Folks, it's only the fifth day of 2023 and Bank runs are already here. This is a chart of A Bank's parent company today after its subsidiary reported an unprecedented 8.1 billion dollar run. we are going to get to three major things in today's video: Number one, the bank run, how it happened, and why many banks in the overall industry aren't going to be able to fulfill withdrawal requests very, very soon. Number two: the latest economic data.

We have number three, the hottest trades to know about including our HKD Liquidity Play and Blph FDA Play which did run today. Let's Get Right to Work timestamps Down Below and today's video is brought to you by the MooMoo trading platform and broker. It's an excellent app to help you take your trading to the next level and they are offering up to 15 free stocks. If you sign up and deposit using our link down below, make sure to give them a look.

Okay folks, so we've been warning about this for months and another Domino has fallen. Banks are sitting on billions and billions of dollars worth of losses on their different held Securities and alternative assets that are on their balance sheets. and so when people are going to withdraw over the reserves that the bank has in the back corner, Well, all of a sudden, the bank is left with a crisis. According to the Berg of Bloom quote, customers withdrew about 8.1 billion dollars of digital asset deposits from the bank during the fourth Quarter, which forced it to sell Securities and related derivatives at a loss of 718 million.

Executives Said on the conference call that Silvergate may become a takeover Target Silvergate being the parent company for the Silver Gate bank which is seeing this massive Bank Run shares of the bank's parent company are now down 95 percent from all-time highs in November of 2021 or as Kathy Wood says, a top performer. But the reason this story really caught my eye is because Silvergate isn't a horribly managed Bank Yes, it is a big player in the crypto space and that has overall dove in this crypto winter, but it's actually pretty conservative in terms of a lot of its balance sheet. I Mean in fact, according to the Motley Fool the bank keeps a very liquid balance sheet, mostly investing in deposits in liquid government-backed bonds, but it had to sell those to meet deposit outflows and bonds have been underwater due to Soaring interest rates. and this is the big problem here.

People are dismissing Silvergate as a risky crypto bank and acting like it's an FTX 2.0 because of its connections to the overall crypto space. But what in reality, as far as I can see in as far as the public SEC filing show us a big back-breaking issue here is that bond prices are getting destroyed. Silvergate took a 718 million dollar loss on the sale of bonds and expects to have to sell more in the first quarter of this year, which could result in another 300 million dollars worth of losses. So remember how our fractional Reserve banking system works if you deposit 100 in a bank that bank lends out maybe ninety dollars and keeps maybe ten dollars in reserves to wipe their rear ends with.

or just in case the clients have a withdrawal request at ninety dollars that is Lent out into the system is either lent out to customers, lent out to be invested, or if the company. the bank is really, really conservative lent out to the treasury in return for treasury bills or treasury bonds when they give it to the treasury. that is about as conservative as it gets for Lending. But the financial system has been thrown through a loop because of the speed of these rate hikes, and now those assets are becoming distressed.

Remember if you buy 10-year bonds that expire in 2030 and they are at lower rates than current rates, those bonds are losing tons and tons of secondary market value because people can now just get the higher yielding ones that have less risk, Why buy risky distressed debt at three percent yields when you can get higher yields at five percent for essentially risk-free treasuries? So that's the problem folks. A lot of these banks have all this distressed debt from the previous Easy Money cycle? but now all that debt is worth Pennies on the dollar. And so it's not doing such a good job backing deposits anymore, And that would be all right if banks could buy and hold them to maturity or a Fed pivot. But if there's a bank run like Silver Overgate saw and you just don't have enough reserves to cover it, you have to go and sell those buns fast for a massive loss and your bank just gets completely destroyed.

Now with Silvergate, the bonds were supposed to be the thing that stabilized an otherwise risky crypto exposed bank, but in this case, it made the situation even worse. and Silvergate is one of the first Banks to head for collapse. But it's not just silver. Bank Folks, a lot of banks have this distressed debt problem and it's only going to get worse according to Yahoo finance and Bloomberg globally, almost 650 billion dollars worth of bonds and Loans are in distressed territory.

It's all adding up to the biggest test of robustness of corporate credit since the financial crisis and may be the spark of a new wave of defaults. Folks I Think you're going to be surprised to find how many more Banks get silvergated and further down the road. If you're a bank, securing your customers funds with assets and those assets lose 50 percent of their value, you may very quickly find yourself in a situation where you can no longer make your customers whole and in the broader banking side segment. That means that the government has to come in and step in with those FDIC bailouts again.

Which by the way, the FDIC fund is greatly greatly underfunded. Next, the jobs data is out. The latest jobs data highlights a resilient labor market according to the Berg of Bloom With companies adding more jobs than forecasted in December and jobless claims fall in now. of course, these days, if your 10 year old son sold his Pokemon card for five dollars to his classmate, the government counts that as a full-time job and says he's gainfully employed.

Not sure if Pokemon cards are still a thing, but even so, this is a bit of A Tale of Two Cities Job gains were concentrated in businesses with less than 500 employees, but the largest companies cut 151 000 workers from payrolls, which is the most since April 2020 during the cough cough crisis. So small to medium-sized companies are hiring big companies or cutting what the heck is happening here. Well, two points: Number one: large corporations like to over hire in attempts to expand during Marine expansionary periods in an economy. If you're an Amazon or a sales force or a meta, it's really easy to over hire to grow during bull periods and get investors excited, which then gives you more and more.

Capital Hire more and more people. and then simply when times get rough and the dark clouds start appearing on the horizon, you just go and lay off those thousands of people that you hired. But if you're a smaller business, there's more of a personal aspect to that, right? So you're much much less likely to over hire. You're only going to hire exactly what you need.

The second situation that is going on here is that if you're a small business during a tight labor market, it's extra difficult to find employees because the large corporations have more money and more perks to offer. so people usually flock to them in droves, leaving everyday businesses understaffed. But now that large corporations are doing layoffs and freezing hiring well, a lot of understaffed small businesses are picking up the people that they are leaving behind. So while it looks like Net, you're adding jobs, in reality it's just some of the still wildly understaffed businesses picking up some of the employees that they've needed for quarters and quarter in quarters.

But the better paying and better benefit jobs at the bigger corporations. while they're disappearing entirely, the job market right now is absorbing a lot of the layoffs, but people are still moving down the totem pole and this new weakness in the job market is being shown pretty clearly in the data. Whether that's from people who are staying in their jobs or people who are leaving for New Jobs Quote: December ushered in the largest decline in Pay growth for job stayers in the three-year Series History: Leisure and Hospitality Trade, transportation and utilities and information sectors had the sharpest declines in Pay gains job Changers Pay growth also fell to the lowest level in 10 months. So the way that supply and demand work in the labor pool is that when you have more jobs than people, companies have to pay more and more to hire you.

When jobs start declining though, they can get away with offering less and less. and then when there's more people than jobs, that's when you start getting widespread layoffs across every major segment. Right now, you are just seeing an overall slow and steady fed induced contraction. So it's easy to walk away with the wrong conclusion and assume the job market is healthy and trending in the right direction.

When in fact, if you look at pretty much any data set, it's not trending in the right direction. it's trending in the wrong one. It's weakening and weakening and weakening. And the Fed and most analysts admit that it's only going to get weaker, not better moving forward.

But on the bright side, hey, there is still a lot of good news for the FED If you're looking at that inflation battle, not only is wage growth going down, but you're also seeing many of the major drivers of inflation continue. Cooling Lumber was one of the most extreme. It was at around 1700. Now at 374 container freight price is the cost of container shipping was at over 12.

000. Now at under 2 000. Plastic has been plummeting Mississippi Barge prices have been plummeting. They carry Commodities Like cotton, grain, soybeans, wheat, corn, lumber, wood, fertilizer, coal, construction materials, metal, and gravel.

So this is a pretty damn big deal. and even home prices have started down trending. So I mean it's not out of this world to assume that inflation may not be the biggest problem that we have for long. The biggest problem is all the demand crunches we are going to see and the resulting skyrocketing unemployment that we're going to start getting towards the back half of this year.

Meanwhile, going over to the Morgans of JP a strategist says that today's market resembles 1969. you know, the other day I had an itch on my lower arm and that itch reminded me of an itch I had in the beginning of 2008. And so I personally think that that scientific evidence a Great Recession 2.0 is coming. But in all seriousness, he makes his argument based on the earnings collapse and the current trajectory has been eerily similar.

I Mean at the same time though, they are both down. I Guess it's hard to be eerily similar per se when you can only go in like three directions, up, down, or sideways. But you get the point. Recessionista.

The takeaway here though is that if you did use the 1969 U.S recession as a guide and a parameter, well, the picture we get is of continued Equity Market declines up to six months after the start of the recession, but a quick recovery after then. Alright Top Trade Recaps The most exciting this morning was HKD We briefed on HKD at roughly 1680 five a share 30 minutes prior to Market open and it ran to 37.72 That's a 123 percent increase briefing price to Highs but how did we find it? Charlie Well, it showed the pre-market proof of concept with an unusually active pre-market session which put it on my radar. And then when I saw the Dicker HKD I immediately recognized it from the play we covered last year where liquidity squeezed to an insane degree. So I thought okay, well if it just gets a bit of that energy, we could see a mini version of that happening again.

And that's exactly what happened. A lot of finding catalysts and trade ideas folks is just showing up every single day and recognizing previous trends that have worked. If I hadn't been around when the first hype rallies happened I probably wouldn't have seen today's run coming right? And that's the kind of value we try to provide in the morning briefings and the kind of value that you can provide to yourself if you stick around and show up every single day and track different Trends and trades and you're aware when things start popping. But anyways, what appears to be the Catalyst for HKD Well, many are opinion it on the hopes for reopening of businesses in China and the reopening of the border between the mainland and Hong Kong where the company is located.

But the real reason it ran in my opinion is that someone executed a big buy order and it caused a liquidity crunch that caused speculators to buy in and rally up prices just like we saw last year. It's a sketchy stock though, like most Runners so something to keep in mind. Fun for trading, not fun to buy and hold. Time in the market does not beat time in the market.

When it comes down to the sketchy plays. we'll move on to FDA plays. So I've been saying that the beginning of this year will be the best time period for FDA and Biotech plays because you see a lot of regulatory decisions in the beginning of each new year, and this year would be especially hot because we didn't see that many towards the end of 2022. so you see a little bit more pent-up catalysts.

Some of the most exciting examples as of late have been the Jasper and call a Place, but another winner from this morning was Blph. We briefed on Blph at about 30 minutes prior to Market open at about 167 a share and it ran to 350 at Open before you had a market open Panic which triggered a take profit cycle that's a 109 increase. Briefing price to highs and this is a pattern folks that we've seen again and again. You get an initial reaction to a catalyst and then there's a take profit period and then more and more people find out about it.

and later on you get another rally. Ralito! The key is becoming aware though of this: Catalyst Sometime between the sell-off on the initial reaction and the next rally, the Catalyst in this case though, was an announcement of a license agreement for the commercialization of Eno Pulse in Greater China New Markets new income potential right next. Abvc followed a similar pattern, except we did a much worse job on the briefing for this one. We briefed on it at like 151 and had to sell off into open and then another pop to 187.

The FDA approved them to proceed with clinical study of one of their main treatments and I thought it had more room to run, but that's kind of just the reality. It's hard to say how far a catalyst can take a stock and how reactive the stock is going to be to the Catalyst on a specific day. Also, an update on the Atnf play we were talking about earlier this week. It has taken another new High pretty solid start to the new Year, but this is Momentum Cycling 101.

You get a leg up, a sell-off and then another leg up, another sell-off and then another leg up. The running and breathing Cycles are Paramount to retaining a longer momentum cycle and after this light sells off again. I'm looking to see if we can get another higher bottom and another attempt to a new high. Speaking of momentum Mullen trying to break past that previous cycle hi again, ho ho ho ho.

maybe Santa rallied to Mullen instead of the rest of the market. so we did get that Santa rally after all, nearly doubled in the last six or SO trading days. Something to know about if we get that breakout. Anyways, back to the briefing.

This is the full list of morning Catalyst ideas that we had this morning. I'm excited to see new big Movers heading into next week. No promises, but I'm pretty optimistic I think we're going to see a lot of catalysts dropping now. if you'd like to join us and get access to our daily morning briefings that come out 30 minutes prior to Market open I'll put the link to zip Creator you down below coupon code hello 2023 will get you a nice discount to join us and that is available using the link Down Below have a good one folks.

Make sure to hit that ravishing like button and subscribe and we will see you in the next video.