Hey, this is Tom Nash And last week I told you in the video that the U.S banking system is far from being out of the woods. The U.S banking system is in a whole heap of trouble and this is just the beginning now. I Also told you that first Republic is not going to recover and it is going to go into the hands of the regulators. and this morning we find out exactly that JPMorgan are jumping on the grenade on behalf of the US government and the regulators and Jamie Diming is rolling the dice on this Bank acquisition.

Now first thing first, this basically means that all of the depositors are safe, all a hundred percent. Nobody will lose money. All the deposits are 100 safe and that's the most important thing you need to know here. Now the bigger question here, the more interesting, the more impactful question here is what happens to the rest of the U.S banking system.

Is this the end of the crisis or this is just the beginning. That's the number one question we want to answer in today's video. Now for us to answer that question, we have to take a look at something that Jamie Diamond just said Now Jamie Diamond is currently as. The recording of this video is on a call and he just said 14 minutes ago.

So in 19 minutes ago that the U.S banking system is not only stable, it's also. He said that this part of the crisis is over and he also said that here commends that. for now, everybody takes a deep breath. So basically Jamie Diamond is saying that the banking crisis is over.

This is just an isolated, idiosyncratic issue and everybody should relax Now before I get to my explanation why I think this is a bunch of baloney I Want to give a quick shout out to today's sponsor now I Don't take a lot of sponsorships, but when I do, it only means that I absolutely love the product Now look I Want to talk about Delete Me? Delete Me approached me and absolutely made me fall in love with their service. If you follow my channel, you know that the number one thing that I'm obsessed about is my privacy I don't like people to know who I am where I am how old I am Nothing about me except listening to my videos, watch my videos and that's it. A lot of people have been trying to find out all this stuff about me, but I like to keep things private I have kids I have a family I don't want some let's put a cuckoo's coming up on my doorstep, etc etc. I don't want my information on the internet I hate this stuff with the Vengeance So when I find out that a company by the name of Delete Me wants to work with me and pay me money to promote their service which I absolutely fell in love with, It's a win-win for me.

This is the sort of sponsorship I Absolutely love. Now look Delete Me which is today's sponsor is a hands-free subscription service that will remove all your information from online selling. These guys are going to remove everything not just from Google from 750 additional data. Brokers and they'll do it all year long.

Now when I signed up and I'll show in a second how easy it is I Got a privacy report within a week. they remove all my personal data, they remove all my passwords, my everything. There's nothing about me because these guys did the work. I Also, find a few things myself.

ask them specifically to remove it and they still did it individually. That's how good the service is. now it. If you want to sign up, here's the deal.

You go here, join Deleteme.com and then you plug in the code Tom20 right here. Tom20 One word: Tom20. You can get 26 off and you're only going to pay 103 dollars instead of 130 dollars and the 100 satisfaction guarantee. As you can see right here, all the terms.

Everything. If you're not happy with the service, they don't want your money. Simple as that, these guys are legit. You sign up, you put in the code, and you use their service, and then all information is basically out of the internet now.

I Think that a hundred bucks for a year for this sort of thing to remove all information is a good deal. Check it out, tell me what you think, and now let's go back to First Republic And that issue we talked about now. look. Jamie Diamond says that the end of the banking crisis is here.

Everybody needs to take a deep breath. Now this is what he said right? but I Want to show you something really interesting right here. So this is from The Wall Street Journal and this is going to make a lot of sense in a second. Why what? Jamie Diamond Saying is absolute horse baloney.

Look, this is what First Republic actually charged on interest on 2021. So in the year 2021, First Republic charged three percent on average on the money they actually lent out. Now how much did they pay out? Well, they pay out depositors Point 12 percent. So right now here's the problem.

If you're a customer of any Bank in the United States this is what you're getting. Point 12 on your savings account. that's your return Point 12 on your savings account. Now you look to the left, you look to the right and you say to yourself, well all up second here.

Sport and I can go to a money market account I can buy some treasuries even a three-month Treasury and I can make four or five percent. Why should I keep my money in the bank on point 12 percent I can get a U.S treasury which is literally risk-free and I can get four or five percent. Why am I staying in the bank? So a lot of money is Flowing out of the banks into money market accounts. The main corporate of this.

why this is happening is because the Federal Reserve raise interest rates from zero percent to five percent in a single year. That drove up the returns you can get in money market accounts. So the Federal Reserve is basically causing drainage from the banks into money market accounts by raising the interest rates. and that's not going to stop until the Federal Reserve is going to reduce rates.

Now, there is no indication as of today that the Federal Reserve is at any point going to reduce rates in 2023. In fact, the last time they've asked Jerome Powell if there's any chance that they will reduce rates in 2023, which will drive money back into the banks or money market accounts, he categorically said that he's not going to do it. In his last speech, John Paul said we will not reduce interest rates in 2023.. He didn't avoid the question.

He didn't dodge it. He didn't give anything ambiguous. He literally said they're not. So if he's good for his word.

and if John Paul actually does not reduce race in 2023, money will keep flowing out of the banks and into money Market accounts. Now, just to give you an estimate of how bad things are for regional: Banks They're not as big and as strong as the big four banks in the US. Well, first, Republic lost 40 percent of their deposits in the first quarter of this year. Imagine a bank losing 40 of the deposits in a single year.

There's very few banks that can handle that. And if you think that first Republic is one of a kind bad situation. that's not the case. The truth needs to be said: a lot of banks are in a similar situation and the only way out for them is number one for the FED to reduce rates, which politically they have a very hard time to do because they're battling inflation and if they reduce rates, it means they have to admit that they broke something.

The other part is that the banks have very little liquidity because of the FED because the FED literally told them in March 2020 not to have 10 percent of cash ratio to deposits anymore, which is again a mistake by the Fed. And the third problem is that the FED also told these Banks to put all the depositors money in treasuries. That same treasury that they bought when interest rates were zero are now very much slashed in price when the interest rates are five because the price of a bond is absolutely inverse to the interest rate. So the FED drove these Banks into one hell of a corner.

and now they're starting to fail one by one. Silicon Valley was the weakest link Signature Bank was the second. We could think this is the third weakest links and these weakest links will keep on happening until the FED allows these Banks to get out of this. There's no way out for the banking system without a reduction in interest rates and that hasn't happened yet and there's no indication of when this might happen.

So for me to hear Jamie Dimon says this, that the banking crisis is over and everybody needs to take a deep breath I Don't know what he's basing this thing are. Where is this coming from? What is this? Based on? there's a lot of regional banks in the same predicament as First Republic So the one thing I can tell you here is before you listen to all these bankers and Suits use your brain, use your common sense. Don't let these guys fool you.