All of a sudden, that funding kind of evaporates and then the cost of capital for banks to fund themselves changes dramatically and alters. And then all the eyeballs come on. Okay, who's the next victim? You know, who's the who's the next leading to have to bear And the serpent in the market. The serpents at least in the market wants to find that next fixture.

Well folks, just as we thought the banking crisis might be over, the banking crisis is continuing to evolve. Take a look at this screenshot of the pricing of Credit Default Swaps of Four Deutsche Bank On the right side, you could see these skyrocketing of credit default swaps. Now we have been at this level before in September and October. but why are we potentially revisiting those levels again? Well, it's potentially because the banking crisis is actually just getting started.

Is it possible that Silvergates and Silicon Valley Bank as well as Signature and those bank failures could all just be the tip of the iceberg? And the answer to that is absolutely And unfortunately. Yeah, Yes, Now don't worry says Jerome Powell Jerome Powell tells us our banking system is sound and we have nothing to worry about. and Janet Yellen says mostly the same, although stopping short of suggesting that will fully guarantee deposits. In fact, Janet Yellen flip-flopped on Wednesday on Wednesday Jerome Powell suggested don't worry, all deposits in the banking system are safe And when he was challenged on that suggesting hey, wait a minute are you now saying that FDIC insurance is extended past 250k because you know that'd be good That'd be a way for you to prevent the banking crisis and the banking runs for continuing, right? And he said, don't worry, deposit outflows have stabilized and we have our tools.

But that's all we're willing to say that same day Janet Yellen said this year. As I said last week, the U.S banking system is sound Federal Government's recent actions have demonstrated our Resolute commitment to take the necessary steps to ensure that deposit or savings remain safe. That was different from what Jerome Powell said. That led to a lot of nervousness like hey, wait a minute trumpal Just said, everyone's safe, You're saying you're taking steps to make sure everyone is safe That led to nervousness.

So the very next day when she then testified before the other chamber of Congress she revised what she said. She said following as I have said, we have used important tools to act quickly to prevent contagion and they are tools we could use Again, the strong actions we have taken to ensure Americans deposits are safe. Certainly, we would be prepared to take such actions again if warranted. In other words, hey, um, we just want to align with what Jerome Powell said Yes, Yes, we still have tools on the tool belt to protect the banking system.

Don't worry, no, we're not guaranteeing everything. but trust us, everything is fine. Well why then Are banks like JP Morgan down 10 in just the last two weeks. Why then our credit default swaps which are like an insurance premium to protect an investor against laws at a bank skyrocketing.

And why all of a sudden are we seeing this fear arising even amongst companies like UBS Again, that uh oh, we might actually have more pain coming than we expect. Well, it's probably because of the A1t Wipeout over at Credit Suisse That A1t Wipeout was actually a really big deal and it started to lead to margin calls around the world and a lot of panic that wait a minute. Nobody really knows the scope of what's going on and that is creating nervousness. Take a look at this article here.

Here's an article from the Financial Times talking about how the A1t bonds were wiped out. Now what's really important to know before you go into this is that bonds. and then and somebody holds a bond is really just somebody who holds an IOU right? If you lent me a thousand dollars and I gave you a piece of paperback that said I owe you a thousand dollars back, It's just like you're holding a bond. Now let's assume you're holding that Bond and you're like, okay, well if Kevin defaults I get access to all his stock Holdings First and that's generally what a bond is known as.

but now you have Swiss Regulators Who came in and said, you know what, We want somebody to buy this bank and we want somebody to get those assets that Kevin has. Maybe for pennies on the dollar, but we want somebody to buy those assets. Let's just screw the bond holders holding that note and wipe them out before we wipe out the shareholders. Now that is really weird because yes, those bondholders can get wiped out with A1ts, but not usually before the equity holders.

But that was the most convenient way to facilitate a deal at Swiss banks. And so that's exactly what happened. The A1t bondholders got completely wiped out written down to zero, while shareholders received 3.25 billion dollars. So in other words, 17 billion dollars of Bonds were wiped out while shareholders actually received 3.25 billion dollars.

which is at least something on the value of the company. Now that has led to this fear of others starting to sell these bonds. Look at this quick note: You can Now use Buy Now Pay Later to check out on the programs of building your wealth. Link down below.

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Link down below. Look at this: selling pressures amongst A1t clients. Especially wealthy clients are starting to receive margin calls. Why would they receive margin calls Because these were deemed to be super safe and they had almost a 10 coupon? Think about this.

A 10 coupon is like saying hey, I lent you a thousand bucks. Will you pay me nearly 10 interest? Sure. And don't worry, you're safe before the shareholders and then what happens, You get rug pulled, You get wiped out before the shareholders get wiped out. But you were expecting to get 10 interest And what's happening Now you're kidding.

Absolutely nothing. And so these wealthy family offices throughout the world, whether they're in China uh, in different parts of Asia or in Europe who invested in these A1t bonds thinking they were safe are actually getting wiped out and now they're getting margin called and now they're panicking thinking oh my God. Well if this could happen at Credit Suisse then maybe this could happen in other Banks as well. And maybe we should sell out of this and this is much riskier debt than we thought.

In fact, the Financial Times is quoting people saying the following: we haven't slept since Sunday said one Singapore-based Private: Banker People are completely gobsmacked. Now what is a private Banker Well, private Banker is a banker that helps work with people who have generally more wealth than normal people who bank at the bank and you do usually have three levels you have uh, for example, if you go to Chase, you have anybody who walks into Chase who can open a bank account. Then you have the private bank which is usually where you have more than 250 000 in assets. or you have the JPMorgan Wealth Bank which is when you have more than 10 million dollars in assets.

These private Bankers are the people usually representing people with a lot of wealth and they are seeing their clients freaking out over these bonds getting wiped out and it's leading to fears that the same kind of stress can happen at other Banks And that is why we are now seeing credit default swaps at Deutsche Bank Skyrocket and what is that leading to? It's leading to their stocks plummeting. In fact, in pre-market trading, Deutsche Bank stock is down as much as 13 and you're starting to see the same kind of pain in American markets down 13 in in European markets right now. on the uh, the NASDAQ or sorry, the New York Stock Exchange we're down 9.53 on Deutsche Bank Uh, in pre-market you've got a more limited response to U.S banks, but they're down JP Morgan for example, is down 2.24 So you're starting to see fear that Janet Yellen and uh Federal Reserve chairperson Jerome Powell might not be capable of handling this contagion because all of a sudden, if Deutsche Bank starts having problems, you're going to have a whole lot more problems. Why? Well, because Deutsche Bank employs 82 500 people across the world.

On top of that, it has 1.5 trillion dollars in assets. Think about that for a moment. Silicon Valley Bank had 211 billion dollars in assets. 1.5 trillion is a multiple of seven, that is.

You're now starting to see stress at a bank that is seven times the size of Silicon Valley Bank. it is three times the size of Credit Suisse and Banks across the world are now suffering. France's Society generally is down seven percent. This morning, Deutsche Bank is obviously a German Bank.

In case that wasn't clear, UBS is also down. As the Justice Department is now probing. UBS Silicon Valley Bank is supposed to be sold this weekend with bids due tonight. Yes, bids are due tonight for a Silicon Valley Bank Gosh bids being due tonight kind of remind me of something.

So yesterday as a tangent here uh this amazing person who works for me Justin uh just sent me a message that we have now introduced. Take a look at this a new feature for the courses on building your wealth that let you now Buy Now, Pay Later with either a firm or Karna or any of the other buy Now Pay Later Services Kind of cool I Didn't know we could integrate that we now have that. A lot of people have been requesting a Buy Now Pay Later option. Uh, and while I'm not the biggest fan of Buy Now Pay Later, we now have that as an option for the courses on Building Your Wealth link down below.

So in honor of that, we have extended the coupon code just today, just today. Uh, so that way you could use that coupon uh, that was supposed to expire Wednesday along with Buy Now Pay Later. So congratulations if you're interested in using that. But anyway, going back to Silicon Valley Bank Silicon Valley Bank Bids are due tonight.

Uh, Bids will be open until this evening and the bank is expected to be sold over the weekend. Now what's fascinating about that is they want this bank to be sold before the Market opens on Monday to prevent Panic of a disorderly sale. Keep in mind the kind of recession that we could be walking into could be a balance sheet recession which is exactly what you're seeing happening at these banks. These banks are seeing their balance sheets deteriorate at the same time as Bank runs and fears are being caused at specific Banks leading to a consolidation of assets at larger Banks but not just at Banks.

People are also fleeing Banks And the reason people are fleeing Banks is because you can essentially get a yield at non-banks well, and money market funds. Why bother getting a yield of bank if you can get yield at money market funds. Look at this folks. Brett Whitton Fantastic guy, brilliant mind over at ARC Invest I'll tell you Kathy would like or not she employs some fantastic researchers.

Look at this chart right here: Money Market Funds: Seeing a skyrocketing Google Search a result A sort of an explosion of Google search results over here. Why are you seeing this explosion of Google search results Where you're seeing it? Because people are looking for a safer place to put their money. And why are people doing that? Because why put your money in the banks? If you could just put your money in treasuries or money market funds and basically get a yield that you couldn't otherwise be getting? It's fantastic. So searches are skyrocketing.

What is that doing? It's leading to more of a run on a Banks That's incredible, but it's also not good for the banks. So what's next? Well, Silicon Valley Bank is expected to be sold this weekend. Listen to what happened at Silicon Valley Bank and it shows. You dare I say the near corruption that happens at these Banks You know how Joe Biden came out and said hey, uh, don't worry.

Even though we bailed out depositors, we punished the executives because they got fired. Really, the executives got punished. well. Guess what? Silicon Valley Bank Just told us about Executives getting punished.

Do you want to hear it here? It is. Executive paying at Silicon Valley Bank soared after the bank embarked on a strategy to boost profitability by buying riskier assets exposed to Rising interest rates. According to the Financial Times analysis of security filings and people familiar with the matter, The jump and pay for CEO Greg Becker and CFO Daniel back was the result of large multi-year bonus Awards pegged to the bank's return on Equity measure of profitability that Rose sharply between the risky Landing period of 2017 and 2021 filing show. Well, isn't that a little bit of a surprise? No, it's not a surprise at all.

Why is it not a surprise at all? It's not a surprise at all because obviously, when banks are encouraged to be riskier, what happens, they make more profit in the short term, so the executives get paid more money. Uh, that is not good because it encourages more risky debt that is not fantastic. Uh, so what do you have? Well, you have Joe Biden telling you, don't worry, everything's fine. The banks are going to be safe because they're going to have good risk mitigation because otherwise they'll get fired.

Really? The CFO was also the guy who worked at Lehman Brothers in 2008 and then moved on to earn a 1.4 million dollar bonus in 2021 alone making 3.8 million dollars a year at Silicon Valley Bank Becker The CEO made 10 million dollars in 2021. Oops, it's ridiculous. We are also seeing bids for credit or uh, Silicon Valley Bank from companies like the Bank of London. That is not to be confused with the Bank of England which is the central bank.

It is to be uh, considered the Bank of Hope London which is a bank that's only existed for two to three years. Like who wants these toxic assets nobody. In the meantime, we're seeing margin calls in the A1ts market. We're seeing bonuses getting Frozen by the Swiss government.

We're seeing Jenny Dylan and Jerome Powell freaking out and they can't even align with their own discussions and the way they're trying to assure American depositors and at the same time that's happening. What's lining up the next bank failure? Yes, Before I read you this one, you're going to want to get yourself life insurance Because well, yes, I have a partnership and a sponsorship with life insurance. Had it for a very long time and it is fantastic. You get life insurance in as little as five minutes.

While you want to make Kevin Arcon life, you get Apple pay or Android pay for it in as little as five minutes. You can get screened. Everything right through the app took me five minutes. It took Lauren who's got asthma like seven minutes? It was great.

Take a look by go to my camera.com The next bank failure is coming. Pack West Bank Corp is apparently now moving to shore itself up after customers pulled 20 of their deposits. Since the start of the Year, 1.4 billion dollars of financing has been established from Partners they have abandoned a capital raise thanks to a surge in customer withdrawals. Pacquest has now borrowed 3.7 billion dollars from the federal Home Loans Bank and they borrow 10.5 billion dollars from the discount window.

and they borrow 2.1 billion dollars from the Btfp, the bank term funding program from the Federal Reserve their emergency facility. And folks, they have seen an outflow of 4.9 billion dollars just from Venture capitalists that is out of the total of 6.8 billion dollars that have flown out of pack West Bank Corps in just the last couple of weeks here. Now this comes at the same time as First Republic received a 30 billion infusion from 11 strong banks with JP Morgan leading the effort. But guess what? it has not really helped quell the pain at all.

In fact, if you look at first Republican Bank stock, it is down six percent yesterday, four percent in uh, the last uh uh, or pre-market here. in the last five days, it's down to 50.8 In last month, it's down 89. In the last six months, it's down 90. It is near record lows in pre-market today.

That might break record lows today. It's pretty remarkable. This is not good. Not only is it not good, but the US government, as much as they're telling us, they're willing to swoop in to guarantee deposits.

because after all, Quote their intervention was necessary to protect the broader U.S banking system. We cannot have a guarantee that if you have deposits in excess of FDIC insurance that you will actually be protected. So what should you do? As somebody who's just trying to get through this crisis, well, my opinion the best thing that you should do is make sure that if you have money in excess of 250k, you have it spread out over different banks. Use the FDIC insurance calculator to make sure you're spread out appropriately.

especially if you operate a business. use multiple different banks multiple different bank accounts. Now, even if you do not have money in excess of 250 000, I think it is worth having money and maybe two to three different banks have your money separated. So that way, if for some reason your assets were temporarily caught up in a you know, a banking shutdown or freeze for a few days, even, you'd still have access to capital for a few days.

It's not a bad idea to have multiple different bank accounts. So I'm a big fan of that. and I think you should consider it as well. So consider that these small and medium Bank contagion fears are real.

Remember this now. It's also worth noting that there's a lot of resistance to creating any kind of universal guarantee on deposits. I Think this is why Jerome Powell and Janet Yellen have this inconsistent messaging. They don't want to send this message that there is a universal guarantee because as the House Freedom Caucus says, quote any universal guarantee on Bank deposits, whether implicit or explicit, enshrines A Dangerous precedent that simply encourages future irresponsible Behavior to be paid for by those not involved who followed the rules.

This is true. Remember folks, people like to tell you that no, the bailout of Silicon Valley Bank was by no means a taxpayer funded. Well, that's only a half truth. While it is true in spirit, taxpayers are backstopping that bailout.

If there's any loss of money from that Silicon Valley Bank fund, you're either going to pay for it through the Treasuries appropriated fund with the Treasury Backstop fund that actually backstops the Btfp from the FED that is the Treasury back stops it. Who's funding that program? you? The taxpayer. But not only that, you might also see it in higher fees that the other banks that you bank at as the FDIC tries to recoup some of their damage. Peter Schiff Tweeted on Monday The U.S banking system is currently insolvent thanks to the Fed and the FDIC thanks for much.

Sounder Under the Gold Standard and prior to the FDIC today we have 18 trillion in deposits quote unquote, insured by 100 billion in treasuries. The value of all Bank deposits will soon be destroyed by inflation says Peter Schiff and he's not terribly wrong about a lack of actual insurance. It's worth noting that the FDIC only has enough money to insure insurer dollar for dollar about one point 95 of all deposit. Reserves Oopsie dupsies.

That's not great here. We all are all wondering about how stable coins are backed one to one. yet the FDIC is backed just 1.95 cents to every dollar you have deposited. Yeah, we do happen to have the FED with the money printer, which is nice and somewhat useful, but it's also, um, you know, slightly concerning.

So worth keeping an eye on what's going on in the banking in the banking system, because, well, ultimately, it affects all of us. But not only does it affect us in terms of our banking, it also affects the market. The reason there's a reason the market is rent Today on these renewed fears of Deutsche Bank sparking concerns of potentially Global contagion. At the time of this recording, most indices are down half to one percent.

We're also seeing actually a flight to safety of bonds that is, the 10-year treasury yield is down nine basis points to 3.31 Now part of you might be thinking, well, this is fantastic. That means mortgage rates are going to come down right? Not so fast. Mortgage spreads have widened so much that even though the 10-year treasury has fallen about 80 basis points, mortgage rates are still close to seven percent. They're not actually coming down because risk Premia measured via spreads are actually Rising Oopsie dupsies.

Now, all of a sudden, you're not seeing mortgage rates come down while people are fleeing to the safety of bonds and bond yields are coming down. That's a bummer for Real Estate but it's actually a good thing for banks see as treasury yields come down, what happens? the value of Bank Bond portfolios actually goes up. That is actually a good thing because it could potentially mitigate how much uh of of these toxic assets banks have on their balance sheets. Remember, these banking crises started just a few weeks ago when the 10-year treasury yield ran up to an almost all-time high During this cycle, the last few years cycle here to about 4.1 percent.

We've dropped about 80 basis points 0.8 in just the last week and a half here. That is actually a fantastic way of propping up the valuation of the maturity or the health, maturity bonds and the available for sale Securities that banks have on their balance sheets in. English The more treasure yields fall, the more stable the banking system ironically becomes. However, it's coming at the same time as now, we're worried that Deutsche Bank could collapse a bank that's seven times the size of Silicon Valley Bank and three times the size of Credit Suisse.

However, the more pain we see at Deutsche Bank. Ironically, the less pain the rest of the banking system faces. But is it likely that we're going to continue to see more bank failures in the near term? Absolutely. That's why I Think it's incumbent upon every individual.

So check out the programs: I'm building a Wealth link down below to get that amazing perspective that I share with you not only daily here on YouTube but in an organized manner on the programs. I'm building your wealth either the zero to millionaire real estate investing. One of our most popular courses, the Stocks and Psychology of Money Group also one of our most popular courses get fundamental analysis nearly every single day when the market is open. Join the Elite Hustlers to learn how you can make more income, increase your income whether you're W-2 negotiate those pay raises, whether you're an entrepreneur looking to learn about liability and LLCs and insurances Tax Strategies And remember, none of these are designed to give you personalized advice.

They're designed to give you a head start a broad way that you really just don't get on. YouTube So fantastic. And guess what? Now we have a buy now pay later option available for all those of you who have been asking for it for the programs on building your wealth link down below. So check those out.

Briefly done, a one-day extension of that coupon code. So that way, those of you who are interested in using buy now, pay later, can do so. All right there you have an update on the Deutsche Bank crisis. Uh, that was.

that was a lot. Uh, it's unfortunate that now we are dealing with a continuation of, uh, this banking crisis. It's also unfortunate battery levels of my iPad are going down. Hold on one sec.

Oh, I have a solution for that? Uh, they have ways of making you charge? Yes. Standby. Plug that in. Success.

All right. Fantastic. So uh. next up.

there's so much to cover today. Thank you so much! Kevin's always on the go and we'll do the show wherever I See you on Twitch I See you people watching you twitch folks? Uh, yes, it's very inconvenient to to not be in the studio, but I do my best anyway. You know we're on day 61 of doing this in a row of basically waking up at 3am and trying to bring as much value as possible to y'all Uh, I actually really enjoy it.