This is a teaser that has been around before, but the whole lead and urgent emotional appeal have changed quite a bit — so I thought it worthy of some comment.

This is for Greg McCoach’s Insider Alert … and they want you to be very afraid (“afraid” is particularly good for precious metals investors).

The headline is frightening, indeed: “FDIC Gearing Up For a Large Bank Failure. Here’s What to Do.”

“What to do” is, of course, subscribe to McCoach’s new uber-exclusive Insider Alert service that will run you two thousand clams for the first year. And when you do, he’ll tell you his seven best picks that are too risky and exciting for his main Mining Speculator readers.

He throws out the thrilling “exclusivity” language that we love so much, too: “The Greg McCoach Insider Alert isn’t like any other investment advisory I offer. In fact, giving away information this sensitive is still unheard of in my industry.”

Ooooooo, what a maverick!

The only sad thing about this teaser letter — aside from the fearmongering — is the fact that he only teases us about one of his stocks. It’s a silver miner (or will be someday, they hope), owner of the legacy of the Hunt Brothers who tried to corner the silver market back in the last century. I already wrote this one up, back in December when I first saw it, and if this is an investment that you have a particular fondness for you’re in luck — the shares are way down since this teaser campaign began.

Anyway, if you want to know about the silver miner, go here and read up on the Rupert’s Paradise mine — you might have missed it if you haven’t been with the Gumshoe long, or if you were too busy with your Christmas shoppping in mid-December. McCoach is still saying that this one “could easily launch from $0.92 a share to $92.21.”

Of course, it was a while back, while colored leaves were still on the trees, that it was at .92 a share — currently, you can pick it up for more like .65 if you’re so inclined. And back then, of course, McCoach was just selling it as a great idea for a bull run in silver, not particularly as a defensive play against cataclysmic bank failures.

But for those of you who already know this one (you still here?), I just wanted to blather on a bit more about the FDIC business. Wait, come back!

Now, to be fair, that “gearing up for a large bank failure” bit came from a Marketwatch article, McCoach didn’t invent it out of whole cloth. The way I read the situation it’s more that they’re preparing for modern-era (read, “bigger banks, electronic transactions”) bank failure. But I’m not a banking analyst, that’s just my perspective and opinion.

McCoach, who undoubtedly has more experience in investing than I do, disagrees. And he wants you to be very worried: “One bank failure could cause a domino effect across the entire economy that would result in a cataclysmic vortex of wealth destruction.”

“Cataclysmic vortex” — now that’s a nicely turned phrase.

Not to panic you, but we have had one bank failure so far this year, on January 28 — yeeks!

Sorry, just having a little fun — we get a few bank failures most years, I can’t imagine that the Douglass National Bank’s failure is a particularly relevant harbinger of the apocalypse.

The letter also notes that, “The last time the FDIC made an update of this nature was nearly 10 years ago, in 1999.”

True — but, keep in mind that “update of this nature” means a revision to the procedures for planning for and handling bank failures, mostly rules about how banks should keep records. Updating regulations once every ten years isn’t that crazy a schedule in the federal government, to my knowledge.

It doesn’t mean that it’s the first time in 10 years that the FDIC has updated us on banks that are troubled — they do that once a quarter, every quarter.

And there’s a quote from the Marketwatch article, too, which also helps to skew the facts a little bit. McCoach’s ad pulls this quote: “‘FDIC data indicate… 65 institutions with assets of $18.5 billion on its list of ‘problem’ institutions.'”

The actual quote? “The number of institutions on the FDIC’s “Problem List” increased for the fourth quarter in a row, from 61 to 65, but the assets of ‘problem’ institutions declined during the quarter, from $23.8 billion to $18.5 billion.”

That’s right — a few more banks on the list, but the assets at problem institutions actually went down at the last report. That’s not to say that they haven’t gone back up again since then, we won’t know until they release the next report, which should be sometime in the middle of February for the December quarter.

If you want to read the proposed new rule, you can certainly do so — here’s a link to the pdf file from the Federal Register. Heck, you can even comment if you want (this is one part of democracy where comments usually even get read … ignored in the end, maybe, but at least read. The few comments already submitted are here, they’re not exactly red hot).

Here’s the actual Marketwatch article that is cited. It basically reports the FDIC data, which is from the September quarter, and says that there is some concern about troubles with big banks. The article quotes a few people who certainly know more than I do, so you can just read that if you want the background.

Clearly, everyone should be careful about bank deposits that are over $100,000, especially in riskier banks or banks on those “problem” lists, but $18.5 billion just isn’t that much money. By comparison, Bank of America, the market leader, had something like $700 billion in deposits as of last fall … and even Countrywide Financial’s bank (just the retail bank, nothing to do with the mortgage portfolio) had $55 billion according to an announcement made around the time of the acquisition. So of course there may be problems, but pay attention to the scale in terms of impact on the economy. Countrywide depositors panicked for a little while, but the bank certainly didn’t fail — are there that many banks of any size that are in worse shape than CFC was?

There probably will be some bank failures (there are a few most years — there have been about 20 in the last seven years, with about half of those during the economic slump of 2001-2002). But unless you’re investing in relatively small banks, or are depositing more than $100,000 in your local bank, it’s probably not going to be something that will change your investment philosophy in a big way. As far as I know, there has been no credible suggestion that there will be a real bank failure at one of the mega banks — and generally, the steepening yield curve and the constant fed rate cuts should be very good for banks and help them become more profitable (on average, of course).

And the jury’s probably out on whether bank failures mean anything for gold and silver prices. The price of gold, for example, did go up a bit in that 2000-2003 period following the tech bubble when we had a somewhat-above-the-recent-average number of bank failures, but it certainly didn’t move nearly as dramatically as it has in the past couple of years. Personally, I would imagine that there is no causality here — bank failures and gold prices might go up at the same time because the economy stinks for a while, but one doesn’t necessarily cause the other, nor is one necessarily a particularly good indicator of the likelihood of the other.

That’s not to say that commodities won’t continue their bull run — they might, and I certainly have some commodity exposure in my portfolio. But I don’t think the FDIC’s warning (which is announced every quarter) is flashing a green light for silver to suddenly double. Maybe McCoach really thinks so, maybe this is just a clever advertising ploy …

… OK, enough of my blathering. What do you think?