Credit Conditions

[everything1]

They are calling credit conditions a slow burn from world S&P global perspective. China for instance has always been tight, their people are known to save 30% of their incomes. The bankers latest or current, they say credit is softening, this kind of defines their look.

https://www.aba.com/about-us/press-r...-index-q3-2023

You can see the graph here in the report. I won't go into it, this is a pretty short read. Something rarely discussed is maybe that so many women are in the workforce and they drive 70-80% of consumer spending. The guys I know who work and have women (drama), they will complain about financing their women and daughters lifestyle, (yes men still shoulder the lions share burden of this lifestyle), while the guys I know who don't have to work anymore because she makes 3 figures don't complain, but they whine. I tend to favor soft landing, and maybe 4th quarter 2022 was a mini-recession of sorts, maybe a possible repeat of that this year? Life is pretty good, Real Estate really shot up but it's hard to tap that equity right now, I'm less partisan with age it seems, but predict this is lining right up with the dem plan, loosen the interest rates right before next POTUS. Rising interest rates seem to coincide with debt flushes (recessions), or so I thought. Just my 2 cents is all.

https://www.aba.com/-/media/document...ex-q2-2023.pdf

[redraspberry]

Stimis all used up? Or inflation racking up he cost?

More Americans Are Having A Hard Time Paying Their Big Credit Card Bills

https://www.zerohedge.com/personal-f...dit-card-bills

The number of Americans rolling credit card debt from month to month is now higher than the number of people paying their bills in full for the first time ever.

Americans are buried under more than $1 trillion in credit card debt. Credit card balances increased by $45 billion between April and June alone. Meanwhile, credit card interest rates have climbed to 20.6%. With both balances and interest expenses rising, more and more people are struggling to pay the bills.

According to a JD Power survey, 51% of US credit cardholders now carry revolving debt. To put that into perspective, from 2018 to 2022, the percentage of those rolling over balances ranged from 40% to 50%.

The average balance on a credit card was $2,573 in June. That represents a 6.5% increase from a year ago.

[brutus2]

Wow - loosey goosey and getting looser.

Will make things pretty bad when something breaks, as will go all the way to positive in a heartbeat

Guess have to wait until tomorrow for last weeks report due to holiday but just catching up.


Index Suggests Financial Conditions Loosened Again in Week Ending August 25
The NFCI ticked down to –0.40 in the week ending August 25. Risk indicators contributed –0.16, credit indicators contributed –0.14, and leverage indicators contributed –0.09 to the index in the latest week.

The ANFCI was unchanged in the latest week at –0.35. Risk indicators contributed –0.22, credit indicators contributed –0.12, leverage indicators contributed –0.07, and the adjustments for prevailing macroeconomic conditions contributed 0.05 to the index in the latest week.

The NFCI and ANFCI are each constructed to have an average value of zero and a standard deviation of one over a sample period extending back to 1971. Positive values of the NFCI have been historically associated with tighter-than-average financial conditions, while negative values have been historically associated with looser-than-average financial conditions. Similarly, positive values of the ANFCI have been historically associated with financial conditions that are tighter than what would be typically suggested by prevailing macroeconomic conditions, while negative values have been historically associated with the opposite.

[ynot2k]

"...Will make things pretty bad when something breaks..."


Yes when something breaks - Mannarino agrees with you on that and in his view it is the historic blown debt market bubble breaking that will bring down the house of cards.

All I really know for sure about the debt market is that it probably is bigger than I can imagine.

[redraspberry]

The markets are as rigged as the DoJ is......

In other news my credit is so good Credit Karma almost insist I should take on more with all the new offers.....

[brutus2]

The markets are as rigged as the DoJ is......

In other news my credit is so good Credit Karma almost insist I should take on more with all the new offers.....

You will not get any new offers when the levee breaks. (regardless of your credit) The sign will be when the index turns positive.
Only question will be, will it provide some warning ( take 3 or 4 weeks or more). or go there all in one week ( no warning)

My guess is the latter, so have to plan accordingly. ( if you believe the Levee will eventually break )




If it keeps on rainin', levee's goin' to break
If it keeps on rainin', levee's goin' to break
When the levee breaks, I'll have no place to stay
Mean old levee taught me to weep and moan, Lord
Mean old levee taught me to weep and moan
It's got what it takes to make a mountain man leave his home
Oh well, oh well, oh well

[LongDonSilver]

I think a dead dog can still get a credit card and the reckoning will be brutal when the credit merry-go-round stops.

[brutus2]

Week ending last Friday. National Credit Conditions as expressed in this index.
Basically treading water in the loose side of pool.



Contributions to the NFCI and ANFCI
The first two columns in the table below denote how many series of the 105 used to construct the NFCI and ANFCI indicated tighter-than-average or looser-than average conditions in the most recent week. The latter two columns indicate how many of the 105 indicators have tightened or loosened in the past week.

09/01/2023 Tighter than average Looser than average Tightened Loosened
NFCI 15 90 55 50
ANFCI 14 91 52 53

[bronkster1967]

I don't quite know how it is now, but when I was attending college (mid-1980's), as long as you were able to form some sort of signature on a piece of paper, all of the credit card companies would gladly get you hooked onto the modern financial equivalent of slavery. "Start 'em young!" seemed to be their business plan. Apparently for most people- it worked.

[brutus2]

Financial Conditions still remain moderately loose.
Government is very loose
Fed is moderately tight

Does not seem like the system is trying too hard to squash inflation.
" The CPI rose .6% in August, it's biggest monthly gain of 2023"


ndex Suggests Financial Conditions Loosened Again in Week Ending September 8
The NFCI ticked down to –0.38 in the week ending September 8. Risk indicators contributed –0.16, credit indicators contributed –0.12, and leverage indicators contributed –0.09 to the index in the latest week.

The ANFCI also ticked down in the latest week, to –0.33. Risk indicators contributed –0.21, credit indicators contributed –0.11, leverage indicators contributed –0.07, and the adjustments for prevailing macroeconomic conditions contributed 0.07 to the index in the latest week.

The NFCI and ANFCI are each constructed to have an average value of zero and a standard deviation of one over a sample period extending back to 1971. Positive values of the NFCI have been historically associated with tighter-than-average financial conditions, while negative values have been historically associated with looser-than-average financial conditions. Similarly, positive values of the ANFCI have been historically associated with financial conditions that are tighter than what would be typically suggested by prevailing macroeconomic conditions, while negative values have been historically associated with the opposite.