Avoid Crisis

April 26, 2023 - Avoid Crisis hosts Reynaldo Arellano and Allen Plyler question whether the biohazard warning from the World Health Organization reflects that Sudan is now the new Wuhan. Released pathogens, including the Sudan Ebola virus are now unleashed and impacts are unknown. Focus on the First Republic depositor flight and the mortal wound of the Ricochet Deposit bullet is explained. FDIC receivership  for First Republic Bank is predicted.

Key Points from Rey:
  • Sudan is close to hot zones Iran and Iraq. Russia and Ukraine battle is not that far away. Russia wants a foothold in the Red Sea.
  • The lack of stability is going to be huge. Humanitarian and economic crisis in this geography is really a concern.
  • The warning from the WHO on the biohazard is big, but has been under the radar in the news.
  • Ebola is a serious virus. What is happening in Sudan is another hit to the global economic environment.
  • Things continue to point to a significant recession. Sudan is shaping up to be the start of a global economic crisis. The lab takeover is just a part of the mix.
  • Volunteers for human trials on the Ebola virus are hard to find.
  • No known cure for Ebola. It could be used as a bio-weapon.
  • There is more pressure for recession now.
  • First Republic issues were bigger than expected.
  • The deposit loss at First Republic Bank was not stopped by the $30 billion provided by other banks. This was a run on the bank. The fact they are still standing is amazing.
  • The migration of deposits was bigger than expected.
  • Agree Mark to Market and Hold to Maturity rules need to be revised for banks. We need professional skepticism.
  • This system of the accounting rules allows gaming of the financials.
  • First Republic bank did the best they could. How can any bank survive a significant deposit withdrawal?
  • We have not heard the last of the First Republic Bank story. FDIC receivership could be next.
Key Points from Allen:
  • Sudan is a humanitarian crisis now and there is concern for the 16,000 Americans that are being evacuated from there.
  • Sudan has 46 Million people and it borders the Red Sea, right across from Saudi Arabia.
  • The Suez Canal is to the north, and the waterway is a key world transport path with global economic impact. More ships go through the Suez Canal than the Panama Canal.
  • We don’t know what happens when this cease fire ends. 20,000 Ships go through the Suez Canal each year.
  • The Suez Canal was blocked by the Ever Given Ship going sideways in the canal, blocking over 400 other ships from passing for six days.
  • What if there was a new tollgate put in between Sudan and Saudi Arabia in the Red Sea.
  • Russia is trying to build a naval base in the Red Sea.
  • Russia is also trying to promote a northern sea route through the Arctic zone.
  • 70% of Grocery stores in Sudan war zone are closed. Lack of food and water is humanitarian
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  • In Khartoum, the National Public Health laboratory was seized by one of the rival general forces and the workers were removed. This lab had measles and cholera pathogens, and biohazards. But the one not mentioned and should be thought of is the Ebola virus.
  • In Uganda, the Sudan Ebola Virus was the cause of the outbreak. We could have an outbreak now.
  • Things related to Covid point back to a lab. There is no vaccine for Ebola.
  • Covid crisis is coming to an end and your insurance coverage most likely is changing.
  • First Republic conference call was really only about 11 minutes, but no questions were taken.
  • There is a real concern here. The flight of deposits in First Republic was a ricochet bullet from the Silicon Valley Bank deposit withdrawal. The tentacles of contagion show First Republic Banis in the crosshairs.
  • The narrative that is saying this is a bank specific issue needs to be examined further.
  • There is a difference here. We have not stopped the fear. The Federal Reserve and regulators are not functioning well. First Republic Bank needs to be saved. Joe Biden, Janet Yellen, Gavin
  • Newsome all need to be involved if they want to keep their jobs. Why didn’t Jamie Dimon know  more money than $30 Billion was needed for First Republic Bank..
  • The video “The real truth about the 2008 financial crisis,” by Brian Wesbury reflects what really addressed the solution of that crisis. The real truth about the 2008 financial crisis | Brian S.Wesbury | TEDxCountyLineRoad - YouTube
  • My speech at Financial Executives International during the 2008 financial crisis “FAS 157 – A Troubled Solution” called on Congress to change the accounting rules. What we need now is to change the accounting rule for the Regional banks. Safe investments were not safe when there was a run on the bank.
  • Consumers will stop spending. We are headed for a severe recession.
  • In 2008 financial crisis, the Regional Banks escaped with little harm. TARP provided money to big banks. There was a halt of shorting bank stocks at that time. Now we need to do the same thing, stop the shorting of the regional banks. The shorts can be coming from North Korea, China, Russia, we don’t know. If we want to save this country from going into a severe recession, we need to stop the shorting of the regional banks and change the accounting rules for them.
  • First Republic Bank is not just a rich man’s bank. They are important to the community and the same analysis has to be applied to all banks in the country.
  • What we have right now is not working.

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Creators & Guests

Allen Plyler, CPA, MPM
Allen Plyler, CPA, MPM is an experienced CFO in Technology, Start-ups and Financial Services with focus on large scale accounting implementations, evaluating emerging accounting Standards and SEC external reporting for publicly held companies. He is experienced in structuring capital markets and equity deals while also providing consulting to CEO and CFOs for business strategy.
Reynaldo E. Arellano, CPA PFS CGMA
Reynaldo E. Arellano, CPA PFS CGMA is a Certified Public Accountant (CPA) with professional designations as a Personal Financial Specialist (PFS) and Certified Global Management Accounant (CGMA). In addition to providing traditional CPA services such as bookkeeping, accounting, and taxes (planning, compliance, and representation) his Firm also offers tactical CFO services and strategic business advisory services. Mr. Arellano started in the financial profession as a Big 8 auditor, then an accounting software consultant, then a Controller eventually becoming a CFO, and held NASD and life insurance licenses (presently inactive). Mr. Arellano has consistently proven to have the highest levels of integrity, intelligence and innovation. He has held numerous managerial (C-suite) and leadership (board of directors) positions within corporations and non-profit organizations.

What is Avoid Crisis?

By seeing what's in front of you and thinking about what can't be seen, one constantly weighs opportunity and risk in alignment with values, beliefs, objectives, and constraints. Crisis occurs when bad things happen to the unprepared. Preparation requires thought, decision, and action. Every moment is a choice and an action. Be deliberate. Avoid crisis. Listen to Avoid Crisis.

Avoid Crisis Inc., Allen Plyler, and / or Reynaldo Arellano are not giving to any listener or listeners any specific tax, legal, financial, medical, or any other advice. Listeners, before taking any action, should seek individualized professional advice from a qualified (and ideally licensed) expert for their own specific facts, circumstances, and purpose.