Contrary to what executives say, the economic situation in the United States continues to deteriorate. “More bank mergers may be required in the future,” US Treasury Secretary Janet Yellen told major bank executives about failing banks.
After the banks went bankrupt, 3/4 of the money distributed to save the bankrupt banks was taken back.
You can check the chart here.
Deposit Runaways
The American people do not trust that bankrupt banks will survive or that another bank will not fail. The proof of this is the continuous runaway of deposits in banks. People continue to withdraw their assets from banks.
You can check the chart here.
Recession Probability
According to a statistic released by the Federal Reserve Bank of New York in May, the probability of the United States economy going into recession is 68,2214%. In the great real estate crisis of 2008, this rate was ~41%, and in the 2020 corona crisis, this ratio was ~38%.
You can check the chart here.
In the document published by Haver Analytics, which includes the system used by the FED to calculate the probability of recession, this rate is 99.3%.
Loan Rejections and Loan Requests
In terms of loan refusals, the lowest value since 2009 was reached with 47.9. Although the managers of the American economy say that there is no problem, they continue to reject the incoming loan requests.
You can check the chart here.
On the contrary, there is no demand for loans from medium and large-scale banks. The data below shows the loan requests from medium and large-scale banks. Today’s current value is worse than the 2020 corona crisis value, and it is very close to the crisis values in 2001 and 2008. Banks of this scale are experiencing major problems after the crisis and demand a lot of loans. As can be seen in the graph, after this increase in demand, the data starts to move upwards.
You can check the chart here.
The FED administration refuses even small loan requests, and continues to tighten the terms of lending. The current value in tightening credit standards is 46.7. This value reached an average of 60 in the 2001 crisis, and an average of 70 in the 2008 and 2020 crises.
You can check the chart here.
The same is true for the European region, although not as bad as the United States. In the graphs below, we can see the loan demands in Europe and the tightening in lending.
In summary, the FED and the European Central Bank no longer want to lend and avoid giving money easily. Because they are also aware that the economic situation is bad, but they hide it with false data and different explanations, and they keep stalling. By looking at these data, we can understand that the global economic trend will not improve in a short time. It will be beneficial for all investors to plan by considering all these situations.
