|After research on some of Italy’s weakest banks, we visited friends in the Aosta Valley.|
While Elisabeth and I have been traveling to some of the world’s primary focal points of economic risk — and beauty — our readers have been busily providing their comments and questions.
Richard L. comments: “Excellent visual and oral leaves an impression that written words lack. Keep it up. I can see you are enjoying yourself.”
Thank you! This is one of the most fascinating voyages of my lifetime. We wanted to see our son, Anthony, who works with a tech start-up in Tokyo.
But instead of the typical U.S.-Japan roundtrip, we bought a round-the-world ticket that lets us make a series of stops along the way for RRR&R — rest, relaxation, research and reporting back to you.
From Italy, I sent you a video update on the dire state of Italy’s largest banks and upcoming political turmoil. (Click here to view.)
From Turkey, my video delves into the millennial East-West conflicts that continue to escalate today. (Go here to watch it now.)
Next Monday, brace yourself for the shocking realities of one of the most powerful and supposedly “stable” nations on the planet — Saudi Arabia.
But no matter where I am, the single best place to leave your comments and questions is below each of my articles. (For today’s, use this link.)
In response to my video on the dire state of Italy’s largest banks, Branko asks “What are the top 5 biggest and safest banks in the world?”
Here are the global banks with assets of $4 billion or more that earn our highest Weiss Safety Ratings:
|Samba Financial Group||Saudi Arabia||62.7||A+|
|American Express||United States||158.8||A|
|Discover Financial Services||United States||88.1||A|
|Al Rajhi Bank||Saudi Arabia||86.2||A|
|Bank Central Asia TBK||Indonesia||46.0||A|
Or, if you prefer banks that are even larger ($200 billion or more in assets), our Weiss Safety Ratings are a tad lower, but still in the “excellent” category:
|Industrial & Commercial Bank of China||China||3,546.3||A-|
|China Construction Bank||China||2,966.8||A-|
|Bank of America||United States||2,185.5||A-|
|UBS Group AG||Switzerland||1,008.3||A-|
|BOC Hong Kong Holdings||Hong Kong||305.5||A-|
Want to restrict your banking to U.S. institutions? No problem. We have recently released our Weiss Safety Ratings for the highest-rated largest banks in the U.S. based on their financial data of June 30, 2016:
|Morgan Stanley Bank, NA||Salt Lake City||UT||135,608||A-|
|Goldman Sachs Bank USA||New York||NY||160,666||A-|
|UBS Bank USA||Salt Lake City||UT||54,680||A-|
|Signature Bank||New York||NY||36,547||A-|
Again, our Weiss Safety Rating of A- is still considered “excellent,” meaning that the bank has maintained a conservative stance in its business operations and underwriting practices as evidenced by its strong equity base, high asset quality, steady earnings, and high liquidity. While the financial position of any company is subject to change, we believe that all of the above banks have the resources necessary to deal with severe economic conditions.
Eagle495 writes: “Just returned from cruise to England and Norway. Most of the successful Italians that I met now live in Great Britain or the U.S. Sadly, the EU never had a minimum economic success level requirement before membership. Had there been one, none of the PIGS would have been granted membership until they cleaned up their balance sheets.”
True. But one of the great ironies of Europe’s fiscal crises is that its two largest economies, Germany and France, were the first to break their own debt rules. Both countries led the charge to establish the rules under the EU’s Growth and Stability Pact. Both countries ran deficits that exceeded the maximum 3% of GDP. And both agreed to rig the system so they wouldn’t face sanctions.
In sum, Germany and France stood shoulder to shoulder as they paved the way for future violations by PIGS countries and for new debt disasters still on the near horizon.
The K-Wave is Coming to Wall Street
It will wipe out the lifesavings of millions of investors. But most people can’t even see it coming. It’s called “The K Wave” or “The Long Wave.” Whether you are totally wiped out by it — or whether you ride the “crest” of this wave to a level of wealth you never dreamed possible — depends entirely on what you decide to do today. Click here to see how you could multiply your money by 300% … 400% … even 500% if you “surf” the K Wave safely into shore. -Larry Edelson
Chuck B. broadens the discussion with this comment: “The entire world economy is dependent on debt. If one large national economy collapses because of that dependence, it is almost certain that the collapse will quickly spread to all nations.”
This fear is the primary reason why the world’s most powerful central bankers and finance ministers have also been breaking all their own rules.
They know darn well the dangers of bank failures and debt defaults. They know their political careers would be toast if they didn’t do absolutely everything — and anything — to prevent them. What they don’t know — or don’t seem to care about — is the long-term consequences of their actions.
This is why U.S. Treasury Secretary Hank Paulson cooked up a massive bank bailout plan in 2008, literally dropping to his knees to beg for its passage in Congress, warning bluntly that, absent the bailout, the world’s entire financial system would melt down.
This is why, on that same day, former Fed Chairman Ben Bernanke embarked on the wildest money printing binge in American history … and why his successor, Janet Yellen has kept it going.
Plus, it’s why the Bank of England, the European Central Bank and the Bank of Japan have galloped down the same primrose path.
Crisis after crisis, year after year, our leaders have faced the choice of either …
- A market-driven housecleaning of bad debts, or …
- A Herculean government effort to sweep them under the rug.
Almost invariably, they have chosen the latter.
Almost invariably, they have decided to prolong-the-agony, compounding the debt disease, destabilizing the global economy, and undermining the foundations of democracy. (In my “Next Black Swans” video, I show exactly how.)
Each successive debt earthquake has been accompanied by stronger seismic waves than the previous. So don’t be surprised if the next one follows the same pattern.
Just remember that predicting their precise source and timing is beyond the capability of the most advances sciences known to man.
Walter S. says: “Your articles are great. But you seem to be avoiding the forest and discussing the trees. How about the world money cartel? What stranglehold does it have on Italian and U.S. banks? Is this issue too hot to handle?”
No one can deny that, throughout history, powerful individuals, families and alliances have enjoyed oversized influence. But history also proves that, despite their power, they are no more capable of preventing a debt crisis — and no less vulnerable to the ultimate justice of market forces — than the elected officials they corrupt.
Frank E. asks “Do you think the U.S. government in desperate times will grab our IRA and our checking account money? Is money in a private safe better than money in a bank account? I love your research.”
In a way, the government has already taken your money away. By wrestling interest rates down to the mat and holding them there for eight long years, the U.S. Federal Reserve has effectively grabbed nearly every penny of interest you could earn on safe savings vehicles. Ditto for Europe and Japan.
Government takeover of your principal, however, is another story entirely. Yes, in an extreme scenario, I can imagine desperate politicians taking some small steps in that direction. But even if they do, it will backfire before it reaches the point of outright confiscation.
Why? Because more than any other borrower, the U.S. government depends on savers, investors and free markets to raise the funds they must have to stay solvent.
“Where would one invest cash holdings?” asks Fred G. “With so many banks in bad financial condition and the threat of negative interest rates,” he says, this is a particularly challenging dilemma for anyone building cash.
We currently assign Weiss Safety Ratings to a total of 5,969 U.S. commercial banks, savings banks and S&Ls, plus 6,017 credit unions. Among them, 2,234 merit a rating of D+ or lower (weak), 4,214 get a rating in the C range (fair), 4,337 are rated in the B range (good), and 1,201 are A- or better (excellent).
That gives you a total of 5,538 banks and credit unions to choose from in the A or B categories. Separately, we also rate 280 global bank holding companies, among which 128 are Bs and As.
Among them, the highest rated large banks are in the lists above.
None of this, of course, helps you overcome the issue of dirt cheap interest rates. But as always, the return of your money is a higher priority than the return on your money. And this very exceptionally long and extreme period of near-zero interest rates, will definitely not last forever.
Good luck and God bless!