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Fri, 17 Mar 2023 08:30
Concern over the US banking system continues to spread, fentanyl dealers may soon face murder charges thanks to a new law in a border state, and officials in Texas are set d to take over one of the biggest school districts in the country. Get the facts first with Morning Wire. Black Rifle Coffee: Get 10% off your first order or Coffee Club subscription with code WIRE: https://www.blackriflecoffee.com/ Boll & Branch: Get 10% off your first order or Coffee Club subscription with code WIRE: https://www.blackriflecoffee.com/ Skylight Calendar: Get $20 off a Skylight Calendar with promo code WIRE: https://skylightcal.com/
This episode is brought to you by Black Rifle Coffee. Start your morning with America's Coffee from BlackRifleCoffee.com. Concern over the US banking system continues to spread despite assurances from the Biden Administration that it's strong. Why are more banks warning about an impending recession? The index leading indicators has been declining 10-11 months in a row. We're down about 6% year on year. We've never not had a recession when you've had those kinds of declines. I'm daily wire editor-in-chief John Bickley with Georgia Howe. It's Friday, March 17th, and this is Morning Wire. Fintinal dealers in one border state may now face murder charges thanks to a new law. It's a fact that Fintinal is flooding our borders. It is absolutely without a doubt killing our citizens on a daily basis. We have the details on the harshest drug policy in America. And the state of Texas is poised to take over one of the biggest school districts in the country. What triggered the drastic action and how will the shake-up affect current students? Thanks for waking up with Morning Wire. Stay tuned. We have the news you need to know. Hey everyone, producer Brand in here. After a long day's work, there's nothing better than co-zying up in my buttery soft sheets from Bowling Branch. Made from the finest 100% organic cotton threads on earth, Bowling Branch sheets are so luxurious they're loved by three U.S. presidents. Get 15% off your first set of sheets when you use promo code wire at BowlingBranch.com. That's Bowling Branch, B-O-L-O-A-N-D, branch.com, promo code wire. One week since the collapse of Silicon Valley Bank, another regional bank is in turmoil. This Treasury Secretary Janet Yellen appears before Congress in an attempt to reassure lawmakers that the U.S. banking system remains sound. Here with more as daily wires, senior editor, Kabbit Phillips. So Kabbit, before we discuss Yellen's comments, we've got to start with the story of another bank on the verge of disaster. What's happening there? Yeah, this story concerns San Francisco-based first-republic bank. That's the 14th largest institution in the country. Now this time, 10 days ago, it was viewed as a fast-growing, totally stable bank. But this week, their shares dropped 60%. After Moody's investor service downgraded its rating, and the positive started withdrawing funds over fears that the bank would go the way of SVB. It's worth noting that two have very similar clientele. But on Thursday, some of America's largest banks began discussing a joint rescue plan that would pour $30 billion into the bleaker bank. Confusion will reportedly include $5 billion each from JP Morgan Chase, Wells Fargo, Bank of America, and City Group. A number of smaller regional banks are also reportedly considering pitching in a few billion dollars between them as well. So a private sector rescue plan there? Yeah, more or less. Now, the fact these banks are working together to prop up one of their competitors gives you an idea of just how serious the banking industry views this threat. They clearly want to stop the bleeding at regional banks before they're all heard even worse. And there are some gears to Treasury Secretary Yellen, who made some highly anticipated remarks before Congress yesterday. What'd she have to say? Well, Yellen's main goal was clearly to reassure lawmakers and more importantly the American people that the US banking system is experiencing a rough patch, but remains on solid footing. I can reassure the members of the committee that our banking system is sound and that Americans can feel confident that their deposits will be there when they need them. The big question Yellen had to contend with was whether the US government was now in the business of guaranteeing and ensuring deposits for all Americans at every bank. Remember, the government took emergency action this week after the collapse of SVB and signature bank and promised investors that their deposits were guaranteed and that everyone would get their money back. But according to Yellen, that wasn't anomaly and will not be the norm moving forward. Here's how she responded when asked if every bank would get the same assistance that Silicon Valley and signature banks got. A bank only gets that treatment if a majority of the FDIC board is super majority of the Fed board and I in consultation with the president determine that the failure to protect uninsured depositors would create systemic risk and significant economic and financial consequences. That obviously begs the question what defines significant consequences. That's exactly what many financial experts are sounding the alarm over. Now when we talked yesterday, Swiss bank credits, Swiss had seen its shares plummet but they've gotten a major lifeline since then, right? They absolutely did. The Swiss Central Bank announced that they'd be loaning credits, Swiss $54 billion to help ensure national confidence in the bank. Specifically, they said they would consider it one of the quote, systemically important banks in the country which meets the standard for support. Economists say it was a move to prevent a bank run like we saw in the US last week. So the systemic importance argument there again? Yes, similar to what we saw from Yellen. And that news seemed to alleviate the fears of many investors and credits, Swiss. Yeah, it absolutely did. At one point Thursday, their shares had gained 33% as investors were clearly reassured by the cash infusion. But it's still worth noting all this instability domestically has increased fears of a recession. Goldman Sachs, for example, raised the probability of a recession to 35%. On that note, I spoke to Joe LeVornia, he's the former chief economist at the National Economic Council and is currently the head economist at SMBC Niko. He echoed those fears. So I think recession risk is high. And if we get a recession sometime in the second half of the year, which to me seems most likely and that unemployment rate starts to move up and move up quickly, that will eventually alleviate these inflation problems. And of course, if there is a recession, unfortunately, that's only going to add to the mess. Captain, thanks for reporting. Anytime. That's DailyWire's senior editor, Kevin Phillips. Coming up, fentanyl dealers will soon face murder charges in Texas. Are you tired of being the gatekeeper for all your family's plans? The Skylight calendar may be just what you need. The Skylight calendar syncs all of your family's schedules and displays them in one beautiful touchscreen arrangement. The calendar will automatically update any changes and you can easily assign household tasks using the Chorchart feature. Plus, you can get on-the-go access to everything with the Skylight calendar's mobile app. MorningWire listeners can get $20 off a Skylight calendar with promo code wire at skylightcow.com. That's skylightcow.com. Enter code wire for $20 off. That's skylght.com promo code wire. The Texas Senate passed a bill on Wednesday that would allow fentanyl dealers to be charged with murder. The bill is a key part of the Texas Legislature's offensive on opioids. DailyWire investigative reporter, Merade Elority, is here with the details for us. Some are ahead. Tell us about this bill. Hi, Georgia. So this bill is called combating fentanyl and the Texas Senate passed it unanimously on Wednesday. The bill would change the classification of drug overdoses to poisonings, which opens the door for prosecutors to charge fentanyl dealers or distributors with murder. Now how does this compare to the previous penalty for dealing fentanyl? So the bill specifically changes the penalty for manufacturing or delivering one gram of fentanyl. Right now, that's a state jail felony, which is only punishable by two years in jail. The bill would make manufacturing or delivering a gram of fentanyl a third degree felony. If the person who received the fentanyl dies from an overdose under this new bill, the penalty would be hiked up to a second degree felony, which would allow prosecutors to charge the dealer with murder. The bill is sponsored by state Senator Joan Huffman, a Republican who represents the Houston area. In 2021, Huffman was also behind a bill that implemented harsher penalties for manufacturing or delivering more than one gram of fentanyl. That bill became law in Texas. Both bills are part of Texas' push to stop the huge amounts of fentanyl that come across the southern border from Mexico. How much fentanyl is currently being trafficked into Texas? What we don't know the full amount, but Texas has seized over 353 million lethal doses of fentanyl since launching Operation Loan Star two years ago. The initiative has a joint focus of apprehending migrants and reducing the flow of fentanyl into the country. This particular bill, combating fentanyl, received bipartisan support, but the immigration issue in general has been much more contentious. Congressman Mark Green, who chairs the Homeland Security Committee, said Monday that every single Democrat on the committee pulled out of attending Wednesday's field hearing about the southern border in Texas. Does DHS have operational control of our entire border? No sir. Okay. Thank you for that, and I appreciate the honesty of Chief Ortiz. During that hearing, the Border Patrol Chief said the situation is now at a crisis level. There have been about 1.4 million Godaway migrants who have crossed the border but not been apprehended since October 2021. Border agents are so overwhelmed with migrants that they're not focused on finding and seizing fentanyl. Most of the fentanyl seas comes through legal ports of entry, but the Mexican drug cartels get drugs across the border in other ways as well, including tunnels and backpackers who run drugs across the border. As you can tell, the numbers have been steadily increasing, and the fentanyl crisis in Texas has worsened with them. Now let's hope this bill makes a dent. Married, thanks for reporting. Thanks Georgia. That was Daily Wire Investigative Reporter, Married Allordie. Texas officials announced on Wednesday that the state will be taking over Houston Independent School District, which serves almost 200,000 students at nearly 300 schools. The announcement marks one of the largest school takeovers ever in the U.S. Joining us to discuss is Daily Wire reporter Brandon Dre. So Brandon, is this primarily because the district is failing or are other issues beyond academic performance? Hey Georgia, there are other issues as well. Four years ago, the Texas Education Agency launched an investigation that found a variety of issues. Some of the district's board trustees had allegedly committed acts of misconduct, which included violating the Texas Open Meeting's Act, inappropriately influencing vendor contracts and making false statements to investigators. State Education Commissioner Mike Morath also accused the district of failing to improve student outcomes due to what he characterized as chaotic board meetings and infighting. But the government really mobilized to seize control of the district in 2019 after 50 out of about 300 schools within the district received D or F grades. So really widespread failure. Now just to put it intangible terms, what do we know about, for example, the literacy levels of students in Houston? While according to recent data, district-wide only 51% of high school students were proficient in reading and 52% for math. For comparison though, less than 20% of Baltimore high school seniors were proficient in reading, less than 10% in math. So Houston is still doing better than some places, but still not great. These failures triggered the state to take over the district because of a newly enacted state law, which forces the Texas Education Commissioner to either close the campus or appoint a temporary board of managers to oversee the district until the end of the school year. The district initially attempted to sue the state to stop the intervention, but ultimately the Texas Supreme Court gave the state the authority to move forward with a takeover. And what do they plan to do once they've taken over? Well, the first step is to appoint a board of managers in a superintendent. It's worth noting that within the last couple years, the district has brought up their scores significantly. They went from having 50 schools receiving failing grades to only 10. And that supposed improvement occurred during the pandemic and it wasn't really clear what metrics they used to calculate it. Regardless, state commissioner Morath still asserted that quote, chronic low achievement on individual campuses was a persistent problem in Houston. The new superintendent and board of managers are expected to be appointed on or around June 1st. So the new board won't be installed until June, but they're at least starting the process before the school year ends. What's the response to that been? Well, it's been mixed. Surprisingly, superintendent Millard House sounded optimistic in the statement. House was elected by the school board in 2021 and will be replaced by June 1st. He touted the fact that 40 out of those 50 schools that were struggling moved out of the DNF list during his tenure. He said he knew he would face obstacles when he stepped into the role, especially considering the state had already signaled that it was I and taking over the district. And I'll also note that House will likely still receive his annual salary of approximately $350,000 until his contract expires in 2024. Commissioner Morath actually applauded House's work in the district, but due to the nature of the law, he still has to appoint a new leadership team for a clean slate. Houston Mayor Sylvester Turner, on the other hand, has been critical of the state takeover. He said the state mishandled the situation and said the leadership shakeup would only cause a distraction for the staff and students for the rest of the year. Democrats in general have disapproved of the move, claiming it's political. Houston is a largely Democrat controlled city, and they have been at odds with state level Republicans over a variety of education-related issues since the pandemic. Now, what's the goal of the takeover? Well, in the near term, the state wants to make the transition as smooth as possible. As I said earlier, they're hoping to have a new leadership team up and running before June. And when they do, they'll likely look at three main factors before giving control back to the district. Those include better performances from students for several years, compliance with state and federal requirements, and evidence that the board is focused on student outcomes over administrative factors. Now, do these state takeovers have a good track record of actually improving student outcomes? Not really, but this is also somewhat unprecedented in Texas. According to local media, the Texas Education Agency has appointed managers in 15 districts. Seven of those districts had a new board of managers put in place, and in most of those cases, the takeover wasn't actually related to academic issues, rather it was for financial issues. None of those have been anywhere near the size of Houston and dependent. And this kind of overhaul from state governments has happened all around the country. Philadelphia, New Orleans, and Detroit have gone through state takeovers in recent years. And you know, critics will often point out that these state takeovers usually don't have much success in improving the academic outcomes. Well, it's something we're going to continue to monitor. Brandon, thanks for coming on. Thank you for having me. That was Daily Wire reporter Brandon Dre. Well, that's all the time we've got this morning. Thanks for waking up with us. We'll be back this afternoon with more of the news you need to know.