“Facts that don’t align with ill-informed prejudice are often infuriating. That doesn’t make them wrong. Someone needs to tell the truth about what it’s going to take to get to a net-zero future,” Emily Mir, a spokeswoman for Exxon, said earlier this month.

And that’s exactly what Judson Berkey at UBS has done, the focus of a new Bloomberg report. Berkey let loose on a recent conference call with regulators about how unrealistic climate goals were for banks trying to integrate them into their respective economies.

The report covering Berkey’s outburst simply concluded that the “world’s biggest banks can’t live up to the green regulatory ideal unless they start dumping huge numbers of clients worldwide at a reckless pace and also roil economies in large swathes of the globe that primarily rely on dirty fuels.”

Berkey was on a “check-in” call where regulators query market participants about regulations, the report says, when he expressed his frustration, interjecting: “Banks are living and lending on planet earth, not planet NGFS [Network for Greening the Financial System]”.

The outburst is a microcosm of “cracks” emerging in the banking sector after being draped with regulations about sustainability, the report says. Bridgewater Associates founder Ray Dalio famously said last year about ESG: “You have to make it profitable.”

Its indicative of new-world climate regulation going head to head with old world capitalism, the report says. 

Adair Turner, chair of the Energy Transitions Commission in Britain said: Climate change is “an economic externality, and you can’t expect a free market to deal with it voluntarily.”

Banks reevaluating their net zero commitments are facing challenges as they confront the practical implications of these pledges, which include limitations on operating in coal-reliant regions like South Africa, Poland, and Indonesia. These commitments also complicate relationships with clients across various sectors, from commodities firms to companies with less obvious carbon impacts. 

Jonathan Hackett, head of sustainable finance at Bank of Montreal, added: “Our net zero commitments are about being our clients’ lead partner and are consciously taken around the idea that we need to be there with our clients and our clients need to succeed, not that we need to hyper select clients in order to get to net zero somehow faster or better.”

A recent sustainability report from UBS highlighted a “notable shift in emphasis” in climate change discussions, moving from net zero pledges to recognizing the need for a transition phase. The Swiss bank noted that high inflation and input costs will be crucial factors for clients as they develop decarbonization strategies.

James Vaccaro, Chief Catalyst at Climate Safe Lending Network, added: “For banks with substantial capital markets businesses, like those competing with the JPMorgans of the world, it’s fee income that’s on the line here. Ditching clients off track from 1.5C means losing major lines of revenue.”

In sum, the financial industry’s initial rush to commit to net zero carbon footprints at the 2021 COP26 summit in Glasgow has hit a reality check. Banks that pledged to reduce financed emissions and invest billions in green and sustainable deals are reevaluating these commitments after facing the complex realities of implementing such drastic changes.

It should be no surprise to our readers: we have been pointed out the collapse of ESG for more than a year now. Earlier in March we wrote how Exxon’s CEO had all but declared victory over the “woke” ESG lobby. 

In February, we noted that CEOs were ditching ESG lingo on conference calls. For some context, peak ESG and related synonyms, such as “climate change” and “clean energy” and green energy” and net zero,” among other terms, peaked at 28,000 mentions in the first quarter of 2022. Ever since, the number of mentions has rapidly plunged. Halfway through the first quarter earnings season, mentions are around 4,800. 

Andy Wiechmann, the Chief Financial Officer of MSCI, mentioned during his earnings call that “Clients are taking a more measured approach to how they integrate ESG.”

On a Jan. 12 earnings call, BlackRock CEO Larry Fink explained how his firm plans to purchase private equity firm Global Infrastructure Partners without mentioning ESG. This makes sense since BlackRock dropped the ESG term after blowback last summer. 

Recall, we also wrote last year about the dying off of ESG and “green” investment products. At the end of 2023, Goldman Sachs shuttered its ActiveBeta Paris-Aligned Climate U.S. Large Cap Equity ETF. 

Bloomberg ETF analyst Eric Balchunas pointed out in late 2023 that “there was just way too much supply for the demand” with the ETF and that “it’s going to get worse too”. Balchunas says the ETF only took in $7 million over the course of 2 years. 

We also wrote about Jeff Ubben late last year, who shuttered his sustainability fund – calling traditional climate summitry an “echo chamber” of diplomats. Less than a week before that we noted that $30 billion had been shaved off the value of clean energy stocks over the preceding 6 months. 

Finally, we pointed out last year how the ESG grift was reaching endgame after Markus Müller, chief investment officer ESG at Deutsche Bank’s Private Bank stated that sustainability funds should include traditional energy stocks, arguing that not doing so deprives investors of a prime opportunity to invest in the transition to renewable energy.

Authored by Katabella Roberts via The Epoch Times (emphasis ours),

The cargo ship that crashed into Baltimore’s Francis Scott Key Bridge on March 26 was carrying more than 50 hazardous material containers, some of which were breached during the collapse, according to the National Transportation Safety Board (NTSB).

NTSB chair Jennifer Homendy said during a press conference on March 27 that the agency, which is currently probing the crash, had obtained a cargo manifest of the 984-foot-long Singapore-flagged cargo vessel named Dali.

The vessel—which reportedly lost power while transiting out of Baltimore Harbor and struck the bridge—had 56 containers of hazardous materials on board at the time of the incident, Ms. Homendy said.

The NTSB chair said a senior hazmat investigator had identified the containers.

“That’s 764 tons of hazardous materials—mostly corrosives, flammable, and some miscellaneous hazardous materials—class nine hazardous materials which would include lithium-ion batteries,” Ms. Homendy said.

“Some of the hazmat containers were breached,” she added.

Asked how many of the containers were in the water, the NTSB chair could not provide an exact number.

“I did see some containers in the water and some breached significantly on the vessel itself,” she said. “I don’t have an exact number but it’s something that we can provide in an update and certainly in our preliminary report which should be out in two to four weeks.”

‘Sheen’ Observed On Water Around Collapse

Officials have also observed a sheen—sometimes caused by gasoline or oil—on the waterway surrounding the collapsed bridge that spans the Patapsco River. According to Ms. Homendy, federal, state, and local authorities are aware of this and are currently working to address those issues.

“The NTSB as part of our safety investigation documents that type of release, it documents the damage and and documents the type of materials involved as part of our investigation,” Ms. Homendy said.

Asked by one reporter to characterize the level of concern regarding the hazardous material leak and the sheen on the water, Ms. Homendy declined to respond and directed him to state and local authorities.

The NTSB will also not provide any of its findings while the investigation remains ongoing, Ms. Homendy noted.

Dali struck the Francis Scott Key Bridge at about 1:27 a.m. on March 26 while leaving the harbor, according to officials.

The incident resulted in the bridge collapsing moments later while eight construction workers—who officials say were from Mexico, Guatemala, El Salvador, and Honduras—were filling in potholes.

Police Recover Bodies

Two of the workers were rescued on March 26 soon after the collapse, officials said. One of them was uninjured and the other was hospitalized in a “very serious condition” but later released.

On March 27, police announced that two bodies had also been recovered during search-and-recovery efforts.

The families of Alejandro Hernandez Fuentes, 35, and Dorlian Castillo Cabrera, 26, have been notified, Col. Roland L. Butler Jr., superintendent of the Maryland State Police, said.

Police discovered their bodies inside a pickup truck that was submerged approximately 25 feet below water in the Patapsco River, around the middle section of the bridge, according to the superintendent.

The two men were with the company, Brawner Companies, doing maintenance on the bridge deck, he said.

The U.S. Coast Guard is continuing recovery efforts in the search for the remaining four missing individuals.

According to Ms. Homendy, the 95,000 gross-ton container ship also sustained damage during the incident, although none of the 21 crew members and two pilots who were onboard at the time sustained significant injuries.

Officials have praised those on board for saving countless lives by raising a mayday alarm just moments before the incident, allowing authorities to limit traffic on the bridge before it collapsed.

While everyone says that the looming commercial real estate crash is nothing to worry about since, well, everyone’s been worrying about it for so long and nothing bad has happened yet (except for the whole regional bank crisis last March when virtually anyone who is not JPM almost imploded), every day we get a new and more shocking foreclosure or default.

Today, it is the infamous Brooklyn Tower, the 1066-foot building, sometimes called the Eye of Sauron, which is the tallest in all of Brooklyn. According to marketing materials from JLL, Silverstein Capital Partners has scheduled a foreclosure auction for 9 DeKalb Ave., JDS Development’s Brooklyn Tower.

JDS took out a $240M mezzanine loan from Larry Silverstein’s firm in 2019 as part of a $664M debt package to build the 93-story, 1,066-foot tower in Downtown Brooklyn. Yet despite what the media said was a flood of interest in the property, less than five years later, JDS has defaulted on the loan, according to the foreclosure notice, first reported by ten31 on X, triggering the foreclosure auction, scheduled for June 10.

It’s all happening at the Tower of Sauron pic.twitter.com/OZIjlQJ3mP

— Hiten Samtani (@hitsamty) March 27, 2024

To lock in the entire capital structure, Silverstein also bought the property’s senior debt, a $424M mortgage originally provided by Otéra Capital, earlier this year. A spokesperson for Silverstein told Bisnow in an email that the junior, senior and mezzanine loans for 9 DeKalb are all in default and that Silverstein is enforcing its rights as a lender, i.e., the Eye of Sauron is about to have a new master.

The mezz loan was the first debt handed out by Silverstein Capital Partners, which was launched in 2018. It has raised over $4B since then and provided debt to projects like Hudson Cos.’ One Clinton condo and retail development in Brooklyn Heights.

JDS, led by Michael Stern, tried to sell the 398-unit rental portion of 9 DeKalb, which also features 143 condos, a little over a year ago, The Real Deal reported. At the time, JDS was reportedly seeking between $600M and $700M for the rental units. Judging by today’s news, they weren’t successful.

Construction on the tower, which sits atop the historic Dime Savings Bank and Junior’s restaurant, began in 2015. The property, which is Brooklyn’s first supertall at just over 1,000 feet, also contains a 130K SF retail portion largely occupied by Life Time Fitness. Unit 72A this week set the record for Brooklyn’s priciest studio apartment when it sold for $905K, 6sqft reported.

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

The IRS is reminding taxpayers who have not filed their 2020 returns to do so quickly or risk losing out on unclaimed refunds.

Nearly 940,000 Americans have unclaimed refunds from the 2020 tax year worth an estimated $1 billion, the IRS said on March 25. The individuals face a May 17 deadline to submit their returns.

The median refund is $932. American citizens typically have up to three years to file and claim refunds, after which the money goes to the U.S. Treasury.

Since taxpayers may find it difficult to gather information necessary to file returns for 2020, the IRS outlined three ways to access such information:

• Taxpayers who are missing their W-2, 1098, 1099, or 5498 forms can request copies from their employer, bank, or other payers.
• Those who are unable to get these forms from employers, banks, or other payers can order a free wage and income transcript at IRS.gov using the agency’s online tool. The agency noted that this will be the quickest and easiest option for many individuals.
• A third way is for the individual to file a 4506-T form with the IRS, requesting a “wage and income transcript.” Taxpayers can then use information to file their returns. The agency warned that written requests for such transcripts can take several weeks. As such, taxpayers are encouraged to try out other options first.

Usually, the deadline to claim old refunds is around the regular tax deadline, which is April 15 this year. The three-year window for the 2020 returns had been extended to May 17 due to the COVID-19 pandemic.

“We want taxpayers to claim these refunds, but time is running out for people who may have overlooked or forgotten about these refunds. There’s a May 17 deadline to file these returns so taxpayers should start soon to make sure they don’t miss out,” said IRS Commissioner Danny Werfel.

Since taxpayers faced “extremely unusual situations” during the pandemic, some of them may have forgotten about a potential refund on their 2020 returns, he stated.

“People may have just overlooked these, including students, part-time workers, and others. Some people may not realize they may be owed a refund. We encourage people to review their files and start gathering records now.”

In addition to missing out on refunds, failure to file the 2020 return could also result in some taxpayers losing out on the earned income tax credit, which was worth as much as $6,600 in 2020.

“The IRS reminds taxpayers seeking a 2020 tax refund that their funds may be held if they have not filed tax returns for 2021 and 2022,” the agency said.

“In addition, any refund amount for 2020 will be applied to amounts still owed to the IRS or a state tax agency and may be used to offset unpaid child support or other past due federal debts, such as student loans.”

The state with the highest number of individuals estimated to have 2020 refunds due was Texas, with 93,400 taxpayers. This was followed by California with 88,200; Florida with 53,200; and New York with 51,400.

Processing Refunds

The IRS usually takes up to 21 days to process refunds for returns filed electronically. It can take four weeks or more if traditional mail was used. The processing time can be extended in case the returns require extra review or corrections. The fastest way to get refunds is through direct deposit.

In certain cases, taxpayers may not receive the refund amount they were expecting. This could be due to the agency identifying errors on tax returns, or if the refund was used to pay off certain state or federal debts owed, or if the refund from a joint return was used to pay off a spouse’s debts.

In case of errors corrected by the IRS, the agency will send a notice to the taxpayer clarifying the changes.

Tax refunds are critical for many American households as they represent the largest annual cash injection into their budgets. Many families use the refunds to boost their savings or cut down debts.

According to a January survey conducted by Credit Karma, 37 percent of taxpayers who expect to receive a refund plan on using some or all of the money to pay for necessities. Over half of the respondents said they were looking to file their taxes early to get faster refunds.

Thirty-one percent of taxpayers surveyed said they would need their refund to make ends meet.

“That number jumps to 40 percent for millennials and 38 percent for Gen Z taxpayers,” the survey report stated.

In addition to encouraging 2020 tax year nonfilers to file their returns, the IRS has launched an effort to identify high-income taxpayers who have not filed their income taxes since 2017. Over 125,000 such instances have been identified, with taxes being owed in many of these cases.

The initiative was launched late last month, with the agency sending compliance letters to these 125,000 taxpayers.

“The mailings include more than 25,000 to those with more than $1 million in income, and over 100,000 to people with incomes between $400,000 and $1 million between tax years 2017 and 2021,” the agency stated.

Mr. Werfel said that if someone hasn’t filed a tax return in recent years, “this is the time to review their situation and make it right. … For those who owe, the risk will just grow over time as will the potential for penalties and interest. These non-filers should review information on IRS.gov that can help and consider talking to a trusted tax professional as soon as possible.”

In a bizarre and unprecedented situation, France has flagged what officials are calling a fake recruitment website which seeks volunteers to fight on behalf of Ukraine in the with Russia. It reportedly was made to look official, to the point of misleadingly presenting itself as a French government-promoted campaign.

France’s defense ministry has shut down the website, saying it was created by malicious actors as part of a “disinformation campaign”. Ukraine’s armed forces have of late been desperate for new recruits while facing devastating losses and thus face a severe manpower shortage.

“A URL for a page called ‘Join Ukraine,’ which used [French] government website templates, is currently being circulated online; this website is fake,” a message on the site reads, according to AFP.

The fake Ukraine volunteer website “invited” 200,000 French citizens to enlist in Ukraine’s national forces, and even emphasized that immigrants to France could serve. Volunteers were told to contact “unit commander Pavel” in order to gain instructions on the process of enlistment.

French authorities did not identify a culprit behind the deceptive campaign; however, a source told AFP that evidence possibly points to the Russian mercenary group Wagner being behind it.

Another government official told AFP that it bore “the hallmarks of a Russian or pro-Russian effort as part of a disinformation campaign claiming that the French army is preparing to send troops to Ukraine.”

Starting last month French President Emmanuel Macron stunned even Western allies by pushing for European countries to consider sending troops to fight in Ukraine.

He had told a Paris-hosted security conference in late February that while there was yet “no consensus” on sending ground troops to Ukraine in an “official manner,” it remains that “nothing was excluded.” He later defended the remarks and said the West cannot allow Russia to win in Ukraine no matter what.

This new fake recruitment website episode could be part of an attempt to troll or mock Macron and call attention to his very dangerous proposal, which would be a sure path to WW3 with Russia. Germany among other powerful allies has opposed Macron’s words.

🇫🇷 🇺🇦 🪖 ❌ #France‘s #defence ministry warned against a fake government website propagating #misinformation, inviting people to defend the country’s interests in #Ukraine.

FRANCE 24’s @tomcanetti has the story ⤵️ pic.twitter.com/lljnMBLJR1

— FRANCE 24 English (@France24_en) March 29, 2024

Early in the war more than two years ago some Western leaders, particularly then UK Prime Minister Liz Truss, were vocally encouraging foreign volunteers to go to Ukraine. But as more and more Westerners died in battle, officials have backed off such public statements.

President Zelensky in February signed a decree opening up Ukraine’s military forces to “foreigners and stateless persons” for the first time ever. The country already had a “foreign legion” but volunteers can now serve in Ukraine’s National Guard, per the recent order, and may sign a contract at the private, sergeant, or officer levels depending on their qualifications.

Authored by Lance Roberts via RealInvestmentAdvice.com,

One of the most interesting conundrums is the surging wealth gap in America. Despite two of the largest bull markets in history since 1980, most Americans struggle with making ends meet and are unprepared for retirement. Such a reality starkly differs from the belief that rising asset prices benefit the masses.

For example, in a recent St. Louis Federal Reserve Bank analysis, total household wealth was $139.1 trillion, covering 131 million families. Of that total wealth, 74% was owned by just 13.2 million families, or roughly 10% of the population.

Notably, this measure of wealth includes the equity of the family’s home. While home equity is essential, it is not readily spendable without taking on debt to extract the value. Therefore, Americans’ “liquid wealth” is far more unequally distributed. However, such is hard to fathom given the endless parade of media and social media influencers extolling the virtues of “building wealth through investing.”

Interestingly, that survey came after the Government injected nearly $5 trillion into the economy, a massive surge in deficit spending, and the Fed’s $120 billion monthly injections doubled asset prices from the March 2020 lows. Unsurprisingly, in February, Fidelity published its latest analysis showing the number of retirement accounts with balances of more than $1 million surged toward a record. To wit:

“The number of seven-figure 401(k) accounts at Fidelity Investments jumped 20% in 2023’s final quarter to 422,000, marking a sharp recovery from the previous quarter’s 7.7% drop.

Gains in the stock market helped swell retirement balances last year as the S&P 500 advanced 24% following 2022’s 19% decline. The impressive run was powered in large part by the so-called “Magnificent 7” stocks that now make up roughly 30% of the market-cap weighted S&P 500 Index. The only time when the ranks of 401(k) millionaires at Fidelity was higher was in 2021’s fourth quarter, when there were 442,000 such accounts. Elsewhere, the number of seven-figure IRAs is at a record 391,600 accounts.” – Bloomberg

However, that data obfuscates the stark wealth gap below the surface. While the “number of retirement millionaires” made headlines, an essential piece of the analysis was overlooked. Those 422,000 accounts comprised only a tiny fraction of Fidelity’s 27.2 million retirement accounts. How small of a fraction? About 1.6%. That number aligns with America’s Top 1% of equity ownership.

But indeed, after two booming bull markets since 1980, most Americans would be well saved for retirement. Unfortunately, that is not the case.

So, what went wrong?

The 50% Problem

The advice to build wealth is quite simplistic. Investment money into the financial market consistently over long periods. That’s it.

Again, considering that most Americans alive today participated in either one or both of the most significant secular bull markets in history, the lack of wealth is quite appalling. If individuals had invested $1000 in 1980 into the S&P 500 index and added just $100 per month, they would have roughly $1.4 million in retirement savings today.

However, if it is so simple, why do most Americans have little or no savings?

“One in 4 Americans have no retirement savings and those who are saving aren’t saving enough. Those that are [saving], on average, what they have saved will afford them like $1,000 a month of actual cash while they’re in retirement.” – Price-Waterhouse Retirement In America.

The report found that the median retirement account balance for 55-to-64-year-olds is $120,000. Dividing over 15 years would generate a modest monthly distribution of less than $1,000. The bigger problem is the large percentage of individuals with no retirement savings.

There are two primary reasons individuals do not save and invest for retirement. While psychological reasons account for 50% of the problem, such as buying high and selling low, the other 50% comes down to a lack of capital to invest.

We have previously written about the various psychological pitfalls investors make in destroying their investment capital. However, for many, it is a problem of being unable or unwilling to save money.

1. Lack of knowledge about budgeting and saving. (15%)

2. The cost of living exceeds income. (70%)

3. Bad previous investing experience (bear market). (15%)

If you ask anyone who doesn’t save money, you will likely get one of those three answers. It is hard to “save and invest” when there simply isn’t enough income.

However, this is where the disconnect between the economic data and the “average American” is exposed.

Not Enough Income

Most mainstream analysis utilizes “averages” to discuss the economy’s health. For example, disposable incomes (DPI), personal savings rates, and debt-to-income ratios suggest that the average American family is flush with cash with little debt. However, most of these calculations, like DPI (income minus taxes), are generalizations due to the variability of household income and individual tax rates.

More importantly, the measure becomes skewed by the top 20% of income earners, notably the top 5%. The chart below shows those in the top 20% saw substantially larger median wage growth versus the bottom 80%. (Note: all data used below is from the Census Bureau and the IRS.). The cost of raising a family of four continues to increase with inflation, so the bottom 80% are forced to live paycheck-to-paycheck, primarily leaving no money for retirement savings.

Furthermore, disposable and discretionary incomes are two very different animals.

Discretionary income is the remainder of disposable income after paying for all mandatory spending like rent, food, utilities, health care premiums, insurance, etc. For the bottom 80% of income earners, the cost of living outstrips most of those individuals’ incomes. Debt must make up the difference.

In other words, given the bulk of the wage gains are in the upper 20%, any data that reports an “average” of the information skews the results higher. This is why there is a vast difference between the debt service levels (per household) between the bottom 80% and the top 20%.

Yes, saving money and investing it into the financial markets is tough when you must go further into debt every month to make ends meet.

The Wealth Gap And The Road To Serfdom

The rise and fall of stock prices has little to do with the average American’s participation in the domestic economy. Interest rates and inflation are entirely different matters. Since interest rates affect “payments,” and inflation increases the “costs of living,” changes negatively impact consumption, housing, and investment.

Therefore, while the stock market surges to all-time highs, the wealth gap leaves increasing numbers of Americans behind. For the average American, it isn’t a choice of not wanting to participate; they simply can’t.

The reality is that middle-class America continues to shrink as the wealth gap increases. The rich can invest, save, and use little debt to sustain living standards. People experiencing poverty rely on debt, making long-term prosperity an impossible goal.

Furthermore, as the peasants demand “more free stuff” from the Government, such requires more debt and higher taxes. Those demands divert more capital away from productive investment, leading to slower economic growth. As growth slows, businesses shift to the lowest labor costs, or automation, to lower income growth for domestic workers. Such leads to more demands from “free stuff” from the Government, and the cycle intensifies, pushing more of the middle class downward.

The share of annual incomes between the bottom 80% and the top 5% is evidence of that wealth transfer from the middle class.

The “road to serfdom” is paved with good intentions. After decades of piling on increasing debt levels to generate economic growth, the damage to economic growth is becoming more visible. Economic growth trends are already falling short of previous long-term growth trends.

Of course, this analysis also underscores why bitter economic sentiment persists even as the bull market registers all-time highs. It is hard to be excited about a booming stock market when you don’t participate much, if at all.

For 80% of Americans, the end game of too much debt, an aging demographic, and the push for “socialistic policies” is the continued extraction of wealth from the “middle class” to the “rich.”

Of course, we don’t have to look much further than Japan to see how this eventually works out. They don’t have a middle class, either.

The Federal Aviation Administration should expedite its plan to curb United Airlines’ growth, including preventing the carrier from adding new routes, following a series of safety incidents in recent weeks and another incident on Thursday evening. 

Last night, United Flight 990, a Boeing 777-200 traveling from San Francisco to Paris, was diverted to Denver International Airport when the pilots reported engine issues. 

Flight tracking website Flightradar24 shows Flight 990 was heading north towards the Canadian border before it turned south towards Denver. United wrote in a statment that the plane landed safely with 273 passengers and 12 crew on board. 

This comes after a series of recent flight mishaps involving United jets, including a tire falling off a Boeing 777 taking off at San Francisco airport, landing gear issues with a Boeing 737 at Houston, and a panel flying off an aging United Boeing 737. 

A Bloomberg report said FAA authorities are considering “drastic measures” to curb the airline’s growth following a series of safety incidents. 

Last week, United CEO Scott Kirby promised customers that the carrier would review the incidents and its employee training. Perhaps what Kirby should be promising customers is to stop pushing “insane,” disastrous, and potentially deadly DEI mandates. 

The entire aviation industry is in disarray, from United to Boeing to the FAA. Why is this Pete Buttigieg? 

Authored by Peter St. Onge via The Epoch Times (emphasis ours),

In case you’ve still got money in a bank, Bloomberg is warning that defaults in commercial real estate loans could “topple” hundreds of U.S. banks.

Leaving taxpayers on the hook for trillions in losses.

The note, by senior editor James Crombie, walks us through the festering hellscape that is commercial real estate.

To set the mood, a new study predicts that nearly half of downtown Pittsburgh office space could be vacant in four years. Major cities such as San Francisco are already sporting zombie-apocalypse downtowns, with abandoned office buildings baking in the sun.

So what happened?

The Fed’s yo-yo interest rates first flooded real estate with low rates and cheap money. Which were overbuilt.

Then came the lockdowns, which forced millions to figure out new workday patterns. People liked foregoing the long commute (not to mention the free money). Despite every effort, downtown businesses have not been able to get all workers back.

These days, everyone talks about hybrid models of working, some in-person and some remote. But judging from observation, remote is winning. In any case, even a 30 percent reduction in the footprint of office space once the leases are renewed could topple the entire sector.

The restaurant and retail sectors of downtown feel the pinch, with more closures all the time. Adding to the pressure are absurd levels of inflation and ever-riskier streets on matters of personal security. Put it all together and there is ever less reason to slog to the office.

When the Fed panic-hiked interest rates in the 2021 inflation, that put trillions of commercial real estate underwater even without other factors. Add to that crime, inflation, plus remote work, and you have a dangerous mix that could topple cities as we know them.

This could mimic and elaborate upon last year’s bank crisis, where falling bond prices panicked depositors. That crisis only stopped when Treasury Secretary Janet Yellen and Fed Chairman Jerome Powell effectively bailed out every bank in America with sweetheart loans written on fictitious asset values along with unlimited taxpayer guarantees through the comically underfunded FDIC.

By the way, the FDIC is essentially guaranteeing more than $20 trillion in deposits on just more than $100 billion. So they’ve got a half-penny on the dollar.

Without those government pre-bailouts, one paper last year by researchers at Stanford and Columbia estimated that 1,619 U.S. banks—about a third of them—could be at risk of failure.

The problem is that nothing was actually fixed. In fact, it’s getting worse. For the simple reason that as the months roll by there’s more and more debt coming due.

And that brings us to Mr. Crombie, who noted that there’s $929 billion of commercial real estate debt coming due in the next 9 1/2 months.

That’s up 28 percent from last year, and it’s getting bigger every day as banks pretend that loans are still healthy by effectively adding missed payments.

We’re starting to see glitches in the matrix; New York Community Bank just went through a near-death experience over its garbage portfolio of commercial real estate loans, dropping almost 80 percent before it was bailed out by vulture investors while the megabanks hover like megavultures.

More will come. Potentially a lot more: A recent study from the National Bureau of Economic Research estimated that up to 385 American banks could fail over commercial real estate loans alone.

These would overwhelmingly be small regional banks, who typically hold a third of their assets in commercial real estate loans.

They hold so much because they know their local markets best, but the Fed poisoned that chalice by flooding easy money to developers.

For now, we’re only seeing the sickest banks dropping out of the herd. That could dramatically accelerate as that $1 trillion-plus in loans comes due.

Commercial real estate delinquency rates have already jumped to 6 1/2 percent—up 30 percent in a matter of months. Rates of distress in office loans just hit 11 percent.

When the smoke clears, we could lose dozens, even hundreds, of regional banks. Going by the last time with savings and loans, taxpayers ate 80 percent of the losses.

Meaning that you could be on the hook for trillions, while the megabanks gorge on the carcass.

Slashing interest rates could staunch the bleeding. But with inflation marching up every month—currently at 5 1/2 percent annualized—that’s not going to happen.

Originally published on the author’s Substack, reposted from the Brownstone Institute

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.

On Friday Israel conducted its deadliest strikes on Syria in months, or perhaps even years, given the immense death toll is mounting into several dozens killed amid a large emergency response to the scene.

The airstrikes were conducted deep into Syria, in northern Syria’s Aleppo province, and left over 40 people dead. This reportedly included Syrian soldiers, Hezbollah militants, and civilians. Most international reports are saying 42 were killed, but the Syrian government did not initially give a precise casualty count.

The anti-Assad opposition and UK-based organization Syrian Observatory for Human Rights (SOHR) described that the Aleppo attack left the highest number of dead among Syrian soldiers in a single such Israeli attack. While Israel doesn’t typically directly own up to or confirm such attacks on Syrian soil, its military has been conducting sporadic attacks on Syria going back years.

The attack happened in the pre-dawn, overnight hours – with state-run SANA emphasizing that many civilians were killed and wounded, but without giving a figure.

Syria’s defense ministry pointed to the airstrikes having some level of coordination from “terrorist organizations” on the ground which “in conjunction” to the air raid carried out drone attacks, presumably from Al-Qaeda (Hay’at Tahrir al-Sham) occupied Idlib. Some reports are saying that Israeli warplanes hit a “Hezbollah warehouse” – though there’s no ground confirmation of this.

This new major attack comes the day after Israeli airstrikes on a suburb of Damascus, which reportedly wounded two civilians. Israeli officials and media have long claimed to be waging a campaign against Iranian and IRGC operatives and assets in Syria.

Sky News has verified social media video showing massive explosions from the site of the overnight Aleppo attacks:

⚡️Sky News publishes scenes showing the bloody Israeli strikes on Aleppo pic.twitter.com/xgLxjrNJmP

— War Monitor (@WarMonitors) March 29, 2024

After the Oct.7 Hamas terror attack, this ‘counter Iran’ campaign has also focused on Lebanon, where Tehran-backed Hezbollah has entered a hot conflict with Israeli forces along the border.

The Syrian government under President Bashar Al-Assad has frequently lodged formal complaints at the United Nations that the country’s sovereignty is constantly being violated by Israeli aggression, however, this is by and large fallen on deaf ears.

In the initial days and weeks after Oct.7, Syria had lobbed several rockets toward the Israeli-occupied Golan Heights, which left no casualties. Much of the Syrian populace has meanwhile become frustrated and expressed growing anger that the Russian military, has has long had a significant presence inside Syria (especially since 2015), has not done more to try and intercept inbound Israeli jets.

As far as Israeli attacks, Moscow has long been content to stay on the sidelines, so long as the ostensible targets are said to be ‘Iranian-linked’.

Authored by Betsy McCaughey via The Epoch Times (emphasis ours),

If you own a home and don’t want to lose it, keep reading.

Homeowners who go on vacation or a business trip, even for just a week, are returning to find their houses overtaken by trespassers who fraudulently claim a right to be there. It’s happening to tens of thousands of homeowners from New York City to Atlanta and Los Angeles.

When owners call the police, they’re told police can’t help. It’s a civil matter, and they have to file an eviction lawsuit, which can drag on for months or years because housing courts are backlogged.

Meanwhile, owners are out on the street while squatters are living free, destroying houses, and even selling off owners’ belongings.

If you found a stranger sitting in your car and called the police, they would immediately ask to see the registration and decide who owns it, according to Georgetown law professor Jonathan Turley. They wouldn’t let the thief drive off. But the law is stacked against homeowners.

You can thank leftist lawmakers who have degraded property rights and tilted the law to favor criminals. The result is an epidemic of brazen squatting.

In New York state, a homeowner faced with a trespasser can expect eviction to take two years. Meanwhile, the owner is barred from turning off utilities, removing belongings, or doing anything else to get the invaders out. It’s crazy.

New York state Assemblyman Jake Blumencranz of Long Island introduced legislation saying a squatter is not a tenant and is not entitled to the same protections. Will it pass in Albany? Don’t hold your breath.

But some states are acting quickly against this crime wave.

The Florida Legislature passed a bill to empower police to immediately remove anyone who can’t produce a notarized lease. Georgia’s statehouse passed the Squatter Reform Act, making squatting a crime—criminal trespass—to be handled by the police, not housing court. It’s likely to pass the Senate shortly.

In blue states such as California and New York, is there hope for homeowners to get protection against squatters? Not from Congress. Democrats in Congress are actually pushing a federal housing law that would bar landlords from learning whether potential tenants have criminal records, including past squatting offenses.

But there is a remedy: bringing a lawsuit in federal court against states such as New York and California that fail to protect property rights. The U.S. Constitution enshrines property rights as a fundamental guarantee. And recently, the justices have struck down state laws that allow trespassers to interfere with property rights. In 2021, the Pacific Legal Foundation brought a suit on behalf of a property owner, and the court ruled in Cedar Point Nursery v. Hassid that “government-authorized invasions of property” amount to a taking just as if the government had taken the property directly.

Favoring intruders over owners constitutes a “taking” that violates the Fifth Amendment, which says government cannot impinge on your right to your property.

There’s no time to waste in acting to protect homeowners.

Venezuelan TikTok influencer Leonel Moreno claims that invading vacant homes is the only option for illegal migrants flooding into the United States. His now-deleted TikTok video explaining how to identify a home that is empty and ready for the taking reached 4 million views.

Surprised? Don’t be. Criminals from south of the border are coming in droves to plunder the far wealthier United States. Some cross illegally and are recruited by the Venezuelan gang Tren de Aragua and El Salvador’s MS-13. Others are coming in on tourist visas. Law enforcement is reporting a surge in South American burglary gangs operating in at least half the states in the United States.

Of course, many migrants are honest and hardworking. But there’s no denying that a movement northward to “take what you can get” poses new danger to homeowners, including the risk of squatters.

As Mr. Moreno says, “If a house is not inhabited, we can seize it.”

Tell lawmakers to act now to protect homeowners. This is the United States. Here, property rights are not up for debate. They’re guaranteed in the Bill of Rights.

You worked for it, you paid for it, it’s yours. Period.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.