- Watch The JD Rucker Show every day to be truly informed.
Is another domino about to fall? Our system was greatly shaken when Silicon Valley Bank and Signature Bank suddenly collapsed, but we seem to have weathered that storm. But what will happen if an even larger bank goes under? As of March 31st, First Republic had approximately 290 billion dollars in assets, and that makes it much larger than Silicon Valley Bank was when it finally imploded.
A 30 billion dollar rescue plan that was hastily put together last month was supposed to stabilize First Republic, but that hasn’t worked.
On Tuesday, First Republic shares fell by about 50 percent after the public learned that “customers withdrew more than $100 billion during last month’s crisis”…
First Republic Bank’s shares plunged 50 percent after a ‘troubling’ earnings call where company executives refused to answer questions.
The stock dropped Tuesday after it emerged that customers withdrew more than $100 billion during last month’s crisis, with fears swirling that it could be the third bank to fail in quick succession after the collapse of Silicon Valley Bank and Signature Bank.
Unfortunately for First Republic, the carnage continued on Wednesday.
Shares of First Republic were down another 29.75 percent, and so far this year the stock price has fallen by a total of more than 95 percent.
Let me try to put this into perspective. On February 2nd, First Republic stock closed at $147.00. Today, it closed at $5.69. That is what a collapse looks like.
The reason why this is happening is because costumers have been pulling their money out of First Republic at a pace that is absolutely staggering. In fact, it is being reported that First Republic lost 40 percent of their total deposits in the first quarter alone…
This week’s drop for First Republic comes after the San Francisco-based lender late Monday said it lost roughly 40% of its deposits in the first quarter. First Republic was seen by customers and investors alike as a risky bank after the collapse last month of Silicon Valley Bank, which had a similar financial profile.
And if 11 of the largest banks in the country had not agreed to collectively deposit 30 billion dollars of their own money in First Republic last month, that figure would have been closer to 50 percent…
But those deposits include the $30 billion that 11 large banks deposited at the bank in March to prop it up and keep contagion from spreading.
Without this influx of $30 billion, deposits would have dropped by 50%. So this was really nip and tuck.
Unfortunately, that rescue plan was not nearly large enough, and so now First Republic plans to beg those banks for even more help…
The best hope for avoiding a collapse of ailing lender First Republic hinges on how persuasive one group of bankers can be with another group of bankers.
Advisors to First Republic will attempt to cajole the big U.S. banks who’ve already propped it up into doing one more favor, CNBC has learned.
The pitch will go something like this, according to bankers with knowledge of the situation: Purchase bonds from First Republic at above-market rates for a total loss of a few billion dollars – or face roughly $30 billion in Federal Deposit Insurance Corp. fees when First Republic fails.
Ouch.
I think that those large banks would be quite foolish to throw more good money into the First Republic black hole, but we shall see what happens.
In addition to pleading for assistance, First Republic also plans to lay off thousands of employees…
The bank says it plans to sell off unprofitable assets, including the low-interest mortgages that it provided to wealthy clients. It also announced plans to lay off up to a quarter of its workforce, which totaled about 7,200 employees at the end of 2022.
Will all of this be enough to turn First Republic around?
Of course not.
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As one expert explained, if First Republic still had any good options left “they would have pursued them already”…
Kathryn Judge, who works as an analyst at Columbia Law School, said that there is no easy solution for First Republic.
‘If there were attractive options, they would have pursued them already,’ she told the Times.
Meanwhile, the overall economy continues to deteriorate all around us.
On Wednesday, Amazon conducted layoffs in their cloud computing and human resources divisions. Sadly, these new job cuts are just the latest wave in “the largest layoffs in Amazon’s 29-year history”…
The layoffs are part of the previously announced job cuts that are expected to affect 9,000 employees. Last week, Amazon laid off some employees in its advertising unit, and it has let go of staffers in its video games and Twitch livestreaming units in recent weeks.
Amazon wrapped up a separate round of cuts earlier this year that affected approximately 18,000 employees. Combined with the cuts this month, it marks the largest layoffs in Amazon’s 29-year history.
Amazon is one of the wealthiest and most prosperous companies in the entire country.
If they have decided that it is necessary to conduct multiple mass layoffs because the economic outlook is so grim, what kind of signal does that send to everyone else?
In recent months, Google, Microsoft, Disney, Walmart and countless other large corporations have ruthlessly pruned their payrolls.
But don’t worry. Joe Biden says that the economy is going to be just fine. You believe him, don’t you?
Don’t let anyone fool you. The economic meltdown that we have been waiting for is here, and it is going to be incredibly painful.
Michael’s new book entitled “End Times” is now available in paperback and for the Kindle on Amazon.com, and you can check out his new Substack newsletter right here.
Article cross-posted from The Economic Collapse Blog.
Five Things New “Preppers” Forget When Getting Ready for Bad Times Ahead
The preparedness community is growing faster than it has in decades. Even during peak times such as Y2K, the economic downturn of 2008, and Covid, the vast majority of Americans made sure they had plenty of toilet paper but didn’t really stockpile anything else.
Things have changed. There’s a growing anxiety in this presidential election year that has prompted more Americans to get prepared for crazy events in the future. Some of it is being driven by fearmongers, but there are valid concerns with the economy, food supply, pharmaceuticals, the energy grid, and mass rioting that have pushed average Americans into “prepper” mode.
There are degrees of preparedness. One does not have to be a full-blown “doomsday prepper” living off-grid in a secure Montana bunker in order to be ahead of the curve. In many ways, preparedness isn’t about being able to perfectly handle every conceivable situation. It’s about being less dependent on government for as long as possible. Those who have proper “preps” will not be waiting for FEMA to distribute emergency supplies to the desperate masses.
Below are five things people new to preparedness (and sometimes even those with experience) often forget as they get ready. All five are common sense notions that do not rely on doomsday in order to be useful. It may be nice to own a tank during the apocalypse but there’s not much you can do with it until things get really crazy. The recommendations below can have places in the lives of average Americans whether doomsday comes or not.
Note: The information provided by this publication or any related communications is for informational purposes only and should not be considered as financial advice. We do not provide personalized investment, financial, or legal advice.
Secured Wealth
Whether in the bank or held in a retirement account, most Americans feel that their life’s savings is relatively secure. At least they did until the last couple of years when de-banking, geopolitical turmoil, and the threat of Central Bank Digital Currencies reared their ugly heads.
It behooves Americans to diversify their holdings. If there’s a triggering event or series of events that cripple the financial systems or devalue the U.S. Dollar, wealth can evaporate quickly. To hedge against potential turmoil, many Americans are looking in two directions: Crypto and physical precious metals.
There are huge advantages to cryptocurrencies, but there are also inherent risks because “virtual” money can become challenging to spend. Add in the push by central banks and governments to regulate or even replace cryptocurrencies with their own versions they control and the risks amplify. There’s nothing wrong with cryptocurrencies today but things can change rapidly.
As for physical precious metals, many Americans pay cash to keep plenty on hand in their safe. Rolling over or transferring retirement accounts into self-directed IRAs is also a popular option, but there are caveats. It can often take weeks or even months to get the gold and silver shipped if the owner chooses to close their account. This is why Genesis Gold Group stands out. Their relationship with the depositories allows for rapid closure and shipping, often in less than 10 days from the time the account holder makes their move. This can come in handy if things appear to be heading south.
Lots of Potable Water
One of the biggest shocks that hit new preppers is understanding how much potable water they need in order to survive. Experts claim one gallon of water per person per day is necessary. Even the most conservative estimates put it at over half-a-gallon. That means that for a family of four, they’ll need around 120 gallons of water to survive for a month if the taps turn off and the stores empty out.
Being near a fresh water source, whether it’s a river, lake, or well, is a best practice among experienced preppers. It’s necessary to have a water filter as well, even if the taps are still working. Many refuse to drink tap water even when there is no emergency. Berkey was our previous favorite but they’re under attack from regulators so the Alexapure systems are solid replacements.
For those in the city or away from fresh water sources, storage is the best option. This can be challenging because proper water storage containers take up a lot of room and are difficult to move if the need arises. For “bug in” situations, having a larger container that stores hundreds or even thousands of gallons is better than stacking 1-5 gallon containers. Unfortunately, they won’t be easily transportable and they can cost a lot to install.
Water is critical. If chaos erupts and water infrastructure is compromised, having a large backup supply can be lifesaving.
Pharmaceuticals and Medical Supplies
There are multiple threats specific to the medical supply chain. With Chinese and Indian imports accounting for over 90% of pharmaceutical ingredients in the United States, deteriorating relations could make it impossible to get the medicines and antibiotics many of us need.
Stocking up many prescription medications can be hard. Doctors generally do not like to prescribe large batches of drugs even if they are shelf-stable for extended periods of time. It is a best practice to ask your doctor if they can prescribe a larger amount. Today, some are sympathetic to concerns about pharmacies running out or becoming inaccessible. Tell them your concerns. It’s worth a shot. The worst they can do is say no.
If your doctor is unwilling to help you stock up on medicines, then Jase Medical is a good alternative. Through telehealth, they can prescribe daily meds or antibiotics that are shipped to your door. As proponents of medical freedom, they empathize with those who want to have enough medical supplies on hand in case things go wrong.
Energy Sources
The vast majority of Americans are locked into the grid. This has proven to be a massive liability when the grid goes down. Unfortunately, there are no inexpensive remedies.
Those living off-grid had to either spend a lot of money or effort (or both) to get their alternative energy sources like solar set up. For those who do not want to go so far, it’s still a best practice to have backup power sources. Diesel generators and portable solar panels are the two most popular, and while they’re not inexpensive they are not out of reach of most Americans who are concerned about being without power for extended periods of time.
Natural gas is another necessity for many, but that’s far more challenging to replace. Having alternatives for heating and cooking that can be powered if gas and electric grids go down is important. Have a backup for items that require power such as manual can openers. If you’re stuck eating canned foods for a while and all you have is an electric opener, you’ll have problems.
Don’t Forget the Protein
When most think about “prepping,” they think about their food supply. More Americans are turning to gardening and homesteading as ways to produce their own food. Others are working with local farmers and ranchers to purchase directly from the sources. This is a good idea whether doomsday comes or not, but it’s particularly important if the food supply chain is broken.
Most grocery stores have about one to two weeks worth of food, as do most American households. Grocers rely heavily on truckers to receive their ongoing shipments. In a crisis, the current process can fail. It behooves Americans for multiple reasons to localize their food purchases as much as possible.
Long-term storage is another popular option. Canned foods, MREs, and freeze dried meals are selling out quickly even as prices rise. But one component that is conspicuously absent in shelf-stable food is high-quality protein. Most survival food companies offer low quality “protein buckets” or cans of meat, but they are often barely edible.
Prepper All-Naturals offers premium cuts of steak that have been cooked sous vide and freeze dried to give them a 25-year shelf life. They offer Ribeye, NY Strip, and Tenderloin among others.
Having buckets of beans and rice is a good start, but keeping a solid supply of high-quality protein isn’t just healthier. It can help a family maintain normalcy through crises.
Prepare Without Fear
With all the challenges we face as Americans today, it can be emotionally draining. Citizens are scared and there’s nothing irrational about their concerns. Being prepared and making lifestyle changes to secure necessities can go a long way toward overcoming the fears that plague us. We should hope and pray for the best but prepare for the worst. And if the worst does come, then knowing we did what we could to be ready for it will help us face those challenges with confidence.
