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Consumer Lending Is Deteriorating Banking System Stability

By Avi Gilburt

Sep 1, 2023 - 12:16 PM EDT

Here's our latest public article in our series about bank safety, published today on Seeking Alpha, titled, "Consumer Lending Is Deteriorating Banking System Stability."

As part of our ongoing series of articles on bank stability, and at the request of many of our clients at Saferbankingresearch.com, we wanted to address the major risks we foresee for bank stability in the coming years.

But before we begin, I want to take this opportunity to remind you that we have reviewed many larger banks in our public articles. But I must warn you: The substance of that analysis is not looking too good for the future of the larger banks in the United States, details for which are here.

Moreover, if you believe that the banking issues have been addressed, I'm sorry to inform you that you likely only saw the tip of the iceberg. We were able to identify the exact reasons in our public article which caused SVB (OTCPK:SIVBQ) to fail well before anyone even considered these issues. And I can assure you that they have not been resolved. It's now only a matter of time.

In our previous Our Banks Are Sick And We Are Watching A Slow-Motion Train Wreck on bank stability, we discussed the recent report from Moody’s on U.S. banks, which came out with a significant time lag relative to our analysis.

If you have been following our work on banks, you would know that we have been discussing the issues to which Moody's was recently referring for the past 18 months. We also noted that Moody’s, as well as other rating agencies and research departments of investment banks, have mostly ignored several major issues that were revealed by the U.S. banks’ 1H23 results. In our view, each of these issues is a major risk for bank stability, and each of them is worth a separate article. This is the first in this series of articles within which we will discuss consumer lending.

Tucker Carlson Says Trump’s Opponents Are ‘Speeding Toward Assassination’

HAROLD HUTCHISON
REPORTER
August 30, 2023
4:15 PM ET

Former Fox News host Tucker Carlson warned that opponents of former President Donald Trump could be “speeding towards assassination” during a Wednesday podcast interview.

Trump turned himself in at the Fulton County Jail to be booked on Aug. 24 after a grand jury handed down indictments on Aug. 14 charging Trump and other associates with racketeering in relation to his efforts to contest the results of the 2020 election in the state. Carlson, a co-founder of the Daily Caller News Foundation, said that the indictments were not diminishing Trump’s support and alleged that Trump’s opponents would resort to something more drastic. (RELATED: Dershowitz Says Fani Willis Wants ‘A Quick Conviction With A Biased Jury’)

“If you begin with criticism, then you go to protest, then you go to impeachment, now you go to indictment and none of them work, what’s next? I mean, you know, graph it out, man,” Carlson told podcaster Adam Carolla. “We’re speeding toward assassination, obviously, and no one will say that, but I don’t know how you can’t reach that conclusion. They have decided, permanent Washington, both parties, have decided that there’s something about Trump that’s so threatening to them that they just can’t have him.”

Guest from Tx wrote: Mon Aug 14, 2023 2:57 pm

Guest wrote: Sun Aug 06, 2023 12:50 am Urban violence is really bad now. I had to stop because of a multi car accident on the highway almost 2 months ago. A group of white policemen overseeing the accident site told me to get in and out of a city that I had to visit on business in June as fast I could.

"We aren't allowed to protect you anymore."

I'm ex-military (and look it), so they (all or mostly ex-military) felt comfortable confiding in me.

Let's be honest with ourselves: we're in deep trouble, and I don't see anyone rising up to deal with the situation.

Not surprised.

Ex-military will form into units, but only like individuals. Civil war is in the offing now.

Guest wrote: Mon Sep 04, 2023 2:53 am

Guest from Tx wrote: Mon Aug 14, 2023 2:57 pm

Guest wrote: Sun Aug 06, 2023 12:50 am Urban violence is really bad now. I had to stop because of a multi car accident on the highway almost 2 months ago. A group of white policemen overseeing the accident site told me to get in and out of a city that I had to visit on business in June as fast I could.

"We aren't allowed to protect you anymore."

I'm ex-military (and look it), so they (all or mostly ex-military) felt comfortable confiding in me.

Let's be honest with ourselves: we're in deep trouble, and I don't see anyone rising up to deal with the situation.

Not surprised.

Ex-military will form into units, but only like individuals. Civil war is in the offing now.

It appears so.

aeden wrote: Mon Sep 04, 2023 2:54 pm Widdowson's predictions from the H notes should be mandatory reading.

DA1 A dark age is an extended period of
significantly reduced integration,
organisation and cohesion.
(From an individual’s perspective, social
bonds may become more intense in a dark age.
However, overall cohesion is reduced because the
social network extends much less far. See Figure
15-1.)
DA1 begs the question of what counts as
significant and what counts as extended. To begin
with, there must be an absolute reduction of
integration, organisation and cohesion,
and not merely a decline relative to neighbouring
societies. The retrenchment must also be large
enough to last at least several decades. Finally,
integration, organisation, and cohesion
must all be affected simultaneously, which is not
necessarily true of depressions (primarily loss of
organisation) or civil wars (primarily loss of
integration).
There is actually no sharp line dividing dark
ages from more modest downturns in a society’s
fortunes. Political, economic and social
relationships are being formed and broken off all
the time. Hence, integration, organisation
and cohesion are in continual ferment (K1) and
fluctuation in the strength of these factors is
normal. Such fluctuations vary in size from very
small to very large, and there is no particular size at
which a fluctuation becomes abnormal. Dark ages
are simply at one end of a continuum that includes
more minor setbacks. Civil wars and economic
depressions may be thought of as mini dark ages.
Alternatively, dark ages may be thought of as
particularly severe depressions.
Political, economic and social
relationships can form and break up with surprising
speed. For instance, it took only a few years for the
once-thriving British motorcycle industry to
disappear and go to Japan.1469 Similarly, it took
only decades for Japan to quadruple its share of
world output1470, and only a century for Muslim
armies to create an empire stretching from the
Atlantic to the borders of China.1471
One of the reasons why change is rapid is that
perceptions and reality follow separate dynamics.
They influence each other only loosely and in
general they tend to become separated. When the
illusion becomes apparent, perceptions may
collapse towards the reality almost instantaneously.
They may even overshoot the real value. The
society will transform in short order to far lower
levels of integration, organisation and
cohesion. Changes in perceptions can also initiate
or exacerbate movement in the real situation, via
the principle of reflexivity (TC11). Hence,
people’s perceptions tend to exaggerate even
relatively smooth changes in the reality into abrupt
movements.
Another reason for change to be rapid is that it
involves a movement between ensembles, with
the in-between states being highly unstable. If the
underlying logic changes significantly and a
society is dislodged from its existing ensemble, it
will be strongly propelled towards a new
configuration. At the end of the first world war,
civil government in Istanbul collapsed, thereby
removing a crucial component of the city’s
institutional ensemble. Consequently, in just three
weeks, a truly terrible situation emerged. Bodies
and rubbish accumulated in the streets, and there
was widespread fighting, looting, and famine.
When allied troops arrived to restore order, the
city’s population was well on the way to a friendstyle
ensemble, with dispersed family-level
groups foraging for themselves.1472
In the 1960s, South Korea was still largely a
peasant society, with no significant mineral wealth
or hydroelectric potential, and was known for its
‘immemorial stagnation’. A lack of education and
aspiration, combined with rapid population growth,
seemed to imply a grim prognosis for many
observers.1473 Yet South Korea went on to become
one of the tiger economies of east Asia, achieving
in a few decades an economy ten times the size of
the North (for which some had detected much
rosier prospects). One should not write off even the
poorest nations. Their backwardness is of a
contingent nature. If conditions change and so the
ensemble changes (in South Korea, geopolitical
considerations led to substantial American
investment), the world’s hardest cases of today
could become its greatest success stories tomorrow.
At any rate, the entry into a dark age tends to
be precipitate and unexpected. Its arrival might be
clear to those who have gained some insight into
the reality. However, most actors, who rely upon
perceptions, remain unaware of growing danger
and the need for a correction. When the
discrepancy is finally revealed, there is panic and a
catastrophic loss of confidence. The political
authority loses legitimacy, its bluff is called, and it
falls apart. Economic organisation unravels in
a swift downward spiral. People discover that their
interests have diverged and they retreat from each
other in an act of discohesion.
The theoretical biologist Stuart Kauffman
suggests that it is a generic property of complex
systems to be sensitive to failure from tiny causes,
so that they always teeter on the brink of collapse.
As examples, he cites the Challenger disaster and
power failures in the National Grid.1474 Teetering
on the brink probably overstates the situation, at
least as far as social systems are concerned. The
system is metastable, which means that, most of the
time, tiny disturbances are absorbed. Only rarely
can they bring down the system or substantial parts
of it. Nevertheless, in the long run, even the rarest
events may occur.
The fact that tiny disturbances are usually
absorbed gives people a false sense of security.
That is to say, the quasi-stability of the system
encourages the belief that it can take anything. Yet
this belief means that the system is eventually
driven to the point of failure – by overtaxation, for
example, or by environmental insult.1475 A system
that seems to be working well can therefore find
itself going over a precipice with very little
warning.

Cool Breeze wrote: Sat Sep 02, 2023 9:43 am

John wrote: Fri Sep 01, 2023 4:55 pm

Cool Breeze wrote: Fri Sep 01, 2023 4:23 pm you can't handle being wrong. Ego is a big thing for most.

You're hilarious

What would make you wrong about BTC, John?

Higgenbotham wrote: Mon Sep 04, 2023 8:10 pm

At any rate, the entry into a dark age tends to
be precipitate and unexpected. Its arrival might be
clear to those who have gained some insight into
the reality. However, most actors, who rely upon
perceptions, remain unaware of growing danger
and the need for a correction. When the
discrepancy is finally revealed, there is panic and a
catastrophic loss of confidence. The political
authority loses legitimacy, its bluff is called, and it
falls apart. Economic organisation unravels in
a swift downward spiral. People discover that their
interests have diverged and they retreat from each
other in an act of discohesion.

The Phoenix Principle and the Coming Dark Age by Marc Widdowson, 2001
pp.140-141

After Booking, Mugshot, Trump Top Choice for Most Republican Voters: Poll

Four criminal indictments and a viral mugshot later, former president and current GOP frontrunner for the seat in 2024 Donald Trump has only risen in the polls, garnering support as more Americans come to view the prosecutions as partisan and political.

A Wall Street Journal poll conducted Aug. 24 to Aug. 30 and published Sept. 2 found that 59 percent of GOP primary voters say he is their top choice.

"The new survey finds that what was once a two-man race for the nomination has collapsed into a lopsided contest," with President Trump widely taking the lead, the publication found.