Bank credit is contracting sharply
This has only happened ONCE in the last 50 years. Source: Game of Trades
The average credit card interest rate right now has risen to 27.81%
And that's with U.S. credit card debt hitting new record highs north of $1,000,000,000,000 Source: Hedgeye
Is the US banking crisis really over?
Unrealized losses on investment securities held by US banks hit $684 billion in Q3, according to the FDIC. This marks a 22.5% jump compared to unrealized losses seen last year. The jump was primarily driven by rising mortgages rates reducing the value of mortgage-backed securities held by banks. Despite these challenges, the FDIC states that banks remain "well capitalized." This comes as usage of the Fed's emergency funding facility for banks hit another record high of $114 billion. Source: The Kobeissi Letter
As highlighted by The Kobeissi Letter >>> Buy Now Pay Later spending soars 20% compared to last year on Black Friday
It's also expected to jump 19% on Cyber Monday to a record $782 million. As excess savings in the US have gone from $2 trillion to zero, Americans are relying on debt more than ever. In other words, "deals" that are 20% off are being financed with credit card debt that has a 30% interest rate...
Hong Kong local bank rate (HIBOR) jumped to its highest level in 16 years
Source: Barchart, Bloomberg
Interest rate on credit card debt has risen to 21.19%
To put this in perspective, this rate was at 14.56% in early 2022. That’s a 6% + jump in less than 2 years. Current levels have NEVER been seen in over 25 years. This is happening at a time when credit card debt has crossed the $1 trillion threshold. To make things worse, personal interest payments have crossed $500 billion. Source: Game of Trades
U.S. Bank Losses on held-to-maturity assets have soared to an ALL-TIME HIGH of $400 Billion! 👀
Source: Barchart, FT
US bank stocks never recovered from the regional banking crisis. Currently, US bank stocks are at record lows relative to the S&P 500
According to Moodys, major US banks are sitting on $650 billion in unrealized losses. Meanwhile, the looming commercial real estate (CRE) crisis has small banks in question. Small banks currently hold ~70% of all CRE loans in the US, $1.5 trillion of which need to be refinanced by 2025. Source: BofA, The Kobeissi Letter
