News/Commentary

Biden mocks Wall Street ‘consternation’ over bank failures: ‘I think we’ve done a pretty damn good job’

March 25, 2023 | | Print Article

Despite banks collapsing left and right, President Joe Biden thinks he’s doing “a pretty damn good job” handling the ongoing crisis.

He revealed as much during a joint press conference Friday alongside Canadian Prime Minister Justin Trudeau after he was asked about Wall Street’s reaction to his actions or the lack thereof.

Listen:

“Some on Wall Street have expressed frustration that it’s unclear what more your administration is willing to do to resolve the banking crisis,” a reporter said to him.

“The markets have remained in turmoil. So how confident are you that the problem is contained? And if it spreads, what measures, such as guaranteeing more deposits, are you willing or not willing to take?” the reporter then asked.

Equipped with a smirk, the president responded by mocking Wall Street.

“First of all, have you ever known Wall Street not in consternation? Number one. Look, I think we’ve done a pretty damn good job. People’s savings are secure, and even those beyond the $250,000 the FDIC is guaranteeing them,” he said.

“And the American taxpayer is not going to have to pay a penny. The banks are in pretty good shape. What’s going on in Europe isn’t a direct consequence of what’s happening in the United States,” he added.

He continued by offering to take action “if” things get worse.

“And I — what we would do is if we find that there’s more instability than appears, we’d be in a position to have the FDIC use the power it has to guarantee those — those loans above 250, like they did already,” he said.

“And so I think it’s going to take a little while for things to just calm down. But I don’t see anything that’s on the horizon that’s about to explode. But I do understand there’s an unease about this. And these mid-sized banks have to be able to survive, and I think they’ll be able to do that,” he added.

The remarks prompted massive pushback and criticism on social media.

Look:

But was the president right or wrong? It’s a little bit of both.

Speaking with CNBC, Alexander Yokum, an equity research analyst at CFRA, said the banks are “fine”: “The majority of banks will be fine. All large banks will be fine.”

Nathan Stovall, the head of financial institutions research at S&P Global Market Intelligence, concurred.

“The banks are OK because the Fed has brought in a bazooka to stave off any further fears that institutions aren’t on strong footing. And most [banks] are saying they have no need for it,” he told CNBC.

Fair enough, though it should be noted that being “fine” and “OK” are certainly not the same thing as being “in pretty good shape.”

And for good reason, because according to Reuters, there are still some lingering problems with America’s banking system that need to be addressed.

“The estimated level of unrealized losses on bank balance sheets and borrowing by banks at the Federal Reserve’s discount window and from the Federal Home Loan Banks (FHL Banks) point to a financial situation in which many regional and smaller institutions are in need of financial assistance — warranted or not,” the outlet reported Wednesday.

“Added into the mix is the fallout from, and central bank response to, the downturn at Credit Suisse and the bank’s brokered sale to UBS earlier this month,” Reuters added.

In addition to all this, some “experts” are continuing to warn of an impending recession. Indeed, in the days after the bank crisis erupted earlier this month, strategists at Goldman Sachs raised the odds of a recession to 35 percent, up from 25 percent.

They cited the “increased near-term uncertainty” that’s surrounding the effects of small bank stress, according to Insider.

Of course, some critics think America is ALREADY in a recession:

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Vivek Saxena
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