The Banking, Auto, and Housing Crisis *JUST Started*.

well the party's over unfortunately

office Market is going to be destroyed

you know hotels are going to be

destroyed it's going to be ugly and so

you have not in recourse mortgages and

they're going to walk away and the

bank's going to get stuck with losses

the ruling Elite in mainstream media

told us the banking crisis was over it's

all good but what if it's not what if

the pain is just getting started what if

the real banking crisis is just now

starting signaled by the auto crisis we

are facing and the commercial real

estate crisis we are already in all

three of these are going to be subjects

that we cover in this video

but it's not just those three issues

it's the aggregate that also looks bad

the total of everything doesn't look

that great especially when Morgan

Stanley just observed the steepest

decline in lending quote on record in

just the last two weeks that's worse

than the 2008 recession there's no way

to make that sound bullish but it's a

reality it's a reality that's hitting

the hardest working and potentially

poorest Americans first

sadly this might just be the start so

buckle up and consider that credit card

balances in the fourth quarter Rose by

61 billion dollars to almost 1 trillion

dollars almost a trillion dollars of

credit card debt surpassing pre-pandemic

highs this is no longer just a

normalization things are starting to get

worse than where we were before the

pandemic the New York fed is also

reporting that the current share of debt

shifting into delinquency is rising for

almost all types of debt the same time

lending standards are significantly

tightening with acceptable mileages for

used cars already plummeting for lenders

some lenders just blatantly shutting

down and 27 of those of you struggling

the most now having to borrow money

through buy now pay later Services just

to make it to your next paycheck people

are paying for their groceries with buy

now pay later just to get to their next

paycheck

add to that anyone with a credit card is

facing a higher delinquency risk and

statistically now than two us two weeks

ago folks this is not just a March

banking Madness from last month

situation it's actually potentially A

Renewed banking crisis driven by taking

away ordinary American opportunities to

access debt and to be able to survive

with a living wage now we kept being

told that the two-week crisis in March

was just really a passing moment there

were some risky Banks and let them fail

and you know what we bailed out

depositors the shareholders took the L

at those Banks and you know what

everything is good but maybe the global

elite doesn't want us to know about

something in the Nuance while they're

saying there's nothing to worry don't

worry you don't have to change Banks

small banks are safe

remember you should take everything they

say with a grain of salt after all the

elite were the ones who well first of

all had money sucked away at Silicon

Valley Bank and were caught off guard

with tens to hundreds of millions of

dollars stuck in Banks like Silicon

Valley bank and they were flabbergasted

that when the government's posted

regulatorily mandated signs of FDIC

Insurance limit 250 000 was actually

real

the elite panicked and people like

Governor Gavin Newsom were floored so

much so that they had to beg the U.S

treasury Department and Biden

Administration to please bail out his

bank all without disclosing that he

actually had Millions at the bank

this should be an outrage to you but

it's no surprise people started getting

smart they withdrew their money that's

exactly what happened at First Republic

Bank who just recorded reported earnings

First Republic Bank we just learned in

the first three months of the year lost

a staggering 102 billion dollars in

customer deposits more than half of the

176 billion dollars in cash that they

held at the end of last year now we

don't have or should I say we didn't

have the privilege of knowing what was

coming back on March 10th but folks in

Congress certainly did like Jared

maskowitz a Florida Democrat who dumped

chairs conveniently around the time of a

banking hearing as soon as he had the

privilege to of course his financial

advisor was just recommending he

happened to diversify around that time

how convenient given that just three

days later many of these Banks lost

upwards of 40 percent of their Market

value

First Republic Bank also announced

recently plans actually just yesterday

plans to cut their Workforce by 20 to 25

percent in the second quarter and

they're quote working with professionals

on restructuring but don't worry

everything is fine they say don't mind

that they show 13.2 billion dollars in

cash on their balance sheet and

borrowings of 106.7 billion dollars

don't mind that they owe over nine times

as much money as they have cash on their

balance sheet don't worry

they're protected they say no wonder the

CEO didn't take any questions during the

company earnings call yesterday and

instead just write a statement off

making sure everybody knew that quote we

are withdrawing all previously

communicated Financial guidance

thanks CEO of First Republic great way

to be transparent

see the aftermath of a Silicon Valley

Bank continues to haunt us we already

know that Regulators have spent over

22.5 billion dollars protecting customer

deposits now the Biden Administration

wants other Banks to pay up and

reimburse The Regulators even though it

was ultimately the government who failed

to properly regulate these Banks and now

they're shafting the blame onto other

Banks potentially small and medium or

other large-sized Banks

short Sellers and Industry professionals

knew the bank had massive problems not

just that one but other Banks

the problems were very obvious and

blatant all you have to do is look at

the fourth quarter Silicon Valley

earnings statement and you could look at

it and go oh Lordy this is a problem

the financial times makes it even more

clear though just in case we don't

actually want to look at that report

what do they say

more than a year before any of these

banks failed more than a year before

outside Watchdogs and even the bank's

own advisors had identified the dangers

lurking at these Banks but no one not

even the government cared they were all

making too much money so instead they

kept pushing their Banks to the Limit

knowing the government would just bail

them out and end up charging the good

Banks

for their recklessness of course maybe

that was the point major Banks like JP

Morgan and Bank of America ended up

attracting massive deposit inflows

through the banking crisis while paying

minimal interest rates smaller Banks

like Western Alliance reportedly lost 11

percent of their deposits just this year

we're only four months into the year

collectively our banks are now valued at

just

their combined Book value down nearly 40

percent

from the start of the year which once

again ends up hurting small and

mid-sized Banks disproportionately this

ends up leading to more tightening

lending Now The Economist tries to

suggest that well maybe we're overbanked

maybe we have too many banks and they're

not wrong to say the US has 4 700 bank

and savings institutions or one for

every 71 000 residents which works out

to about 20 percent more than the

European Union has one bank for about

every 85 000 residents

but the question now is what does this

mean for average Americans and what do

we do about it well let's start by

making it clear that we should be

expecting a lot more car repossessions

The Wall Street Journal just suggested

we could face a surge in car

repossessions almost as if it's

Christmas time for the Repo Man

as lenders like Capital One and US Auto

Titan lending standards so much or even

close dealerships it's becoming

increasingly difficult for consumers to

finance their car purchases particularly

those with subprime credit scores the

ones who need their car the most to be

able to survive

Capital One just shut off all dealer

floor plans that's a fancy way of saying

all dealer line of credits are closed

from Capital One for certain Auto

Lenders

the same thing was done by Ally

Financial and guess what happened as a

result of that well U.S auto saw its

bonds downgraded leading to not only a

tightening of lending standards but when

they got rug pulled by Ally Financial

they directly decided we have to close

39 of our dealerships and we are now

unable to help people buy cars US Auto

happens to be a dealer that doesn't

cater to the rich or the elite no it

caters to people of all walks of life

all credit scores but now it can't offer

any loans anymore so once again it's not

just actually it's not at all the

Reckless Rich who have had their credit

Titan it's actually normal hard-working

Americans who now find it harder to get

a car loan the average monthly car

payment

is now as expensive as in some areas it

used to be to actually rent a one or two

bedroom apartment

it's as high as 730 dollars per month

for a car to get from point A to point B

and potentially not even reasonable

safety and comfort you're now paying 730

per month on average

those who need a car the most are now

least likely to be able to get one the

average borrower of a U.S auto loan had

a FICO score 5018.

that is subprime that is well into the

subprime category these are the people

who really need a car to be able to

survive and get to work

and Borrowers

at US Auto on average took out a loan

for 150 percent of what the car's actual

value was

specifically related to one tranche of

bonds that were downgraded at U.S auto

the average principal balance 20 199

with an 18 interest rate those are

credit card rates

at overvalued levels for cars that are

not worth as much they're basically

zombie car loans loans that are being

made to the poorest of Americans who are

least able to afford these higher

interest rates

at essentially predatory loans

it's no surprise that the Wall Street

Journal suggests 75 of these zombie

loans will end up being able to default

and the dealers will still be able to

make a profit that's because of the

insane upfront fees and the interest

rates they're charging in the residual

value they think these cars will have

but remember they're lending assuming a

lot of these car loans will default but

that's only when they decide to right

now the global Elite seems to be

suggesting you know what

too much even if 75 default we still

make money that's not good enough let's

just stop lending to the people who need

it the most

this comes at the same exact time as the

cost to maintain or fix a car has risen

12.5 from a year earlier in February

this leads to more vehicle repossessions

as people can't afford to maintain their

cars anymore Wells Fargo is now laying

off all Junior underwriting staff as

auto loans essentially start

automatically getting declined for

people with lower debt to income

standards or people with worse credit

scores in other words your credit crunch

is here again for poor people but hey at

least some discounts are starting to

roll in for the first time in a year car

makers are using incentives to attract

buyers more than they had last year

according to Kelly Blue Book car makers

spent an average of 3.2 percent

on incentives to move vehicles in other

words a 3.2 percent discount to get you

to buy

however that incentive which averaged

about fifteen hundred dollars at 3.2

percent was less than half the discount

wealthy people got

and we're not talking about numbers wise

that is of course you would expect a

more expensive car would have a higher

dollar number of discount

but the percentage might be similar

right wrong

poorer individuals got a 3.2 percent

discount wealthy people got more than

double

an average 6.7 percent discount

so once again it's getting tougher for

the poorer Americans poorer people

especially those who have to use buy now

pay later Services just to make it to

the next paycheck have on average twelve

thousand dollars Less in savings than

those who don't use buy now pay later

services

now brace for the Real Pain remember

2008 in 2008 many Americans lost their

homes others said I don't mind if the

real estate market goes down because I

don't own a home

and then they lost their job

now some are warning exactly the same

wave of trouble could be coming from the

commercial real estate markets implosion

which will exacerbate the pain not just

in the banking crisis in The Lending

crunch but also the job market

consider that since 2015 Regional banks

have accounted for 90 percent of the

increase in commercial real estate bank

loans yikes just what we don't want to

hear smaller and Regional Banks taking

on even more risk

a bank like JP Morgan or Bank of America

only held about six to seven percent of

an exposure to the commercial real

estate lending Market of their total

assets smaller commercial Banks 25 to 30

percent

this is leading Morgan Stanley to give a

dire warning

that between 2023 now and 2025 we will

had a peak period of refinancing that is

loans coming due for commercial real

estate properties requiring refinancing

or

liquidation

and given that commercial real estate

vacancies are rising thanks to not only

the desire to work from home but also

the ability to work from home and the

fact that office space is becoming less

valuable or less functional

we're expecting to see wider banking

losses and that will likely trickle over

to more widespread job loss look at this

information from Morgan Stanley Morgan

Stanley is warning we could be facing a

40 percent decline in real estate values

take a look at the following on screen

now

a recent Morgan Stanley read report

assumed

even more Stark terms for new office

underwriting

here they give you some costs of debt

and what do they say about the entire

office Market

a 40 decline in office values from

current levels over the next two to

three years so in other words if you

want to get an office loan you want to

get a new office loan you're faced with

everyone in the industry being assumed

that valuations will fall 40 percent

these right here these yellow bars

represent commercial real estate

maturities over the next five years

let me add that number up for you it's

right here

1.6 trillion dollars of commercial real

estate will mature come due for

refinancing over the next five years at

the same time valuations are expected to

be down 40 percent and Bank lending is

substantially tighter

what does that mean well it means big

problems in fact listen to this

regarding commercial real estate debt

commercial real estate loans consist

anywhere of six to thirty percent of

bank loans six percent for the bigger

Banks thirty percent for the smaller

Banks if commercial mortgages default

and mass banks would face significant

losses and impact the International

Financial system everything gets hit by

this kind of pain absolutely everything

and it's not just Banks it's also our

jobs

this is scary

but it how do we know that commercial

real estate vacancies are rising and how

do we know that commercial real estate

is the one especially office that has

more potential risk than maybe apartment

buildings well all we have to do is look

at this chart right here from Reis which

shows you this green line going up and

the blue line going down in other words

less

vacancy for apartments more vacancy for

offices these are quarter to quarter

ticks

so folks

how do we prepare because we are likely

to face job loss we are likely to face

substantial pain over the next year now

as much as I personally have the

optimism that certain pricing power

segments of our Market will continue

via a volatile elongated Nike Swoosh

style recovery I've talked about it many

times before I personally think we're in

a Nike Swoosh style recovery but that

swoosh is going to take a long time

potentially the rest of the decade don't

expect those 2021 valuations to come

back anytime super soon

but what do we want to expect between

now and well the end of this crisis well

in my opinion prepare yourself in any

way that you possibly can and how could

you do that well number one in my

opinion you want to keep a cash cushion

it doesn't have to be a massive cash

cushion just look at your expenses now

usually I don't recommend a massive cash

cushion because it's oftentimes out of

generally six out of seven years we're

in a bull market and it makes sense to

just discount the value of the money

that you have in your investment

accounts but today when you're earning

four to five percent on your cash it

doesn't hurt to have a slight cash

cushion and it's much better than having

money outstanding in margin to where if

we have a sudden flash crash you don't

get eradicated that would be the worst

case scenario this is why you want to be

very careful with margin so be careful

investing money that you need soon stay

out of debt and dollar cost average your

Investments when you make them also

consider age-dependent strategies like

making extra payments on your mortgage

and looking for free cash flow and the

safety of capital if you're older if

you're younger you can often take more

risk but you don't want so much risk

that you end up getting wiped out so

stay strong and remain productive also

increase your skill set learn about

artificial Intel Legends learn about

prompting artificial intelligence learn

about if you can anything that you could

do to become a professional anyone of

you watching this video right now and

I've said it a million times before but

I want to give you that inspiration you

can become a licensed CPA A lender a

real estate agent anything you want and

consider the licenses that I've

personally gotten I've personally sat

and passed as a licensed contractor test

the real estate agent license test the

real estate broker license test the

realest of the real estate lender the

mlo test mortgage loan originator test

the license financial advisor test I can

keep going

the point is

I feel if I can pass all of those tests

you can pass one and Elevate yourself

become more valuable at your job and

above all remain optimistic this is a

tough time this is a hard time and it's

always always very helpful to remember

that there is light at the end of the

tunnel

you have to make it to 2025 get through

this madness and yeah maybe stimulus

checks may come in the future but

betting on that is not a good strategy

we don't want to bet on hope we want to

bet on Surviving

thanks so much for watching if you found

this helpful consider sharing the video

subscribing to the channel and we'll see

you in the next one thanks again goodbye

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