by Michael Snyder, The Economic Collapse Blog:
It should have been apparent to everyone that the dark clouds on the horizon would bring a storm, and now rain is furiously falling all around us. Our entire system is being viciously shaken, and the dominoes are going to continue to fall in the months ahead. Once Silicon Valley Bank and Signature Bank went down, we all knew that it was just a matter of time before more large banks started to implode. Now First Republic has failed, and over the weekend U.S. regulators were working very hard to arrange a sale…
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U.S. regulators have been trying to clinch a sale of First Republic over the weekend, with roughly half a dozen banks bidding, sources said on Saturday, in what is likely to be the third major U.S. bank to fail in two months. Guggenheim Securities is advising the FDIC, two sources familiar with the matter said on Saturday.
As a I write this article, that still hasn’t happened yet.
But it could happen at any moment.
When a sale is finally announced, the FDIC is also expected to tell us that it has seized First Republic…
The Federal Deposit Insurance Corp is expected to announce a deal on Sunday night before Asian markets open, with the regulator likely to say at the same time that it had seized the lender, three sources previously told Reuters.
They are trying to time everything so that as little panic as possible is created.
But I feel really badly for those that owned First Republic stock.
It was going for about 120 dollars a share at the beginning of March, and once the bank is seized by federal regulators it will almost certainly be worthless.
That is how fast these things can happen.
More dominoes will fall throughout the rest of 2023, and you don’t want to be caught holding the bag.
So do what you need to do while you still have time.
When the Federal Reserve decided to go nuts with their rate hikes, we all knew that this would put enormous pressure on the banks, and that is precisely what has happened.
We also knew that higher rates would crush the housing market, and last month pending home sales dropped much more than expected…
March is with both feet in the spring selling season, when home sales jump and when prices move higher, and where everything looks rosy for a few months, no matter what, after the dreariness of winter.
So, well then, here we go again. Pending home sales – which are “a forward-looking indicator of home sales based on contract signings” – fell by 5.2% in March from February, according to the National Association of Realtors today, thereby annihilating the little-bitty gain in February that had sent all the headlines abuzz with hype.
If you are looking to sell a home, I would recommend doing it quickly, because prices are likely to go quite a bit lower from here.
Meanwhile, big companies are laying off workers all over the country at a very frightening rate. In fact, we just learned that Jenny Craig is getting ready to conduct “mass layoffs” as it prepares to wind down operations…
Jenny Craig has alerted employees to potential mass layoffs as it begins “winding down physical operations” and hunts for a buyer, according to communications the weight-loss company sent some staffers this week.
The company said it “has been going through a sales process for the last couple of months,” according to a document titled “Jenny Craig Company Transition FAQs” that was dated Tuesday and provided to NBC News.
I don’t know why, but I am sad to see Jenny Craig go.
Perhaps it is because of all the Jenny Craig commercials that I watched when I was younger.
Joe Biden keeps telling us that the economy is doing great, but we just keep seeing one large company after another go belly up…
For 2009 there were 118 bankruptcies through April. In Covid-impacted 2020, there were 71 bankruptcies. In 2023 there have been 70.
This is the third worst start to the year since 2000.
This didn’t have to happen.
If our leaders had not flooded the system with money, inflation never would have gotten out of control.
And if inflation had never gotten out of control, officials at the Fed never would have had to recklessly hike interest rates.
Sadly, we have a real nightmare on our hands at this point, and there is no turning back now.
Not too long ago, a prankster that was impersonating Ukrainian President Volodymyr Zelensky was able to completely fool Federal Reserve Chairman Jerome Powell during a video chat.
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