Consumer Credit

Raising Interest Rates Can't End Well

"The economy looks to me like a type of Ponzi Scheme. It depends on both rising energy consumption and rising debt. Judging from the problems we are having now, it seems to be reaching its limit in the near term. Raising interest rates will tend to push it even further toward its limit, or over the limit. The world economy is operating at too close to 'stall speed'. The financial system is too fragile."

What The Hell Is Going On? - Part 2

"Desperate households across the land aren’t clinging to guns and bibles. They’re clinging to credit cards as their only lifeline in this failing empire of debt, deception, and delusion. "

Stocks Mixed As Treasuries Suffer Longest Losing Streak Since 2012, Dollar Pops Ahead Of ADP

Asian markets dropped following disappointing China trade and Japan GDP data, while European stocks rebounded for the first time in five sessions led by miners and banks. US futures were little changed with a strong dollar pressuring oil below $53; sterling slid for the eighth day out of nine before the chancellor of the exchequer delivers his spring budget. Treasuries are headed for their longest losing streak since 2012 ahead of a 10Y U.S. debt auction, and today's ADP private payrolls report.

US Credit Card Debt Sees Biggest Drop In Over Four Years

The credit-card fueled spending spree came to a screeching halt in January, when according to the latest just released consumer credit data from the Fed, revolving credit tumbled by $3.8 billion. This was the first decline since February of 2016, and the biggest drop since December 2012.

Futures Decline, Europe Slumps After German Industrial Orders Collapse

After a turbulent overnight session on Monday morning, this morning traders settle at their desks to find a relatively calmer environment, with US equity futures down 0.2% to 2,371.75, while European stocks fell for a third consecutive day, and Asian markets which closed mixed (China up, Nikkei down, MXAP up 0.2%).

Key Events In The Coming Week: All Eyes On Payrolls

The key economic release this week is the employment report on Friday, which as Janet Yellen noted in her speech on Friday, is the only economic event (together perhaps with the CPI report on April 15), that could potentially derail a now practically guaranteed rate hike.

S&P Futures, Global Stocks, Euro Dragged Lower By Deutsche, Geopolitics, French Election Worries

European shares and S&P futures are modestly lower this morning, dragged down by fresh geopolitical concerns out of North Korea which last night fired 4 ballistic missiles, by renewed political jitters ouf of France where Alain Juppe announced he would not run in the presidential election, from Deutsche Bank whose aggressive equity offering has weighed on local stocks, and from China's announcement over the weekend in which it modestly cut its economic outlook.

US Household Debt Rose To $12.6 Trillion In 2016: Biggest Jump In A Decade

Total US household debt jumped in Q4 driven by increases in credit card debt, auto and student loans, and a Q4 surge in mortgage originations, and as of December 31, 2016, stood at $12.58 trillion. For the full year, total household debt rose by $460 billion, the biggest annual increase in a decade.

The Norwegian Economy In 2017: Black Swans Hovering Overhead

Norwegians are just now starting to grapple with the effects of their “single cylinder” economy, mostly dependent on oil and gas (ca. 60% of exports). Despite optimism about $50-$70/barrel oil, American crude output is surging, on track to be the highest ever, since 1970, while cracks start to form in OPEC’s latest agreement. In addition to the oil tailspin, a flock of “black swans” have taken flight, led by one with a very orange beak.

Political Worries Keep Europe On Edge As Earnings Push Stocks Higher; US Futures Unchanged

In a mostly quiet Wednesday session, Asian stocks rose overnight along with European bourses, which were led higher by miners after Rio Tinto posted higher profits for the first time in three years and a bigger-than-expected dividend, while India’s Sensex extended declines after the central bank unexpectedly left rates unchanged. US futures were little changed as oil continued to fall after API reported a huge inventory build

At Over $2.5 Trillion, US Student And Auto Loans Hit New All Time High

While US consumers may have stepped back from a credit-card funded splurge in the last month of 2016, the far more troubling trend in student and auto loans remains, and as the following chart shows, as of Q4, both car and student debt hit all time highs of $1.407 trillion and $1.11 trillion, respectively.

S&P Futures, European Stocks Bounce As Dollar Rises Most In Two Weeks; Gold, Yen Slide

The dollar rebounded from a key support level, strengthening against all major peers, pushing S&P futures higher as European shares rose, led by basic resources and real estate, while Asian stocks fall. Gold fell from its highest level since November as demand for some haven assets ebbed while global bonds declined. Oil dipped, pressured by a stronger dollar.

Key Events In The Coming Week

It is a relatively light week in the US, with mainly trade balance, JOLTS and consumer credit data out. The key economic release this week is University of Michigan consumer sentiment on Friday. In addition, there are a few scheduled speaking engagements from Fed officials this week. 86 S&P 500 companies reporting, representing 11% of the index market cap

Global Stocks, US Futures Rise Despite Growing Political Tension In Europe

In a relatively quiet session, which may see US traders sleep in a bit after last night's Superbowl thriller, European and Asian shares rose ahead of Mario Draghi’s testimony at the European Parliament, while US equity futures were fractionally higher (up 0.1% to 2,293) after stocks jumped the most in a week, as traders assessed the trajectory for interest rates while scrutinizing every new Trump tweet.