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.