Financial Crisis - 2023

Listening to this clown is like hearing joe crow 2.0. babble, we have to help China and give more to poor countries.

I do agree that we are heading towards a global setback of some kind.

Where do they get these 's:

https://www.foxbusiness.com/economy/global-economy-heading-eye-category-5-hurricane-un-secretary-general-warns

This article kind of sums up the state of our economy and the majority of people that are hurting from the radical lefts spending:

https://www.foxbusiness.com/markets/gdp-report-reveals-ominous-great-depression-warning-sign-1932

rick1 wrote:This article kind of sums up the state of our economy and the majority of people that are hurting from the radical lefts spending:

https://www.foxbusiness.com/markets/gdp-report-reveals-ominous-great-depression-warning-sign-1932

Silicon Valley Bank collapses, sized by the feds, the largest failure since 2008, 2nd largest since the great depression. What's coming, don't know, but it don't look too good.

Hundreds of billions of dollars lost, around 90% of investments are NOT insured by the FDIC. A lot of companies and people are a little upset.

Old crow bait joe's Yellen is doing a bang up job, she's been keeping an eye on this bank for a couple of months now:

https://www.politico.com/news/2023/03/10/silicon-valley-bank-collapse-00086586

rick1 wrote:...
Old crow bait joe's Yellen is doing a bang up job, she's been keeping an eye on this bank for a couple of months now:
https://www.politico.com/news/2023/03/10/silicon-valley-bank-collapse-00086586

So, what you are saying is: she has been watching it collapse?
nice.

I have concerns about contagion. When Bear-Sterns collapsed in 2008, Lieman Bro's thought they were solid, but some of their "solid" investments took a hit on BScollapse, and went under, taking LB with them. (We bailed them out, of course.)

The federal gov is in debt, up to their ears,
several of the states are in debt, up to their ears,
home mortgages are up to their owner's ears,
ex students are in debt, up to their ears,
the public is into credit card debt, up to their ears
...
can anyone "hear" where this is going?

I posed this question on a financial forum, about 14 hours ago.

My question is: how close are we to not being able t pay the interest, without borrowing more?

No takers, yet.

Silvergate Bank and Silicon Valley Bank collapse within 48 hours of each other, who's next:

https://www.thestreet.com/technology/two-us-banks-collapse-in-48-hours-which-one-is-next

rick1 wrote:Silvergate Bank and Silicon Valley Bank collapse within 48 hours of each other, who's next:

https://www.thestreet.com/technology/two-us-banks-collapse-in-48-hours-which-one-is-next

Y'all better get a little bit of money out of the bank and stash it at home. Small bills would be the best people won't make change.

rick1 wrote:Silvergate Bank and Silicon Valley Bank collapse within 48 hours of each other, who's next:
https://www.thestreet.com/technology/two-us-banks-collapse-in-48-hours-which-one-is-next

I had to look up silvergate, since I hadn't heard of that crash.
It isn't a bank. It was a crypto exchange, and a capital exchange.
It operates outside of banking regulations, and not under the FDIC.

Dave58 wrote:Y'all better get a little bit of money out of the bank and stash it at home. Small bills would be the best people won't make change.

I did that, years ago.
Mostly out of concern that one day I would wake up and the credit card readers wouldn't work.

Just a quick round up, of the number of bills (greenbacks) in circulation.
(As of, about two years ago.)
One's - - 14 Billion
Two's - - 1.4 Billion
Five's - - 3.4 Billion
Ten's - - - 2.3 Billion
Twenty's - 11.9 Billion
Fifties's - 2.46 Billion
Hundred's - 177 Billion

Notes of interest:
No one knows how many $3 bills there are.  

Almost as soon as Trump got out of office, the number of $50's in circulation exceeded the number of $10's.

There are about 10 times the number of C-Notes in circulation as 10's 20's and 50's combined, largely thanks to unlawful enterprises.

Total cash (face value) in circulation has been increasing by about 6% each year.

https://www.uscurrency.gov/life-cycle/data/circulation

EDIT TO ADD: just to be clear, the numbers above are the actual number of bills, not the value.
There are 3.4 billion $5 bills, for a value of $17 billion.

Now that joe crow 2.0 has bailed out SVB, look forward for others to be bailed out now that he has started a new fad. And the customer will pay the price to bail them out. Corn pop is lying to the American people, again.

Moody's is weighing to down grading 6 other banks, this may be just the beginning.

https://thehill.com/business/3899531-moodys-weighs-downgrade-for-six-us-banks-following-svb-collapse/

rick1 wrote:Now that joe crow 2.0 has bailed out SVB, look forward for others to be bailed out now that he has started a new fad. And the customer will pay the price to bail them out. Corn pop is lying to the American people, again.

Moody's is weighing to down grading 6 other banks, this may be just the beginning.

https://thehill.com/business/3899531-moodys-weighs-downgrade-for-six-us-banks-following-svb-collapse/

Signature bank was also seized, and there is talk of the Swiss bank "Credit Suisse" is on thin ice.

https://nypost.com/2023/03/14/credit-suisse-shares-hit-record-low-amid-market-turmoil/

Credit Suisse shares hung near all-time lows in early Tuesday trading after the Swiss banking giant admitted to discovering “material weaknesses” in its financial reporting over the last two years.

The Zurich-based firm said the weaknesses amounted to a “failure to design and maintain an effective risk assessment process to identify and analyze the risk of material misstatements.”

Credit Suisse said its full-year results were not impacted by the issue and that its financial statements still “fairly present, in all material respects, the Group’s consolidated financial condition.”

That sounds, to me, like the exact same weakness that took down SVB.

They are also, all three, big donors to the Democrat party:
https://nypost.com/2023/03/14/failed-banks-donated-most-to-democrats/

The banks — through their employees and affiliated PACs — donated nearly $1.2 million to Democrats between 2017 and 2022, according to the government transparency group OpenSecrets. Republican candidates got less than $750,000 over the same period.

All three banks spent big to defeat President Donald Trump in 2020, collectively giving $198,926 to Joe Biden’s presidential campaign.

TRex, that's exactly Y they are being bailed out.

186 banks may be at risk of failure, just like SVB in kilifornia.

These possible failures, along with inflation will really hurt the economy, buckle up, it's may be a rough ride ahead:

https://www.foxbusiness.com/economy/study-finds-186-banks-vulnerable-svb-like-collapse

rick1 wrote:186 banks may be at risk of failure, just like SVB in kilifornia.

These possible failures, along with inflation will really hurt the economy, buckle up, it's may be a rough ride ahead:

https://www.foxbusiness.com/economy/study-finds-186-banks-vulnerable-svb-like-collapse

I feel like our banking system is nothing but a house of cards. The first really strong breeze and it will fall.

Dave58 wrote:

rick1 wrote:186 banks may be at risk of failure, just like SVB in kilifornia.

These possible failures, along with inflation will really hurt the economy, buckle up, it's may be a rough ride ahead:

https://www.foxbusiness.com/economy/study-finds-186-banks-vulnerable-svb-like-collapse

I feel like our banking system is nothing but a house of cards. The first really strong breeze and it will fall.

That is exactly what the government wants, they are now talking about a federal digital currency. They will control every part of our lives.

https://news.yahoo.com/biden-takes-big-step-toward-110129902.html

Dave58 wrote:I feel like our banking system is nothing but a house of cards. The first really strong breeze and it will fall.

Well, I don't know if I would go that far, but of the three little piggies, this house sure ain't build out of brick, and the Big Bad Wolf is coming down the street.

rick1 wrote:That is exactly what the government wants, they are now talking about a federal digital currency. They will control every part of our lives.

https://news.yahoo.com/biden-takes-big-step-toward-110129902.html

The news, both good and bad, is that the article, and the Gov document it links to, are both over a year old. Good cause that means the Patriots have had a year to study it, and bad because that means we are also a year closer to implementing it.

Should we have a separate thread for Central Bank Digital Currencies?   There may be a lot of rumors and hype, but somewhere in there, there  may be a bunch of true warnings, too.

I think I shall start one, here:
https://emergencyhomeprep.forumotion.com/t2261-central-bank-digital-currency#16269

First Republic Bank on the verge of collapse, remember what happened in 2008, we may be on the verge of the same:

https://www.cnn.com/2023/04/28/business/first-republic-bank-stock-plunge/index.html

There are 186 banks on the verge of collapse, doesn't sound or look good:

https://www.noradarealestate.com/blog/which-banks-are-in-danger-of-failing/

Well, First Republic is now re-branded as some other bank, but, in the never ending saga of the Biden Economy, the debt ceiling is approaching, and the two establishment parties and staring down one another.

Surprisingly, we are not hearing anything of a government shut down, this time, but instead, hearing of a "default."

Personally, I am not worried about it, but I know a lot of people will be, temporarily, in a hurting status, if one bunch of critters or the other doesn't back down.

I have mentioned it in other threads, but here is more evidence that we are in a recession, even as the government denies it:

https://mishtalk.com/economics/manufacturing-ism-contracts-six-straight-month-new-orders-down-eight-months

“The April Manufacturing PMI registered 47.1 percent, 0.8 percentage point higher than the 46.3 percent recorded in March.

Regarding the overall economy, this figure indicates a fifth month of contraction after a 30-month period of expansion.

The New Orders Index remained in contraction territory at 45.7 percent, 1.4 percentage points higher than the figure of 44.3 percent recorded in March.
...
The Employment Index elevated into expansion territory, registering 50.2 percent, up 3.3 percentage points from March’s reading of 46.9 percent.

Most economists put 50 as the point above which the economy is growing, and below which it is contracting. (I wish they wouldn't say "percent," as this is an index, not a percentage.)

I say that, in order to compensate for increasing population, the real divide is about 52 on the index, and anything less should be considered pushing into a recession.

This is also bad. Low productivity means working more to get less.

https://mishtalk.com/economics/year-over-year-productivity-negative-for-5-quarters-thats-never-happened-before

Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons, including employees, proprietors, and unpaid family workers.

Nonfarm business sector labor productivity decreased 2.7 percent in the first quarter of 2023

Output increased 0.2 percent and hours worked increased 3.0 percent.

From the same quarter a year ago, nonfarm business sector labor productivity decreased 0.9 percent, reflecting a 1.3-percent increase in output and a 2.3-percent increase in hours worked.

Reductions in productivity could indicate burnout, depression, "quiet quitting," or failure to invest in training or production enhancing technology.

Productivity has always given the US an edge, as we were known around the world as one of the countries with the most productive workers.

I don't know much about this guy, but what he says makes sense, but I sure didn't lose $10,000. I know I've lost thousands under joe crow 2.0, but not as much as this guy is saying:

https://www.foxbusiness.com/economy/us-human-capital-crisis-decades-budget-watchdog

rick1 wrote:I don't know much about this guy, but what he says makes sense, but I sure didn't lose $10,000. I know I've lost thousands under joe crow 2.0, but not as much as this guy is saying:

https://www.foxbusiness.com/economy/us-human-capital-crisis-decades-budget-watchdog

They measure a lot of things, to get that $10,000 number. A lot of stuff that you don't notice, because you lost money or time (waiting in lines, or waiting in traffic, waiting for someone to get something done), over a period of months.

They keep saying we are not in recession, but some of the numbers they don't talk about tell a different story:
https://mishtalk.com/economics/solid-services-pmi-but-a-strong-deterioration-in-manufacturing-especially-new-orders/

Germany is in recession. The Eurozone is in recession. China is weak. US manufacturing is in recession. US housing is in recession.

US services appear strong. US is GDP, assuming you believe the numbers, is at trend growth. GDI is a vastly different story. For discussion, please see "Not in Recession? Don’t Count On It. Two Key Divergences Explain."

GDI is Gross Domestic Income. The linked article says that, while GDP is up, GDI is down.

Manufacturing PMI keeps slipping to the down side. This is a real indicator of how we are doing. Services sector moves money from place to place, but Agriculture, Mining and Manufacturing create wealth.

Someone in the comments pointed out: we have seen numbers diverge like this before, in 2015 and 2016, when a lot of foreign money was parked in US investments, including luxury apartments and stocks. (This would keep US stocks artificially high)

Another article along the same lines:
https://mishtalk.com/economics/ism-manufacturing-dips-to-46-percent-8th-straight-month-of-contraction/

Economic activity in the manufacturing sector contracted in June for the eighth consecutive month following a 28-month period of growth according to the Institute for Supply Management.

A note about Mish (the author of the articles I link to): the man is a studied expert in his field, which is economics. He understands the economic situation very well, but can be somewhat confused, when people act in irrational ways.

On The Other Hand, he doesn't do well, when discussing politics (especially dirty politics) and reading his articles on war will make you dumber. He doesn't do well discussing topics where deception is a major component of the game.

While I love the idea that truck fuel (diesel) should be cheap and plentiful, the drop in price over the past few months is simply a measure that consumption is slowing. Another indication that we are in a recession, despite Leftist denials.

https://www.ttnews.com/articles/diesel-price-below-380

The current average price marks the first time the national diesel average has been below $3.80 since it was $3.78 on Jan. 24, 2022.

Diesel prices have dropped for each of the past seven weeks, shaving 31.9 cents off the average cost of a gallon.

...

“I don’t believe we’ll go much lower since diesel margins have narrowed substantially for refiners and probably are within 5-15 cents a gallon of a bottom” on the retail side, Tom Kloza, global head of energy analysis at price reporting agency Opis, told Transport Topics in an email.

“Now that wholesale gasoline prices are higher than wholesale diesel, refiners are tilting their output to make maximum gasoline and a bit less diesel,” he said. “In a sense, they may be planting the seeds of the next rally (perhaps in front of heating season 2023-24) by concentrating on higher gasoline yields.”

If you like bidenomics, then you'll love this article:

https://www.foxbusiness.com/economy/treasury-dropped-financial-bomb-bidenomics-means-worst-yet-come

They say it's costing the average family over an additional $11,000/year to maintain what they once had before corn pop became head clown.

I did hear on a business channel that the demanrats, if they win in 2024, they plan on/will be raising taxes on us poor foke:

Robert Kiyosaki predicts the worse is yet to come:

https://www.foxbusiness.com/markets/us-in-serious-trouble-warns-financial-world-legend-who-predicted-lehman-collapse

TRex2 wrote:

Dave58 wrote:Y'all better get a little bit of money out of the bank and stash it at home. Small bills would be the best people won't make change.

I did that, years ago.
Mostly out of concern that one day I would wake up and the credit card readers wouldn't work.

I ran across an odd (to me) tidbit of information, while researching "Gift Cards."

Now, this has nothing to do with gift cards, that is just where I found the info.

https://marketrealist.com/consumer/is-it-better-to-give-cash-or-a-gift-card/

However, especially in light of the coronavirus pandemic, which encouraged cashless spending to prevent the spread of germs, Pew Research Center suggests that as of August 2022, 41 percent of Americans don't use cash on a regular basis. Despite this, it should also be noted that 58 percent of American adults try to have cash on hand, so it's not a big deal if the gift recipient doesn't often use cash, as they'll likely keep it in their wallets until its needed.

This was a year and a half after it was determined cash was not likely to be a mode of transmission for the virus, and still 41% don't use cash on a regular basis.

And, keeping cash "on hand"? They can keep it in their wallet?
That isn't very much "cash on hand."

I've listened to Harry Dent on a number of occasions and he makes a lot of sense.

Now, what he is predicting is way, way out there. I hope he is wrong, 'cause if he's right, your 401k and retirement won't be worth the paper it's printed on.

This article is worth reading, especially if you have any investments:

https://www.foxbusiness.com/media/us-economist-predicts-2024-bring-biggest-single-crash-lifetime

rick1 wrote:I've listened to Harry Dent on a number of occasions and he makes a lot of sense.
...

He talks a good talk, but I do have to point out, though, his record is somewhat mixed. (and I am being kind)

https://en.wikipedia.org/wiki/Harry_Dent#Forecasts_and_performance

[2014]He also predicted that the price of gold would fall to USD$700 an ounce, later revising this prediction to 2017.
On December 10, 2016, Dent predicted that the Dow Jones Industrial average could fall 17,000 points as a result of Donald Trump's election win. Less than two weeks later, Dent reversed his opinion ...

None of the above predictions happened, and most of them got revised, multiple times.

My current forecast is: the current (shallow) recession that will continue to get worse.

I back it up with data and opinions from Mich Shedlock. As I have pointed out, in the past, Mish is somewhat of a genius in economic analysis (though, not always genius in predictions). Just have to understand he doesn't have a firm grip on the field of dirty politics, and he is lost in the ever deceptive art of war. He should stick to analysis of economics: he does that well. And he writes in a way that the average person has a reasonable chance of comprehending.

Here is an article on the current state of affairs in our economy:
Sept 7, 2023
https://mishtalk.com/economics/debt-to-gdp-alarm-bells-ring-neither-party-will-solve-this/
In this discusses demographics and federal budget.
We are getting older, medicare and interest on our debts continues to increase. This cannot be offset by a "baby boom" the way the WW2 debts were dealt with, as our domestic population continues to decline, and is being replaced by a population of immigrants (both legal and illegal) that will be dependent on government handouts for many years after arriving.

This is recommended reading, if you want to understand the future of the US economy.

My own forecasts for a long slow slide into a worsening recession is mostly based on what is in this article. I would temper any forecasts from anybody with this: Mish has pointed out, in the past, markets can remain irrational for longer than most rational people would expect.

The interest rate bomb that some of us have been predicting for a couple years has now gone off.

Somewhere in the past (a year ago, give or take a few months), I stated that the US debt had crossed a line, and that there was no longer any (rational) way to repay the debt the federal government has run up.

Asked what I meant, I said that in time, the interest rates would rise, and even without further borrowing, the interest on the debt would rise to over a trillion dollars a year.

That has happened.
Interest on the Federal Government's debt is over 1 Trillion Dollars.

To give a little perspective, the National Defense budget is 880Billion.

The only thing that has a bigger budget than our interest payments is Social Security. (And the trust fund for that (and Medicare) is scheduled to run out around 2034. Trust me, it will run out, a couple years sooner.

https://mishtalk.com/economics/debt-jumps-past-34-trillion-1-trillion-interest-another-budget-showdown-looms/