Welcome to one of the last days before the proverbial "shit storm" hits both Main Street and Wall Street. Lars Toomre's sense in the next thirty days is what many will feel that the proverbial economic train has flipped off the tracks as suggested by the image below.

There are a series of issues that are all likely to come to a head around the first of October. The UAW may well be out on strike against perhaps all three of the Big Three traditional automakers. There certainly appears to be no compromise ahead of a September 14th strike date.

Good morning on Jackson Hole Day! This image is from the last 2019 Jackson Hole Economic Symposium Lars Toomre attended in person... Lars will not be present this year at the 2023 Economic Symposium due to some personal issues. However, Lars has the unsettled feeling that this again is a Central Bank meeting occurring ahead of a major economic storm.

Lars Toomre is simply amazed by today's capital markets, particularly the American fixed-income markets. There is considerable talk about "buying duration" because real yields are now around two percent in the longer-duration sectors. As a member of the 1980s "Bond Vigilante" traders community, Lars simply replies when asked, "Are you nuts?"

The first two days in May have been spent in San Diego at the 2023 American Bankers Payments Forum. Hence, Lars was on the West Coast among commercial bankers the two days after the failure of First Republic, a west-coast-focused bank, that primarily failed due to its loan book of self-originated mortgages.

Jamie Diamond said yesterday that the banking crisis is largely over. There is absolutely no f**kin' way that statement is true. We are in the midst of a credit crisis largely caused by unrealized losses in the commercial banking sector.

The American population is finally awakening to the steep losses various institutions have suffered in the last year. We have seen bank runs that have quickly finished off three regional banks. We have seen the Swiss virtually force the demise of Credit Suisse into UBS (thereby keeping the Americans and British from unearthing and further revealing some of the dark secrets of the Swiss banking system).

The wheels have come off the American banking system due to the failure of Silicon Valley Bank. This is more significant than the bankruptcy of Lehman Brothers back in 2008.

Lars has previously worried about how liquidity was disappearing from various corners of the global Capital Markets (see 2022-12-07 WILT). This weekend it is the smaller banks being discussed and closely examined. Just wait a few days and weeks for the market discussions to turn to the smaller pension funds that reached for yield in 2018-2022!!

Lars Toomre now is virtually certain the American economy is tipping over into a deep recession. The key to how deep the 2023 recession will be has always been the mighty American consumer. Will the broad American population continue to spend in face of the COVID outbreak in the Far East, the steep rise in the US Treasury yield curve, the 2023-2024 European energy crisis in Europe, and …??

Things are going to get very rough over the next few days and weeks (and months). This article from today's New York Post speaks to the coming sh*t storm traveling across the flyover part of America will entail.

Over the horizon of the Hudson river (a reference to a famous New Yorker cartoon about a New York City resident's perspective of America from Ninth Avenue), temperatures in America's core are plunging [Due to global warming? Ha! The joke is on you deep-pocketed taxpayers.]

As some are aware, Lars Toomre is the Managing Principal of a FinTech “skunkworks” group that goes by the name BRC FinTech Corporation (“BRCF”). [Nota Bene: If one follows the URL links to www.brcfintech.com, Google and some other search engines report that the BRCF website is a security risk.

Many eyes are focused on Washington DC as the U.S. Senate and House of Representatives try to wrap up a "lame duck" session before recessing for the Christmas holidays. The Republican Party will be taking over the majority of the House of Representatives with the start of the 118th Congress on January 2nd, 2023.