the opening of the Nasdaq, where the bank’s shares were traded.

As its name implied, Silicon Valley Bank was a major financial conduit between the technology sector, startups and tech workers. It was seen as good business sense to develop a relationship with the bank if a startup founder wanted to find new investors or go public.

Conceived in 1983 by co-founders Bill Biggerstaff and Robert Medearis during a poker game, the bank leveraged its Silicon Valley roots to become a financial cornerstone in the tech industry.

Bill Tyler, the CEO of TWG Supply in Grapevine, Texas, said he first realized something was wrong when his employees texted him at 6:30 a.m. Friday to complain that they did not receive their paychecks.

TWG, which has just 18 employees, had already sent the money for the checks to a payroll services provider that used Silicon Valley Bank. Tyler was scrambling to figure out how to pay his workers.

“We’re waiting on roughly $27,000,” he said. “It’s already not a timely payment. It’s already an uncomfortable position. I don’t want to ask any employees, to say, ‘Hey, can you wait until mid-next week to get paid?’”

Silicon Valley Bank’s ties to the tech sector added to its troubles. Technology stocks have been hit hard in the past 18 months after a growth surge during the pandemic, and layoffs have spread throughout the industry. Venture capital funding has also been declining.

At the same time, the bank was hit hard by the Federal Reserve’s fight against inflation and an aggressive series of interest rate hikes to cool the economy.

As the Fed raises its benchmark interest rate, the value of generally stable bonds starts to fall. That is not typically a problem, but when depositors grow anxious and begin withdrawing their money, banks sometimes have to sell those bonds before they mature to cover the exodus.

That is exactly what happened to Silicon Valley Bank, which had to sell $21 billion in highly liquid assets to cover the sudden withdrawals. It took a $1.8 billion loss on that sale.

Ashley Tyrner, CEO of FarmboxRx, said she had spoken to several friends whose businesses are backed by venture capital. She described them as being “beside themselves” over the bank’s failure. Tyrner’s chief operating officer tried to withdraw her company’s funds on Thursday but failed to do so in time.

“One friend said they couldn’t make payroll today and cried when they had to inform 200 employees because of this issue,” Tyrner said.

Adapted from reporting by the Associated Press

FBI and Pentagon Secretly Built Dystopian Facial Recognition System: Report

Ken Silva
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FBI and Pentagon Secretly Built Dystopian Facial Recognition System: Report

(Ken Silva, Headline USA) The FBI and Department of Defense have been secretly building facial recognition technology for years to be used for mass surveillance of Americans, according to documents obtained by the ACLU.

The documents, which the ACLU provided to the Washington Post, reportedly show that Pentagon officials worked with FBI scientists to design software that would quickly and accurately process the “truly unconstrained face imagery” recorded by surveillance cameras in public places, including subway stations and street corners.

This project was reportedly code-named Janus, a reference to the two-faced Roman god.

“To refine the system’s capabilities, researchers staged a data-gathering test in 2017, paying dozens of volunteers to simulate real-world scenarios at a Defense Department training facility made to resemble a hospital, a subway station, an outdoor marketplace and a school, the documents show. The test yielded thousands of surveillance videos and images, some of which were captured by a drone,” the Post reported.

The Janus project officially ended in 2020, according to the Post. However,  its work was reportedly then folded into the web-based interface Horus—named for another deity, this one the falcon-headed Egyptian god of the sky.

According to the report, the facial recognition technology has since been made available to civilian police forces.

“The improved facial recognition system was ultimately folded into a search tool, called Horus, and made available to the Pentagon’s Combating Terrorism Technical Support Office, which helps provide military technologies to civilian police forces, the documents show,” the Post reported.

According to the Post, the facial recognition system is part of a broader FBI surveillance database, called Next Generation Identification, which contains the fingerprints, palm prints, face photos and eye patterns collected from millions of people applying for citizenship, getting booked into jail or requesting job background checks.

The FBI signed a $120,000 contract earlier this year with Clearview AI, the facial recognition company that developed its software by illegally scraping millions of social media photos from the internet—meaning there’s a good chance your social media photos are being used by the FBI to develop its tech.

The Post’s story included a choice quote from FBI Director Chris Wray, who in January feigned concern that the Chinese government could develop mass surveillance technology like what his bureau already has.

“AI is a classic example of a technology where I have the same reaction every time. I think, ‘Wow, we can do that?’ And then I think, ‘Oh, God, they can do that,’” Wray reportedly said in January.

Ken Silva is a staff writer at Headline USA. Follow him at twitter.com/jd_cashless.

DeSantis Secretly Spills Plans for 2024 POTUS Run

Contributing Author
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DeSantis Secretly Spills Plans for 2024 POTUS Run

(Headline USA) Florida Gov. Ron DeSantis has privately indicated he plans to run for president in 2024, according to the Washington Post.

DeSantis, who has been considered a frontrunner in the GOP primary, plans to visit Iowa and Nevada over the weekend — the clearest indication yet that he plans to launch a campaign. A super PAC in support of DeSantis, founded by Ken Cuccinelli, who served as acting director of U.S. Citizenship and Immigration Services under the Trump administration, was also created Thursday as an outside spending vehicle for DeSantis’s campaign, the Daily Signal reported.

“Ron DeSantis doesn’t just talk — he acts, but most of all, he never backs down,” Cuccinelli said in a video announcing the Never Back Down Super PAC. “Gov. DeSantis, today, I’m asking you to run for president. You’ve had our back; now we will have yours.”

DeSantis plans to travel to Iowa first, where he will meet with Gov. Kim Reynolds. He then plans to head ot Las Vegas to meet with Adam Laxalt, the Republican nominee for Nevada’s Senate seat during the midterm elections. The visits are part of his promotional tour for his newly released memoir.

“You ain’t seen nothing yet,” DeSantis said during his State of the State address this month.

Former President Donald Trump also plans to make a trip to Iowa in the coming weeks. He’s attacked DeSantis sharply, accusing the Florida Republican of being in bed with the establishment.

“In 2016, I declared I am your voice,” he said during an address at the Conservative Political Action Conference. “Today, I add: I am your warrior. I am your justice. And for those who have been wronged and betrayed: I am your retribution.”

DeSantis, for his part, has avoiding criticizing the former president directly.

“I’m appreciative of a lot of things he did,” he told Fox News recently. “It doesn’t mean I agree with everything he’s doing lately.”

Cruz: Biden’s Border Has Turned ‘Narco-Terrorists into Multi-Billionaires’

Molly Bruns
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Cruz: Biden’s Border Has Turned ‘Narco-Terrorists into Multi-Billionaires’

(Molly Bruns, Headline USA) In an interview with Jesse Watters on Fox News, Sen. Ted Cruz, R-Texas, painted a worrisome picture of the effect the pourus southern border has had on human trafficking.

“Joe Biden created the chaos at the border. Joe Biden stopped building the wall. He reinstated Catch and Release. He pulled out of Remain in Mexico,” Cruz said. “And what Joe Biden has done is, he’s turned these vicious narco-terrorists into multi-billionaires.”

Cruz referenced several reports that indicate drug and human trafficking has and continues to enrich criminals, according to Townhall. One piece from The New York Times revealed that that human smuggling increased by 2,500% in 2022, with the industry generating $13 billion in net profits.

Cruz’s blistering criticism continued, citing the rising death rate of drug overdoses from fentanyl flooding coming into the U.S. from the south.

“Joe Biden becoming president is the best thing that ever happened to the Mexican drug cartels,” Cruz said. “… Biden and the Democrats are responsible for turning these vicious murderers into multi-billionaires. We need to bankrupt them, we need to put them out of business.”

Violence erupted at the border in recent weeks, with several suspected cartel members assaulting and kidnapping several American citizens in a Texas border town.

The Americans crossed the border to receive medical care in Mexico when they came under fire and several men forced them into a pickup truck. The FBI issued a reward for the return of the victims and arrests for the culprits. Two Americans were reported dead and two returned, supposedly with any apology note from cartel members.

The Biden administration took bipartisan criticism for their slow response to the situation and apparent unwillingness to work to retrieve the victims.

Illegal immigrants are pouring in from across the southern border in record numbers under the not-so-close watch of Biden and Vice President Kamala Harris, who was put in charge of the project. Recently, Republicans in Congress took up an effort to force Biden to restart construction on the border well.

L.A. Times Declares Driving Your Car Is Racist

Jacob Bruns
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L.A. Times Declares Driving Your Car Is Racist

(Jacob Bruns, Headline USA) In a comically serious op-ed, Los Angeles Times journalist Sammy Roth argued that white people are to blame for ruining air quality for “LA’s people of color” by driving their cars.

According to Roth, white people driving their cars is an expression of a deeper racist plot by whites to harm “people of color.”

“It may sound like a paradox, but it’s not,” Roth wrote. “It’s a function of the racism that shaped this city and its suburbs, and continues to influence our daily lives — and a stark reminder of the need for climate solutions that benefit everyone.”

Roth noted that the plot to harm people of color runs deep. One can only see it with the help of studies published by leftist college professors.

Specifically, Roth cited a study published by Geoff Boeing, a professor at the USC Sol Price School of Public Policy.

“He told me it largely comes down to the shameful history of Los Angeles County’s low-income communities of color being torn apart to make way for freeways — a history that has been extensively documented by The Times,” Roth wrote of his contact with Geoff.

According to Boeing, the freeways themselves are racist.

“It’s not like commuters are coming in and shopping in those communities, patronizing restaurants,” Boeing said. “They’re just driving through to get from one side of the city to the other.”

Ultimately, Roth declared his own white privilege and waxed about his own virtuous steps that he has taken to renounce his whiteness.

“As a white guy who’s lived on L.A.’s Westside for most of my life, I’ve benefited from the region’s sordid history as well,” he wrote.

“Much as I try to do my part — taking the train a couple times a month, walking to local coffee shops and restaurants instead of driving across the city — there’s no question I contribute to the inequitable air pollution that Boeing’s study describes.”

Dems Peddle Bill to Prevent Charging Anyone Under 25 w/ Felony Murder

Molly Bruns
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Dems Peddle Bill to Prevent Charging Anyone Under 25 w/ Felony Murder

(Molly Bruns, Headline USA) Democrat lawmakers in Baltimore, Maryland, proposed a bill that prohibits anyone under the age of 25 from incurring charges of first-degree murder in particular circumstances.

Democrat Delegate Charlotte Crutchfiled wrote and proposed House Bill 1180, also known, somewhat ironically, critics noted, as the “Youth Accountability and Safety Act.”

In addition to reducing the overall sentence of felony murder from a lifetime to 40 years, the bill would ease the murder charges by limiting the legal definition of the occurrence, ZeroHedge reported.

House Bill 1180 would only permit individuals under 25 years of age to sustain charges of felony murder if another felony was in progress at the time of the killing, including burglary, carjacking, rape and other sexual offenses.

Conservatives, law enforcement officials and even some Democrat delegates came out in fierce opposition to the proposal.

“It would be absolutely outrageous and result in more crime,” said law enforcement expert Maury Richards, former Chief of Police of Martinsburg, West Virginia. “Last year, with Senator Carter’s Juvenile Justice Reform Act, it really opened the floodgates. There is a crime wave of violence going on right now, but instead of the legislator debating to rescind that, we’re hung up on whether 25-year-olds should be charged with murder.”

Several officials argued that the law will lead to a spike in crime among young people, with gang leaders recruiting teens and young adults to commit more serious crimes.

“If this bill passes, you’re going to have kingpins, you’re going to have gangs use juveniles to do their dirty work,” said Delegate Susan McComas.

The main argument of the bill is that the brain is not fully developed until the age of 25, and young adults who commit heinous crimes are unable to understand the consequences of their violent actions. McComas fought against this argument, pointing out that Democrats also support gender affirming care and underage voting for children.

“Proponents of the bill say that the human brain is not fully formed in the frontal lobes until age 25,” she argued. “But yet, we’re doing other things in the general assembly, letting children vote earlier and earlier, letting them get hormone inducing drugs to change their sex.”

Oscars Fret Rekindled Will Smith, Chris Rock Slap-Feud

Jacob Bruns
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Oscars Fret Rekindled Will Smith, Chris Rock Slap-Feud

(Jacob Bruns, Headline USA) The manufactured drama of the Oscars will continue this upcoming weekend as corporate media outlets give undue coverage to the infamous Will Smith embarrassing slap of Chris Rock at last year’s event, the New York Post reported.

The next round of the Oscars–which will air this upcoming weekend–is being hyped by various media outlets as the Smith-Rock feud being rekindled. Things began when the slapped, Chris Rock, released a Netflix special mocking Will Smith for the onstage slap in 2022.

“Everybody called that man a b*tch,” Rock said, alluding to Will Smith’s and Jada Pinkett Smith’s well-documented marital problems, which apparently include numerous affairs.

“And who’d he hit?” Rock cracked. “Me! A n*gger he knows he could beat. That is some b*tch-ass sh*t. It still hurts! I got ‘Summertime’ ringin’ in my ear!”

Rock’s joke, however, reportedly hurt Smith’s feelings.

“Will is embarrassed and hurt by what Chris said about him and his family in his Netflix special,” an insider source said.

“He didn’t watch it, but he had people tell him what Chris said,” the insider continued, noting that “Will and Jada (Pinkett Smith) have seen comments about it.”

“Will apologized to Chris and would like for Chris to let it go,” the source added.

New Oscar Academy chief Bill Kramer played along with hype, claiming that his team have gone all out to make sure this year’s event doesn’t turn into a slap-fest.

“We have a whole crisis team, something we’ve never had before, and many plans in place,” Kramer said. “We’ve run many scenarios. So it is our hope that we will be prepared for anything that we may not anticipate right now but that we’re planning for just in case it does happen.”

In order to continue to stoke the drama and boost its faltering viewership, 2023 Oscars host and corporate media hack Jimmy Kimmel vowed to “beat the sh*t” out of anyone who tries what Smith tried at last year’s award ceremony.

“Well, whatever I say about it, it’s going to have to be great, right?” Kimmel added. “Because so much has been said and there’s so much focus on it. I obviously don’t want to make the whole monologue about that, but it would be ridiculous not to mention it.”

J.D. Vance Slams Republicans Not Standing Up for East Palestine

Ezekiel Loseke
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J.D. Vance Slams Republicans Not Standing Up for East Palestine

(Ezekiel Loseke, Headline USA) J.D. Vance slammed Republicans who are more concerned with the special interests related to the railroads than regulating railroads to prevent more catastrophic accidents.

The recent derailment of a train has caused massive environmental and wellness concerns for residents of East Palestine, Ohio. Vance and five other Senators have sponsored a bill to prevent future environmental hazards from such derailments, according to Breitbart News.

When a railroad lobbyist attempted to kill Vance’s bill, he slammed the Republicans listening to the special interest, according to Breitbart.

“I worry that there has been a movement in my party and in my movement in response to the legislation that I’ve proposed that would not hold Norfolk Southern or the rail industry accountable,” he said. Vance said he was addressing, “a particular slice of people who seem to think that any public safety enhancements for the rail industry is somehow a violation of the free market … if you look at this industry and what’s happened in the last 30 years, that argument is a farce.”

Vance pointed out that the railroad industry is anything but a free-market operation.

“This is an industry that enjoys special subsidies that almost no industry enjoys,” he said.
“This an industry that enjoys special legal carveouts that almost no industry enjoys. This is an industry that just three months ago had the federal government come in and save them from a labor dispute, it was effectively a bailout, and now they’re claiming before the Senate and the House that our reasonable regulation, our reasonable legislation is somehow a violation of the free market?”

Vance highlighted the obvious hypocrisy of the situation, and then explained why the Republican party needs to reject these arguments.

“There’s been a big political realignment in this country over the last 30 years … we are the party of firefighters, of police officers, of the people who go to work, pay their taxes, fight our country’s wars, and keep our communities safe,” he said. “We are proud of that and we should be proud of that in the Republican Party.”

“But now we are faced with a choice, with this legislation and how we respond to this crisis, do we do the bidding of a massive industry that is in bed with big government, or do we do the bidding of the people who elected us to the Senate and to the Congress in the first place?”

Vance stated the question even more clearly.

“Are we for big business and big government or are we for the people of East Palestine?”

GOP Blasts Biden’s Bloated Budget, Promises Better

Jacob Bruns
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GOP Blasts Biden’s Bloated Budget, Promises Better

(Jacob Bruns, Headline USA) In response to President Joe Biden‘s potentially disastrous budget plan stuffed with upwards of $5-trillion in new tax hikes and a huge pay increase for federal employees, Republicans in Congress vowed to push their own alternative budget in the coming weeks.

Three top House Republicans released a joint statement accusing President Biden of using his annual budget proposal to advance his private political agenda, Fox News reported.

“President Joe Biden’s budget is a reckless proposal doubling down on the same Far Left spending policies that have led to record inflation and our current debt crisis,” wrote Speaker Kevin McCarthy, R-Calif., Majority Leader Steve Scalise, R-La., and GOP Conference Chair Elise Stefanik, R-N.Y.

According to the Republican leaders, Biden and the Democrats are intent on spending the nation into oblivion.

“This is a spending problem, not a revenue problem. Yet President Biden’s unserious budget proposal includes trillions in new taxes that families will pay directly or through higher costs,” they said.

House Republicans vowed to resist Biden’s massive spending plan.

“In the coming weeks, House Republicans will put forward a budget that actually works toward getting our fiscal house in order by reining in out-of-control spending and putting us on a path to balance,” Rep. Ben Cline, R-Va., said.

Sen. Eric Schmitt, R-Mo., noted that there would be similar resistance to Biden’s plan in the Senate.

“Any budget request that focuses on tax hikes and more spending rather than cutting spending and easing the economic burden on this country is deeply unserious – this budget doesn’t have an ounce of serious proposals in it. The federal government doesn’t have a revenue problem, it has a spending problem,” Schmitt noted.

Charges Loom for Trump in N.Y. Prosecutor’s Porn Star Bribery Case

Molly Bruns
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Charges Loom for Trump in N.Y. Prosecutor’s Porn Star Bribery Case

(Molly Bruns, Headline USA) Prosecutors in New York indicated this week that former President Donald Trump may face criminal charges for a case involving a bribe paid to porn star Stormy Daniels.

Manhattan district attorney Alvin Bragg released a report announcing that Trump is invited to defend himself in front of a grand jury, which will hear the evidence before the final indictment is announced, according to the New York Post.

Trump has habitually declined offers to appear in court and is likely to do so again. If indicted, Trump will be the first former president to face criminal charges.

Bragg did not announce what specific charges the former commander in chief will face, but the report indicated that he may have evidence of forged business records in addition to the bribery.

The partisan case, which Bragg opened five years ago, focuses on a $130,000 payment made to Daniels during his 2016 presidential run. Daniels claims to have had an affair with Trump in 2005, and former Trump ally Michael Cohen allegedly made the payment and received compensation from the former president.

Trump responded to the accusations in a post on Truth Social, saying he “did absolutely nothing wrong,” and calling the affair a “witch hunt.”

“I never had an affair with Stormy Daniels, nor would I have wanted to have an affair with Stormy Daniels,” he said. “This is a political Witch-Hunt, trying to take down the leading candidate, by far, in the Republican Party while at the same time also leading all Democrats in the polls.”

Trump added that the statute of limitation on bringing charges against these alleged crimes expired a year ago.

Bragg’s pursuit to bag Trump is one of many partisan efforts to take down Trump. The former president is also under investigation in Georgia for purported interference in the 2020 election, which hit a bump when a jury foreperson went on a media binge. There is also a special counsel looking into the Trump administration’s handling of classified documents as well as his actions on January 6, 2020.

 

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