The latest in the alleged banking crisis saga is that a bunch of big banks are going to try to move deposits into First Republic Bank in order to stabilize the situation. First Republic stock jumped more than 30 percent on the news. It’s an interesting private sector approach that kind of harkens back to the days before there was a Federal Reserve or an FDIC or all these goofy federal bank regulators who seem to bungle everything they touch.

Remember the story when J.P. Morgan allegedly sat down with Theodore Roosevelt during the panic of 1907 and basically said, “You have your man talk to my man and we’ll take care of this”? I don’t really know if that story is true. It’s a fabulous anecdote, but not even I was around to confirm it back then.

Anyway, back to the main story: The Wall Street Journal and the Washington Post are breathlessly reporting that bank regulators huddling with the big banks, including JPMorgan, Bank of America, Citi, and Wells Fargo, are trying to work out a deal as early as this evening. I think the idea is depositors who fled the rogue Silicon Valley Bank and First Republic could be turned back to one or both of those banks.

For First Republic, people are talking about $30 billion, but it’s a bit more complicated. After all, the deposits are the private property of the depositors, so presumably somebody has to ask those individuals if they want to go back to First Republic.

I’m sure deposit rates can be agreed upon, but somebody’s gotta go through the accounting line by line to figure out who moved what from where to where. I can see why the lefties and the FDIC would like this, since they hate big banks and they’re the ones who bungled the sale of SVB to one of the big banks in the first place last weekend.

If they had put their populist ideology aside, they might’ve made a deal last Sunday and avoided bailing out uninsured depositors, which apparently not only includes Silicon billionaires and lesser lights but also the Chinese. Who knows who else? 

Ultimately, a private sale of SVB would take both the FDIC and taxpayers off the hook. Sources say that First Republic is in better shape, which I guess means its duration risk management and its asset liability mix is not as disastrous as that of SVB. I don’t know much about their woke management. Maybe that will come out better.

Hat tip to the Babylon Bee for reminding us that President Biden is trying to tax all the Silicon Valley billionaires on that money the federal government just gave them. If that sounds stupid, it is, but that’s a topic for another riff. 

Meanwhile, the treasury secretary, Janet Yellen, told the Senate Finance Committee today that all is well in the banking system except for these two banks. Not sure anyone believes this, but it could conceivably be true. As I have said, the Fed-Treasury’s new lending facility is a good thing and may in fact be a firebreaker.

So this may not in fact be a true nationwide financial crisis. It certainly doesn’t yet look or feel like 2008. But then again, banking contagions can pop up anytime, and with the sharp rise of interest rates the stage has been set for some mighty big problems. Therefore no one’s crystal ball can be clear about this kind of thing, least of all mine.

Here’s something I can be very clear about: Ms. Yellen is shilling for Mr. Biden’s huge untruths about the economy. “Over the past two years,” she said, “the United States has experienced a historic economic recovery. In January 2021, our country was in the middle of an economic calamity triggered by the coronavirus pandemic.” 

The economic calamity she was describing, which occurred under President Trump, was a huge rebound from the pandemic collapse during the second half of 2020. By the beginning of 2021, the economy was growing at 6.5 percent with a 1.4 percent inflation rate. These are factoids, and Mr. Biden has had so many pinocchios for his untruths about his early months in office. 

In fact, Mr. Biden’s whole first year continued the Trump boom, adding up to about 6 percent growth primarily from the Trump tax cuts that Mr. Biden tried but failed to repeal.

Meanwhile, Mr. Biden’s first full year in office, which was 2022, so mangled the economy — with inflationary spending, unbelievable record-setting regulations, the war against fossil fuels, and the subsequent inflation that led to this banking crisis — that it slumped to only 0.9 percent growth with 6.5 percent inflation.

Today, inflation is still three times the Fed’s 2 percent target, and the massive runup of rates by the Fed, which at first denied the inflation problem, put everybody at risk: banks, companies, working people, housing, manufacturing, and on down the line.

It’s a shame to see this from Ms. Yellen, who knows better than to buy into the Biden untruths. We all remember her hostage video last year, when she finally acknowledged there was an inflation problem that even Obama advisers such as Larry Summers and Jason Furman predicted.

From Mr. Kudlow’s broadcast on Fox Business News.