Keep an eye on regional banks. If something is going to break in the U.S. that’s where it will be.
Just a friendly reminder of the magnitude of CRE exposure that was amassed in the Small/Regional Banks 🟪 compare to the 25 large Banks 🟩 post Pandemic
Also scary, is how rapidly it’s retreating 😳 pic.twitter.com/KIwJf1Olik
— E-Ⓜ️ulti (@multi_finance) August 11, 2023
These charts are saying we're early and only 3 weeks away 👀 t.co/VmxG6W0a21 pic.twitter.com/OPR0D6KClY
— Financelot (@FinanceLancelot) August 11, 2023
Gamma Exposure (GEX) has peaked and fallen away indicating the next rally should be the last. 🚨 t.co/3tLX9GVvZK pic.twitter.com/QVN7IBW9f3
— Financelot (@FinanceLancelot) August 11, 2023
Jefferies: "We still expect a recession, but now we are looking for it to begin in Q1 2024 rather than Q3 2024."
— unusual_whales (@unusual_whales) August 10, 2023
#Bonds are starting to look bad… US Treasury term premia (black) are breaking higher and pushing 10y yields up (orange). This isn't good for #liquidity which uses a lot of collateral pic.twitter.com/7RkuYWcNLo
— CrossBorder Capital (@crossbordercap) August 11, 2023
US money-market assets have reached a new record of $5.5 trillion. t.co/rGFJqriJgc pic.twitter.com/nF3sAOYkCr
— Lisa Abramowicz (@lisaabramowicz1) August 11, 2023
The juice keeps flowing. pic.twitter.com/33RzWqODH6
— Sven Henrich (@NorthmanTrader) August 10, 2023
2024 The Greater Financial Crisis: Rickards
The U.S. credit rating was downgraded by Fitch from AAA to AA+. Though this isn’t a short-term market concern, it signals the country’s unsustainable fiscal trajectory. Meanwhile, Moody’s has flagged immediate threats, downgrading several U.S. banks due to looming recession in 2024 and potential profitability pressures. The anticipated crisis might not emerge from subprime mortgages, but from commercial real estate defaults. With changing dynamics in the post-pandemic world, both the CRE space and the banking sector are showing cracks. Investors should proceed with caution.
The Money Supply Has Shrunk For Eight Months In a Row = Credit Crunch
The money supply has sharply contracted, marking the deepest decline in 28 years and reminding many of the Great Depression era. From a peak in April 2022, the money supply has plummeted by $2.8 trillion or 15%, the most severe drop since the Depression. This decline has been accompanied by rising interest rates, with the Federal Reserve increasing the federal funds rate to its highest in over two decades. Companies, facing the weight of these interest rates, are declaring bankruptcy, resulting in massive layoffs. Loan accessibility has tightened, mortgage rates are soaring, and alarming levels of credit card debt are emerging despite increasing interest rates. Indicators suggest an economic bubble on the verge of bursting, with the Fed caught in a dilemma. If they pump more money, it will escalate inflation, further burdening the average American already grappling with skyrocketing living costs. This downturn, fueled by years of easy money policies, now puts the economy and ordinary citizens at risk.