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Questions, Questions, Questions...
Chatter about SVB, Epstein Banker Jes Staley, and Tucker Carlson
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Apologies for the gap between posts. I succumbed to the flu and by the time I started to see straight, it felt like everything else had turned upside down.
To me, the SVB crisis feels like deja vu. That’s because I spent the months after the 2008 Financial Crisis interviewing many of the former senior lieutenants at what had been Lehman Brothers for what would become my 2010 book The Devil’s Casino.
Is what had happened at SVB exactly the same? No and yes. In fact I spoke to one or two of my old Lehman sources who told me they thought it was right in the current environment of high inflation that regulators protected the deposits of SVB’s customers. (They still believed that it was wrong that the government had let them fail back in 2008, seeing it partly as the result of a long-standing rivalry with Goldman Sachs).
But there are echos of 2008 and Lehman in the SVB narrative. That SVB’s CEO reportedly sold millions in stock shortly before the bank run is reminiscent of the behavior of Lehman’s president Joe Gregory who had cashed several hundred million dollars of stock, and asked for a further $233 million from the Lehman estate after the bankruptcy. That US regulators worked all weekend to come up with a solution and that the SVB UK got acquired in the nick of time by HSBC after British lawmakers, including PM Rishi Sunak stayed up all night reminded me how in 2008, at the end of that cataclysmic September weekend of desperate negotiations, the British arm of Lehman got deserted by the US and woke up Monday morning with no funds. I reported how Lehmans’ General Counsel, Tom Russo phoned his UK counterpart and said “you are on your own.” You can be sure that the British remembered that, too, these past hours.
In time I am sure we will come to learn more of the details of the mistakes, the overreach, and the culture that caused the debacle, but for now we live with questions.
And speaking of questions: Going into the weekend, I spent time on the phone fielding questions on two topics I’ve touched on before.
First is Jes Staley. The former banker who was until 2013 head of private banking and thus Jeffrey Epstein’s relationship manager at JP Morgan. Last week it emerged that JP Morgan is now suing him in a third-party suit, in a bid to hold him financially accountable for its damages, should they lose the suits that the US Virgin Islands and Jane Doe have filed against them – claiming the bank aided and abetted Epstein’s sex-trafficking. JP Morgan has accused Staley of deception. Staley has said he had no knowledge of Epstein’s sex trafficking.
But it has emerged in court filings that there are 1200 emails logged between Staley and Epstein, some of which reference young women. They also reference trips Staley took to visit Epstein or to visit his island. The emails are on JP Morgan’s corporate email. Which begs several questions.
Was no one inside JP Morgan’s compliance team doing an email check even peripherally? And would Staley not have to have disclose he visited Epstein’s island or took a trip on his plane, given he was a client? There are SEC regulations about this sort of thing. You have to wonder why Staley thought it was okay to write so freely to Epstein on company email.
Wall Streeters have expressed surprise to me about Staley’s alleged involvement with Epstein, given that he appeared the polished banker, replete with a glamorous wife, a full family life and a very busy work schedule. He’s not the stereotypical billionaire nerd who never got the girl in high school. But Epstein’s canny ability to manipulate powerful people as if they were play-dough has proven to be one of the more fascinating, albeit shocking elements of his awful story.
I’ve also fielded questions about Tucker Carlson, the Fox News host and prime-time star who has been bombastically pro-Trump on air, and most recently excused January 6th as a peaceful sightseeing tour.
So, that has begged lots of questions and punditry about journalism, Fox News, the polarized media landscape – but also; who is Tucker Carlson when he is not on air?
It’s a conundrum, certainly.
I worked with Tucker Carlson at Talk magazine in 2000. Back then he was a bow-tied, center-right Conservative. He was charming, funny, honest – and one of the best writers on the masthead. Everyone at the magazine – maybe 40 people, mostly New York-based journalists – liked him.
But all these years later a different group of people likes a different him: his TV audience of 3.5 million. And it hardly needs to be said that his current audience is way more lucrative and powerful for him than his old one.
Of all the places I’ve ever worked, Fox News is the most neurotic about controlling what you are going to say on air. I remember going for an interview with various senior news executives there many years ago and telling them about a story I’d done about an attempted coup in Africa. A bunch of white men, including Margaret Thatcher’s son Mark, were accused of trying to overthrow the dictator running the oil-rich country of Equatorial Guinea.
No sooner had I said “Equatorial Guinea” than I got stopped. “If you say those words on our air our viewers will switch channels and you’ll lose them,” I was told. “You tell them: a small country in Africa.”
Ok, then. So all these years later I am writing about this to you.
And Tucker Carlson, on the other hand, is paid millions to talk positively about Trump and January 6th.
We are who we are, I guess.