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ERROR: type should be string, got "https://www.msn.com/en-us/money/savingandinvesting/a-wave-of-bankruptcies-and-foreclosures-appears-to-be-building/ar-AATLcCi\n\nA Wave of Bankruptcies and Foreclosures Appears to be Building\n- William Lobel, ESQ. 1 day ago\n\nEconomists and professionals in the restructuring sector of business and real estate have been anticipating a distressed economy for the past 18 months. Thus far they have been wrong.\n\nThe public is just plain confused. Many people today don’t trust their politicians, their news sources and, surprisingly, not even their health care providers and professionals. This lack of trust, coupled with the pandemic-driven mandated way in which many employees work remotely, has caused many people to reassess their lives and the location from which they are willing to provide their services. \n\nMany employees holding mid-and upper-level jobs will opt to permanently work remotely and never return to the office. This shift in the way people will work in the future will have a profound effect on many aspects of our economy, including the ability of landlords to keep commercial spaces leased. \n\nFactors Influencing the Current Economy\nCOVID-19, the Delta, Omicron variants and now the highly contagious BA.2 variant have caused millions of workers to be unavailable for work, either remotely or otherwise. This has created a serious supply and distribution chain disruption. This problem is caused in part by manufacturers not being able to supply component products due to worker disruptions in factories. Add to this supply shortage the fact that personnel disruption in the transportation and delivery of products caused by COVID (i.e., the shortage of truck drivers) and we can clearly see the full picture of the disruption in the supply chain.\n\nThe threat of a substantial new round of tariffs, embargoes and other economic sanctions based on the political climate creates further risks of the U.S. becoming a distressed economy. In addition, there is a looming threat of high inflation. On the positive side, until recently the stock market and overall economy were generally clicking along at a solid and positive pace. The stock market doesn’t always accurately represent what is really going on in the economy, but recent market volatility may be a harbinger of troubled times ahead.\n\nWill the accumulation of these factors ultimately cause the predicted distressed economy? No one knows for sure, but in analyzing the situation it may be instructive to look at the issues that have prevented the anticipated downturn.\n\nBanks and Banking\nSince the pandemic began, regulators have not been pressuring banks to take action with respect to defaulted loans. Historically, banks have been willing to “kick the can down the road” with respect to defaulted loans if they could do so without significantly impairing the accounting value of the loans with respect to the banks’ capital requirements. Regulators’ current attitudes have allowed the banks to do just this.\n\nWhile the regulators’ laissez-faire attitude has had a definite positive short-term effect on the economy, at some point the regulators know that the effect of their actions will cause banks to have misleading financial statements.\n\nIt is not likely that regulators’ behaviors will change before the midterm elections later this year. At some point, however, they will have to stop allowing banks to avoid classifying loans. Otherwise, they risk allowing the banking system to continue to mispresent the value of its loan assets, with all the risks of that situation impacting the creditability and stability of the banking system. \n\nIt is my view that when the bank regulators change their position with respect to their treatment of defaulted loans, an anticipated tsunami of real estate foreclosures and bankruptcies will be upon us.\n\nAdditional Factors to Watch\nInterest rates have historically had a substantial impact on the economy, especially the real estate sector.\n\nThe Feds have kept interest rates at almost zero to support the economy. Now, however, the specter of high inflation will almost certainly bring an end to near-zero interest rates. Annual inflation during 2022 is projected to be close to 7%. The Fed has already announced its intention to fight inflation by raising interest rates as early as in March. The issue is not whether interest rates will rise. Rather, it is by how much and when.\n\nRising interest rates hurt individuals in many ways:\n\nThe most obvious is that they make housing less affordable. As interest rates rise fewer and fewer people will qualify to buy their own homes. Present homeowners with variable-rate mortgages will also be negatively impacted by interest rate increases.\nRising interest rates also negatively impact the profits of businesses. This will impact the stock market, and therefore the value of stocks in individual IRAs and 401(k)s.\nMajor shifts in the way people work will result in winners and losers. Time will tell how this will play out, but it is certainly looking like the economy will be disrupted.\nPressures on Businesses Pile Up\nThe re-emergence of COVID in the form of the current variants has all but destroyed the timetable for society’s return to normalcy. There is no reliable way to predict the effect of this re-emergence on the psyche of the country. It is predictable, however, that this re-emergence will negatively impact the economy, and will further delay a return to normalcy.\n\nIn fact, it is likely that normalcy, as it existed pre-pandemic, will never fully return. Trends like the shift of consumers primarily conducting their shopping online will have a negative effect on brick-and-mortar retail sales. The need for retail space seems poised to continue to decline even more than it has already. This problem has been accelerated by the pandemic.\n\nOwners of shopping centers and commercial buildings are girding for the rash of vacancies that are most assuredly on the horizon. Individuals would be well advised to assume inflation and higher interest rates are on the near horizon and should act in any way possible to mitigate the harm to them from the looming dual threat. It is uncertain how federal, state, and local governments will react to the situation.\n\nUncertainty is the enemy of business, and it is clear we are facing uncertain, unpredictable times. The public’s general perception of all of this is yet to be seen. There is much distrust by the people of our nation. These factors will combine to create a perfect storm for companies and real estate investors to experience increasingly distressed financial times.\n\nSteps to Consider\n The best advice we can offer is for entities to deal with their distressed assets early on.\n\nFor homeowners, interest rates will almost certainly increase in the near future. If a homeowner can refinance his or her mortgage to take advantage of the current low interest rates, that course of action should be considered.\nFor consumers, accelerating the timing of any major purchases will make sense since the looming inflation will make the dollar worth less and less and make the effective cost of an item more expensive as time passes.\nIndividuals should also consider exiting the stock market or minimizing their stock portfolios as soon as possible. Conversion of stock to cash is not a good strategy during a time when the value of the dollar will steadily decline. Conventional wisdom dictates that investment in precious metals, such as gold and silver, is a safe harbor. Thus, selling stock and buying gold and silver makes sense.\nBusiness owners should analyze their businesses based on the assumption that the near future will bring high inflation, high interest rates and a continuation of supply chain disruption. It is prudent to take steps to restructure the business in a way that will mitigate the damages if those future assumptions come to pass. \nThe general public will be looking at inflation and rising interest rates and will react accordingly. The earlier people and businesses accept and respond to these changes, and react appropriately, the more likely it is that Chapter 11 bankruptcies can be avoided. This not only increases the chances that companies can resolve their financial issues without resorting to bankruptcy, it often reduces the need for employee layoffs."

ERROR: type should be string, got "https://www.investmentnews.com/ria-takes-dispute-with-fidelity-to-the-supreme-court-81331\n\n\nThere might be an article limit on the site, so I'm posting the article here.\n\n\nThis is quite concerning, for those who have not DRS'd to CS already. \n--------------------------------------------------------------------------------------------------------------\n\"\n\nA defunct registered investment adviser and two former clients locked in a legal battle with Fidelity Investments are appealing their case to the U.S. Supreme Court.\n\nThe petition involves allegations by now defunct AER Advisors that **Fidelity lent out shares of stock owned by the RIA’s clients**, the father-and-son duo of William and Peter Deutsch, for purposes of short selling against the clients’ wishes in 2012.\n\n**Two lower courts have ruled in favor of Fidelity on the basis of a law that gives legal immunity to a securities firm that files a suspicious activity report**, which Fidelity filed against AER.\n\n“Fidelity put me out of business to cover up their fraud,” said Dave O’Leary, the founder and chief executive of AER before it went out of business in March 2013.\n\nAccording to the petition, AER was operating as an RIA on Fidelity’s wealth central platform in 2011 when Mr. O’Leary introduced his “China Gold” strategy designed to take advantage of a widespread selloff of Chinese companies.\n\nWilliam and Peter Deutsch, founders of Deutsch Family Wine & Spirits in White Plains, N.Y., were aggressive investors trying to gain a controlling interest in China Medical Technologies, a Beijing-based maker of cancer-treatment devices.\n\nIn March 2012, after the Deutsches had accumulated approximately 13 million shares of China Medical, they received an email from Fidelity inviting them to participate in a “fully paid lending program,” which would involve allowing Fidelity to lend the stock to short-sellers for a fee.\n\n**Even though the lending program would have paid more than 7% annually for use of the shares, the Deutsches declined the offer since they are continuing to accumulate shares.**\n\n**Despite their decision, the lawsuit alleges that between March and June 2012, Fidelity lent out nearly 1.8 million shares of the Deutsches’ China Medical stock to short sellers.**\n\nNot only were the Deutsches not paid for unwittingly lending out their shares, but in June of 2012, when they tried to move shares between their own accounts, Fidelity had to start recalling shares from short-sellers to replenish the Deutsch account.\n\nWhen that effort failed to produce enough shares, Fidelity had to buy 1.2 million shares of China Medical on the open market, which drove up the price by nearly 200%, leading to a halt in trading by the Securities and Exchange Commission.\n\nThe sudden spike of a heavily shorted security is known as a short squeeze for the way it forces short-sellers to abandon positions to halt losses.\n\n***Despite owning more than a third of all China Medical shares and in the midst of a strategy to acquire more, on July 5, 2012 Fidelity filed a suspicious activity report, effectively accusing the Deutsches of influencing the stock’s sudden spike.***\n\nThe Deutsches did not respond to a request for comment for this story.\n\nMr. O’Leary claims Fidelity filed the suspicious activity report to gain immunity for its own violations of securities lending practices and that the court should not grant immunity in this case. He claims lower courts have interpreted the immunity rule differently.\n\n“Petitioners brought this action against Fidelity seeking redress for Fidelity’s fraudulent concealment of its own conduct, a cover-up of its illicit lending practices and market manipulation that created the short squeeze,” the petition states.\n\nEven though the government investigations into AER Advisors, which were triggered by the suspicious activity report, were not prosecutable, they were enough to put AER out of business.\n\nIn response to a request for comment, Fidelity spokesman Vincent Loporchio emailed the following: “All of their claims were without merit, which is why the lower federal courts ruled in our favor.”\n\""