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5 Dec 2023

2024 is expected to be a year of interest rate cuts

Here's what's currently priced in markets of who does what when. Source: Bloomberg, David Ingles

4 Dec 2023

As highlighted in the Kobeissi Letter and in the chart below from Tavi Costa >>> Annualized interest expense on US Federal debt is nearing $1.1 TRILLION

To put this in perspective, 2023 defense spending was $821 billion. This means the US is on track to spend 34% MORE on interest expense than defense spending. In 2023, the US government produced $4.4 trillion in revenue. This means that 25% of receipts in the entire 2023 are equivalent to Uncle Sam's annual interest expense. Rising rates and falling tax revenue are both occurring at the same time. A tricky combination

24 Nov 2023

This level was last seen during the Financial Crisis

9% of bonds are due to mature within the next 2 years. High interest rates will make it harder to refinance. Source: Game of Trades

23 Nov 2023

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

3 Nov 2023

Interest costs as a share of US corporate profits are near the lowest levels in 40 years

This is partly because many companies have locked in long-term financing at low rates. This has kept profit margins elevated. Maybe companies are better to manage their debt schedule than the US Treasury... Source: The daily shot, Lance Roberts

27 Oct 2023

Welcome to Zombie Land

"There are some serious problems in small-caps, especially in the US. Good luck paying interest without profits. Great chart via Soc Gen showing the distribution of stock forward P/E valuations in the MSCI Europe small cap and Russell 2000 index. Source: SG, Themarketear, Lance Roberts

9 Oct 2023

BREAKING: Average interest rate on a 30-year mortgage rises to 7.93%, its highest since July 2000

Since January 2021, less than 3 years ago, interest rates have gone from 2.65% to 7.93%. This means that homebuyers just 3 years ago would see their interest rate TRIPLE if they decided to move. This is exactly why existing home sales are at their lowest since 2010. The average new home is about to cost LESS than the average existing home for the first time since 2005. You know something is wrong when old costs more than new. Why sell if your mortgage rate triples? From The Kobeissi Letter

6 Oct 2023

Interesting FT article on UK neobanks: "UK fintech: neobanks may end up blending in"

Low fees mean profits have remained elusive. But higher interest rates are now compensating for that, not least with better returns on client money put out on deposit. Satisfaction scores by customers are also much higher than traditional banks. Some lessons need to be learned. Source: https://lnkd.in/emZyY76d

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