🏦 Taking their belt in

Plus, a close shave for the UK | [Finimize]( Your Weekly Brief should take you 3:14 minutes to read. Let us know [what you think here]( Weekly). Credit Crunch Vibes US banks had already become a bit stingier, tightening standards for all kinds of business and consumer loans, mostly because of their own worries about the economy. And now, not coincidentally, they’re seeing a slowdown in loan applications. Here’s what it all means and what to watch for in the week ahead. [Crunch Vibes] 👀 WHAT JUST HAPPENED? US - US banks continued to tighten their lending standards last quarter. - Coworking space giant WeWork filed for bankruptcy last week. Europe - The UK economy stagnated last quarter. Asia - The International Monetary Fund (IMF) raised its forecasts for China’s economic growth. - China’s imports unexpectedly rose last month, but exports continued to fall. - The world’s second-biggest economy slid back into deflation in October. ✍️ WHAT DOES ALL THIS MEAN? US banks reported tight lending standards and weak demand for loans in the third quarter, according to the Federal Reserve’s senior loan officer opinion survey (or “SLOOS”). But it wasn’t all bad news: the trend across both measures actually showed some improvement compared with the prior three-month period. Once the darling of the startup world, WeWork threw in the towel last week, filing for bankruptcy protection. The firm known for revolutionizing office work had boasted coworking spaces on seemingly every desirable street and a valuation of $47 billion. But the company was soon weighed down by colossal losses and its disaster of an initial public offering. Expensive leases, signed before the pandemic, and the habit-changing effects of working from home piled $19 billion of debt on WeWork and sent profit firmly into the red. The British economy flatlined in the third quarter, registering zero growth compared to the quarter before, with weaker spending by consumers, businesses, and the government offset by stronger trade activity. While this outcome was marginally more encouraging than the 0.1% drop forecast by economists and reduced the likelihood of a recession in 2023, it also points to an extended period of economic stagnation for the country – one exacerbated by higher interest rates. The IMF delivered a sunnier outlook for China’s economic growth for this year and next, encouraged by stronger support from the government, but it warned that property sector weakness and muted external demand would persist. The fund now sees China’s economy expanding by 5.4% this year and 4.6% in 2024, up from previous estimates of 5% and 4.2%, respectively. Longer term, it sees growth gradually sliding to about 3.5% by 2028, because of weak productivity and an aging population. Chinese imports rose 3% in October from a year ago, marking the first gain in eight months and defying forecasts for a drop. Exports, on the other hand, dramatically fell by 6.4% – far worse than the 3% drop that analysts had projected. It was the sixth consecutive decline for exports and came as a big disappointment: the period was expected to compare favorably to October of 2022, which faced pandemic-related disruptions in logistics and production. China’s latest monthly consumer price index, meanwhile, showed that the world’s second-biggest economy slid back into deflation in October, highlighting the country’s struggles in shoring up growth by boosting domestic demand. After remaining virtually flat in August and September, consumer prices fell by a more-than-expected 0.2% last month, compared to a year ago. What’s more, producer prices – which reflect what factories charge wholesalers for things – fell for a 13th straight month, dropping a steeper 2.6%. 🔍 THIS WEEK’S FOCUS: US bank lending The SLOOS figures are calculated as net percentages, or the share of banks reporting tighter conditions minus the share of banks reporting easier standards. And the net proportion of banks tightening standards on commercial and industrial loans for medium and big businesses fell to 33.9% in the third quarter, from 50.8% in the one before. Asked why they're still tightening lending standards, banks most frequently cited a less favorable or more uncertain economic outlook, a falling tolerance for risk, a deterioration in the credit quality of loans and collateral values, and concerns about funding costs. Now, despite the quarter-over-quarter improvement in bank lending standards, several economists were quick to point out that the numbers are still pretty dire and do little to dispel fears about a looming credit crunch – especially after the turmoil in the banking sector earlier this year. Credit, after all, is the lifeblood of the economy: when it gets harder to borrow, consumers spend less and businesses invest less, derailing economic growth and increasing the odds of a recession. In fact, an analysis by Goldman Sachs shows that when the SLOOS survey indicates that banks are turning more cautious in their lending practices, it tends to precede a decrease in actual lending, which often leads to a recession. 📅 THE WEEK AHEAD - Monday: Nothing major. - Tuesday: UK labor market report (October), US inflation (October). Earnings: Home Depot. - Wednesday: Japan economic growth (Q3), China retail sales (October), UK inflation (October), US retail sales (October). Earnings: Cisco. - Thursday: Japan trade balance (October), US industrial production (October). Earnings: Walmart, Alibaba. - Friday: UK retail sales (October), US housing starts (October). [StartEngine]( SPONSORED BY STARTENGINE The crowdfunder is crowdfunding [Investments in regulation crowdfunding]( have now surpassed $2 billion in total funds raised. And yet, they still only make up a fraction of the [$10 trillion private investment markets](. That means there’s potentially a lot of room for this rapidly growing opportunity to expand. [StartEngine]( is leading the charge in this space: over 1,000 funding rounds have successfully wrapped on the platform and built up a startup-obsessed community of 1.8 million (1,2) As one of the US’s first-ever dedicated spaces to investment crowdfunding, and led by Howard Marks with Kevin O’Leary as strategic adviser, this platform is helping fund the future. (3) Now you can [get a piece of the crowdfunder itself](. Over 40,000 investors have raised over $75 million already. Now’s your chance to [join them](. (4) [Find Out More]( Reg A+ offering made available through StartEngine Crowdfunding, Inc. No broker-dealer or intermediary involved in offering. This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment. Please see the most recent [supplement](, [offering circular](, and [selected risks](. (1) Includes funding rounds via Reg. CF and Reg. A+ combined through StartEngine’s funding portal and broker dealer, StartEngine Capital, LLC and StartEngine Primary, LLC respectively, as well as StartEngine’s own raises. (2) StartEngine Community: Count of 1.8 million is determined as the number of unique email addresses in StartEngine’s database as of 10-6-2023. (3) Kevin O’Leary is a paid spokesperson for StartEngine. See his 17(b) disclosure, [(. (4) StartEngine’s investor count and investment amount include the total number of investors and funds raised over multiple offerings and at different terms in StartEngine Crowdfunding Inc itself. When you support our sponsors, you support us. Thanks for that. [StartEngine]( SPONSORED BY STARTENGINE Kevin O’Leary is an investor in this project Shark Tank’s Kevin O’Leary* is a firm believer in this crowdfunding platform. Formerly an investor in StartEngine, having invested in a previous round, he’s now a strategic advisor for the platform, helping shape the future of Venture Capital. He “wanted to compete with [CEO]( Howard [Marks straight]( out of the gate, but after seeing what he had built with the StartEngine team, it made a lot of sense to join him instead.” A community of two nearly million has collectively committed over $1.2 billion on startup fundraising campaigns, and the platform’s been named one of Inc. Magazine’s [5,000 fastest-growing US private companies two years in a row]( (2022 and 2023)***. Now, you can invest in the same company as strategic advisor Kevin O’Leary: over 40,000 investors** have already [bagged their piece of StartEngine, and you have until November 15th to join this funding round](. So if you want a piece of this platform, and the $10 trillion market it potentially taps into, [check out the funding round](. [Find Out More]( Reg A+ offering made available through StartEngine Crowdfunding, Inc. No broker-dealer or intermediary involved in offering. This investment is speculative, illiquid, and involves a high degree of risk, including the possible loss of your entire investment. Please see the most recent [supplement](, [offering circular](, and [selected risks](. *Kevin O’Leary is a paid spokesperson for StartEngine. See his 17(b) disclosure, [(. **StartEngine Community: Count of 1.8 million is determined as the number of unique email addresses in StartEngine’s database as of 10-6-2023. ***Includes $760M in funds raised as of May 9, 2023 via Reg. CF and Reg. A+ combined through StartEngine’s funding portal and broker dealer, StartEngine Capital, LLC and StartEngine Primary, LLC respectively, as well as StartEngine’s own raises. Also includes $470M in funds raised previously through offerings conducted on www.seedinvest.com outside of the StartEngine platform. In May 2023, StartEngine acquired assets of SeedInvest, including email lists for SeedInvest’s users, investors and founders seeking to raise funds. As measured by revenue growth over a three-year period. [Inc 5000 source](. Includes investors over multiple offerings and at different terms. When you support our sponsors, you support us. Thanks for that. ⏸ Want to turn off the Weekly Review? 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