Vigilant News

Eternal Vigilance is the price of liberty.

Finance

U.S. Banks Desperately Try to Stay Open Amid a Flood of Branch Closings.
JPMorgan Chase will close a total of 159 local branches by the end of this calendar year

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Things will work out well in the long run if you do them the right way. Conversely, things will go badly if you do them the wrong way. Unfortunately, our banks, the circulatory system of our economy, have been seemingly intentionally doing things wrong for a long time.

The whole system is being shaken up because of this. An alarming number of loans are becoming past due, there have been numerous “banking glitches” in the past few months, tens of thousands of banking workers have already been let go, and U.S. banks are holding on to hundreds of billions of dollars in hidden losses.

It looks like things will get even more confusing over time. As smaller banks fall, the bigger banks will take them over. Of course, the big boys will also be having a hard time staying living as things progress toward an inevitable conclusion.

If you think I’m just pulling all of this out of my derriere, consider that it is being reported that JPMorgan Chase will close a total of 159 local branches by the end of this calendar year…

In 2023, JP Morgan Chase has or will close 159 branch locations across the United States. The banking giant is not alone in its decision to scale back its physical presence as banking moves online; Bank of America, Wells Fargo, and Citi Bank have announced closures at similar scales that will continue into 2024.

Bank of America is following close behind. More than 100 local offices will be shut down for good by the end of 2023, we’ve been told.

Bank of America is the second largest bank in the United States, and this year, the financial giant has announced that it will close up to 138 locations. To date, 95 branches have been closed this year, and 15 more are to shutter by the end of the year. The remaining locations are planned to close in 2024, meaning that the trend, common among nearly all of the big banks of shutting local branches will continue.

Naturally, this “avalanche” of closed branches didn’t start yesterday. We saw more than 3,000 bank stores closed in 2022. It’s unprecedented in modern times, but the consensus is that more branches will close in 2024.

At this very moment, U.S. banks are sitting on a huge pile of deferred losses. Not only that, but new numbers just out show that U.S. banks have a total of $684 billion in unrecognized losses…

“Unrealized losses” on securities – mostly Treasury securities and government-guaranteed MBS – at FDIC-insured commercial banks at the end of Q3 jumped by $126 billion (or by 22%) from the prior quarter, to $684 billion, according to the FDIC’s quarterly bank data release on Wednesday.

The real danger will be if Americans, seeing that certain banks cannot honor withdrawal requests, decide to make bank runs. Do you remember when Silicon Valley Bank failed earlier this year? Well, that is precisely what happened.

A new report says that three banks are especially at risk right now…

As per the Daily Mail:

Regional banks Comerica, First Horizon and Zions are at risk of being targets for acquisition by larger rivals, according to a new report.

Since the collapse of Silicon Valley Bank in March, the US banking industry has been poised for a reconfiguration that could see smaller regional banks wiped out.

At the same time, the housing bubble is poised to burst.

A recent report showed that the number of potential home sales in the U.S. has dropped to its lowest level ever…

Pending home sales, a measure of signed contracts on existing homes, dropped 1.5% in October from September.

They hit the lowest level since the National Association of Realtors began tracking this metric in 2001, meaning it’s even worse than readings during the financial crisis more than a decade ago. Sales were down 8.5% from October of last year.

Spend some time mentally marinating on those paragraphs.

Pending home sales have never been this low, not even in the worst days of the financial crisis in 2008 and 2009.

Let’s hope that everyone stays calm and things keep going as normal for as long as possible. Because there will be a huge problem as soon as people start to worry and take their money out of banks.

Lots of U.S. banks are “financial zombies” right now, as are a lot of U.S. customers, with the U.S. government being the biggest “financial zombie” of all.

Key FED Indicator Suggests That The US is Already in a Recession

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What has been called a “Key economic indicator” from the Federal Reserve seems to suggest that the country is not “heading into a recession”, but is already entered recession territory.

The Federal Reserve Bank of Atlanta’s GDPNow forecasting tool said on Friday that “real GDP growth (seasonally adjusted annual rate) in the second quarter of 2022 is -1.0 percent on June 30, down from 0.3 percent on June 27.”

Jeff Cox, an economic analyst, wrote at CNBC on Friday saying that the 1% contraction, “coupled with the first quarter’s decline of 1.6% … would fit the technical definition of recession.”

The GDPNow model offers a more bleak point of view for the next quarter following its assessment, claiming that:

 “the nowcasts of second-quarter real personal consumption expenditures growth and real gross private domestic investment growth decreased from 2.7 percent and -8.1 percent, respectively, to 1.7 percent and -13.2 percent, respectively.”

The current Federal Reserve Chairman Jerome Powell has promised Americans that the Fed would “succeed in getting inflation down to 2%.”

“The process is highly likely to involve some pain,” he said during a panel discussion at the European Central Bank, “but the worse pain would be from failing to address this high inflation and allowing it to become persistent.”

 But experts have been warning of a perfect storm of economic chaos as inflation has decimated spending across the economy while Federal Reserve efforts to stave off that inflation have seen interest rates spiking sharply.

World’s Billionaires Watch $1.4 Trillion in Wealth Swirl Down the Crapper Amid Market Turmoil

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Ryan DeLarme,
June 16th, 2022

The Bloomberg Billionaires Index, A daily ranking of the world’s richest individuals, shows a vast amount of wealth disintegrating this year as the Federal Reserve’s blunders -intentional or not– have triggered cross-asset implosions.

The 500 wealthiest people -on the books at least- lost a shocking $1.4 trillion this year alone. On Monday’s stock market rout, billionaires lost $206 billion.

Binance CEO Changpeng Zhao experienced the steepest losses amid the crypto meltdown. Bloomberg’s data shows he lost a whopping $85.6 billion as of Tuesday. His total net worth is now only $10.2 billion.

Only $10 billion? He might as well file for bankruptcy!

Jeff Bezos is next on the list, losing $66.8 billion this year, with a total net worth of $125.5 billion. Mark Zuckerberg lost $64.4 billion, now only worth $60.9 billion. Elon Musk lost $61.6 billion but still secured a solid $208.7 billion stockpile of wealth as the world’s richest person. Doesn’t your heart just ache for these guys?

Bezos, Musk, Bernard Arnault (top luxury designer and CEO of luxury goods company LVMH), Warren Buffet, and Bill Gates round out the top five spots for the world’s wealthiest people. 

In contrast, the largest gainers of net wealth this year include Indian billionaire Gautam Adani and Dubai-based Swiss billionaire entrepreneur Guillaume Pousaz. 

In a separate report via Capgemini World Wealth we see the monetary response by global central banks increased the world’s population of high-net-worth individuals jumped 8% in 2021. It showed that the US, Japan, China, and Germany are home to 64% of the world’s billionaires. 

Gains in net worth first began to reverse in late 2021 when the Federal Reserve and other central banks started to communicate to markets about how an inflation problem (now a stagflation caca-storm) would be met with hawkishness or rate hikes. Global stocks reversed in late December and have been spiraling lower ever since.

It will only take a few oversized rate hikes by the Fed this summer to get recession fears to flourish and market participants to start pricing in the next round of easing — that will be the moment when billionaires get richer. 

May Inflation Numbers Soar Beyond Expectations – CPI Hits 40-Year High

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Ryan DeLarme,
June 10th, 2022

Though it may not come as a surprise to those of us who feel it in our wallets, May’s inflation numbers were higher than expected at 8.6% – the highest numbers since 1981.

Utilities are up 30%, Gas is up 49%, and the consumer price index (CPI) is higher than expected at 8.6%.

On top of that, we saw: new vehicle prices increase, used cars and trucks, Airline prices, furnishing, medical care, apparel, and so on. I think it is fair to say that everything is up, inflation is having the broadest possible impact on the entire economy. 

Everything in this report is up, but it was shelter, gasoline, and food that were the three largest contributors in the report, and arguably the three most important things required for the average American family to function and survive.

Stock Market Sees Largest Drop in Years

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Ryan DeLarme,
May 19th, 2022

This Tuesday the U.S. stock market saw its worst day since June of 2020 as inflation strokes investors’ fears and cuts retailers’ profits. The S&P 500 sank by more than 4%, in what Yahoo Finance called the index fund’s “worst day since June 2020.”

According to Seeking Alpha, the Nasdaq Composite fell by more than 4.7%. The Dow dropped by nearly 1,200 points, or 3.6%, making it the “ninth largest single-day point drop in history,”.

This dramatic drop comes on the heels of major retailers reporting lower-than-anticipated quarterly returns, showing inflation’s toll on profits. 

 Bloomberg has reported that Target’s shares fell more than 20% in its worst drop since 1987,

“I think what investors realized was these seemingly safe haven stocks, the staples like Target, like Walmart, are not immune — that their costs are rising, they cannot pass their higher costs onto their consumers. And as Walmart said yesterday, their customers are coming in and buying groceries, but they’re not buying hard goods, they’re not buying other products where they have a slightly higher margin,” Cresset Capital CIO Jack Ablin told Yahoo Finance.

“So if you look at the consumer and recognize yes wages are up, but they’re not going up at the same rate as inflation, and the highest cost increases are food and energy, that’s funneling away spending that ordinarily would be spent at a more profitable side of Walmart and a Target,” he explained.