Fed's "FHLB" Bank is FLASHING RED | Massive Bank Failures Coming.

Federal Reserve had a baby what you're

going to learn in this video is going to

teach you what that baby looks like and

that baby actually exists and it gives

you some warning signs of which banks

might be knocking on the door of oopsie

dupsies next but first I want you to

understand how close we were to

financial Calamity with Credit Suisse

listen to this the Swiss government

quote was compelled to intervene to save

Credit Suisse as the troubled bank would

not have survived another day said the

Finance Minister of Switzerland Not only

would they have not survived another day

but their entire payment transaction

systems would have not only been

significantly disrupted but could have

potentially collapsed and we could have

more broadly expected a literal and

Global financial crisis quote the crash

of Credit Suisse would have sent other

Banks into the abyss in in other words

one Domino knocks over and lots of

dominoes the banking crisis is very

severe we've got to study it and that's

why we're going to talk about the

federal reserve's baby in this video is

that baby's getting a little bit more

active here and it's something to pay

attention to now all other options were

more risky for the state say they're

Swiss and so taking over Credit Suisse

was very clearly important they could

not allow a restructuring or liquidation

of Credit Suisse they had to intervene

now let's get into it but remember if

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Now 50 of users who are signing up are

using buy now pay later to sign up at

least within the last 24 hours since we

turned on that option obviously we know

we're in the midst of a banking crisis

and there's an institution that not a

lot of folks know about it but it's

actually quite important it is the

federal home loan bank now this isn't

just for home alone as they this a

banking system is actually a banking

system that's chartered by Congress it

operates somewhat like the FED it's sort

of like the next version of the fed the

small like If the Fed had a baby it

would probably be the FED home loan

banking system and the question is who's

borrowing from this and could it be a

signal of potentially which companies

are going bankrupt next take a look for

example at this following chart that I'm

going to pull up here this will show you

loans in 2007 taken out by banks for the

uh or or from the federal home loan

Savings Bank

in 2007 and these highlighted in red

here were banks that didn't make it

and so look at the borrowing that you

had in 2007 and 2007 you had advances of

63.9 billion for WAMU they went under

and ended up being acquired by JP Morgan

Countrywide 18.9 billion they went under

acquired by Bank of America and then you

have the others here as well Merrill

Lynch Wachovia they're gone these

companies absolutely gone I remember

being a child in fourth grade being

invited uh in the school to listen to a

presentation about how important savings

accounts and checking accounts were and

how we should have our parents come to a

Wachovia branch and open up a kids bank

account with them

yeah

they went bankrupt

anyway uh so what is this

ushin and why does it potentially matter

well first of all we have a new chart

that shows us which banks are

potentially at risk of uh of of collapse

as well because of their borrowing from

this institution now uh this institution

is generally considered to be a source

of liquidity we have seen borrowing for

this Bank Skyrocket to 304 billion

dollars in just one week it provides

liquidity so it's basically if a bank is

having problems like you go hey man can

you lend me a little bit of money that's

what they do they're kind of the the

secondary backdrop think of them as like

there's the discount window at the FED

which is kind of embarrassing to go to

because it's public record and then

there's going to the second stop which

is the fhlb which is also

not great

this

uh this banking system by the way the

federal home loan Banks uh set up is is

a private Cooperative so again it's it's

chartered by Congress uh through the

federal home loan Banking Act of 1932 so

it's been around since the great at the

end of the Great Depression era it's

really a network of about 11 Regional

banks in the United States and its

primary purpose is to be a stable source

of low-cost funding for banks

and uh that enables commercial Banks

savings institutions Credit Unions

insurance companies financial

institutions of of other types to be

able to have access to to Capital and

and those loans to make sure the Cog

wheels of the economy keep going now uh

fhl Banks together on the 13th so about

12 days ago we're looking to raise about

64 billion dollars via bonds that's

actually how the fhl makes most of their

money so it's not actually another

quote-unquote fed facility it's actually

another banking system it's a whole

whole other group of banks and they make

money by issuing bonds and people think

those bonds are safe that's why they buy

them providing that liquidity to the

banking system because they believe

they're basically a baby fed and there's

no way they're going to go bankrupt

that's the belief although there's no

such guarantee

now it's worth looking at

that facility this well well the

facility from the FED which is the um I

like to call it the buy the FED pivot

facility but uh it's the bank term

funding program that facility uh the

bank term funding facility plus the

federal Home Loan Bank facility uh will

give us a lot of data into who is

borrowing which banks are actually

borrowing from these facilities

and take a look specifically at this

chart here and you're going to see

Federal Home Loan Bank borrowing from

the bank of San Francisco as of December

31 2022 so this is Q4 which banks

borrowed the most money from the fhl and

it's scary you ready for this

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the most popular all right here we go

you ready for this look at this look at

that look on the left side

do any of those Bank names seem Familiar

of banks that are going to the federal

Home Loan Bank

yeah they do

the first one Silicon Valley Bank well

they went kaput what's the next one so

this one's already gone what's the next

one oh look at that

First Republic Bank oh what do we have

over here is that

silvergate which also went PK how

interesting so this is just the San

Francisco bridge but it shows you

some of the heads up warning signs

that when Banks start going to the fhlb

for loans

it might be a little bit of a red flag

uh that uh that there could be some more

stress coming to the banking system it

is a sign of stress remember Washington

Mutual when when this happened uh the

last time around look at this Washington

Mutual receivership gets bought by Chase

Countrywide Merrill Lynch both purchased

by Bank of America Wachovia bought by

Wells Fargo

these were the ones that one could put

and they borrowed from the a fhlb

just like these right here that are

either kabut or on the cusp of going

kaput

now Reuters is presently reporting that

the uh

fhlb is continuing to experience

heightened demand as Regional Banks look

for more liquidity support and they're

not just resorting to the discount

window with the fed or the F uh the by

the FED pivot facility but they're

actually also going to the federal Home

Loan Bank

that's because everybody right now is

trying to avoid a major banking failure

and this is deemed to be a very

important system for low-cost funding

that enables essentially cheap uh

housing borrowing or or uh you know

cheap credit lines or cheap loans for

startups look at that Silicon Valley was

one of the big borrowers and they were

able to take cheap money and

unfortunately when that cheap money

became expensive money

they went bankrupt

the New York Times reports that Regional

Bank stocks uh have seen a surge in use

pass this Q4 report here even more

substantially than what we see here and

what's reflected and that's because uh

the federal Home Loan Bank uh borrowing

in general has skyrocketed over 300

billion dollars

it's pretty remarkable because when we

consider those numbers they blow

anything out of the past out of the

water

they're just so high

now Mark Cudmore a writer over at

Bloomberg he believes it's actually

ridiculous to believe that a the banking

crisis is so severe that we are going to

need rate cuts and I think that's the

implication out of all of this is if the

banking crisis continues is it possible

that

we are going to crush the economy with

such tight lending standards and the

answer is yes

but what do we have well we have central

banks who are responding with confidence

the bank of Europe well the European

Central Bank had the privilege of going

first after the banking cycle or crisis

and what did they say

banking crisis suck here's your 50 BP

hike then the FED came out what'd they

say banking crisis suck here's your 25

BP hike in other words they're still

hiking in the face of this banking

crisis some say this actually encourages

uh the belief that the banking crisis is

not what you want to be concerned about

and so the market is pricing in rate

cuts by q3q4 because of the belief that

the banking crisis is going to continue

but if the banking crisis goes away

then all you are is focused on inflation

best case scenario the banking crisis

goes away if I could snap my fingers and

the banking crisis would go away and

inflation would go away tomorrow we

would go to the Moon

it's that simple

now if the banking crisis creates a

severe and extended credit Crunch and

people don't have the increased savings

on hand to spend through the the credit

crunch then we got big problems remember

it was Bank of America who reported

that somebody with an average bank

balance of twenty five hundred dollars

to five thousand dollars now had the

honor of having about

thirteen thousand dollars in their bank

account

uh

compared to prior to the pandemic now

okay they didn't actually call that an

honor because it's still not a lot of

money but the the point is uh that uh

people might have an extra four to five

times as much money as they had uh

pre-pandemic and so potentially that

could help people spend through this

recession

assuming the banking crisis ends of

course in the last days we've been

concerned about Deutsche Bank we've been

uh which is five times the size of um

uh Silicon Valley Bank three times the

size of Credit Suisse so

some people are writing that off as

speculation Deutsche Bank is fine Jim

Cramer says Deutsche Bank is fine so it

must be fine

but uh

the idea that these particular banks are

pulling money from the federal Home Loan

Bank

at these elevated levels which often has

been associated with

essentially going bankrupt in the past

it's a little bit scary and it makes me

wonder how that impacts me as as just uh

you know as as anyone really me on

behalf of you as an average everyday

American or even just myself uh and I

think the banking crisis one we do have

to really pay attention to and hopefully

what we're getting from the FED in terms

of the 25 hike the ECB the 50 hike is a

real signal that this banking crisis is

not systemic that this is that this

banking crisis is weeding out the most

risky

and that's it then the pain stops

that's helpful I don't think hope is an

investing strategy but I suppose we'll

see

so somebody here writes I just pulled

500 000 out of my Community Banks and

put it in JPMorgan infidelity

you know I mean I I don't blame you I

think if there's a non-zero chance of a

default why would you be there

so anyway that does it for today's me

Kevin report thanks so much for being

here we're gonna go to the elite

Hustlers live stream soon uh in about 19

minutes after I get some food and we'll

see in the next one goodbye