The Truth about the Banking Crisis from Hugh Hendry
Is it Time to Panic based on the preserve actions of the Federal Reserve?
Is it Time to Panic based on the preserve actions of the Federal Reserve? Answer, according to Acid Capitalist as per his Hat is Yes. Hence the Truth about the Banking Crisis, told in manner not seen much on TV. BS Free Reporting was our stance, thus his video has to be covered because is he cutting out the Wall Street Speak BS.
What makes this story even more remarkable and down right bizarre is that not only does he not look like a typical Wall Street Douche Bag, but he also does not talk like a typical Wall Street Douche Bag, such as the Jamie Dimon types.
Hugh Hendry is a British hedge fund manager who is known for his contrarian investment style and his outspoken views on financial markets. He is the founder and former chief investment officer of Eclectica Asset Management, a London-based hedge fund that he ran from 2002 to 2017.
Hendry gained notoriety for his successful bets against the US housing market in the lead-up to the 2008 financial crisis, which earned him significant profits and made him a sought-after commentator on financial markets. He has also been known for his provocative and contrarian views on a range of topics, including central banking, government debt, and the role of speculation in financial markets.
Since leaving Eclectica in 2017, Hendry has focused on managing his personal investments and has continued to be an active commentator on financial markets. He has also been involved in various philanthropic and educational initiatives, including the Hugh Hendry Foundation, which supports education and entrepreneurship in Africa.
Thank you, Guy. That's what was so off about yesterday. That Jay [Powell] and the Fed actually aggravated the problem further.
They're like, Why don't we hike 25 more? Why don't we encourage more deposit flight from the regional banks? It's like, hello, is anyone in a second. If they hadn't done anything and they said, you know what, we're going to hold tight because the regional banks are having a problem and they didn't do anything, everyone would have panicked anyway. Hey, sometimes it's kind of relevant to panic.
I would recommend you panic. What I would recommend is transparency and honesty. You know what, folks? I'm speaking to you on behalf of the Federal Reserve.
But what that means is that's the deposits fleeing the system and going into money market funds okay. When that could reach a crescendo where, like I say to you, the treasury and the Fed may have to come in and actually restrict your right as a US citizen to pull money out of the US banking sector.
Hugh Hendry
Hugh Hendry was a Hedge Manager, thus one of the Wall Street Elites, but obviously he has gone off the script and is speaking the Truth. Therefore, please listen if you value your assets and your hard earned income which you have left in the Banks thinking those Deposits were safe and sound. Not so according to Hugh Hendry. And also in ignorance of the signs that have already happened in the past few months.
Not only our your Deposits at Risk, but the Fed is working to make it worse and bring about the crisis and will eventually move to restrict Bank withdrawals.
The overall timeline and script now makes sense. Collapse the Banks, consolidate the Banks into about 5 Big Banks and then introduce the FedNow program, which starts in July 2023 to cover up the entire Mess and make everything 100% digital and thus no more Cash in the entire Banking System. You will be a 100% Certified Digital Slave.
And add to that a potential June 1, 2023 Debt Ceiling Default and Congress and President still fighting over the details. No increase means a default, but it it by Design or just more Mismanagement by the Feds, the Treasury and all other actors. We are weeks away from a major financial move by the Markets and/or the Feds.
When did you last see this type of move in history from the Feds? Answer, when the Feds moved against your Gold which used to be real money and real assets. They have done it before and they will do it again and now you have been warned officially. And like old fashioned Money Magic it last happened in May 1933 and we are now writing in May 2023. Just more coincidences?
In the Biden pretend Presidency the 2nd, 3rd, and 4th largest American Bank failures have occurred. Was that not enough to clue into the bigger picture? See our previous posts on the Banking Crisis, in particular how the SVB Scandal unfolded.
An explanation of Terms in this discussion so you can follow along.
What is the M2 Money Supply
M2 is a measure of the money supply that includes cash, checking deposits, savings deposits, and other time deposits that are less than $100,000. It is a broader measure of the money supply than M1, which only includes cash and checking deposits.
M2 is often used by economists and policymakers to track the overall level of liquidity in the economy and to monitor changes in the availability of credit and the demand for money. It is also used to analyze the relationship between the money supply and other macroeconomic variables such as inflation, interest rates, and economic growth.
In the United States, M2 is published by the Federal Reserve on a weekly basis and is widely followed by economists and financial analysts. The components of M2 can vary slightly depending on the country or region in question, as different countries may use different definitions or classifications of money and financial assets.
What is the "Mark to Market"?
"Mark to Market" is an accounting practice that involves valuing assets and liabilities at their current market value rather than their historical cost or book value. This is done to provide a more accurate picture of a company's financial health and to reflect changes in the market value of assets and liabilities over time.
Mark to Market is commonly used in financial markets, where it is used to value securities such as stocks, bonds, and derivatives. For example, if a company holds a portfolio of stocks, it may use mark to market accounting to value the portfolio at its current market value, rather than the price at which the stocks were originally purchased. This can provide a more accurate picture of the company's financial health, as it reflects changes in the market value of the stocks over time.
While Mark to Market accounting can provide a more accurate picture of a company's financial health, it can also lead to increased volatility in financial markets. This is because changes in the market value of assets and liabilities are reflected in a company's financial statements, which can lead to fluctuations in the company's reported earnings and net worth. This can in turn affect investor confidence and lead to increased market volatility.
Mark to Market accounting played a role in the 2008 financial crisis, as the collapse of the housing market led to a sharp decline in the market value of mortgage-backed securities. This in turn led to significant losses for financial institutions that held these securities, which contributed to the overall instability of the financial system.
Time to take heed and make your financial moves, but we are neither Hedge Fund Mangers nor financial experts, which is why use your discernment as always.
A Summary of The Truth about the Banking Crisis from Hugh Hendry
Regional Banks and the Federal Reserve
In this section, the speaker [Hugh Hendry] discusses the current state of regional banks and the potential for a crisis. They also discuss the role of the Federal Reserve in this situation.
The State of Regional Banks
00:20 The speaker believes that regional banks are in a bad state and that it will get worse.
01:07 Deposits are leaving banks due to low interest rates on CDs compared to other investment options.
01:24 This has revealed issues with holding securities until maturity, as deposit flight makes it untenable.
02:27 Fed data shows that banking assets are worth 23 trillion dollars, which is one times GDP.
The Role of the Federal Reserve
00:49 The speaker suggests that officials may consider locking U.S. bank deposits due to capital flight.
02:06 Cutting rates could solve some problems but would not address all issues.
03:15 The Fed's actions have aggravated problems rather than solving them, such as encouraging more deposit flight from regional banks.
04:08 The speaker suggests that transparency and honesty would be better than panicking or aggravating problems further.
05:14 Deposits and Money Market Funds
In this section, the speakers discuss M2 deposits and how they are not loans. They also talk about how deposits can flee the system and go into money market funds, which could lead to restrictions on U.S citizens pulling money out of the banking sector.
M2 Deposits
05:14 M2 deposits are not loans.
05:33 Deposits can flee the system and go into money market funds.
05:53 The Treasury and Fed may have to restrict U.S citizens from pulling money out of the banking sector.
05:33 Restrictions During Financial Crisis
In this section, the speakers discuss how Europe banned short selling on banks during a financial crisis. They also talk about whether we will see similar restrictions again.
Short Selling Restrictions
05:33 Europe banned short selling on banks during a financial crisis.
09:13 The speakers discuss whether we will see similar restrictions again.
06:08 Stock Hammering vs. Deposit Increase
In this section, the speakers discuss how Pac West's deposits have stabilized and even increased while their stock keeps getting hammered. They debate whether short selling should be banned before positive flight is banned.
Stock Hammering vs. Deposit Increase
06:08 Pac West's deposits have stabilized and even increased while their stock keeps getting hammered.
06:22 The speakers debate whether short selling should be banned before positive flight is banned.
06:22 Truth-Telling in Market Price
In this section, the speakers discuss how the price is the truth in the market. They debate whether banning behavior is a good idea when the trip becomes shocking.
Market Price and Banning Behavior
06:22 The price is the truth in the market.
06:42 Banning behavior may not be a good idea when the trip becomes shocking.
07:06 Ultra Long Treasuries
In this section, the speakers discuss how ultra long treasuries are trading two to three standard deviations below their ETF. They also talk about why it's time to own ultra long treasuries.
Ultra Long Treasuries
07:06 Ultra long treasuries are trading two to three standard deviations below their ETF.
08:12 It's time to own ultra long treasuries.
08:12 Gold Bars and Bitcoin
In this section, the speakers discuss gold bars and Bitcoin as investment options. They debate whether commercial property is a good investment option during this crisis.
Gold Bars and Bitcoin
08:12 The speaker prefers gold bars over other investments.
08:49 Bitcoin could trade three or four times higher in the next five years.
09:01 Commercial Property
In this section, the speakers discuss commercial property as an investment option during this crisis. They debate whether it's at the center of banking crises or significantly mispriced assets elsewhere.
Commercial Property
09:17 Commercial property is at the center of banking crises.
09:17 It's one of many crises that we will experience during this time.
10:00 The Slow Evolution of the Market
In this section, the speaker discusses the slow evolution of the market and how it affects asset value. He also talks about the impact of illiquidity on taking risks in the economy.
10:00 The market is slow to evolve.
10:10 The market is overstating its true value.
10:16 This leads to a profound gap between asset value and open market value.
Illiquidity and Risk-Taking
10:21 Illiquidity in owning shares can lead to slower movement within the system.
10:29 This lack of liquidity can stop people from taking risks.
10:34 When people are not willing to take risks, it can have a negative impact on both the US and global economies.
Endure till the End and take Care of Yourself. Remember on planes they always tell you put the mask on first, before helping others. Therefore, Take Care of Yourself First and then do what is in your control, and then leave the rest to the universe to solve.
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Until we meet again.
For we wrestle not against flesh and blood, but against principalities, against powers, against the rulers of the darkness of this world, against spiritual wickedness in high places.
Ephesians 6:12
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