The Banking Collapse is STARTING | Financial Crisis 2.0.

You don't have to worry about a

financial crisis until the banks start

rolling. Hey, this might be the start of

a serious banking crisis. We should look

at the components of this in detail in

this video so you know what's going on

and where the concerns are. Because even

though we had a collapse of Silicon

Valley Bank and the essential universal

bailout of well venture tech bros and

politicians like Gavin Newsome and well

basically every bank by the Federal

Reserve in 2023, we might have actually

just swept the cockroaches under the

rug.

>> Cockroaches. private credit further on

the defense after a group of academics

at John Hopkins and UCAL Irvine warning

that the industry's claims of market

beating stressfree returns are

elusiiori.

>> Absolutely. And I was just out at the

table.

>> Well, if you look at what happened to

the market today, you can see SoFi fell

5%. The financial sector ETF fell 2.7%.

JP Morgan down 2%. Regional Bank ETF KRE

down 6.2%.

The Regional Bank IATShares ETF down

4.8.

Zans Bank 13% down. Western Alliance

down 10.8%.

And Jeff,

one of the lenders that got caught up in

the Triricolor and First Brands collapse

we covered just a few weeks ago, $10

billion market cap company, just lost

10.6 6 billion. And if you zoom out,

this company is down over 39%

from its highs just after Donald Trump

was elected. So what's going on in the

banks? Is trouble actually brewing here

or are we going to be okay? Well, let's

understand first what was filed. And

this has people well nervous,

understandably so. So, Zion's Bank says

they recently became aware of legal

actions initiated by several banks and

other lenders against parties that were

affiliated with two borrowers under two

related commercial and industrial loans.

So, what you ended up with is you got

Zions writing down $50 million of a $60

million loan to these entities. This,

mind you, comes after thericolor and

first brand's multibillion

loss with Jeffre taking a $700 million

hit. This is a lot smaller. But what's

making people nervous is potentially

that banks are starting to say, "All

right, after the Canary and the coal

mine burst, so in other words, after

Zions and First Brands blew up, it's

time to cut these loans. We're done

extending and pretending. And this is

why people now say we could be walking

into a dirty and ugly black swan. Look

at this. Zion's bank is now filing a

lawsuit in California against the

parties to try to recoup as much as they

can of that $50 million. Though of

course a similar bank called Western

Alliance said that they too were exposed

to the same group that Zions was exposed

to and that they're filing a lawsuit

against these individuals potentially

for fraud and this would be a way to

bypass the nonreourse aspect of a

commercial loan and come after these

borrowers personally. So they're trying

to come after the high net worth

individually individuals personally to

get basically as much debt as they can.

And people are wondering, man, you know,

we looked up some of these properties

and we looked up like these strip malls

right here. You can see it's boarded up.

We looked up the ownership of this

property and this has had notice of

notices of default circulating on it

almost all of 2025. I mean, I certainly

saw them back in April. It was notice of

default, notice of default, notice of

default. They just kept filing it over

and over and over again. And you're

finding these empty leases, high debt

properties, property values falling in

office and commercial. And what some

people are saying is that post first B

brands and tririccolor,

the jig is up. No more extending or

pretending. In fact, consider for a

moment what had been done for years to

try to get a little bit of a better

understanding of how this whole process

works. When you look at the Financial

Times and you go to a 2024 article, they

said the bills could soon come due for

mortgages on commercial properties. And

basically, they reference these charts

where companies and banks are just

pushing 2023 defaults to 2024 and 2024

defaults to 2025. Everybody's kicking

hundreds of billions of dollars of

commercial maturities down the road.

These are the maturity walls right here.

2023 right here as of the end of 2022

you had about 700 billion. In 2024 as of

the end of 23 you had almost a trillion.

Uh and then you had Yeah, that's that's

a lot. I mean we're at you know billions

or hundreds of billions over here. Uh

and then you're kicking the can down the

road over here on 2025 of another $600

billion. So these are massive amounts of

debt walls that just sort of keep

getting kicked down the road, which

isn't great. Now, the total principal

balance

uh of these loans is a systemic risk if

you get a lot of these that start taking

haircuts. That's why people say this

could be a massive black swan. I mean,

you're talking about hundreds to

trillions of dollars, hundreds of

billions to trillions of dollars of debt

that if banks start saying, you know

what, we're done pretending we're just

going to start foreclosing, you could

have massive collapses in the banking

sector. And the components of those

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Now, when I was just talking to Ross

Gerber uh at uh lunch in Malibu, he

said, "Kevin, you don't have to worry

about a banking uh or you don't have to

worry about a financial crisis until the

banks start rolling." When the banks

start rolling, that's when you want to

start getting nervous about a financial

crisis because that's what the name is,

recession, financial crisis. banks. When

banks start having problems, that's when

you want to pay attention. And look at

what we have today. Nothing other than

Jeffre is down 10%, the regional bank

indices down 4 to 6%, Western Alliance

and Zions down over 10 to 13%. And it's

leading a lot of people to wonder, are

the debts of the banking crisis just now

finally starting to come due? Midcap

bank analyst at Wells Fargo stated,

"When credit risks rise, investors tend

to adopt a sell first, ask questions

later approach." Jaime Diamond just

argued that when there's one cockroach

like First Brands or there are probably

more. And this pissed off a lot of

people in banking because they're like,

"Oh my gosh, Jamie Diamond, you're

bagging on banks. Like maybe you have

problems. Maybe you're pointing the

finger, but it's really you that are

have problems." But then people started

getting nervous and going, "Uhoh, maybe

the regional banks do have problems if

they're lashing back this hard against

Jaime Diamond." And so, take a look at

this. When you see this um

headline here, our credit black swans

back. Troubles at two US regional banks

trigger an abrupt V-shaped reversal in

the stock market. you recognized, huh,

this could actually end up having

systemic impacts, broader impacts. So,

where do people flee when they want

money out of financials and into safety?

There are two places they go. Number

one, gold. Gold is literally up three%

today. This is insane for gold. And it's

either absolute FOMO that people have

missed the gold run or

it's a sign that there's major risk and

you potentially have institutions that

are like, "Oh crap, it's starting."

Because remember, financial crisis

crises start with the banking sector.

and the banking sector got saved in 23

by the Fed, but we really just swept the

problems under the rug. Now people are

flying out of financials and into two

considered safe assets. One, gold and

number two, bonds. Now remember, bonds

gain price, yields go down. The yield on

the 10-year down 7.4% 4% today, which

means

bonds, bond prices skyrocketed today,

probably more than gold did. So, bonds

performed amazing today. Gold performed

amazing today and financials tanked and

the broader stock market started having

a little bit of a panic as you started

seeing the Q's sell off. Now, we ended

up the day only down 37 basis points.

We're down another 19 basis points in

after hours. Bitcoin had a triple bottom

that it barely held on to. Ethereum, we

can see the pain of Ethereum heading

back down to the 3500 range. And even MP

Material, which is a stock that we

actually called a top on in the alpha

report, saying 100 was a top. It's going

to reject. It's highly likely to reject.

Obviously, can't make guarantees. Uh,

but it's been straight down since then.

It's down almost 17% since our call that

MP material was topping. You can get

those in the Meet Kevin Alpha report.

can't always be right, but you could

join us, get that perspective every day

before the market opens and you get our

alpha report and you get lifetime access

to that could even be taxdeductible. On

top of that, remember you also I always

think this is funny when the camera does

this. Uh you also get access to all

eight courses, all the trade alerts and

get to see everything uh that I'm doing.

So,

something that you really want to watch

for now is what happens to all of the

people who are quickly trying to sell

their real estate in the commercial real

estate market. Well, take a look at

this. If you go to 1031s.com,

this is actually Ben Mala's

uh portfolio. He's been trying to sell

his portfolio. It doesn't bas if the

website is updated, which I'm assuming

it is, I'm not actually seeing his

commercial portfolio turn yet. But what

I am seeing is price reductions at least

that he's listing now. I don't know. I

mean, who knows? Like maybe that's just

the way they're marketing it or what.

But what I do notice is that this

fitness center here, which has an

address listing, does indicate on public

records that it was purchased for $10.9

million in 2019.

That was 6 years ago. It is now listed

for sale for $1.5 million. And if the

loans that were taken out on these

properties, I don't know if they have

loans. I'm just wondering. But if the

loans that were taken out on these

properties were intereston loans, that

means principal was probably not paid

down. Which means if this sells for much

under 109

less selling costs, it's possible some

of these portfolio properties could end

up selling for under what they were

acquired for whether they're hotels or

whatever they are. Uh, and I think this

is why this Moneywise article here says

business mogul Ben Wallace selling his

entire real estate portfolio. Here's

why. He says banks have gone from

pretend and extend to pray and delay.

Now, that's really interesting because

it's this argument that in 2024 we had

extend and pretend like we'll just

extend the due date on your loan. We'll

give you a little bit more time and now

it's uh hopefully rates come down

quickly cuz otherwise we're going to hit

the fam. And I think now we're in the

third inning. So like first inning

extend and pretend and extend. Second

inning pray and delay. Third inning is

we're going to start filing lawsuits and

foreclosure action against these people.

And the fourth inning

is the drop. And we've started to see

that today in the banking industry. Now

maybe this is a big nothing burger. We

do know that commercial foreclosure

activity is ticking up though. look at

uh the uh financing data that we have

total US commercial foreclosures as of

the end of last year. We don't get

recent data very commonly sadly with

commercial foreclosures, but you could

see since 2020, you've basically been

relatively flat here on foreclosures.

It's starting to tick up. In other

words, the banks are done. Why? probably

because credit spreads are starting to

widen and people are getting nervous

that whether it's due to tariffs or

whether it's due to an expensive or high

valuation stock market, it's time to

take profits. Maybe banks have been at

high valuations. So maybe it's time to

take profits there or to start

pressuring banks to be a little bit more

aggressive in their collections or fear

over what happened withricolor and first

brands that a lot of these loans might

just be built up on either fraud froth

or garbage.

Maybe we're in for a bigger problem than

we thought. Take a look at this.

Summer Street Real Estate has an article

on this and they say that between 2020

and 2022, billions in multifamily

repositioning and value add deals were

financed through commercial real estate

collateralized loan obligations, CRLO's.

CLLO's became the go-to financing

because you could basically chop them

up, bundle them up, and you know, sell

them to investors at high fees who

wanted yields.

This is scary though because what

happens when you start getting defaults?

Some lenders are tapping these warehouse

lines of credit to finance the buyout of

defaulted lines of credit. So in other

words, we're taking on debt

to bail out other CLLOs's. Well, what

happens when all of the ability to

borrow money evaporates and nobody wants

to borrow against this junk anymore? the

whole jig might be up, which is scary.

You look at Jeffrey's balance sheet.

It's not exactly my most favorite

balance sheet. And bank balance sheets

are some of the most complicated balance

sheets to understand. They right now

have about $22 billion of bills

outstanding and they have 17.9 liquid.

So, they don't have as much liquid as it

might look when you actually start

digging deeper. But I think a lot of

investors are looking and saying cash

flow is going to start getting hit if

some of these loans start rolling over

because all of a sudden you're not going

to get repayments on things that you're

declaring as assets on your balance

sheet. Remember a lot of these financial

balance sheets are built up under here.

Investments in loans related to related

or to related parties. That's weird. A

billion dollars of loans to related

parties. Okay. Securities borrowed.

Securities purchased under agreements to

resell. Securities sold under agreements

to repurchase. Got $12 billion of

repurchase obligations here. What

happens when you start having to

repurchase and the valuations have

collapsed? It's not great. So the

banking sector is going to be something

we have to pay attention to a lot more

than I think a lot of the market

thought. And remember this because this

might be the critical message. Financial

crisis start with the banks.

>> Why not advertise these things that you

told us here? I feel like nobody else

knows about this.

>> We'll we'll try a little advertising and

see how it goes.

>> Congratulations, man. You have done so

much. People love you. People look up to

you.

>> Kevin Praath there, financial analyst

and YouTuber. Meet Kevin. Always great

to get your take.