Episode 128

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Published on:

31st Mar 2023

Jerome Powell vs Ben Bernanke and Paul Volcker, Bank Conspiracy Theory and Don't Do This

As a series of U.S. lenders were besieged by customers yanking out their money this month, banking giants such as JPMorgan Chase & Co, Citigroup Inc. and Bank of America Corp. warned employees: Do not make it worse. JPMorgan, the nation's largest bank, told all employees they "should never give the appearance of exploiting a situation of stress or uncertainty," in a March 13 memo. "We do not make disparaging comments regarding competitors."

In this episode of The Higher Standard, Chris and Saied examine this news and determine the effect it will have on the economy as a whole.


They discuss data showing that customers have recently pulled nearly $100 billion in deposits, while Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell and more than a dozen other officials convened a special closed meeting of the Financial Stability Oversight Council.


Chris and Saied look at news that Deutsche Bank’s stock plunged Friday as the market hones in on the German firm as the next major bank at risk in the wake of long-time rival Credit Suisse’s collapse and similar events stateside. Frankfurt-listed shares of Deutsche Bank dropped 7.5%, now down more than 25% since March 8, when confidence in the international banking system began to crumble.


They also offer some thoughts on data from Trepp, an analytics provider for the Structured Finance, CRE, and Banking markets, indicating that this year, roughly $270 billion in commercial mortgages held by banks are set to expire. This means that big owners of property face the prospect that beleaguered banks, especially smaller ones, could get more aggressive with lending arrangements, giving landlords even less room to breathe as they try to refinance a mountain of loans coming due.


Join Chris and Saied for this fascinating and informative conversation.


Enjoy!


What You’ll Learn in this Show:

  • Paul Volcker’s monetary policy career and Ben Bernanke’s role in AIG bailout.
  • Jerome Powell's role in the current banking crisis.
  • The two different types of lender in the commercial real estate space.
  • Why JP Morgan and Bank of America have been telling staff not to poach clients from stressed competitors.
  • And so much more...


Resources:

"Volcker Slayed Inflation. Bernanke Saved the Banks. Can Powell Do Both?" (article from Bloomberg)

"Exclusive: JPMorgan, Citi, BofA tell staff not to poach clients from stressed banks" (article from Reuters)

"Nearly $100 billion in deposits pulled from banks; officials call system ‘sound and resilient’" (article from CNBC)

Custodia Bank via Twitter

"Veteran of FDIC Takeover Tells What It’s Like to Run a Failed Bank" (article from The Wall Street Journal)

"What’s Going On at Deutsche Bank?" (article from The Wall Street Journal)

"Commercial real estate is in trouble. A banking crisis will make it worse." (article from Yahoo! Finance)

"Elon Musk says Jerome Powell is so bad at his job that GPT-4 would be a better Fed chair: ‘This foolish rate hike will worsen depositor flight’" (article from Yahoo! Finance)

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About the Podcast

The Higher Standard
This isn’t a different standard, it’s the higher standard.
Welcome to the Higher Standard Podcast, where we give you ultra-premium, unfiltered truth when it comes to building your wealth and curating the lifestyle of your dreams. Your hosts; Chris Naghibi and Saied Omar here to help you distill the immense amount of information and disinformation out there on the interwebs and give you the opportunity to choose a higher standard for yourself. Sit back, relax your mind and get ready for a different kind of podcast where we elevate your baseline with crispy high-resolution audio. This isn't a different standard. It's the higher standard.

About your host

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Christopher Naghibi

Christopher M. Naghibi is the host and founder of The Higher Standard podcast — a rapidly growing media platform delivering unfiltered financial literacy, real-world entrepreneurship lessons and economic commentary for the modern era.

After nearly two decades in banking, including his most recent role as Executive Vice President and Chief Operating Officer of First Foundation Bank (NYSE: FFWM), Christopher stepped away from corporate life to build a brand rooted in truth, transparency, and modern money insights. While at First Foundation, he had executive oversight of credit, product development, depository services, retail banking, loan servicing, and commercial operations. His leadership helped scale the bank’s presence in multiple national markets from $0 to over $13 billion.

Christopher is a licensed attorney, real estate broker, and general building contractor (Class B), and he brings a rare blend of legal, operational and real estate expertise to everything he does. His early career spanned diverse lending platforms, including multifamily, commercial, private banking, and middle market lending — holding key roles at Impac Commercial Capital Corporation, U.S. Financial Services & Residential Realty, and First Fidelity Funding.

In addition to his media work, Christopher is the CEO of Black Crown Inc. and Black Crown Law APC, which oversee his private holdings and legal affairs.

He holds a Juris Doctorate from Trinity Law School, an MBA from American Heritage University, and two bachelor degrees. He is also a graduate of the Yale School of Management’s Global Executive Leadership Program.

A published author and sought-after speaker (unless it’s his son’s birthday), Christopher continues to advocate for financial empowerment. He’s worked pro bono with families in need, helped craft affordable housing programs through Habitat for Humanity, and was a founding board member of She Built This City — helping spark interest in construction and trades for women of all ages.