Metro Bank in the UK appears to be crashing. Their stock has dropped 30% and has significant interest in the U.S. Fitch downgraded them yesterday, and everyone is panicking today. If you have assets in that bank, you might consider moving them before the government prevents you from doing so. It is another commercial mortgage issue.
The way things are going right now are really making my hair stand up. I’m on another forum with a lot of folks that are into fabrication, manufacturing, machine work, heavy equipment, this is a post one of them just made today. ***** “The storm is comingm make no mistake about it. Here are some excerpts from a monthly newletter my company puts out. This is from the CEO: The main challenge is that demand for our products has declined markedly. September ended up being the worst month for new orders in several years, and there is nothing that makes us think that the rest of the year will be any different. Our customers have plenty of inventory on hand, and their sales have also slowed. The sales decline has been most pronounced in our Consumer Products division, but now the decline is spreading to all our market sectors. Customers are using the lull to become aggressive in seeking ways to reduce their costs. They are demanding price decreases from us, and they are not shy about threatening to change suppliers – often to lower cost options in Asia and Europe. Over the past few years, foundries were so jammed with work that customers had few options but to stick it out with their suppliers. Now that has changed. The financial environment has also become very tricky. Higher interest rates and problems at banks have caused many of our customers to become financially unstable. Several customers are taking longer and longer to pay their bills. I would not be surprised if a few of our customers go bankrupt, leaving unpaid bills in their wake. This is from our Foundry VP: Quote activity for August and September are at record levels. Close to 800 quotes were generated during this time frame. Some of the work being quoted is not easy but our plan is to chase after everything and try to win a few. New order activity took a huge turn for the worse in September. Our incoming orders are about 25% of what they need to be based on our budget and workforce. The down turn appears to be across all work centers and customers. Not sure if this is the result of customers not wanting any inventory at the end of the year or if there are other specific reasons for this sudden drop (weak consumerdemand). Either way, we are monitoring this very closely.” *****
Part of this is deliberately generated and part is a consequence of Covid and other things like the stoppage of free money from the government and the beginning of people having to pay their obligations again, such as student loans and mortgages/rent. I have heard from some analysts that the government is trying to crash the stock market (equities) to save the bonds (fixed income) as the government debt burden is getting to great even for the bozos in Washington. Soon the interest on the U.S. bonds will be greater than the Federal income. Social Security has the same problem as banks, since much of the SS money has been parked in treasuries, which are losing value as the interest rates rise. When the SS system cashes in the bonds to pay beneficiaries (as I am told) they get back less than they put into it. On top of that, SS is being given to illegals who put nothing into it. I also heard that the recent bill passed to forestall a shutdown was entirely financed by borrowed funds. The Fed is doing everything it can to prevent Japan from dumping its bond holdings, as many others, including China are already doing so. As I see it, we are totally screwed. We were on a downhill slide before, but the Biden's mishandling of the domestic and foreign situations, and the inability of Congress to get their stuff together is leading to some very bad times ahead for the U.S. and, consequently, the Western world as a whole. If you have a lot in the stock market, I would suggest moving it to cash, at least for a while, for if they deliberately crash equities, it will be sudden and dramatic.
Here’s another quote from the board mentioned previously. I don’t know history like this guy does so I’m taking his word at what he says but his math seems alarmingly simple, even if beyond the comprehension of our elected “leaders”. ***** “The economy doesn't fall apart all at once, it crumbles slowly, then picks up momentum. And, for those of you that say the government cannot default, FDR did it ... twice. '33 and '36, if I remember it correctly. He just called it "restructuring." If this continues it will not be like 2008 ... because they're going to print like a *obscenity* and debase the dollar. We're already at 800 billion a year in interest and the rates are rising. At 1 trillion interest +, 2.3 trillion for Medicare and 1.8 trillion for Social Security, we've already exceeded our 2.5 trillion GDP. Scoff all you want.” *****
I don't disagree with you. The economy is already in steep decline. Recent job numbers show that fewer people have full-time jobs, and the increased job numbers demonstrate many people being counted twice because the have two or more jobs. When you look at the number of full-time jobs, it is dropping rapidly. That also indicates the number of people with employer-provided healthcare is declining. I have heard that Biden is considering changing the definition of "Full-Time" to 30 hours per week just like they changed the definition of recession to fool people. Banks are teetering, the government is teetering...it won't take much to make them fall.