Mish: Tidal Wave of Money Leaving Banks Will Kill Bank Profits and Lending

Let’s tune into a mass exodus of deposits at banks for money market mutual funds and what it means.

Mish, Apr 24, 2023 – Excerpts:

Jim Bianco 21-Tweet Thread / Mish opinions:

The “bank walk” becomes a “bank powerwalk” to 5%.

More Bank Failures? – “To be clear, a bank walk will NOT lead to another bank failure, wrong metric. But it will kill their profitability, especially the smaller banks.“

Giant Bank Sucking Sound – Question On Stopping the Run 

Mish: “Banks need NEW Deposits because they already locked up existing deposits in 10-YR notes at 2.0% or so. Offering 3% will not attract much new money with others offering 5%.“

Bianco: “Exactly correct: They [banks] locked up securities and loans that generate much lower interest rates. Somewhere around 3%. Over time they mature and get rolled into higher rates. But not now. So, they lose money by trying to compete with market rates. This explains why the bank stocks cannot rally.“

Bianco The “bank walk’s” cumulative impact on markets, the economy, and lending. It will be a significant drag later this year.

Moody’s Downgrades 11 Regional Banks:  Moody’s Downgrades 11 Regional Banks, Including Zions, U.S. Bank, Western Alliance.

Regional banks, Moody’s said, are more exposed to hard-hit commercial real estate. U.S. banks hold about half of total CRE debt outstanding, and some are concentrated in construction, office, or land development.

U.S. Bank has a “relatively low capitalization” as well as unrealized losses on its securities, Moody’s said.  Zions has “significant” unrealized losses on its securities portfolio and its capital has deteriorated, Moody’s said.

Downgraded Banks

• U.S. Bancorp USB, with $682 billion in assets
• Zions Bancorp ZION with $89 billion in assets.
• Bank of Hawaii Corp., BOH with $24 billion in assets.
• Western Alliance Bancorp WAL, received a two-notch downgrade.
• First Republic Bank, which faced a run last month, had its preferred-stock rating cut.
• Six More: Associated Banc-Corp., Comerica Inc., First Hawaiian Inc., Intrust Financial Corp, Washington Federal Inc., UMB Financial Corp.

Banks will not be taking any extra risks. Nor will larger banks that also face the “powerwalk”. This will pressure bank lending across the board.

Like it or not, the Fed is purposely angling for recession to cure inflation. 

And the Fed does not have an inflation ally in the White House. Biden is doing everything possible to fuel inflation with inept Green policies. 

This post originated at MishTalk.Com

________________________________________

The right way for the Fed to rescue troubled banks:

The Leviticus 25 Plan, provides the tidal wave of fresh capital that will flow into banks through debt pay-downs by American families: Mortgage debt, Consumer debt, Household debt, Student Loan (unsubsidized) debt; credit card debt.

A good share of that debt, in ‘delinquent’ status, will be ‘satisfied,’ or ‘made current,’ which will be an important additional benefit.

The Leviticus 25 Plan will also reignite economic growth, which will help relieve pressure on Commercial Real Estate (CRE) debt service.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (6066 downloads)

Here’s A List Of Biden Tax Hikes Which Take Effect Jan. 1

ZeroHedge, Dec 31, 2022 – Excerpts:

When the Democrats finally passed the “Inflation Reduction Act” in 2022 (how’s that going?), they included several tax hikes set to take effect on Jan. 1, 2023.

Americans for Tax reform‘s Mike Palicz has conveniently compiled a list of them, along with his take on their intended effects:

$6.5 Billion Natural Gas Tax Which Will Increase Household Energy Bills   

Think your household energy bills are high now? Just wait until the three major energy taxes in the Inflation Reduction Act hit your wallet. The first is a regressive tax on American oil and gas development. The tax will drive up the cost of household energy bills. The Congressional Budget Office estimates the natural gas tax will increase taxes by $6.5 billion.

And of course, this tax hike violates Biden’s pledge not to raise taxes on Americans making under $400,000 per year. According to the American Gas Association, the methane tax will slap a 17% increase on the average family’s natural gas bill.

$12 Billion Crude Oil Tax Which Will Increase Household Costs

Next up – a .16c/barrel tax on crude oil and imported petroleum products which will end up on the shoulders of consumers in the form of higher tax prices.

The tax hike violates President Biden’s tax pledge to any American making less than $400,000 per year.

As noted above, Biden administration officials have repeatedly admitted taxes that raise consumer energy prices are in violation of President Biden’s $400,000 tax pledge.

As if it weren’t bad enough, Democrats have pegged their oil tax increase to inflation. As inflation increases, so will the level of tax.

$1.2 Billion Coal Tax Which Will Increase Household Energy Bills

This one increases the current tax rate on coal from $0.50 to $1.10 per ton, while coal from surface mining would increase from $0.25 per to to $0.55 per ton, which will raise $1.2 billion per year in taxes that will undoubtedly be passed along to consumers in the form of higher energy bills.

$74 Billion Stock Tax Which Will Hit Your Nest Egg — 401(k)s, IRAs and Pension Plans

Democrats are now imposing a new federal excise tax when Americans sell shares of a stock back to a company.

Raising taxes and restricting stock buybacks harms the retirement savings of any individual with a 401(k), IRA or pension plan.

Union retirement plans will also be hit.

The tax will put U.S. employers at a competitive disadvantage with China, which does not have such a tax.

Stock buybacks help grow retirement accounts. Raising taxes and restricting buybacks would harm the 58 percent of Americans who own stock and more than 60 million workers invested in a 401(k). An additional 14.83 million Americans are invested in 529 education savings accounts.

Retirement accounts hold the largest share of corporate stocks, accounting for roughly 37 percent of the outstanding $22.8 trillion in U.S. corporate stock, according to the Tax Foundation.

In 2017, corporate-sponsored funds made up $4.45 trillion in market value; union-sponsored funds accounted for $409 billion; and public-sponsored funds, which benefit teachers and police officers, added up to $4.25 trillion.

A tax on buybacks could dissuade companies from doing so, and US companies will face significant compliance costs, which will – again, be passed along to consumers.

$225 Billion Corporate Income Tax Hike Which Will Be Passed on to Households

American businesses reporting at least $1 billion in profits over the past three years will now face a 15% corporate alternative minimum tax, which will be passed along in the form of higher prices, fewer jobs and lower wages, according to Americans for Tax Reform.

A Tax Foundation report from last December found a 15 percent book tax would reduce GDP by 0.1 percent and kill 27,000 jobs.

Preliminary cost estimates from the Congressional Budget Office found the provision would increase taxes by more than $225 billion.

According to JCT’s analysis, 49.7 percent of the tax would be borne by the manufacturing industry at a time when manufacturers are already struggling with supply-chain disruptions.

Which industry will likely be most affected? According to the Tax Foundation, “the coal industry faces the heaviest burden of the book minimum tax, facing a net tax hike of 7.2 percent of its pretax book income, followed by automobile and truck manufacturing, which faces a 5.1 percent tax hike.”

_________________________________ 

Question: Do Washington Republicans have a plan to erase these Democrat tax hikes, generate federal budget surpluses, reignite economic growth, and restore American families’ financial health?

Answer: No

Main Street America Republicans do have a plan.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (6065 downloads)

White Collar job cuts likely mean reduced federal and state income tax revenue, reduced payroll tax revenue, reduced sales tax revenue (from reduced discretionary spending); increased government outlays; and increasing budget deficits.

……………………………………………………..

The Companies Conducting Layoffs in 2023: Here’s the List – WSJ

Facebook parent Meta, Alphabet, Microsoft and Goldman Sachs are cutting positions amid recession fears

White-Collar Recession: Why Job Cuts Are Hitting Professional Workers.

By Joseph De Avila – Updated March 28, 2023 – Excerpts:

A stream of companies have announced layoffs in recent months as they recalibrate head counts and tighten belts amid concerns about a slowing economy.  

The job cuts at the start of the year have been mostly concentrated in the tech industry, with Facebook parent Meta Platforms Inc., Google parent Alphabet Inc. and Microsoft Corp. trimming their workforces. Meta said it would cut roughly 10,000 jobs over the coming months, its second wave of mass layoffs. 

The downsizing has shifted beyond high-growth technology companies to other parts of the economy, with companies including Dow Inc. and 3M Co.

The broader labor market has continued to add jobs, however, with the U.S. unemployment rate at 3.6% in February.

Here’s a look at some of the companies that have announced layoffs. While these announcements make waves, they can serve more as a message than a blueprint. Some companies that have announced big cuts in the past have ended up employing nearly as many people a year later.

Technology and Media

Alphabet – The Google parent said it plans to eliminate roughly 12,000 jobs, reducing its staff by 6% and marking the company’s largest-ever round of layoffs as it copes with a darkened economic outlook. The reductions will cut across Alphabet units and geographies, the company said.

Amazon – Amazon.com Inc. said it would cut 9,000 corporate jobs across units that include its profitable cloud-computing and advertising businesses, a few months after announcing layoffs of over 18,000 mostly corporate workers in January. Chief Executive Andy Jassy cited economic uncertainty for the latest reductions. Amazon added a significant number of employees during the pandemic.

Dell – Dell Technologies Inc. said it is cutting about 5% of its workforce and taking steps to reorganize its sales, customer-support, product-development and engineering teams. The cuts amount to some 6,600 jobs, based on the 133,000 total workers that the company reported having in early 2022, its most recent disclosed figure.

Jeff Clarke, Dell’s co-chief operating officer, said the company had already paused hiring, limited employee travel and reduced spending on outside services. Those steps, he said in a memo to employees, “are no longer enough.” 

Disney – Walt Disney Co. said it plans to cut 7,000 jobs and eliminate $5.5 billion in costs as part of a corporate reorganization that gives more power to content executives and puts a greater emphasis on sports media.

Robert Iger, who returned to the role of chief executive in November, said on Disney’s earnings call that it was “time for another transformation.” Disney is facing questions about the health of its streaming business, what to do with Hulu and ESPN, and how to navigate a challenging economic climate with its debt-heavy balance sheet.

DocuSign – DocuSign previously made cuts to its workforce in September amid slowing growth.

DocuSign Inc. said it plans to cut about 10% of its staff, eliminating approximately 700 jobs, after an earlier round of cuts in September. The cuts will focus on the company’s field organization, according to a securities filing.

DocuSign’s workforce nearly doubled during the pandemic. But investors soured on the stock as pandemic-era trends began to normalize, and the company is now facing slowing growth. 

Ericsson – Ericsson AB plans to lay off 8,500 employees worldwide, or about 8% of its workforce, to cut costs while orders for its 5G gear have slowed in the U.S. and other markets. A few days earlier, the Stockholm-based telecommunications-equipment company had announced 1,400 job cuts in Sweden.

IBM – IBM said it would cut about 3,900 jobs, reducing its head count by about 1.4%. The cuts stem from its spinoff of Kyndryl Holdings Inc. and healthcare divestiture, from which the company will incur about a $300 million charge, a spokesman said.

Meta – Facebook parent Meta said it would cut roughly 10,000 jobs in multiple rounds of job cuts in an effort to be more efficient in a difficult economy. Company recruitment teams will be cut first, followed by restructuring and layoffs in its technology groups in late April and in business teams in May, Meta CEO Mark Zuckerberg said. “This will be tough and there’s no way around that,” he said.

Microsoft – Microsoft said it was laying off 10,000 employees, which would affect less than 5% of the company’s global workforce, CEO Satya Nadella said in a blog post. “We’re also seeing organizations in every industry and geography exercise caution as some parts of the world are in a recession and other parts are anticipating one,” Mr. Nadella said.

News Corp – News Corp said it expects to cut 5% of jobs, or about 1,250 positions, this year. The parent company of The Wall Street Journal publisher Dow Jones & Co., book publisher HarperCollins Publishers and news organizations in the U.K. and Australia reported lower quarterly revenue in its most recent earnings report. Chief Executive Robert Thomson said inflation and higher interest rates had affected all of the company’s businesses, and the job cuts would affect all divisions.

Okta – Okta Inc. said it is laying off about 300 employees, or 5% of staff, after it went on a hiring spree during the Covid-19 pandemic. The business-software provider had 5,030 employees as of Jan. 31, 2022, up from 2,248 at the same time in 2020, according to regulatory filings. “This led us to overhire for the macroeconomic reality we’re in today,“ said CEO Todd McKinnon.

Philips – Royal Philips NV said it would cut an extra 6,000 jobs by 2025, including 3,000 this year, as part of a reorganization aimed at improving its performance. The job cuts are in addition to the 4,000 roles that the Dutch health-technology company said it would eliminate in October. Philips has grappled with supply-chain challenges, lower sales in China and the fallout from the Russia-Ukraine war.

Salesforce – Salesforce Inc. said it would cut 10% of its staff. Salesforce Co-CEO Marc Benioff said the company overhired at the start of the pandemic and now faced sluggish demand from customers who were cutting back on spending. 

SAP – Software company SAP SE said it would shed up to 3,000 positions after a steep profit drop late last year. CFO Luka Mucic said the job cuts would be spread across the company’s geographic footprint, with most happening outside its home base in Germany. “The purpose is to further focus on strategic growth areas,” Mr. Mucic said. 

Splunk – Splunk Inc. said it is laying off about 325 employees, or 4% of its staff. The company, which makes software used by companies’ information-technology and security operations, also said it would scale back the use of external agencies and consultants as it seeks to cut costs. Last year, the Journal reported that activist investor Starboard Value LP had a stake in the company and planned to push it to take action to boost its stock price.

Spotify – Spotify Technology SA plans to cut its workforce by about 6% as part of broader cost-saving measures, CEO Daniel Ek said in a note to staff. The Stockholm-based company has about 8,600 employees worldwide, according to its website.

Unity Software – Unity Software Inc. said it would eliminate 284 jobs. The San Francisco-based company, a provider of tools for creating videogames and other applications, previously disclosed layoffs in June. Unity had more than 8,000 employees before its most recent round of cuts. 

Verily – Verily Life Sciences, a healthcare unit of Alphabet, is laying off more than 200 employees as part of a broader reorganization. The cuts will affect about 15% of roles at Verily. The company will discontinue work on a medical-software program called Verily Value Suite and several early-stage products, CEO Stephen Gillett said.

Vimeo – Vimeo Inc., a video-sharing platform, said it would lay off 11% of its staff. The company said it was making the cuts amid slowing economic growth, including high interest rates and global recession fears.

Yahoo – Yahoo Inc. will lay off 20% of its workforce by the end of the year, with nearly 1,000 positions being eliminated this week, the company said. Yahoo, the early internet pioneer now owned by private-equity firm Apollo Global Management Inc., is overhauling and shrinking its advertising tech unit. The company said the group had “struggled to live up to our high standards.” 

Zoom – Zoom Video Communications Inc. is laying off 1,300 employees, or 15% of its staff, while its chief executive said he and other executives were taking pay cuts. Zoom grew rapidly during the Covid-19 pandemic, as did its employee base. CEO Eric Yuan said the company had tripled in size in two years. But growth has cooled as companies call employees back to the office.

Financial Services and Consulting

Accenture – Accenture PLC said it is cutting about 19,000 jobs, or 2.5% of its workforce, as the professional-services company looks to slash costs and streamline operations. The layoffs are expected to take place over the next 18 months, the company said. 

BlackRock – BlackRock Inc., the world’s largest asset manager, is laying off 500 employees, or around 3% of its total workforce, according to a memo sent to employees. A BlackRock spokesman cited “an unprecedented market environment” as the reason for the layoffs.

BNY Mellon – Bank of New York Mellon Corp. plans to cut about 3% of its workforce this year, or about 1,500 jobs, in an attempt to cut costs, the Journal reported. At year-end, the bank had 51,700 full-time employees. Management positions will likely be targeted in the cuts, the Journal reported.

Goldman Sachs – Goldman Sachs Group Inc. plans to cut 3,200 jobs. Goldman and other Wall Street banks are curbing expenses to offset declines in deal-making revenue. Goldman’s executives have been planning since at least December to slash thousands of jobs.

McKinsey – McKinsey & Co. plans to eliminate as many as 2,000 jobs in what would be one of its largest head-count reductions, according to a person familiar with the matter. The company’s restructuring plan for its 45,000-person staff is expected to be finished in the coming months, the person said.

PayPal – PayPal Holdings Inc. will lay off 2,000 employees, or 7% of its workforce. PayPal is the latest fintech company to cut costs amid high interest rates and a volatile market. New digital payment services have also threatened its market share.

Retail and Services

Bed Bath & Beyond – Bed Bath & Beyond Inc. is planning more cost cuts, including an unspecified number of job reductions, as its cash pile and sales continue to dwindle. The home-goods retailer continues to face deep obstacles in its bid to remain solvent. The company has said it was running low on funds and considering several options, including seeking relief in bankruptcy court.

Carvana – Carvana Co. is cutting additional employees after laying off 4,000 people last year, the Journal reported, citing employees and industry analysts. The people said the online used-car seller is trying to stay current on more than $7 billion of debt while facing a deep slowdown in sales.

FedEx – FedEx Corp. is laying off more than 10% of its global management staffers and consolidating some of its teams and functions amid a shipping slowdown. The delivery giant has already trimmed its U.S. workforce by 12,000 since the start of the fiscal year through regular attrition, a hiring freeze and other head count initiatives. It had more than 550,000 employees globally, according to its most recent financial statement in December.

Hasbro – Hasbro Inc. said it would eliminate 15% of its global workforce, or around 1,000 positions, this year, as it focuses on cutting costs and increasing growth rates and profitability. The toy and entertainment company’s president and chief operating officer, Eric Nyman, will depart as part of the changes. 

Indeed – Job-search website Indeed said it expects to lay off about 2,200 employees, or 15% of its workforce. “With future job openings at or below prepandemic levels, our organization is simply too big for what lies ahead,” said CEO Chris Hyams, who is taking a 25% cut in his base pay. Indeed is part of Recruit Holdings Co.

McDonald’s – McDonald’s Corp. said it was planning to make difficult decisions about changes to corporate staffing levels. The fast-food company said it would trim or reorganize corporate staff, even as it plans to expand its business globally. The CEO said he expects to save money from the staffing changes but doesn’t have a set number of jobs he is looking to cut.

Stitch Fix – Stitch Fix Inc. said it is trimming 20% of the company’s salaried jobs. The San Francisco-based company, which provides personalized shipments of apparel, shoes and accessories, has been facing a sales downturn. CEO Elizabeth Spaulding will resign, Stitch Fix said, and its founder will return.

Wonder Group – Food-delivery startup Wonder Group is laying off staff as the company overhauls its business strategy. Wonder had planned to roll out a nationwide fleet of food trucks, but said it has shifted to a less expensive restaurant-delivery model that will allow it to save money as funding remains tight. The company’s majority owner and chief executive is Marc Lore, an experienced entrepreneur and former Walmart Inc. e-commerce executive.  

Crypto

Coinbase – Coinbase Global Inc. said that it would eliminate around 20% of its staff and enact broad cost cuts, the latest sign of pain in the cryptocurrency industry. The cryptocurrency exchange will reduce operating expenses by 25% from the previous quarter, including laying off about 950 people.

Rival exchange FTX’s collapse has sparked a fresh round of layoffs across the crypto industry. In a blog post explaining the layoffs, CEO Brian Armstrong cited “the fallout from unscrupulous actors in the industry, and there could still be further contagion.” 

Crypto.com – Crypto.com is cutting 20% of its global workforce in a second round of layoffs in six months. In a blog post, the cryptocurrency exchange’s co-founder and chief executive officer, Kris Marszalek, didn’t specify how many employees were laid off. Several hundred individuals found out on the day of the announcement that they no longer had access to Crypto.com’s systems and were being laid off, the Journal reported.

Genesis – Crypto lender Genesis Global Trading Inc. laid off 30% of its staff and then filed for bankruptcy protection. The layoffs weren’t confined to one department and were across the company, the Journal reported. Genesis has 145 employees left after the recent layoffs. 

Autos and Manufacturing

Boeing – Despite the job cuts, Boeing said in January that it plans to add 10,000 jobs in total this year. Photo: Ellen M. Banner/Associated Press

Boeing Co. said it would cut about 2,000 jobs, primarily in finance and human resources, through layoffs and attrition. The Arlington, Va., aerospace manufacturer is planning to increase its overall head count this year, however. It said in January that it would add 10,000 jobs in total this year, focusing on engineering and manufacturing. 

Dow – Dow Inc. said it is laying off about 2,000 employees globally. The Midland, Mich.-based chemicals company said it is targeting $1 billion in cost cuts this year as slowing economic growth and a drop-off in demand weigh on sales.

Ford – Ford Motor Co. said it is planning to cut 3,800 jobs in Europe over the next three years. The layoffs are intended to help the auto maker cut costs and boost profit amid its push to invest $50 billion in the development of electric vehicles over the next few years.

Lucid – Lucid Group Inc. plans to lay off approximately 1,300 employees, or 18% of its workforce, as the electric-vehicle startup looks to cut operating expenses and preserve cash ahead of releasing a second model next year. The job cuts, expected to finish by the end of the second quarter, will occur across Lucid’s U.S. operations and include executives, the company said.

Rivian – Rivian Automotive Inc. plans to trim another 6% of its workforce, the latest in the electric-vehicle startup’s efforts to preserve cash. The reduction follows a cut of the same size made last summer in response to inflationary pressures and an uncertain economic climate.

3M – 3M Co. said it is cutting 2,500 manufacturing jobs globally as the company confronts turbulence in overseas markets and weakening consumer demand. The maker of Scotch tape, Post-it Notes and thousands of other industrial and consumer products said it expects lower sales and profit in 2023 after demand weakened significantly in late 2022.

_____________________________________

Washington Democrats and Republicans have our country accelerating into an economic nosedive.

America’s Main Street Republicans have a solution:

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (5993 downloads)

America needs a clean path to reducing dependence on government… and eliminating the massive fraud and waste built into our big government social policy ‘solutions.’

It is shocking that Washington Republicans and Democrats, for all intents and purposes, have turned a blind eye to this gigantic, ongoing tax-payer rip off.

………………………………………………..

Improper Payments

Government Accountability Office (.gov) | https://www.gao.gov › improper-payments

Improper payments—payments that should not have been made or were made in the incorrect amount—have consistently been a government-wide issue…

……………………………………………….

Welfare Fraud – Federal Safety Net

Federal Safety Net | https://federalsafetynet.com › welfare-fraud

Improper welfare payments, including welfare fraud and welfare abuse, are estimated to be 15.2% of all federal welfare payments. They total $161 billion in the fiscal year 2021. The estimate stems from the Office of Management and Budget (OMB) [i] and The General Accounting Office (GAO) reports. Eight of the Welfare Programs make the OMB list of “High Priority Programs.” These are programs with improper payments greater than $2 billion annually.   Shown below is information on each program.  

The table below shows billions of dollars of estimated welfare fraud and improper payments by welfare programs. The table takes total expenditures by program and applies the improper payment percentage. Adding up the programs approximates the overall improper payments from the welfare system as a whole.

……………..

America’s Health Care Programs are Full of Improper Payments

Paragon Health Institute | https://paragoninstitute.org › americas-largest-health-c…

Dec 4, 2022 — A new report estimates official improper payments made by federal health programs are about $132 billion annually…

……………..

How Medicare and Medicaid fraud became a $100B …

CNBC | https://www.cnbc.com › 2023/03/09 › how-medicare-an…

Mar 9, 2023 — Medicare and Medicaid programs are being brazenly targeted by sophisticated criminals. Estimated annual fraud tops $100 billion…

………………………………………………..…

Social Security Fraud: What Is It Costing Taxpayers?

Millions, possibly billions, of dollars every year

By The Investopedia Team | Updated September 02, 2022

Reviewed by Charlene Rhinehart | Fact checked by Vikki Velasquez

Social Security fraud statistics can be difficult to pin down. Some are grouped inside a larger category that the Social Security Administration (SSA) calls “improper payments,” which includes everything from innocent mistakes to willful fraud. The SSA estimates that it made about $8.3 billion worth of improper payments during the 2020 fiscal year.

Social Security-related fraud can also take other forms, such as identity theft using stolen Social Security numbers and scams involving bogus phone calls and emails purporting to be from the SSA. Collectively, these frauds cost the U.S. government and individual taxpayers millions, if not billions, of dollars every year.

……………………………………………………..

Programs Susceptible to Improper Payments Are Not Adequately Addressed and Reported

Oversight.gov | https://www.oversight.gov › oig-reports › TIGTA

May 6, 2022 — Earned Income Tax Credit (EITC) – The IRS estimates 28 percent ($19.0 billion) of the total EITC payments of $68.3 billion were improper.

…………………

CHD, Apr 12, 2023: Biden to Spend $5 Billion on New Coronavirus Vaccine Initiative Supported by Gates, Fauci and Republican Lawmakers

___________________________________________

The Leviticus 25 Plan

Qualifying participants will each receive a $60,000 deposit into their Family Account – and, for five years, will no longer be enrolled beneficiaries in the following programs: EITC, child tax credits; SNAP, Housing Assistance, SSI, Child Nutrition, TANF.

Qualifying participants will also receive a $30,000 deposit into their Medical Savings Account, and will then have a $6,000 annual deductible for primary health care services accessed through Medicaid, Medicare, VA, TRICARE, FEHB for five years. This would eliminate tens of millions of claims and provide cleaner programs for improper payment and fraud prevention.

Participants will not receive Social Security Disability Insurance benefits for five years. OASI benefits would not be affected.

Participants would not receive free Coronavirus vaccinations.

……………………………..

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (5993 downloads)

Much of the banking sector in the U.S. is reeling, primarily from ‘duration stress’ – having lent long-term money out in recent years at relatively low interest rates, and now having to borrow at much higher rates. Inflation hit, rates rose, and in due course market value of these paper assets on their balance sheets have dropped significantly.

The KBW Bank Index, a bellwether indicator tracking the prices of 24 large banks in this sector, began crashing in March. It is now down 46.7% year-to-date.

Index Components – As of May 2021, the individual index components included:

• Bank of NY Mellon (BK)
• Bank of America (BAC)
• Capital One Financial (COF)
• Citigroup (C)
• Citizens Financial Group (CFG)
• Comerica (CMA)
• Fifth Third Bank (FITB)
• First Horizon (FHN)
• First Republic Bank (FRC)
• Huntington Bancshares (HBAN)
• JP Morgan Chase (JPM)
• Keycorp (KEY)
• M&T Bank (MTB)
• Northern Trust (NTRS)
• PNC Financial Services (PNC)
• People’s United Financial (PBCT)
• Regions Financial (RF)
• Signature Bank (SBNY)
• State Street (STT)
• SVB Financial Group (SIVB)
• Truist Financial Corp (TFC)
• US Bancorp (USB)
• Wells Fargo & Co (WFC)
• Zion’s Bancorp (ZION)

Source:  Investopedia

…………………

The S&P Regional banking ETF, KRE, is also under significant stress – down 35% from recent highs.

KRE vs SPX:

……………………..

The Fed has three apparent choices.  Two bad.  One good.

1. Bailouts. The Fed may be ‘forced’ into another round of bank bailouts to shore up capital requirements covering scores of Institutions within the sector – with the Fed recreating various credit facilities through which to pump hundreds of billions of dollars out to major banks (domestic and foreign) to stabilize the system.

Primary beneficiaries:  Wealthy industry insiders, Board of Director members, wealthy major shareholders like Warren Buffett and Bill Gates (circa 2008-2011), and others.

Primary non-beneficiaries:  Working class Americans, particularly those losing income, getting laid off, struggling to pay rents and mortgages.

Bad Choice: This would do nothing to restore credibility within the sector.  Federal and State governments would remain mired in debt.  There would be no positive long-term benefits for U.S. economic growth, no positive debt elimination benefits for American families.

……………………………

2.  Rate Reduction: The Fed could embark on aggressive rate reduction.  This would ostensibly shrink ‘lend long, borrow short’ rate gap that is plaguing the sector.  Duration risk, theoretically, would be at least partially mitigated as the market value of banks’ paper assets rises. 

Bad Choice:  Fed would lose a lot of credibility. Inflation would likely come back to haunt the Fed (and millions of working class Americans). There would likely be severe repercussions to credit markets (actually, ‘all hell could break loose’). Federal and State governments would remain mired in debt.  There would be no positive long-term benefits     for U.S. economic growth, no positive debt elimination benefits for American families.

……………………………………..

3. Re-target liquidity flows. The Fed could create a new facility, a Citizens Credit Facility, to officially launch The Leviticus 25 Plan.

Primary beneficiaries:  Working class U.S. citizens.

Good choice: 1)  Bank sector duration risk would rapidly resolve as underwater paper assets would be converted to dollars assets at par value – for banks to re-lend at market rates.  It would restore confidence within the sector.

2)  Massive debt reduction / elimination across the board for millions of American families.

3)  Marked gains in GDP growth as trillions of dollars previously earmarked for debt service boomerang back into the economy, creating jobs, re-incentivizing work, increasing economic productivity, generating enormous new flows of tax revenue and payroll tax revenue (Social Security, Medicare).

4) The Leviticus 25 Plan, through its recapture provisions, would generate $619 billion federal budget surpluses and major budget gains for most state and local governments, and would pay for itself entirely over a 10-15 year period.  

……………………………

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (5969 downloads)

The Federal Reserve’s ‘secret liquidity lifelines’ for major banks:

Bloomberg LP filed a Freedom of Information Act (FOIA) lawsuit on Nov 7, 2008 to gain access to information regarding special emergency lending programs that the U.S. Federal Reserve had been running to help borrower banks deal with cash shortages and collateral deficiencies. The Fed fought the lawsuit, but ultimately lost.

Bloomberg gained access to more than 29,000 pages of previously secret loan documents and Fed spreadsheets and published the highlights of those programs in late 2011.

According to Bloomberg, the top 15 recipients of Fed’s ‘secret liquidity lifelines’ were:

Morgan Stanley   $107 billion                                                                                      

Citigroup Inc.   $99.5 billion                                                                                               

Bank of America Corp   $91.4 billion                                                                                

Royal Bank of Scotland Plc   $84.5 billion                                                                        

State Street Corp   $77.8 billion                                                                                         

UBS AG  $77.2 billion                                                                                                 

Goldman Sachs Group Inc.   $69 billion                                                                               

JP Morgan Chase & Co    $68.6 billion                                                                      

Deutsche Bank AG  $66 billion                                                                                   

Barclays Plc   $64.9 billion                                                                                               

Merrill Lynch & Co Inc.  $62.1 billion                                                                                

Credit Suisse Group AG  $60.8 billion                                                                             

Dexia SA  $58.5 billion                                                                                              

Wachovia  $50 billion

………………………………………………………………………..

Meanwhile, here’s how Main Street America made out.

8.7 million Americans lost their jobs during the financial crisis years.

4.1 million American families lost their homes through completed foreclosures from September 2008 through December 2012, according to CoreLogic..

________________________________________

Round and round we go – the Federal Reserve is once again bailing out troubled institutions in the banking sector.;;

ZeroHedge, March 16, 2023: Today’s weekly H.4.1 update from the Fed :

In the week ended March 15, borrowings under the Fed’s deeply stigmatizing last-ditch liquidity facility, the Discount Window, exploded to $152.85BN, a record $148BN weekly jump to an all-time high which surpassed even the borrowings during the financial crisis!

It is time to re-target Fed liquidity extensions: U.S. citizens deserve nothing less than to be granted the same direct access to liquidity that has been so generously provided, time and time again, to Wall Street’s financial sector during times of financial stress.

Let the liquidity flow through the hands of U.S. citizens first – and then on up to the banks (to reduce/eliminate household debt, student loan debt, mortgage debt), instead of mass-pumping newly-created electronic ‘money’ into the banking sector, with mere crumbs falling through for America’s hard-working, tax-paying U.S. citizens.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizens – Leviticus 25 Plan 2023 (5967 downloads)

                                     

“But the essential features of that individualism which, from elements provided by Christianity and the philosophy of classical antiquity, was first fully developed during the Renaissance and has since grown and spread into what we know as Western civilization—are the respect for the individual man qua man, that is, the recognition of his own views and tastes as supreme in his own sphere, however narrowly that may be circumscribed, and the belief that it is desirable that men should develop their own individual gifts and bents.”  ― Friedrich August von Hayek, The Road to Serfdom

Note: There is a clear path out of this mess…

…………………………………………..

World Bank Warns Of ‘Lost Economic Decade’ As Turmoil Spreads

ZeroHedge, Mar 29, 2023 – Excerpt:

“A lost decade could be in the making for the global economy,” Indermit Gill, the World Bank’s Chief Economist and Senior Vice President for Development Economics, warned in a new report. 

The report “Falling Long-Term Growth Prospects: Trends, Expectations, and Policies” reveals new forecasts that show global long-term potential output in growth rates are expected to slide: 

Nearly all the economic forces that powered progress and prosperity over the last three decades are fading. As a result, between 2022 and 2030, average global potential GDP growth is expected to decline by roughly a third from the rate that prevailed in the first decade of this century—to 2.2% a year.

For developing economies, the decline will be equally steep: from 6% a year between 2000 and 2010 to 4% a year over the remainder of this decade. These declines would be much steeper in the event of a global financial crisis or a recession.

World Bank’s chief economist continued:  “The ongoing decline in potential growth has serious implications for the world’s ability to tackle the expanding array of challenges unique to our times—stubborn poverty, diverging incomes, and climate change.”

However, he said: “But this decline is reversible. The global economy’s speed limit can be raised—through policies that incentivize work, increase productivity, and accelerate investment.”

Ayhan Kose, director of the World Bank’s forecasting group, said the fracturing of the global economy implies “the golden era of development appears to be coming to an end.”

Earlier this year, the World Bank cautioned global central banks to stay alert to the economic risks related to aggressive monetary policy tightening aimed at combating inflation, as these risks may have widespread consequences. Just weeks ago, the emergence of a regional bank crisis in the US and problems with Credit Suisse in Europe demonstrated the validity of these concerns.

Besides a banking crisis, central bankers are also facing their nemesis… Stagflation…

While the global economy appears to be on a crash course with a ‘hard landing,’ no thanks to reckless central banks, the World Bank said, “It will take a herculean collective policy effort to restore growth in the next decade to the average of the previous one.” 

__________________________________________

The Leviticus 25 Plan.

Again, from the World Bank: “But this decline is reversible. The global economy’s speed limit can be raised—through policies that incentivize work, increase productivity, and accelerate investment.”

There is currently one U.S. economic acceleration plan up and ready to launch, that will accomplish these crucial policy initiatives.

The Leviticus 25 Plan will: 1) incentivize work; 2) increase productivity; 3) accelerate investment; and 4) stabilize the banking system – reversing the damaging effects of ‘duration risk’ and bringing distressed loans to ‘current status’; 5) rejuvenate long-term economic growth and insulate the economy from random economic shocks; 6) generate $619.5 billion federal budget surpluses for the coming 5 years; 7) restore economic liberty.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2023 (5963 downloads)