JP Morgan Citigroup and Bank Of America are in trouble

➡ The Federal Reserve and the Federal Deposit Insurance Corp have found weaknesses in the plans of four of the eight largest American banks, including Citigroup, JPMorgan Chase, Goldman Sachs, and Bank of America, for dealing with potential financial distress or failure. These banks are struggling to manage their massive derivatives portfolios, which are contracts tied to stocks, bonds, currencies, and interest rates. This issue is serious as these banks are tied to institutions that are in trouble, and they lack a good exit strategy to manage these toxic assets. The situation is worsened by the fact that banks need to give out loans to make money, even in bad times, which can lead to more financial instability.
➡ Citigroup is struggling and has been laying off employees and brought in a new CEO. The Federal Deposit Insurance Corporation (FDIC) and the Federal Reserve don’t agree on Citigroup’s status, with the FDIC being more concerned about the bank’s insurable versus uninsurable accounts. The article also discusses how banks make most of their money from mortgages, not credit card loans, due to the difference in interest. It warns about the dangers of refinancing and how banks can manipulate the system to their advantage.
➡ The value of currency impacts all asset classes, and currently, we’re seeing an increase in the value of gold, silver, and Bitcoin as investors move away from stocks and bonds. Understanding financial cycles can help you make better investment decisions, like buying property when the market is low. However, there’s a potential financial crisis looming, with large banks at risk due to their derivatives books. It’s important to be prepared and have a solid financial plan in place.

The bank could have serious problems. There’s a story out of CNBC. We’re going to talk about mortgages and all types of different loans. If you think about it, most people don’t realize that the banks print money out of thin air. But how they print that money is someone has to come and ask for a loan. Banks actually need to survive. And there’s all these little ways to figure out what type of loans banks need to make and how to get amazing deals on those loans. Most people do not shop for loans. They just go to a bank or they go to a credit union.

They go get a loan. They have no idea how much money they could save by actually knowing how this game is played. And this story, I believe, is very relevant to the So this is not a CNBC. It says regulators hit Citigroup, JPMorgan Chase, Goldman Sachs and Bank of America over living will plans. Now, if you’re just a headline reader, you’d probably think that they’re talking about actual living wills like a lot of us have. That is not the case. We’re talking about the bank’s living will. It says banking regulators on Friday disclosed that they found weakness in the resolution plans of four of the eight largest American lenders.

The Federal Reserve and the Federal Deposit Insurance Corp said the so-called living wills plans for unwinding huge institutions in the event of distress or failure of Citigroup, JPMorgan Chase, Goldman Sachs and Bank of America filed in 2023 were inadequate. So I want to make or let’s break so much going through my mind right now. Let’s take a second step back and realize that in 2023, the banking failure that occurred not really started with Silicon Valley Bank. There was a line of banks before it that really went unnoticed. But Silicon Valley Bank was the one that was in the mainstream in the eye of the media.

That banking crash taking out multiple banks equated to more money that was spent to rescue the banks, but they’re not rescued yet. Throughout all of 2023 was larger than all of the great financial crisis combined. That’s a big deal. I’m sorry, all of 2008 combined. In 2008, the crash of Lehman Brothers and other banks actually was after what happened in 2005 when Ben Bernanke addressed the nation said we fixed the mortgage back security crisis. Don’t bail out a handful of banks in 2005 and fix their derivatives position. Then three years later, the collapse happened.

Last year, the beginning, let’s say the 2005 moment happened and it was massive. It was so massive that the FDIC actually came out and said they were completely broke insolvent and they needed more money. I believe that the second wave of the banking crash happens well before three years after 2023. Type one if you agree with that. This banking crash is not only much worse on a dollar scale, but in power. We have a story right now in front of us where the Federal Reserve and the FDIC is going to four of the eight largest banks in the nation going, hey, the institutions you’re dealing with that you’re banking with are collapsing.

You don’t have a good enough plan to get out and you’re going to be drugged down with it. Think about how serious this is. Look, if we move over to FinTech, there’s a difference between banking and financial technology. FinTech uses the technology to tie banks together and put them together with lenders or borrowers. They’re like a big advertising arm. Right now, we have a company going down, Synapse, that’s going into bankruptcy and collapsing. Hundreds of millions of dollars in deposits are locked up right now and people don’t even know who owes what.

Again, derivatives or side accounts. Think about it that way. I’m trying to break this down to the most simplest way for people to understand where we are. Think of JP Morgan or Citigroup as the head bank, but then underneath it, it deals with institutions. These institutions are in trouble. The Federal put out fires as fast as they can, but it’s not fast enough. They’re telling these big banks, when these institutions go down, you’re tied to them and you don’t have a good exit strategy to dump these toxic assets, derivatives. You need to figure this out now.

It says regulators found fault with the way each of the banks plan to unwind their massive derivatives portfolios. Derivatives are Wall Street contracts tied to stocks, bonds, currencies, and interest rates. For example, when asked to quickly test Citigroup’s ability to unwind its contracts using different inputs, then those chosen by the bank, the firm came up short according to the regulators. That part of the exercise appears to have snared all the banks that struggle with the exam. Now, I’m going to keep going through the story, but I want to explain something very important that you need to understand.

Banks have to give out loans to make money. End of story. That’s how they make money. Banks always give out loans. During really good times, banks are crushing it and credits cheat. They’re out giving loans, they’re giving mortgages on homes, they’re giving out car loans, they’re giving all kinds of different loans, credit cards, things like that. In bad times, they still have to give loans. As a matter of fact, they need to try and give as many loans as possible. But the problem is, during bad times, banks run to the Federal Reserve for help.

And the Federal Reserve says, okay, tighten up your lending standards. We got a little out of whack just like they did in 2005, just like they did a year or two ago. And they said, tighten up your standards. And so many people miss out on amazing deals on loans. And that’s why asset prices fall. Home prices fall, car prices fall. Everything falls because people can’t afford to go get loans to go leverage themselves to go get the deals. So the prices fall. And I don’t want that for you. That’s why I came out with the Mortgage Master Course.

If you want, I’m going to throw an 80% off link. The course just got finished. And people need to know how to prepare themselves for this stuff. So if you want, links down below, if you want to check that out. All right, so we’ve established that banks still need to loan in good times and bad times. We’ve established that the banks are getting smacked upside the head by the Federal Reserve and the FDIC because they are in a position where these toxic institutions that have made bad loans, made bad decisions with their money that are tied to these big banks, the banks are still too tied to them.

They have to be able to figure out an exit plan. It says here, for example, when asked to quickly test Citigroup’s ability to unwind its contracts using different inputs than those chosen by the bank, the firm came up short, according to regulators, right? That part of the exercise appears to have snared all the banks that struggled with the exam. An assessment of the covered company’s capability to unwind its portfolio under conditions that differ from those specified in the 2023 plan revealed that the firm’s capabilities have material limitations, regulators said of Citigroup.

The living wills are a key regulatory exercise mandated in the aftermath of the 2008 global financial crisis. Every other year, the largest US banks must submit their plans to credibly unwind themselves in the event of catastrophe. You know, it’s interesting that these words, catastrophe, crash, they’re coming out more and more in the media. Why? Because human beings are projecting what their guts are actually telling them. Type two, if you agree with that, you know, it’s one thing to have a gut feeling. Do you know how many people had a gut feeling? I’ll just ask.

Type three, if you had a gut feeling about 2008, about the lead up, like things can’t keep going like this. Things are getting out of whack, but you didn’t do anything about it. Type three, if you’re one of those people, and it’s a good thing. It’s a good exercise to go through. Like, you know what? I felt like it wasn’t right. Something didn’t feel right. Things were a little out of whack. Money was going crazy. Stocks going up. House prices were going up in 2005, 2006. And I had a feeling, and I would even talk about it at picnics and barbecues, but I didn’t do anything about it.

Well, it’s important to say that, all right, because a lot of people that I knew had that. Now, here’s the thing. Those people at type three, type four, if you go fool me once, shame on me, fool me twice, now that ain’t gonna happen. And right now, by typing four, you’re saying I’m getting ready for this. Like, I see the writing on the wall. I’m cool with having some patience because patience is a virtue and patience leads to amazing opportunities. It is a big deal. I want people to understand how big of a deal this is.

All right, so it says here, while JP Morgan, Goldman, and Bank of America’s plans were each deemed to have shortcoming by both regulators, Citigroup was considered by the FDIC to have a more serious deficiency, meaning the plan wouldn’t allow for an ordinary resolution under the US bankruptcy code. Look, we’ve been covering Citigroup, and Citigroup is, in my opinion, dead man walking. They’ve been laying people off, trying to do everything they can to revitalize this. They brought in a new CEO. That’s what they always do when everything’s coming to an end.

It’s being made pretty obvious. Since the Fed didn’t concur with the FDIC on its assessment of Citigroup, the bank did receive the less serious shortcoming grade. We are fully committed to a, now, you know, it’s interesting. It’s interesting that the Fed and the FDIC don’t agree on Citigroup. The reason why I believe is the FDIC looks very closely at specific parts of these banks. Primarily, crap, how many of your accounts are insurable versus uninsurable? What is the likelihood of us having to pay out on those insurance policies? The FDIC has a really serious, not bone to pick, but a real serious dog in the fight when it comes to checking out these banks because they know that these banks may have to call on their insurance services.

All right, so here’s another thing. The number one, the bulk money is made in mortgages for banks. Most people don’t realize that. You know, you could have more credit card loans out than mortgages to a bank and have more credit cards out like in volume. Let’s say 1.5 trillion in credit. I’m just throwing out a number. Okay, 1.5 trillion the banks have out in credit card debt, but they’ve only got 1.1 trillion in mortgage debt. What I want you to understand is there’s a massive difference between front loaded amortized interest in a mortgage than simple interest with a credit card.

When you put out $100,000 in credit card debt as opposed to $100,000 in mortgage debt, you get a lot back more. The lender gets a lot back more in the form of interest. And it’s very dangerous. Most people don’t know the dangers of refinancing how banks do all this stuff. As a matter of fact, I’ve got some stories I’ve got to share with you. Check this out. And let me ask you this. Type five, if you’re thinking about refinancing your mortgage because you bought at a higher rate, or you’re thinking about refinancing pretty soon because the Fed is about to completely open up seconds.

So you’re thinking about getting a second mortgage, right, to consolidate debt. There’s nothing wrong with that. Okay, but you have to know the dangers because there’s this game that these companies play. So this is out of CBS News. The title is why you may want to refinance your mortgage soon. It says following a major spike inflation, the highest it’s been in decades, the Federal Reserve last year raised rates, blah, blah, blah. We know all that, right? However, since last summer, inflation has cooled significantly. And now the Federal Reserve is hinting at an interest rate cut to come.

I’ve warned about that. I believe they are going to do it. It’s not going to really have any effect on mortgages. And I’ll explain that in a second. But it’s going to be a head fake before the election. It says, and while a formal reduction rates would ensure that rates are on borrowing products, sorry, and while a formal reduction of rates would ensure that rates on borrowing products will fall, even the indication that they will is helping to ease rates a bit against this backdrop, homeowners who purchased a home in recent years may want to consider refinancing, right? And then they say below, these are some reasons why we think you should and they start giving some calculators, right? And then they go back into the story.

Well, if you go down, you think about this narrative right here. And you go to another story that was out of CBS, and we’re going to stay with mainstream media, because these are liars, right? They don’t want to tell you the truth. And they get paid big money from these companies. It’s out of CNN. The title is mortgage rates fall to their lowest level in almost three months. All right, I’m going to explain something to you that most people do not realize, especially if you’re not in the market for a home or refinancing right now.

I’ll read the first couple of sentences here. So you’ll see mortgage rates fell this week to their lowest level since early April, taking some pressures off America’s unaffordable housing market. The standard 30 year fixed rate mortgage average 6.87% in the week ending June 20 mortgage financing giant Freddie Mac reported Thursday, that’s down from last week’s 6.95 average and marks the third consecutive weekly declines rates are down from a 2024 peak of 7.22%. All right, this is something you need to understand this if you and if there are any mortgage brokers in the house right now, say I am a mortgage broker, and then I want you to back me up.

Right now, to go and get that rate that they’re quoting, you are going to be paying points. See, the banks know that you are more likely to fail and not pay your mortgage payment in the next three years, because they believe that the economy is going to turn down. They believe that unemployment is going to go up. And they believe that inflation is going to get worse. I know it sounds crazy, but this is all baked into the cake. So what they’re doing and the reason why I know this is true, the underwriters and all of the bankers get together and they believe that pretty much the same thing they go, we’re going to charge points.

Our goal is to give someone a loan, charge them upfront points. Because we believe in the next six months, that either the Fed is going to lower rates, or they are going to need some kind of assistance, the borrower, so they’re going to if the Fed lowers rate, they’re going to refi out of our loan, and we are going to get charged the difference because banks mainly want to make give you a loan and then sell the loan to another company or to the government. Does anybody understand this type six if you do, once you start to learn all of the how the ins and outs, you learn of the sales cycles of mortgages, and you learn how to save, no joke, 1000s and 1000s of dollars every mortgage you get, and then 10,000, 10s of 1000s of dollars over the next few years, because you get a better loan rate.

Most people do not understand this. And that’s what I set out to start teaching people, because if you get ready, now, you get all of your ratio set up, you learn how to fix your credit and all this kind of stuff. Now, you’re going to absolutely dominate it when no one else can qualify for a mortgage. That is probably the most important thing I can stress right now. That’s why I put together that course. If you want it, I’ll put an 80% off link down below. It’s like 199 bucks. So that’s the question.

What’s I want to make things no brainers for people, people that never believed in how if they could buy their own home, you’re gonna, you’re gonna believe in yourself and know exactly how to do it after this course. I want people to save 1000s of dollars on their refinances, because there is a cycle coming, it’s going to be in a couple of years. Well, more than likely, it’ll happen within the next year to two years when the Fed starts in earnest lowering rates. But at that point, it’s too late. 90% of the borrowers in our nation have been knocked out of the game for between six months and two years because of problems with their past payment history, which is actually happening right now.

You’re seeing news stories of 90 day delinquent receive rates on credit card payments are skyrocketing. We haven’t seen these rates since 2010. You’re seeing auto repossessions picking up again, you’re seeing foreclosures are now picking up because of Dodd Frank, because banks were having to hold on to this, these distressed loans since the pandemic, because of Dodd Frank. And now you’re seeing maze numbers picked up pretty incredibly. I told you six months ago, the month of June is the month of watch. Well, guess what? We’re in the month of June, we’re going to see the data second week of July, and then Ninja will be right, you’re going to see a spike in foreclosures.

And there’s not a lot of people out there putting their neck online and saying you’re going to see this bank crash in two quarters from now. And it happens, you’re going to see lumber prices go from hyperinflation to dumping, because what’s going to happen is nationally, food and energy prices are going to increase. It’s not because I’ve got some crystal ball, it’s because I spent a lot of time, this is my third economic cycle that I’ve been an investor in the beginning through sold, and now I’m waiting on the sidelines. Ironically, though, this cycle is a currency bubble, which is the greatest cycle you could ever be a part of because it has the most impact, it affects the currency value, which affects every asset class.

And during a currency bubble, and there are a lot of people type it down below if you bought some of this stuff, you know, when I started talking about it two, three years ago, this cycle affects all kinds of assets differently. And so as a currency expands, and then explodes, that little blow off top that we’re seeing with the dollar, as all the other currencies around the world are failing. So some people are diving into dollars and giving it a miss conceived value, a miss appropriated, I don’t even have the right word.

It’s not an appropriate value. We see things going up like gold, silver, Bitcoin as more and more prudent investors are diving into those assets and liquidating things like stocks and like bonds. So we are in a moment where certain asset classes are going up exponentially. And in the last six months, whoever has bought gold in the last six months has well outperformed the S&P. So you can throw the Dave Ramsey theories goodbye. See, because over the long term, the stock market does pretty darn well, right does pretty well. But once you learn cycles, and you move in and out of them, that’s why I sold most of my homes in 2005 2006.

Because I saw that cycle. And then now think about this, when my credit score was solid, in 2010, there were deals to be made, amazing deals in real estate. But if you weren’t set up for it, and you didn’t know the cycles, and you weren’t prepared, and you couldn’t walk into a bank, and them just go, yes, we’re gonna give you whatever you want. And I’ve been told that many times, like I go into a car dealership, they go, sir, you could have any car on this lot. Well, of course, because I got my credit score set up.

And it’s a thick binder, you’re going to give me anything you want. Anyway, it’s just the payments, right? But I’ve been told that about homes as well. And I want people to be ready. So I just want to do the story, because this is very telling about the banks, the four, four out of the eight largest banks are getting smacked by the Fed, because they’re like, hey, and they’re using the word catastrophe in the news stories. There is catastrophe right over the edge. We all know it. Everybody knows it in the banking sector.

And I’m talking about high up the banking sector. Don’t go to your branch manager and ask them about a dollar crash or the banking, but don’t even ask your branch manager, or regional manager, what a bail in is, they don’t even know that. But they think they’re super smart. You can sit there and you see catastrophe over the line, or right over the horizon. And we need to unwind these derivatives, we need a plan to unwind these derivatives books that all these big banks have, or we’re going to have another Lehman Brothers on their hands.

Good news. They already have a Lehman Brothers on their hands. The ninja has already been talking about it. And so I hope you got something out of this. If you want, I’m going to put an 80% off link to the course down below. I want you ready. And you just need a clear cut plan. If you keep listening to all my videos, you get all the information for free, or you can get it all into one block and start working on it right now. Hope you have a great day. The economic ninja is out.

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