Looking Backwards …
LB #1
I was all ready to write about the GDP report that came out Wednesday that reported slower growth as 1st quarter GDP came in at 1.6% versus the 3.5% expected and inflation was shown to be increasing. The word stagflation was bandied about with real concern. It seems the economy was much slower in the first quarter than expected even with the massive fiscal stimulus being fed into the economy and the phony baloney government statistics. Its why I said we were starting in recession when all of the layoffs were starting in January, companies have still not gotten their decrease in rates and the bankruptcies continue to rise, white collar jobs are being replaced by part-time jobs, domestic workers are being replaced by immigrants and the job market is bad, not good when you look under the hood.
We will get back to the stats in a minute, but after the market close on Friday we got a bombshell. The FDIC seized Philadelphia Republic First Bancorp and sold it to fellow regional lender Fulton Financial, which is the 4th high- profile bank failure since last spring according to Gina Heeb, Lauren Thomas and Justin Baer in the Wall Street Journal. They write, “Republic First had for months struggled to stay afloat. Around half of its deposits were uninsured at the end of 2023, according to FDIC data.
Its total equity, or assets minus liabilities, was $96 million at the end of 2023, according to FDIC filings. That excluded $262 million of unrealized losses on bonds that it labeled “held to maturity,” which means the losses hadn’t counted on its balance sheet…. The FDIC said it expected the failure, even with the deal, to cost its insurance fund about $667 million. The nation’s biggest banks had taken billions of dollars in charges to rebuild the insurance fund for last year’s failures.”
Interest rates are higher than last year when Silicon Valley Bank went bankrupt, so all of these unrealized toxic assets are still sitting on bank’s balance sheets. NYCB bank is trading under $3 a share again this week after getting a billion-dollar bailout. This issue isn’t going away, which is why Powell is so desperate to lower rates, but the inflation numbers are going the wrong way.
This from ZeroHedge, “what about the inflation/PCE? Well, this is where things get really bad, because after PCE came in hot in Q4, it came in even hotter in Q1, as GDP prices, the prices of goods and services purchased by U.S. residents, increased 3.1% in Q1 after increasing 1.9%, and above the 3.0% estimate.” Oh mama mia, what are we going to do now? If we don’t cut rates the banks are in trouble and we risk going in recession, but inflation is going up and we haven’t cut rates yet? Sleep well America, our leaders have got this…
LB#2
Speaking of our leaders, we finally got a bi-partisan action in Congress last week. They decided to give $95 billion to Ukraine, Israel, and Taiwan. Lost in the legislation was any money for border security. What this does is confirm the corrupt nature of our politicians, like we needed confirmation, but in the face of $35 trillion in debt we are still giving away money. I know that the money given to them will ultimately come back to the defense companies that are selling weapons and matriculate back to the United States, of course it will, the only thing this country produces is the US dollar and war. Check our history, it is just facts. If countries can’t buy our weapons, we will have our government give them money and then they can buy our weapons. Meanwhile grocery prices are up 40% in the last 4 years. But Congressmen are getting rich, defense companies are getting rich, and the average American is now footing the bill for foreign people to kill each other. Don’t forget how political this is considering there isn’t a dollar for border security when we have who knows how many foreign nationals, mostly young working and fighting aged men, crossing our borders. The Republicans wouldn’t attach this bill with border security so Trump can use that as a political card against Biden. Meanwhile illegal immigrant gang bangers are killing American girls like Laken Riley in Georgia. Sleep well America, and keep voting for Democrats and Republicans.
LB#3
These bills passing is bad enough, but in this legislation, there is also the ability to seize the Russian frozen reserves and use those funds for Ukrainian aid. That’s right, also passing was the Repo Act which would allow the Biden administration to confiscate billions in Russian assets and add the funds to the war arsenal and ultimately use them against Russia. That would be devastating for the dollar as it would show every other country on earth, agree with us or risk us taking your money. Good for gold though and it has been since we foolishly seized their funds and kicked them out of the Swift banking system, to no avail I might add. Here is what ZeroHedge reported,
“On Monday, the Kremlin reacted to the weekend passage of the REPO Act, vowing to fight and inflict corresponding punishment on the US and West. Putin Spokesman Dmitry Peskov told reporters:
“We are very skeptical about this, because this is essentially the destruction of all the foundations of the economic system. This is an encroachment on state property, on state assets and on private property. By no means should this be perceived as legal action – it is illegal. And accordingly, it will be subject to retaliatory actions and legal proceedings,” the Kremlin official said.
“If such measures are implemented, of course, many investors will think ten times before making any investments in the American economy or storing their assets there,” Peskov added, noting there’s still a long, complex road ahead if Washington ultimately seeks to pull the trigger on stealing Russia’s assets. “This is a very dangerous precedent,” Peskov underscored.”
This is why we are talking about the BRICS nations. The rest of the world is being bullied and they are tired of it. Foreign governments are pushing back against our government leaders, but the people of this country haven’t yet deciphered that the dirty diaper stink beginning to infiltrate their lives is coming from their own elected leaders. Maybe TikTok needs a smell feature…Which they also outlawed in the legislation, but I don’t have the time or energy to discuss how removing high school girls dancing in their underpants is a threat to society when Hillary Clinton fully clothed is allowed to walk free.
Looking Forwards…
LF#1
We have some progress being made regarding the Baltimore bridge disaster. When we wrote about this on Mar 27, Balticshipping.com was listing the captain as Ukrainian and that has been disproved by the AP. According to the AP fact check article written by Melissa Goldin, the entire crew is Indian nationals. No to be confused with the Washington Nationals baseball team who play nearby or the Cleveland Indians baseball team who are now the Guardians which is part of the name of Biden’s failing maritime program Operation Prosperity Guardian which is watching the entrance to the Indian Ocen, no relation to the Cleveland former baseball team, but named after the country where the crew of the Dali is from. The two pilots who were navigating the ship into and out of port were Americans. What is new is that now the city of Baltimore and their attorneys are are blaming the crew and saying it was negligence which caused the crash in a new lawsuit.
There is too much money being lost aka real damages for the attorneys not to swoop in and try to get their beaks wet. From ZeroHedge “The Dali slammed into the bridge, causing the bridge’s immediate collapse, killing at least six individuals, destroying Baltimore property, and bringing the region’s primary economic engine to a grinding halt,” the city said in court filings.
“None of this should have happened,” the attorneys said, adding, “Reporting has indicated that, even before leaving port, alarms showing an inconsistent power supply on the Dali had sounded. The Dali leftport anyway, despite its clearly unseaworthy condition.”
They still haven’t figured out how the ship lost power and veered into one of the main pillars causing the bridge to come crashing down. It is also fascinating the the black box which is guaranteed to work in all circumstances somehow stopped working just two minutes before the ship hit the pillar. It took a month to determine charges were warranted against the shipping company and crew, but terrorism was ruled out before the sun came up on the harbor that morning. Sleep well America, these things just happen.
LF#2
The current narrative in the housing market is that there just isn’t enough inventory. It’s bullshit, but it keeps getting trotted out anyway. If you think every man, woman, and child need their own house then yes, that would be the case. If you think that every cheap money come lately hedge fund and every overleveraged recreational real estate investor with the price tag still on his book ‘How to make a million in real estate’ shouldn’t have 10-15 properties each then I would agree with you. As interest rates rise, these people will find that leverage works both ways. What is the result of that? Check out the glut of supply hitting the markets in some of these boomtowns. Cape Coral Fl has 51% more listings than the year before and North Port/Sarasota has 48%. They also have 41% and 48% of the listings with price cuts. Aarthi Swaminathan writes for MarketWatch,
“Two years ago, the North Port metro was one of the most competitive housing markets in the country because it was affordable for remote workers and there was a shortage of homes for sale, but none of those things are true today,” Eric Auciello, a Tampa, Fla.-based sales manager at Redfin, said. “Sarasota, in particular, has been overvalued for decades, and the chickens have finally come to roost,” he added. Florida homeowners pay the most for home insurance in the U.S., with an average annual rate of $11,759 projected for 2024 — significantly higher than an projected national average of $2,522.”
That is almost $1,000 a month for home insurance. That is unsustainable and people will soon have to relocate out of Florida. The cost of owning a home in America is unachievable for the majority of Americans in this country. The only way for this to change is the price of ownership must drop significantly or incomes must go up. No housing market in our country’s history has survived when the total cost of ownership is over 40% of the take home income. The standard for real estate lenders used to be 28%. That means a 33% price drop or everyone gets 33% raises. Which do you think will happen?
LF#3
According to a Wall Street Journal exclusive written by Aruna Viswanatha, Dustin Volz, Warren Strobel, Alan Cullison, and Thomas Grove giving credit to these authors is exhausting, it would appear the Biden accusing another country’s leader of killing a political rival was wrong. “Make no mistake. Putin is responsible for Navalny’s death,” Biden said after the world learned of the death.” Wrong again Joe, please stick to what you know which is over at Ben & Jerry’s.
According to the article, US intelligence agencies have determined Putin didn’t order the death of Alexei Navalny. They didn’t offer up any alternative explanations either. This is exactly what Putin said after it happened.
It is just another case of not trusting this government to tell us what is happening. Thankfully, an alternative to Biden is waiting in November. He spent his week sleeping in court humiliating his wife as the courts reviewed how many times he cheated on her. Sleep well America we shall reap what we sow.
Sincerely Yours,
C Thomas Printer
The Dow Jones finished trading at …………38,239.
The 10-year Treasury bond is at …a 4.66%
The price of Brent Crude is … at $89.50 per barrel.
The price of gold is … at $2,349./oz.
The price of silver is … at $27.22/oz.
Thank you for listening today and you can find all of our articles and more on our website cthomasprinter.com.