Financial Head Fakes & Florida’s DEI Deception – Top 3 Takeaways – March 15th, 2023
- Head fake. Look, the second to last thing I want to do is to be an alarmist about what’s happening economically in the country right now. But the last thing I want to do is to see what’s happening, say nothing, and have you caught off guard and unaware until it’s too late. During and after the Great Recession brought about by the financial crisis, I routinely heard from and worked with listeners who were desperately attempting to afford to stay in their homes, find work and a path forward after having lost most of what they had. If I see the potential for a crisis, or at a minimum another recession, as I accurately predicted we’d enter to start the year last year; I’m going to error on the side of providing you with a heads up. As I mentioned on Monday, Here’s my question for all of us today. What are the odds with 40+ year high inflation, spiking consumer debt levels, barely affordable (or unaffordable) housing prices and rent rates, still rising interest rates which are now the highest since, you guessed it, 2008, and now the 16th largest bank in the country collapsing...that somehow or another this just all works out? I don’t know, which for me is the problem. But I do know history. This situation escalated quickly, and the question is what’s next? I wish I didn’t see what I currently see in the economy. But I do. Something I don’t see...elasticity in the economy to handle much more of this. And that’s the thing here. If all of the looming affordability issues, banking issues, etc. get better from here, the economy just might be alright. But the problem for me is that it all must work out from here. What happens if...
- There’s another shoe to drop? And I’m not throwing that out there as some theoretical question. Yesterday, one of the big three credit rating agencies, Moody’s, not only suggested its possible. They named seven potential shoes which could drop. Quoting Moody’s, We have changed to negative from stable our outlook on the US banking system to reflect the rapid deterioration in the operating environment following deposit runs at Silicon Valley Bank (SVB), Silvergate Bank, and Signature Bank (SNY) and the failures of SVB and SNY. Now, add that to the mix of what I already mentioned on Monday and how does that make you feel? The outlook of the entire US banking system is now negative as opposed to stable according to a big three credit rating agency... I could provide you with some financial analysis on that, but something tells me you don’t need it. And as for the seven shoes which could next drop? Moody’s identified First Republic, Intrust Financial, UMB, Zions Bancorp, Western Alliance and Comerica as banks under review for potential ratings downgrades. And as an aside to all of the bank specific news... Moody’s said they think the US will reenter a recession later this year. It’s just one of the big three, and the first of the big three, but they’re now seeing exactly what I was saying. Yesterday there was a relief rally in the financial markets. My intuition, in addition to my economic analysis, suggests it was a head fake. I would be preparing for further downside in the financial markets and the economy. I have.
- You down with DEI? Or perhaps do you feel it’s time to put an end to DEI? Of course, anyone who opposes diversity, equity and inclusion programs at taxpayer expense is automatically labeled a bigot, racist, homophobe, itaphobe (I made that one up because they made all of it up) etc. Thus, as the Florida Public Postsecondary Educational Institutions bill is being considered by the state legislature, which would end the recent rapid expansion of DEI departments at taxpayer expense at Florida’s colleges, the Republicans behind it have been called all of those things along with many four-letter words during an official hearing in which order had to be restored. The ignorant masses hear DEI and think who wouldn’t want that? But then there’s the real story. The date was July 9th, 2018. Any clue what that is? It’s the date the first public college in Florida, the University of Florida, added their first “Chief Diversity Officer” for the price tag of $280,000 per year. All that’s happened since is a proliferation of that Department, which now spends nearly $2 million per year running a department to counter the systemic racism in our society which doesn’t exist, along with the proliferation of related departments at colleges across our state. Now, at the time UF added the DEI program, greater than 57% of the student body were women and only 52% of the student body was white – at a time in which 71% of the state was white. So with a college far more diverse than the state’s population what was the need for this again? Oh right, virtue signaling and woke politics. So, if someone asks you if you’re down with DEI, feel free to tell them, no not I.