Video: Caution not Complacency. Debt Crises, First Republic, Credit Crunch, Fed to 5.25%, QT, Down Earnings

  • Caution not Complacency.
  • Treasury Secretary Janet Yellen indicated the US Federal Government might be out of money by June 1 requiring extraordinary measures. This means not all expenses are paid unless Congress acts to increase the debt ceiling. The Debt Crises is a result of out of control spending by the Federal Government starting at the Great Financial Crises in 2008 and leaping further during COVID. Nearly $32 Trillion in US Federal debt, $35 Trillion in unfunded Medicare liability and $22 Trillion in unfunded Social Security liability. This is in comparison to total US Economy of $25 Trillion in 2022.
  • First Republic (FRC) seized by FDIC creating more panic in regional banks and accelerating the credit crunch that will push economy into a recession.
  • Fed Funds Rate to 5.25% at May Meeting. QT (Quantitative Tightening) is back after pause around Silicon Valley Bank (SVB) collapse.
  • Second quarter earnings will be down year over year significantly due to recession on top of a modest decline in first quarter earnings.