WATCH: Sen. Kennedy Rakes Silicon Valley Bank CEO Over the Coals in Brutal Questioning

AP Photo/Alex Brandon

The Silicon Valley Bank failure in March was the largest bank collapse since the global financial crisis in 2008. One of the reasons for the collapse was the higher interest rates from the Federal Reserve to deal with Bidenflation and they didn’t hedge the risk of the interest rates, as people then pulled their money out of the bank.

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I wrote earlier about the Senate Banking Committee hearing on Tuesday and the incoherent comments of Sen. John Fetterman (D-PA), as the Senate was looking into the questions surrounding the bank failures. The opposite of the struggling Fetterman — who should retire and recover as much as he can back in Pennsylvania — is the brilliant Sen. John Kennedy (R-LA) who had absolutely no problem saying what he wanted to say in an expert grilling of a witness.

Silicon Valley Bank CEO Greg Becker was testifying before the Committee. But he didn’t accept a lot of the responsibility for the failure. He blamed everything and everyone else but himself. But Kennedy went to town on him and raked him over the coals for his “stupid decisions,” failing to account for the risk.

Kennedy observed how the value of the bank’s interests went down a lot when the Fed raised interest rates. “You didn’t have hedges, did you?” Kennedy inquired, with the look of the parent who knows the kid broke the dish and doesn’t want to ‘fess up.

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Becker tried to pretend that wasn’t his area of knowledge at the company but he’s the CEO, so that just strained credulity, as Kennedy indicated, “You’re the CEO and….you had 55 percent of your assets in government bonds and you don’t know whether you were hedged or not?”

Kennedy said he knew the answer to the question, and he wasn’t even the CEO. Kennedy scolded him, observing that if he bought those hedges, “it would have cut into your profits,” which was why they didn’t do it and got over-extended. Becker tried to wiggle out of the obvious answer that yes, they cost money, but he wasn’t able to.

“Mr. Becker, you made a really stupid bet, that went bad, didn’t it? And the taxpayers of America had to pick up the tab for your stupidity, didn’t they?” Kennedy said, ripping into him. Becker tried to fall back, saying it was due to a series of “unprecedented events.”

But ft he didn’t understand that with Bidenflation—that the rates were likely to be raised and what might happened—then, yes, that truly was stupid. He’s supposed to be the CEO.

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Kennedy wouldn’t let him get away with that, though.

“No, this wasn’t unprecedented,” Kennedy said, blasting him. “This was bone-deep, down-to-the-marrow stupid.”

He continued: “You put all your eggs in one basket and unless you were living on the International Space Station, you could see that interest rates were rising.”

That completely broke down the reason for the bank failures, and we shouldn’t have to be saddled with covering for any of this stupidity. Nobody could have predicted it? We all could have predicted the rates would rise.

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