by Michael

This recent economic downturn is beginning to bite, and we’re beginning to see signs of severe pain all around the nation.  In actual fact, unless you might be independently wealthy, you might be likely feeling pain too.  The associated fee of living has risen to extreme oppressive levels, and this has happened at a time when near two-thirds of the country was already living paycheck to paycheck.  Because of this, many Americans are having their funds stretched to the breaking point, and thousands and thousands of them are reaching out for help.  For instance, on Saturday morning the road of individuals waiting for assistance at certainly one of Boston’s largest food pantries “stretched the length of two football fields”…

The road outside Boston’s American Red Cross Food Pantry on a recent Saturday morning stretched the length of two football fields.

The number of individuals filing into the red-brick industrial-zone warehouse on some days now exceeds the worst periods of the pandemic economic crisis and in April it had the second highest monthly traffic because it opened in 1982, in accordance with David Andre, the director.

In recent months, food stamp advantages have been reduced to pre-pandemic levels, and that has made things even tougher for those near the underside of the economic food chain.

But it surely isn’t just those which might be unemployed or which might be on government assistance which might be hurting.  At one food bank in Colorado, “military families, teachers, nurses and even dual-income couples” at the moment are coming for help…

Nathan Springer, a retired army colonel who’s president and chief executive officer of the Colorado Springs-based Care and Share Food Bank, said his organization is seeing more requests for groceries from military families, teachers, nurses and even dual-income couples following the cut in assistance.

“We’ve seen young full-time employees who’re for the primary time facing hard decisions: Are we going to purchase food or pay our utility bills?” Springer said.

We witnessed this type of suffering in 2008 and 2009, but at the moment food prices were no less than relatively stable.

Here in 2023, food prices have already surged to absurd levels, and so they proceed to go higher at a really alarming pace…

In the primary quarter alone, global foodmaker Nestlé SA reported raising prices in North America 12.4% in comparison with last 12 months. Unilever Plc raised prices 13.4% globally in its food division.

Regardless of what the Federal Reserve does, I consider that food prices are going to maintain rising.

And that just isn’t going to be good for any of us.

In a recent tweet, I feel that Mike Cernovich summed up what plenty of Americans are feeling right away…

I’ll offer you example. I took my kids to a causal restaurant. Ordered meals. Saw the quantity due. And was PISSED. I can afford it that’s not the problem. It’s like we’re being bled all over the place. If you happen to’re struggling, this sentiment is amplified by helplessness, which ends up in rage.

Are you able to discover with that?

I sure can.

I remember the times when you could possibly exit to eat and feed a whole family for just ten bucks.

Pointless to say, those days are long gone.

The times are also gone when the typical family could afford to buy a brand new vehicle every few years.

At this point, thousands and thousands upon thousands and thousands of us keep patching up our old vehicles because recent vehicles have grow to be just too expensive…

Juan David Ramirez knows that his 2012 Nissan Juke SL is on its last legs. But buying a brand new automobile within the Orlando area today reminds him of automobile buying in his home country in Colombia, where only the rich can afford recent cars.

Ramirez, 33, and his wife Angelica Castro-Calle actually need a brand new, small SUV with a bit space for camping and paddleboarding gear. But despite good jobs in finance and business contracting, the couple’s monthly loan payment would run around $700 for the $35,000 models they’re taking a look at, before dealer markups.

So that they plan to patch up the Nissan, which is paid off.

Actually, plenty of people would argue that if he has a vehicle that’s from 2012 he continues to be living the high life, because many Americans are driving around in vehicles which might be far older than that.

After all there have been plenty of very unwise those who went out and purchased vehicles that they may not afford over the past couple of years, and now subprime auto loan delinquencies are spiking…

The duo pointed to 60-plus day delinquencies hitting 9% in March for borrowers with credit scores of 550 and below when taking a look at subprime auto loans packaged into asset-backed securities, or bond deals. That’s up from a rate of about 7% in March 2019 before the COVID crisis.

In addition they studied evaporated savings of the bottom income borrowers since mid-2021 peak levels, and anticipate a greater share of all U.S. consumers will “run out of excess savings,” within the months to return, leaving them vulnerable to missing payments and delinquencies.

Perhaps more alarming, the 1-month constant default rate for subprime auto bonds, or asset-backed securities, already was nearing 12% (see chart), on a path toward the 16% peak seen within the wake of the worldwide financial crisis.

Identical to in 2008 and 2009, we’re going to see an enormous wave of mortgage delinquencies, auto loan delinquencies, and bank card delinquencies within the months ahead.

Meanwhile, banks are stepping into financial trouble all around the nation and in order that they are beginning to get really tight with their money.

In actual fact, the Fed’s most up-to-date quarterly Senior Loan Officer Opinion survey shows that a credit crunch for businesses is already here…

Forty-two percent of banks said they somewhat tightened lending standards for big and midsize corporations over the past three months, in accordance with the Fed’s Senior Loan Officer Opinion Survey. And 45% said they somewhat toughened lending criteria for small firms.

And lending standards have also been rapidly getting tighter for consumers…

Banks also toughened lending standards for consumer, auto and bank card loans, in accordance with the survey. Bank card balances have reached a record level and delinquency rates have edged higher as low- and middle-income households grapple with high inflation.

As I even have been warning my readers, lending standards have only just begun to tighten.

The newest SLOOS report confirms this.  Based on the report, U.S. banks are “expecting to tighten standards across all loan categories” throughout the remaining of this 12 months…

“Banks reported expecting to tighten standards across all loan categories,” the report said. “Banks most steadily cited an expected deterioration within the credit quality of their loan portfolios and in customers’ collateral values, a discount in risk tolerance, and concerns about bank funding costs, bank liquidity position, and deposit outflows as reasons for expecting to tighten lending standards over the remaining of 2023.”

What does this mean?

It implies that things are going to get substantially worse than they’re right away.

So the lines on the food banks are going to get even longer.

And quite a bit more persons are going to lose their jobs.

And more businesses are going to fail.

If you happen to remember what 2008 and 2009 were like, that offers you some idea.

We’ve got a protracted, hard road ahead of us, and our leaders appear to have absolutely no idea how one can get us out of this mess.

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