Escalating delinquencies in commercial real estate loans, a shrinking S&P 500 real estate sector, and plummeting property values paint a dire picture, hinting at an imminent banking crisis. With soaring mortgage payments and declining retail sales, the signs point to an urgent and potential economic crisis.
Delinquent commercial real estate loans at US banks have hit their highest level in a decade, per FT.
— unusual_whales (@unusual_whales) November 16, 2023
Delinquent commercial real estate loans at US banks have hit their highest level in a decade, per FT: pic.twitter.com/49KEsXMH16
— unusual_whales (@unusual_whales) November 17, 2023
CRE has been in a bear market ever since the pandemic hit.
It's hard to see a case where all the office buildings we needed before will be needed in the future.
This is a long-term shift in market dynamics.
Follow us @KobeissiLetter for real time analysis as this develops.
— The Kobeissi Letter (@KobeissiLetter) November 16, 2023
Another day, another housing market record:
New monthly mortgage payments have skyrocketed
Nearing $3000 per month, levels NEVER seen before
This is happening when 62% Americans are living paycheck to paycheck
Unsustainability at its best pic.twitter.com/nKPrOyx6Lf
— Game of Trades (@GameofTrades_) November 16, 2023
The ongoing banking crisis, worsened by fluctuating asset valuations and high-interest rates, has left many banks potentially insolvent. This is particularly true when assets are evaluated on a mark-to-market basis, as current higher rates significantly devalue the bonds many banks hold. The Federal Reserve, using historic cost accounting, masks its own technical insolvency, notably not reflecting the true value of gold.Investors should be wary of this precarious situation, as it could escalate into a more severe crisis. In this context, gold stands out as a more stable investment option amidst the potential for further banking system turmoil.