More banks are on the rocks, is Real Estate the next domino to fall?

Deutsche Bank shares slide on risk of being the next Credit Suisse.

Trouble brews in Europe again, Credit Default Swaps (CDS) for Deutsche spiked another 50% over the last few days. The massive increase in the cost to insure against a bank collapse (ala SVB, Silvergate, CS) is far from a good sign for the German banking giant.

Cramer, bless his soul, gave Deutsche the kiss of death on air.

Charles Schwab ($SCHW) got the CDS spike of doom yesterday as well.

Their CEO has stated that they could cover 100% of deposits “without having to sell a single security.” That’s a pretty massive claim, and one that investors seemed to respond to as their share price remained mostly flat during trading on Friday (everyone knows the opening candle doesn’t count, right?)

Investors look to Real Estate as the next potential crisis.

Yep, we’re revisiting Real Estate as the next phase of this shitstorm dawns. Lets try and contain the 2008 Flashbacks, yeah?

Long story short, markets are cyclical and housing/real estate markets are no exception. Data, as shown in the above video, is beginning to look a lot like 2008 in terms of housing prices. However, there is no sub-prime mortgages to crash the market and banks like there was in 2008.

Wait, banks are crashing all on their own this time?

Shit.

The data presented is for residential housing, but the current banking situation may actually be impacting Commercial Real Estate more directly, according to the New York Times. I’ll leave it up to you on how to get around the paywall, just remember, piracy is bad, mmmkay?

The elevator pitch summary of the situation is that Commercial Real Estate was already in a slowdown likely due to the aftereffects of Work-From-Home movements and preferences arising from Covid. Coupled with layoffs from big tech companies, we’re beginning to hear stories like Meta and Salesforce wholly removing office presences from cities like Chicago.

This article highlights the importance of Midsize and Regional banks, exactly the class of banks currently under stress, to the construction economy. If the trend continues and we see more failures of regional banking institutions, the effects on construction could be catastrophic. First Republic Bank being on the rocks has already pushed the Bay Area construction industry into confusion. This is not a trend we want to see continuing around the country.

Rapid fire time.

Guess the TikTok ban isn’t about TikTok or “National Security.” Regardless of your stance on the idea of banning the Meta competitor, this is the definition of “ripe for abuse.”

I guess the Edgar Allen Poe quote applies now more than ever, “Believe nothing you hear, and only one half that you see.”

Lets top it all off with a roundup, yeah?

Let this be your weekly reminder to never trust the Government, or the Corporate Media.

Thats gonna wrap it up for this edition!

Keep an eye on Garen’s Youtube channel, we’ve got some very exciting developments coming this week!

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