How to Trigger a Bank Crash

What the REAL indicators tell us… [Morning Reckoning] May 02, 2023 [WEBSITE]( | [UNSUBSCRIBE]( How to Trigger a Bank Crash - Insane price targets are back… - Tesla shares are sliding… - Is the market’s newest mini-bubble bursting? [Urgent Income Demo]( Jim Rickards calls him The Banker. He’s a financial anomaly. He doesn’t target 1,000%... 3,000%... or 5,000% gains. Instead, this former hedge fund manager is all about steady – and fast – income. And he’s among the absolute best in the world at that. That’s why YOU should [click here now to learn his strategy](. [CLICK HERE NOW]( Baltimore, Maryland May 02, 2023 [Greg Guenthner] GREG GUENTHNER Good Morning Reader, Shares of First Republic Bank (FRC) cracked early last week after management revealed the bank had lost half its deposits during the first quarter. Oops! To be fair, the stock had already plummeted as much as 90% in March during the crisis sparked by the Silicon Valley Bank debacle. But the earnings revelations once again spooked investors, opening a trap door that sent shares down more than 60% early last week. As the SVB failure unfolded during the first quarter, we discussed how financial media was quickly losing interest in the banking crisis – but that it probably wasn’t totally finished. It still felt as if another shoe (or three) needed to drop. Luckily, I was in New York late last week to help FRC take its final lap as a publicly traded company. I just so happened to be at the New York Stock Exchange to attend an event celebrating the 50th anniversary of the CMT Association. I was even dragged into a few photos with friends and colleagues on the exchange floor. Here’s one for the scrapbook: [MR] you’ll see the stock had stabilized back above $6 by Thursday’s close. But my presence on the exchange floor apparently sealed its fate. The bank was once again in free-fall the next morning, only to die a quick death over the weekend. Now, Jamie Dimon and the folks at JPMorgan – along with the FDIC – have to sort out whatever’s left. A couple of important lessons as another Bay Area bank bites the dust… [Response Requested]( 1/1000th of an ounce of gold available As a The Daily Reckoning reader, Jim Rickards is offering you 1/1000th of an ounce of gold when you upgrade your account. It will come in the form of a “Gold Back” - a new type of gold currency that’s starting to spread across America ([click here to view](. If you have not responded to Jim’s offer yet, and want to know how to claim yours… Please click the link below for details. [Click here to learn how to claim your new Gold Back Currency<]( Thanks! Amber Anderson Customer Service [VIEW MY URGENT VIDEO MESSAGE]( Much like SVB, First Republic stock gave investors zero reasons to attempt to scoop up shares following the March rout. The stock never came close to rallying after its initial 90% collapse. Instead, shares were stuck in a tight, sideways range. Not good! With the benefit of hindsight, we know FRB is a zero. But even in real-time, any attempts at scooping up shares over the past couple months would have been insane. Remember, every stock that does eventually crash will likely have peaked many months before the main event that seals its fate. Sometimes, the downfalls can be lightning fast. But most of the time, a company will gradually deteriorate and the stock will begin to slowly trend lower. Sellers are orderly at first. But if things start to fall apart, the real crash will happen quickly. Still, speculators love to gamble on potential snapbacks in stocks like FRB. They even bought FRB ahead of last week’s earnings announcement! Don’t be like them. Leave the banks alone – and all the other stocks struggling in downtrends right now. The Real “Smart Money” Indicators While I was in New York, I also had a chance to check up on how the real “smart money” feels about two important asset classes: stocks and gold. Analysts love to toss around the numbers from various sentiment indicators, most notably the American Association of Individual Investors (AAII) bull-bear poll. But I’m much more interested in what the technical analysts are doing with their money. This information is especially important right now considering the key levels approaching in stocks and gold as we kick off a new trading month. The averages are trapped in some sideways chop. Meanwhile, gold continues to flirt with a true breakout above $2,000. What do the best technicians and money managers in the country think? First, let’s talk stocks… Unfortunately for the bulls, most of the smart money traders believe the S&P 500 will remain range bound for the rest of the year. Very few are expecting the S&P to finish below 3,600 – yet they also don’t see the market taking out all-time highs by the end of December. There were some folks who think the S&P can clear 4,500 by year-end. That’s not too far-fetched, especially with a big test of 4,200 approaching. If the large-caps can extend here, we could see another thrust higher before encountering any summer consolidation. [MR] Next up: Gold! While most of the experts anticipate a choppy stock market, almost everyone thinks gold finally breaks out above $2,100 and stays above this mark into 2024. That’s great news for gold bugs… The bad news – at least, in the short-term, is that it might not be a clean move. In fact, gold is running into trouble at $2,000 again. The early April run to $2,050 has fizzled out. Gold once again failed to post a monthly close above $2,000 in April. It will have to try again this month – which is also a seasonally weak time for the yellow metal. Keep alert for a bounce in the dollar index. That could cause some weakness in precious metals in the weeks ahead. The longer-term outlook for gold is strong. But some turbulence in May might require a hard reset before it gets moving higher once again. Let me know what you think of this article, or if you have any feedback, suggestions or questions by emailing me[here](mailto:feedback@dailyreckoning.com). Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com [Over 62 And Collect Social Security? Take Action Immediately!]( [Click here to learn more]( [If you’re over the age of 62 and currently collect Social Security, you need to prepare now](. Because Biden has given our country the worst inflation in decades – and many warn things will only get worse from here. Worse yet, the Social Security check you receive now may not keep pace with inflation… [Which is why, if you don’t act now, you could fall behind in the months ahead](. Is your retirement at immediate risk? [Click here now to get the simple, step-by-step actions to survive inflation](. [CLICK HERE TO SEE WHY]( In Case You Missed It… “You’ll Be Poor and Like It, Beggar!”… [Sean Ring] SEAN RING Good Morning Reader, Happy Thursday! Friday, October 4, 2024, marks the day I will have spent half my life outside the United States. It’s over a year away, but I can’t believe how close it is. I remember when I first left, I calculated that date, never for a minute thinking I’d approach it while still living outside America. Yet here I am, in sunny Italy. But before that, there was rainy London. On October 3, 1999, I flew from JFK to London Heathrow (landing on the 4th, as it was the red eye). I was just over two months away from my 25th birthday. So I was still impressionable, but not completely. And I thank heavens for that. Because Europe, England, and London, had an enormous influence on me in every way. But luckily, I never caught the disease of socialism. Let me put this out there: because Americans know the founders of their country fought a war for their freedom, they look at the world in a way no one else anyway does. - Singaporeans were granted their independence [against their will](. - Australians and Kiwis were given their independence, over time, with no argument from The Crown. - The Irish almost managed it, then had The Troubles… [but will almost certainly get it done soon](. - The Scots were offered a vote on their independence… [and then voted “No!”]( Only the United States declared independence and then managed to win a war (thanks to French help, merci beaucoup!) to settle the issue. Basking in that reflected glory is one of the main reasons non-Americans can’t stand Americans. But seriously, how else are Yanks supposed to feel? Yes, our forefathers picked up a gun and said, “King George, take your 2% tax and shove it where the sun doesn’t shine!” Just hearing it involuntarily puffs out the chest. Obviously, our fathers have done nothing over the 39.8% top rate of income tax except, perhaps, polish their guns. But that’s a different story entirely. It’s for this reason I’m so grateful to have been born in America. History teaches Americans a fundamental truth: if you really want something, violence pays. Think that’s the wrong lesson? I don’t. Because when that violence was, and still is, a threat, governments are held in check. Somewhat. [Shocking Backdoor Crypto Play – LIVE on Camera!]( Crypto millionaire James Altucher just received a strange box that could COMPLETELY change how you look at cryptos: [Click here to learn more]( [CLICK HERE to See What’s In the Box]( He opens it live on camera, and shares details on the strange device that’s delivered everyday Americans over $1,170 per month in passive crypto income. [Click here to discover it for yourself now](. [CLICK HERE FOR THE DETAILS ON MY SPECIAL $10 OFFER]( Are Basketball Players Smarter Than Hedge Fund Managers? Just over a year ago, this headline appeared in[The New York Post]( “Bucks star Giannis Antetokounmpo has money in 50 different bank accounts.” “The Greek Freak” deposited $250,000 each into 50 bank accounts. That’s $12,500,000 into 50 different accounts. Why did he do that? Because he smartly knew that every bank account at a different bank in the US is FDIC-insured up to $250,000. Of course, the billionaire hedge fund manager advising Antetokounmpo told him he wasn’t investing correctly. That he should put this money into T-bills and T-bonds. Rubbish! This is a brilliant move. Why? Antetokounmpo is worth at least $200 million. So that $12.5 million in those accounts represents only 6.25% of Antetokounmpo’s wealth. It’s guaranteed safety for the cash portion of his portfolio. The Greek Freak wasn’t concerned with a return on capital. He wanted a return of capital. And last year, T-bills weren’t earning anything anyway. Now, it’s a different story. I asked you that question first because I’m introducing what confidence trickster Edward H. Smith called the “pay-off” or “convincer.” And that is deposit insurance. Once you know how this system works, you’d never stick your cash anywhere near it… unless it was for deposit insurance. Your bank goes under because of its own stupidity? Here’s $250,000. Or in Oprah’s case, here’s $690 million. (I’m still upset about that, by the way!) As the average American has about $500 in his bank account, he never has to worry about his bank going under. The government will give him his $500 immediately, thanks to deposit insurance. But how could the system work any differently? [IMPORTANT OPPORTUNITY: From The Vice President Of Publishing.]( Doug Hill, VP of Publishing, just recorded a [2-minute video clip]( making a major announcement for readers like you. And it could alter the course of your life forever. [You’ll understand everything when you click here to see this important message](. [CLICK HERE TO LEARN HOW]( Unfortunately, the English surrendered their guns and their pride a long time ago. Now, they are going through what I’ll call “Empire Regret.” Empire Regret is when a people are sorry for their past aggression and begin a period of prolonged, and obnoxiously unnecessary, self-loathing. The British Empire wasn’t perfect; no empire could possibly be. By nature, empires take more than they give. Just ask India. But there’s not a single person alive in England today who’s responsible for any imperial aggression. And yet, the young and impressionable English are tearing down statues (learned from their American cousins), rewriting Dahl and ignoring Kipling, and denying Clive, Rhodes, and old Queen Vic their rightful places in history. As a British citizen, it drives me batty. Because unlike most Yanks who move to London, I didn’t try to terraform the place into New America. I loved the weather, food, and barely being able to stand up straight after a night out. I started to watch football (not soccer!), rugby, and cricket. I learned to hate Australians for beating us at cricket, the Kiwis for beating us at rugby, and the French… for being French. But how I learned more Shakespeare in Hasbrouck Heights Junior-Senior High School than most of my English friends did on The Sceptred Isle baffled me. That they didn’t teach Alfred the Great, the Battle of Agincourt, and sinking of the Spanish Armada annoyed me. Now I know it’s because, for some reason, England is ashamed of its history. I learned that the English liked their limits. Their monarchy limited them. Their government limited them. Their socialism limited them. But it seems, finally, thankfully, the English may have had enough. If you’re an American, strap yourself in for this one. Take One for The Team, Peasant! Huw Pill, Chief Economist of the Bank of England, said that the people of England need to lump it when it comes to inflation. From [The Times of London]( Speaking on the Beyond Unprecedented podcast, Pill said: “If the cost of what you’re buying has gone up compared to what you’re selling, you’re going to be worse off. “So, somehow in the UK, someone needs to accept that they’re worse off and stop trying to maintain their real spending power by bidding up prices whether through higher wages or passing energy costs on to customers. “What we’re facing now is that reluctance to accept that yes, we’re all worse off and we all have to take our share.” Yes, what Pill is intimating, if not outright commanding, is that while the Bank of England can print up trillions of British Pounds to finance things like lockdowns, the English people must eat the resulting price rises. The British elite love throwing around the term “fair share,” as if they ever take it themselves. No one has ever been able to specifically define what a “fair share” is. What it means colloquially, of course, is that “if you make money, you pay more.” And that’s because the numbskulls in the Bank of England haven’t been held accountable for the sharp rise in UK inflation… [MR] Nearly 1 of every 3 British Pounds was printed in the last three years. But according to another Bank of England economist, the resulting inflation isn’t the bank’s fault. From the Obnoxious to the Incompetent [Ben Broadbent rejected criticism money created by central banks]( since the 2008 financial crisis and the pandemic caused the rise in prices. On the face of it, this is an asinine assertion. Like Milton “Uncle Miltie” Friedman said, “Inflation is everywhere and always a monetary phenomenon.” Broadbent went on to say supply-chain problems caused by the pandemic and the surge in energy prices after Russia’s invasion of Ukraine are clearer causes of inflation. Broadbent said: It’s always possible, at least with the benefit of hindsight, to construct an alternative path for monetary policy over the past that would have kept inflation on target, even in the face of these subsequent shocks. But that’s not the same thing as saying that the actual policy was ‘inevitably’ going to result in excessive inflation. I don’t mean to put words in Broadbent’s mouth, but he basically admitted the Bank got caught out. They didn’t render their policy safe enough not to be shocked into high inflation. Look at this chart… [MR] It’s been roughly double digits since July 2022. Does this central bank look like it knows what it’s doing? But whatever its level of incompetence, the people are supposed to “accept their lot” and “pay their fair share.” Piss off, mate. That’s what I say to these “economists.” The issue these economists don’t understand is that we’re not saying the increases in money supply caused inflation. It’s that an increase in money supply is inflation. Sure, besides the central bank screwing up, the government lent it a hand. Her Majesty’s Government stupidly shutdown the country during the plandemic causing some and adding to other supply chain problems. And its folly following America by uselessly sanctioning Russia added to the surge in energy prices, for which they are still dearly paying. But ultimately, increasing the money supply is inflating it. And inflating the money supply usually leads to increases in price levels. Boo! Hiss! These Economists Don’t Know Sh*t! Well, some [English peeps had this to say]( “It feels like people don’t live in the real world. They need to come and spend a day here and see what’s going on. How can people ‘accept’ the fact they can barely afford a loaf of bread? People are in real poverty.” “Unless they’ve seen that person walk through our door in floods of tears, embarrassed to be here, and it’s taken them up to an hour to calm down enough tell you what their situation is, they’ll never understand.” “In the last few weeks it has been absolute mayhem with the food parcels, the amount of people needing them. It’s been worse than normal. People are suffering, it’s hard out there. “It’s all right for people to say, ‘it’s OK, you can survive’, but unless you see and hear it yourself, you can’t understand what people are going through.” Bill Gates once said, “Be nice to nerds. Chances are you'll end up working for one.” Maybe… but some nerds really need a good ass-kicking. Let’s hope England regrows its pair forthwith. Have a lovely rest of your week! If this is the sort of thing you’d like to see more of, please let me know [here](mailto:feedback@dailyreckoning.com). Or if you have any suggestions for future topics, do let me know that as well. All the Best, [Sean Ring] Sean Ring Contributing Editor, Morning Reckoning feedback@dailyreckoning.com [Sean Ring] [Sean Ring, CAIA, FRM and CMT]( is a former banker and financial educator and is the editor of the Rude Awakening. Sean has trained interns and graduates from Goldman Sachs, Morgan Stanley, Citi, Bank of America, Standard Chartered Bank, DBS (Singapore), the Abu Dhabi Investment Authority (ADIA), Bank Indonesia (the central bank), HSBC, Barclays, RBS, and BlackRock. He knows the global economy is being corrupted by forces that most people can't understand and has used his unique and worldly experiences to help people navigate the markets. [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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