“A Fitch Ratings analyst warned that the U.S. banking industry has inched closer to another source of turbulence — the risk of sweeping rating downgrades on dozens of U.S. banks that could even include the likes of JPMorgan Chase.
The ratings agency cut its assessment of the industry’s health in June, a move that analyst Chris Wolfe said went largely unnoticed because it didn’t trigger downgrades on banks.
But another one-notch downgrade of the industry’s score, to A+ from AA-, would force Fitch to reevaluate ratings on each of the more than 70 U.S. banks it covers, Wolfe told CNBC in an exclusive interview at the firm’s New York headquarters.
‘If we were to move it to A+, then that would recalibrate all our financial measures and would probably translate into negative rating actions,’ Wolfe said.
The credit rating firms relied upon by bond investors have roiled markets lately with their actions. Last week, Moody’s downgraded 10 small and midsized banks and warned that cuts could come for another 17 lenders, including larger institutions like Truist and U.S. Bank.
Earlier this month, Fitch downgraded the U.S. long-term credit rating because of political dysfunction and growing debt loads, a move that was derided by business leaders including JPMorgan CEO Jamie Dimon.
This time, Fitch is intent on signaling to the market that bank downgrades, while not a foregone conclusion, are a real risk, said Wolfe.”
THINGS TO PONDER:
The market forecasts and predictions that we’re making are coming more quickly than ever now…
This is also something that we forecasted within this timeframe…
While we take no pleasure in delivering difficult news, it’s what we’re built for.
We encourage you to listen to our segment on the Officer Tatum Show with Carl Jackson last week, as well as our “hour of power” back in March.
Your Future Depends On It.
From last week:
From March of this year:
“The U.S. has seen a record increase in homeless people this year as the Covid-19 pandemic fades, according to a Wall Street Journal review of data from around the country.
The data so far this year are up roughly 11% from 2022, a sharp jump that would represent by far the biggest recorded increase since the government started tracking comparable numbers in 2007. The next highest increase was a 2.7% jump in 2019, excluding an artificially high increase last year caused by pandemic counting interruptions.
This year’s surge reflects a host of pressures around the U.S. such as rising housing costs, lack of affordable rental units and the nation’s continuing opioid crisis, according to reports from nonprofits and government agencies counting the homeless.
The biggest driver remains high housing costs, which are now taking a heavier toll following the wind-down of pandemic-era relief spending and policies such as eviction moratoriums, according to advocates for the homeless.
‘The Covid-relief funds provided a buffer,’ said Donald Whitehead Jr., executive director at the National Coalition for the Homeless, an advocacy group. “We’re seeing what happens when those resources aren’t available.’”
“Things Are GREAT! Just Ignore Those Homeless Families…”
It’s getting harder and harder for the average American family to have a decent life in the US…
But everything is going great…
Until you look at this chart from Bloomberg:
We don’t need to beat a dead horse: This isn’t good… and if you don’t act, it’s coming straight for you.
Know Your Foe.
Brace For Impact.
“Global regulators spent more than a decade trying to ensure that a large bank could fail without any government support.
Despite this year’s bank failures, they are still working on it.
Global regulators are reviewing the March failures, including Credit Suisse’s collapse and Swiss officials’ decision to push UBSto acquire its rival in a deal with billions of public money, people familiar with the probe said. Swiss officials chose to sidestep the postcrisis plan for global megabanks, under which Credit Suisse would have been wound down by regulators or restructured into a new entity.
In the U.S., regulators are considering new rules as soon as this month that would force midsize banks to add to their financial cushions in case of insolvency, people familiar with the plans said. The March failures of Silicon Valley Bank and another midsize bank prompted officials to take extraordinary steps to promise depositors they could access their money.
Still, the bank failures in the U.S. and in Switzerland have exposed gaps in the regulatory regime built up after the 2008 bailouts, some officials say.
‘It is shocking to me that after 15 years of costly reform efforts, we still couldn’t resolve even a $200 billion bank like SVB without extraordinary government support,’ said Jonathan McKernan, a Republican member of the Federal Deposit Insurance Corp.
THINGS TO PONDER:
So… “Big Banks Are Supposed To Fail Without Causing Panics.”
How is it even possible to write a headline like this?
Well, when you’re working to normalize behavior, this is the norm…
“Just make bank failures out like they are no big deal… if we say it enough, the simpletons will believe us…”
And here we are. Many will see their life savings go up in smoke… and they will say…
“That’s the way the ball bounces…”
Don’t be that person… and don’t let anyone you know be that person either.
If you have not had a chance to see our publisher’s keynote address from last week, it will help you to navigate what’s happening and what’s coming:
Know Your Foe.
Stop waiting to take the next step in growing your own food supply. The team at FFA is making it easy (and cheaper!) to get started.
Learn what you need to know ASAP FOR FREE, AND get a discount on your action plan.
When was the last time you checked on your “go-to’s”:
*Your go-to investment?
*Your go-to emergency plan?
*Your go-to community members?
If it’s been a while, here’s some bad news: They probably need to be updated. Role call for Preppers!!
That means you’re behind in planning for rough times.
You should care.
What should I do?
Take a moment… right now if you can… to take inventory of what you’re seeing in this newsletter each day.
Have you ever seen a time quite like this?
Ok good, you’re paying attention. That’s the point.
If you’re not paying attention and trapped in the hustle and bustle of a busy world (with a ton of useless stuff, by the way), this stuff will come up on you like a thief in the night.
You need to take the time to prepare as best you can for a time when good supplies, strong communities, and strong connections are the difference between surviving and thriving or being in bad shape.
GET MOVING ASAP.
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Ripped From The Headlines is your daily digest of what’s happening worldwide. We help you to understand what it means, why you should care, and what you should do.
Have a tip on a story, case, or issue that needs to be covered? Email us: asksherloc@protonmail.com. Confidentially assured.
