Free Republic

Zohran Mamdani is on track to become New York City’s next mayor. That’s bad for your interests, even if you don’t live, work, or spend time in the rotting Big Apple.Manhattan’s financial sector is the beating heart of the American economy. Every day, trillions of dollars course through Wall Street, making NYC the nation’s indispensable financial engine. It is not just a local hub but a national artery, driving investment, credit, and economic activity across the country.Decisions made in New York City ripple outward to affect retirement accounts in Ohio, mortgage rates in Florida, and small business loans in Texas.Now...

Following its stress test earlier this year, the Federal Reserve Board on Wednesday announced final individual capital requirements for all large banks, effective on October 1. Large bank capital requirements are informed by the Board's stress test results, which provide a risk-sensitive and forward-looking assessment of capital needs. The table shows each bank's common equity tier 1 capital requirement, which is made up of several components, including: The minimum capital requirement, which is the same for each bank and is 4.5 percent; The stress capital buffer requirement, which is based in part on the stress test results and is at...

The cargo ship craashing into and collapsing the Key bridge in Baltimore is emblematic of Bidenomics: an ongoing wreck. And the mortgage market is the Key bridge collapse over a longer period. Specifically, from the start of Biden’s Regime in 2021. Mortgage applications decreased 0.7 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 22, 2024. The Market Composite Index, a measure of mortgage loan application volume, decreased 0.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased...

The Federal Home Loan Bank System (comprised of Federal Home Loan Banks or FLUBs) are a major source of American home loans and liquidity … at least until now. The problem is that bank credit growth has been contracting for several weeks now. 18th straight week of negative credit growth. As FLUB advances decline with Fed balance sheet shrinkage. Everything is beautful? Not really. 5 Fed rate hikes priced in for 2024. Yes, its beginning to look a lot like rate cuts. So we are seeing Son of FLUBBER. Except this Flubber is crashing and burning.

Back in red? As US fiscal policy deteriorates further thanks to endless Federal spending (not to mention seemingly endless wars under Biden and Nobel Peace Prize winner Obama), we are seeing pain in the bank lending business. Commercial and industrial (C&I) loan lending standards is tightening (blue line) to levels typically seen in recessions. Even though Barclays HY-10Y spreads remains low. Bank credit growth remains negative for the twelve straight week. Under Biden/Yellen’s economic model, the appropriate themesong is “Hell’s Bells.”

The Biden administration released a statement Thursday warning financial institutions against using a person’s immigration status in credit applications. The Consumer Financial Protection Bureau (CFPB) and the Department of Justice (DOJ) released a joint statement telling financial institutions that while it is not illegal to consider a person’s immigration status in the decision on whether to lend money, an overreliance on it could run afoul of the law, according to the statement. The statement implicates the Equal Credit Opportunity Act (ECOA), which makes it illegal to discriminate on the basis of race, color, religion, national origin, sex and more in...

Bidenomics is failing catestropically. Example? As interest rates rise to fight Biden’s Federal spending splurges, bank credit growth slowed to -0.41% YoY for the 10th straight week of negative credit growth. While interest paid on short-term loans almost 10%!! “Jimmy, watch me tank the economy even worse than you did!”

We know that the horribly-flawed Bidenomics doesn’t work, unless you are a large corporate donor in green energy. For the rest, particulary small companies, Bidenomics is a total bust. Under Bidenomics (the Soviet-style command economy), small companies are paying reconrd interest expense WITHOUT a major boost from interest income. Well, ain’t that a kick in the head … to most companies. Pension funds that invested in “safe” MBS are finding that MBS isn’t so safe under inflation. Look at the 10Y-2Y yield curve since Covid. I had a slight surge by March 2021, then has flattened then inverted as The...

Call Bidenomics a new name: The Biden Blitzkrieg Bop since the administration launched a blitzkrieg attack on America’s middle class and low wage workers through bad energy policies and soaring inflation. Economists have practically sounded the all-clear on a looming recession, but plenty of signs are still flashing red. Clearly, economists were wrong earlier this year when they forecast an economic contraction that has yet to manifest. Could they be wrong now? To be sure, economic growth, the labor market and consumer spending have proven unexpectedly resilient in the face of rising interest rates and elevated inflation. But there are...

US personal savings are being exhausted as The Fed raises rates to fight inflation. I call this phenomenon “low riding” where consumers are being punished by The Federal Reserve and Biden Administration. Meanwhile, large bank loan volumes are shrinking. With money-market fund assets hitting new highs, and banks’ usage of The Fed’s emergency funds facility at record highs, we wonder how much longer The Fed can keep the dream of rising deposits alive (after last week’s massive NSA inflows). On a seasonally-adjusted basis, The Fed says that total deposits dropped $11BN last week (the first decline in 4 weeks). We...

We are back in the USSR! And the economy taking commands from Washington DC! Introduction During the COVID-19 pandemic the occurrence of remote work jumped, out of sheer necessity. The technology was already available, but the pandemic accelerated its adoption and bypassed the hesitation of employers to allow people working from home. In many cases, remote work has been successful and therefore seems to have become a permanent feature, often in hybrid form. For employers, it has become an employee benefit to attract people in a tight labor market and it saves on office space costs. The flipside of the...

As massive consumer tailwinds like excess savings fade, one wonders what — if anything — could help fuel the next leg of the consumer spending boom that has been juicing economic activity.In a research note Tuesday, Wells Fargo economists Tim Quinlan and Shannon Seery put a spotlight on a potential whopper: home equity."Strong home price appreciation in the years following the pandemic may be an underappreciated tailwind for the household sector," the economists wrote. "The total value of the U.S. single-family market breached $40 trillion last year, and the mix between debt and equity has shifted over time with the...

I don’t know whether Cap’n (Credit) Crunch is Fed Chair Powell or the big spender Boss (Tweed) Biden? Money supply growth fell again in June, remaining deep in negative territory after turning negative in November 2022 for the first time in twenty-eight years. June’s drop continues a steep downward trend from the unprecedented highs experienced during much of the past two years. And with M2 Money growth down for 8 consecutive months, bank credit down -0.2% YoY.

Bidenomics relied on massive Federal spending thanks to Covid and massive monetary expansion. This led to the highest inflation in 40 years (Bidenflation). But now The Fed is slowing M2 Money growth into negative territory and hiking their target rate. The result? Bank credit growth has crashed to 0.5% YoY. In other words, banks are no longer expanding credit for the first time since the aftermanth of The Great Recession and Financial Crisis of 2008/2009. Of course, Washington DC bailed out their bestest buddies, the banks, while middle America suffered. As America loses steam under Biden and The Fed, 41+...

Bidenomics is based on massive Federal spending and massive Fed monetary stimulus. But like all stimulus, it wears off. Such is the case with bank lending as The Fed raises interest rates. US bank credit year-over-year (YoY) has stalled to a lowly 0.7% rate as M2 Money growth YoY increases slightly to -4%. White House report signals openness to manipulating sunlight to prevent climate change. Its figures. With the Socialist Federal Reserve manipulating interest rates and Biden/Congress spending like drunken sailors trying to manipuate economic growth, it makes sense that Biden wants to explore Bill Gate’s idiotic idea of blotting...

Inflatiion Joe Biden (or Unaffordable Joe). Bidenflation has led to The Federal Reserve tightening interest rates. As I said on Stuart Varney’s show years ago, “When The Fed starts raising rates, KABOOM!” Now we are seeing US Loan Demand weakening by the most since the 2009 financial crisis. Then we have large/medium sized banks reporting a crash in stronger demand for C&I loans.

That’s creating new tensions with the U.S. and its Western allies The ascendance of China in developing country finance threatens to add to the broader trend of “decoupling” that is unraveling trade and technology ties with the West. The debt China is owed by poor countries only consolidates its influence in Africa and other regions. “We are moving to more of a bipolar system with a very significant creditor to a great many countries bent on doing things bilaterally with its own rules,” said Carmen Reinhart, who served as the World Bank’s chief economist until last year and has directly...

American banks experienced a historic contraction in the final two weeks of March, greater than even during the 2008 financial crisis, in the clearest indication yet that credit conditions are tightening as a result of deteriorating economic conditions.According to Federal Reserve data dating back to 1973, commercial bank lending saw a drop of nearly $105 billion in the two weeks ending March 29th. The final week saw a decrease of over $45 billion, which can be attributed primarily to a decline in small banks’ loan offerings.This reduction in lending has particularly impacted real estate, commercial, and industrial loans. The most...

The Federal Reserve is doing Archie Bell and The Drells “Do The Tighten Up!” Over the fourth quarter, significant net shares of banks reported having tightened standards on C&I loans to firms of all sizes. Banks also reported having tightened all queried terms on C&I loans to firms of all sizes. Actually, banks are tightening standards across the various credit boxes. And as banks tighten up their credit box, we are seeing the median age of US homebuyers rising from 31 to 47 years. This is reminding me of Germany where you save for your entire life to buy a...

The bankruptcy of crypto’s marquee lender, Genesis Global Capital, may be one more blow than the industry can withstand, at least in its current form. The list of bull-market stars laid low now includes nearly every major player to have captured the public’s attention by offering market-beating returns for the simple act of depositing tokens. Genesis joins BlockFi, Celsius Network and Voyager Digital among firms whose collapse have left countless clients angry and unlikely to risk more money on their daredevil exploits. Acting as de facto banks, these firms took in assets which they then lent out freely across the...