A good, short read on another perspective...
Slowly at First...
There's an old adage that says "Risk comes on slowly at first, then all at once." It is very true.
It's like a pot on the stove you're trying to get to simmer. Every time you look at it, there's more and more "tiny" bubbles, but not what you're looking for. Then all of a sudden the next time you look, your soup is in a rolling boil, all over the sides of the pot all over the range.
We've been watching dozens of parameters showing that indeed risk is building. Day by day, hour by hour, the pressure is mounting. So far, it's been either managed, or ignored as we flirt with all time highs in the equities markets. But please, do NOT become comfy up here.
I've said many many times that this summer would bring us spectacular things. We've already seen one, as we witnessed a past President get charged as a felon. That's pretty spectacular, and I'm more than confident we'll see more.
Let's start off with this.....
Bloomberg Economics is out with a jarring report, saying monthly nonfarm payroll prints likely overstated job growth last year by 730,000 with hiring possibly falling below zero in October. By the end of 2024, they believe employment will be overstated by ONE MILLION, with half of that coming from the Birth/death model.
What?? You mean all those dozens of months that I've shown you how the BLS "makes up" jobs via the Birth/death model was real?? You mean...Bob wasn't crazy or making things up? Unfortunately no, I could be crazy, but didn't make anything up. The BLS did.
Moving along with the same theme, we just got the jolts report. Basically that's a nationwide look at how many advertised job openings there are. Well.....
April job openings (JOLTS) were 8.06M, the weakest in 3 years and well below consensus of 8.35M.
Hmmm, weakest in 3 years. Now think about that for a minute folks. Three years ago, weren't our businesses shut down, people locked in their homes, only "necessary businesses" allowed to open? And yet we have less job openings now than we did then? Is anyone paying attention to this?
On day one of the Russian invasion into Ukraine, I stated in this very letter that I was more nervous of a global war than at any time in my entire life. Oh and by the way in my younger days, we'd have weekly drills in our school about how to hide under our desks in case of a Russian attack. I wasn't worried then. Everyone sort of knew that a nuclear war wasn't in anyone's best interest.
But now, some 60 years later, yes indeed I'm concerned. Not because Russia is some manacle evil villain state hell bent on taking over the earth. No, not at all. But because of the US's belief in total global hegemony, and the lunatics that run the show actually WANTING war. These satanic morons think that they can lure Russia into a conventional war, take out Putin, put in a puppet and divide the nation and access its resources.
Russia will have none of it. If NATO gangs up on them, there is NO question that they will respond with nukes. Sounds like risk to me, no? Yes. So what's the latest headline out of these war criminals at NATO? Just this...
NATO has disclosed its preparations to deploy American troops to the European frontlines in the event of a full-scale conflict with Russia.
They say it's "just in case Russia wants to try and expand westward. " Bullshit. Russia has not and does not have any intentions of taking over parts of Europe. This is nothing more than trying to draw Russia into a hot war.
Slowly then all at once is getting louder in my ear.
Moving along, we find that the FDIC now has 63 Banks in GRAVE danger, but of course won't tell the plebes which ones they are, so they can get out. That's criminal, but hey... that's banking. Check this:
The number of banks on the Problem Bank List, those with a CAMELS composite rating of 4 or 5, increased from 52 in fourth quarter 2023 to 63 in first quarter 2024. Total assets held by problem banks increased $15.8 billion to $82.1 billion during the quarter.
Industry wide unrealized losses on available-for-sale and held-to-maturity securities increased by $39 billion to $517 billion in the first quarter. Higher unrealized losses on residential mortgage-backed securities, resulting from higher mortgage rates in the first quarter, drove the overall increase. This is the ninth straight quarter of unusually high unrealized losses since the Federal Reserve began to raise interest rates in first quarter 2022.
The industry's total loans declined by $35 billion, or 0.3 percent, in the first quarter. Most of the decline was reported by the largest banks, in line with a seasonal decline in credit card loans and lower auto loan balances.
Okay, so let me get this straight. We've got 63 banks on the critical list that could fold up on any particular day. The banking industry has losses on 517 billion worth of securities, but aren't losses yet as they haven't taken the hit.
Let me tell you something. That number is a feel good number. You can bet that the derivatives these 63 problem children have is multiple times that.
But here's the kicker.
The Deposit Insurance Fund (DIF) balance was $125.3 billion on March 31, up $3.5 billion from the end of the fourth quarter.
Catch that? Our entire banking system, with trillions in deposits, is still only covered by 125 billion at the insurance fund.
Banks collectively hold 517 billion in bad loans and securities, 63 troubled banks that could fold have 82 billion in so called assets, but unknown derivative liability.
IF there's a major systemic banking/debt market collapse, how far does the FDIC's 125 billion go? No where. Drop in the bucket. System collapses.
Risk is out there folks. Simmering, stewing. But as the heat continues to rise, one day it's going to boil over. We've tried to get you prepared for that, with countless articles on protecting yourself. I hope you heeded the advice.
Pretty wild right? Yep.
Slowly at First...
There's an old adage that says "Risk comes on slowly at first, then all at once." It is very true.
It's like a pot on the stove you're trying to get to simmer. Every time you look at it, there's more and more "tiny" bubbles, but not what you're looking for. Then all of a sudden the next time you look, your soup is in a rolling boil, all over the sides of the pot all over the range.
We've been watching dozens of parameters showing that indeed risk is building. Day by day, hour by hour, the pressure is mounting. So far, it's been either managed, or ignored as we flirt with all time highs in the equities markets. But please, do NOT become comfy up here.
I've said many many times that this summer would bring us spectacular things. We've already seen one, as we witnessed a past President get charged as a felon. That's pretty spectacular, and I'm more than confident we'll see more.
Let's start off with this.....
Bloomberg Economics is out with a jarring report, saying monthly nonfarm payroll prints likely overstated job growth last year by 730,000 with hiring possibly falling below zero in October. By the end of 2024, they believe employment will be overstated by ONE MILLION, with half of that coming from the Birth/death model.
What?? You mean all those dozens of months that I've shown you how the BLS "makes up" jobs via the Birth/death model was real?? You mean...Bob wasn't crazy or making things up? Unfortunately no, I could be crazy, but didn't make anything up. The BLS did.
Moving along with the same theme, we just got the jolts report. Basically that's a nationwide look at how many advertised job openings there are. Well.....
April job openings (JOLTS) were 8.06M, the weakest in 3 years and well below consensus of 8.35M.
Hmmm, weakest in 3 years. Now think about that for a minute folks. Three years ago, weren't our businesses shut down, people locked in their homes, only "necessary businesses" allowed to open? And yet we have less job openings now than we did then? Is anyone paying attention to this?
On day one of the Russian invasion into Ukraine, I stated in this very letter that I was more nervous of a global war than at any time in my entire life. Oh and by the way in my younger days, we'd have weekly drills in our school about how to hide under our desks in case of a Russian attack. I wasn't worried then. Everyone sort of knew that a nuclear war wasn't in anyone's best interest.
But now, some 60 years later, yes indeed I'm concerned. Not because Russia is some manacle evil villain state hell bent on taking over the earth. No, not at all. But because of the US's belief in total global hegemony, and the lunatics that run the show actually WANTING war. These satanic morons think that they can lure Russia into a conventional war, take out Putin, put in a puppet and divide the nation and access its resources.
Russia will have none of it. If NATO gangs up on them, there is NO question that they will respond with nukes. Sounds like risk to me, no? Yes. So what's the latest headline out of these war criminals at NATO? Just this...
NATO has disclosed its preparations to deploy American troops to the European frontlines in the event of a full-scale conflict with Russia.
They say it's "just in case Russia wants to try and expand westward. " Bullshit. Russia has not and does not have any intentions of taking over parts of Europe. This is nothing more than trying to draw Russia into a hot war.
Slowly then all at once is getting louder in my ear.
Moving along, we find that the FDIC now has 63 Banks in GRAVE danger, but of course won't tell the plebes which ones they are, so they can get out. That's criminal, but hey... that's banking. Check this:
The number of banks on the Problem Bank List, those with a CAMELS composite rating of 4 or 5, increased from 52 in fourth quarter 2023 to 63 in first quarter 2024. Total assets held by problem banks increased $15.8 billion to $82.1 billion during the quarter.
Industry wide unrealized losses on available-for-sale and held-to-maturity securities increased by $39 billion to $517 billion in the first quarter. Higher unrealized losses on residential mortgage-backed securities, resulting from higher mortgage rates in the first quarter, drove the overall increase. This is the ninth straight quarter of unusually high unrealized losses since the Federal Reserve began to raise interest rates in first quarter 2022.
The industry's total loans declined by $35 billion, or 0.3 percent, in the first quarter. Most of the decline was reported by the largest banks, in line with a seasonal decline in credit card loans and lower auto loan balances.
Okay, so let me get this straight. We've got 63 banks on the critical list that could fold up on any particular day. The banking industry has losses on 517 billion worth of securities, but aren't losses yet as they haven't taken the hit.
Let me tell you something. That number is a feel good number. You can bet that the derivatives these 63 problem children have is multiple times that.
But here's the kicker.
The Deposit Insurance Fund (DIF) balance was $125.3 billion on March 31, up $3.5 billion from the end of the fourth quarter.
Catch that? Our entire banking system, with trillions in deposits, is still only covered by 125 billion at the insurance fund.
Banks collectively hold 517 billion in bad loans and securities, 63 troubled banks that could fold have 82 billion in so called assets, but unknown derivative liability.
IF there's a major systemic banking/debt market collapse, how far does the FDIC's 125 billion go? No where. Drop in the bucket. System collapses.
Risk is out there folks. Simmering, stewing. But as the heat continues to rise, one day it's going to boil over. We've tried to get you prepared for that, with countless articles on protecting yourself. I hope you heeded the advice.
Pretty wild right? Yep.
