The Untold Story of 2023's Bank Collapses
This week, Joel Litman and I revealed the exact steps you must take before January 1 if you don't want to get blindsided by more stock market losses in 2024. I also want to share an incredible story today... One I think more investors need to understand if they want to weather Wall Street's surprises – and I say this as someone who's hard to surprise, after having spent 50 years on Wall Street! Let me show you a recent example... It has to do with this spring's bank collapses – some of the worst in American history. Who could have foreseen them? Well, my Power Gauge sure did – it flashed SELL on both Silicon Valley Bank and Signature Bank nearly a year before they crashed to zero. And so did the government... Despite their assurances that the U.S. banking system was secure, they knew – they just smartly didn't want to spark panic or more bank runs. But here's a dirty little secret of how bank failures work: Due to a massive loophole in banking policy, the FDIC legally can't prevent a bank collapse... they can only cover a bank when it's already failed. Naturally, this creates a system of perverse incentives... Potential buyers of a troubled bank have every reason to wait until it fails rather than step in and try to save it. And that's exactly what happened this past spring... JPMorgan could have saved First Republic Bank weeks before it collapsed, however, it would've then shouldered the burden of First Republic's debts. Instead, JPMorgan waited until First Republic collapsed for a few key reasons: - First, the FDIC would absorb First Republic's losses...
- Then it would pay JPMorgan $13 billion to take over First Republic (funded by the taxpayer, of course)...
- And this doesn't even include the $92 billion in new assets JPMorgan got out of the deal in the first place!
It was a great day for JPMorgan... But a terrible one for taxpayers, the economy, and First Republic shareholders. Joel says that in many respects, our system is set up to encourage failure and instability... And Wall Street is FULL of massive loopholes like this. Some of it's due to oversight... some of it's intentional... But bottom line: It's important to understand how the game is played. Even more important, you need to know how to look out for yourself. Especially when you understand everything Joel and I see coming in the early days of 2024. Here's what you need to do BEFORE January 1. Sincerely, Marc Chaikin
Founder, Chaikin Analytics P.S. Did you know the Fed found 722 banks at risk of default on February 14... a full MONTH before we saw three of the worst bank failures in American history? 31 of those banks were in such bad shape that Uncle Sam immediately cut them off from borrowing any more federal money. Even as the government continued to assure us all was well! Again, I'm not here to worry you, but it's important you know what we're dealing with. Here are the actions I'm recommending all my readers take immediately. | 
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