The banks are all broken

I am starting to see more of the effects from the banking meltdown which happened in March and continued through May. There were already plenty of reasons for lending to contract to lower levels but the banks blowing up had an immediate effect on just about every metric in the lending system especially risk.  I have said this  before; as long as interest rates stay where they are every bank in the system is insolvent if there's a demand on deposits.

Credit scores matter more now than ever; anything below fico 630 is getting much worse offers than just two months ago and most are getting declines. here's an insider tip which will help many owners: Lock your credit report.

I can't over-emphasize enough how important this detail is. Most people don't know that when they fill out any loan application the authorization to check their credit has no time limit. That is, lenders can and, regularly do, check your credit well after you made your original request. The reason is that credit reports change so lenders will use it as a "pre-screening" tool before they approach borrowers to offer funding. This results in your credit being "pinged" multiple times without you having applied for a loan and that results in a lowering of your fico score.

Avoid the web-based "lending tree-type" sites: they blast your credit with a flood of requests, one of my clients dropped his score 80 points from that.

I recommend Experian monthly account (they charge a fee) which has an online portal from which you can lock your credit. That way, any time someone wants to check it, you must first physically unlock it before they can. This simple measure can mean huge savings in capital costs.

Meanwhile in the banking world, those banks who have already gone under are once again trying to game the system -the SVB bailout is a scandal: 40 Billion dollars of government (taxpayer) money went to 20 high tech hedge funds whose accounts were UNINSURED. Now they're trying to get away with more:

"Judge Martin Glenn said he was unable to approve the sale of SVB Securities to a group led by its former CEO Jeff Leerink because he was unsure if executives including Leerink had any actual liability, Reuters reported.
The deal, as presented to the court, had a provision that would have released Leerink and other executives from liability associated with the collapse of SVB — an event that triggered multiple other bank collapses, and a broad loss of faith in the banking system.
“You’re releasing them from everything,” Glenn told SVB Financial’s attorneys, according to Reuters. “I can’t believe you’d even try to sneak this by me.”

Sneaky banks that go under do sneaky things - what about the government making the decision to use taxpayer money to bailout uninsured deposits for wealthy high tech fly boys? Well, they did it already because they can and because we won't do anything to stop them.

Meanwhile, there are plenty of headwinds that make certain industies vulnerable like housing which affects construction. Already the overhang of residential homes which produce income through rental agencies like Air B&B are rolling over.

Over 1 Million AB&B homes compared to only 570k for sale

Last week the Supreme Court made a decision that will mean in a few months student loans will have to start being paid again. This will put an additional $300-400 average monthly drag on millions of US households. Retail will suffer along with all the service providers along the supply daisy chain.

The Biden administration promised to "do something" but we'll have to see what, if anything that will be.

All of this is hitting regular rank-and-file consumers and small business owners very hard:

"The entire burden of the monetary collapse and rate hikes is falling on the shoulders of families and small businesses, while large corporations and governments are virtually unaffected."

"The rapid decline in global money supply is staggering, at -3,4% at the end of the first quarter according to Longview. Meanwhile, in the United States, money supply is also contracting at the fastest pace since the great recession. Consider that, in the same period, government indebtedness at a global level is up 3% and United States borrowing has also risen faster than real GDP, according to the IIF. And those deficits are financed even if the cost is higher. Governments do not care about rising borrowing costs, because you pay for it."

"These are the main reasons why we are living in the middle of a recession and destruction of private wealth and wages, but the official data does not reflect it. As government weight in the economy rises faster, technical recessions may not appear in the official data, but citizens suffer it, nevertheless."

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