Trade Secrets: The Bull Is Back. Bank Crisis Over.

What is going to happen next? [image] The Bull Is Back. Bank Crisis Over. The signal that the bull market was back was the advent of the bank crisis. What?! Yes, it's true. A modern bank crisis is a good signal to buy stocks. Here's why. In the old days, a bank crisis where banks would go bankrupt would be very bearish for stocks. Look at the Panic of 1907 or the Crash of 1929. Both caused by bank failures. The reason they were bearish is that bank failures effectively reduced the money supply because the banks were the main factors affecting money supply. In 1907, there was no Federal Reserve Bank and, in 1929, the Fed was contracting money supply before the Crash and that was the precipitating factor behind the Crash. The ensuing bank failures caused the money supply to shrink further. In the old days, a bank failure meant that the equity in that bank, plus some of the deposits of depositors, was lost in the bankruptcy so money supply shrank. And that shrinkage of money supply or liquidity caused the stock market to decline. Starting in 1987, in particular, Fed Chairman Alan Greenspan, decided that stock market crashes were bad and he flooded the economy with money or liquidity to support the stock market. This is now called the Greenspan Put which is the idea that the Fed will come in to support the stock market if there is a major bear market. We have seen every Fed since then come into the market every time stocks drop about 30% to support the stock market. But then, in 2008, the Fed effectively nationalized the major banks. The Treasury, under Treasury Secretary Hank Paulson and the Fed, under Ben Bernanke, and the New York Fed, under Timmy Turbo Tax Geithner, called a meeting of the major commercial and investment banks and told them what they were going to do no ifs ands, or buts. These commands included: - taking over investment banks like Merril Lynch - accepting government money in return for greater regulation and government control - converting some investment banks, like Goldman Sachs, from investment banks to commercial banks These banks were to do these things. Period. This effectively gave control of the banks to the Fed and the Federal government. By the way, the only bank who said no in this meeting was Morgan Stanley which survived the banking crisis without government aid, thank you so very much. Small banks still have a little autonomy, often because they are state chartered not federal chartered. SVB, for example. But the big banks are now run strategically by the Fed and the Federal Government. Same thing in Europe as we can see in the shotgun wedding between UBS and Credit Suisse. So we had several banks go bankrupt in the US in the last week largely because they had losses in their portfolios of government bonds they owned. I will tell you the insanity of all of this in another article later. So the two Feds, the Federal Reserve Bank and the Federal government, panicked and flooded the banking system with money or liquidity to stop any further runs on the bank. Almost the first place that money will go is into the stock market and, sure enough, stocks are now rallying. Right now, I look for the Fed to hike rates today and then pause. But, at the same time, they will keep flooding the banking system with money. They have already boosted assets by over $300 billion in just the last week and will likely continue to flood hundreds of billions more in the coming weeks. They are saying to the banking systems, you can have all the money you want but we are charging a bit more for it. In addition, the Fed is saying that the safety of the banking system is more important than the fight against inflation. You may expect: - Inflation will start to increase again almost right away - The recession will be delayed again by months - The stock market will rally - The dollar will tumble - Gold will rally - The banking/financial crisis is delayed possibly until 2024 How do we make money from all this? I think I just outline the trading plan! [image] [Courtney's New Book Is Out! Click here to learn more!](=) [Sign up for Courtney's new Blog! Click here now!](=) Thoughts To Live By Jesse Livermore's Methods of Trading in Stocks by Richard Wyckoff Late hours and late sleep are two things the majority like to indulge in; this majority is known as "the public," millions of whom attempt in a desultory way to master the greatest and most difficult game in the world—one that requires an almost complete reversal of previous mental and physical habits. Where to get more Courtney! New blog!: [Click here to join for free!]() Youtube: [Freebee Wall Street Winners]() Podcast: [The Courtney Smith Show]() Substack: [courtneysmith.substack.com](=) Medium: [Courtney Smith – Medium](=) [Profile Image] COURTNEY SMITH WealthBuilder LLC Work (702) 761-6837 | Text Message (702) 718-8588 Support@WealthBuilderLLC.com CourtneySmith.com Share The Love If you like Trade Secrets, then please pass it on to your nearest and dearest so they can [sign up]() too. If you believe in the power of good journalism, make it something you subscribe to. Sharing is caring. [image] 1. Get your Option Strategy Guide and 7 Option Top Trading Tactics.[Click here](=) 2. Health is very important at this time. Ian Cooper has a new report and LIVE trade sheet to learn which are the BEST Health care, Pharma, Biotech, Insurance Companies.[Click here](=) [image](=) [image]() [Unsubscribe]( Wealthbuilder LLC 6671 Las Vegas Blvd South 210 Las Vegas, Nevada 89119 United States (310) 579-2965