'WINING CLASS': THE GREAT AMERICAN WINE BAILOUT OF '23
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California’s Democratic Governor Gavin Newsom also owns PlumpJack wines. Photo Credit: Screenshot PlumpJack.
Wineries owned by California's millionaire Democratic Governor Gavin Newsom were spared significant financial losses by Pres. Joe Biden's bailout of a failed bank favored by Tech Titans.
Silicon Valley Bank was worth $209 billion in Jan. 2023 but was closed by regulators Friday Mar. 10. Gov. Newsom was among those who begged Pres. Biden to bail the bank out on Saturday.
"Over the last 48 hours, I have been in touch with the highest levels of leadership at the White House and Treasury," Gov. Newsom acknowledged in a news release.
Pres. Joe Biden's administration announced that it would bailout the bank Sunday night-but refused to call it a bailout. Despite the Government's Orwellian Economics, the bailout amounts to a taxpayer sell-out, as previously reported by The Free Lance.
Silicon Valley Bank's collapse was set in motion by investors like hedge fund kingpin Bill Ackman who panicked and triggered a classic bank run. Even the Wall Street Journal condemned what it called financial "fearmongering." Lax Government oversight was also a factor, according to The Atlantic.
"Once again, the American people are propping up a financial system incapable of rendering itself safe," Annie Lowrey wrote.
It is the second-largest bank collapse in US history, after the 2008 collapse of $308 billion-dollar Washington Mutual. 94% of its deposits were uninsured because depositors' accounts exceeded the $250,000 maximum FDIC coverage, the Associated Press reports.
Silicon Valley Bank specialized in banking wineries through its "Wine Division." The website of the now-dead bank offers what it calls "Premium Wine Banking." It boasts "$4 billion in loans" to our "premium wine banking clients for 26+ years." It had, it said, a "long-standing" relationship with West Coast wineries.
Photo Credit: Screenshot Silicon Valley Bank.
Roughly 400 wineries were clients of the failed bank. Of the 400, 117 were considered by the bank to be "premium wine clients," according to documents obtained by The Free Lance. A random sampling revealed it to be a rarefied, elite group.
The Alexana winery produced a 2016 pinot noir worth $469. Elk Cove's 2016 pinot noir was a little less at $336. But a 2019 Kanzler pinot noir was a whopping $868. Panther Creek's 2004 pinot noir remains a relative bargain at $299. The second most expensive wine found in the random sampling was Tyler Winery's 2018 Chardonnay: $1,378.44. The most expensive: Immortal Estate's $1,850 2014 Cabernet Sauvignon.
Gov. Newsom's Plumpjack Estate Winery was one of the select 117.
A magnum of Gov. Newsom's 2003 Cabernet Sauvignon will set you back $1,699.99. His 2016 Reserve Cabernet costs $500 and a 2017 offering is $593.75. The Democrat's current best, the "Winemaker Signature Trio," costs $379. A two-bottle "Truffle Shuffle" kit costs $336. It comes with an online cooking class.
Besides his winery's accounts, Gov. Newsom also held personal accounts at the Silicon Valley Bank, according to the Intercept.
Whether Gov. Newsome disclosed his financial interests in the Silicon Valley Bank when he begged Pres. Biden to bail it out is, at this time, unknown. Nathan Click, a spokesperson for Newsom, didn't claim that he did.
“Governor Newsom’s business and financial holdings are held and managed by a blind trust, as they have been since he was first elected governor in 2018,” Click said.
Click also failed to mention that Silicon Valley Bank gave $100,000 to a charity founded by Newsom's wife in 2021.
Meanwhile, the White House press office covered Democrats' elitist tracks by planting favorable stories in mainstream news outlets casting the bank bailouts in a favorable light. Stories in the Washington Post, New York Times and Associated Press breathlessly recounted how Pres. Biden saved the world from economic catastrophe. The world yawned in response.
“I don’t see any risk of contagion,” French Finance Minister Bruno Le Maire said on Monday. “We are monitoring the situation but there is no specific alert.”
A plane full of California's Chardonnay-sipping Tech Titans and their bankers were flying home to San Francisco after a weekend of partying at a music festival in Texas when news of the bailout broke Sunday evening. The wining class erupted in cheers, the New York Times reports.
“It was the most excited I’ve ever seen people on an airplane,” banker Prashant Fonseka said.
“There is definitely a class element” to the bailout of the Silicon Valley Bank, economist Dean Baker of the Center for Economic and Policy Research told The Intercept.
“Look at how easily we can toss tens of millions of dollars at people who couldn’t figure out how limits on FDIC deposit insurance work, but the idea of giving $10k in debt relief to a student who might have used bad judgment in taking out a loan when they were 18, gets so many people upset about moral hazard and individual responsibility.”
Gov. Newsom’s press office was invited to respond. If it does, it will be included.
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