You’ve just witnessed the bank runs of the 21st century, but the panic isn’t over yet.
It started with mismanagement and social media panic. Facilitated by a smartphone app, $42 billion in deposits was expelled from banks in a single day.
By the end of it, Silicon Valley Bank (SVB) was the second largest bank failure in history.
Bank stocks had their worst day since the 2008 financial crisis following the SVB collapse.
But the failures of SVB and Signature Bank, another bank acquired by the FDIC, are very different from 2008.
That said, Mr. Market is still gearing up for the worst, and the stock has continued to sell in the last four trades.
Stocks fell again this morning after rising yesterday.
The stock market plunged at the start of trading on fears of more infections and more bank failures.
In fact, the aftermath of the SVB collapse has pushed oil prices down to five-week lows.
So why did investors decide to sell… oil?
Because that’s what happens when fear rules the market. everything falls together.
energy opportunities
in the last few weeks The Banyan EdgeI showed how Biden’s energy mandate is impossible to meet with today’s technology.
Just mining the material would be disastrous for the environment.
Not to mention handing over the keys to the global economy China and Xi Jinping.
See the chart below and you’ll see what I mean. It shows how demand for fossil fuels has skyrocketed since 1900.
The orange line shows how quickly you have to give up everything to meet the Biden deadline.
(Click here for a larger image.)
It’s like pushing the economy off a cliff.
That is why Washington is already rolling back its war on fossil fuels.
During the 2019 campaign, Biden told supporters:
And just last week, the Biden administration approved a new oil drilling project in the Alaskan Arctic.
A big leap in 3 years. But even Biden knows the article is on the wall at this point.
He even acknowledged it in this year’s State of the Union address.
In an apparently unscripted moment, he told America, “We’re going to need oil and gas for a while,” specifically addressing the industry’s concerns.
Meanwhile, Wall Street is still somehow lagging behind. This is great news for Main Street investors.
Because it means you can secure some of the best fossil fuel investments on the market at bargain prices…
Bargain buys: oil and natural gas
Fossil fuels have a long runway.
We have seen estimates that oil production will continue to increase until 2040.
That’s why I’m long term bullish on oil and gas.
Remember, you can’t say what the price per barrel of oil will be next week, next month, or next year.
However, based on the simple laws of supply and demand, I am confident that oil and gas prices will rise significantly five years from now, and certainly ten years from now. materially high.
One way to profit from this bullish energy trend we’ll see over the next decade is to buy the largest energy ETFs. Energy Select Sector SPDR Fund (NYSE: XLE).
Exchange-traded funds (ETFs) own 23 companies, including the world’s largest energy companies, including ExxonMobil, Chevron and Schlumberger.
And 100% of those companies are in the US.
Like many stocks this week, this ETF turned the jaws on. 5% less.
But that doesn’t mean the business has a fundamental problem. That alone makes it even more affordable.
The road to higher returns always tests investors — see how confident they are in their position in the face of recessions, like those that follow major events like the SVB collapse for.
And if you’re looking for a more direct exposure to oil and gas, I’ve just released a new video detailing the three best strains I’ve found.
- It is one of the top five natural gas producers across North America.
- An Oil 2.0 company ideally positioned for growth.
- A company with 120,000 miles of pipeline across 41 US states.
You can check all the details and find out how to unlock my recommendations. click here.
nice to meet you,
Charles Mizrahi
Founder, alpha bester
PS Are you using this time to buy quality companies at bargain prices? BanyanEdge@BanyanHill.com.
If you’re looking for recommendations, see below. ⬇️ ⬇️ ⬇️
SVB Collapse = Your Opportunity
The bottom line is this…
We focus on business, not the daily volatility of the stock market.
That way, you can get a good night’s sleep and not worry about panic or market turmoil that won’t affect the companies in your portfolio.
In fact, if you have the temperament, now is a great time to buy one at a bargain price.
If you want Charles Mizrahi’s recommendations, Click here for details now.
Of course, the failure of Silicon Valley Bank is the biggest news of 2023.
Or at least it was.
Today, Credit Suisse seems to be the center of attention. The Swiss banking giant, which nearly collapsed in the aftermath of the 2008 meltdown, is now at the center of the headlines.
As I write this, Credit Suisse stock is at an all-time low.
why?Bank surprised the market By mentioning “significant weaknesses” in financial reporting. This may result in “misrepresentation or disclosure of account balances”.
No one knows exactly what that means, but it sounds like a vague notice from a bank in 2008. So investors sell first, ask questions later, just like what happened to SVB.
Saudi National Bank noisy and publicly He said he was not interested in bailing out Credit Suisse with an investment.
Hmm… let’s see what happens. Personally, I don’t think we’re looking at a scenario like the 2008 financial crisis.
But we may be looking at a similar situation Savings and loans crisis (1986-1995). And it wasn’t very fun either.
About a third of the savings and loan associations went bankrupt during that period, which hit the economy of my home state of Texas particularly hard. And, as now, the root of the problem was the mismatch between short-term liabilities and long-term assets.
History class is great.
But more practically: What can you actually do to protect yourself from a bank run?
Let’s make a list:
- Do not hold more than $250,000 in cash for FDIC insurance in one bank.
Yes, the federal government has pledged to help bank depositors who have already failed. This effectively increases the cap on his FDIC insurance of $250,000 to infinity.
But there is no guarantee they will continue to do so. They’ve arbitrarily raised it, and they can easily lower it. There’s no reason to risk it when there are other options.
- Consider moving cash deposits not needed for immediate spending to the U.S. Treasury itself.
This makes it completely bulletproof.
why?because Treasury Direct Access T-bill and various US Treasuries.
Despite the debt ceiling debacle, the US government is not at risk. If they fail to protect your cash, that means the zombie apocalypse is here and your money is worthless anyway.
- You can also sweep large cash balances in your brokerage account into your T-bill.
So far, the market panic has centered around banks. But that could change quickly and spread to brokerage firms.
Keeping your extra cash in T-bills is safe and yields aren’t too bad these days. You can get about 5% with a maturity of 6-12 months.
No need to run out of quality long-term inventory and sell it. As Charles Mizrahi points out, such panics create good opportunities for increasing quality long-term positions. Recommendations in oil and natural gas.
But with your cash, your cold hard cash, it’s so easy to protect it that there’s no reason to risk it.
nice to meet you,
Charles Sizemore Editor-in-chief, The Banyan Edge