1 00:00:00,040 --> 00:00:02,120 Speaker 1: Twenty twenty four is shaping up to be the year 2 00:00:02,200 --> 00:00:05,160 Speaker 1: in which many, many more banks begin to fail. This 3 00:00:05,200 --> 00:00:08,760 Speaker 1: will result in consolidation of the banking system among just 4 00:00:08,960 --> 00:00:14,480 Speaker 1: a few very large banks, resulting in ever more concentration 5 00:00:14,880 --> 00:00:17,919 Speaker 1: of power and more central control over the banking in 6 00:00:18,000 --> 00:00:21,040 Speaker 1: the financial system, less choice for you. Now, this has 7 00:00:21,079 --> 00:00:25,599 Speaker 1: happened many many times before in the past. There are patterns. 8 00:00:25,800 --> 00:00:28,080 Speaker 1: We can see these patterns, which is how we can 9 00:00:28,120 --> 00:00:31,240 Speaker 1: know they're happening again. Despite what they try and tell 10 00:00:31,280 --> 00:00:34,519 Speaker 1: you every time, this time is not different. While the 11 00:00:34,560 --> 00:00:38,240 Speaker 1: overall pattern is the same, the catalyst that triggers it 12 00:00:38,280 --> 00:00:41,520 Speaker 1: is usually different. Like last time it was mortgage backed securities. 13 00:00:41,720 --> 00:00:44,800 Speaker 1: This time is the commercial real estate collapse. So to 14 00:00:44,880 --> 00:00:47,000 Speaker 1: understand what is going on right now and how it 15 00:00:47,040 --> 00:00:49,360 Speaker 1: will play out, let's take a trip back through time 16 00:00:49,640 --> 00:00:52,360 Speaker 1: and see how this pattern unfolds throughout history. The very 17 00:00:52,400 --> 00:00:56,960 Speaker 1: first banks were simply gold storage companies. So somebody would 18 00:00:57,000 --> 00:00:59,360 Speaker 1: have some gold coins. They didn't want to carry them 19 00:00:59,400 --> 00:01:01,600 Speaker 1: around with them for fear of getting robbed, or they 20 00:01:01,600 --> 00:01:03,880 Speaker 1: wanted a safe place to store them, so they gave 21 00:01:03,960 --> 00:01:07,960 Speaker 1: them to a goldsmith. Usually those were the original banks 22 00:01:08,080 --> 00:01:10,839 Speaker 1: and just said hey, we'll pay you keep this safe 23 00:01:10,840 --> 00:01:13,399 Speaker 1: for me, and at some point I'll come back and 24 00:01:13,440 --> 00:01:15,720 Speaker 1: get my goal. A person would be issued a little 25 00:01:15,720 --> 00:01:17,920 Speaker 1: receipt that said, hey, you can come back at any 26 00:01:17,920 --> 00:01:20,040 Speaker 1: time and get your one ounce or five ounces or 27 00:01:20,080 --> 00:01:21,880 Speaker 1: ten ounces of goal. When the person wanted to make 28 00:01:21,920 --> 00:01:24,440 Speaker 1: a purchase, they would go get their gold make the purchase, 29 00:01:24,600 --> 00:01:28,039 Speaker 1: and eventually these things grew into popularity and more and 30 00:01:28,080 --> 00:01:30,560 Speaker 1: more people started storing their money there After a while, 31 00:01:30,600 --> 00:01:33,360 Speaker 1: this meant that people were no longer going to retrieve 32 00:01:33,440 --> 00:01:35,800 Speaker 1: their gold to make the purchase. They were just using 33 00:01:35,880 --> 00:01:38,679 Speaker 1: their little slips of paper, their receipts that gave them 34 00:01:38,680 --> 00:01:41,160 Speaker 1: the claim on that gold to make the purchase. Because 35 00:01:41,160 --> 00:01:42,920 Speaker 1: if I can go use this piece of paper to 36 00:01:42,959 --> 00:01:44,800 Speaker 1: get an ounce of gold, I can just give you 37 00:01:44,840 --> 00:01:46,840 Speaker 1: the piece of paper as payment, and then if you 38 00:01:46,880 --> 00:01:48,400 Speaker 1: want to go get the gold, you can do that. 39 00:01:48,480 --> 00:01:50,400 Speaker 1: This system worked out great for a long time, but 40 00:01:50,480 --> 00:01:53,720 Speaker 1: eventually the banks realized they didn't even have to charge 41 00:01:53,760 --> 00:01:56,840 Speaker 1: people to store their gold because they had another way 42 00:01:56,880 --> 00:01:58,800 Speaker 1: to make money. They would simply take the gold that 43 00:01:58,840 --> 00:02:01,640 Speaker 1: people had entrusted to them and loan it out. Even 44 00:02:01,680 --> 00:02:04,520 Speaker 1: this arrangement worked out great for a while, but you 45 00:02:04,600 --> 00:02:06,800 Speaker 1: started to notice a pattern of banks taking on too 46 00:02:06,920 --> 00:02:11,160 Speaker 1: much leverage, making too many loans or too risky of loans, 47 00:02:11,240 --> 00:02:14,000 Speaker 1: and then the depositors would get wind of this realized, hey, 48 00:02:14,200 --> 00:02:16,760 Speaker 1: the bank might have trouble getting my gold back, so 49 00:02:16,840 --> 00:02:18,720 Speaker 1: everybody would go line up to get their goal. There 50 00:02:18,720 --> 00:02:20,600 Speaker 1: would be a bank run and the bank would collapse. 51 00:02:20,680 --> 00:02:24,200 Speaker 1: So this is the pattern that we see all throughout history. Deposits, 52 00:02:24,360 --> 00:02:29,120 Speaker 1: loans over leverage, bank run, collapse. A fantastic book detailing 53 00:02:29,120 --> 00:02:31,480 Speaker 1: this for the last eight hundred years is called This 54 00:02:31,639 --> 00:02:35,480 Speaker 1: Time Is Different by Carmen Reinhart and Kenneth Rogoff. I 55 00:02:35,520 --> 00:02:38,240 Speaker 1: highly suggest this book. Now, about three hundred years ago, 56 00:02:38,360 --> 00:02:40,799 Speaker 1: in order to try and stop this problem, we had 57 00:02:40,840 --> 00:02:43,160 Speaker 1: the invention of the central bank. This would be a 58 00:02:43,200 --> 00:02:46,240 Speaker 1: bank four banks, so that if one bank was too risky, 59 00:02:46,320 --> 00:02:48,320 Speaker 1: made too many loans and started to see a bank run, 60 00:02:48,600 --> 00:02:50,560 Speaker 1: there would be a bank that could draw from all 61 00:02:50,600 --> 00:02:52,840 Speaker 1: the other banks in the system to bail that individual 62 00:02:52,840 --> 00:02:55,880 Speaker 1: bank out. The only problem this solved was individual bank risk, 63 00:02:55,919 --> 00:02:57,840 Speaker 1: but it actually scaled up the risk of the entire 64 00:02:57,919 --> 00:03:00,680 Speaker 1: system and you started to have systemic ins to as 65 00:03:00,720 --> 00:03:03,200 Speaker 1: a result of central banks. This is why Again, in 66 00:03:03,280 --> 00:03:06,120 Speaker 1: nineteen thirteen, when the Federal Reserve was established in the 67 00:03:06,200 --> 00:03:08,640 Speaker 1: United States, our central bank, you had the first Great 68 00:03:08,639 --> 00:03:11,519 Speaker 1: depression start. Just seven years later as a result of 69 00:03:11,560 --> 00:03:14,520 Speaker 1: the same pattern, banks took the deposits, made too many loans, 70 00:03:14,600 --> 00:03:17,320 Speaker 1: too risky of loans, leverage built up in the system, 71 00:03:17,520 --> 00:03:19,560 Speaker 1: there are bank runs, and the system collapsed. If you 72 00:03:19,600 --> 00:03:21,840 Speaker 1: want a great resource on that, I suggest reading The 73 00:03:21,880 --> 00:03:26,160 Speaker 1: Forgotten Depression by James Grant, another fantastic book on this topic. 74 00:03:26,240 --> 00:03:29,079 Speaker 1: But the US and the Fed did not learn their lesson, 75 00:03:29,200 --> 00:03:32,320 Speaker 1: because just nine years after that they repeated their mistakes, 76 00:03:32,400 --> 00:03:34,880 Speaker 1: banks across the United States making too many loans, too 77 00:03:34,960 --> 00:03:36,960 Speaker 1: risky of loans, leverage built up in the system, bank 78 00:03:37,040 --> 00:03:39,280 Speaker 1: runs happened, and the whole system collapsed again. Now there 79 00:03:39,320 --> 00:03:42,320 Speaker 1: was a period of calm for a few decades after this, 80 00:03:42,680 --> 00:03:46,000 Speaker 1: simply because the rest of the world started using the 81 00:03:46,000 --> 00:03:49,240 Speaker 1: Federal Reserve as their own central bank. So we had 82 00:03:49,320 --> 00:03:52,440 Speaker 1: a global central bank now with the Federal Reserve for 83 00:03:52,480 --> 00:03:55,000 Speaker 1: the first time. But the same exact patterns started to 84 00:03:55,040 --> 00:03:58,480 Speaker 1: repeat itself. All of those deposits, the central banks started 85 00:03:58,480 --> 00:04:01,760 Speaker 1: to make too many loans and too many claims on 86 00:04:01,880 --> 00:04:04,000 Speaker 1: the amount of money the goal that they actually had 87 00:04:04,000 --> 00:04:06,560 Speaker 1: in storage, so leverage built up in the system. The 88 00:04:06,680 --> 00:04:10,560 Speaker 1: depositors realized their money wasn't actually there, so they started 89 00:04:10,560 --> 00:04:13,160 Speaker 1: to go and get their gold, and in nineteen seventy one, 90 00:04:13,400 --> 00:04:16,000 Speaker 1: the United States was about two weeks away from completely 91 00:04:16,080 --> 00:04:17,960 Speaker 1: running out of all of its gold. There was a 92 00:04:18,000 --> 00:04:20,120 Speaker 1: bank run going on. It was just a global bank 93 00:04:20,200 --> 00:04:22,560 Speaker 1: run this time, and that's when Nixon decided to default 94 00:04:22,560 --> 00:04:25,680 Speaker 1: on its obligation as the Bank for the World closed 95 00:04:25,680 --> 00:04:27,640 Speaker 1: the gold window and just said, no, we're not giving 96 00:04:27,640 --> 00:04:29,760 Speaker 1: you your money back. You can keep the paper instead. 97 00:04:29,800 --> 00:04:32,240 Speaker 1: But it was the same pattern as it's always been. 98 00:04:32,680 --> 00:04:35,920 Speaker 1: The deposits were made, too many loans in leverage built 99 00:04:36,000 --> 00:04:38,280 Speaker 1: up in the system, a bank runt started, and then 100 00:04:38,320 --> 00:04:41,120 Speaker 1: there was the collapse. The savings and loan crisis that 101 00:04:41,200 --> 00:04:44,320 Speaker 1: happened in nineteen eighty was again the exact same pattern. 102 00:04:44,360 --> 00:04:46,640 Speaker 1: And fast forward to about fifteen years ago during the 103 00:04:46,680 --> 00:04:50,280 Speaker 1: Great Financial Crisis, the same pattern. Again. Banks took the deposits, 104 00:04:50,360 --> 00:04:53,159 Speaker 1: made too many and two risky loans, this time in 105 00:04:53,160 --> 00:04:56,120 Speaker 1: the form of mortgage backed securities. There were bank runs. 106 00:04:56,160 --> 00:04:58,640 Speaker 1: There was not enough liquidity. The collapse started to happen. 107 00:04:58,680 --> 00:05:01,520 Speaker 1: If we take a look at the chart of bank 108 00:05:01,680 --> 00:05:05,200 Speaker 1: failures that happen every single year, we can notice a 109 00:05:05,279 --> 00:05:08,000 Speaker 1: couple of things that give us some insights onto the 110 00:05:08,000 --> 00:05:11,400 Speaker 1: pattern unfolding before us right now. Usually, prior to a 111 00:05:11,520 --> 00:05:15,080 Speaker 1: period of instability and collapse, there is about two years 112 00:05:15,200 --> 00:05:17,840 Speaker 1: of calm calm before the storm. This happened in two 113 00:05:17,880 --> 00:05:20,200 Speaker 1: thousand and five and in two thousand and six. In 114 00:05:20,200 --> 00:05:23,480 Speaker 1: two thousand and eight, we can see that total assets 115 00:05:23,600 --> 00:05:28,240 Speaker 1: lost were massive three hundred and seventy three billion dollars 116 00:05:28,480 --> 00:05:31,400 Speaker 1: to be exact. However, the total number of bank failures 117 00:05:31,480 --> 00:05:34,680 Speaker 1: was actually very small, at only twenty five banks. The 118 00:05:34,760 --> 00:05:40,800 Speaker 1: subsequent years resulted in smaller and smaller number of assets lost, 119 00:05:40,960 --> 00:05:44,200 Speaker 1: even though there were higher and higher numbers of total 120 00:05:44,240 --> 00:05:47,320 Speaker 1: bank failures happening. Essentially, the big boys with the most 121 00:05:47,360 --> 00:05:50,840 Speaker 1: assets get wiped out at the beginning, and following that 122 00:05:51,200 --> 00:05:53,160 Speaker 1: you have the carnage spread to the rest of the 123 00:05:53,200 --> 00:05:55,880 Speaker 1: banking system, with smaller and smaller banks feeling and they're 124 00:05:55,920 --> 00:05:58,680 Speaker 1: smaller banks, so there's less assets, but there's still more 125 00:05:58,720 --> 00:06:00,960 Speaker 1: bank failures. As a result of the years following the 126 00:06:01,000 --> 00:06:05,000 Speaker 1: Great Financial Crisis, we saw massive consolidation in the banking 127 00:06:05,080 --> 00:06:08,560 Speaker 1: system as the larger banks absorbed all of the assets 128 00:06:08,600 --> 00:06:11,960 Speaker 1: and liabilities from the rest of the banking system, resulting 129 00:06:12,000 --> 00:06:16,760 Speaker 1: in fewer banks, more concentration, more control over the financial system. 130 00:06:16,800 --> 00:06:19,680 Speaker 1: Twenty twenty one and twenty twenty two were years that 131 00:06:19,800 --> 00:06:21,840 Speaker 1: mirror two thousand and five and two thousand and six 132 00:06:22,080 --> 00:06:24,920 Speaker 1: as a calm before a storm with zero failures. However, 133 00:06:25,000 --> 00:06:27,440 Speaker 1: twenty twenty three is a mirror of two thousand and 134 00:06:27,520 --> 00:06:31,120 Speaker 1: eight with a massive record breaking number of assets lost 135 00:06:31,160 --> 00:06:34,440 Speaker 1: five hundred and forty eight billion dollars with only five 136 00:06:34,560 --> 00:06:36,919 Speaker 1: bank failures. As the trouble hits the rest of the 137 00:06:36,960 --> 00:06:40,279 Speaker 1: financial system much more slowly, twenty twenty four and the 138 00:06:40,320 --> 00:06:43,960 Speaker 1: subsequent years will likely be years in which more and 139 00:06:44,080 --> 00:06:47,120 Speaker 1: more small banks will fail, even though it's a smaller 140 00:06:47,200 --> 00:06:49,880 Speaker 1: number of assets, and then all of those assets and 141 00:06:49,920 --> 00:06:53,160 Speaker 1: liabilities will get absorbed by the rest of the banking system, 142 00:06:53,240 --> 00:06:57,400 Speaker 1: meaning more consolidation, fewer banks, easier central control over the 143 00:06:57,480 --> 00:06:59,880 Speaker 1: entire financial system. So that's the pattern that we see 144 00:07:00,080 --> 00:07:03,799 Speaker 1: unfolding throughout history. Is there any evidence, though, of things 145 00:07:03,800 --> 00:07:06,520 Speaker 1: happening with banks today that would give us reason to 146 00:07:06,520 --> 00:07:08,680 Speaker 1: think that more small banks are at risk of failure 147 00:07:08,839 --> 00:07:10,640 Speaker 1: and the large banks will absorb them. Well, if we 148 00:07:10,680 --> 00:07:13,080 Speaker 1: take a look at this data from EPB Research, we 149 00:07:13,080 --> 00:07:16,400 Speaker 1: can see that large commercial banks only have about seven 150 00:07:16,560 --> 00:07:20,840 Speaker 1: percent of their loans exposed to commercial real estate, whereas 151 00:07:20,880 --> 00:07:24,920 Speaker 1: small commercial banks have about thirty percent of their loans 152 00:07:24,960 --> 00:07:28,960 Speaker 1: in commercial real estate. Beyond that, large commercial banks have 153 00:07:29,040 --> 00:07:32,600 Speaker 1: been decreasing their exposure to loans as a percent of 154 00:07:32,640 --> 00:07:35,880 Speaker 1: their assets for years now, which means that small commercial 155 00:07:35,880 --> 00:07:38,280 Speaker 1: banks have been picking up the slack as loans have 156 00:07:38,360 --> 00:07:42,200 Speaker 1: been making a larger and larger percentage of their bounce sheets. Okay, 157 00:07:42,320 --> 00:07:45,640 Speaker 1: so small banks have more exposure to commercial real estate loans, 158 00:07:45,640 --> 00:07:48,080 Speaker 1: but does that actually mean they're at more risk. Today, 159 00:07:48,120 --> 00:07:49,800 Speaker 1: more and more people are waking up to the fact 160 00:07:49,840 --> 00:07:52,880 Speaker 1: that commercial real estate is facing what some are calling 161 00:07:52,920 --> 00:07:58,760 Speaker 1: an existential crisis. Billionaire Barry stern Light, who founded Starwood Capital, 162 00:07:58,840 --> 00:08:03,080 Speaker 1: said the commercial property market is facing a generational change 163 00:08:03,160 --> 00:08:05,720 Speaker 1: and that it's going to be very, very ugly. We 164 00:08:05,760 --> 00:08:08,880 Speaker 1: can also take a look at what these small banks 165 00:08:08,920 --> 00:08:11,560 Speaker 1: are doing compared to the S and P five hundred. 166 00:08:11,640 --> 00:08:13,880 Speaker 1: The top blue line here is the S and P 167 00:08:14,000 --> 00:08:16,720 Speaker 1: five hundred year to date, which is up about six 168 00:08:16,800 --> 00:08:19,920 Speaker 1: percent The best performing of these small banks on this 169 00:08:20,040 --> 00:08:23,760 Speaker 1: list is KeyCorp, which is down about five percent. The 170 00:08:23,760 --> 00:08:26,240 Speaker 1: rest of the banks on this list ranged from being 171 00:08:26,320 --> 00:08:28,800 Speaker 1: down anywhere between five percent all the way to the 172 00:08:28,840 --> 00:08:31,280 Speaker 1: worst defender in New York Community Bank, which is down 173 00:08:31,360 --> 00:08:34,600 Speaker 1: fifty three percent year to date. But it's not just 174 00:08:34,760 --> 00:08:38,440 Speaker 1: the commercial real estate companies and investors that are worried, 175 00:08:38,480 --> 00:08:41,840 Speaker 1: and it's not just the market that is worried about 176 00:08:41,880 --> 00:08:45,320 Speaker 1: the bank's performance. As a result, we also see regulators 177 00:08:45,320 --> 00:08:47,960 Speaker 1: have been talking about this more and more. Recently, Janet 178 00:08:48,000 --> 00:08:52,480 Speaker 1: Yellen herself said that she expects bank stress due to 179 00:08:52,520 --> 00:08:55,240 Speaker 1: the losses from commercial real estate. She also said that 180 00:08:55,280 --> 00:08:58,920 Speaker 1: commercial property is a worry, but regulators. 181 00:08:58,320 --> 00:08:58,720 Speaker 2: Are on it. 182 00:08:58,760 --> 00:09:02,480 Speaker 1: That sounds eerily similar or to something another former chairman 183 00:09:02,559 --> 00:09:06,199 Speaker 1: of the Federal Reserve said about another real estate crisis. 184 00:09:06,360 --> 00:09:09,000 Speaker 1: At this juncture, however, the impact on the broader economy 185 00:09:09,040 --> 00:09:11,840 Speaker 1: and financial markets of the problems in the subprime market 186 00:09:12,240 --> 00:09:16,040 Speaker 1: seems likely to be contained. In addition to that, Jerome Powell, 187 00:09:16,040 --> 00:09:19,720 Speaker 1: the current Chairman of the Federal Reserve, was recently interviewed 188 00:09:19,720 --> 00:09:22,920 Speaker 1: on Sixty Minutes, and he was asked specifically about the 189 00:09:23,000 --> 00:09:27,080 Speaker 1: current crisis unfolding with commercial real estate impacting small banks. 190 00:09:27,240 --> 00:09:28,040 Speaker 1: Here's what he said. 191 00:09:28,080 --> 00:09:33,119 Speaker 2: There's some smaller and regional banks that have concentrated exposures 192 00:09:33,160 --> 00:09:35,800 Speaker 2: in these areas that are challenged, and you know we're 193 00:09:35,840 --> 00:09:36,439 Speaker 2: working with them. 194 00:09:36,480 --> 00:09:38,319 Speaker 1: You believe it's a manageable problem. 195 00:09:38,360 --> 00:09:40,640 Speaker 2: I think it's going to see bank failures across the 196 00:09:40,679 --> 00:09:42,800 Speaker 2: country as we did in two thousand and eight. I 197 00:09:42,840 --> 00:09:44,679 Speaker 2: don't think there's much risk of a repeat of two 198 00:09:44,720 --> 00:09:46,920 Speaker 2: thousand and eight. Certainly there will be some banks that 199 00:09:47,000 --> 00:09:50,079 Speaker 2: have to be closed or merged out of existence because 200 00:09:50,120 --> 00:09:52,640 Speaker 2: of this. That'll be smaller banks. I suspect for the 201 00:09:52,679 --> 00:09:53,120 Speaker 2: most part. 202 00:09:53,160 --> 00:09:56,720 Speaker 1: Do you get that. Certainly there will be smaller banks 203 00:09:56,760 --> 00:09:59,040 Speaker 1: that will close and will have to be merged as 204 00:09:59,040 --> 00:10:01,720 Speaker 1: a result, and they will be smaller banks. It's the 205 00:10:01,760 --> 00:10:05,920 Speaker 1: same pattern unfolding as it has many times throughout history. 206 00:10:05,960 --> 00:10:09,760 Speaker 1: Banks take deposits, they make loans, either too many loans 207 00:10:09,840 --> 00:10:13,000 Speaker 1: or two risky loans. Either way, too much leverage, losses 208 00:10:13,120 --> 00:10:16,040 Speaker 1: pile up, depositors go to withdraw their funds, and the 209 00:10:16,080 --> 00:10:20,360 Speaker 1: banks collapse. The result is fewer banks left existing as 210 00:10:20,400 --> 00:10:23,560 Speaker 1: the assets and liabilities are absorbed by the larger banks, 211 00:10:23,720 --> 00:10:28,079 Speaker 1: less choices for individuals and more central control over the 212 00:10:28,280 --> 00:10:31,080 Speaker 1: entire banking and the entire financial system and the Federal 213 00:10:31,120 --> 00:10:35,679 Speaker 1: Reserves behind the scenes bank bailout facility called the Bank 214 00:10:35,840 --> 00:10:39,160 Speaker 1: Term Funding Program that they opened up last year when 215 00:10:39,160 --> 00:10:42,960 Speaker 1: Silicon Valley Bank failed, has recently been experiencing a spike 216 00:10:43,080 --> 00:10:47,199 Speaker 1: in usage, and in just about one month, this facility 217 00:10:47,280 --> 00:10:50,559 Speaker 1: is scheduled to close, and the Federal Reserve has said 218 00:10:50,800 --> 00:10:54,199 Speaker 1: it will close according to schedule, which means less liquidity 219 00:10:54,320 --> 00:10:57,440 Speaker 1: and harder times for those smaller banks that are relying 220 00:10:57,480 --> 00:10:59,720 Speaker 1: on it. Now, the reality is the biggest problems are 221 00:10:59,720 --> 00:11:03,120 Speaker 1: allways paired with the biggest opportunities. People can make money 222 00:11:03,120 --> 00:11:06,160 Speaker 1: in bull markets, but they make fortunes in bear markets 223 00:11:06,160 --> 00:11:09,000 Speaker 1: as long as you're paying attention and you're prepared. So 224 00:11:09,080 --> 00:11:12,320 Speaker 1: here's exactly how to play this. Number one. Don't keep 225 00:11:12,360 --> 00:11:15,040 Speaker 1: your money in small banks. Keep your cash in high 226 00:11:15,080 --> 00:11:18,320 Speaker 1: yield savings accounts, in money market funds, in T bills, 227 00:11:18,440 --> 00:11:21,000 Speaker 1: and in big banks, because if you are over the 228 00:11:21,080 --> 00:11:25,000 Speaker 1: FDIIC limit, your money will not be bailed out. It 229 00:11:25,040 --> 00:11:27,120 Speaker 1: will be bailed in, which means you lose it with 230 00:11:27,200 --> 00:11:29,920 Speaker 1: the bank. Now, not all of these banks will fail, 231 00:11:30,040 --> 00:11:32,280 Speaker 1: some of them will survive and they'll have a huge 232 00:11:32,360 --> 00:11:35,959 Speaker 1: rebound as a result, which is why, as the original 233 00:11:36,360 --> 00:11:40,920 Speaker 1: bankster said Baron Rothschild, buy when there's blood in the streets. 234 00:11:41,000 --> 00:11:43,440 Speaker 1: I never recommend getting out of the market, but I 235 00:11:43,559 --> 00:11:47,440 Speaker 1: do usually recommend staying hedged, especially when risks go up 236 00:11:47,559 --> 00:11:49,880 Speaker 1: and the market is not pricing in those risks. So 237 00:11:49,920 --> 00:11:53,160 Speaker 1: you can use very small bets to play the bailout, 238 00:11:53,280 --> 00:11:56,160 Speaker 1: or even play the lack of the bailout. Simple strategies 239 00:11:56,360 --> 00:11:58,720 Speaker 1: like a debit spread where you buy either a call 240 00:11:58,800 --> 00:12:00,960 Speaker 1: or a put, and then you sell either a call 241 00:12:01,080 --> 00:12:03,440 Speaker 1: or a put that is further away from that strike 242 00:12:03,480 --> 00:12:05,200 Speaker 1: price further out of the money, will give you a 243 00:12:05,200 --> 00:12:08,200 Speaker 1: cost effective way to bet on a large move. With 244 00:12:08,280 --> 00:12:10,400 Speaker 1: these strategies, the most you can lose is the amount 245 00:12:10,400 --> 00:12:12,080 Speaker 1: you spend on the trade, and if you pick the 246 00:12:12,160 --> 00:12:15,080 Speaker 1: right strike prices and the right expiration dates, many of 247 00:12:15,120 --> 00:12:17,880 Speaker 1: these trades on these banks right now have between a 248 00:12:17,920 --> 00:12:20,200 Speaker 1: two and a ten x upside. And finally, if you 249 00:12:20,280 --> 00:12:23,000 Speaker 1: need help learning any of these strategies, that's exactly what 250 00:12:23,080 --> 00:12:25,760 Speaker 1: members of Heresy Financial University get. A moment ago, we 251 00:12:25,760 --> 00:12:28,400 Speaker 1: were talking about how to manage your cash. I teach 252 00:12:28,400 --> 00:12:30,760 Speaker 1: you the most effective way to be able to maintain 253 00:12:30,920 --> 00:12:34,080 Speaker 1: your liquidity while also getting a return that beats inflation 254 00:12:34,320 --> 00:12:37,920 Speaker 1: on your cash, while also decreasing your risk, because ultimately 255 00:12:37,960 --> 00:12:39,800 Speaker 1: that's what you want with your savings. You want an 256 00:12:39,800 --> 00:12:42,400 Speaker 1: interest rate that beats inflation. You want to maintain that 257 00:12:42,440 --> 00:12:44,120 Speaker 1: liquidity so you can use it at any time. You 258 00:12:44,120 --> 00:12:45,719 Speaker 1: don't want it locked up, but you also don't want 259 00:12:45,760 --> 00:12:47,760 Speaker 1: to be exposed to any risk where you might lose it, 260 00:12:47,800 --> 00:12:49,720 Speaker 1: because after all, that's the point of savings. You can 261 00:12:49,760 --> 00:12:51,679 Speaker 1: have it when you need it. Members also get access 262 00:12:51,720 --> 00:12:55,520 Speaker 1: to advanced training material to learn options strategies like debit 263 00:12:55,559 --> 00:12:58,400 Speaker 1: spreads that we talked about. These are strategies that professionals 264 00:12:58,480 --> 00:13:01,480 Speaker 1: use because the average retail investor can only make money 265 00:13:01,559 --> 00:13:03,440 Speaker 1: if the stock they buy goes up, and they lose 266 00:13:03,440 --> 00:13:05,640 Speaker 1: money if the stock goes down. And in reality, with 267 00:13:05,760 --> 00:13:09,319 Speaker 1: financial education, you learn how to make money in any market, 268 00:13:09,360 --> 00:13:12,720 Speaker 1: whether the market goes up, down, doesn't move, or moves 269 00:13:12,720 --> 00:13:14,680 Speaker 1: in either direction. On top of that, you get access 270 00:13:14,720 --> 00:13:18,240 Speaker 1: to the Haresey Financial community, monthly group coaching calls, and 271 00:13:18,320 --> 00:13:20,640 Speaker 1: much much more. So at this point, the only question 272 00:13:20,679 --> 00:13:22,640 Speaker 1: you should be asking yourself is how much money are 273 00:13:22,640 --> 00:13:25,760 Speaker 1: you losing every single month by not knowing how to 274 00:13:25,800 --> 00:13:27,920 Speaker 1: take advantage of these moves, So sign up with the 275 00:13:27,960 --> 00:13:29,800 Speaker 1: link below to get started today. As always, thank you 276 00:13:29,880 --> 00:13:31,280 Speaker 1: so much for watching. Have a great day.