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Prior to the Silicon Valley Bank failure, interest rates on bonds issued by money center banks like JP Morgan were about 15bps lower than for bonds issued by large regional banks like Huntington Bankshares and M&T Bank. That gap has…

While CPI inflation continues to steadily fall and April is only up 4.9% Y-o-Y, down from 9.1% in 6/22, core-inflation remains troublingly high and stubbornly stable. It rose 0.4% M-o-M and 5.5% Y-o-Y, exactly where it was in 1/23. However,…

In the five years before Covid, revolving credit card debt/GDP was flat at 6.5%, well down from the staggering Housing Boom level of 9%. The level sank to 5.5% in 5/20 and remained there through late 2021. Since, it’s been…

April payrolls grew a surprisingly strong 253,000, the unemployment rate fell to a 55-year low of 3.4%, the rate for Black Americans hit an all-time low, and M-o-M wage growth was reasonably hot at 0.5%. But February and March job…

The Friday File: The world’s largest Cinco de Mayo celebration is in Los Angeles. September 16 is Mexico’s Independence Day, while May 5 commemorates the Battle of Puebla. There are 36.6 million US residents that trace their heritage to Mexico,…

The Fed’s currently preferred bond market signal is not the traditional spread between the 2-yr Treasury rate and the 10-year rate, it’s the near term forward spread. That is the spread between the rate that a three-month Treasury bill is…

Hooray, rate hikes are over! With yet another bank (PacWest) disintegrating before our eyes, a debt ceiling debacle that looks suspiciously grave, and a 3-month 10-year yield curve that is profoundly inverted, the Fed finally hauled out language suspiciously similar…

As recently as 20Q1, interest on the public debt was $549 billion at a seasonally adjusted annualized rate. During Covid, rates collapsed and despite a rapid rise in the debt, carrying costs declined to just $516.1 billion in 20Q3. They…

The reason there were no buyers for First Republic before it was seized by regulators is because buying the bank for $1 would have been insanely expensive. Generously assuming the portfolio losses equal the bank’s remaining equity, the acquirer would…

The Friday File: Until the late-1970s there were never more than two 300 lb. players in the NFL. By 1990, there were 72, in 2000 there were 286, by 2010 there were 379, and in 2020 there were 468. Accounting…