Realtors and mortgage lenders are kicking rocks looking for new customers after the Feds doubled interest rates. And they didn’t slowly work the rise in. No sir. They went with a quick wham bam thank you, ma’am. Real estate-related service companies, such as title firms, have already sent employees packing as they have little choice but to whittle down staff as the housing market plummets.
In their failed efforts at throwing a lifeline to the nation’s deflated economy, the Feds tossed a lead weight at inflation. With the taste of working America’s blood still fresh in their mouths, they aren’t done feasting yet. More rounds of teeth-sinking agony are on the way.
As lending rates continue to mercilessly soar, business activities in all areas have once again slowed to a crawl, igniting new fears of slipping into another recession worse than the one the nation just recovered from two years ago.
Since nearly every business in the nation operates on some form of credit, thunder clouds are brewing. Executive director of the International Association of Credit Portfolio Managers, Som-Lok Leung, said in no uncertain terms, “People are getting ready for the storm.”
Leung’s team conducted a survey with a number of banks and not one of them isn’t shaking with fear over the impending number of corporate defaults they’re going to have to swallow. Out-of-business signs will be selling at a premium.
Not even considering America’s heartbeat of small to moderately sized businesses, more than three million employees are at risk of receiving a pink slip. In the vicinity of 1,300 large employers have openly admitted to already balancing on the default line. One or two more shoves by the Feds and its lights out. Go home, everyone.
The head of credit strategy for Swiss Bank UBS, Matt Mish, said with an exasperated sigh, “The higher the Fed goes, the closer we get to a severe credit cycle.”
Tech companies in particular rely on a steady flow of cash to fund new projects and such, so they generally maintain open lines of credit that don’t grow any mold. Since this is a well-known industry-wide practice, their stockholders are cleaning out their portfolios and seeking safer investments. Those stocks have already dropped to a never before seen low, and as such, lenders are backing off.
It only makes sense that as mortgage rates rise, builders quit building, and jobs are lost by construction crews, engineers, designers, heavy equipment operators, and even building supply employees as the rolling stone gathers more moss. Call it the domino effect.
Chief economist for big dog Fannie Mae, Doug Duncan, said when inflation hits 10 percent, which all indicators say it will, the average mortgage rate will jump to an unfathomable 6 percent. He said that the intense pain and suffering will be felt throughout the industry and far beyond.
New credit cards are being handed out with the largest increase in percentage points since 2011, shooting up an extra 1.3 points. This is keeping more consumers from “charging it” and waiting until they can dig up the cash, or not buying a particular product at all.
The entire idiotic scheme was to raise interest rates enough to pump more resources into the federal reserve which would n turn restore America’s fledging economy to its once glorious luster.
The decision was made by a bunch of Biden aristocrats who wash their steak and lobster down with hard-seltzer. They don’t pinch pennies at Piggly Wiggly to feed a family of five or wonder whose rear end they’re gonna pull the next electricity payment out of.
And they certainly don’t realize how making it even more expensive to live in a country bordering on recession is stabbing the knife deeper into the hearts of everyday Americans who are already struggling to get by.
More people will buy a $30 knockoff of something rather than a $300 original. If it’s a popular item it’ll easily outsell the original by 100 to 1, and in the long run, generate a much higher profit. It’s the volume principle and it’s based on how much the average consumer can afford, or is willing to spend.
The same principle could have easily been applied to interest rates, but instead, we’re all on the losing end because the Feds, with total disregard for America’s citizens crying in the wilderness, did the opposite. But dang…that economy sure is looking a whole lot better on paper.