Jeff Sekinger Founder & CEO, 0 Percent Who is Jeff Sekinger? Visionary Trailblazer Jeff Sekinger has been in the financial industry for over a decade. Starting out as a JP
SVB and five other banks just went insolvent over the past few weeks, not to mention the S&P 500 is now trading below that 200-day moving average and back into that broadening descending wedge. And there’s also some crazy things going on in the stock market as well. Some of the largest volume that is buying the S&P 500 in an index called SPY, 7.3 billion in volume, has poured into the ETF, which is the largest since the pandemic, and not to mention at the same time the largest put volume that the stock market has ever seen, which means people are protecting their positions or betting on their positions going down.
Not to mention some extremely urgent information going on with what the FED is now doing, which is going to change everything and it’s probably going to wipe out a lot of investors. So in this video, I want to help you understand what is going on because I’m telling you the timing of all this stuff is super, super critical. So obviously there’s a huge banking crisis going on. What has really happened recently is banks have bought in a ridiculous amount of assets with all the depositors’ money.
Now a lot of banks don’t even have to hold any of depositors’ money, so if you put a hundred bucks in, they can hold zero of those dollars in the bank. It’s pretty much like FTX because what they do is they lend that money out and then they also make investments. And meanwhile, the things that they invested in, AKA U.S. treasuries, have gone down by about 30, 40, 50 percent since they have bought them over the past couple of years because the FED continuously raised rates, and bond prices have inverse relationships to interest rates, so they’ve gone down in value. So now there are massive unrealized losses, and the FDIC is extremely worried about these losses, and they are so big. I’m telling you, there are over 600 billion dollars in losses right now.
Across different U.S banks, which is extremely worrisome, so as a Fed key keeps hiking rates and hiking rates and hiking rates, that’s pushing bond prices down, down, down. Meanwhile, no one really knew that banks had this much exposure to treasuries, which is a very bad sign for depositors because right when Bob and then Jim and then Cindy all start to ask for all their money back from the bank, what does that trigger that makes the bank? They’re going to have to start selling at a massive loss and then next thing you know they’re selling assets to pay back depositors. And when too many depositors request their money back, well, you know what happens, they run out of money, and then depositors are screwed, and it causes a massive avalanche of people freaking out. And unfortunately, Janet Yellen, she recently said in an interview she stated that we are only going to protect some of the largest financial institutions that would have a systemic risk, okay?
So pretty much if a bank is going to go under and it doesn’t impact the entire industry and economy, we’re not backstopping them. So now what is everyone doing? They’re looking at these banks that are these small regional banks and saying, “I need to get my money the heck out of these banks because the FDIC is not going to protect these small banks.” So now there’s a huge bank run on these small banks, and what is even crazier is it is projected that over 300 banks, by the way, this article was actually posted all the way back on September 8th of 2022, but they’re estimating over 300 banks do not have the liquidity to back depositors because again they took risks with that liquidity and bought assets and those asset prices are way down.
So yes, there have been five banks that have essentially gone insolvent over the past couple weeks, but apparently, there’s over 300 different banks that are not going to be able to meet the liquidity requirements for depositors which is extremely, extremely scary. And the only way out of this, is there’s two different things, okay?
Number one, the FDIC and the Federal Reserve they let this whole thing kind of landslide and there is a massive financial crisis, huge drop in the stock market. I think that would just be complete fear, because I can’t even project how low markets would go. That would not be good. That would probably be the worst thing in the short term. The only other thing is hey, let’s backstop all of these banks and try to help them. So the first and foremost thing they would try to do is let’s drop the interest rate so that bond prices come back up so that the banks don’t have such a large unrealized loss. And how are they doing that? Well, I’m already going to give you the answer.
They are increasing their balance sheet. So guess what the FED has recently done last week, and this is why you’re seeing the Bitcoin price pump, as the Fed has said, you know what? We gotta backstop them. We gotta, we gotta stop this landslide. So what are they doing? They just printed 300 billion dollars and bought assets. And they’re specifically buying treasuries so that again, the unrealized losses of the banks come back up, and it also provides more liquidity to markets and Bitcoin and crypto, and the stock market. They’re all pumped based on liquidity. You’ve probably seen some of my previous videos where I’ve talked about the total stock market market cap divided by M2 money supply. The run-up does not look like this. In fact, the price of the stock market was below early 2000, which is way, way, way, way down here if you took out the huge growth in M2 money supply. If we look at the M2 money supply, look how ridiculous this growth has been. So, the massive rallies that we’ve seen in markets over the past decade has been from this immense amount of influx of new money and also low interest rates.
What is happening right now is the Fed just showed the first sign of a pivot. This is a really, really big deal because what were they doing? They were decreasing their balance sheet this entire time, then you see this huge spike up right here, which literally just happened over the last week. This huge spike is them printing money and buying assets, which is extremely bullish for assets. The second thing that is happening is they, you know, there’s a few very large Banks like JP Morgan that believe the FED is going to print another two trillion dollars. Another two trillion. Oh, just two trilly, we’ll just drop it on the market real quick. That’s all we need to do. If you look back during the pandemic we were at 15 trillion in supply of US dollars on M2. Now, you know, the top was about 21.6 trillion. So, we grew over 6 trillion dollars and now we’re just like, “ah yeah, we might print another two trillion.” It is very likely to send markets flying, and if we actually look at where we are at right now with the recent M2, we saw them actually taking out M2. So, so lowering the amount of circulating dollars in the system, and you can see that that was coming down pretty much all of 2022, and then now look at this, we’re starting to see the creep upwards from 21 to 36. Now we’re at 21,267. So, the printing has started – they are increasing the M2, which is extremely bullish for markets.
So, what is really key is this week we are seeing the FOMC meeting where they’re going to decide on interest rates. If we see, which a lot of Market participants are believed that the FED is officially going to pivot, they’re either going to stop rates, they’re going to literally halt them and keep them where they’re at, or they’re going to lower the interest rates once again to try to pump up the bond market, hopefully stop the unrealized losses, and bring more liquidity into markets because more people will borrow, more people will spend more money, and then overall it’ll prop up the stock market and the bond market.
So, we will see if that actually happens, but again, if you guys have been following my channel and all my data, whether it be here, or on Instagram, or on Twitter, you know that the official Fed pivot, when they actually drop rates, that while there may be a really bullish time in the market when the fed pauses rates after they drop rates, it is actually extremely bearish for markets. So, I would not be surprised if we see a move right up here in the stock market in crypto. You know, we’re already seeing that Bitcoin is up 62 percent. Look at this huge, huge rally and this is what I’m talking about.
This is all based on, there being new liquidity coming into the market, so the market is just going haywire. And also, this is the key test for Bitcoin. This is the key test and why Bitcoin was invented: to reduce counterparty risk and to be able to actually store value in an asset that you can hold your own keys to. That is true empowerment, and this is exactly what we’re going to see. Is Bitcoin going to play out how it was actually meant to play out? Is this utility of Bitcoin going to shine during a massive financial crisis? Well, we are about to find out. And actually, in my next video, I’m going to go over what I am actually going to be doing with my own capital based on what I think are the largest opportunities. Because I’m telling you, if they print another 2 trillion and we just keep seeing M2 going parabolic like this, it is not going to be good. And the short term, yeah, it might help. It’s kind of like a drug addict, right? You’d give the drug addict more drugs, and very short term, yeah, it might help. But long term, this is going to cause massive, massive problems.
Sign up to receive news & updates!