Got to talk Silicon Valley Bank and all the craziness that's not just happened yesterday, but that is now unfolding after the collapse of Silicon Valley Bank. So we're going to be talking about what's happening with the Federal Reserve what are they pricing in? Who just got fired at the Federal Reserve We're going to be talking about what the Insiders at Silicon Valley Bank are doing. What kind of a talk there is in terms of which businesses might actually be affected and these are quite a few public companies. Uh, we'll also talk about potentially what's going to happen on Monday and what the heck is going on with Usdc? Uh, the circle backed stable coin that has potentially Now depegged by a total of 8.8 percent as of the time of this recording.

It's pretty remarkable. On top of that, you've got Venture capitalists absolutely freaking out, complete disaster and sh9t show. So let me give you a very quick synopsis. Basically, you had a bank that had somewhere around 211 billion dollars in assets and then when they actually marked to Market which basically means like, hey, you're saying you have all these assets, but what's the true fair market value of those? When they did that, they were basically insolvent.

Once rumors started spreading that uh oh, this bank is insolvent, people started getting worried about their ability to retain access to their cash on hand. With this bank that represented 50 percent of silicon, well close to 50 percent of Silicon Valley startups, They say they they have almost all of the banking needs for about 44 percent of Silicon Valley baked startups. And that's because when they give Startups loans, they'll have covenants in their loan agreements that say Hey If you want to be able to work with our loans, our easy lines of credit, and our easy lending for startup, you have to have all of your banking at Silicon Valley Bank So in other words, you've got about this 44 group of startups that just primarily bank at Silicon Valley Bank They were the go-to people for startup loans and you couldn't have a banking relationship somewhere else. Which what's really weird is now that the bank has collapsed.

sort of makes you wonder, oh crap, if the bank collapsed then people, even though they knew they should probably get out, probably didn't get out because that would violate their loan covenants of taking your money out of the bank, right? So imagine, if you're a business, right, you're a startup and you've got a million dollars of of payroll every month that you gotta pay. That's 250 000 a week in payroll that you have to pay every Friday potentially. So let's say, you have money over at the bank and you're like, well, crap. I'm I'm actually using a line of credit to fund my business right now because I'm a startup and we're in a recessionary environment and new.

Venture Capital Funding is pretty dry. Okay, Silicon Valley Bank is is falling apart. Oh no. maybe I should get my money out.

But wait if I get my money out I lose access to my lines of credit I can't get my money yet then you're stuck. Now you lose access to everything as the company collapses. Not only do you lose access to your line of credit, but you lose access to whatever cash you had left. It's a complete sh9t show and there are some people going as far as saying they this what has just happened sets a vast majority of Silicon Valley startups back potentially 10 years Because think about it, you got phenomenal potential startup ideas that now don't actually have access to Capital operate anymore.

Potentially they have to lay off staff if they don't get access to that capital. And it's not just access to the cash, it's also access to the credit lines right? So even if via FDIC on Monday somehow we get cash out. If they don't have access to the the easy lending anymore, you can actually really crimp the entire startup space and you're not getting new Venture Investment? Not really I mean you are getting some in sort of like a chat GPT AI style companies. but to me the valuations are so frothy over there anyway that I wouldn't recommend doing that at this point.

But what's remarkable is this potential idea that my goodness, how many startups like, even companies that have really matured from startup stage like Matterport Bill.com Roblox Blocks Roku These are all massive companies that started in Silicon Valley and have a lot of association with Silicon Valley Bank Matterport has stopped sending payments uh through Silicon Valley Bank They used to have their accounts payable go into Silicon Valley Bank. Now they're changing A Banks Obviously, because the bank's going into receivership, you've got Roblox that was exposed to Silicon Valley Bank by quite a bit. Roblox had about 150 million dollars at Silicon Valley Bank that only represents about five percent of their cash Lending Club at about 21 million, Rocket Lab had 38 million. That's about eight percent of their cash Matterport switching banks to JP Morgan Etsy was using Silicon Valley Bank for some of its uh, some of its providers for some for payouts to sellers Roblox Had we mentioned about five percent of their casts, this was an interesting one.

Roku Said they had about 25 of their cash sitting in a Silicon Valley bank account. How coach one fourth of their cash And keep in mind, Roku's still burning money. That's one of the complaints that I have about Roku is they're burning money? Uh, kind of. it.

Makes me a little nervous. Sunrun was a company that potentially has 15 exposure to Silicon Valley Bank And these are all companies that have a lot more than the 250 000 FDIC Insurance limit. Remember, you get 250 000 of FDIC Insurance limit per person per account and that includes potential accrued interest at your owed. So if you're a big startup and you've got tens of millions of dollars there, you might not have access to 99 of your Capital at Silicon Valley Bank for for a very long period of time.

If ever remember, the way FDIC receivership works is: FDIC is taking over the bank as we speak right now on Monday they will actually open up the branches again and you can bet people are just going to be queuing up and lighting up to get their money out. In fact, that's exactly what they were doing on. Friday you could see this. Uh, Twitter Let's see here.

Look at this Twitter video right here. You can just people lining up queuing outside of these Banks There it is Silicon Valley Bank and you had a lot of this. It wasn't just this, you had a lot of posts like this circulating on Twitter about people queuing up at the bank to get their money out. to the point where security guards at these Banks had to lock the doors and put signs in like basically saying come back Monday Now at the same time as you had all this drama going on, listen to this.

this. CEO sold 11 of his shares in the company 3.57 million dollars just 12 days ago so the CEO probably saw the writing on the wall that they were insolvent. I Mean after all, remember you could look at their Q4 earning statement and when you look at their Q4 earnings statement, you could actually see how close to insolvent they were in December And things have only gotten worse since December. And now we find out that the CEO sold 11 of his shares and he hadn't been selling in years.

Just all of a sudden happens to sell right before this collapse. Doesn't seem sass at all. doesn't at all seem like Insider Trade? Yeah, nothing. Go nothing to see here folks.

And then on top of that, the CFO sold about uh, 375 000 of shares. Also, 12 days ago. So something happened 12 days ago I Think where they woke up and realized honey, we've got a little bit of a problem at the bank. Maybe we ought to, uh, since we know about it since we're insiders.

Maybe we ought to show some of our shares. but it wasn't just the CEO or the CFO. You also had the CMO uh selling early last month and uh, or uh sorry, it was uh yeah, early February and late January also selling all three of these top Executives selling out uh, at least some of their stake right before this collapsed. It's not a good look.

The CEO by the way, was apparently a director at the San Francisco Federal Reserve. This shows you how deep this Insanity goes. So let me say that again: the CEO of Silicon Valley Bank was one of the directors at the San Francisco Federal Reserve and he was promptly fired after this, uh, this disaster, this banking uh, crisis and pretty bad look to be selling shares of the company that you know is about to go to hell. But let me just quickly show you again how you could see how close they were to insolvency as of December 31st which Remember we're almost through the first quarter so these financials are already like 71 days old.

So you know the people on the inside are looking at the financials going. Oh no, it's getting even worse. But look at this. all you have to do is it like you can make this so so simple.

You go over here and look at Total Assets 211.7 billion dollars. You look at the total liabilities right here, right? 195. Oops, You can't see it There we go. So you see the difference right here.

That's about 16 billion dollars, right? Total Assets 211 Minus 195. That's about 16 billion dollars of a difference right? But wait a minute folks see this number right here. This 91 billion That 91 billion is Not actually worth 91 million or a billion. In my opinion, this is just straight up fraud right here.

By the way, how do I know this is not worth 91 billion Because it literally says right here, Hell to Maturity Securities Fair value of 76.1 billion dollars. Now yes, if they the reason they can get away with this is because technically if they do hold these maturities to or sorry these Securities to maturity, they're bonds. Okay, so it's kind of like hey, if you have a three year bond, if you hold it all the way for three years. Yes, it's technically worth 91 billies.

but if everybody all of a sudden needs cash because we're in a recessionary environment, the Fed's raising rates like crazy, Well, you're gonna have to start selling and liquidating some of your health and maturity Securities and those are going to become what are known as available for sale Securities Whoa. Fantastic. Well there goes the 16 billion dollar difference you had. It leaves about a bill in the difference, but it shows you as of December 31st, they were basically insolvent already based on the public financial statements of December 31st.

Quite remarkable. The insider trading is pretty remarkable as well. But another thing that's pretty wild is uh, with the fact that you had 42 billion dollars of cash withdrawn in just one day from Silicon Valley Bank That's pretty remarkable. But on top of that, apparently somewhere around a 3.3 billion dollars of the assets backing Usdc are at Silicon Valley Bank And as a result, now you've got what looks like a a D-peg occurring on Usdc because people are questioning how many how much cash is actually available to back.

Uh, the stablecoin Usdc. Which is kind of wild because I don't think anybody would have ever thought that oh my gosh, Usdc, would go before tether goes. Everybody always makes fun of tether, but it's pretty remarkable that Usdc right now is the one that's in deepeg mode. Look at this: 91.3 cents is where it sits right now.

down 8.76 Now, in case you're not familiar with stable coins, this is bad. This is an example of an unstable coin. and I mean In Fairness, it lost its backing. potentially at least some of its backing.

You know you've got about what a 33 billion dollar market cap over here. For Usdc, you've got about 3.3 billion dollars potentially that are evaporating, so the market seems to be making that sort of adjustment now. A lot of people are trying to Arbitrage play this. In fact, yesterday tether was was sitting at 1.0 seven dollars in some D5 markets.

so you could have literally bought it. You could have bought tether on something like Coinbase and then sold it for 1.07 for a seven Cent profit. uh per Buck Which is insane a seven percent instant Profit Just playing Arbitrage in the D5 space. So a lot of arbitrageurs have been at work here.

Uh, and that is. uh. generally arbitraging leads to a consistent one dollar Peg But not when potentially ten percent of the assets are oopsie Doopsies gone. So that's pretty scary if we go back here a little bit and just look at Uh Bitcoin Bitcoin actually holding up through this and so is Ethereum in the last 24 hours, both of them roughly flat.

If anything, net Net Ethereum's up in the last 24, which is pretty remarkable. You've got uh, Busd has been pretty stable along with uh tether. Again, at some point, tether in the D5 markets was, uh, deep hagging. But beyond that, hey, uh, Usdc at 91 cents it's a red flag.

It's It's shows you that Stable Coins We we can't 100 trust stable coins just yet. This is why one of the things that I talked about regularly since January of 2022 is: I Think you're better off in short-term treasuries if you're looking to yield Farm you know, six month T bills. Basically, then you are in stable coins because the time you're going to have stress in crypto is now during a recessionary environment. Nobody knows how the cards will fall, but this is where the cards are starting to fall.

Now you have these contagion risks as well. Not just for crypto, but you have these contagion risks around what the CEO of Y combinator is suggesting. He was on CNBC complaining about this idea that oh my gosh, we could end up seeing 10 years essentially of of startups setback. In other words, so many startups that are potentially on the cusp of of working towards profitability or launching new products or Services might all be getting set back and we don't know the implications of all of these yet.

it. But think about it a lot of companies in Silicon Valley provide apis that are the foundation for a lot of different goods and services that we use. Now we don't know, for example, if Stripe is affected. Uh, so far, it doesn't seem like they are.

They haven't said anything. uh, doesn't mean they aren't though. But let's just say for example, you, uh, use Stripe to check out on Shopify uh, that is, you're a merchant and you use Stripe and all of your Ecom stores. What if all of a sudden, Stripe lost like Roku 25 of its capital and they had to freeze some of their their you know, they couldn't pay some of their bills and some of their servers froze.

You could see how this sort of contagion can spread through because now all of a sudden the Apis break for processing payments. All of a sudden that now you have Shopify stores breaking all of a sudden. now you're lowering GDP because everything's basically Frozen and it's a wall You lose a few days. You can really start pushing the economy into an actual recession because you're robbing the market of GDP Kind of crazy.

so that's something to think about. I Mean really, you could take our our annual GDP and divide it by about 365 and and you can find that? Okay, yeah, we've we've got. you know, somewhere around, uh, 65 billion bucks a day of GDP So every single day is worth a lot of goods and service at Dallas Uh, so you could really start breaking the economy pretty quickly because it doesn't take many of those days. Not obviously that the entire economy would go to zero on those days, but it doesn't take many of those days to be shaved off because things are broken.

Uh, to potentially where you're not recouping that when things are repaired again And does that then potentially lead to other smaller bank failures? Uh, whether that's a first Republic or Pacific Bank Or you know, these are companies that are seeing their stocks plummet because of this fear that, oh, the contagion is going to take them out as well. Now the hope is that FDI receivership solves this on Monday that is hope. Uh, personally I Don't think hope is an investing strategy, but the idea is that I mean it's all you have right now if you're affected by by Silicon Valley Bank The idea is that on Monday when the bank goes into receivership, hopefully FDIC is basically sort of a bailout mechanism for banks because Venture Capitalists specifically people like David Sachs are freaking out. And the reason they're freaking out is well, partially in part because somebody like David Sachs does support a lot of startups.

That's their business, right? The all-in Pod These these folks they work regularly with Venture uh as Venture capitalists for and in the private Equity markets for startups. And if all of a sudden a lot of their companies are now getting reamed or potentially risking bankruptcy, that's bad for them. But for them, they are making these strong arguments right now that hey, the FED needs to come in, the banks need to come in and bail out or or the Federal Reserve Banks and the larger Banks need to come out. come in potentially even the government and bail out Silicon Valley Bank or other banks that are potentially at risk to prevent everybody from panicking.

I mean ideally if this could just end up being look Silicon Valley Bank went under much like an FTX it went under. It's fine, It doesn't take anything else with it. Fine, of course with FTX it took a lot of things with it. Block VI Voyager Genesis A lot of companies got destroyed because FTX went under and the fear is that similar kind of Destruction could happen here.

And so this argument that's being made is hey, you know, why not just make uh, have FDIC come in, bail everyone out and give people the faith that uh, we are not going to end up having more Bank runs. that's the idea right? Uh, because after all the last thing people want is the fear that uh oh if it can happen to Silicon Valley Bank the largest bank, the biggest bank failure now since 20 uh or 2008, well then it could happen uh to to any local bank any Regional Bank now when I uh when I was at a dinner yesterday with Kathy Wood I asked her opinion on this because I One of the big concern that I have is it's not just the contagion that it could spread to these other Banks it's also the fact that Silicon Valley Bank probably has to sell somewhere around 80 billion dollars and available for sale Securities and held to maturity Securities both those together. Yikes. Because here's the thing.

if you have available for sale Securities That's one thing that was only about maybe 10 15 of the balance sheet of Silicon Valley Bank You take a loss on those as they did. They took their 1.5 billion dollar write down, they tried to raise some money, whatever. uh, and then that way you raise some Capital But the real issue becomes uh oh, what happens when you take those hell to maturity Securities You weren't thinking about selling, but now FDIC comes in, it starts liquidating those bonds. Well, you could see a total of somewhere around 80 billion mortgage-backed Securities hit the market.

Now, how does that affect you as an individual? Well, technically right now, it's creating so much fear that a lot of folks believe. Uh oh well, that's it. The Federal Reserve's terminal rate is going to come down. Rate expectations are being cut.

We went from 5.65 to somewhere around 5.29 Now all of a sudden we're pricing in a rate cut in December. Again, the bond market is literally pricing in a rate cut in December. So you saw this massive collapse of Treasury yields yesterday I Think the 10-year treasury was down to the tune of 21 bips. which is just insane.

Yeah, 21.9 Bips down back to 3.7 We were just at 4.1 a week and a half ago. So this insane drop in yields, which some folks are saying oh well, I mean that's good for Real Estate right? That's going to drive mortgage rates down. Not necessarily because even though usually mortgage rates align with the 10-year Treasury and are generally in alignment, so the 10-year goes up, the mortgage rates go up right? 10-year goes down. Mortgage rates go down.

But wait a minute. If all of a sudden you have 80 billion dollars of commercial and mortgage and residential mortgage-backed Securities that have to get dumped, you could actually see the value of those bonds plummet, which drives the yields up for mortgage-backed Securities which could potentially actually drive up uh, mortgage rates for for uh, new home or commercial buyers, or even variable interest rate loans. And that is called the widening of the spread between the 10-year and what mortgage rates actually are. Usually they get to a point of alignment and there's a set spread, but if that spread widens, you could actually see higher real estate rates while you have lower mortgage rates.

because all of a sudden people aren't wanting to touch commercial or residential mortgage-backed Securities anymore. Now, when I was at dinner with Kathy Wood I asked her specifically I Go Isn't there a risk that the Largest Eight Banks which the largest I specifically asked about the largest eight because as we've researched and talked about before, the Largest Eight Banks go undergo the strongest and most stringent stress tests at the Federal Reserve JPMorgan City Wells Fargo Goldman uh, Bank of America right? These sorts of banks HSBC they go under the most severe and scrutinizing stress tests from the Federal Reserve and so I asked Kathy I said hey, is is it not a risk that these larger Banks potentially even in the stress tests don't actually have the appropriate write Downs made in the stress test for Cmbs and and MBS mortgage Securities and Kathy had this interesting point. She said, the thing is, after the Great Recession and our Bazel 3 Financial requirements especially for the biggest of the banks, the biggest banks right now only hold about seven percent of commercial mortgage-backed Securities and we specifically focus in on Commercial mortgage-backed Securities because we're thinking vacant offices, those are the ones getting hit the worst, right? That's really where you get the worst of the liquidation. So uh, she mentioned that larger Banks only hold about seven percent of their balance sheet exposure or have about seven percent exposure to commercial mortgage-backed Securities whereas smaller Regional Banks said about 25 percent and one of the reasons she said there was such a difference was that because of the new requirements maybe back in the past, all banks sat somewhere around 15 percent.

Let's say mortgage-backed Securities for commercial Uh, but because of the new requirements on on banks on the larger eight, at the largest eight, you actually saw their commercial mortgage-backed security Holdings go down to about seven percent on average. Uh, whereas at the small Regional Banks they picked up the slack and they went up to about 25. So potentially that contagion is worse for regional Banks than it is for the big Banks So Kathy's not a believer that this is this is really an element of of widespread contagion or some sort of sort of systemic risk. Big believer that the financial system is still extremely sound I Agree with her I just would not be associated with smaller Banks right now which I Feel bad I Feel bad for all their smaller Banks but look, when the writing is on the wall and there's smoke, there's usually fire and so I would not recommend keeping Too much exposure now to small banks.

In fact, I wouldn't even want to rely on the FDIC limits now. I know a lot of people are like look, FDIC is great. The reason you like FDIC is because they're going to come in like at least you have an FDIC unlike FTX right? But if you have an FDIC at least You can have some form of essentially bailout protection and get some of your money back eventually. Hopefully that's right away, but we're not sure if it's actually going to be right away.

So the big question is okay. how bad do things get now Joe Biden did come out yesterday and I thought this was really remarkable Joe Biden Came out yesterday and said Kevin's course is on building your wealth are phenomenal and you should definitely use the same panties coupon below before it expires next week. It's linked down below and you get lifetime access to them. So if you take the programs and you're like man I really have a question for Kevin on this I'll ask him in the last streams or maybe he can make a lecture on this which I do regularly add new lectures, you get lifetime access to all of that.

Check that out down below. but that's not actually what Biden said. What Biden actually said on the same day is we're having all these contagion fears is he says I'm confident CPI will be in good shape next week now I Thought that was really interesting because Joe Biden doesn't typically come out and give us a spoiler of what the inflation report is going to look like on Tuesday. but Joe Biden literally just gave us a spoiler and said he's confident CPI will be in good shape next week Now that either it means one of two things: if he has no idea what the report is going to show, it could just be BS politics right? but he's going to look like a an idiot if it comes in hot next week, right? So I actually think it's more likely that Joe Biden has a little bit of a heads up in terms of what's going on in the CPI report and the reason they might be okay Essentially, pre-leaking some of the CPI data to Biden is because if Biden can come out and say hey, CPI is going to be good next week, that actually relaxes financial markets, It buys financial markets some time to stabilize.

so it's actually a sort of a manipulation of markets really. But as long as it's true, it's great if we get rug pulled on. Tuesday Well wow. okay now you just can't trust anything the government says which I specifically worded that line like that because you should be skeptical skeptical about everything the government says.

But anyway, he is confident that CPI will be in good shape next week. That would be very embarrassing if he would. He comes out and says that and he's wrong. So I don't think he would make that I don't think he would make a statement if he didn't know I think he I think he got a thumbs up and the reason he got a thumbs up is to help the Fed and banking Regulators maintain some Financial stability because the worst case scenario is not.

Oh, the President just leaked CPI data. That's not the worst case scenario. The real worst case scenario is a real financial crisis Again, right? That will lead to insane numbers of job losses. The recession like we haven't seen for the last 14 15 years Donald Trump will end up being right.

Remember what Donald Trump said when during the 2020 election he says, hey, if Biden gets in, you're going to have potentially a 1929 style recession. Oops. Uh, anyway, so that's that's potentially a positive right. And at least again, we have FDIC I Can't understate that point compared to Uh in in Crypto where when FTX collapsed, there was no protection.

The same is true for stable coins. They're really there really isn't technically protection. Now the idea is that maybe you get passed through FDIC Insurance Maybe. but it's not actually you that is FDIC insured.

It's technically supposed to be the deposits that are insured. But again, if Circle has 3.3 billion dollars at Silicon Valley Bank and Trust what are they going to get 250 000 of FDIC Insurance What a joke. Again, a lot of people uh, and uh, Wall Street types clamoring for this idea that oh my gosh, we need to bail out. We need to bail out as soon as possible.

personally. I'm actually not the biggest believer that that's the right move right now. I Think that uh FDIC can can uh prove that it could support Port its Mission which is protecting people up to 250 000. Unfortunately, somewhere on 95 percent of people uh, that have deposits at uh Silicon Valley Bank and Trust have more than 250 000 of deposits.

uh, that sucks. Uh, and then on top of that, FDIC really only has about 1.7 percent of the liquidity in the banking system. So if you had a larger crisis in the banking system, you'd have a you'd have some pretty big problems. Uh, but uh.

and by the way, here's the screenshot of that uh where where Circle also shows you in the Usdc Reserve report. uh that they hold money not just at Silicon Valley Bank but they also hold money ad look at that folks. Silvergate Bank. Now you might remember because I Covered Silvergate Bank Two days in a row About three days ago I covered silver.

Uh, Silvergate and basically the liquidation of Silvergate. Uh, you know Silicon Valley Bank took all all the fun like it took all the story and the excitement. uh I mean it's so exciting I started tweeting things like this: uh, here's a picture of a Silicon Valley Bank credit card and I tweeted today I started paying all my bills through this new buy Now pay Later firm. sorry I have to make stupid jokes because it's fun.

Uh, but uh. but anyway. uh you know. another thing too is I was looking at Robin Hood and they haven't replied yet but I tweeted Robin Hood and I tweeted them this picture I said which banks are in your network and I said hey I know your cash deposit sweeps are in these Banks right here Goldman HSBC Wells Fargo Citibank blah blah blah and it says that as of this: January 31st, 2022 Uh, we we use these Banks and we might change them.

It does say we'll let you know in advance if we change them, but what if they forgot to change them, You know what what if all of a sudden some of the brokerages like a wealth front or an M1 Finance have uh um, you know, potentially some exposure to these companies. We just we just don't know. Uh. So anyway here's just a screenshot example of uh David Sacks freaking out.

Where's Powell Where's Yellen Stop this crisis now Announced that all depositors will be safe uh Place Silicon Valley Bank with a top four Bank Do this before Monday open or there will be Contagion and crisis will spread. Uh, people in the Uh in the comments aren't very very happy about that because when you get to the comments, you get people saying things like this. and and just so you know, when I like things on Twitter it's not because I actually like it, it's it's just because I'm kind of curious I want to get people's perspective look at this one. Just incredible billionaires and their corrupt cronies begging to get bailed out by taxpayers and hard-working Savers from their own Reckless delusional stupidity after having dumped the worst companies in history on them.

I mean potentially a little extreme, but but you know it's it is interesting I mean how quickly we're jumping into this idea of oh, let's uh, let's quickly bail out, let's quickly bail out, right? Uh, and in the past, some of the Venture capitalists that are now begging for bailouts were actually anti-bailouts during the Covet era. So you kind of have a little bit of that, um, that irony going on. uh, which is is kind of not surprising because you know it's it's when you're affected. Uh, you're you're much more interested in, uh, getting help than when somebody else is affected, right? Like you care about losing your own money and not so much about somebody else losing money.

which is terrible. But I mean quite frankly, it's the truth. Uh, you know. But then you have people even tweeting stuff like this.

here's somebody. Bob Elliott He says the U.S Banking system is built on the expectation that Equity involvement holders except Bank economic risk and depositors blah blah blah basically saying like hey man like this is bad like people people should you know do really good due diligence and the banking system is set up under the basis that people do good due diligence of of Banks and that's what makes the whole system work. And he literally said that He says the word here that a financial investors in Banks do the necessary diligence to quantify the bank risk. I I wrote lost you at diligence because I actually don't think most people on Wall Street do a lot of actual fundamental analysis.

There's a reason why in our course member live streams almost on a daily basis I do fundamental analysis with everyone because it to me it's a Lost Art In fact when uh, when I had dinner with Kathy Kathy would one of the things she mentioned was how frustrated she was that in 2015 she went to an ETF conference and she's looking around like where are all the Bloomberg terminals where all the researchers and she's right, most people on Wall Street aren't actually doing real fundamental due diligence. it's it seems like it's more of a marketing game than it is one of actual due diligence. Uh, so I I thought that was very interesting, but but this is the kind of stuff that you're seeing in sort of the debates that you're seeing online at the same time as you have uh uh, you know the the Insiders essentially cashing out of their shares and it's really scary. But in my opinion and I've reiterated this a few times now.

but yesterday I mentioned uh oh gosh at this point about 13 hours ago I mentioned no sorry 25 hours ago I mentioned that this collapse the near collapse yesterday morning that now collapse in my opinion, increases the the likelihood of not just a 25 BP hike, but I think there's a greater percent chance that as long as CPI comes in good, we could be seeing a zero percent hike as a greater percent chance than uh, than the 50 BP High That's my theory. Uh, that is definitely my theory. Someone here says DD was never an art. Uh, I think due diligence is absolutely an art.

Uh, there. There fundamental analysis uh, generally is based on assumptions and uh, and assumptions are, uh, are different for everybody, right? And so when you have something that's different for everybody, they really are. It really is an art. And so that's important to remember is that when when one person looks at a discounted cash flow, uh, State You know.

analysis. Uh, your assumptions going into that are going to be vastly different than somebody else's what are you using for Opex Is your operating leverage increasing or decreasing, What's your Revenue growth? What's your discount rate? I mean there is no one size fits-all way to actually do due diligence. and I think that's where most people just don't do any diligence. which is quite unfortunate.

Uh, somebody here says is asking about my startup. uh, if Househack goes to two billion dollars as a market cap? Well, you get a house hike tattoo? Sure. Uh, thank you for that. Uh, anyway.

so really, really crazy uh stuff here with with the Silicon Valley bang and uh, hopefully on Monday the contagion is limited. The last thing we want to hear on Monday is that other banks are starting to have issues. But let me be very clear. Okay, and I'm not trying to spread fear I am trying to be a business person providing what I believe is a reasonable suggestion.

I Would not have any of my money with a smaller bank right now I would have all of my money in a tier one Bank Warranty bills. That's it. t Bills tier One Bank That's it.