Credit Conditions

[Markpti]

Imagine being penalized for improving your credit score. What incentive do people have to improve their credit score if they are penalized? Aren’t they incentivized to purposely tank their score?

Does this policy only consider credit score? A good credit score doesn’t make one wealthy.

New example of..you're damned if you do and damned if you don't.

I know someone with credit so bad that they'd be sure to get a decent size subsidy toward a mortgage. Problem is, no agency would give her a mortgage due to such a poor credit history..........TODAY! If Biden wins in 2024, maybe he'll mandate she be given that too ....with no repayments. HEY! Such a deal!

[jjmcwill]

New example of..you're damned if you do and damned if you don't.

I know someone with credit so bad that they'd be sure to get a decent size subsidy toward a mortgage. Problem is, no agency would give her a mortgage due to such a poor credit history..........TODAY! If Biden wins in 2024, maybe he'll mandate she be given that too ....with no repayments. HEY! Such a deal!"


Yea, this is a problem. If Trump is the only viable option, again, I may have to vote for that idiot. This is blatant socialism. I spent two years building my credit up and now my responsible behavior.is penalized. Not okay.

[brutus2]

Great article. Lots of data and indicators and common sense, saying it will certainly be rough waters ahead.

Here is an indicator that is screaming something is probably broken in the credit market, which could have an impact, as soon as tomorrow.
( it may mean nothing or it may mean everything) we will see

The spread between a 4 week and a 8 week US Tbill should be pretty close. Historically this is true. They should only differentiate a bit due to perception of imminent rate hikes and supply demand issues, but since they are close approximates of each other and the maximum rate hike usually thought to happen within 4 weeks is .5%, and that needs to be spread, it is extreme to have a differentiation of more than 50 basis points. Currently you would think maybe a 25 basis point differentiation is warranted at the most. Like I said in normal times it would be about the same yield.

Since April 11th the difference exceeded 50 basis points and has remained well in excess of this. Peaking at 161 basis points on 04/20.
That is an absurd differential. WHY is the question. The common perception is that the Fed will only hike by 25 basis points once more.
There is minimal difference in holding one T bill over the other. All other maturities are exhibiting normal behaviour.

These 2 maturities would be considered the safest and most liquid securities in the world by the financial establishment.
Presumably the 4 week is the King due to its even shorter duration. Is there a stampede to get ones hands on the supposedly best in class collateral?
Why?




I hear nothing in the establishment press about this unprecedented irregularity. It was nowhere near the differentials that we have this month, when Lehman Brothers collapsed in Sept 2008.

Time will tell what its significance means, I do not think it will be long to find out one way or the other. ( extremely significant or minimally significant)

This link shows all the historical differentials in an easy to read way, right up until Friday.


https://home.treasury.gov/resource-c...ate_value=2002

This very strange irregularity has resolved with the 4 week note now having the highest yield which is what you would expect ( that or similar) given the markets expectations of future rates. I guess it meant nothing, but certainly bizarre for a short time.

[golditiki2]

moaning about the stupid behaviour of the PTB is meaningless. Only active voting at all levels against all those who desrtuct honest and boycotting companies and their products who support evil ( which is not equal to freedom ) and the propagation of such an attitude is the right thing to do.

Golditiki2+++

[brutus2]

Credit conditions ( in aggregate in the US) continue to loosen.

It is looking to me that 'faith' in the system/Fed/Government largess is so strong that it will take a significant credit event to move this index into positive territory within short time frame.


Index Suggests Financial Conditions Loosened Again in Week Ending May 5
The NFCI ticked down to –0.28 in the week ending May 5. Risk indicators contributed –0.13, credit indicators contributed –0.10, and leverage indicators contributed –0.05 to the index in the latest week.

The ANFCI also ticked down in the latest week, to –0.26. Risk indicators contributed –0.19, credit indicators contributed –0.06, leverage indicators contributed –0.05, and the adjustments for prevailing macroeconomic conditions contributed 0.04 to the index in the latest week.

[redraspberry]

California defaulted on their Federal Covid unemployment debt that they borrowed.

California Defaults On $18.5 Billion Debt, Leaving State Businesses Holding The Bag

https://www.hoover.org/research/cali...es-holding-bag

Little did California businesses know that they were cosigners on the state’s nearly $20 billion loan from the federal government that was used to cover California’s unemployment fund shortfall during the COVID pandemic. This ugly truth became apparent when the state recently decided to stop making payments on this loan. When a state defaults on its federal unemployment insurance loan, federal law requires that the state’s businesses repay the loan.

What makes this default even more egregious is that the stone-age-era IT system of the state’s Employment and Development Department (EDD) opened the floodgates to bad actors, permitting more than $30 billion in fraudulent unemployment claims during the pandemic. Those receiving fraudulent payments include incarcerated felons, a person impersonating a one-year-old, and a person impersonating Senator Dianne Feinstein. A single residential address received checks for around 60 separate individuals filing from that address.

****************

Personally I think this is just more money laundering. Illinois has the same situation and they let it go on without any real investigation.

[LongDonSilver]

New example of..you're damned if you do and damned if you don't.

I know someone with credit so bad that they'd be sure to get a decent size subsidy toward a mortgage. Problem is, no agency would give her a mortgage due to such a poor credit history..........TODAY! If Biden wins in 2024, maybe he'll mandate she be given that too ....with no repayments. HEY! Such a deal!"


Yea, this is a problem. If Trump is the only viable option, again, I may have to vote for that idiot. This is blatant socialism. I spent two years building my credit up and now my responsible behavior.is penalized. Not okay.

Yes, don't think that this is capitalism. This is socialism or crony capitalism at best. Equity is not the same as equality. Mandating equal results without equal efforts leads to what was often stated regarding people in the USSR: "They pretend to pay us and we pretend to work"

[brutus2]

Credit conditions loosened again ( marginally) in the week ending May 12th. ?????



Index Suggests Financial Conditions Continued to Loosen in Week Ending May 12
The NFCI ticked down to –0.30 in the week ending May 12. Risk indicators contributed –0.15, credit indicators contributed –0.10, and leverage indicators contributed –0.04 to the index in the latest week.

The ANFCI also ticked down in the latest week, to –0.29. Risk indicators contributed –0.21, credit indicators contributed –0.06, leverage indicators contributed –0.05, and the adjustments for prevailing macroeconomic conditions contributed 0.04 to the index in the latest week.

[brutus2]

Credit conditions loosened marginally, once again last week, and are in a decent zone currently.
I have attached the link ( charts etc.) so anyone that is interested can note that they can change rapidly and that
for something bad to happen they always register a positive number during its occurrence. In a fiat system it is always about credit conditions.


Index Suggests Financial Conditions Loosened Again in Week Ending May 19
The NFCI ticked down to –0.31 in the week ending May 19. Risk indicators contributed –0.16, credit indicators contributed –0.11, and leverage indicators contributed –0.03 to the index in the latest week.

The ANFCI also ticked down in the latest week, to –0.30. Risk indicators contributed –0.22, credit indicators contributed –0.07, leverage indicators contributed –0.05, and the adjustments for prevailing macroeconomic conditions contributed 0.04 to the index in the latest week.

https://www.chicagofed.org/research/...i/current-data

[brutus2]

Credit conditions remained unchanged last week.

We will see how long all that excess M2 ( now dwindling) and the runoff of the TGA ( now ended) can keep the engine lubed enough to run good enough.

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Index Suggests Steady Financial Conditions in Week Ending May 26
The NFCI was unchanged at –0.29 in the week ending May 26. Risk indicators contributed –0.16, credit indicators contributed –0.10, and leverage indicators contributed –0.03 to the index in the latest week.

The ANFCI was also unchanged in the latest week, at –0.33. Risk indicators contributed –0.22, credit indicators contributed –0.08, leverage indicators contributed –0.05, and the adjustments for prevailing macroeconomic conditions contributed 0.02 to the index in the latest week.