The Banking Crisis Isn’t Over

How to protect yourself [Morning Reckoning] October 05, 2023 [WEBSITE]( | [UNSUBSCRIBE]( The Banking Crisis Isn’t Over - If you’re concerned with the banks, there are many ways to minimize your risk. - But the best ways are the ways rich people protect their wealth. - You can mimic the rich even if you have less resources and capital. [URGENT: Unclaimed Giveaway Offer]( We have an item of considerable value on hold for you in our warehouse. Valued at nearly $300, this [special item]( is an opportunity you wanted to miss. [Click here to see how to claim yours now.]( [LEARN MORE]( Asti, Northern Italy October 05, 2023 [Sean Ring] SEAN RING Good morning Reader, I spent most of my banking career in an investment bank’s sales and trading division. That means I had hedge fund managers and other institutional money managers shouting down the phone at me all day. It's not as glamorous as you think, trust me. But the intellectual caliber of the workforce there, amoral though they may be, is staggering. Almost everyone has a top degree - which used to mean much more to me than it does now - and is incredibly intense. So, you can imagine my shock when I got to the private banking side, where relationship managers know almost nothing about the products they sell. Now, I’m not claiming all investment bank traders and salespeople knew that CDOs-cubed were a terrible idea. Watch The Big Short for confirmation on that. However, private bankers, known inside the industry as relationship managers (RMs), are not known for their product knowledge. As their title says, it’s all about the relationships with them. In Asia, guanxi is the most essential thing an RM can have with a client. That’s the network and connections that create mutually beneficial business opportunities. From Investopedia: Guanxi is closely intertwined with the Confucian philosophy - a philosophy that has shaped many Asian cultures - that self is extended to family, friends, and society to create a harmonious community. Guanxi implies an obligation that one has to another. In China, it is stated that the wheels of business are lubricated with guanxi. To be fair, the Chinese coined the term, but the West expanded upon the idea. Through English Common Law, the West built a legal system that extended this trust to entire nations. That’s one of the reasons what we may call “bribery” is just “a gift to a friend” in the East. Interestingly, the distributed ledger technology upon which the blockchain is built extends trust without custodians. There need not be a middleman like a banker if the peer-to-peer networks work independently. It eliminates the age-old question, Quis custodiet ipsos custodes, or “Who watches the watchmen?” Eliminating some go-betweens would free up valuable resources regarding fees and time. After all, you probably don’t need an RM if you can articulate your wants to a client advisor. Or, if you’re expert enough, you can do much of this yourself. Not knowing more about your position, I can’t offer advice. (Well, I’m not allowed to provide advice anyway.) With all this in mind, let’s discuss five ways to protect yourself. [New AI 62 Times Smarter Than Einstein?]( [Click here to learn more]( AI is already 100,000 times faster than humans are… And by 2025, Elon Musk predicts AI will also be “vastly smarter” than any human. Masayoshi Son, the CEO of SoftBank goes as far as to predict that, over time, AI could reach an IQ of 10,000… That would make AI more than 62 times smarter than Einstein’s IQ of 160. Can you imagine the possibilities of an AI supercomputer which is 100,000 times faster than any human and has an IQ of 10,000? [Over time, AI could be used to cure cancer, enable a new age of space travel, and much, much more](. That’s why AI is set to change the world in ways almost nobody can imagine today. And anyone who invests now – while this new technology is still in its infancy – could see the chance at making generational profits. [Click here now to see the 3 tiny AI stocks we believe are best positioned to profit](. [LEARN MORE]( Keeping Your Cash on Hand You’ll set off alarm bells at your bank if you withdraw $20,000. That’s for sure. But you certainly want to keep a certain amount you feel comfortable with in your safe. And put that safe underground. (The first place thieves will look is behind a painting.) You don’t need to go all John Wick, but my parents had a cool safe in our old house. It was small, but they put it under the rug in their closet. If there’s a master thief in the world that would look there, kudos to him. I wouldn’t. Besides the cool factor, you’ll know your notes are as safe as possible. Keeping Your Cash in Multiple Banks The average high-net-worth individual in Asia has at least five bankers. On average, one banker gets half his “wallet.” “Wallet share” is bankerspeak for how much of a client’s assets they manage. The bankers never know for sure, but they can guess. The next four bankers will get a piece of the rest. So, it’s essential to be a good banker. What does this mean for you? First, retail and mass affluent clients often think one bank is enough… and the banks count on it. When I teach retail banking during the graduate season, I teach that retail deposits are “sticky.” That means ordinary folk pick one bank and put all their money in it. This isn’t an issue since the average American has about $500 to their name. But if you’ve got a chunk of cash, you should spread it between 3 to 5 institutions. I know opening bank accounts isn’t as easy as it used to be, but it’s certainly something you should invest time in. That way, you can keep up to $250,000 in each bank, and all those deposits will be insured. But even if you only stick $10,000 in each bank, you’re much better diversified. Keeping Your Gold and Silver in a Safe Place I could be wrong, but I don’t see why anyone would keep their gold and silver in a bank. Maybe a safe deposit shop that’s separate from a bank. But I wouldn’t even do that. My good friend Michael once mentioned he has enough gold, silver, and ammo to defend his keep until the end of his days. I’d keep my gold and silver in a super safe under the floorboards in my house and never mention it to anyone. Or dig a hole in your backyard. Just don’t forget where you dug it! If Biden or his successors outlaw privately owned gold and silver in the coming years, and your stash is in a bank, it’s game over - at whatever price they decide. Investing in Crypto We’ve talked about this a lot. Owning crypto is an intelligent bet, even if it’s just 2% of your portfolio. You can’t lose your house but can participate in the upside. And that currency is practically untouchable. Especially if you plan to live abroad, just keep the crypto in cold storage. “Cold storage” is cryptospeak for a device that resembles an old USB stick where your crypto can be kept off-exchange. Just always remember your password and key - and never lose it! You don’t want to wind up like this guy: Credit: [CNBC]( Wrapping Your Assets in a Company This is too little spoken about. If you own a company and structure it correctly with the help of your lawyer and accountant, you can use it to shield your assets. Remember, you control your company, but the company owns your assets. It’s one of the best ways to protect yourself from lawsuits. It also keeps away unwanted bankers who’ll try to manage your wealth. I’ve long written in this newsletter that you ought to start an internet business that grooves with your passions. Once it starts to make money, leave the money in there until you need it. You can use the company as a savings vehicle. If you build it big enough, you can sell it for a chunk and move to Switzerland, whose private bankers understand the meaning of “discretion.” I hope that helps. Have a wonderful weekend! All the best, [Sean Ring] Sean Ring Contributing Editor, The Morning Reckoning feedback@dailyreckoning.com X (formerly Twitter): [@seaniechaos]( [White House insider exposes epic Biden mistake]( [Click here to learn more]( Thanks to the incompetence of President Joe Biden… [And the HUGE mistake he made on February 24, 2022]( And an unthinkable event has now happened… Bringing in hyperinflation like we’ve never seen… Crushing the value of the money in your savings and retirement accounts… Tanking our economy… And changing our country’s global standing forever. But there’s still time to protect your money. But you can’t wait. [>>See Biden’s terrible mistake here<<]( [LEARN MORE]( In Case You Missed It… Why I QUIT Investing, Part 2 Greg Guenthner, Editor [Greg Guenthner] GREG GUENTHNER Good Morning Reader, [Last week]( we discussed how you can change your life by thinking like a trader. This idea has nothing to do with quitting your job to stare at a row of glowing monitors every second of the day. That doesn’t sound like freedom to me. I “quit” investing to trade because I enjoy keeping my own schedule, spending time with my family, and (mostly) ignoring the market pundits who are only blathering about stocks to sell ad space for prescription drugs and car insurance. It’s just easier to trade when you tune it all out. Thinking like a trader will not only dramatically improve your returns, it will also free you from the neverending spin-cycle of the financial media, bogus Wall Street analysis, and foggy economic prognostications that never seem to come true. More importantly, you can apply the principles of trading no matter how you invest – short-term, long-term, and everything in between. You don’t have to change your timeframe to succeed with trading. You simply have to change your mindset. Today, I’m going to dig a little deeper. Let’s get started… Fundamental Mistakes What is an investor’s most important task? If I polled a random group of people, I’d expect “research” would be the most popular answer to this question. After all, if you’re going to invest in a company, you want to know what it does, who its customers are, how much money it makes, various valuation metrics, plans for future growth, etc. These are all supposed to be important pieces of information. And information is what most investors crave. Many diligent market watchers – especially newer investors – love to dig into news articles, analyst ratings, and earnings statements. They want to feel informed. After all, the more you know, the better chance you have at picking a winner. Except this isn’t entirely true. Over the long haul, a company will live or die based on its ability to make money and grow. I’m not disputing these facts. But you probably won’t profit from these long-term success stories based on widely-available fundamental research or economic trends. Let me explain… Electric car pioneer Tesla Inc (TSLA) currently trades for 54x forward earnings estimates. Legacy automaker Ford Motor Co. (F) trades a little more than 6x forward earnings estimates. Does this mean Ford shares are a better “deal” than Tesla right now? Will Ford outperform Tesla over the next three years because Tesla stock is too richly valued? Or, is Ford stock cheap because it simply can’t compete with Tesla? Perhaps Tesla is on the cusp of a major breakthrough in its autonomous driving technology that will cement it as the most important transportation and technology company in the world. Or, maybe the opposite is true – Tesla’s biggest growth days are behind it and the company struggles to meet its aggressive goals over the next several years. No matter how much research we do (you can replace forward earnings with your metric of choice and repeat this process ad nauseam), we cannot confidently answer any of these questions. Sure, we can come up with some very serious stories about how the economic, political, and company-specific fundamentals will perfectly align… But it’s highly unlikely any of our well-researched ideas will come true. The markets – and the world – are way too complicated for this to consistently happen. You Have No Edge Not only do we live in a complicated, chaotic world – we also have to deal with highly sophisticated professional investors who can exploit limitless resources to deliver returns to their clients. In other words, it’s virtually impossible to discover information about a company that Goldman Sachs doesn’t already know. The connections analysts can exploit and the sheer amount of information they can obtain that a Main Street investor could never sniff is obvious. Plus, the major Wall Street institutions have access to billions of dollars (of course!), armies of quantitative analysts, mathematicians, and virtually unlimited computing power. So why should we attempt to play their game? Stop pretending you can beat these monsters after spending a couple hours Googling stocks. You and I don’t have an edge over these firms. There’s no information we could legally obtain that would tell us something about a specific company someone in a major financial institution’s research department doesn’t already have on file. I spent way too much time at the beginning of my career trying to figure out the fundamental research that would give me some sort of a repeatable edge in the markets. Looking back, I don’t even think this endeavor is possible – even for investors much smarter than me. Even the handful of lionized investing legends who have made billions in the market concede that many other factors played into their success, such as when they started investing. But that’s a story for another time… There is a way you can leave all this fundamental confusion behind. It starts with the concepts we’ve discussed so far. First, we acknowledge fundamental and economic analysis is important in the long-term – but it’s useless for attempting to determine when to buy or sell stocks. Next, we admit that we have no edge in the markets – and possess no magical information that can give us an advantage over the professionals. That leaves us with the big question… If fundamentals are flawed, what strategy can I use to beat the market? We’ll dig into this answer – and more! – next week… In the meantime, hit me up with your most pressing trading questions by emailing me [here](mailto:feedback@dailyreckoning.com). Best, [Greg Guenthner] Greg Guenthner Contributing Editor, Morning Reckoning feedback@dailyreckoning.com Thank you for reading The Morning Reckoning! We greatly value your questions and comments. Please send all feedback to [feedback@dailyreckoning.com.](mailto:dr@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. To end your The Daily Reckoning e-mail subscription and associated external offers sent from The Daily Reckoning, feel free to [click here.]( Please note: the mailbox associated with this email address is not monitored, so do not reply to this message. We welcome comments or suggestions at feedback@dailyreckoning.com. 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