Cash – Cumulative Increase in Savings Deposits at Commercial Banks Household excess liquidity remains strong. Is it a contrarian bullish signal for stocks? Image: Morgan Stanley Wealth Management
Commercial Bank Loan Delinquency Rate Chart suggesting that the commercial bank loan delinquency rate is expected to rise Image: Deutsche Bank Global Research
Commercial Bank – Credit Cards Interest Rate In the United States, the average credit card interest rate is 17.39%, at highest level in decades. Is the U.S. consumer doing well? Image: Deutsche Bank Global Research
Commercial and Industrial Loans of U.S. Banks as % of GDP vs. Deliquency Rate Is the end of the U.S. credit cycle near? The delinquency rate remains low, while U.S. business loans are close to previous highs. Image: Pavilion Global Markets
S&P 500 Non-Commercial Net Long Futures Speculative futures in S&P 500 are net short. Image: Deutsche Bank
Commercial and Industrial Loans Continue to Accelerate in the U.S. That’s a positive sign for the U.S. economy. Indeed, U.S. banks wouldn’t be lending if they were concerned about the economic situation. Past three recessions saw bank loans negative year over year.
Why Are U.S. Banks Healthier Than Ever? U.S. banks are much stronger than ever. They have more capital and should withstand the next recession. See Fed’s annual stress test (Dodd-Frank Act Stress Tests): “The capital levels of the firms after the hypothetical severe global recession are higher than the actual capital levels of large banks…
Why the US Banking System Is Divided in Two Groups? The delinquency rate on credit-card loans at all commercial banks is very low, whereas the delinquency rate on credit-card loans is high only at commercial banks other than the 100 largest banks. The US banking system is divided in two groups: small banks accept high…
Why Demand For Saving Deposits Has Weakened Since The Great Recession? Because risk aversion is declining, like money demand, even if interest rates are rising. This explains in part the rise of the US stock market.