0:00 So, you really think of banter is a really good really important. Part of this? Yeah. As long as it's not forced, right? Yeah. I mean that's all bullshit. You sleepy guy. Yeah. So you you just got back from Australia, right? Yeah, me Zealand. New Zealand long ago, TG. Yeah. Wow. I was that. So and I'm it right? Amazing. Except for the Cyclone that we got stuck in and Napier, Hawke's Bay. We lost four days of the trip there. We got stuck in a little Motor Lodge No imposter. Did you gain four days because you were forced to stay there for four more days? No, we didn't get to stay extra four days. We know it wasn't an extra four days. We missed Harbour Town, we missed the whole Center.

0:40 OH, Zealand kaity missed the Pinnacle that trip? Yeah, well, no, I mean you, when you go through the South, the south island of New Zealand, it's like amazing. We went to Milford Sound, we tried a couple times. I don't know if I told that story already where we car broke down Falls, The helicopter and it was crazy was really really crazy. Well on that note welcome back to a record of my father. Today we're going to be talking about a recent turn of events. Yeah we find to be very interesting. What is that? What is that event? Yeah, I mean if anybody knows anything about banking Silicon Valley Bank went into distress yesterday day before yesterday yesterday there were actually you know senior hedge fund people talking At a bailout was really interesting to hear bailout and bank because it's like, hold it, you know, they just seem to be having a little trouble. We're doing with the gas tank, that was yesterday. Well, this morning you wake up and they're the price of their stock dropped 60% yesterday.

1:45 And this morning, it was after hours, trading, dropped another 60 percent, it was a three hundred fifty dollar stocks a couple days ago now. It's 60 I think or not it stopped at 100 because they couldn't let it drop another 40, you know. So it's It's with the but The Regulators wouldn't shut at the bank, they did that today, which is a big deal because it's the second largest bank ever shuttered. Its it just happened. They did this to Washington Mutual and I think I was seven, it was another huge bank and they're doing this, you know, kind of like really, really, really quick. You know, and you look at where the economy is in a market is, and it's a completely different place than wasn't 08.

2:27 You know, you don't have this oversold crazy. I mean, we had a crazy economic housing thing, but then that kind of died when we start raising interest rates and everything went to hell in the housing market. Well, then it hadn't gone to Hell, yet the actual shuttering of all the banks and the banks could make a, you know, they could make any more, you know, no interest rate, no doc loans, which is foolish, but we don't wait, we digress address. So, here we are on Friday. And, and the reason we even talk About this current event. We never talk. We sometimes talk about current events is that the first time I lived through something like this was in October of 87.

3:07 There was a there. It was October 16th, it was Black Friday and everything. It was the triple Witching Hour, which is the third week. It's when all the options expire on all the different Industrials and a bunch of other things, I don't know the technical and you know, I can look it up. Second, this was your first day. Working for this traitor. No, no, no. This was my first day was Monday was Monday. Okay. Monday, which is now forever known as Black Monday. Black Friday was not called Black Friday. When it happened, it was just sort of like what the hell correction it's bad. But then over the weekend fear grew and that's and that's what it is.

3:47 Now it's like the markets closed and people can't do anything and they're all sitting there. I'm getting calls from people and I started getting emails. It's like what the hell's going on? What's going on? What can I do? Could I do and I'm like we can't do a damn thing now everything's closed can't do anything till Monday morning it's shut take it all out. Should take it all out. We run CH run Joey run and I do not like oh my gosh I can it just kind of feels like the same thing which means that Monday would be Black Monday all over. Again that was my first day working for a Trader who had he he was a arbitrator Arbitrage which is they look for disparities in price. You know, so many makes an offer for a company that's 18 and they think it's going to be 30 or 20, or 25. So they bought they take a big position in the company with information that they think they know more about the company than the people that are making the offer and then the price of the stock Rises and they make that sliver between what the offer is or right before the offer and what they all company, ultimately, sells for.

4:50 There's a okay, very, very, very simplistic terms. Well eyes, I call Monday and back then 100 million shared a was considered impossible and yet the the extent they were wishing that they would reach like a billion shares or know. When I, when I went in, I went in there was 100 million. They were trying to get 85 in 85, I went with the finance 84. I wouldn't it Finance Club went New York Stock Exchange and they were preparing for some day. Being able to trade 100 million shares. That's what I want. Yeah, wasn't it? Yeah.

5:31 And it was crazy. And here they were doing it like 4 years, 3 years later and they didn't want to be in. The problem was they weren't keeping up. So you would, you would say, hey, I want to buy that stock at 17, and was showing it was bleeping 17, but the trades hadn't caught up with it. Exactly. And really, it was, it was six. So if you just put in a sell order, you see you Thought you were selling at 17 because you're trying to you trying to get out of the stock, it's 17 because you figured okay, that's not a bad loss. Well, then when it closed to three days later, they had three day close it, close it, 60, you. I mean people got wiped out and there were a lot of them that worked on margin and margin.

6:15 You got to settle the in a day and there were like, I don't know, 10 big hedge funds at that point, no, not hedge funds, 10, big or four. Arms and four of them went out of business that day. I mean, Kidder Peabody was really, really big. They got hammered then and they lost a third of the capital. In one day, I remember counter delaio. They were this really up-and-coming firm and had hundreds of millions in capital and then borrowed capital and then They lost it all in a day and then they were closed and they were all looking for jobs by Wednesday. I mean it was just it was a Slaughter and everybody said this is it this is the end of the world. The markets never going to come back. We should everybody should go into long-term bonds or you just all the all the Tuesday, Wednesday Thursday. Well anyway, let me go back to the day I call in my first day because I'm calling the 13 D's is that's when someone acquires 5% or more, they came out hourly and pay Paper at the SEC. And the first point of dissemination was there. So if you had somebody in the room, you would hear about the market before it got posted it Al Jones got posted it out Jones at quarter past so you could technically Insider trade with quite a few.

7:38 Yeah. With the scc's information and it was perfectly legal because the documents came out and if you could summarize them get them. And remember this is a stack of documents that how to open. Hands in here foot and a half tall. 25 are coming out an hour because that was the kind of acquisition back then. Everything was going crazy. This was, this is the boesky times. I remember one of the firm's I work for before. Well, boesky had every every little research firm in the reference room on call. They paid them a monthly stipend. So first one to get it to him got a Bonus, all the rest, got their monthly, I mean that was what it was.

8:19 So everybody was trying to Get the information to them first and the same thing with the other arms were all getting wise to the ways that all the other arms, tried to gain the marketplace. Anyway, where was I going with this? I was talking about the difference in the trades, I call you know, my Williams Act filings I call and there's companies that are going into distress at the time. I think I'm trying to remember one I think was CSX or I don't want to say cxx it was a it was a Home Building Company. It was asbestos really. I don't remember the name of it completely. It was a special was really it was something. It was like it was trading at like 17 is share.

9:01 They had a tender offer for 17 and And they were like 10 days into the tender offer and not that day but the day or two later they rescinded the tender offer and then the stock went down to like six and our guy, our guy sold his it's 16 instead of like 9 or 8 or 7 so you know and he had like I think 100,000 shares. So you know, 100,000 times. 10 is what? How's your mouth? A million. Okay, so on one trade, you know, in that and that may not seem like and that's not a lot today, but this is one that was 87 this.

9:45 Yeah, that's a little different. But anyway, that's all on that Monday. I'm calling and I call it no one's answering the phone. In a way, the phone system setup is I'm calling from a pay phone. I call into a central number. There are three Traders and their two analysts, and there's a person who calls all the companies and browbeat cement to give them information. And then there's the owner. And the phone is like, remember those? I don't know if you remember dial phones or push-button phones, and they had five lines, and when I call, I would come in on a line and all three of them could hit the line at any time. And it's like, you say, you had a portfolio of these three stocks and you'd hit the line, say Phil.

10:29 What For me and I would read shit to you real fast and say so and so is acquired three point, five point one percent. He said what are the prices that ice? It's a 14, 14 and a half 17. He's got 10,000 shared traits that set 19. Just got 10,000 share trades at 20. It's like, what does he say, says he's going to see control. Does he have financing? Yes. Yes, financing. Okay. That's serious. That's serious. When you have financing, you're doing. It is a highly confident letter. That was a very big thing then but it was very, very compact. It was, I work 10 minutes an hour. From 9:00 was no time because the market wasn't open the market already reacted information. It was 10 11 12, 1 2 3 so I were I was on call six hours a day for about ten minutes each. Our holiday was your work, this job form curious. I only worked for about seven or eight months because it was really, it was by far the most Stressful and non rewarding just the way you're talking about because you wouldn't you wouldn't make it.

11:30 A sitting is, is everybody picks up the phone and and each one of these Traders had their own little group of stocks that they watched. And if you were watching Pfizer and it and it came up in the D's and Billy Bob was watching, you know, Xerox and Xerox came up in the die's. Billy Bob would ask for Xerox. So then I get the whole document. You want me to read the whole damn thing. You know, we had a million bucks in it and I would come back, I'd have to go physically, get it, come back, call you back on the phone and then he wouldn't pick up. You would pick up and you would say, I don't fucking want the Xerox. Shit, get the fuck away from me, where the fuck is my Pfizer?

12:11 You know, he fucking own Pfizer, why don't you fucking have Pfizer? And then, I'd be like, okay, I'll get Pfizer and then I go and I get buys, when I come back and then the Xerox guy picks, it's just like, and then I can see, and then they get online. They get then they both click in. And then they start cussing at each other, like, you fuck her. Why the fuck are you fucking with my fucking tray? You know it's like mmm and I mean everything that is. Yeah, every third word. It just third were just crazy, crazy crazy. They had a woman analyst who could just minutes. Ask you late any man I've ever seen just so believe it.

12:52 She would just be so So brutal, she would just like Crush you, you know I mean she talked about your anatomy and how small it was in your hand size and I mean without even like you know not even giving you a chance to cry. But she also was like really really good at talking to like vp's at large corporations and call on the board members and getting tidbits of information from them like asking questions. Like so you guys are going to buy that, right? Well that's not. What do you mean? We're not. We're that's not public, we're not going to do that, you know? So there was all these different things that you would say that would solicit information. Anyway, I was calling, they answered it 11:00 and all I heard was Free Fall.

13:40 It's a fucking free fall. No one fucking cares. What you're saying, slam? Well, that was my one call that I got that. I talked to them on that day. Well no, I did. I got a Somebody got a message to me, I don't remember how, but I was supposed to call in for it. 4:00, you know, after the market closed, we're going to have a 415, we're going to have a session. And then we called in, we're all in the market and it's like, well, how much did we lose? Well, we're down. I don't know. I think it was like, 8 or 10 or 15 million, you know, which was a third of the capital, you know, they had a lot of money but not that much money because it's a small art desk and And then there was all this commiseration about this and that what's going on and all that kind of stuff. But then, as it slowly went, that turned out to be one of the longest bull markets we've ever had afterward. If you stayed in the market, most people ran, I was living with a guy at that time had his girlfriend there. His girlfriend had a trust and she was all pissed off at her dad because he lost all the money in the market. And so she ordered him to take it all out of the market and everybody that took all their money out of the market. At that day, missed the largest bull market so so it's sort of like that, but it does Silicon Valley thing feels like that. So, I'm expecting over the weekend fear. I'm expecting fear to rise and I've already got feeling it. I'm all I've gotten like,

15:11 feeling I've gotten like 10 emails. You can go online and run and run an email. I mean, Run a search for Silicon Valley and the stories are just popping. Now, people are starting to pick it up and it's only fair. Friday and they can't do anything. And so, guess what happens, when see what we need on, Tuesday, comes around. Let's see, it's like, it's like an Alfred Hitchcock flick because you don't have to show the guy stabbing, the woman in the shower, in some gutter away and gutting her, and thrown her heart on the floor and all that kind of happy horseshit. All you have to do is let them let their imaginations wrong and citing fearing, right? Little bit of eyesight went with if you don't see like the President or someone senior Financial guy, go on TV say we're having National talk about what's going to happen. Monday, shit's gonna hit the fan. That's, I don't know that for a fact. But I'm telling you I think that's what's going to happen. You need some recourse right away pal. The head of the FED has to come out and say we're going to support this.

16:15 We're the banks are going to be fine. The banks are going to be fine. Banks are going to be fine. You need someone idea of believe. Somebody holds cigar that people trust, it doesn't seem like a total idiot. Pals, kind of like the only reason any of these economic systems have ever worked is because people have confidence in them from other people saying that they are confident in the system. I mean, that's the only reason why any of this is ever work to begin with. Well, the dollar not being a piece of ameica piece of paper. Why is it worth 100 pennies? No, because you believe it's worth it, right? Yeah. It's the only American us of a, that's why you know. So so that's why I thought that I thought about the time in about how cool it is.

16:59 Hmm. You know it's a very very interesting thing and for somebody who has so much knowledge on it as well, I think this is a an important topic to cover. Especially that's what it just really jumped out at me because I remember that timeframe housing markets as well. Yeah, doesn't he? Well the thing is is so now we can Populate. Yeah, you know, do we want to do? We want to do not look. I mean, I want to put this out like today or tomorrow. I really do believe. I think we should put this out tomorrow. It's very like a promissory 11:21 Valley Bank. Have we seen this before? Because, you know, I think we have, I mean, people will say we can tie it to like the 2008 highs housing crisis, but I think that's for a different reason this right now is, you know, They bet heavily.

17:51 Hmm, and they put all of their cash and treasuries. And then they had a run on the bank. And you say to yourself, what they did is, they bought a bunch treasuries that were earning one or two percent. Instead of having it in fully liquid counts so they bought a treasury that's 1%. Well the treasury say it's thousand dollars Rose to now it's 4% short-term treasuries so if you want to buy a thousand dollar treasury that only earns one percent in interest you're not going to pay 1,000 for it. You're only going to pay like 960 or something, or 959 90 or whatever you do. Pay a whole lot less than 1000.

18:36 And that loss is eaten by the bank and the bank needs to cash the treasuries in because everybody's going to the bank and saying, we want our money one or money now or money. Now, so the bank's already down one point, eight billion. It's a 16 billion dollar bag. I mean, so I'm surprised but most of the assets are tied up in you know they loan money to venture capitalists so in VC. And so the money's tied up in, you know, illiquid Securities. So they can't, they don't have a Way to get Capital. So they went out and they try to borrow and they couldn't they I mean, you could say that the CEO going to the market saying we need two and a half billion to shore up, our balance sheet was an incredibly stupid move.

19:17 But You know, it is what it is, right? Exactly, we'll see. What happens. Here we've been seeing what's happening with Bed Bath & Beyond? No, no, I'm gonna watch that at all. If you've been watching, there's the last ditch effort to basically Crown fund money from shareholders and they actually update for it was like they gained like what was? It was like 350 million dollars the other day surprisingly and you're just seeing their stock like go down from $2 to. Dólar de Bank up to $2 like every single day. It's just doing this back and forth and so, interesting, it's crazy. See the movement, you know, it's very, very anything.

20:00 I'm like, wow. Wow, wow, I'm hoping for a a Holy Savior to buy the kind of thing where you last, you haven't, you you own Bed Bath and Beyond. Yeah, I do heroically. I do not. I'm not happy right now. It's still not be as bad as upstart know, God. That was so bad. I'm still looking at that. Oh my gosh, my God, it's a 380 and the, you know, it's dropped a 300. It's to its 280. It's 270, it's 250. Oh my God, it's never dropped a slow. It'll never go any lower, it's worth so much more than this is worth so much more than this. It's worth so much more than this and I read like ten articles and all this kind of power in the handful of round. They did all the financing and they showed the income statement and balance sheet and how its kind of grow out of this. And you know, this is the, this is the bottom. Well mean, watching the Laughs at that company kush. Yeah and then the mean water it's now three guys now it's at 9:00.

20:56 Is it even? Let me see, let me check its nine or 19 or something like that. I look at that. I'm just like what the hell say let's see. What's that do? Hmm. Fifteen dollars and fifty.