The Panic is Just Beginning

Recession coming? Think again. [Altucher Confidential] April 06, 2023 [WEBSITE]( | [UNSUBSCRIBE]( Has the panic subsided? The answer is, no. The panic is just getting started. [Hero_Image] The Panic is Just Beginning By Jim Richard's [Trade Alert] This Explosive Sector Is Primed To Deliver Huge Gains… Fast! [Click here for more...]( Have a few hundred dollars and the desire to make huge gains? If so, [this explosive stock market sector]( needs your attention right away. I’m talking about biotech. And as one headline from late July reads, “investors back [biotech]… as sector booms.” Point being, there’s a lot of money up for grabs right now. Best of all, we’ve identified what could be the No. 1 biotech stock pick in the world. It could deliver substantial gains over the coming weeks to those who act fast. And you can still buy shares for less than $3. [Just click here now for the urgent details.]( [Chris Campbell] CHRIS CAMPBELL Dear Reader, Consider the signs of the time: Europe and Japan are already mired in the recessionary quicksand. The China "reopening" flopped harder than The Matrix 4. The stock market has been more bipolar than a gadfly in a room of flip-floppers. Treasury yield curves are more inverted than a California skatepark -- unseen since 2007. Think a recession is coming? Think again. It's here. "The evidence that we’re already in a recession is powerful," argues our colleague Jim Rickards. "Low unemployment is almost irrelevant because labor force participation is also low. World trade is contracting. Industrial output is declining. Wholesale inventories are high, which means markdowns and lower profit margins are on the way. Interest rates are still going up and inflation is still sapping real wages." In short, says Jim, it's not looking good… And all the happy talk is a mirage. In other words… If you think you've seen some panic since 2020… In the timeless words of Bachman Turner Overdrive… You ain't seen nothin' yet. Jim lays it all out below. Read on. Biden Caught Red-Handed! [Click here for more...]( Biden, AOC and all of their Democratic cronies were just caught RED-HANDED… Selling YOU and every American patriot despicable LIES about [so-called “green energy”](. This is the biggest “SCAM” in the history of this great country. Not only is “green energy” unreliable and inefficient… It’s also [DANGEROUS in ways you didn’t even KNOW](. Today, one man is daring to speak the truth… And revealing the secret to profiting from Biden’s ultimate blunder. [Click here to discover the TRUTH about Biden’s “Green New Scam”…]( And learn how YOU can profit from its spectacular failure. The Panic is Just Getting Started Jim Rickards Make no mistake. The recession is already here. But what about another global financial crisis? We know that a banking crisis has already begun. Here’s the casualty list from just this month: Silvergate Bank – Announced its bankruptcy on March 8 Silicon Valley Bank – Taken over by the FDIC on March 10 Signature Bank – Taken over by the FDIC on March 12 First Republic Bank – $30 billion liquidity rescue by 11 banks on March 16 Credit Suisse – Swiss government shotgun wedding with UBS on March 19 That’s five bank failures or rescues in eleven days including Credit Suisse, one of the largest banks in the world and the second largest in Switzerland. Combined losses of stockholders and creditors of these institutions exceed $200 billion. Market losses in the banking sector are much greater. These failures and rescues were accompanied by extraordinary regulatory actions. The FDIC abandoned its $250,000 deposit insurance limit and effectively guaranteed all the depositors in Silicon Valley Bank and Signature Bank, a guarantee of over $200 billion in deposits. This will deplete the FDIC insurance fund and require higher insurance premiums from solvent banks, the cost of which will ultimately be borne by consumers. The Federal Reserve went further and offered to lend money at par for any government securities tendered as collateral by member banks even if the collateral was worth only 80% or 90% of par. These collateralized loans will be financed with newly printed money, which might exceed $1 trillion. These actions have thrown the U.S. banking system and bank depositors into utter confusion. Are all bank deposits now insured or just the ones Janet Yellen decides are “systemically important?” What’s the basis for that decision? What about the fact that unrealized losses on U.S. bank portfolios of government securities now exceed $700 billion? If those losses are realized to provide cash to fleeing depositors, it could wipe out much of the capital of the banking system. The most important question is: Is the crisis over? Has the Fed done enough to reassure depositors that the system is sound? Has the panic subsided? The answer is, no. The panic is just getting started. We base that answer on the history of the two acute financial crises in recent decades — 1998 and 2008. The 1998 crisis reached the acute stage on September 28, 1998, just before the rescue of LTCM. We were hours away from the sequential shutdown of every stock and bond exchange in the world. But that crisis began in June 1997 with the devaluation of the Thai Baht and massive capital flight from Asia and then Russia. It took fifteen months to go from a serious crisis to an existential threat. Likewise, the 2008 crisis reached the acute stage on September 15, 2008, with the bankruptcy filing of Lehman Brothers. But that crisis began in the spring of 2007 when HSBC surprised markets with an announcement that mortgage losses had exceeded expectations. It then continued through the summer of 2007 with the failures of two Bear Steans high-yield mortgage funds, and the closure of a Société Générale money market fund. The panic then caused the failures of Bear Stearns (March 2008), Fannie Mae and Freddie Mac (June 2008), and other institutions before reaching Lehman Brothers. For that matter, the panic continued after Lehman to include AIG, General Electric, the commercial paper market, and General Motors before finally subsiding on March 9, 2009. Starting with the HSBC announcement, the subprime mortgage panic and domino effects lasted twenty-four months from March 2007 to March 2009. Averaging our two examples (1998, 2008) the average duration of these financial crises is about twenty months. This new crisis is one-month old. It could have a long way to run. On the other hand, this crisis could reach the acute stage faster. That’s because of technology that makes a bank run move at the speed of light. With an iPhone you can initiate a $1 billion wire transfer from a failing bank while you’re waiting in line at McDonald’s. No need to line up around the block in the rain waiting your turn. In addition, the regulatory response is faster because they’ve seen this movie before. That begs the question of whether regulators are out of bullets because they’ve already guaranteed almost everything so they don’t have more rabbits to pull out of the hat. This could be the crisis where the panic moves from the banks to the dollar itself. If savers lose confidence in the Fed (we’re almost there) not only will the banks collapse, but the dollar will collapse also. At that point, the only solution is gold bullion. Further evidence comes from the fact that no sooner was the Credit Suisse shotgun wedding completed than investors aimed their sights at Deutsche Bank, another perennial weak link in the chain. Who’s next? Barclays? Santander? We don’t know. Neither do regulators or investors. But we do know more failures are coming. By the way, this is not really a banking crisis even though it plays out in the form of bank failures. What’s going on is a crisis caused by a shortage of Treasury bill collateral to support derivatives positions and shrinking balance sheets as a consequence of the collateral shortage. Why doesn’t the Treasury just issue, say, $2 trillion of new T-bills and let the primary dealers and Fed underwrite them with as much printed money as needed? One reason is that neither Jay Powell nor Janet Yellen understands what we just described. The other reason is that we’re up against the X-Date when the Treasury runs out of cash and can’t borrow more because of the debt ceiling. Is Congress ready to raise the debt ceiling? Nope. It’s the usual Democrat versus Republican game of chicken with no resolution in sight. So, we go from bank runs to a Treasury bill shortage to a debt ceiling standoff in no time. Do regulators and financial journalists understand this? No, they don’t know how to connect the dots. But you get it. We may not be able to prevent the crisis, but we can see it coming and prepare accordingly to preserve wealth. More on that soon. Regards, Jim Rickards For Altucher Confidential --------------------------------------------------------------- Urgent From James Altucher! Hey, it’s James Altucher. I just announced a massive new change to Altucher’s Investment Network, and as one of my readers I wanted to make sure you know what’s going on. [Click here now to see my urgent announcement.]( [Paradigm]( ☰ ⊗ [ARCHIVE]( [ABOUT]( [Contact Us]( © 2023 Paradigm Press, LLC. 808 Saint Paul Street, Baltimore MD 21202. By submitting your email address, you consent to Paradigm Press, LLC. delivering daily email issues and advertisements. 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