Folks, we've got a lot to discuss. Number one, a bank crisis metric reaches an all-time high as more Banks barreled towards disaster. Number Two, a prominent hedge fund manager makes a bold prediction of what the FED is going to do next. Very important to talk about right now, as the next Fed decision is just a couple days away on Wednesday And then number Three.

Of course, we've got to discuss the latest big trade ideas in this market condition, including our Pxmd play, which has been doing exactly what we've expected and shorts are just starting to cover. I'll explain what could be next and I'll put all the timestamps down below. And today's video is sponsored by Zipu and our 50 off coupon code paddy50 which expires tomorrow night. It is a one-time fee and you'll gain access to our step-by-step lessons, our private chat, our daily morning briefings, and some other resources that you can learn about.

With that link down below. Make sure to check it out before tomorrow night. Get your 50 off now! Okay, so I Want to go ahead and start with this chart here: Discount window borrowing reaches all-time high Bank Usage of Feds backstop surpassed 2008 crisis level. So what is the discount window? while it's a lending facility meant to help commercial Banks manage short-term liquidity needs.

As we've been talking about, lots of banks have a ton of their customers' deposits locked in long-term bonds which if sold now, would be at a massive massive loss. They need to be held to maturity to realize their full value back. So if customers want to go and pull their deposits from these Banks Well, the banks don't have the money to give to those customers if it's all locked up in these shitty government bonds. So the FED goes and offers what they call the discount window to these Banks To provide short-term liquidity.

In this kind of situation, they basically say, hey, look, Banks if you need some money, we're the lender of Last Resort Come and give us your toxic assets. We'll give you cash in return and we'll give it to you at a discount AKA We're not going to pay the full amount of the collateral. In fact, we're going to give you less cash than the total collateral is worth. but at least you'll have cash to pay out the depositors that are going on runs.

and in simplified terms, the more banks are pulling up to this discount window, the more you know liquidity is drying up fast as the positives are rushing for the exit. and you can see during the Great Recession it skyrocketed during the pandemic, it skyrocketed and then it climbed at a moderate Pace as the FED timed in 2022. But then all of a sudden, guess what happened? It skyrocketed. Now think about this.

If you were to go and you were to chart the amount of time the average person spent in the hospital the last 20 years, you'd find the vast majority of the time the average person is not is not in the hospital And if you looked at somebody's chart over that 20-year period and you knew nothing about that person, but you saw certain periods of time where they were in the hospital, what conclusion would you draw from those periods of time if somebody is in the hospital, that means they're pretty damn sick. There's something seriously wrong, and it is the same thing in the banking system. If in 2020 Banks went in for a checkup, a casual checkup. Well, in 2023 banks are going in and they're in the freaking ICU They are getting emergency surgery and the surgeon is operating with an ax and with his eyes closed.

The discount window is essentially a hospital for banks. You know when a lot of banks are going to that window that they're very, very sick. So what has historically allowed Banks to back away from the discount window? AKA Get out of the hospital? Well, monetary medicine, namely, the FED cutting rates and QE And folks, as you know, we've been warning about this for months after 08. The entire Financial system was built to be dependent, completely dependent, like a junkie.

on record, low interest rates, and a Fed that was willing to provide endless amounts of liquidity. But it was never built. It was never built to withstand High rates. and it certainly was not able to withstand this pace of tightening, right? This pace of raising rates, This pace of QT.

And so now by trying to crank down on inflation, the FED has essentially broken the entire system and it is only going to get substantially worse unless the FED pivots. The good news though, is that if the FED continues to go through with more rate hikes and more tightening, while inflation will almost certainly drop substantially because everyone's deposits are going to be gone. Remember the fractional Reserve Bacon system essentially expands the money supply exponentially until it blows up in everyone's faces and contracts as money evaporates. If I give a dollar to a bank and the bank lends it out to another Charlie who then goes and puts it in his own bank.

who then goes and lends it out to another Charlie Well, you've just expanded that one dollar to having the impact of being like three or four dollars in the overall system back in October When we spoke about why banks will need to freeze withdrawals in the coming liquidity crisis, we broke down an example of how if one hundred thousand dollars gets lent out just a few times and each Bank keeps a healthy reserve, it can still very very quickly turn into about 271 thousand dollars in the system after just a few iterations. And that's a very, very conservative estimate with a very very high Reserve standard which most banks don't follow and again, small Banks don't have to follow the same Reserve standard that big Banks Do We have this weird situation where we decided to encourage tons and tons of small Banks to pop up because we decided not to regulate them the same way as we regulate the big Banks But the thing is, when you put them all together as we're seeing now, when you add up all the small Banks Well, it turns out that they're kind of a Goliath. The reality is that in a fractional Reserve banking system, a dollar goes through an unlimited unlimited amounts of periods of being lent out and all of a sudden when it gets stopped, the House of Cards collapses and Papa Fed has to come in and re-stimulate The monetary system is a massive house of Cards that continuously expands until one of the cards starts falling. If you want to learn more about how the fractional Reserve Banking system works, I'll go ahead and link to this video down below I Highly recommend checking it out.

but nonetheless, it is obvious that right now we are in the beginning of what is going to be a massive massive crisis and actions taken right now by the Fed and by U.S Regulators and by the biggest banks are going to have a big impact on the outcome. This is the most crucial time to watch the response because the response is going to have the biggest impact right now. Responses in a year or two years to this probably not going to have nearly as much of an impact because the damage is already going to have been done. Anybody that tells you that things are just berries and roses and then it's all fud well just have them open their eyes to what's going on The Kobec letter tweeted this morning: Markets in 2023 Bank Stocks halted 10 plus times per day Swiss Government covering losses for UBS Credit Suisse FDIC backstopping deposits on collapsed Svb fed provide liquidity after years of QE Regulators delisting auctioning Banks This is far from normal and that is exactly right folks.

Anybody that tells you that fears are overblown clearly clearly has their eyes completely closed. These individuals clearly aren't looking at the fact that Banks themselves are running to the proverbial hospital at record paces. And remember folks: Banks They do Not want to go to this discount window. It is horrible to go to this discount window.

It makes them look week. It makes them look like pathetic little banks that can't handle themselves without going to. Papa Powell Daddy Powell Please please give me some of those bucks when Banks go to this window. It makes them look terrible to the people that are invested in them.

It makes them look terrible to their depositors. It tells the world that, hey, we have a liquidity crisis. We can't manage our liquidity, don't bank with us because we don't even know how to manage ourselves. And they also get a bad rate.

They get a discounted rate on their collateral so they only go to the FED. They only go to this Hospital In a last resort, the lender of Last Resort is the Fed. So when you see them all rushing here at once, what does that mean? It means that we are in a dire situation. Now let's talk about what a prominent fund manager is predicting is going to happen and what he's personally doing with his money.

Business Insider Reports the U.S is going through a textbook financial crisis and that means investors should expect sluggish returns in the S P 500 for a long time according to billionaire investor Leon Cooperman. But Charlie Wait a second. Why are we in a financial crisis? Janet Yellen says everything is fine and dandy. She wouldn't be yelling up a storm of positivity if she wasn't right.

right? Well, I mean any environment where Regulators are orchestrating 30 billion dollar rescue plans with bigger Banks trying to rescue smaller ones While any environment like that is a shaky environment at best. Kind of like textbook. Cooperman said, we have a self-induced crisis by irresponsible fiscal and monetary policy over the last decade. I did not forecast the Svb issue, but I did have a view that we were heading into a crisis of some kind and we're seeing it.

Cooperman expects that the Federal Reserve will likely hike interest rates by 25 basis points on Wednesday and that it will then be ready to accept a higher level of inflation for the sake of stabilizing the financial system. He said the latest crisis is the response to debt buildup in the country and questioned how many out there want to buy U.S debt, which is estimated at more than 31 trillion dollars. The banks are not buyers anymore, he said. so he's saying Papa Powell is going to accept a much higher rate of inflation I've read other opinions from folks that are saying hey, you know what the FED is just going to Simply extend their time frame to reach that two percent Target Oh, we said two years to reach two percent.

Oh, we met 20. that way they could say no, we're not backing down on our Target rate of inflation, we're just extending it out. We're gonna take our damn sweet time. maybe even cut in the process.

But don't worry, the cut will be transitory, transitory, panzatory. Now again, though, if Powell decides to stick to his guns and keep raising rates, inflation will indeed no longer be a problem real soon. Because there's not going to be any cash left. There's not going to be any banks left.

JP Morgan Chase will own the entire banking system and Jamie Diamond will be the pseudo Federal Reserve chair. And honestly, I think he'd probably do a much better job than Powell. But anyways, Cooperman is making the argument here that Powell is going to really quickly switch dovish and turn the money printers back on. and that is going to result in this market environment where you have really high inflation, elevated inflation, and then rates going back down.

Which means guess what? eroded earnings power, but still pricey Equities. Pricey equities that pretty much stagnate over the next 10 years until earnings can really catch up. In Cooperman's opinion, investors are now in a stock picker's environment, especially if the S P 500 turns out to be very pedestrian. He believes that we've seen the fat years and that now we're headed for seven lean years, Adding that the S P 500's all-time high near 4800 is probably going to remain the top for quite a while.

Okay, let's go ahead and talk trade ideas. And as always, because you're the one that's going to be taking the risk, make sure that you're the one that's going to be doing the Frisk right. A Lot of people get real frisky, but they don't think about their risky. Let's start with Pxmd The Lovely: Pax Medica So Pxmd We made a video breakdown for on Thursday when it was trading at about 223 a share.

We had already briefed on it several days prior at decently lower levels, but in that video, I presented the case for why it might be a worthy buy at 223 a share. We went into the short setup, the float the Catalyst and so on and so forth. I said I see its retention period ending in yet another run and breakout and then that ending in yet another retention period. In this case, that's exactly what happened and it broke out to 307 on Friday morning and then had its take profit cycle today, which then it proceeded to bounce off of quite a bit.

Now, as expected and is commonplace, shorts you use today's lovely dip to close out of their short positions buying back shares. Oh, not so tough now, Huh? not so tough. I guess it went up a little bit. that was too much for you.

Now you got to get out as fast as possible. just a little dip. Now, why would shorts that shorted mostly at lower levels be willing to cover at a loss this high up. Why would they be willing to buy back shares this much higher up? Well, likely because they are worried about the risk of this skyrocketing much further.

And if Shorts continue to rush for the exits by again buying shares Because that's how covering shorts works and the overall momentum stays strong and it keeps peaking people's interest and momentum Traders interests as it breaks out to newer and higher highs? Well, I Expect Pmxmd Pxmd to have one of the best breakouts this week. One of the most insane resistance, break, and shattering breakouts. Again, that is just my process of thinking here, because you're seeing the momentum build and build and build. and now you're seeing shorts start covering.

That is a killer setup. But anyways, don't take my word for it. You want to see some proof of concept. The next critical breaking point is 307.

Watch for that and place this atop your radar. Watch the volume and watch how fast it can hold. Those take profit periods because you get one that doesn't hold. And boom.

You've lost confidence in the stock. and then all of a sudden you get a massive massive sell-off at the end of the day. We know how these trade, they go up, and then they go down. So you want to be very careful that you get it during the upcycle, during the momentum cycle, during the proof of concept cycle, and then you lock in your profits or in some cases, yes, your losses very very early on.

Next L-y-l-t So this is part case study and part potential new upside opportunity play. So we briefed on Lylt at about 13 cents a share this morning after it showed extensive pre-market activity that then dumped before open. This is a pattern you'll often see before huge huge breakouts. a pre-market ripe with moves and people trying to chase the low extended liquidity, the low extended hours liquidity, and that then puts it on the rest of the Market's radar.

Come open. it triggers a lot of those scanners, and likewise, it ran to 29 cents right after open, so that is a more than double from the brief everything, price, briefing, price, the highs more than a double here. And in this case that's simply because we knew that pattern, right? We knew the situation where all of a sudden, if you get a lot of pre-market activity, you get a lot of pumpy dumpy pumpy dumpy in the pre-market Well, that's going to catch a lot of people's attention and if you get just a little bit of proof of concept come up and all of a sudden the rest of the market starts pouring in. And in this case, that worked out pretty well.

And that is the power of doing pre-market research. Now the goal of the briefings, of course, is to find tradable Opportunities. The performance of our briefing ideas tends to vary greatly based on Market condition on any given day, and whether there's even a lot of Runners present in the market. You know, we have situations where you go through weeks where you have no runners in the market and it's like, well, it doesn't really matter what you're looking for, if there's no Runners, there's no Runners and other periods where there's tons of Runners right? So a lot of the situation when it comes down to how much a catalyst will run is based on the market condition on that given day.

But in any case, today, very, very fun with this play. Anyways, if you'd like to be a part of our daily morning briefings and the full zip pre-review program again, we have our Paddy 50 coupon code, which we'll be expiring tomorrow night. But anywho, moving forward, the critical breakouts that we want to watch for are at 29 cents and then at 37 cents. If it can't break out again in the next two or three days, it's more likely than not dead.

Shout out to folks who played this correctly, but you don't want to overstay your welcome if it doesn't continue showing Proof of concept. That is for literally any stock that we've ever talked about. And it's also a good relationship advice. If you get into a relationship with someone that you really, really like and then all of a sudden while the relationship is toxic and bad, you want to get out.

It's the same thing. It's the same thing with stocks. It could look like a really good setup. When you get in, it could run a decent amount, but all of a sudden if the setup's not looking so hot, well, maybe you should get out.

And lastly, by the way, make sure that you always pay attention very very closely when we have sponsored stocks. We had a sponsored stock yesterday and it did pretty exciting moves. Today we only accept the most exciting stocks for our sponsored segments and yesterday we presented the setup on Inm and why? I Saw short-term and long-term potential and it completely destroyed the game today, breaking out to 168 up 47 plus at highs. We've got another sponsored stock coming later this week on Wednesday and there's some really strong upside potential both long-term and short-term that I see I could be wrong.

but again, I Really would pay attention to these sponsored stocks because a lot of times they have some really interesting setups and we only take the best stocks that we like in our sponsored stock segment because we do get a lot of offers anyways. that caps off today's video. Make sure to hit that ravishing like button and subscribe. Check out that link to Zip Theater you down below.

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Have a good one folks and we'll see in the next video.