Bank Crisis 2.0 As SP Issues Warning On 5 Banks | The Economic Ninja

➡ The Economic Ninja discusses the current banking crisis, warning that several regional banks are at risk due to exposure to risky office space. He advises people to ensure their bank balances are within the FDIC insurance limits for safety. He also criticizes those who ignore the signs of a financial downturn, comparing it to a lifeboat that’s useless if not in the boat when needed. Lastly, he mentions the ongoing collapse in commercial real estate and encourages proactive investment and diversification.

➡ The article talks about the current financial situation of some US regional banks. These banks are facing challenges due to higher office vacancies and an increase in loan maturities. Some banks are also selling off properties to appear financially stable. However, this could lead to a decrease in their stock prices and potential financial instability.

➡ The government and wealthy individuals often take advantage of people with less knowledge about finance by offering loans and investments that seem good but can lead to loss. This is done by hiding the true nature of finance and economic cycles. The system is rigged to favor those with wealth, allowing them to make more money through insider trading and taking companies public. The speaker warns that this is how wealth is often made, not by running a successful business or investing in real estate, and that people need to be aware of these tactics to protect themselves.

Does everyone see the lifeboat that is floating in the background? That orange object? I’m going to talk about that in a second. It’s interesting that it’s just out there, floating, missing from its boat. I want to talk today about the banking crisis. The S and P has just issued warning downgrading five new regional banks, it looks like, and it says here, out of market watch, they issue negative outlook on five us regional banks due to risky office space exposure.

Before I get into the story, I want to tell you a story of something that happened on my other channel, the real estate ninja, if you don’t mind going over there and checking it out. I do. Totally. All different stories from here. It’s a backup channel, not only has to do with real estate, but all economics, because the entire economy affects real estate, employment, inflation, all kinds of things.

I did a story and on banking, and somebody left a comment. It’s a public forum. You can leave comments on there. Sure, there’s banned words like curse words, but you could leave anything on there. And I decided, because it was a call for help, they asked, what should I do? I have over $800,000 in my bank account, and I’m feeling really nervous. So it was one of those rare moments that I decided to answer someone’s.

I made a video about it. There was no names. I didn’t even read the comment. But thank heavens, I actually screenshotted the comment, needless tonight, or little did I know I was going to need that as proof. Because what I said is, I said, you want to make sure that your bank accounts, if you’re concerned about the safety of the bank that you’re in, are holding balances that are within the FDIC insurance limits.

So just in case something happens, you can get your FDIC insurance payout and your account’s made good. Just like what happened with everybody in Silicon Valley bank. The FDIC went in. They even said at that point, 80% of those accounts weren’t insurable. But we’re gonna go ahead and do it now. That’s what they did in the beginning of the great financial crisis of zero eight. They made people whole until they couldn’t.

And they finally let a bank go under, one of them being Lehman brothers. This person decided to then turn me into YouTube. YouTube calls me, contacts me, and says, hey, someone’s saying you violated their privacy. I’m like, okay, give it to me. And they told me the timestamp. Nowhere in the video is me reading a comment saying someone’s name. And I, even for the heck of it changed the dollar amounts of the comment, but it was there to teach, to help somebody.

So I sent YouTube the screenshot of the comment, and I said, what do you think about this? And they just rolled their eyes. Yeah, there’s nothing there. And YouTube was doing their job. Right. But it’s interesting how people freak out and they aren’t even accountable to their own words. And here you have people that, in my opinion, if you’re afraid about the banking crisis that’s already underway and you’ve got more than the FDIC insurance limit, and you can’t even take that information in and do something about it, you got issues.

And it just goes to show you that not everybody here in this channel thinks the same way. Right. And that should be a good. A good should actually be motivation for you. So this boat, this life saving device, it’s just floating behind me. It’s no good if it’s not in the boat when it’s needed, right? It obviously came out during a storm and it’s just floating around. And it’s an interesting sort of thought that I had when I walked up here to make this video on the banking crisis, because all the warnings are out there and you can know about it.

You’re watching videos on it, you’re following the news. But if all your money’s in one bank and it goes under, it’s your fault. It’s nobody else’s fault. You can whine and get upset all you want and pound your fists. You have to be the one to do something about it. That’s why wealthy people are wealthy. They go and are proactive. They are invested and diversified. They care more about holding onto the money they built than spending it.

Totally different mindset. And here we are in the middle of an amazing downturn in the economy that people like me and type one, if it’s like this for you, it’s so obvious. This is obvious turning. You know, the other day I did a video with regarding Dave Ramsey. He’s straightforward lying, straight up lying to you, saying that we’re at an all time high for the median home price.

That is a lie. That is not misinformation. It’s a lie. I showed where the Federal reserve, the fed out of St. Louis shows you. The housing crash has already begun. The median and average price, both of those metrics are down around 8% from the peak. And you know what’s really cool? Every time I say that, someone goes, and this is, this is the words of a simpleton, please understand this.

A simpleton will go, oh, so it’s a crash because it’s down 8%, but it’s up 40. Like, you have no idea how crashes start. Dams don’t break all at once. They, a little leak starts, and then leak grows. The leak grows. You know, a good example of that is the Oroville dam, when the water was going over the spillway, and a handful of people, and I started reporting on it right away because like, hey, there’s too much water.

And it’s, the water is coming off the spillway, and it’s eroding the dirt down below the dam. And you’d watch the human experience, the human behavior take over, and you’d have the simpletons running around like you’re an alarmist. You’re an alarmist. It’s fine. Look at how far away it is from the dam. They’re fools. They don’t see that. Oh, it starts down there, and the erosion gets closer and closer and closer to the damage.

Ultimately, weeks later, you see the dam fail. And that’s what’s happening right now in our banking system. So here is yet one more story. Let me grab some coffee. Yet one more story or proof. And what even blows me away even more about this banking crisis is before the banking crisis I lived through as a real estate investor, selling my homes, preparing for it to go absolutely dominate during the downturn of the great Recession.

None of those credit agencies have the, I’ll keep it clean, the fortitude, or the guts to stand up and issue negative credit ratings before the collapse. But you know what’s crazy? This is what’s true type two, if you agree with this crash already happened. You had a handful of banks go under last year. You’ve got New York community bank right now, and you have the greatest cover up in banking history happening right now with the CMBS collapse.

You know, it’s real funny. I see all these people, these pundits, these talking heads that get great views on Fox and stuff, and they got all the stories, and now they’re starting to come out and go, oh, we got a problem with the banking system. Well, you know, that was easy to point out two and a half years ago. Two and a half years ago. And this isn’t patting myself on the back.

It’s trying to wake people up to say, you know, there are people that get it way ahead of time, and there’s that little fluff of a stock market going up, and I’m positioned in some other assets. You remember a couple of years ago when we were. I was saying, look, buy gold, buy silver, buy bitcoin. Two out of the three have really started to run silver. It was $15.

Now it’s 25. That’s. That’s pretty darn good on a percentage basis, but it doesn’t shine. Compare right now, compared to these other asset classes, bitcoin’s completely just blown up. Right, on a percentage basis since then. And I stopped talking about crypto for a while. I made my positions, I made my investments, and then I sat back and I said, this isn’t the time to talk about that. We’re going to talk about.

And I started focusing on commercial real estate. And for two years, I’d been banging the drums. And now it is the greatest, no joke, the greatest collapse since the Great Depression. And people don’t see it. When I did the story about strs, when they turned around and one of the biggest pension companies in the country had to take out, what, a $20 billion loan to just band aid over their lack of renters, tenants in their commercial spots, because they’re so afraid that if they go to sell their, and everybody knows this, the second they start to sell these commercial buildings, it’s going to be a fire sale.

There are some commercial buildings that I’m looking at. I’m already getting all of my ducks in a row from my entities and getting financing ready, like getting the people in position to where when this happens, I’ll be ready to pull the trigger on some amazing deals. But I will not be buying them from the owners, the current owners. I will be buying them from banks. The current owners are trying to sell them right now.

I ran into somebody that’s having a hard time in the commercial space, and he’s like, I should have sold earlier. I should have sold windows full. And it’s always that way. It’s always that way with all of us. That’s human nature. But you want to be on the right side of human nature. You want to be a little bit ahead of the crowd. That’s all you got to be, is just a little ahead of the crowd.

So the story out of s market watch, it says here that S and P Global has issued a negative outlook on five us regional banks facing an increased challenge from higher office vacancies, as well as an increasing number of loan maturities on the horizon. Let me also stop. There’s a story out of Blackrock. They just sold off a large swath of warehouses. I want people to understand that when you see something in the news, you have to realize that companies have other entities that they start that are outside of arms, reach arm’s length.

That makes it look like, hey, we just sold a bunch of closed office spaces. And what they did is a new entity that they started that if you dig deep enough they own, you can find out that they have some tie to it and you, they go and get new financing to buy distressed properties and take them off of their books. So the main corporation looks solvent and whole.

All right. It’s a big deal because it’s a big, it’s what it is, is a shell game where you put something under the shell, you know, and you’re just moving the shells around and you don’t know which one’s full, which one’s got the assets at first, and you got a picket, and then the other two are left empty. Think of shell corporations or cell companies. All right? And so that’s happening a lot right now.

It says here, First Commonwealth, First Commonwealth Financial Corp. The ticker FCF, M and T Bank Corp. Ticker MTB, Synovus Financial Corp. SNV and trust, Mark Corp. Trmk, sorry, one more. And Valley National Bancorp Vly were downgraded to a negative outlook from stable. So all of these I’ve heard of First Commonwealth financial, but all these other four banks, we haven’t seen the news yet. Right. Okay. So it’s going to start picking up.

Now that it’s in the news wire, more people are digging into it. We’re probably going to see some downturns in their stock prices, which is only going to accelerate the issues that they’ve got. Okay. Because now S and P has pinned these guys as negative outlook, things aren’t good with them. Quote coming from S and P analyst Brendan Brown says increases in criticized and modified loans and increasing loan maturities may foreshadow an eventual material deterioration in the asset quality and performance of these banks.

Let me explain that. When it says increased loan maturities, because commercial mortgages have to be refinanced every five years or so, as opposed to when you could get a fixed rate on a 30 year fixed rate for home mortgages, your balance sheet shows the maturity date. And when you have to refinance all of these, well, not your balance sheet, but it’s in your company documentation that these analysts are looking for.

They see how much of your loan portfolio needs to be refinanced, let’s say in the next few months or six months from now. And analysts go, all right, these loans are at x rate, let’s say 4% 5%. Now you’ve got a refinance and you’re sitting at like 1012 percent. Right? That’s not good. That doesn’t bode well, because we see your cash flow coming in, or lack thereof, because it’s commercial buildings and we see how much free cash flow you’ve got or how much money in the bank you have, and you don’t have enough to keep up with those payments.

So we see this as being bad now with the bank. Banks are also financing these deals, and so they’re looking at the finance ability. Like, is the bank going to be able to refinance these at higher rates? No, because they’re people, the landowners, the property owners are not going to be able to do that as well. They’re not going to be able to take those on. So they look at this book of loans.

I’m trying to break this down real simple. Sorry. And they go, this is not going to bode well for the bank. So they put out these warnings. It says here, though, on the plus side for the banks, however, most haven’t reported a sharp rise in delinquent and non accrual commercial real estate loans. I’ll explain that. There’s a lot of bridge loans happening right now, and there are a lot of banks that are seeing the crisis already unfolding and they’re jumping out ahead and trying to rework these loans with their customers.

The problem is, if they can’t go and access cheap money from the Fed, and now they have to keep additional funds for the first time since COVID started that additional 3% of your deposits off to the side in case of an emergency. The liquidity is drying up very, very fast, it says. A check of bond prices by M and T Bank Synovius and Valley national shows that Valley national has seen a drop in the value of its bonds in 2024, as its large exposure to rent regulated, multifamily loans has weighed on its debt, along with its office space exposure.

You know, another thing that’s really interesting about all these banks is their held to maturity portfolios of their loans, their bonds. We’ve talked about this before. You have these bonds that they’ve went out and purchased, and they’re worth less because interest rates have gone up. If you wanted to sell those bonds, who would really want to? No one would want to pay face value on a bond that’s paying 2% a tenure, let’s say, when you could go out with the same amount of money and get 4% on your money.

So there is no realized gains in those portfolios yet because they haven’t been sold. Problem is, the value is still known by everybody. Assessing the bank’s health doesn’t bode well, especially if the bank is in need of a bridge loan itself to go and get money from another bank. The bank’s looking at going, can you pay that? That’s what happened in 2019 in September, when the interbank lending rate spiked.

To believe, because nobody trusted each other in the banking system, and that’s happening right now. It’s amazing. Valley National’s bond prices. Prices have fallen amid jitters in the banking sector around the lower value of multifamily real estate in New York City, tied to New York Bancorp, Community Bancorp. Again, we’re seeing one bank being affected by another, and this is one big cascade. It already started in 2023. We’re already there.

We are in that banking collapse, and yet everybody is just foaming at the mouth, waiting for rates to lower. This is the exact same scenario we had in 2006. Everybody was begging. Well, by the time rates come down, the Fed’s really smart. They wait for a full collapse. You can’t qualify for the loans. That’s why a year and a half ago, we set out to get everybody ready and prepared for this, keep that credit.

And this is why I wanted to impress how important this situation was. And I don’t know if anybody on YouTube, feel free to share it in the comment section, but I don’t know if anyone, a year and a half ago, saying how important it is to keep that credit score together and get some money stash off to the side, because once you prioritize that and nobody else does, and they slip into a crash and they can’t take advantage of that.

Those amazing prices or deals on real estate, you’re gonna. You’re gonna be left out. The only reason why there’s amazing deals on real estate in 2008 to 2010 was because there were so few buyers. And that’s another thing that I need to add. I need to share with you. We have got ninja loans already here. No income verification. Loans are alive and well right now. Matter of fact, they’re charging around 10% for no income verification, and that sits higher than where we were in 2007.

But that’s a great sign that there are banks willing to take on that kind of risk again. And we will have pay option arms before you know it. I believe that we’ll have pay option arms by June or July. I mean, I could be wrong, but the point is, is that there are banks or private equity that are willing to take on risk for specific properties in a specific location, that they’ll loan that money out knowing that it may not return.

But they’re going to go grab that piece of property, especially now. And this is the other thing that people don’t realize, banks as they can, they’re going to still issue bonds, they’re going to issue debt to go out. They’re going to figure out a way of getting that money to grab those properties and then come back and take them from you when you’re at your lowest. That’s why you see all of these programs right now, the president coming out and saying, hey, you know, let’s make sure that the minorities get these loans.

They did the exact same thing in 2005. There’s nothing new under the sun. And what they’re really doing is targeting a demographic of human beings that have a lower education when it comes to finance. Now the government’s doing a really good job of trying to lower financial education for everyone equally. Okay? It doesn’t matter what race you are. And that’s evident because they don’t want you to know true finance and how economic cycles work because they want to take advantage of it.

It makes me sick to my stomach that congresspeople go get a job and Congress becomes so twisted and deranged because they become multimillionaires within a matter of couple years because of the dirty stuff they’re voting on. And then they get to go and invest and legally do insider trading. It’s absolutely disgusting to me. I think it’s absolutely disgusting. The whole system’s rigged against you until you hit a certain level of wealth.

Most people don’t understand that. It’s called being a accredited investor, where you get amazing tax write offs and benefits from certain investments. I became accredited and qualified as an accredited investor when I was 25 years old and it opened up my eyes to a whole new world of dirty investments. And it’s like, don’t worry, don’t let them, the people, the common people should not be able to invest the way we do because they just don’t know.

It doesn’t matter what my net worth is because I could still lose my money, but, oh, I get to just now get into the investments well before they go public. That’s where you make your big money. That’s how all almost like, was it 99% or 95% of billionaires made money taking something public? That’s where you make your money. That’s where you make the insane money. Like Jeff Bezos he owned something before it went public.

I’ll be doing that as well. Just, you know. But I’m telling you the whole way, this is how you make money. You take a company public, and you sell the shares to everybody, and then you run a successful company. It’s not. You don’t run into the ground or run away. Jeff Bezos was running, you know, as much as you love him or hate him, he was running a successful business that makes lots of money and employs tons of people.

Right. That’s how you become uber wealthy. You could become wealthy on real estate. You become uber wealthy taking a company public. I know this video took some twists and turns, but it started with the banking crisis and how some people, they see it, but they’re not doing anything about it. And just like a boat. That’s amazing. There’s probably some yacht sitting around this lake right now that’s missing a big lifeboat.

So the day that the yacht starts sinking and they go looking for the lifeboat, how good is it? I’ll let you guys decide. Hope you have a great day. The economic ninja is out. .

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