Home Depot co-founder Bernie Marcus says Americans need to “wake up” to the reality that the US economy is facing tough times following the collapse of Silicon Valley Bank.
Marcus also placed some of the blame for the bank’s failure on the Biden administration for prioritizing “global warming” over shareholder returns.
Marcus argued that the bank’s collapse shows that the US economy is not as strong as President Biden suggested.
He criticized bank officials for selling their shares before the collapse and lamented the fact that many Americans lost their money in what he called a “wake up bank.”
“I can’t wait for Biden to get back on the speech and talk about how big the economy is and how it’s moving forward and getting stronger by the day. And this is an indication that everything he says is not true.
‘And maybe the American people will finally wake up and understand that we are living in very difficult times, that, in fact, a recession may already have begun. Who knows? But it doesn’t look good,” Marcus said in foxnews, on Saturday.
Home Depot co-founder Bernie Marcus urges Americans to pay attention and understand that the country is in for “difficult times” after the collapse of SV Bank.
Marcus blamed the Biden administration for pushing banks to prioritize “diversity and all the waking up issues” over shareholder returns and suggested that a focus on social policies is now causing banks to be mismanaged and that do not protect their shareholders and their own employees.
‘I feel bad for all these people who lost all their money in this woke bank. You know, it was more distressing to hear that bank officials sold their shares before this happened. It’s depressing to me. Who knows if the Department of Justice would go after them? They’re a awake company, so I’m guessing not. And they will probably get away with it,” he continued.
Marcus then went on to note how the US economy is in trouble, with the Federal Reserve raising rates and inflation going in the wrong direction.
“I think the system, the management has pushed a lot of these banks to (be) more concerned about global warming than shareholder returns. And these banks are mismanaged because they all focus on diversity and all the emerging issues and don’t focus on the one thing they should be, which is shareholder return,” Marcus said on Fox.
Marcus said he doesn’t believe President Biden’s speeches when he talks about improving the economy.
‘Instead of protecting shareholders and their employees, they are more concerned with social policies. And I think it’s probably a poorly run bank. They have been there for many years. It’s pathetic that so many people have lost money and don’t get it back.’
Marcus criticized Biden’s proposal to tax the middle class and the rich, calling it “silly” and arguing that in a recession, such policies are counterproductive.
But Marcus’s warning is grim and he believes the US economy is in deep trouble with the collapse of Silicon Valley Bank a sign of things to come, believing the US needs to take a more sensible approach to economic policy if you want to weather the storm.
He argued that people are struggling to pay their bills and fill their gas tanks, and the Biden administration, in his opinion, is “obtuse” on such issues.
Marcus called for someone with a ‘sane head’ to come in and understand that the US can’t keep raising rates, keeping inflation as strong as it is, and taxing people more than they already pay.
‘The Fed keeps raising rates and inflation keeps going in the wrong direction. It’s not staying where it should be. The people are fighting. They can’t fill their tanks with gasoline. And if you think that’s a good sign, I don’t think it is. And we have an administration that is obtuse about this. They just keep talking about the good times and how good it is. It’s not good,” concluded Marcus.
Someone with a sane head has to come in and understand that you can’t do two things. Number one, you can’t keep raising rates. You can’t keep inflation as strong as it is. And you can’t tax people more than they are. (Biden’s) proposal to tax the middle class and the rich is as silly as I have heard it for a long time. In a recession like this, you don’t do things like that.’
Mark Cuban, business owner of the Dallas Mavericks, has called on the Federal Reserve to take quick action and take responsibility in the aftermath Silicon Valley Bank
Meanwhile, Mark Cuban, business owner of the Dallas Mavericks, has called on the Federal Reserve to take quick action and take responsibility after Silicon Valley Bank.
Cuban posted a series of tweets urging the Fed to buy all the securities and debt owned by SVB at near par, which should cover most deposits.
He suggested that any losses be paid for with capital and new debt from the new bank or its potential buyers.
“The Federal Reserve should IMMEDIATELY buy all the securities/debt held by the bank at near par, which should be enough to cover most deposits,” Cuban wrote online.
‘Any loss paid in capital and new debt from the new bank or whoever buys it. The Fed knew this was a risk. they should own it
‘If the Fed doesn’t own it, confidence in the banking system becomes a problem. There are plenty of banks with more than 50 percent uninsured deposits.
‘What would be the best practices to protect yourself from future foreclosure if your company writes millions in checks weekly?’
Cuban argued that the Fed knew that such a risk existed and therefore should take care of it.
Failure to do so, he said, could undermine confidence in the banking system, since many banks have uninsured deposits of more than 50 percent.
Cuban also questioned the role of regulators in supervising SVB and expressed surprise that the bank was allowed to operate the way it did.
The bank had a reputation as the go-to bank for Silicon Valley startups, and listed firms like Airbnb, DoorDash and DropBox among the benchmarks.