With everything going on in the banking world, is it any wonder Your Survival Guy likes doing business with Fidelity? It’s a non-bank, non-publicly traded company.
Banks are under enormous government pressure to consolidate, while publicly traded brokerages are pressured to meet quarterly earnings. It’s a bad one-two punch. Look at Charles Schwab, for example. It has a banking division and is publicly traded. Its stock is down over 30% year to date.
Fidelity is not a bank. It’s privately held. It’s a family-run business.
What could possibly go wrong now that all depositors are (implicitly) insured by the government? Select banks are forced to merge with other “select” banks. One gets assets for a song, and the remaining banks pay the bill. It’s like having dinner with your college buddies, and then half of them skip out on the bill. Solid banks are punished for running a tight ship.
If you have money in a bank above the FDIC-insured level, does it even matter now? The road’s been paved for the surviving banks to become digital currency messengers for the almighty government.
Another crisis (or this one) could usher in massive consolidation into the too-big-to-fail megabanks. We already know the government is in the boardrooms there.
Do not waste time predicting what the Fed will do next. I can certainly see them cutting rates to shore up balance sheets and reduce the pressure to pay depositors—if there are any left.
Times like these are the perfect opportunity for things considered crazy to become the norm.
Action Line: Get your banking life in order. If you need help, I’m here.
E.J. Smith - Your Survival Guy
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