German banks are NOT passing on the increased interest rates to their customers
Commerzbank, Germany's 2n-largest retail bank, has announced it will increase net interest income to €8bn. Commerzbank has increased its deposit beta - a measure of how much of a rate increase it passes along to savers - slower than initially expected. The bank will end this year with something around a deposit beta of avg 40%. Source: HolgerZ, Bloomberg
Over the last 15 years, the US National Debt has increased at a rate of 8.5% per year versus an increase in economic growth (nominal GDP) of 4.0% per year
Source: Charlie Bilello
Central banks meetings calendar
Source: Bloomberg
An ugly canadian CPI, surging crude oil prices and cautious positioning ahead of tomorrow's FOMC decision have pushed #us treasuries yields to their highest since 2007...
Bonds are now at their cheapest to stocks since Oct 2007... Source: Bloomberg, www.zerohedge.com
From October onwards, US consumers face a double whammy: student loans + auto loans...
Suspended Student loan payments helped fuel the auto market over the last several years. Auto loans pass Student loans in consumer debt load for the first time in 13yrs, which means consumers face a double-whammy starting in October w/existing auto payments & resumed student loan obligations. Auto loan delinquencies are on the rise and more consumers could fall behind if unemployment increases. Source: Bloomberg, HolgerZ
In the US, the slow motion bank run continue...
Interest Rates on Deposits, by Bank: 1. Wells Fargo: 0.15% 2. Citibank: 0.05% 3. Chase: 0.01% 4. Bank of America: 0.01% 5. US Bank: 0.01% Rates on Alternatives to Bank Deposits: 1. CDs: 5.0% 2. Money Market: 4.5% 3. Treasury Bonds: 4.0% Deposits continue to flow out of banks at a historic pace with $1 trillion+ withdrawn over the last year. The era of "free" money for large US banks is coming to an end. They must raise interest paid on deposits or capital will continue to leave. Source: The Kobeissi Letter, Apollo
Why German industrial model is at risk in one chart...
Without reliable access to affordable power, Germany fears energy-intensive companies will invest elsewhere, and “we will lose this industrial base,” vice-chancellor Robert Habeck said. Source: Eurostat, Gustavo Philippsen Fuhr
Have you ever heard about mortgages in negative amortization?
As highlighted by The Kobeissi Letter, three of Canada's largest banks are seeing ~20% of their outstanding mortgages in negative amortization. What does this mean? Monthly payments on ~20% of mortgages at BMO, TD, and CIBC are no longer enough to cover interest expense. This means you end up owing more than your original loan amount over time. Typically, variable rate mortgages with fixed payments experience this in a rapidly rising interest rate environment. These homeowners may begin to foreclose over the next few months. This is an important trend worth watching.
