Tuesday morning news: March 14, 2023

Biden banks  » President Biden says despite the second and third-largest bank collapses in US history … there’s no need to worry.

BIDEN: Americans can have confidence that the banking system is safe. Your deposits will be there when you need them.

The federal government is backstopping every penny deposited in both Silicon Valley Bank … and Signature Bank.

While depositors are getting their money back, investors in those banks are out of luck.

BIDEN: They knowingly took a risk. And when the risk didn’t pay off, investors lose their money. That’s how capitalism works.

Biden says taxpayers will not foot the bill for refunding deposits. Instead “the money will come from the fees that banks pay into the deposit insurance fund.”

But GOP Sen. Mike Rounds, who serves on the Senate Banking Committee, says if more banks fail …

ROUNDS: Who is going to actually pay the cost of guaranteeing those deposits in the future, and I think that’s something we’re going to have to talk about. And I think it’s something Congress is going to have to probably get involved in.

Fed rates effect on banks »

Biden and some lawmakers say they intend to get to the bottom of what caused the banks to collapse. The president says he’ll call for tighter banking regulations.

Many analysts say the Federal Reserve’s interest rate hikes played a role. Mark Hamrick is senior economic analyst at Bankrate.com.

HAMRICK: There were some unintended consequences of those interest rate hikes intended to rein in inflation. Many of us were wondering if something was going to break, and now it does appear that something has broken.

The bank failures could complicate the Fed’s efforts to get inflation under control.

AUKUS pact » The U-S is set to sell at least three Virginia Class nuclear submarines to Australia. It’s part of a three-way pact between the two countries and Britain … intended to counter China.

British Prime Minister Rishi Sunak:

SUNAK - For the first time ever, it will mean three fleets of submarines working together across both the Atlantic and Pacific. Keeping our oceans free, open and prosperous for decades to come.

Sunak also says his country will be increasing its defense spending… And pouring more resources into the alliance, known as AUKUS.

SUNAK - For the first time, for the first time, the United Kingdom will move away from our baseline commitment to spend 2% of GDP on defense to a new ambition of 2.5%. Putting beyond doubt that the United Kingdom is and will remain one of the world's leading defense powers.

Sunak says the UK will divert part of that increase to back Ukraine’s military against Russia.

Xi to visit Moscow soon, will speak with Zelenskyy too » Chinese leader Xi Jinping could visit Russia as soon as next week. Reuters first reported his upcoming trip on Monday.

Vladimir Putin has repeatedly invited the Chinese leader to the Kremlin … after China’s foreign minister visited last month.

The Wall Street Journal meanwhile reports that Xi may speak with Ukrainian Prime Minister Volodymyr Zelenskyy after his trip Moscow. U-S National Security Advisor Jake Sullivan.

SULLIVAN - We have been encouraging President Xi to reach out to President Zelenskyy because we believe that PRC President Xi himself should hear directly the Ukrainian perspective and not just the Russian perspective on this.

SULLIVAN - They [Ukrainian officials] have not yet actually gotten any confirmation that there will be a telephone call or a video conference. We hope there will be. That would be a good thing because it would potentially bring more balance and perspective to the way that the PRC is approaching this.

China has offered to broker a peace deal in Ukraine… But the U-S claims Beijing is also considering selling weapons to Russia.

Alaska drilling permission » The Biden administration is approving a major oil-drilling site in Alaska. WORLD’s Josh Schumacher has more.

The Willow project is expected to produce 180,000 barrels of oil per day once construction is complete.

The plan has broad support in Alaska from officials, businesses, and the public. Some are calling it an economic lifeline for the state.

But environmental activists are blasting President Biden for approving the drilling project while saying he wants to cut carbon emissions.

The administration has limited drilling in other areas of Alaska and the Arctic Ocean.

For WORLD, I’m Josh Schumacher.

A thousand migrants rush border » A group of more than a thousand migrants pushed past Mexican authorities and rushed a US border entry point in El Paso, Texas Monday.

But US Border Patrol agents blocked the mostly Venezuelan group … using barricades and razor wire on bridge over the Rio Grande.

Texas Department of Public Safety Director Jose Sanchez

SANCHEZ: CBP did an excellent job. Outstanding job of securing that bridge. That bridge is directly — leads into downtown El Paso.

Misinformation from a Facebook post may have triggered the crowd surge. That post reportedly claimed that migrants who showed up at the entry point on Monday would be granted entry.

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