While NoBull’s simple 1% Plan to fix America’s deteriorating financial condition will not cure our condition overnight, it could buy us some time by setting the U.S. dollar on a firmer foundation.
What is Going on with the Banks?
The frailty of the banking system has come front & center over the last couple of weeks as more secondary, unintended symptoms develop from the Fed’s race to raise interest rates.
Fixed-Income Issuance Says a Lot About Economy
Total U.S. fixed income (FI) issuance declined -34% y/y to $8.8 trillion during 2022 as interest rates ramped up.
What Happened to Silicon Valley Bank?
Don’t assume that SVB’s difficulties are symbolic of the entire banking industry.
Inflation is Marginalizing Purchasing Power from the Lower-Income Demo
As households with annual incomes >$70k drive 62% of total food-away-from-home sales, it is more important than ever to focus on this demo especially as spending from the lower-income demo slows.
Forever Wars Are Expensive!
Ukraine aid payments of $77B through 1/15/23 represent the equivalent of a 5% dividend on LTM S&P 500 earnings.
The median U.S. home sale price was $383k in January 2023
According to Redfin Estimates, the total value of U.S. homes was $45.3T at the end of 2022, down -4.9% ($2.3T) from a record high of $47.7T in June 2022.
Increasing Domestic Oil Production will Help Keep a Lid on Energy Prices
The EIA forecasts that the U.S. benchmark West Texas Intermediate (WTI) crude oil price will average $77 per barrel (b) in 2023 and $72/b in 2024, down from $95/b in 2022.
Consumers are OK For Now Judging by Credit Card Delinquencies
Credit card debt is up sharply post-covid which is not surprising given the substantial inflation that subsequently developed.
An Inverted Yield Curve is an Excellent Predictor of Recessions
As the last 5 recessions have been preceded by an inverted yield curve, it makes sense to note the positioning of the current inverted yield curve…