There is a strong divergence within the May jobs report as released by the Bureau of Labor and Statistics (BLS) [DATA HERE].  Payrolls increased 339,000 in May from April and previous months were revised up by 93,000. That is good news.  However, the household survey, from which the unemployment rate is derived, showed employment down 310,000 jobs and the unemployment rate increased to 3.7%.

One of the aspects driving higher payroll starts are the number of people taking on additional part-time jobs.  This aspect is noted in a decline for the number of hours in the average workweek. As more PT jobs are added, the number of hours in a workweek declines. As noted in the BLS data, “the average workweek for all employees on private nonfarm payrolls edged down by 0.1 hour to 34.3 hours in May.”

There were 161.0 million people working in April.  There are 160.7 million people working in May.

There were 5.7 million people unemployed in April.  There are 6.1 million unemployed people in May.

The unemployment rate increased from 3.4% to 3.7%.

There are 310,000 fewer people working in May than were working in April.  However, payrolls increased by 339,000 over the same timeframe. See graph above for where those jobs were gained.

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People have been gobsmacked by a seemingly 180° change in the ideological outlook of Twitter owner Elon Musk.  The hiring of Diversity Equity and Inclusion (DEI) czar Linda Yaccarino as CEO caught everyone by surprise. {link} A Day later he conceded a free speech position to the government of Turkey, agreeing to silence the political opposition of Recep Erdogan. {link}  Perhaps some clarity can be found in a recent Bloomberg article:

Pay attention to DATES:

(Bloomberg) Elon Musk was issued a subpoena by the US Virgin Islands in its lawsuit accusing JPMorgan Chase & Co. of knowingly benefiting from Jeffrey Epstein’s sex-trafficking.

The US territory said in court papers it had reason to believe Epstein may have referred or attempted to refer Musk to JPMorgan as a client. Several other billionaires, including the Google co-founders Larry Page and Sergey Brin, have also been issued subpoenas by the USVI.

The USVI on Monday asked the judge overseeing the case to authorize alternative means of serving the April 28 subpoena on Musk. The territory said it made good-faith efforts to obtain an address for Musk, including hiring private investigators, but had been unable to locate one. 

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According to those who relish the Cloward-Piven strategy, things are proceeding swimmingly.

…”As long as the decisionmakers continue doing the things that are creating the crisis, the crisis will continue.”

Federal Reserve Chairman Jerome Powell said yesterday the “U.S banking system is sound and resilient,” insert uncomfortable snicker here.  However, uncertainty is continuing to pummel the banking industry, despite assurances from the Fed, Treasury, FDIC financial regulators and bankers such as Jamie Dimon who are all saying there is no crisis in the banking industry.

If you want to know the big picture source of the uncertainty, it’s the great pretending.  The average person can sense something is wrong, and the person who pays attention has the experience of institutional lying over the past several years.  The last ten years of lying and pretending has created the biggest collapse in institutional trust in U.S. history.

Russians interfered with the election – trust us. Stick this needle in your arm, it’s safe – trust us.  The FBI are the good guys – trust us. Biden won more votes – trust us. This inflation is merely transitory – trust us.

See the problem?

So, when the same voices shout, “the banking industry is sound, trust us,” well,… yeah, that suspicious cat sense that’s on high alert isn’t buying the chorus.

Reasonably intelligent people who accept things as they are, not as they would have us pretend them to be, can see the core connection to the World Economic Forum, Central Banks, and western globalist policy to change the entire dynamic of economics and finance around the “Climate Change” agenda, or Build Back Better, or Green New Deal.

Overlay that commonsense and pragmatic outlook with the logical consequences of the activity, and this banking collapse issue is a self-fulfilling prophecy.  As long as the decision makers continue doing the things that are creating the crisis, the crisis will continue.

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Everything about the process of cutting down energy exploitation, then driving supply side inflation, then raising interest rates to shrink demand (stem inflation) created by a desire to lower economic activity to the scale of diminished energy production, is a game of pretending.

The collateral damage from the rate hikes has been the banking destabilization, which shows the priority of the government officials and central banks to support the climate change agenda.  Into the game of pretending comes the second unavoidable consequence with inflation continuing as a result of the energy policy.

They simply cannot cut energy demand enough to meet the diminished scale of production.  There is no alternative ‘green’ energy system in place to make up the difference. That is the reality.  Now, the fed is scheduled to raise rates again, then begin to debate the collateral damage as they continue the pretending game.

(Via Wall Street Journal) – […] Another quarter-percentage point increase would lift the benchmark federal-funds rate to a 16-year high. The Fed began raising rates from near zero in March 2022.

Fed officials increased rates by a quarter point on March 22 to a range between 4.75% and 5%. That increase occurred with officials just beginning to grapple with the potential fallout of two midsize bank failures in March.

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The topline story from the announcement by JPMorgan Chase [SEE HERE] there are no banking rules/laws in the Biden Fed/Treasury system.

The Dodd-Frank laws are still on the books, but the FDIC decision to insure all deposits, regardless of size, now means those laws, rules and regulations are not required to be followed.  Additionally, as a result of JPMorgan gaining another $100+/- billion in deposit assets, the law(s) surrounding the 10% U.S. deposit maximum, within too big to fail banks, no longer exists. Noted in the announcement, “JPMorgan Chase is assuming all deposits – insured and uninsured.”

JPMorgan is also assuming assets consisting of $173 billion in loans and approximately $30 billion in securities.  The FDIC is going to assume risk (with a risk sharing agreement) for current First Republic Bank mortgage and commercial loans acquired by JPMorgan, guaranteeing JPMorgan a 5-year fed fixed rate on $50 billion in mortgage bonds.

The Federal Deposit Insurance Corporation (FDIC) rule requiring the holding of 1.5% of deposits for all depositors up to $250k in all institutions is now essentially moot.  If the FDIC is guaranteeing all deposits, there’s no way for the insurance corporation to capture or hold $1.5% of all banking deposits.  The law is in conflict with the outcome action of the Fed/Treasury and ultimately the FDIC, ergo the law is nulled by the ignoring of it.

Mohamed El-Erian gives his take below, but seemingly missed the part of the announcement where JPMorgan states, “no systemic risk exception was required” in the deal.  This means the FDIC is completely free-range with the agreement, they are not even trying to justify why they would make a too big to fail bank even bigger. WATCH:

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Gary Cohn is connected to the banking and finance industry, well connected.  In this interview with Face The Nation earlier today, Cohn is discussing the current status of First Republic Bank, another big player in the California banking system that is about to collapse.  Cohn notes something at the 1:15 mark that just seems obvious yet is undiscussed in most outlines of the FRB discussion.

Six weeks ago, in an effort organized by the FDIC, $30 billion was pushed into FRB by eleven larger banks to stabilize it.  However, the only thing that infusion of capital did was allow institutional depositors time and ability to withdraw their funds. A complete racket.  Once the at-risk group exits, suddenly the collapse is back on the tee.  WATCH:

[Transcript] – MARGARET BRENNAN: We want to turn now to Gary Cohn, who is the vice chairman of IBM, former Goldman Sachs president and a former Trump administration top economic adviser. Good morning to you. Lots of titles, Gary, Lots of experience. That’s why we like having you here. I want to ask you about what’s happening with First Republic. It’s been under pressure. We know they’ve been looking for a buyer, the FDIC, the government is looking to arrange, moving it into government control and then maybe selling it. What are you hearing about how this would roll out?

GARY COHN: Margaret, thanks for having me. I think you’re portraying the situation as we find ourselves again on a weekend. As we closed business of Friday, the FDIC was in a process of looking for acquirers or bidders for the assets over the course of the weekend. I think the FDIC has asked potentially three banks for their final bids for the entire bank. The FDIC would prefer to sell the bank in its entirety than the pieces. What will most likely happen is the FDIC will seize control and then simultaneously resell the asset to the successful bidder. I think that will happen sometime later this afternoon before the markets open in Asia this evening.

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There’s something sketchy afoot in the world of high finance.  Following the collapse of Silicon Valley Bank, the most likely first contagion bank would have been First Republic Bank; both California banks carried similar vulnerabilities.  However, once the Treasury Dept agreed to cover all deposits, even those unsecured deposits over the $250k FDIC insurance protection, suddenly First Republic Bank survived.

After the FDIC announcement, a group of 11 larger banks lent First Republic a tranche of money ($30 billion) to secure its holdings and help stabilize it.  Approximately six weeks passed, suspiciously perhaps the burn rate for the tranche in combination with risk averse exits says I, and suddenly First Republic starts destabilizing again.  [Insert Suspicious Cat here]

The First Republic stock value collapsed further last week, and the FDIC is now trying to get a takeover bid secured before government regulators are forced into a position of receivership.   I’m not dialed in to the banking industry, but it looks to me like the six-week interim phase was an agreement to give the illusion of stability and afford time for highly exposed, ¹likely well connected, stakeholders to exit.

With the Treasury taking the prior SVB position, thereby securing all deposits regardless of scope, the FDIC is now on the hook if the collapse includes a govt takeover.  The FDIC seems to be playing hot potato and looking for a buyer.  Additionally, the FDIC is asking JP Morgan-Chase if they are interested.  JPMorgan holds more than 10% of all deposit funds in U.S. banking.  From a regulatory position, JPM cannot legally take any more institutional deposits.  So, what gives?  It is all sketchy, all of it.

(Bloomberg) — The Federal Deposit Insurance Corp. has asked banks including JPMorgan Chase & Co., PNC Financial Services Group Inc., US Bancorp and Bank of America Corp. to submit final bids for First Republic Bank by Sunday after gauging initial interest earlier in the week, according to people with knowledge of the matter.

The regulator reached out to some banks late Thursday seeking indications of interest, including a proposed price and an estimated cost to the agency’s deposit insurance fund. Based on submissions received Friday, the regulator invited some of those firms and others to the next step in the bidding process, the people said, asking not to be named discussing the confidential talks.

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Stop looking at the Washington DC Potemkin village; start looking at the financial system behind it that controls it.

You may recently have seen this story:

WASHINGTON DC – Homebuyers with good credit scores will soon encounter a costly surprise: a new federal rule forcing them to pay higher mortgage rates and fees to subsidize people with riskier credit ratings who are also in the market to buy houses.

The fee changes will go into effect May 1 as part of the Federal Housing Finance Agency’s push for affordable housing, and they will affect mortgages originating at private banks across the country. The federally backed home mortgage companies Fannie Mae and Freddie Mac will enact the loan-level price adjustments, or LLPAs.

Mortgage industry specialists say homebuyers with credit scores of 680 or higher will pay, for example, about $40 per month more on a home loan of $400,000. Homebuyers who make down payments of 15% to 20% will get socked with the largest fees. (read more)

If you focus on the DC Potemkin Village, you view this move through the prism of Biden’s FHFA creating a policy to favor low-income (nonwhite) voters by punishing stable credit worthy borrowers.  That’s what the powers who control the levers, and create policy, want us to focus on.  That’s not what is going on.

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As higher interest rates continue to put pressure on borrowers, the ability of the average person to afford a mortgage diminishes.  Higher mortgage rates lead to downward pressure on residential home values as fewer borrowers can afford higher payments.  Simultaneously, commercial real estate is dropping in value as vacancies continue increasing.

Put both of these issues together and already tenuous banks holding mortgage bonds as assets can become more unstable.

This dynamic creates the continual tremors in the background of an economy already suffering from high inflation and low consumer purchasing of durable goods.

A perfect storm starts to realize.

(Wall Street Journal) U.S. existing-home sales decreased 2.4% in March from the prior month to a seasonally adjusted annual rate of 4.44 million, the National Association of Realtors said Thursday. March sales fell 22% from a year earlier.

March marked the 13th time in the previous 14 months that sales have slowed. The housing market had a surprisingly strong February, when sales rose a revised 13.75% from the previous month. But after mortgage rates ticked higher, March sales resumed the extended period of declines.

The housing market’s slowdown is now starting to weigh on prices, which have fallen on an annual basis for two consecutive months for the first time in 11 years. The national median existing-home price decline of 0.9% in March from a year earlier to $375,700 was the biggest year-over-year price drop since January 2012, NAR said.

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Almost as soon as German Chancellor Olaf Schulz said, “The banking system is stable in Europe – Generally, I think we are in good shape,” shares of German-based Deutsche Bank began dropping.

After a Friday loss of 14%, the bank came back to close -9.8%, and on the heels of the Credit Suisse collapse and subsequent purchase, concerns are still reverberating.

BRUSSELS (AP) — European Union leaders Friday played down the risk of a banking crisis developing from recent global financial turbulence and hitting the economy even harder than the energy crunch tied to Russia’s war in Ukraine.

After a meeting in Brussels, the EU government heads said lenders in Europe are generally in sound health and in a position to weather a combination of rising interest rates and slowing economic growth.

“The banking system is stable in Europe,” German Chancellor Olaf Scholz told reporters after the summit. Dutch Prime Minister Mark Rutte said: “Generally, I think we are in good shape.”

The EU deliberations came in the wake of U.S. regulators’ shutdown of two U.S. banks, including Silicon Valley Bank, and a Swiss-orchestrated takeover of troubled lender Credit Suisse by rival UBS.

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