/View.info/ There is a reason I watch the banks so carefully. Banks are the beating heart of our economic system, so if they get into big trouble, we’ll all feel the pain. It happened in 2008 and it’s happening again right now. There have been endless bank “failures” in recent months, with banks closing hundreds of branches and laying off thousands of workers, making it harder for lenders to manage their money while sitting on hundreds of billions of dollars in unrealized losses. And just in time for Thanksgiving, three of America’s “too big to fail” banks were downgraded by Moody’s…
Moody’s cut its outlook on Bank of America, JPMorgan Chase and Wells Fargo from stable to negative, but stocks rose on Tuesday amid weak inflation data.
The major news networks really don’t report much on it.
This is a really serious matter for me.
When push comes to shove, the “too big to fail” banks will turn to the federal government for help, but the federal government’s financial position continues to get weaker and weaker…
Moody’s analyst Peter E. Nurby said the worsening outlook for bank debt was due to “a potentially weaker ability of the United States government (Aaa-) to support systemically important US banks.”
Specifically, JPMorgan’s downgrade was in part because the bank runs a “complex” capital markets business that could pose “significant” risks to its lenders.
For now, most Americans still seem to believe in the stability of the banking system.
And that’s good news.
But signs of trouble keep popping up all around us.
Last week, six banks filed to close nearly 40 branches, leaving millions of Americans without access to vital financial services, with Wells Fargo alone closing 13 branches.
Wells Fargo leads the nation in closing branches, closing 160 in the first half of the year, according to Standard & Poor’s.
When financial institutions get into trouble, they really start to mismanage their money.
And according to a report just released by the Federal Reserve, loan default rates have risen significantly over the past year…
The applicant rejection rate increased by 2.1 percentage points to 20.1% in 2023 from 18.0% in 2022, a significant increase from the 17.6% level in 2019.
I am convinced that in 2024 this number will increase even more.
A painful credit crunch has begun, which means we are entering very difficult economic conditions.
Just look at what’s already happening with home sales.
Today we learned that sales of existing homes in the United States fell to their lowest level since 2010….
Existing home sales fell 4.1 percent last month on a seasonally adjusted annual basis to 3.79 million units, the lowest level since August 2010, when sales fell after the government’s homebuyer tax credit expired.
This is terrible.
With housing affordability at its lowest level since at least the early 1980s (and homebuilder sentiment plummeting as mortgage rates rise), it’s not surprising that analysts expected the selloff of existing homes to fall by 1.5% per month.
Sales actually fell 4.1% month-on-month (much worse than expected and the 20th decline in 23 months), with September’s 2.0% month-on-month decline further revised down to -2.2 % on a monthly basis. Because of this decline, existing home sales are down 14.6% year-over-year…
It looks a lot like 2008.
And just like during the Great Recession, consumers are starting to cut back on spending everywhere…
Shoppers will spend less this holiday than in years past, major retailers say.
Some supermarket chains reported lower sales in their latest quarter on Tuesday and forecast that holiday sales would decline from last year.
“Consumer demand was even more uneven and difficult to predict,” Best Buy Chief Executive Officer Cory Barry said in a statement, noting that the company was “preparing for a customer that is very transaction-focused.”
Earlier this week, I wrote an entire article about the serious issues currently facing consumers in the United States.
The cost of living is rising much faster than wages, and as a result, US consumers simply don’t have the flexibility to spend their money.
In the past few years, 80% of people on the lowest incomes have become poorer, and our economic problems are now getting worse.
But as bad as things are now, the truth is they will get even worse in 2024 and beyond.
The turmoil in our banks will intensify in the coming months, putting incredible strain on the entire system.
Unfortunately, right now our system just can’t handle the many stresses…
Translation: V. Sergeev
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