Your money this morning.
Americans are having a harder time
borrowing money.
A survey conducted
by the New York
Federal Reserve Bank
found that nearly
60% of Americans
say it is harder to obtain
credit than a year ago.
That is the highest level
since it began crunching
the numbers in 2013.
At the same time, consumers say
inflation is going to be worse
not better in the year ahead.
Let's hope
hopefully there's
some good news in this interview
Joining me now
is the chairman of O'Leary Ventu
and shark tank judge Kevin O'Lea
Mr. Wonderful.
A lot of names.
Yeah a lot of names and a lot of
Right.
I like AK.
That's okay. So take a listen.
You deal a lot with small busine
As an investor, as a CEO.
What are you telling me?
Why is it so hard?
Why is it so much tougher now
to borrow money?
It's all happened in the last tw
What's in the last two weeks?
I mean, we survey our CEOs
with over 50 investments
in private companies
in almost every state,
almost every geography, in Ameri
And we're constantly in contact
and obviously financing,
particularly receivables.
When you're a small business
doing 50 million,
maybe you have 100 employees,
you have 60 to 90 days of
your sales
tied up in receivables
of big box retailers maybe,
or wherever else are selling to.
We used to be able to factor
that it's called in other words
borrow against those those recei
at around seven to 9%.
Today that has gone from 17 to 3
in two weeks.
And so the reason that happens
very simple.
Silicon Valley Bank
sent a shockwave
through all the regional banks
that do a lot of this factory
or hedge funds or private equity
And money is tight
and it's really hard to borrow n
Yeah.
And Jamie Dimon
was talking to Poppy
last week in that interview
and he was talking about interes
staying higher for longer
is his prediction.
Yeah, I think he's right.
I think inflation and the Fed
will raise another
25 basis points in the main meet
Here's the thing, though.
The effect of this
drying up of of capital to small
has not been shown up yet
in the CPI data.
So I put up my hand up to the Fe
and say, let's pause.
Let's wait
and see the effect of this
drying up of liquidity.
And also let's wait
and see what the data says about
because it's rolling over.
Rents are down in most cities
that are not coastal cities by 2
Yeah, but you don't think that t
is going to do what you say?
You don't think
you're going to take a pay cut
finally to the place where
I would put up my hand
and say, wait, pause.
Let's just wait, wait, 60 days.
But I don't think they're gonna
They're probably going to raise
another 25 basis points
No, go ahead, because I have an
I want to bring up.
I was going to talk about
the regional banks.
You're saying
this all happened with SBB and
is that what your
is that your idea as well?
Is it the regional banks?
Are you saying there is?
Is there more of a need
for regional banks?
Is this or is there less of a ne
Because we have this ongoing
dialog together right here every
And I'm arguing
that will now move to super regi
because the small guys
will not be able to attract.
What is that?
In other words,
do we really need 3000
small banks in America?
No.
Maybe we get by with a thousand
small banks
and the major money center banks
But all I'm saying is
let the market be the market.
Doesn't matter what I say.
It what matters what the market
Because I personally,
and I can assure you
that there are millions like me,
do not want to guarantee
every single account in every ti
because some percentage of them
are run by idiots.
I'm sorry I said that, but it's
Well, in some percentage,
big banks are run by idiots.
That's true. But let's be the ma
Let the market be the market.
If an idiot is running a bank,
they will be forced out of that
And we should not be forced
to guarantee every tiny bank.
Here's the problem and I.
I pursued you on this last time
we were talking.
Where would you put your own mon
Now that you know
that these regional banks
are so unstable,
we disagree on this fundamentall
because I think
small banks are important.
And what I was saying
because you think you have an im
guarantee up to 250,000,
and I'm saying
I'm not giving that to you anymo
And so is the rest of America.
Well, it is.
You are giving it to me, though.
It is still in place,
but I'm not okay with it.
They haven't gotten rid of that
I understand that.
But to the point about small
banks is
what Jamie Dimon
was saying in this interview
with Poppy is saying
that he thinks they're important
because it's a community bridge.
People can go it.
Let me say why people can go in.
They feel more comfortable
going into a bank that they know
that is run by people
they know in a town that they kn
they can learn more about their
like someone
learns more about their subjects
Let's talk about you.
What do you think he's going to
He's got to talk his book.
He's getting billions of dollars
coming in every week. I'm part o
I've moved
a bunch of money to JPMorgan, Mo
because it's safer than a small
And he's got to say,
oh, I've got to support the smal
because they're important
He's talking his book.
He's doing he's
saying the right thing
because frankly, those banks
aren't going to be around for 24
That's my opinion.
Did you hear what I was whistlin
Yes. Kumbaya.
No, I was whistling
Andy Griffith Show may very
well continue this saga
disagreeing over small banks.
How did you want to get in on th
I would just say, hi, Kevin.
I would just say that, you know,
everyone should read Jamie's
annual letter
that came out about a week ago
talking about how we need
a healthy banking
system writ large, right?
Yes.
JP Morgan got assets from this
but we need a healthy
banking system writ large.
I'll see you next.
He's going to say it,
but you don't get to response.
I'll get that.