President Joe Biden landed in San Diego on Monday with daughter Ashley and granddaughter Natalie to sign a nuclear submarine deal with the UK and Australia — as the collapse of the Silicon Valley Bank sent shockwaves through Wall Street.
He stepped down from Air Force One ahead of a military agreement ceremony to bring the nations together to fight China and bolster their nuclear fleets.
The deal with British Prime Minister Rishi Sunak will help Australian Prime Minister Anthony Albanese acquire three US Virginia-class fast attack submarines over the next decade.
Ashley, 41, and Natalie, 18, followed him out of the plane doors into the California sun – as the contagion spread across the financial markets.
At least 20 regional banks were hit by trading freezes during Monday’s unrest after the president assured Americans that the banking system is “safe” and that taxpayers will not be affected.
President Joe Biden landed in San Diego on Monday with daughter Ashley and granddaughter Natalie to sign a nuclear submarine deal with the UK and Australia – as the collapse of the Silicon Valley Bank sent shockwaves through Wall Street
Ashley, 41, and Natalie, 18, followed him out of the plane doors into the California sun – as the contagion spread across the financial markets.
Hedge fund boss Bill Ackman warned that the “economy won’t function” unless Biden “guarantees all deposits now” as the contagion spread to the Big Four’s trillion-dollar US banks.
Shares of Wells Fargo fell 7.5 percent, Bank of America fell 7.4 percent, Citigroup plummeted 5.8 percent and JP Morgan fell 2.7 percent.
One of the hardest hit regional banks was Western Alliance, which saw its shares fall 75 percent as the opening bell sounded. Trade breakers were also imposed on First Republic, as the price fell by two-thirds, and PacWest, which fell by 35 percent.
Our economy will not function properly without our common and regional banking system. Therefore, the Federal Deposit Insurance Corporation must now explicitly guarantee all deposits. Hours matter,” Ackman said.
“We need to hear from our government that it is explicitly committed to preserving our system of smaller banks. While not every small bank is ‘systemically important’ like @jpmorgan or @Citi, collectively they are just as, if not more, systemically important.”
The declines came despite U.S. authorities on Sunday guaranteeing SVB customers that their money would be safe and ready to be withdrawn Monday after a $200 billion run on the bank that triggered the second-largest collapse in history. , the worst since 2008.
Before boarding Air Force 1, the president made brief remarks, hoping to reassure Americans that “American banking is safe” following the collapse of Silicon Valley Bank on Friday.
Shortly after Biden’s departure, the New York Stock Exchange opened and trading was quickly halted for three banks: First Republic Bank, Western Alliance and PacWest after shares fell 75 percent.
Financial jitters continue to overshadow the international deal as Wall Street scrambles to figure out what’s behind multiple US bank failures.
San Diego is Biden’s first stop on a three-day trip to California and Nevada. He will discuss gun violence prevention in Monterey Park, California, and his plans to reduce prescription drug costs in Las Vegas.
The trip will include fundraising freezes as Biden ramps up his political activity ahead of an expected announcement next month that he will seek re-election in 2024.
Before boarding Air Force 1, the president made brief remarks, hoping to reassure Americans that “US banking is safe” following the collapse of Silicon Valley Bank on Friday
Biden then sat down with Australian Prime Minister Anthony Albanese (left) and British Prime Minister Rishi Sunak (right)
Sunak deal will help Australian Prime Minister Albanese acquire new US Virginia-class submarines and bolster their nuclear fleet
Landing in San Diego, home of the US Pacific fleet, Biden will meet with Australian Prime Minister Anthony Albanese and British Prime Minister Rishi Sunak – two of America’s closest allies – as part of the 18-month nuclear partnership, known by the abbreviation AUKUS, which stands for AUstralia, UK, USA.
Announced in 2021, the consortium paved the way for Australia’s access to nuclear-powered submarines, which are more stealthy and capable than conventionally powered boats, to counterbalance China’s military buildup.
Ahead of the trilateral meeting, Sunak announced he will increase British military funding by £5 billion ($6 billion) over the next two years in response to Russia’s invasion of Ukraine and Chinese aggression.
The AUKUS partnership was announced in 2021, but Monday’s announcement will bolster the details. Australia is buying up to five Virginia-class boats as part of the deal, according to the Associated Press.
China objects to the deal because it violates the Nuclear Non-Proliferation Treaty, which prohibits the transfer of nuclear weapons material from a nuclear-weapon state to a non-nuclear-weapon state.
Australian officials counter that they are working to procure nuclear-powered and non-nuclear-armed submarines.
Biden will also hold bilateral meetings with Albanese and Sunak in San Diego.
Australia will buy up to five Virginia-class submarines – above the Virginia-class USS North Dakota
British Prime Minister Rishi Sunak, left, speaks with Australian Prime Minister Anthony Albanese at Lionfish seafood restaurant in San Diego on Sunday
British Prime Minister Rishi Sunak addresses the British press traveling with him to San Diego
Silicon Valley Bank SVB’s logo is pictured on its German branch in Frankfurt, Germany, as concerns over a potential international financial contagion mount
Signature Bank was acquired by New York State Agencies last Friday, March 12, 2023.
The three parties have worked to provide Australia with a fleet of nuclear-powered submarines, given restrictions on technology transfer and classified nuclear processes.
On the way to the US, Sunak said China “presents a game-changing challenge to us and to the world order. It is a regime that is becoming increasingly authoritarian at home and assertive abroad, and has a desire to reform the world order.’
But, he added, “you can’t ignore China” given the size of its economy.
“It’s good to engage with China on the issues where we can find common ground and make a difference, for example climate change, global health, macroeconomic stability,” he said.
“That is the right approach and at the same time very robust in defending our values and our interests.”
The secretly brokered AUKUS deal included the cancellation by the Australian government of a $66 billion contract for a French-built fleet of conventional submarines, sparking a diplomatic squabble within the Western alliance that took months to mend.
French President Emmanuel Macron brought his ambassador from Washington in September 2021 and later met Biden in Italy at a G20 so the two could make amends.
Biden called Macron on Tuesday, but a White House reading of the call didn’t say whether the AUKUS deal would materialize.
The two leaders did discuss growing Chinese influence in the South Pacific, an issue that also worries Australia.