Bank Of America Bails Out A Bank In Trouble | The Economic Ninja

Another bank is in trouble, and Bank of America has bailed them out. Now I’m going to go through two stories, very different stories, because of just a few words that are different. It’s important to realize how these bank failures happen and how the Federal Reserve puts them together and a lot of times forces these banks. I have been able to sit down with a handful of people that own banks and owned banks during the great financial crisis. I’ve heard stories of SWAT teams raiding, along with federal agents, banks shutting it down, locking it down for 24 even up to 72 hours, holding all the bank employees and some of the depositors in the bank for a long period of time while they sort out the bank failure.

I have sat down with the bank owner that was forced, his bank, to take on another bank’s assets. And so what’s happening in the news is yet one more regional bank that’s failing. I’m going to show you through the news story, the way they word this, how this is happening, because I want you to see it before it hits the mainstream news. Okay? Now, this first story is out of payments.com. It’s entitled Washington Federal Bank to sell 2,000 commercial real estate loans to Bank of America. Washington Federal Bank, a wholly owned subsidiary of Wafed, has disclosed its agreement to sell some commercial multi-family real estate loans to Bank of America for about 2.9 billion dollars.

Wafed said in a Friday filing with the Securities and Exchange Commission that the deal involves 2,000 commercial multi-family real estate loans with a current aggregate unpaid principal balance of 3.2 billion. So a lot of people upon reading that would say, hey, that just unpaid balance means that that’s what’s owed on the properties. Okay, that’s true. Check this out. The commercial real estate sector has been challenged by both higher borrowing costs and all that stuff. We know all that, right? The sector was one of three potential issues around financial stability highlighted by Federal Reserve Governor Lisa Cook in a speech delivered on May 8th.

The commercial real estate sector continues to feel the effects of the pandemic, right? Now, this is a quote from her from Cook. All told, I view CRE risk currently as sizable, but manageable, and I will be paying close attention to the sector in the short and median run, Cook said. I want to bring me back to 2005. When Ben Bernanke addressed the nation and said that the mortgage-backed security crisis is now fixed, they’ve figured it out. It’s done. We’re good. Okay. So this is perfectly aligned with what he said when Cook says, the CRE risks currently are sizable, but manageable.

Okay. I’m going to keep reading a little bit of this, but I want to give you a little bit of back some ideas here, thoughts. This transaction was forced. It wasn’t volunteered. Okay. I want you to understand this. The regional banks in our country, we’re going to see hundreds and hundreds of banks fail between now and 2026, hundreds of them, and those are the actual companies out the branches. Okay. We are going to see this continued downturn in the banking sector, and right now what’s happening is they are trying to patchwork a little bit of stuff.

Bank of America took on not the best of the best. See, the Federal Reserve does not want you seeing they want to put it off past the election, this financial collapse. So what they’re doing is they’re taking the loans that are in distress, they’re giving them to another, they’re selling them to another bank that can take that on their balance sheet. Okay. These monthly losses, these special, not interest, but special accounting sort of scenarios where these loans are not being paid. And so Bank of America can take this on their balance sheet.

So this bank, Washington, Washington Federal doesn’t show up on the bank closure list. Okay. It’s a patch. This is happening with many banks around the country. As a matter of fact, if you work for a bank and you’re all of a sudden seeing your loan portfolio being sold to a bigger bank in commercial real estate, please let me know, especially in the comment section. I’ll be looking for this. So they say here in February, JPMorgan Chase, Jamie Diamond said to CNBC that because many property owners are already handling the current level of stress and the challenges of lower valuations and higher interest rates are already known.

Only pockets of the commercial real estate sector will experience problems. So long as the country avoids a recession, I believe that we are well into recession that the government is 100% lying about its results. Type one, if you agree with that, I think that you’re going to go down in, this is going to go down in history where just like the other day on, on the mainstream media, the head economic advisor to the president is being called a straight out liar on camera. They are lying straight through their teeth. Okay. And we have to realize that and move accordingly, pivot accordingly.

Now I’m going to go to this next here. We’re going to close this story on this little remark. In April, Newmark CEO, Barry Goshen told the Financial Times that banks are facing a $2 trillion wall of property debt that must and must reduce their exposure to commercial real estate. As that debt comes due over the next three years, banks under will be under pressure. Okay, we’re going to move this next story. And commercial real estate is going to be an amazing opportunity. I teach it to my students. It’s unbelievable. You have to get ready for this.

You have to learn how to get the right mortgages for it. You have to learn how to secure the proper properties. There are going to be commercial opportunities that you could turn to residential. And when we’re talking about big multi-family properties, those are going to be unbelievable too. That’s what I am going to be buying in this next crash. Five to 10 units are one sector, but then 10, 11 up, the price per square foot falls off of a cliff. And these are going to be hot potatoes. A lot of people dove into these about, let’s say the last five, six years, seven years, and they can’t refinance.

This is going to be a massive opportunity. Real quick, 70% off link to the real estate crash course down below if you want it. And all my students, you’re all being sent an email today for live training on what’s going on right now in the industry that I don’t want to share on the channel. I just can’t. I don’t get too many copycats. All right, so here we go. This story is very, very important. It’s the same bank, right? It made it sound nice. They sold 2000 loans to Bank of America.

And I’m telling you, there’s something behind this. This story is out of connectcre.com. It says, Wafed agrees to sell 2000 multi-family loans to B of A. It says, Wafed Inc. said in a regulatory filing that it’s Washington Federal Bank subsidiary has agreed to sell 2000 commercial multi-family loans to B of A. B of A is acquiring the portfolio which has an unpaid principal balance of $3.2 billion for approximately 91.6% of the balance or $2.9 billion. Bam! That is the proof that these are severely distressed assets. Why do I know that? Because a bank does not sell its A portfolio of loans for less than face value unless they cannot collect.

And I want you to understand this. Please get this. Type 2 if you get this. The Federal Reserve is putting these banks together and telling them, you are going to sell your loans, so we’re going to go find a buyer. They did this exact same thing, which was well-documented back in the great financial crisis. They went to the five largest banks, Wells Fargo, Bank of America, JP Morgan, and so on and so on. Then they said, you’re going to take these assets because the country is collapsed right now. The economy is falling.

Everything’s going to crap and we’ve got to hide it. We’ve got to hide it right now. If you don’t think there is a banking collapse, you are living under a rock. And my goal, my hope for you, is to come out of that rock and start moving right now financially. Start pivoting the right way. Stop looking at the stock market. Whoa, look at it. Because remember, the last time it had an all-time high and then it didn’t. In 2000, all-time high, then it didn’t. Falls by 50%. 2006, 2007, all-time high, and then it didn’t.

Falls by 50%. Let me ask you this. How do you think the country is going to react if it just does what it has normally done in the last two cycles and the Dow Jones, the NASDAQ, the S&P falls by 50%? If it just acts normal in the last two cycles, if it just does what’s normal, just falls by 50%, what do you think is going to happen to the economy? Do you think that companies are going to hire more people or are they going to fire more people? Which one? Hire or fire? Type it down below.

Do you think that people are going to go out on more vacations or less vacations? This is, to me, very easy to figure out, but to a lot of people, it really isn’t. It’s not because I’m smarter. Type 3, if you get this, because you’re like, why is it that I seem to understand how economics work, but nobody else does? It’s because you have been fooled by bankers and intellectuals for a long time say, whoa, whoa, you don’t have the right degree. You aren’t that smart. You need to let us manage your money.

You need to let us manage your life. Type 3, if you understand that, that’s how the world really works. They’ve been confused and deceived, right? So right here is the canary in the coal mine. This bank sold a book of its assets, a large portion, 2,000 loans, commercial, multi-family loans. Think big apartment complexes. That’s what I want you to own. That’s what you should be shooting for. All right. I get it. Maybe some of you have never owned a rental. I’ll take care of that. I’ll show you how to do that.

Super easy to buy your first rental and you buy it right. You can buy rentals right now. If you buy it right, I would wait with the bulk of my money like I am to buy massive amounts of property as this thing keeps going down. And that’s why I keep showing you these daily reminders. Hey, look, this bank’s failing. This is a failing bank, Washington Federal. It’s a failing bank. It was forced to do this. This is what they’re doing with others. I’m going to bring you as much news as possible to keep reiterating inside of you.

Oh yeah, everything’s falling apart. That’s right. That’s why I’m buying more gold. That’s why I’m buying more silver. That’s why I’m buying more Bitcoin. I didn’t like that Bitcoin move, by the way, in the last week. Holy cow. Seattle-based Washington Federal did not provide specifics on locations of the properties backing the loans. The bank has a physical presence in nine western states, including Washington, Oregon, Idaho, California, Nevada, New Mexico, Utah, Arizona, and Texas. Now, think about this. All of those states are collapsing when it comes to real estate prices. I know it sounds crazy because your real estate agent says something different, but you’re all going to find out as soon as they go, oh yeah, I guess we should have went with the real fed data and not the national association of realtors.

The transaction is slated to close on June 21st, after which Wafed intends to enter into a structured transaction or loan sale with one or more funds managed or advised by Pacific Investments Management Company. You know, another thing, too, and check this out. This is really important to say. Bloomberg News reported that Wafed last September crossed two thresholds for greater scrutiny by federal regulators, banks whose portfolios of commercial real estate loans are more than triple their capital and CRE portfolios that had grown to at least 50% in the past three years. These are thresholds set by the Federal Reserve for auditors to eyeball or scrutinize more strictly certain banks.

Another threshold is when they pass a certain value of their portfolio assets under management. One of those is a billion dollars. When a company, a bank crosses the billion dollar threshold, it brings in so much more scrutiny, and New York Community Bank is a great example of that. All of a sudden, it bought some distressed assets from Silicon Valley Bank. It’s like, yes, we are crushing it. We got a sale. We took advantage of a crashing bank. They took it. They put those assets on their balance sheet, and then the auditors start looking at them and go, what are you talking about? You guys are screwed, and you guys are in trouble, and they’re like, what are you talking about? We’re crushing it.

This should show you the mentality of the banker, the C-suite bankers. Please, please understand this. This isn’t a joke. You think because they drive a fancy car in a suit, and they got a job that makes tons of money, and they got all these degrees that they know what they’re doing, they don’t know crap. And that’s a perfect example. A bank that’s like, we are taking advantage of the situation. We’re stronger. They are weaker. We’re buying their assets for pennies on the dollar, and a year later, boom, they’re done. They’re in trouble. Well, I want you to know this, and I say this with a smile.

I’m just going to open this up. Oh, man, earlier, there’s like a beam of light just coming right back down on the Ninja. I had to close it. Please understand this. There are hundreds of banks in the exact same situation right now. Most of the situation, in type 5, if you understand red tape, how the larger an organization goes, the more crap you got to go through, and oops, you got to jump through to get something done, right? They don’t, the bigger they are, the harder they fall, because the bigger they are, the more red tape and crap they got to go through.

And you’ve got some good-hearted, smart employees usually done at the bottom, because the top employees have been getting paid so much, are fat, dumb, and happy, and they’re too prideful, and pride comes before fall. So they sit there, and they go, everything’s fine, until it’s not. Just one little more tick up in the bond market, a little bit more pressure in the CRE market, and all of a sudden, their balance sheet goes to crap. Well, guess what? I’m going to be taking advantage of it, and I want you to be too.

To everybody in the course, there’s a live teaching that I’m going to be doing to everyone in the course tomorrow night. There’s an email coming out, so just make sure you’re there. If anyone wants to be in the crash course, 70% off, link down below. I think it’s like $299. I’m coming out with some more products that are going to change people’s balance sheets personally. The real gifts are coming out. I can’t wait, guys. This is going to be exciting. I am going to be taking advantage of it. If you are going to take advantage of it, type 10, because we’re going to take this to level 10.

I just hope there’s a million of you coming with me. The Economic Ninja is out. [tr:trw].

See more of The Economic Ninja on their Public Channel and the MPN The Economic Ninja channel.