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What Happened Last Week and What It Means to You: March 22, 2023

Week Ending March 17, 2023

Fed bails out Silicon Valley Bank (SVB) and Signature Bank…In SVB’s case, it was a highly concentrated banks with more than 85% of its deposits uninsured.

What does it mean – To heck with moral hazard!!! Big Government to the rescue. The good news for those who would have lost a portion of their savings they don’t have to worry. The Fed’s action definitely settled down the markets but created a precedent and a road map thick with moral hazard and a path towards a national bank and the destruction of capitalism. Fewer banks mean fewer opportunities, less competition, and more expensive capital. Just look at Europe.

Many of the recipients of the bail out are well connected and large contributors to the current administration in DC. Even worse, we are bailing out China. Over the last few days, it has been reported that possibly 30% of the bail out will go to Chinese companies and Chinese citizens with strong ties to the CCP. SVB was one of the few banks allowed to bank in China. Talk about a trojan horse.

As reported in both cases, management and the boards seemed to care more about pushing diversity, equity, and inclusion (DEI) and teaching their staff about how to properly discover and use their pronouns. Instead of doing their job, they wasted shareholder money and put at risk its client’s savings and checking accounts and now are dependent on you, the taxpayer.

SVB, the 16th largest bank donated $73 million to BLM, mandated diversity training and promised $5 billion to sustainable financing for ESG initiatives instead of managing risk at the bank and making sure they managed the rising interest rates we all are facing. This is the very definition of moral hazard. I will bet shareholders, investors, and clients did not sign up to support programs that would distract management and employees from doing their job or cost shareholders millions and billions if left alone, but opened accounts and invested in a bank that was supposed to manage their accounts in a safe way that provided them access to their money when needed.

The President, through the Treasury Department and FDIC board are acting unilaterally without following the rule of law or the procedures put in place by Congress and the very agency that is supposed to oversee the banks? This action violates long standing laws and banking regulations by not letting the free markets take over. It destroys faith in the system, in capitalism, and puts government in charge of picking winners and losers. According to Janet Yellen, her five FDIC board members now get to decide what banks will get help and which ones will not. Since when did our country allow unelected bureaucrats the ability to rewrite precedent and act unilaterally without Congress and the Presidents approval? This is crony capitalism and downright socialism and goes against everything that made America the most prosperous nation in the world.

SVB could have been purchased but the Biden administration did not like or agree with the politics of the potential suitors willing to buy SVB. Instead of following the process, this administration and Janet Yellen shut it down and put you, the taxpayers and all banks on the hook for a bail out that was favorable to their political ideology. What happened to letting the markets work it out? Instead of letting potential buyers work out a price for the bank, you got stuck with the bill. Another moral hazard violating the FDIC and banking regulations that have been in place since the Great Depression. We can not allow the government to pick winners or losers.


The Fed’s balance sheet surged…In one week the Fed’s balance sheet reverses four months of quantitative tightening.

What does it mean – Banks have borrowed $165 billion from the Fed in one week. But don’t worry, According to President Biden and his economic council made up of economic dwarfs have said, “It won’t cost taxpayers one dime.”

Check out this chart and ask yourself, “Is this inflationary?” Remember these are the same people that told us, “inflation was transitory.”

Before the Panic of 2008 the Fed had total assets of about $875 billion…As of Wednesday last week, its assets were around $8.6 trillion. That’s with a “T”!!!

What does it mean – Since 2008 the Fed increased its balance sheet by buying Treasury debt, which allowed government spending to soar. The Fed also held interest rates artificially low, making that increased spending cost less. According to First Trust, “when rates where at .25%, it didn’t mean much; after all, banks were only earning 0.25% per year on the reserves.” Yet, still costing taxpayers billions. “Now that banks are earnings 4.65%, it’s a much bigger deal. In fact, given the increase in short-term rates in the past fifteen months, the Fed is now paying banks more in interest than it earns on its bonds. Banks own about $3 trillion in reserves on which the Fed pays interest. So, if short-term rates reach 5%, banks could earn about $150 billion per year,” of your taxpayer dollars. And what do the banks have to do to earn that money? Not a darn thing!! They literally do nothing. Just sit around, keep the reserves on their books, and collect “rent.”

Think how the public and lawmakers will react when that becomes more widely understood. Call your congressman now and send them this letter. Demand real change. Ask yourself, “are you willing to sacrifice your future, your children’s future or your grand children’s future over pronouns and woke policies that do nothing to secure, build, or create wealth, or insure life, liberty, and pursuit of happiness for all Americans?”

We, the people, better focus on the big things that keep us free. Wake up!!!

Buried in the news.


The Conference Board’s Consumer Confidence Index for February was down again…Coming in at 102.9 vs. a consensus of 108.4.

What does it mean – The monthly decrease was driven entirely by consumers’ short-term outlook, which entailed becoming considerably less upbeat about their short-term income prospects. Consumers see income down as inflation invades the paycheck making it worth a lot less. Getting less for more. It is the Governments core competency.


Business inventories are creeping up…Inventories are starting to creep up.

What does that mean – Look for sales. If manufacturers can’t move products look for them to cut deals or lower financing costs. For the first time in a long time, I saw Ford and Nissan advertise 0% financing.


CapEx spending remain subdued…Corporate America is signaling a slowdown in equipment investing.

What does it mean – As the government tries to push and tweak the levers of the economy, corporations are not buying it. This chart says a lot.

Who wants to go back to the 1970’s?…Only if we get the 1980’s.

What does it mean – When we lack a strong and prudent fiscal policy from our elected officials, the Federal Reserve is forced to overcompensate with a strong monetary policy. History has shown this over and over. Hopefully for our sake we will realize the lack of fiscal policy coming from this administration and focus on leadership that drives economic policy that reduces bureaucracy, creates capital, protects freedom, and intellectual property. The below chart from Bloomberg says it all.

“Go West young man.” Horace Greely’s famous quote about DC says it best. “Washington D.C. is not a place to live in. The rents are high, the food is bad, the dust is disgusting, and the morals are deplorable. Go West, young man, go West and grow up with the country. There is health in the country, and room away from our crowds of idlers and imbeciles.” DC has not changed a bit other than some great restaurants.

What Greely was referring to, was the American Expansion or Manifest Destiny. So, in that spirit of expansion and freedom, rid yourself of the chains of socialism and entrapments and entanglement of a government scheme promising an equal outcome. Seek your fortune and relish in the excitement and thrill of your adventure. Seek and protects a land that protects your thoughts, your words, and your inventions. Nothing ventured, nothing gained.

Let’s roll America!!

Doug De Groote, CFP®, MBA, CTC
Managing Director

De Groote Financial Group, LLC is a federally registered investment adviser that maintains a principal office in the State of California. The information contained in this message is confidential, protected from disclosure and may be legally privileged. If the reader of this message is not the intended recipient or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any disclosure, distribution, copying, or any action taken or action omitted in reliance on it, is strictly prohibited and may be unlawful. If you have received this communication in error, please notify us immediately by replying to this message and destroy the material in its entirety, whether in electronic or hard copy format.

Jeannie Ewing-Nicholson

Operations Manager

Jeannie started her career in the Financial Services industry in 1994 with Oppenheimer & Company. As part of the De Groote Financial Group, Jeannie is responsible for the operational needs of the firm including cash management and account administration. With her upbeat attitude and attention to detail, Jeannie provides an efficient streamlines experience to ensure clients meet their goals. Jeannie enjoys travel, outdoor activities, Pilates, and is a football and basketball fan. She resides in Westlake Village with her husband, daughter and son.

Mary-Ellen Lykken

Executive Assistant

Mary-Ellen, Executive Assistant at DFG, keeps the office running smoothly by providing administrative support and assisting with scheduling and organization. With a background in human resource and office management, Mary-Ellen comes from the non-profit and services industries.

Outside of the office, Mary-Ellen is committed to the advancement of independence and productivity for those with disabilities. By telling her story of the challenges and joys of raising a child with complicated disabilities, she hopes to help others navigate similar circumstances.

She is happiest when visiting her two grown sons. Otherwise, you can find her competing on the pickleball courts.

Sara Mariniello

Operations Manager

Sara is new to the financial industry only starting in 2022 when she was hired at De Groote Financial. As Operations Manager, Sara is responsible for all the paperwork surrounding opening accounts and investment paperwork and is also responsible for much of the client communication. Sara has her bachelor’s in science and nursing from Concordia University, Texas and worked as nurse for over a year prior to moving back to California. She loves all things sports and church related and is likely spending every free moment with her Husband visiting family in Texas and New Jersey.

Fadi Ahmed

Chief Operations Officer and Chief Compliance Officer

Fadi works with clients to ensure an exceptional experience. He coordinates and assures the planning process and wealth management tools are at your fingertips to provide the clarity you deserve and the transparency and access to all your accounts. Fadi ensures the data and information is reflective in our planning software. All changes and updates flow through his desk and he coordinates those changes with the rest of our team.

Andrew Krout

Wealth Advisor, Co-Chief Investment Officer

Andrew Krout is a Wealth Advisor at De Groote Financial Group, LLC. He also serves as a Co-Chief Investment Officer for the firm, focused on wealth management.

Previously, Andrew served as CIO with Kelly Financial in Boston Massachusetts since 2013. He is a licensed investment advisor representative and insurance producer. He graduated from Saint Francis University with a bachelor’s degree in both finance and accounting. He is a candidate for CERTIFIED FINANCIAL PLANNER™ designation. Andrew holds life insurance licenses in Massachusetts, New Hampshire and Connecticut.

Andrew is passionate about serving his clients and investment management and how to apply news and current events to investment decisions. He played Division 1 golf in college, and still enjoys playing and watching the sport in his free time.

David Darst

Co-Chief Information Officer

David Martin Darst, CFA is an Investment Advisor to DeGroote Financial Group, specializing in asset allocation and product selection. Previously, David served for 17 years as a Managing Director and Chief Investment Strategist at Morgan Stanley Wealth Management, with the responsibility for Asset Allocation and Investment Strategy. He joined Morgan Stanley in 1996 from Goldman Sachs, where he held Senior Management Posts within the Equities Division and earlier, for six years as Resident Manager of their Private Bank in Zurich.

David is the author of 13 books, including bestsellers The Art of Asset Allocation, 2nd Edition (McGraw-Hill), and The Little Book that Still Saves Your Assets (John Wiley & Sons). He also appears as a frequent guest on CNBC, Bloomberg, FOX, PBS, and others, and has contributed articles across a variety of publications.

David graduated with a BA in Economics from Yale University, and earned his MBA from Harvard Business School. He has lectured extensively at Wharton, Columbia, INSEAD, and New York University Business Schools, and for nine years, David served as a visiting member at Yale College, Yale School of Management, and Harvard Business School. He is a CFA Charterholder and a member of the New York Society of Security Analysts and the CFA Institute. 

Doug De Groote

Managing Director

Doug is a Certified Financial Planner™ (CFP®) with an MBA in Financial Planning, and is an active member of the Financial Planning Association (FPA). Before establishing De Groote Financial Group, Doug founded the United Wealth Management division of United Capital. Prior to that, Doug was a partner at Crowell, Weedon and Co. He regularly contributes to a variety of financial and general media.

Doug’s passion, and what he believes, is that everyone deserves the opportunity; they deserve to have the freedom and responsibility to be pro-active in achieving independence and financial success.

Doug’s life is focused around his family, wife and three children, and making sure they get the foundation that is necessary for them to have the awareness of the opportunities that abound in our great country.

Doug helps increase his client’s awareness and success, to identify and take advantage of opportunities that present themselves and help protect them from some of the pitfalls or obstacles that are thrown in our paths. With regards to their financial circumstances, Doug helps his clients identify their goals, plan for various outcomes and manage their assets to help them make their vision a reality.