The Banking & Financial Crisis is Worsening | Biden Seeks Buffett Bailout.

well folks the banking crisis is

continuing to evolve with now

potentially Warren Buffett stepping in

and that is usually not a good sign for

what's going on in markets but a great

sign for potentially where we are in the

cycle let's get into all of these

updates so first to catch you up to

speed UBS is now offering potentially

one billion dollars for Credit Suisse

but they're really only doing that if

they can get guarantees from the Swiss

government that they won't suffer losses

from the Credit Suisse disaster in other

words UBS is offering a billion dollars

for a bank on the condition that they

can't lose money now on in some regards

this sort of makes sense and I've been

talking about this for weeks why would a

private Enterprise buy a company like

Credit Suisse or Silicon Valley Bank it

doesn't make sense you would have to buy

it for such a low amount for such

Pennies on the dollar to hedge yourself

against the potential initial risk of

taking on those toxic assets UBS is

specifically concerned about the risk

your investment division uh over at a

Credit Suisse that's the trading desk

the investment banking division the

speculating division the division that

deals with credit default swaps and all

the goodies that led to the 2008

financial crisis

now UBS is also asking if they get

guarantees against losses from the Swiss

National Bank that's their Federal

Reserve and they're able to buy a Credit

Suisse they want it to happen quickly

they also want the deal to be hedged so

that if credit default swaps spreads the

spreads in cds's credit default swaps

Jump by 100 basis points in other words

if the market thinks the risk is going

up in that deal UBS also wants a

contingency to be able to cancel the

deal and get out so in other words UBS

is like look we'll only buy this if we

don't take the risky crap and the stuff

that we do buy we want guarantees

against losses we want a contingency to

be able to cancel the deal if the deal

doesn't work out and we want you to

change the law literally Swiss

authorities are now planning to change

the country's laws to bypass a

shareholder vote to get the deal done in

other words private Enterprises know the

Credit Suisse deal is so risky and nasty

nasty that they basically want the

government to pre-bail them out and

eliminate any risk of this private

takeover because the deal is so toxic

that shows you how nastily these banks

have gotten away with I mean basically

Insanity in financial markets like where

Have The Regulators been yes we've had

Regulators supposedly for the big big

Banks but where were they here with

Credit Suisse apparently nowhere to be

seen but this is the same thing that's

happening at smaller Banks as well and

this is where talk about Warren Buffett

also comes up but I want to give you an

example first speaking of first remember

First Republic Bank well First Republic

Bank smaller Regional Bank right we've

heard that the larger banks have agreed

to move about 30 billion dollars in

deposits to First Republic Bank

excuse me and that is sort of being done

as a charade to show look if the big

banks have faith that they can put their

deposits into the local banks well you

should have faith that you can put your

deposits into the local banks as well

well that might be the charade the

government is putting on because if you

haven't been watching for the last two

weeks let's be real yeah money ain't

safe at the smaller Banks if you have

more than the FDIC Insurance limits

Google the FDIC calculator to make sure

you're within the limits but anyway this

is what the government trade or this is

the government trade that's being

attempted to be put on but what's

happening behind behind closed doors

well watch this unlike Insider sales

reports that are required to be made for

larger companies those at First Republic

Bank because it's a smaller Bank aren't

required to be reported as clearly or as

quickly as at larger institutions thanks

to the Securities Act of 1933.

well get what's happening at First

Republic Bank and then we'll get to

Warren Buffett top Executives of First

Republic Bank have sold 12 million

dollars of company shares in the three

months before the company shares

plummeted during this Panic that we've

been going through executive chairperson

James Herbert II sold the most 4.5

million dollars in shares since January

1. he made two sales worth five and

seven percent of his Holdings at the

same time the bank's president of wealth

management sold 73 percent of his shares

for 3.5 million dollars in his first

trade since 2021 and the CEO sold nearly

1 million dollars worth in January with

the chief credit officer selling over

two and a half million dollars worth in

three sales since the start of 2023. do

you see what's happening here folks the

government wants everybody to think

you're safe with the small Banks

everybody's everything is fine says the

governor government but what's actually

happening the Insiders are dumping their

shares at First Republic just like the

Insiders dump their shares at Silicon

Valley Bank and the private Enterprises

who are being asked to bail out the

other big boys like Credit Suisse are

like y'all need to guarantee us against

losses because these are some major

toxic assets it's bullcrap these are

toxic you don't want to be around them

the banking crisis is real and all you

have to do is look at where the money is

going and when you follow the money you

know what's going on but what does all

of this have to do with Warren Buffett

ah yes well Warren Buffett is apparently

now in conversation with the bidens

team Buffett and team Biden are having

conversations about potentially getting

Warren Buffett to invest in the regional

banking sector remember back in 2008

Warren Buffett gave Goldman Sachs a 5

billion dollar Lifeline to get through

the financial crisis remember in 2011

when Bank of America was trading at rock

bottom Warren Buffett came in and

injected Capital liquidity and gave a

vote of confidence because we all know

when Warren Buffett buys something other

people like to buy something therefore

the Biden Administration is trying to

get Warren Buffett to help Shore up the

regional banking sector but guess what

he probably won't unless he has massive

guarantees much like UBS does this is

why Warren Buffett likes to hold his

cash people like to think oh Warren

Buffett makes great deals by buying

proper or buying companies publicly on

the market well to some extent that may

be true Warren Buffett's most fantastic

deals don't tend to come in the form of

common shares they tend to come in the

form of preferred stock preferred stock

is wonderful because preferred stock

basically gives you a rate of return

sort of a dividend payment it gives you

the first rights in the event of a

liquidation event like a bankruptcy at a

company you're the one who gets paid out

first

and you tend to have conversion rates to

common stock so in other words you get

the best of all worlds you get a

dividend you basically get the upside of

a common stock and in the event of

liquidation you're the first to get paid

out so your risk is limited this is when

Warren Buffett makes this big bucks he

comes in in these sort of distressed

environments and he basically minimizes

his downside substantially while

maximizing his upside it's brilliant

obviously everybody wants to invest like

Warren Buffett but you have to see these

opportunities for Warren Buffett are

created through his name and reputation

people want to be associated with the

Buffett name that's why the Biden

Administration is basically trying to

get his Blessing over the regional

banking system but guess what folks

unless he gets massive guarantees

against the downside it ain't gonna

happen now he can make a fantastic deal

here but let's be real there are two

there are three possible well I would

say there are two possible abilities

here one possibility is buff it just

kind of advises the Biden Administration

and does not invest that's possibility

number one the second possibility and

that's probably my opinion most likely

the second possibility is Warren Buffett

actually does make some kind of

investment and it's going to be some

kind of charade investment to make

people feel a false sense of confidence

in the regional banking system if Warren

Buffett makes any kind of investment it

will be done so in such a way that he's

probably getting massive guarantees

either from the government or in the

private sector to where you will not

have the same guarantees that he is

getting in other words they will

basically be borrowing and leveraging

his name the problem with that is that's

a very risky Endeavor for Warren Buffett

because if Warren Buffett invests in

let's say as an example a First Republic

Bank

and then it goes bankrupt even though he

might be protected his name could be

scarred so and he's well aware of that

even his legacy right he doesn't want

potentially one of his last acts dare I

say that okay bless the guy knock on

wood love Warren Buffett but he's old

you don't want one of your last acts to

be a failure okay so uh being real here

I think there would have to be uh there

would have to be some massive guarantees

for Warren Buffett to actually walk into

any kind of deals here in the regional

banking system but he's probably a

fantastic advisor for politicians and I

think politicians ought to listen to

whatever Warren Buffett is telling them

uh because I think he uh he knows a

little bit more about finance and

economics than the politicians do but

anyway what all of this goes to show you

is that the banking system is in a

nightmarish position

and I think what we have to always

consider is what is the impact to us as

as regular Americans who don't get these

preferred share opportunities who don't

get the blessing of guarantees us normal

Americans who look at the stock market

and say look we just want to make a buck

we want to work hard

we want to invest our money and we just

want to make a buck and make our family

happy and provide for our children and

our children children if possible Right

well in my opinion the answer is very

clear the answer is you can't be above

FDIC limits with smaller Banks I'm not

saying ha don't have a relationship with

smaller Banks smaller banks are a

fantastic way for you to make money I

want to be very clear about this my

first rental property that I ever bought

was made possible by a smaller bank

that's because I

bought my property with an FHA loan

thanks to the government okay the

government subsidized anytime you put

less than 20 down thank the government

anytime you get a 30-year fixed rate

mortgage thank the government those

institutions exist because of the

government so I thank you to the

government for allowing these

opportunities three and a half percent

down on my first home and getting a

renovation loan on my first home would

not have been possible without the

government and I realized that and I'm

thankful for that and I encourage other

people to take advantage of the

institutions the government sets up for

us this 30 year fixed rate loans are a

blessing so

that was a blessing but listen to this

when I built equity in my first property

much like I teach in my zero to

millionaire real estate investing course

linked down below I teach you exactly

how to build equity in your first

property instantly when you buy it right

that's the goal I bought my place for

about 350k all in with fix up costs it

was in a 450 000 neighborhood so my net

worth and my wife's net worth we went

from about an eighteen thousand dollar

net worth to around a hundred and fifty

thousand dollar net worth basically

instantly when we fixed up the property

so okay a couple months uh and that's

fantastic that's called buying a wedge

deal right but listen to what I did then

then I refinanced with a local credit

union Okay small Bank look I understand

Credit Unions non-profits they're

slightly different from a Regional Bank

but they're all still smaller okay I get

it I owe them a massive thanks because I

went to Logix Federal Credit Union

and I refinanced my home

and I got a home equity line of credit

they let me take out uh so not only did

I refinance my first with a 20 down loan

because I had all this Equity but they

let me attach a home equity line of

credit which let me pull out up to 90

percent and honestly the appraisal I got

was was pretty generous at the time uh I

I thought the the uh a credit line

appraisal was was very generous uh

anyway so I was able to take out a

credit line uh in in my opinion up to

probably around 100 of the actual value

of the property and I used that credit

line

to put 25 down on my first rental

property

okay that that started my career as a

real estate investor so I want to be

very clear I understand for the last two

weeks I've been making videos pooping on

the small Banks because I don't want you

to lose money okay so so spread it out

I'm not saying don't do business with

the small Banks just realize you're not

guaranteed above the 250k

and I respect the small Banks I don't

want them to go away because they give

us these opportunities they help

startups exist they hate they help

people get a start in America because

they have looser uh uh credit standards

dare I say right you can get better

deals at the smaller Banks so I want

them to exist I don't want them to go

away but until uh the government

steps in and basically extends FDIC

Insurance limits either to a larger

amount or or whatever I don't think you

can be exposed to more than the FDIC

limits and unfortunately that means

there's probably going to be a massive

consolidation of banks now don't worry

they will come back whether that's

through fintech or otherwise that

flexibility will always come back we

always it's it's like a balloon okay or

dare I say a bubble things get really

really loose and bubbly then there's a

correction and a bunch of them go

bankrupt and then they come back so I I

bless uh the the small Banks up to the

FDIC limits I love doing business with

them but I think right now we're in a

risky environment and quite frankly I

don't think any uh Credit Suisse

rejected the UBS deal yeah there'll be

drama all over that but anyway whether

or not that deal happens or not it

doesn't really matter uh the Credit

Suisse is a big old toxic asset and and

really the again the only way you're

actually going to see those deals go

through is if there are massive

guarantees from the government that's

how you're going to see that but my

point is uh you have to be careful so

for a regular person I personally think

stay away from any Finance related

stocks stay away from Finance related

stocks this isn't personalized investing

advice I I don't know what your personal

situation is I am a licensed financial

advisor run an ETF I run a real estate

fund all of us uh but my point is my

belief is stay away from the finance

sector I think there are great

opportunities to invest out there I

think we're going to look back and look

at 2023 and say wow that was a fantastic

time to invest and and make good moves

but just be careful and and do your best

to work hard and make more money and I

know it's hard get a second job if you

need to and I know that's hard to say

because we want free time we want r r

time but now is the time to work hard

and and get through this period of time

uh and and so hopefully we can get

through this this Insanity of this

banking crisis relatively unscathed

really what it requires

is inflation continuing to Trend down

it's going to take time for it to Trend

down but we need to get through the

banking crisis I don't think the banking

crisis is so bad that our sibs the

systemically important Banks actually

are going to suffer a massive issue like

we saw in 2008 we don't know that I

think their stocks are probably going to

Trend down because there'll be a lot of

punishing revaluing going on uh but

that's why I wouldn't touch them with a

10-foot Pole from an investment point of

view but again over FDIC limits I'd be

out of there so anyway uh somebody here

donates 11 Euros to say we're back to QE

yes yes we know we know we've talked

about that for the last few days already

but yes yes we are to some extent we are

back to QE now now listen that does not

mean we are permanently back to QE right

just because the fed's balance sheet

pops up 300 billion dollars in a week

doesn't mean we're back to QE

permanently okay yes for the week we are

big downtrend spike up this does that

mean we're going to continue trending up

quite possibly it possibly does mean qut

is over it does technically we're still

in QT technically even though we popped

up 300 Bill technically we're still

dropping by 90 Bill a month

obviously the pace at which the printing

press has been turned on is very very

rapid and very fast right now right

where outpacing QT uh what will be

interesting is whether or not the FED

pauses QT but we'll talk about that in a

different segment uh but yes for the

week the fed's balance sheet has popped

up and I think the more we pay attention

to the fed's balance sheet the more we

can see how much Financial stress there

truly is in the banking system and and

there are real stresses JP Morgan

estimates that we could be uh printing

as much as two trillion dollars in other

words all of the QT that we've done to

the extent of about seven to eight

hundred billion dollars of QT we've

already gone through all of that could

be eradicated and we could actually just

swing to the opposite direction and be

so high in qt or QE again quantitative

easing that we actually end up printing

more money than we ever tightened and

vacuumed out of the system it's going to

be remarkable it's going to be

remarkable

okay so that is an update on the banking

system remember folks we have a coupon

code for the uh St Patty's week that

expires after the FED meeting coming up

here on Wednesday so make sure to check

out that program uh link down below any

of the programs you get lifetime access

to them all of them come with the course

member live streams and uh Elite

Hustlers has a custom live stream that

it comes with uh which I got to catch up

on one of those lives for this weekend

and I'd love to see you there thanks so

much