Maybe I’ll write an overview or introduction to the concept, but the idea I have is to document what news things are “breaking” at least from my perspective as the economy is at a seemingly delicate point.

Today, March 27 2023, the economy is GREAT – kinda – I don’t know.

It really depends on how you define it.

House prices are less affordable than ever before.

Rents are higher than they have ever been before

Food is higher than it’s ever been before.

Inflation is eating out any “gains” in pay raises that actual workers gained during the Covid times and workers aren’t feeling “rich” like they were possibly before.

So the question that comes to mind is recalling other recessions.

Are we in a recession? Well, the stock market is down? Not sure how that impacts most people but it still seems, to my perception, like an unknown.

If unemployment is all time low – then how can the economy be bad?

But at the same time – if Ai is taking over and allowing big companies to cut down on workforces – as they cut back out of precaution of a slow down… Who knows!

I don’t know for sure, that’s why I’m going to document some of these videos (which I’m sure some will be taken down overtime, so maybe I’ll archive them somehow).

Here’s the script (in case the video gets removed)

This sort of misunderstanding of capital buffers.

0:02I mean, we’ve had this multiple times over the past few weeks of turmoil,

0:07right? What’s the situation when it comes to

0:09Shrub’s business? Yes.

0:12Heidi, good to talk to I. We looked at the balance sheet and what

0:17we saw is that Schwab has a lot of its revenue that’s coming of being a net

0:23interest margins. So when you look at what Schwab’s

0:28revenue looked like last year, 50 percent of it was from the net interest

0:33revenues. And so that means that, in essence,

0:36they’re not just a broke their bank. Unfortunately, a lot of those assets are

0:40very low yield and they’re long dated mortgage backed securities, treasury

0:46securities. And according to their 10K filings, the

0:50average yield for their entire source of of assets is 2 percent.

0:59And that’s very low. That’s only doable in a zero interest

1:04rate environment because they’re able to pay their bank deposits such low

1:10interest. And so we’re at a point now where there

1:14is the potential for those deposits to leave and also for trust to have a

1:19margin squeeze as a result of that. OK.

1:22So this is the kind of, you know, hidden under the surface.

1:27You see who’s snake, where the tide goes out kind of story.

1:30But Charles Schwab has such a strong reputation.

1:33And what would cause a run, quote, unquote, on them?

1:38Yeah, I think it’s the same thing that’s causing a run on all of these banks.

1:42It’s the fact that they’re not paying enough interest in terms of the deposit,

1:47that there are other places you can go you can go to money market accounts, you

1:51can go to many different places in order to get your yield.

1:55And so as a result of that, now that we’re in a different interest rate

1:59environment, Schwab is either going to have to let some of those accounts go or

2:04they’re going to have to probably lift the yield that they’re supplying for the

2:08sweep. That is, is that, you know, every

2:11account that has cash in, it goes into a sweep and that those that money is being

2:15paid into. If people have, you know, tens of

2:19thousand dollars left in their Schwab account and they’re getting no interest

2:22on that, that money, they’re more likely to put that into a money market account

2:27that will pay them 3 4 percent interest.

The facts I’ve heard recently is that only 2% of “our” bank deposits are actually in cash / in the banks.

There have been giant banks already collapsed last week (SVB) and Credit Suisse – and that will take down many other banks as well.

And sure enough, big companies are tightening up right now.

So is this a domino tipping?

I don’t know.

Just documenting it along the way.

Will we keep moving up? Down? No predictions here.

Lastly, I’ll end with a scrolling screenshot of “suggested search results” for other videos.