Folks, we've got several major things to discuss. Firstly, the lender of Last Resort here in the U.S has officially begun lending and in a historically significant way this signifies looming threats of a liquidity crisis in major parts of our economy, specifically banking. What do you need to know? Secondly, I Want to give you a violent update on plays including Arcola play. This was actually an insanely fun end to the year we briefed on this FDA play at roughly 6 41 a share on Wednesday morning, and since then it's run to 45.70 Even since the public video on Tuesday was posted, it's more than tripled.

Obviously, not all of our trade ideas work out, but this was a very nice one. To cap off the year. we'll discuss what you need to know moving forward and some takeaways. Time stamps down below.

Let's get right to work. Okay, so let's go ahead and start with the lender of Last Resort situation that is spiraling upward. Now to ask the obvious: what is a lender of Last Resort A lender that you go to in an emergency when everyone else is failing to provide you with the liquidity that you need. You need cash fast and no one has it? Well, you go to the lender of Last Resort The lender of Last Resort for the financial system and specifically banks in our economy is of course, the FED.

During the Great Recession in the 0809 era, you had a substantial increase in borrowing from this lender of Last Resort Financial institutions panicked to get funding to fulfill customer requests and outflows in some of the darkest periods of that era, and then they basically needed nothing from mid-2010 to early 2020. Then the great cough cough of 2020 happened and the financial system needed liquidity again. And then that reversed. But as the FED has tightened this year, as you notice right in the beginning of 2022, the bacon sector has consistently and significantly been running to the Fed.

You may look at this and say, oh, Charlie No, No, this is nothing but. remember, for around 10 years, the lender of Last Resort has not needed to inject any real liquidity In this way, the economy of late 2010, 2011 or 2012 wasn't amazing or without insane risks. It was a very, very slower recovery, but they still didn't need the level of Last Resort lending that we need today, and that has been increasing since the beginning of this year. And as you can imagine, if this trend continues is going to be significantly worse this time next year.

If the amount of emergency money Banks need from the lender of Last Resort is baloney, What does that say about the economy, folks? Does that say that we're in the strongest economy ever in the history of man? or does this say that things are starting to get bad rapidly? Now, keep in mind when it comes to this lender of Last Resort Banks, they don't want to look bad when they go running and crying. To the FED, it generally reflects horribly on them and makes them look weak and is a sign of poor liquidity management or financial strain. At minimum, that's a huge stigma. Huge stigma is attached to that.

so when they do it, you have to know they are having huge huge problems. I'll give you an example: when I was a kid, my dad a U.S marine Corvette was more intimidating than the rest of my family. If I had a problem that needed help I would prefer to go to everyone else first and then if all else failed I'd go to him. he was the last resort.

If I stubbed my toe or got a splinter I'm not gonna go to him. He's gonna think I'm a pansy, right? But if he's the last resort and I start having to go to him a lot, that would mean that I'm having a lot of really bad problems, right? That would mean that I've gotten myself into a lot of emergency situations. Well, this is what you should think of when you see this overall uptrend. This is the trend of banks that are running to the FED with emergency liquidity demands.

They are more worried about liquidity issues than they are about getting that stigma that is attached to running to the central bank. daddy. Now, it's worth mentioning that post-financial crisis error rules specifically Dodd-Frank require the FED to publish who is tapping these emergency lending facilities, but it takes about a two-year lag. However, when it does come out, it looks horribly horribly on the banks.

and even just a groom or just a small rumor that your bank is going to go to The Lending facility reflects horribly on them. And of course, trust me, Bank employees tend to leak to the Press Anyways, so no bank is going to be lagging two years to get that stigma. And some people say oh no, banks are just trying to be careful and there's liquidity everywhere. It's plentiful.

Charlie Wrong! When banks are running to the central daddy at the FED, it means shite is hitting the fan and it's hitting the fan rapidly. Yes, people all the time say there's so much liquidity in the system, it's just overflowing everywhere. But there's a lot of liquidity in the system at Banks like JP Morgan the biggest of the big, not necessarily in a lot of the smaller to mid-sized Banks And in a crisis, the smaller ones start going belly up first and then it. Dominoes So what are some reasons this could be happening? Well, one of the reasons floated around by the Berg of Bloom could be that banks have accumulated over 770 billion in unrealized losses in their Securities portfolios.

The theory here is that those unrealized losses have destroyed Banks equity, and in many cases Banks could be dipping into the negative equity territory. So there's this rule, for example, that certain institutions are required to use tangible equity which includes Securities when they decide which banks are are healthy enough to lend to. So if you're a small Bank going to a lending partner to get liquidity fast and you no longer qualify because your tangible Equity has evaporated, well, you may have no other choice but to go to the main sugar daddy over at the FED. There's also this other Theory which I find very fascinating.

Perhaps you have a lot of new fintech Banks whose dollar deposits are linked to crypto assets and exchanges and thus now need liquidity in light of the collapse. According to the Berg of Bloom quote, small Banks often hold customer dollar deposits and accounts that are linked to crypto assets and exchanges. Investors use these Banks to settle the Fiat side of their crypto transactions. and while the bank has no direct exposure to crypto, its depositors might as crypto prices fall, These depositors may be emptying their accounts rapidly enough that these Banks couldn't need to turn to the discount window.

The discount window referring to this line of Last Resort lending that were seen from the Fed, and their liquidity crunch might be compounded by the decline in Treasury and mortgage-backed security prices this year that make selling their Holdings more expensive. Superficially, at least crypto prices have fallen all year. As discount window borrowing has risen, a lot of people say Oh no, you're so stupid. There is no big Bank exposure to cryptocurrencies.

None at all. Well, if you're a customer getting margin called or otherwise need cash in a hurry to cover certain positions in crypto, you may rush to get your cash from Banks but we have a reserve banking system and Banks only hold so much cash on their balance sheet at any given time. So then what happens? Well, they have to rush to the central Daddy to make up for it to make up for those cash shortfalls. And I believe you'll see this not just with crypto, but with many other asset classes that collapse in the upcoming 12 to 18 months.

So far, we've seen it mostly with crypto and mostly with the stock market, but you've got a lot more pain left and thus a lot more need for imminent cash. Any event that causes massive sell-offs is going to spark massive margin calls, massive coughing up of cash, and mass scale withdrawing of funds from Banks which may seem not have money to cough up and have to go to the FED Now that said, these theories aside, whatever the specific reasons for this uptick in borrowing, well, the bigger picture is loud and it is clear banks are needing more and more emergency dough and that is something that tends to happen right before a major economic catastrophe. Next, I Want to go ahead and give you an update on different trades and different play ideas that you absolutely need to know about as well as some different trends that I'm seeing. But first, I Want to go ahead and give a word from today's sponsor MooMoo Today's video is brought to you by MooMoo and the now up to 20 free stocks that you can get if you sign up and deposit using our link down below.

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Socala Lovely. Cala has just been insane. We briefed on this bad bad girl back on Wednesday at 6 40ish a share and it's now run up to 45.70 at highs which is about a 612 percent increase. Briefing price to Highs Now Obviously not all of our trade ideas and morning Catalyst fines do that.

We can only really take credit for finding the Catalyst and setup, but it's the market that actually rewarded it right. And I Think that's the attitude that you should always have as a Trader But what is the Learning lesson here? Well, like we were talking about on Wednesday's video, Calla had rocket it up after the FDA okayed their end application for their Pced treatment which is for a certain defect of the cornea. and when you have a super small cap whose whole goal is to get their drugs or therapies to Market that means any form of success is going to come with a likelihood of a massively positive Market reaction. If this gets to Market it's going to be a game changer for the company.

so people are buying in in speculation of that and that pumps up the price to a huge degree. But a bigger reason it spikes so much is that the stock is just so low float and so small cap that any sort of buying pressure is going to have many times the effect that that same buying pressure would have on a much bigger company. and when that stock shows proof of concept day over day, that momentum tends to attract attention from larger populations of Market participants and they buy in and it further causes the price to go up. It does a little rally ralito, not to mention the Amplified effect when you have short sellers trying to jump in on It and all of a sudden they're getting squeezed further, causing the price to go up a lot faster.

According to Or Tech, short interest is up almost 50 percent in the last seven days when you're dumping shares and then getting squeezed day after day. That's painful and accelerates the uptrend. It can be quite beautiful. We've seen more beautiful short squeezes than this.

This is just kind of like the short squeezes amplifying the already really strong momentum Trend but it's still there now. That said, as you know, every rose has its thorn. and if you look at the past, we know how this game ends. Every single pump this year has ended in a massive dump and the one from March when Cala announced that their Isuvius was covered under certain commercial plans and certain Medicare coverage.

Well, that also ended up dying after a few short weeks. So again, we know how this game is played after this momentum wave dies off, which probably will happen shortly after New Year's there's going to be a big take profit period and it'll die down consistently until the next catalyst. So my opinion here is that if a person has played this move successfully, they should be elated and happy. but just don't get too cocky.

Now if you would like access to our daily morning briefings where our goal is to find catalysts that run like Kala, those are available as part of of membership to zip Trader you I'll go ahead and put the link to that down below. Okay, this morning Pally was also an interesting case study. We briefed on it 30 minutes prior to Market open at about 4 55-ish as it was selling off from its pre-market pump, we were hoping for a post open rally and continuation of momentum. once volume came in and we did end up seeing that it ended up rallying to 854.

What was the Catalyst here though? Well, Pally is another FDA player where Traders are trying to factor in the likelihood of their success at getting to market. We've actually been covering most of the steps in Pali this past couple of years. In July 2021, we covered their positive mid-stage data release in March 2022, we covered their critical phase 3 trial notification in May 2022, we covered their clearance to begin phase 3 trials in China with one of their co-development partners, and last month we covered their FDA Fast Track designation here in the US And if you recall that last month, Catalyst the company received a fast track destination from the FDA for its Lb114a drug for normalizing bowel functions. Now don't want to be overly political here, but I've always been super pro proper bowel functions and that's their goal so I'm all for it.

But that aside, we briefed on it back then and it had a nice one day rally and then you have the massive dump. Now remember, Pally is a company trying to help people with bowel movements, so it should not be a surprise when the bowels aren't the only thing that is dumping. That's what happened after the first Catalyst run we found and that's what in all likelihood is going to happen again after this new Catalyst dies off. But the bigger picture is this entire stock is trading based around the projections on the company's process and success with the FDA.

You also had an offering this morning which was priced in at 2.37 which would have been taken badly in most situations, but it was mostly glossed over I Think speculators see it as something that makes Pally more likely to get through the capital intensive phase trials, so they haven't been super worried about this, but more dilution could come and that could derail it further if that is something that happens. Okay, now another thing to take away from Pally is that one of the big trends that I'm seeing is that multi-day momentum runners in the small cap space are starting to see piggybackers little piggybackers ride them, which are causing them to see continued momentum for several days after the original rally. That said, one of the only telltale signs of this phenomenon is highly elevated pre-market positive activity that is building on the previous day's momentum For example, Pally this morning had bounced back and forth, but the overall trend from the previous session and today was very directionally upward. Right? So you have momentum Riders going and buying the dip at open, then piggybacking for the next leg upward.

but the minute that the overall trend breaks, it's going to need a new Catalyst to really spark another rally because all of a sudden all those piggybackers are going to be gone fast and then all the new momentum bars are going to be gone. So all of a sudden you get this massive take profit period. so something to keep in mind there Now Finally, Tgtx I Continue to believe that this stock is under pricing their FDA approval that they got earlier this week I Know we talked about this on Wednesday's video and it barely made a new high. but to me, the sales potential and notoriety potential of a drug that could generate 1 billion in annual sales for a 1 billion market cap company is just bigger than What markets Think in my view, it's worth keeping on the radar.

We do not have an open position in this or any of the stocks mentioned in this video, just so that you understand that we are completely impartial and just trying to cover things the best of our ability. But this is my thought process on these stocks and the different trading opportunities and trends that we see coming into the first couple of weeks of 2023.. Anyways, folks that caps up today's video I Hope you have a very Happy New Year's and we will see you in the next one.