People are broke, but look at what the heads of banks have decided to do.

November 16 (King World News) – Gerald Celente:  Americans under age 50 were more than $9.5 trillion in debt in this year’s third quarter, compared to about $9.3 trillion in the preceding three months, marking the largest quarterly increase since 2022’s fourth quarter, U.S. Federal Reserve data shows.

Since the beginning of the COVID War, individuals under 50 have added a net new $2.1 trillion to their debt load, while people 50 and older added about $900 billion, Bloomberg said.

U.S. households collectively borrowed another $228 billion during the quarter, raising the total owed to $17.3  trillion. Debt held by adults 50 and older remained about the same after peaking in this year’s first quarter; the increase came largely from younger people.

Adults in their 40s have the highest piles of debt. Those in their 30s and 50s have about the same debt levels as each other. Households under age 50 are toting about $1.2 trillion in student debt, while older adults have about $400 billion in college loans remaining. 

The new debt was largely due to mortgage loans, more credit card usage, and new student debt. Credit card balances swelled by about 4.7 percent, or about $48 billion, to a total of $1.08 trillion…

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About 5.8 percent of credit cards fell at least 90 days late in payments during the quarter, compared to 3.7 percent a year earlier.

Auto loan balances grew by $13 billion, reaching a record $1.6 trillion. Households with adults under 50 are toting $1.2 trillion in student debt; older households have about $400 billion in student loans remaining.

In the last four years, Americans have signed onto an additional $264 billion in vehicle loans. For borrowers in their 20s and 30s, vehicle loans that are more than 90 days behind in payments have reached the highest number since the early days of the Great Recession, Fed figures show.

With prices still rising, interest rates remaining high, and wage increases slowing, more Americans will default on their credit cards and other loans. That will put even more pressure on banks, adding to the number of bank failures or buyouts in 2024.

Meanwhile, Wall Street’s Top Bankers Are Bailing Out Of Bank Stocks

James Gorman, Morgan Stanley’s CEO for the past 12 years, has sold $48 million worth of his hoard of Morgan stock so far this year, bringing the total he has cashed in to $78 million. Ted Pick, who will take over for Gorman in January, has sold $30 million worth of his shares, according to the Financial Times.

Morgan top executives Andy Saperstein and Dan Simkowitz have sold $19 million and $25 million, respectively.

At Goldman Sachs, CEO David Solomon has dumped about $22 million of his shares since 2006. John Waldrom, the bank’s second-ranking leader, has offloaded $20 million worth over the same period.

At JP Morgan Chase, Mary Erdoes, chief of asset and wealth management, has sold $63 million in shares over the past 17 years. Daniel Pinto, chief investment banker, has turned $53 million worth of shares into cash over that time…

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Now James Dimon, who has been JPMorgan’s CEO since 2006 and has not sold a single share of his JP Morgan stock during that time, will sell about $140 million worth next year, the bank has announced.

Dimon will be breaking the “blood oath” that Sandy Weill, Dimon’s predecessor at the top job, required of his executives that no one would sell a share of their company stock until they left the bank’s employ.

Dimon’s sale will still leave him with about a billion dollars’ worth of shares and he accumulates tens of millions of dollars in additional shares with each year’s annual bonus.

The CEOs of the six largest U.S. banks have been awarded more than $400 million in restricted stock since 2020, figures from data service ISS show. 

Restricted stock cannot be sold until certain conditions take place, such as profit targets being met.

The itch to sell stock grows as stock options overwhelm the cash portion of executive pay, an unnamed Wall Street executive told the FT.

“If you get paid $25 million, 50 percent goes to taxes and 80 percent is paid in stock,” the person said. “Everyone can live on that but you’re not accumulating liquid net worth.”

Banks’ C-suite residents are hinting that now is a good time to trade bank stocks for something better.

Bankers are selling shares as bank stocks listed in the Standard & Poor’s 500 index have crashed to an all-time low compared to the S&P average as a whole, according to the Financial Times.

Last spring’s three bank failures only underscored the industry’s weakness: 

● holding $400 million or more in unsellable low-yield bonds;

● being forced to pay higher interest rates on deposits to keep accounts; 

● holding billions of dollars in commercial real estate loans that could go bad over the next few years;

● seeing income from mortgage sales and investment banking plunge;

● feeling pressure from regulators to stockpile more cash to offset loans that turn sour.

Also, “banks have failed to recover ground lost following the 2008 financial crisis when waves of new regulation hit returns already squeezed by super-loose monetary policy,” the FT noted.

The industry is also facing more new rules that Dimon in September warned risked making bank stocks “uninvestable.”

We continue to see more bank failures ahead as a result of the Office Building Bust and dramatic declines in many commercial real estate sectors. The pressures on banks will drive a number of small and regional banks to the brink of insolvency. Some will fall off the edge and fail outright. Most will be bought by larger rivals, reducing the number of locally-oriented banks and leaving customers to deal with larger bureaucracies and fewer branches.

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