Shocking stat of the day: US net interest payments as a share of GDP are set to reach 3.9% by 2034, the highest in history.
This exceeds the all-time record percentage seen in the 1990s as well as World War II levels. Net interest is expected to account for 75% of the budget deficit increase over the next decade, according to the CBO. All as interest expense has already DOUBLED in just 3 years and now costs the US ~$2 billion per day. The worst part? This project assumes no recession hits within the next 10 years. What happens if we enter a recession? Source: The Kobeissi Letter
The US money supply is back in line with the size of the economy, after the excesses of the pandemic period
Time for the Fed to take its foot off the brake pedal regarding liquidity Source: US Federal Reserve, BEA
The US is the largest oil producer in the world, by quite a lot...
Source: Markets & Mayhem, Vivizm
US Home Prices hit another all-time high in March, rising 6% over the last year. Affordability remains near record lows.
Source: Charlie Bilello
More US high-grade borrowers at risk of downgrade as economy slows
A rising share of the $8.9tn high-grade US corporate bond market is at risk of being slashed to junk status, with rating agencies’ expectations of downgrades exceeding upgrades for the first time since the end of 2021. The proportion of the lowest-quality investment-grade bonds that rating agencies have on so-called “negative watch” or “negative outlook” — meaning their ratings are more likely to be downgraded — stood at 5.7 per cent this week, according to analysis by BofA Securities, including names such as Paramount Global and Charter Communications. That is almost double the level of 2.9 per cent at the start of this year. In contrast, the percentage of these bonds on “positive watch” — meaning they are more likely to be upgraded — stood at 5.3 per cent, down from 7.9 per cent in early January Full FT article >>> Source: FT, C.Barraud
Homebuyer conditions for US consumers plummeted to their lowest level in history this month.
The index of buying conditions for houses fell to ~30 points which is below the previous low of ~40 points in the early 1980s. In just 4 years, conditions for buying a house have dropped by 110 points, a massive 73% decline. Meanwhile, buying conditions for vehicles and large household durables are down for 3 straight months. Source: The Kobeissi Letter
Thursday's US stock market heat map. $NVDA is literally holding up the entire market.
Source: The Kobeissi Letter
Jamie Dimon does not rule out a hard landing for the US economy
Source: CNBC
