[Music] hi there I'm Dean huskin thank you for tuning in to our podcast entitled The Secret war on cash where we take a hard look at what's going on with your and my cash in this ever so changing financial and economic climate that we find ourselves living in today I have with me my frequent co-host Chris aalos good morning Chris how are you today hey good morning uh doing well doing well no complaints today well that's good to hear I'm glad must mean hopefully things are going well in your world yeah for the time being I probably just jinxed myself let me knock on some wood over here yeah that's smart uh well let's get right we haven't I you know as I was getting ready for today's podcast it kind of dawned on me it's been a little while I believe since we've really talked that much at least twice as much as we did at the uh throughout last year about the banking system and about what's going on with banks and not that there hasn't been things going on it just seems like there's been other things that have been a little more let's say relevant or a little more timely in the news as it pertains to money Finance the economy Etc so let's get right into it here we have um this was a topic that we that was discussed quite a bit last year uh JP Morgan Chase taking a 29 million doll loss on an LA on a on a singular La apartment complex uh in a deal with a mega landlord as this report says the now to be fair this is not this headline in of itself is not something that is at all a shock or a surprise in so much as that this was really a lot of the talk last year was you know the commercial real estate issue and how there were so many vacancies out there companies pulling out of cities like name brand companies pulling out of cities so this doesn't come as a surprise but the the as you get into this article and I'll let you kind of get into it here Chris in a moment there there's already a lot of things or issues that these banks have been dealing with and for quite some time now these when you're talking about a single a single apartment complex with a $29 million loss the question becomes like how many of these can they W with sustain if you will before it creates some kind of a major disruption and this is certainly not going to be the last of you know what we're going to see in terms of losses being incurred um the commercial end of things or with real estate holdings by Banks so you know what what is is this just a A oneoff or is this something that could be like that spark that gets that fire that theyve been warning us about going is it relates to you know what we start seeing with uh real estate you know uh closures uh yeah seizures whatever you want to call it like where where the market I don't want to say collapse but for lack better term where the market might collapse yeah well that's the thing they're you know they're trying to limit their losses um or I guess you know cut cut some of their losses and uh reduce exposure um so it makes sense that they're they're unloading um some properties that they don't see uh you know would have the ability to turn things around in the short term so or even midterm really um and this is one of those cases but you know it has been happening um like you said you know this this whole last year or so we we've talked about it a little bit it doesn't seem like it gets a a ton of AirPlay um you know if if you're paying attention to things you'll see the the stories but they just kind of you know uh come and go um but yeah this is this is nothing new I mean they talk even in here that uh All State um had a building that they purchased a couple of years ago they they purchased it for 30 million they sold it for 11 million um you know like a what's that a 66% or so um loss in their investment in just a couple years time um another building they they mention in here was uh the you know the once the tallest building in St Louis um purchased for 200 million and 06 and and just sold for about four million U major major loss there overall um so I think we are going to see this heat up it's one of those things where you know they they too many of them can't d it at the same time because they don't want to collapse the market so they kind of try to time it at the same uh time you don't want to be the last one out right the last one uh holding these buildings so uh I think we're gonna we're going to continue to see it with everything going on um with uh the economy you know a lot of commercial buildings are struggling we see that you know here in the in the Phoenix area as well so uh you know some companies that are that are uh they have really good cash reserves and that they own the properties they can weather the storm long term but a lot of these Banks and investment companies that were speculating and and purchasing properties you know maybe uh 2018 through 22 uh where you had covid in in the middle there and how that's changed our world and how many people work remote uh and just the the overall landscape I mean they're going to they're going to see some some losses and they want to minim it like I said so they don't cause a a complete collapse quickly um but at the same time they need to move this product and not be the last one out yeah you know it look on on the surface or you know as you look at not as as a looking at it as a whole honestly it sounds like a a tremendous opportunity and in a sense take take for instance that that you know the tallest building in St Louis there yeah 2006 which a few years back obviously but arguably you know things in since 2006 have for the most part gotten more expensive versus less when you talk about buying a building that you know in 2006 was purchased for 205 million yeah now they're picking it up for 3.6 million I mean that and that's the whole point I mean the fact that people are buying these that like versus which there's been some where you know you have institutions uh that have just walked away from buildings in this case that they are being purchased you know and it does set the stage if we can finally reach a bottom in this you know in the in this whole real estate uh sector that bottom could present you know a great opportunity I mean good Heavens even you know if that recovers by 50 Cents on the dollar from its 06 price you're talking about a right as you said like roughly a $4 million investment going to 100 yeah however it does speak to the uh fragility if you will of this real estate market and there is the unknown factor as well not knowing you know when is that bot gonna gonna hit uh if it is going to hit before you know we find the plug getting pulled on on this area of the market so moving into other banking news this one and this article is is a little different than any we've discussed before but my goodness I mean you're a banking giant here that read you the headline banking giant prepares for a $3 billion fine over their role in a massive money laundering scheme three billion yeah now what bank are we talking about here this is um TD Bank which is I believe currently in fact I looked that up I think they're currently based out of uh New Jersey I think it is their headquarters is in Cherry Hill New Jersey the this is the I believe the 10th largest bank in the United States by in terms of total assets how in the as I read this saw this headline and read the article like how in the world does something like this happen where they were involved in money laundering not just money laundering but money laundering that was being done by Chinese gangs and like I was under the impression our country was on high alert with anything pertaining to what was going on with the Chinese and you you're not talking about a moneya laundering scheme with the 10th largest bank in the US how does this even happen yeah well they they did come out and admit that their um anti-money laundering practices were uh inadequate um yeah you know no kidding um you know now that they got caught um and you know there was an employee apparently that that uh took a bribe and uh you know perhaps you know they had a a big hand in in kind of pushing this this through without the the higher ups knowing but um you know what a lot of people may say well who's you know TD Bank um but a lot of people in the past have probably heard of TD amerit trade um you know this company is part of Charles Schwab which is another big big name so even though you know TD may not jump out at you they are a a big player uh and you're right you know number number 10 um 10th largest uh here in the US so um yeah they actually in this case too they're they're having to sell off some of their stake in Charles Schwab to help you know pay this uh pay this fine and and really the fine isn't it sounds like it's not completely uh done yet you know they're um they're doing this in preparation for the fine um which again they've they've admitted admitted guilt too so just another another big blow to the bank but you know what it makes me wonder is um because you hear this you know about other large Banks and investment companies um some sort of you know fraud or mismanagement and there there's fines and and penalties um but you know who who really pays for that in the end um you know the bank is cutting the check now but you know uh it's it's going to be the the other shareholders it's going to be the uh the clients um you know it's it's you and I right that that ultimately end up uh paying for these these mistakes and uh and these big entities oftentimes get get bailed out or or they make so much more money than the fine that it's sort of you know you got to wonder is it just a cost of of doing business to them and uh it's you know it's it's frustrating it's frustrating to see that um somebody can can be this negligent and um sure they're they're paying a fine but it's a slap on the wrist you know I I highly doubt anybody's going to actually go to jail or do any real time for something like this um yet you know the average American citizen maybe that is struggling right now because of everything going on in the economy maybe they're having a hard time making their property tax payment on the house um you know the law comes down on the average man pretty hard and it's hard not to be uh you know cynical when you see all these all these big boys get off with you know essentially a slap on the wrist well I agree and the here's the thing you're talking about a$3 billion doll fine and if you read this article and from what TD is saying if if from my takeaway let's say maybe I'm not maybe I'm misunderstanding what it is that they're saying here but they're basically blaming a single employee that's what it kind of sounds like yeah how do you one single employee has the ability to facilitate the amount of transacting that and and the question the amount of transacting that's in in question here there's A3 billion fine I don't even know for sure if if anyone knows for sure what the total amount of illegal activity was no they said like five or 600 million but right that that's what they caught so how much more could it really be you know it could be a lot more and yeah to your point now as they mentioned you know they're they need to uh hone up on their anti-money laundering practices yeah but but as you look at this and for those of you who've been tuning into our podcast which by the way our next podcast this is our 99th podcast the next one will be our 100th we've covered multiple uh Top This Topic in multiple different scenarios of like business owners who have had 30-year-old businesses here in the United States are depositing monies in the same way shape or form that they have for 30 years and just seemingly somewhat arbitrarily banks have either said we don't trust the fact you're a legitimate business all of a sudden and they Clos their account right or there's been seizure of funds in some cases is in the strong six figures where they were even a little bit suspect of you know a depositor and seize their funds so all these frustrations you know there I mean I could go on about you know the the the different ways where people who paid taxes they they had these are established accounts all these various things and the banks had stepped in to to you know take their money from them how does this happen how how does it happen again for with the Chinese no less yeah well maybe you know hey look the bank probably isn't going to look the other way for a $50,000 deposit or a $100,000 deposit from a small business right um but when there's these you know big dollar amounts hundreds of millions and even billions of dollars involved that's why you got to wonder you know okay they catch all this little stuff um that arguably uh is is much harder to find but they conveniently missed out on this you know this large situation that was ongoing uh that they were likely you know profiting on so and that and again that's I know I can be a little cynical when it comes to the to the big Banks because it doesn't seem like they ever really pay their fair share uh but they certainly want uh you know all the other depositors to we're gonna get we're going to get you on that you know $3 ATM fee because you went out of network or whatever right um but you know the the rules for for thee but not for me right I think that's what they say well look at the end of the day I mean looking at the first article how many more losses can they take how many more of these fines and not only now not even the millions and hundreds of millions now billions of dollars worth of fines can Banks withstand and to your point the banks make their profits off of us depositors people who are borrowing money and paying money back I mean it it just seems like a NeverEnding cycle now we'll cover Banks more on our podcast but all you tuning in let's hope to goodness we never have to cover anything like this one again where yeah again you've got the Chinese that has been laundering money through the US banking system I mean that that would seem like if there was a pecking order of things that we should be watching that's got to be at least in the top five maybe even the top three you think anyway all right for those of you tuning in if you are not subscribed to this podcast please do so uh follow us on social media as well we'd love to keep in touch with you there uh we we will be bringing you more information as I mentioned hopefully not information like this something a little more positive and encouraging but uh if you do have anything that you'd like to comment on we'd love to hear from you so thanks for tuning in Chris thanks for being here and have a great rest of your day thanks take care [Music]