 Credit Swiss is now borrowing up to 54 billion dollars from the Swiss national bank shares rose more than 30% after the market opened today based on that bailout news and it comes after the banks sunk on fears of this contagion, the fear about bank failures after the collapse of Silicon Valley Bank and Signature Bank. The thing is, should taxpayers be footing the bill when it comes to bad management at these banks? A new Reuters ipsos poll found that 84% of people think taxpayers should not have to pay to resolve problems caused by irresponsible bank management. There are some questions as to whether this is a bailout or not, but a lot of people feel like it is and when the Fed's bailout banks like Silicon Valley, the little guy often pays eventually in the form of fees or some other kind of cost that gets passed on to consumers. Let's call a money huddle to talk about what we can expect from this. Dan Geltrude joins us. He's an accountant and a professor at Montclair State University. Also with us, Seth Denton, a business and market analyst. And with us today, Melissa Armo. She's the CEO and founder of the Stock Swoosh. Melissa, great to have you with us. Seth and Dan, great to have you guys back with us as well. Good to be here. Thanks, John. Seth, I know you deal a lot or at least you know a lot about these regional banks. One of the concerns now is this just creates this incentive for more money to move to bigger banks. You have more consolidation, less competition. And therefore, things like fees get passed on to consumers. What do you think is happening here in the long run? I mean, it certainly could. I don't think that's ultimately going to happen because the government did step in. I think it allowed an opportunity for it to kind of calm the fears here, John. But listen, in OA, the government picked winners and losers. Let's be very clear. The government took the 400 banks that were out there and they took the top biggest banks and said, hey, we're going to let you guys go buy them up, and we're going to finance this deal for you. The government's already picked winners and losers, and the big banks have benefitted from that. My hope is that with the government stepping in and doing what they're doing, it will calm the fears enough that our mid-sized regional banks will be able to stay afloat. Melissa, if you're a consumer and you're thinking, well, who's going to get to the front of the line first? The federal government, Uncle Sam's bailout money. You got to put your money on a big bank. I mean, what's to kind of stop that mentality of people thinking, I guess I'm better off going with a big bank if all of your deposits are going to be guaranteed anyway? What do you think? Well, first of all, they have not come out and changed that regulation yet. As of now, it's 250,000. You can combine it depending on if you have multiple people, but it's 250,000 for the FDIC limit. And there are many, many, many, many people and many businesses that have more than $250,000 at a bank. People don't have 5,000 bank accounts. So the concern with SVB was really a trickle-down effect where it would affect the regular people, not just the businesses, payroll of those people. Many people don't understand this. I was in banking industry for 17 years. I actually started my career as a bank teller. I would cash checks for people, and I counted money in the vault. And there's never, there's never as much money on cash on hand at any bank for a bank run to happen that people could get all their money out. So they had to do something to prevent actually to have confidence in the banking system that there wouldn't be a run on banks. And whether it's large banks or small banks, even large banks, don't have enough cash on hand for everybody to run to the bank and get their money out. So it's a problem. I think it was more of a risk management problem with the banks that went under in the last week where it was just poor money management. They were invested in long-term bonds and rates have gone against them. There's something called interest rate risk, which a lot of people don't talk about. But it was clear as of last year that the Fed was going to continue to raise rates. I'm not sure why they didn't cash out of those bonds last year, but they probably Silicon Valley Bank didn't know they'd have a run on the bank. They didn't, and that might have been avoided. But people talked about it last week and then it came to fruition. Again, people act first and think later. So I think the Fed has a big job next week because it's really, it's not only about solvency and liquidity for these banks. It's about confidence because if there's a run on every bank, the whole system is going to collapse. Well, Dan, they haven't changed the rule officially, but haven't they kind of done it unofficially by offering this one time? Whatever the deposit is, we're going to back it up. I mean, who's going to be the first bank that's not going to get their deposit? They're deposits over $250,000 to be guaranteed by the FDIC. If they don't change the rules, that's going to have to happen at a certain point. Is it not? Well, John, I think you bring up a good point related to your establishing a precedent right now where the government will step in and go beyond the $250,000 worth of insurance that's provided by the FDIC. I think they made the right move for right now because they had to stop the panic and they have to have stability in the banking system. Now, whether in the long run, this is going to benefit the big banks to some extent it will, but stability in the system is most important. And by doing what they did, yes, going beyond the $250,000 was the right move for right now. For right now, the question, of course, is what comes later? Seth, I mean, you don't think this is going to lead to a downward spiral here. Do you have confidence in what Janet Yellen told us today about America's banking system being sound and that no one should worry? I mean, she also told us that inflation was transitory not that long ago. She also told us that everything's fine in the economy, not to worry. Listen, I don't have any confidence in anything Janet Yellen says anymore, unfortunately, and I hate that because I once did. But she's lost that. I do have confidence in our banking system in large part because I have confidence that we are still the largest, greatest economic superpower and we won't let our banks fail. End of story. So from that perspective, there's no reason to go panic. Don't go start doing a bunch of things. Hold your positions. Don't make this the toilet paper craziness of the banking system, right? We all know that. I didn't know where you were going with that one, Seth, but I got it. I finally got it. I felt like I was going to have to explain identity bars. So no, I think we're just like, I'm not confident in where the economy is, but listen, we're all in this together from that perspective. Are we, Melissa, are we all in this together? Because it does seem like that the big banks, some of these depositors, like the folks in Silicon Valley Bank, the venture capitalists, the folks who are tight with President Biden, the board members of this bank, all of them, except for one, had no investment banking experience whatsoever. So in some of them were Hillary and Obama, AIDS and donors. It seems like we're not all in this together, I think, to a lot of people. Well, first of all, Janet Yellen, I think her time has come and gone. And the fact that the Biden administration put her in charge of this, I wish they'd found someone else, someone younger, someone new, but they didn't do that. Long story short, the European Central Bank raised rates a half a point today, and they discussed, Christine Lagarde discussed inflation. So next week, we still could have a rate hike. And even though the markets were acting positive today to what Yellen said, and of course what the central bank did in Europe today, the fact is that we could crash next week. So we are all tied together and you can't ignore that. Morgan Chase and Morgan Stanley and a few other banks today were talking about coming in with a cash infusion for First Republic Bank, which a few days ago people thought they were going to go under. We can't lose regional banks. Kevin Leary was on Fox News this morning and he was discussing how, just forget about regional banks, do away with them, have five big banks like they do in some other countries. I don't think that's a good idea. Small banks, regional banks do provide service for people. And also they provide loans to small businesses that many, many large banks would not give. I used to work in banking. Like I said, I started out my career at a small bank. We would give loans to small businesses and big banks won't do that. So there's reasons to have regional banks. And obviously the large banks that are out there, the stronger banks are looking to help these banks from coming under. And again, it's a confidence issue. It's not good for anyone in the bank, even the big banks, if more people go under. While there were many people out there that obviously benefited from people pulling their cash, and now some of the larger banks, the top 10 banks have gained deposits in the last few days because people are scrambling to transfer money, pull money, move money around. Again, you have to have confidence in the banking sector. And overall, the whole world, when you look at it, we are tied together. So I think it's a problem because the Fed acted too late. They waited too long to raise rates. Then they decided to raise them too fast. And now there's a problem. If the Fed decides not to raise rates next week, then you're basically going to say, okay, well, we can't believe anything they said. Because they said they're going to keep raising rates until they get inflation down to 2%. But people are going to be upset. The market may be upset if they do raise rates a quarter or a half next week because the market doesn't like rates to keep going up. And I still think that there's a high probability, specifically after the last week, that we're going to go under recession in the second half of 2023. And you've already seen companies letting people off. And that's what we've heard from Jerome Powell. That's the alternative to raising interest rates. He's got to see enough people have their jobs eliminated. That's the other way they're trying to tamp down inflation. It just raises a lot of concern, as you see. Dan Geltrude, last to you real quickly. Do you see us entering a recession like Melissa does? Yes, I do. I don't see an opportunity for a soft landing here. So I think it's going to be really tough to balance inflation, raising interest rates, and now the pressure being put on the banks. So, yeah, I think the option, unfortunately, is heading towards a recession. If we're not already in one, because remember they were trying to change, or Janet Yellen was trying to change the definition of a recession, I believe, as well, along this odyssey that we've all been on with her and Jay Pap. Great to see you all. Now we're changing the definition of a bailout. Yeah. Yeah. We're rewriting all the rules. That's why we keep calling these money huddles so everybody's aware of the new rules. Dan, Seth, Melissa, thank you all for being here. Thank you.