Avoid Crisis

On this episode Paul Kapustka joins the show to discuss how technologies are developing and being deployed at professional arenas and stadiums throughout the country to avoid a communication or security crisis. Paul is a longtime journalist who started Stadium Tech Report 10 years ago https://stadiumtechreport.com/

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In this podcast, the Avoid Crisis hosts explore how Artificial Intelligence is tracking the chemical composition and the lateral lines of otoliths (ears) of fish to determine where they have lived their lives and to predict future "Dead Zones" in the ocean.

Resources :
https://abcnews.go.com/US/video/penguins-stroll-quiet-streets-cape-town-70235402

https://www.pnas.org/doi/10.1073/pnas.1100684108

https://eos.org/articles/just-how-anomalous-is-the-vast-baltic-sea-dead-zone

May 10, 2023 - Avoid Crisis hosts Reynaldo Arellano and Allen Plyler are alarmed at the all time high average temperature in the oceans today and focus on how artificial intelligence will help track the continuing damage to the our earth in crisis, and its impacts to our economy. The hosts question believing in the promises from appointing czars in the government over AI, to any observations that come from penguining marches of billionaires to Washington. Without changes in human behavior, the environmental crisis will continue to worsen and disrupt food supply while wreaking havoc in weather and ecological systems worldwide. The impact of depleting oxygen available to fish populations is explored.

Think.  Decide. Act. Avoid Crisis.

Key Points from Rey:
· Over two thirds of the world is water.  The ocean is an incredible carbon sink.

· The ocean and acidity is a big issue.  The Great Barrier Reef is the canary in the coal mine.  It has shown strain.  The ocean temperature rise will impact our weather.

· You would not expect warming temperatures at the lowest depths of the ocean, but recent studies are indicating that is happening.

· Research: the deep sea is slowly warming - Welcome to NOAA Research

· Think, which includes analyzing, Decide, Act, that is what is needed to avoid crisis.  Can AI help here?

·  AI can’t change human behavior.  Climate change is real.

·  We all need to think of small changes we can make.  I used reusable metal straw and utensils on my recent trip.  If a couple of billion people changed their behaviors, it will have a positive impact.

·  The food we get from the ocean worldwide is very important and is a big part of our food supply and the warming temperature in the ocean is a big issue.

·  World fish production 2022 | Statista

·  The large bottom feeders being caught could be reflecting warming temperatures.

·  There is going to be an enormous displacement in the labor force.  But the labor force may become more efficient.  There is going to be a displacement from those workers that are not educated or trained, and there will be a bigger gap between the haves and the have nots. 

 Key Points from Allen:
·  Our planet earth is in a crisis.  The boiling of the ocean can be understood by seeing that the average temperature in April 2023 in the ocean surface was 21.1 Celsius a record.  In April 2016 the previous high was 21.0.   Something is happening here to see this temperature rise.

·  Sea Surface Temperature (nasa.gov)

·  World Water Temperature & (seatemperature.org)

·  As sea temperatures rise, it may be that fish from the deep are dying.  In Oregon, the Lancetfish were washing up on shore.

·  No one knows why these creatures are washing ashore in OR | The Sacramento Bee (sacbee.com)

·  In Southern California an 18 foot oarfish was found.  They live very deeply in the ocean.  It seems like something is happening deep in the ocean and maybe fish are dying there.

·  18-Foot Sea Monster Emerges from the Depths of Sunny Southern California's Coast (msn.com)

·  We don’t know if maybe there are large hydrothermal vents in the ocean that are impacting marine life.

·  What is a hydrothermal vent? (noaa.gov)

·  AI can help to predict weather patterns and provide better modeling, maybe use more data, like from cell phones to provide predictions.

·  Humans need to change their behavior or this crisis will get worse.

·  Fish are an indicator of our environment.  We are seeing state and world record fish being caught this year.  This may not be a good thing as it may reflect warming temperatures, even in inland rivers.  If there are more sucker fish, there may be less trout.

·  The bull trout is a great example of how environmental changes impacts fish populations.  The bull trout used to be abundant and Native American Indian populations relied on this as a food source.

·  History of Bull Trout and the Salish and Pend d'Oreille People |   CSKT | Division of Fish, Wildlife, Recreation, & Conservation (csktnrd.org)

·  When fish don’t have enough oxygen, their size is limited.  State records and world record fish being caught could reflect the big fish are eating smaller fish.  In Argentina the world record Chinook salmon was caught this year.

·  Colorado resident may have set fishing world record | News | denvergazette.com

·  There are already over 192,000 tech jobs lost in 2023 and AI is expected to potentially end up eliminating many jobs.  AI is a revolutionary change.   We are in a different world in computing power than IBM and Deep Blue in 1997.

·  If you are not worried about what AI is going to do to your life, you need to be.

Resources :

https://www.sacbee.com/news/nation-world/national/article274989696.html

https://www.msn.com/en-us/news/us/18-foot-sea-monster-emerged-from-the-depths-of-the-ocean-and-was-caught-off-of-southern-california-s-coast/ar-AA1aPYuM?ocid=msedgntp&cvid=eb3151a58d114c3a80eba781886a399d&ei=134

https://www.eventbrite.com/e/implications-of-rising-temperatures-coastal-marine-estuarine-ecosystems-tickets-608702153527

https://www.seatemperature.org/

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linkedin.com/in/allen-plyler-cpa-mpm-3803992a/

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May 4, 2023 - Avoid Crisis hosts Reynaldo Arellano and Allen Plyler get strapped in for a Marathon Man reminder and question listeners with "Is it Safe”? The pleas for the Biden Administration to recognize the banking crisis is turning into a political crisis fall on deaf ears as the FDIC Hoodwinks the public by stealing from the poor regional banks, then in Hood Robin style, auctions off a give to a rich bank JP Morgan Chase. One bank, two bank, three bank, four. Four is a bunch and count on more.

Key Points from Rey:

• Is it safe out there? First Republic Bank is taken over.
• The Fed is so fixated on inflation. They were oblivious to the collateral damage. Silicon Valley Bank was a fatality. The Fed is saying the FDIC is an antidote. No. We called it here before. We need to stop the shorting on the regional banks, and to change the rules on banks.
• Let’s keep trying to get the word out the best we can. Let’s see if people can catch up and see what is going to happen. Our banking system was never designed to handle the money in and money out that is happening today.
• Social media can collude with short sellers to tank a bank, and they can keep doing that.
• The deal gave a good set of assets to JP Morgan Chase with the sale of First Republic Bank forpennies on the dollar.
• The consumers and investors are not protected here. The banking system is too volatile. The deposit flight is taking money away from regional banks, and some of that is going to bigger banks.
• The investor is in the chair and wondering if it safe. It is a mess. All we can say is adjust your portfolio if you feel you have exposures.
• The bank balance sheet needs to be fixed and the Federal Reserve needs to lend against devaluation of bonds based on interest rates.
• How far will this go before people understand this is pervasive in the system.
• Pension funds are investors as well. The Fed doesn’t realize the impact here. There is international exposure.
• Credit Unions have the same issues on the balance sheet as the regional banks.
• Even the press release from First Republic Bank didn’t sound that bad. Several weeks later they were gone.

Key Points from Allen:

• We need more than Oil of Cloves, it is not safe. What we needed was Jerome Powell needed to pause on interest rates. The interest rate moves makes it even worse on the regional banks.
• The mark-to-market rules continue to make it worse. The regional banks are getting slaughtered.
• Previously on Avoid Crisis we said the Fed must pause, they did not.
• We have urged listeners to do fact checking. We hear from Federal Reserve Jerome Powell the banking system is resilient. But look at regional banks stock prices falling. The market is not agreeing that it is safe.
• The Fed’s report showed there were regulatory failures, and even now, bank deals are not getting regulatory approval.
• The contagion and fear we talked about in our earlier episodes is getting real. Rey you said Jerome Powell needed to fall on the sword, you said the debt ceiling crisis was going to come to roost sooner than people think. Janet Yellen now is saying that. Who is not listening to this podcast?
• The long period of low rates and rapid rise of interest rates is driving the banking crisis.
• The FDIC has hoodwinked, or deceived the public with the idea that they are saving the banking system. In a Hood Robin style they are handing the poor regional bank to a rich bank JP Morgan with the First Republic Bank sale.
• The Silicon Valley Bank failure was something the regulators are to be blamed for because they did not step in and take action sooner. There are going to be more bank failures, even beyond First Republic Bank.
• How many banks have failed in 2023? The stock prices look like the stocks split, but they have not. It is just the stock prices have come down.
• This is not a Tra La La Moment, one bank, two bank, three banks, four, and now how many more will fail.
• There needs to be money thrown at this problem. How many things have we talked about in this show that are later picked up and discussed in the news and business media? Our government is not taking enough of a stance on this issue.
• The prediction here is the business media will now start talking about this issue since we are mentioning it now on this podcast. That is the issue of the largest shareholder in the regional bank is often a hedge fund. And those hedge funds can end up being the largest shareholder in more than one regional bank. When their investors see the losses, they may want to take their money out of the hedge funds, and the hedge fund will have to sell shares in the regional banks.
• If a short moratorium happens, it might be too late for some of those hedge funds that were forced to sell.
• You are going to hear it first here, on Avoid Crisis, there is also an issue with Credit Unions.
• Credit Unions can fail here too.
• The uninsured deposit issue is going to ripple into the big banks too.

Connect with Rey
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April 30, 2023 - Avoid Crisis hosts Reynaldo Arellano and Allen Plyler interrupt their weekend to plead for the Biden Administration to  recognize the incompetence of the Federal Reserve and to try to stop the direct path to severe recession with an effort to save First Republic  Bank. They predict a sale to a large bank will not stop the crisis.

Key Points from Rey:

• The war room is set up here. In real time they are working on it now.
• Was the Big Bank $30 Billion injection done when they knew how deep the deposit run was?
• The fair market value of the assets has to be determined.
• First Republic bank had 30 year loans for around 3% rates and invested in Treasuries that thefair value, they are in trouble.
• Regional banks are GameStop in reverse. There is not a single bank in the US that can survive a bank run. Every bank in the system is vulnerable.
• Banks are important pillar of our economy and society. The accounting rules and the steep rise of interest rates created this situation. It needs exceptional and unusual action to resolve.
• First Republic Bank lost more than half of their deposits in a very short time.
• Small banks are not lending as they have in the past. The credit issue in our system will limit the economy. Jobs and investments are impacted. Lending terms are going to choke out growth in the economy.
• Does it mean every bank should be putting in a “going concern” disclosure to their financial statement?
• Every single bank has these issues, and all could have a bank run.
• There are enough banks around maybe the shock in real estate won’t be that big. But people can react emotionally.
• Wall Street sharks are circling.
• What if China is shorting the bank stocks? This pillar of our economy is vulnerable.
• The dominos here are not good. SVB and Signature had different risk issues, but the regulators didn’t do what they needed to do.
• Labor shortages are causing issues.
• Things are happening faster now. We can’t take time to fix this as more things will break.

Key Points from Allen:

• Auction for First Republic bank is going on. Who are they protecting here?
• We saw SVB fail, Signature Bank fail, and now they are asking for Big Banks to help take over the banks in trouble.
• The friendly bankers, with here to help message, was a way to make the bank die and then be here to pick up the pieces.
• Too big to fail is a misnomer. All banks have a balance sheet that is a derivative.
• Why are these banks even publicly traded? Where is the SEC on this?
• The accounting rules need changed for the banks.
• There is a regulatory failure here. SVB should have been taken over long ago based on the MRAs and MRIAs issued.
• This is going to go from a banking crisis to a political crisis.
• Janet Yellen and Jerome Powell are the ones to blame. There should have had meetings with the banks and worked to make the capital secure.
• There are enough banks around maybe the shock in real estate won’t be that big. But people can react emotionally.
• The next regional to fall is ‘X’ and let’s go attack it. Investors can make money now in the
• regional with the strategy, short, short, short, the regional bank and they will fail. Hedge funds across the world know this.
• Imagine if the SEC determined to stop the shorting in the regional banks. It would reinflate the Regional Banks stock prices.
• Covid money flooding in is a part of the cause of the issues today. The banks didn’t know what to do. It was ok to save America, but now it is not ok to save the lenders to America?
• Every small town has its wealthy people in the local community banks. They will take their money out of the banks when they see bank failures.
• Maybe the Treasury only wants big banks. But the fight on inflation is not right because we are not going to have inflation, and instead we are going to have a severe recession. There are high risk loans that are not going to be paid back. This is consistent with prior lending periods where excess risk was taken.
• The Fed needs to provide guarantees to make a deal with First Republic Bank to happen.
• Joe Biden is missing how critical this is. If he doesn’t do the right thing, this banking crisis is going to turn into turmoil and severe recession.
• When you see panic, it is real. When you see fear, it’s real. When you see the crowd react, it’s real.
• Even the big banks are vulnerable here.
• There is risk in the commercial real estate market, and in home prices if there are not jobs being created. The Bay Area has more risk now with losing SVB and First Republic Bank.
• Credit Suisse action was related to SVB failing. Are banking issues in Europe contained? Do we feel safe?
• The government should use the weekend to stop the shorting, guarantee the deposits, and change the accounting rules. Otherwise, it is a $30 billion flea bag.
• Fear and contagion is still out there. Action needs to be taken in a thoughtful way. There isn’tmuch time left to fix this.
• This is a real show for real people in real time.

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April 26, 2023 - Avoid Crisis hosts Reynaldo Arellano and Allen Plyler question whether the biohazard warning from the World Health Organization reflects that Sudan is now the new Wuhan. Released pathogens, including the Sudan Ebola virus are now unleashed and impacts are unknown. Focus on the First Republic depositor flight and the mortal wound of the Ricochet Deposit bullet is explained. FDIC receivership  for First Republic Bank is predicted.

Key Points from Rey:

• Sudan is close to hot zones Iran and Iraq. Russia and Ukraine battle is not that far away. Russia wants a foothold in the Red Sea.
• The lack of stability is going to be huge. Humanitarian and economic crisis in this geography is really a concern.
• The warning from the WHO on the biohazard is big, but has been under the radar in the news.
• Ebola is a serious virus. What is happening in Sudan is another hit to the global economic environment.
• Things continue to point to a significant recession. Sudan is shaping up to be the start of a global economic crisis. The lab takeover is just a part of the mix.
• Volunteers for human trials on the Ebola virus are hard to find.
• No known cure for Ebola. It could be used as a bio-weapon.
• There is more pressure for recession now.
• First Republic issues were bigger than expected.
• The deposit loss at First Republic Bank was not stopped by the $30 billion provided by other banks. This was a run on the bank. The fact they are still standing is amazing.
• The migration of deposits was bigger than expected.
• Agree Mark to Market and Hold to Maturity rules need to be revised for banks. We need professional skepticism.
• This system of the accounting rules allows gaming of the financials.
• First Republic bank did the best they could. How can any bank survive a significant deposit withdrawal?
• We have not heard the last of the First Republic Bank story. FDIC receivership could be next.

Key Points from Allen:

• Sudan is a humanitarian crisis now and there is concern for the 16,000 Americans that are being evacuated from there.
• Sudan has 46 Million people and it borders the Red Sea, right across from Saudi Arabia.
• The Suez Canal is to the north, and the waterway is a key world transport path with global economic impact. More ships go through the Suez Canal than the Panama Canal.
• We don’t know what happens when this cease fire ends. 20,000 Ships go through the Suez Canal each year.
• The Suez Canal was blocked by the Ever Given Ship going sideways in the canal, blocking over 400 other ships from passing for six days.
• What if there was a new tollgate put in between Sudan and Saudi Arabia in the Red Sea.
• Russia is trying to build a naval base in the Red Sea.
• Russia is also trying to promote a northern sea route through the Arctic zone.
• 70% of Grocery stores in Sudan war zone are closed. Lack of food and water is humanitarian
• crisis.
• In Khartoum, the National Public Health laboratory was seized by one of the rival general forces and the workers were removed. This lab had measles and cholera pathogens, and biohazards. But the one not mentioned and should be thought of is the Ebola virus.
• In Uganda, the Sudan Ebola Virus was the cause of the outbreak. We could have an outbreak now.
• Things related to Covid point back to a lab. There is no vaccine for Ebola.
• Covid crisis is coming to an end and your insurance coverage most likely is changing.
• First Republic conference call was really only about 11 minutes, but no questions were taken.
• There is a real concern here. The flight of deposits in First Republic was a ricochet bullet from the Silicon Valley Bank deposit withdrawal. The tentacles of contagion show First Republic Banis in the crosshairs.
• The narrative that is saying this is a bank specific issue needs to be examined further.
• There is a difference here. We have not stopped the fear. The Federal Reserve and regulators are not functioning well. First Republic Bank needs to be saved. Joe Biden, Janet Yellen, Gavin
• Newsome all need to be involved if they want to keep their jobs. Why didn’t Jamie Dimon know  more money than $30 Billion was needed for First Republic Bank..
• The video “The real truth about the 2008 financial crisis,” by Brian Wesbury reflects what really addressed the solution of that crisis. The real truth about the 2008 financial crisis | Brian S.Wesbury | TEDxCountyLineRoad - YouTube
• My speech at Financial Executives International during the 2008 financial crisis “FAS 157 – A Troubled Solution” called on Congress to change the accounting rules. What we need now is to change the accounting rule for the Regional banks. Safe investments were not safe when there was a run on the bank.
• Consumers will stop spending. We are headed for a severe recession.
• In 2008 financial crisis, the Regional Banks escaped with little harm. TARP provided money to big banks. There was a halt of shorting bank stocks at that time. Now we need to do the same thing, stop the shorting of the regional banks. The shorts can be coming from North Korea, China, Russia, we don’t know. If we want to save this country from going into a severe recession, we need to stop the shorting of the regional banks and change the accounting rules for them.
• First Republic Bank is not just a rich man’s bank. They are important to the community and the same analysis has to be applied to all banks in the country.
• What we have right now is not working.

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linkedin.com/in/allen-plyler-cpa-mpm-3803992a/

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April 19, 2023 - Avoid Crisis hosts Reynaldo Arellano and Allen Plyler face the sting of preparation for changes coming from Artificial Intelligence and call out a disaster is in the making now.  AI is a knowing and learning entity with the power of never forgetting.  Snow pack melting and heavy rains resurface Tulare Lake, and put valuable farmland under water.  Inflation battle expected to worsen with China’s economic gain.

Key Points from Rey:

• Regulation is always behind.  Things are happening faster and faster and the legislative process is too slow.
• Something big is going to blow up with AI.  Personal information and confidential information is at risk.
• The debt ceiling and the tax filing season have a big connection with each other.
• California relief for tax depositing will create a shortfall in Federal deposits available.
• As the rains fell, FEMA gave more relief to California tax filers and their deposit requirements.
• Go buy a six month CD if you are in California and earn interest until you need to make a payment.
• The debt ceiling issue is going to come to roost in the next several months.
• This is going to be a showdown, and it is going to happen faster than people think.
• This is a push to recessionary impacts.  Layoffs are coming, funding is difficult. Tighten the belt.
• Lock in 10 or 20 year fixed now and refinance later if interest rates fall.
• If banks can hold bonds to maturity and not sell off their underwater investments, the depositors may return to the regional banks.  However interest rates going up again may make things work.
• Inflation in UK going up is a concern, and now we may see interest rates going up in the US in the inflation battle.  To get inflation under control will there will be pain.
• Wheat and grain production declines from the conflict with UK and Russia is impacting food prices.
• Social media is a tool and how they are used is an issue.  Flash mobs are a risk.  Behaviors have to have consequences.
• We tried lifting the limits for classifying felonies.  We tried it and it didn’t work, so get rid of it.
• California is going to have some disasters from the melting of snow and the river flows.
• Tulare Lake has appeared again in the San Joaquin valley.  Mother Nature is going to win here.
• Huge amount of farmland is underwater now.  Tulare Lake is a crisis now.
• Will be inviting a geology expert to be on the show.
• California capitol used to be in San Jose, but was moved to Sacramento due to flooding.

Key Points from Allen:

• In the middle of a crisis there is always an unknown, a new piece of information.  We need to be doing our homework and think about the fallout from the banking crisis and SVB and how this impacts our economy and lives.
• False narratives from AI are a big risk.  What are the guardrails to know the truth of identity?
• There is a legal crisis coming in copyright law from AI.
• The debt ceiling is going to be a big issue.  We have heard it too many times.  Is it like the Boy that Cried Wolf?
• For the first time ever there is the possibility the US may end up defaulting on its debt.
• The Government can’t pay its obligations with a receivable of tax payments.
• Make sure you have backstops.  Get lending lines or other sources of cash as credit contraction is coming.
• Western Alliance earnings report showed deposits stabilized and they saw deposits moving in.
• First Republic Bank reports after the close next Monday.  Short squeeze could happen.
• Did the government backstop of guaranteeing the uninsured deposits at SVB and Signature Bank help stem the contagion of the current banking crisis.
• SVB management could have done a better job and people need to be held accountable.  We will learn more as the SEC provides more information.
• China coming out of Covid restrictions and growth in economy may cause inflation pressures worldwide.
• There is a contraction in jobs available in the US now.  It may represent a contraction in spending.
• Food prices continue to rise.  If transportation cost is going down, what is driving this?
• Crime is rising in a lot of areas, and social media is often used in instigating crowd action.
• Recession is not going to make things easier and the distance between the wealthy and the poor is growing.
• What happens when law enforcement starts using AI?  More to discuss on that.
• We have a large snowpack now in the mountains.  Where is all the water going to go when it melts?
• Reservoirs are filling up, and that is good news, but a lot of water is going to be flowing as the snow melts. 

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Connect with Allen
linkedin.com/in/allen-plyler-cpa-mpm-3803992a/

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April 12, 2023 - Avoid Crisis hosts Reynaldo Arellano and Allen Plyler walk back the financial crisis memory lane and note that Warren Buffet, an invited guest, has not shown his cards about stepping in to support the regional banks.  The banking models are showing signs of stress on both the balance sheet and income statement.  Artificial Intelligence may take over your job.

 Key Points from Rey:

• First Republic Bank suspending the preferred dividend this year is indicative of the struggle banks are facing with the cash on the balance sheet.
• Banking relationships are up in the air now, a very challenging time from both the balance sheet and income statement sides at the bank.
• Bad press is hurting FRB, but time will tell.  Would be hard pressed to get me to bet against their management team.
• CFOs in the startup world now are going to be very challenged based on this crisis we are in.
• Getting capital now is going to be difficult.  You need to maintain a high level of cash.
• The pendulum has swung now, funding is going to be very difficult for companies now.
• Good ideas won’t get funded now and maybe for some period of time.
• The current market activity shows inflation seems more under control in the US, and now the Fed should pause on raising rates.
• The Fed raised rates too fast after keeping them too low for too long.  It’s time to take a pause. 
• Avoid Crisis by avoiding a single point of failure risk, this is true for supply chain, banking relationships, etc.
• What percentage of the workforce will be replaced by Artificial Intelligence?  AI is going to create a bigger separation between the haves and have nots.
• In the long run, AI may drive GDP growth, but it will be painful.
• Think Bob Lee issue may not be directly related to Cash App.
• Think, Decide, Act…..Avoid Crisis, get rid of credit card debt and manage cash flow.
• It’s time to cut back on discretionary spending, and rebalance your portfolios.
• As an individual now, you need to be in a flight to frugality.
• You can win in this environment, but you have to watch what is happening on the playing field.
• We’ll connect the dots when the guests come on as to how they learned of the podcast.

Key Points from Allen:

• The banking crisis is creating a challenge as deposit losses are making the timing of investments even more critical.
• The debate on whether we have too many banks goes back to Jefferson and Hamilton.  Jefferson wanted more banks and Hamilton favored a central bank.
• Maybe the idea that FRB must be sold is going to be taken off the table.
• SVB failure, the second largest in US History, is going to have a big impact in the startup community as funding is going to be very difficult as the lender of choice is no longer there.
• There will be more clarity on the economy as the bank earnings come out.
• More investors are looking for a pause in interest rates.
• The financial models that have been used in the past may not be as relevant, as technology and artificial intelligence is impacting companies in ways we may not understand yet.
• Think about your job, how much of your job and be replaced in part or in whole by AI?
• AI can perform tasks and analyze data faster than humans in many situations.
• Cash App founder Bob Lee murder, is there more there, especially with ties of Cash App to crypto and the accusations from the Hindenburg Research Report.
• The banking crisis is not over, where will the ripples surface?
• The recession risk now is growing.  Economic contraction is expected, how to avoid a crisis should be thought of now.
• Have not heard from invited guests Sharon Stone, Spencer Lee, or Shaquille O’Neal, but expect as our audience grows word of mouth will let them know they are invited and they will come on as guests.

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linkedin.com/in/allen-plyler-cpa-mpm-3803992a/

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April 5, 2023 - Avoid Crisis hosts Reynaldo Arellano and Allen Plyler studiously postulate that the Jamie Dimon led $30 billion balance sheet injection to First Republic Bank will stop the spread of contagion in the banking crisis.

 Key Points from Rey:

• First Republic Bank (FRB) had big banks come to their aid, but we still don’t know if it was a rescue
• FRB has lost key employees and their earnings may suffer
• Do we have too many banks, does the market need this many
• The Federal Reserve's next report on M-1 will be interesting to watch.
• Money may be going back to the market
• To hold a short on FRB now, you must think it is going to tank completely, which I don’t think is going to happen
• The rebound could be steep for the stock price of FRC, you will be competing with other buyers
• Interest rates went up a quarter a point, and inflation seems to be coming down some
• More money paid in interest is less money to pay for a house, and housing prices may come down further
• OPEC cutting production made oil go up in price, the long cycle and going green has to be thought of
• Companies that need to raise money now may not be able to get the cash they need.  A lot of good ideas won’t get funded.
• Easy cheap money isn’t here anymore and it won’t be for a long time.  This will have a big negative hit on our economy.
• Everyone listening to this podcast should tell their friends to listen too
• Rey added to his list of invited guests of Warren Buffet and Jamie Dimon, a new guest, Mike Roffler, CEO of First Republic Bank.

Key Points from Allen:

• Earnings season release for banks are about to come out and we will hear more on the economy
• Jamie Dimon indicated the banking crisis is not over
• The big banks are not necessarily the winners here
• FRB lost employees even after the injection of $30 billion
• Deposits are coming out of banks internationally
• Can banks consolidate until they are too big to fail?
• Local lending is important, big banks may not understand the local community lending needs
• The banking crisis we are in is leading to people taking deposits out of banks.  Where is money going?
• If you were a winner with the short of FRB, take your win, there could be a short squeeze coming.  The short volume has gone from 5 million a quarter before to 9 million now.
• If you are shorting FRB, you are betting against the city of San Francisco
• Regional banks may be losing employees in this banking crisis
• Local banking is needed because big banks don’t have the same understanding of the local community
• Analyst questions with the banks will focus on deposit inflows and outflows
• It is going to be harder for individuals to get a loan now
• The Fed should pause on raising rates now
• People should be looking to reduce their debt now
• Shaquille O’Neal, an invited guest, just showed how he helped a teen in a crisis and helped get the teen Size 22 shoes.
• Jamie Dimon and Janet Yellen orchestrating the injection of funds into First Republic Bank was significant and we don’t know what would have happened if bank runs continued.

Connect with Rey
linkedin.com/in/reynaldoarellano

Connect with Allen
linkedin.com/in/allen-plyler-cpa-mpm-3803992a/

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March 30, 2023 - Avoid Crisis hosts Reynaldo Arellano and Allen Plyler open up about being a real podcast for real people, and that includes being in the process of figuring out technical challenges.   Strange footnote in Form 10K from SVB parent gets a drill down on what it could mean.  FTX impact is not fully known yet.  First callouts for guests invited to the podcast are made.

Key Points from Rey:

• You have to be aware of issues and that starts you down the path of Avoiding a Crisis.
• Again, calling for FDIC to raise the insured deposit limits to $500,000
• We have buyers for Signature and SVB assets, do they know what they bought? 
• Technology now permits rapid deployment of funds and transfers.  This is a part of the escalation of risk in the financial sector.
• The Fed and FDIC need to take action now to avoid a crisis.
• Money is going to get really tight.  
• Companies are not getting funded and rough waters are coming.
• Monitor your cash and cut back on spending to get through an upcoming recession.
• California residents are getting relief on tax payments and due dates.  Details provided on who benefits and the extensions provided.  Counties impacted include 44 counties in California.Rey
• Rey invites a guest as well.  To respond he asks for email to [email protected]
  • Warrant Buffet

Key Points from Allen:

• Is the market thinking this crisis is over?  Is there really a guarantee of all deposits?  What impact would there be if there are a large number of people pulling out of the bank?
• The movement out of deposits in banks is happening in both large and smaller banks.
• FDIC got an equity kicker in the deal, what about the equity holders that were taken effectively to zero.
• The guarantee of uninsured deposits as a government backstop was too little too late.
• What if the government acted faster to stop the run on SVB with a guarantee of the uninsured deposits?
• You may need a financial planner now to help avoid a crisis
• With reminders of “It’s a Wonderful Life”, Allen asks for the Jimmy Stewart Museum to send an invitation and maybe an episode will happen there.
• SVB was a lender of choice, where do you go now if you are a startup?  You need a source of funds.
• Allen points to his speech during the financial crisis at Financial Executives International on FAS 157 a Troubled Solution that his research led to a footnote that showed Congress the power over the accounting standards and the standard setter the FASB.  It was just a footnote, but it had a lot of meaning.  He called on Congress to drive change on the mark to market criteria.
• SIVB, parent of SVB Form 10K has a footnote that discusses a change in accounting policy that was retrospectively presented.  What exactly was the change and what led to the change?
• The SEC should be looking in their investigation into SVB their use of derivatives and their disclosures.
• We have not seen the full impact of FTX yet.  Who made the money and where did it go?
• Is the government too early with the all clear view?
• Using a financial planner now may be prudent to Avoid a Crisis.
• Allen names his guests that are invited to the podcast and names.  No further details are provided for why they are invited, but it is aligned with the Avoid Crisis themes.  He requests to be contacted at [email protected]
  • Sharon Stone
  • Spencer Lee
  • Shaquille O’Neal

Connect with Rey
linkedin.com/in/reynaldoarellano

Connect with Allen
linkedin.com/in/allen-plyler-cpa-mpm-3803992a/

Leave a review on Apple Podcasts or Podchaser

Subscribe to the Avoid Crisis podcast in your favorite podcast app!