Late Tuesday night, Moody’s downgraded NYCB’s credit rating to BB, putting it in junk bond status. The action occurred after NYCB stock had fallen 60% year to date. The lesson from 2008 and, more recently, in March 2023 is that stock investors can seal the fate of a bank. Panic selling by stock investors crushes […]
In early 2021, China’s CSI 300 Index, representing the top 300 stocks traded on the Shanghai Stock Exchange and Shenzhen Stock Exchange, peaked at 5800. Today, three years later, the index sits at 3300, down over 40%. China’s key stock market index rout is not surprising, given China’s economy has been sluggish, its property sectors […]
The price of New York Community Bank (NYCB) was cut in half last week as it drastically increased its loan loss reserves. As we noted in a recent Commentary, they took this action partly because of the commercial real estate (CRE) loans they bought from the failed Signature Bank. The work-from-home movement and higher interest […]
The BLS stunned investors Friday morning, reporting that the labor market was hotter than expected. The labor market added 353k jobs in January, almost double expectations for 180k. Furthermore, December’s figure was revised upward by 117k. Of some concern for the Fed, average hourly earnings grew by 0.6%, twice what was expected. However, there are […]
Interestingly, the Fed removed the following statement from Wednesday’d FOMC statement: “The U.S. banking system is sound and resilient.” We bring that up because New York Community Bank (NYCB) fell over 40% earlier that day. Therefore, we must ask- are the banking problems from last year resolved, or is the Fed worried? NYCB reported a […]
“Call it a gold rush” started a Washington Post article, The Economy (Taylor’s Version), detailing the amount of money Taylor Swift’s tour is making for herself and how much economic activity it generates. For starters, the article estimates that Taylor Swift will personally rake in over $4 billion from her Eras Tour. The following statistics […]
Bond bears have warned that the Treasury will overwhelm the market with debt, pushing yields much higher. For more on why we disagree with the narrative, check out our article, Context and Facts. The Treasury is keenly aware of the narrative and worried that such a mindset could significantly increase their borrowing costs. The Treasury […]
We believe that the clearest sign of a coming recession is weakness in the labor markets. Thus far, we haven’t seen anything overly concerning in employment data. Hence, to help us assess the labor markets, we follow many government and private employment gauges. The ASA Staffing Index was recently brought to our attention. A reader […]
On a few occasions, we have shared data on the differences between real-time rent inflation versus the rental price index used in CPI. In a nutshell, almost all private sector rent indexes are flat to slightly lower. However, the CPI rent index is growing by 0.4% monthly, or nearly 5% annualized. In a telling article, […]