Posted on 11/22/2023 10:57:20 AM PST by Red Badger
Recent House and Senate committee hearings involving the top US regulators suggested that America’s banking crisis had been contained because of Washington’s smartest men and women. While the calamity witnessed earlier this year has quieted down, the situation is far from over. Case in point, another bank failure occurred, lifting the annual number of collapsed institutions to the highest level in six years. Just wait until next spring!
The Never-Ending Bank Failure Story
Citizens Bank, an Iowa-based company, became the fifth bank failure of 2023. Its closure did not capture national headlines because it possessed fewer than $66 million in assets as of Sept. 30, contributing very little to the $553 billion total assets of other shuttered banks this year.
According to the Iowa Division of Bank (IDOB) and Federal Deposit Insurance Corporation (FDIC), Citizens Bank’s demise was caused by “significant loan losses” related to a single industry: trucking. The two organizations noted that they submitted a consent order with the entity in August, mandating it reach out to a third-party loan consultant to manage the firm’s commercial trucking loan portfolio and produce a credit risk reduction plan. But it was not enough to prevent a bank failure.
In the end, it maintained $58.9 million in deposits and $38.2 million in loans, with real estate loans accounting for nearly 42%. The IDOB was forced to close it on Nov. 3 and appointed the FDIC as the receiver. Iowa Trust and Savings Bank assumed all its deposits and purchased close to all its assets.
Citizens Bank joined Silicon Valley Bank, Signature Bank, First Republic Bank, and Heartland Tri-State Bank on the list of failures.
Could more come to face to face with doom? The real test of the banking system’s resilience will occur in March when the Federal Reserve’s loans are due. When SVB and Signature folded faster than Superman on laundry day, the US central bank launched an emergency funding facility to prevent further closures. It reached a fresh record high last week, rising $7 billion to $113 billion.
Mailing a Loss to Taxpayers
Despite projecting it would break even, the US Postal Service (USPS) lost $6.5 billion in the fiscal year 2023. The government’s money-losing venture proclaimed it was on the road to profitability, so the latest results are disappointing, particularly for taxpayers. The USPS reported a net income of $56 billion last year, thanks to 2022 legislation that injected a one-time $57 billion gain into the organization. The legislative effort adjusted how the post office accounted for its retiree health care expenses.
Postmaster General Louis DeJoy blamed inflation, noting that higher prices impacted operations. The most notable increase was the jump in printing prices, which primarily deterred junk mail marketers from sending flyers. In other words, because the cost of ink and paper has skyrocketed, companies are shipping out fewer materials, so households are not receiving 15% discount coupons on hair loss treatments.
“We are just in the early stages of one of the nation’s largest organizational transformations,” he said. “We are already providing more consistent, reliable, and timely delivery to America’s businesses and residences. We are also addressing near-term financial headwinds relative to inflation as we make strong progress in our long-term cost control and revenue generating strategies.”
The World Sells US Debt
Foreign investment into US government debt might have come at the worst time possible. The world reduced its holdings of America’s bonds by 1.25%, or $44.6 billion, in September, according to the Treasury Department’s monthly TIC report. To no one’s shock, China continued to diminish its exposure to US debt by $27.3 billion, or more than 3%, to $778.1 billion. Over the last 12 months, Beijing has decreased its Treasury holdings by 14%.
Japan, the world’s largest holder of US debt, trimmed its pot of American IOUs by $28.5 billion to $1.087 trillion. The United Kingdom and Canada also sold off approximately $30 billion and $15 billion, respectively. Other nations to adjust their holdings lower on a brisk September afternoon: Switzerland, Taiwan, India, Norway, South Korea, and Hong Kong. States to lend a helping hand to the US government during the back-to-school season: Luxembourg, Singapore, Saudi Arabia, and Germany.
This comes as domestic investor demand for US government debt has been abysmal over the past few months. The financial markets have signaled that they fear Washington’s fiscal picture will only deteriorate, a concern supported by Moody’s latest downgrade. Another bank failure, waning foreign interest in US bonds, and a ballooning budget deficit – is anything good happening in the economy?
Anyone know a safe place to put money?
Despite projecting it would break even,
<><>the US Postal Service (USPS) lost $6.5 billion in the fiscal year 2023.
<><>The government’s money-losing venture had actually proclaimed it was on the road to profitability
<><>The USPS reported a net income of $56 billion last year
<><>2022 legislation injected a “one-time $57 billion” into the USPS.
<><>The legislative effort adjusted how the USPS accounted for its retiree health care expenses.
Postmaster General Louis DeJoy blamed inflation, noting that higher prices impacted operations. The most notable increase was the jump in printing prices, which primarily deterred junk mail marketers from sending flyer.
USPS Employee Says He Earns Over $100K a Year Delivering Mail, Sparking Debate;
employee sparked a viral debate after claiming that postal employees earned $2,200 a week.
snip
So what are some profitable long-term jobs folks can get without a college degree? According to a TikToker: USPS.
SOURCE: INSTAGRAM | @MGATOLLARI VIA TIKTOK | @LUKASTHEGIANT
Nationwide, there have been reports of delivery delays due to increased consumer reliance on packages being shipped to their homes, which has resulted in a shortage of employees for the federal mail carrying service. So, Lukas’ claim about USPS’ hiring frenzy seems to be backed up by secondary reports.
He also claims that he earned $4,400 in two weeks and that there are plenty of mail carriers who earn around $100,000 per year with overtime hours. The best part is: you don’t need to go to college to be earning that kind of money.
It’s also alluring if sitting down in an office all day and working on spreadsheets, sending emails, and inputting data into Salesforce isn’t your idea of fun. Mail carriers get plenty of on-the-job exercise, and often work the same routes, giving folks the opportunity to become a part of the community they’re constantly delivering packages to.
For anyone who was incredulous about the amount of money Lukas says he earns, or if they wondered how much they’d have to put in in order to make $2,200 a week, he provided screenshots of his earning sheet in his TikTok video
“Somebody said prove it on one of my checks, so,” Lukas then shows a green screen of his check, “Here’s one of my last checks. As you can see the overtime hours, plus my normal pay, all equals up to 4,423 dollars, and that’s for two weeks of work.”
We need help and the post office pays well. Granted I’ve only been in here for you know less than ten years, but, the post office pays well and we’re hiring, we need help desperately.”
According to Lukas’ sheet, he clocked in an additional eleven and a half hours over the standard 40 full-time employees are expected to put in.
The TikToker concluded by saying, “So, the money’s out there. We just need people to come in and help spread it around.”
Responses to Lukas’ video were varied. Some folks called working for the post office “recession proof” and glowingly spoke about their time employed there.
snip
Affirmative.
Sam Bankman-Fried can get you into crypto. / just kidding
“Citizens Bank joined Silicon Valley Bank, Signature Bank, First Republic Bank, and Heartland Tri-State Bank on the list of failures.”
In another life, I analyzed banks and occasionally talked to finance officers. They had little sympathy for failed institutions, because these people had failed to listened to the warnings of their finance officers who watched balance sheets and looked at interest rate exposures.
I could speculate credit unions might offer some protection because have they different regulations about acceptable loans and investments. Those including the word “community” in their title can except just about anyone.
The grand ol’ USPS has never reported as ‘in the black’, since beforeBush 2.
A bank is fine. Don’t listen to scaremongers. I made good money off banks that were going broke during the Neil Bush’s S+L Escapade. The ones going broke were paying over 9% on MMFs until the FEDs closed them. The sign would change in a day and the bank was right back in business, paying much lower rates. I’d transfer the money to another failing S+L paying 9+%.
In my No 8 I mean to write “A bank is fine for up to $250k per account.”
Do you know if FDIC-insures community credit union deposits?
LOL - Very funny Red...
Credit union deposits are insured by the National Credit Union Administration, similar in structure to the FDIC, but for credit unions.
That would have taken serious courage back then... I’ll bet you buy into bad markets too - riding markets up...
How NCUA Insurance Works
https://www.nerdwallet.com/article/banking/ncua-insurance-keeps-credit-union-deposits-safe
Of course they call it a bank failure but it’s really another taxpayer bailout. We need real capitalism with real failures
Thanks Mike...
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