Friday, July 15, 2016

While Central Banks Have Gone All In, Delinquency Rates Rising. Is A New Banking Crisis imminent?

Technically Speaking: Breakout Or Market Meltup? – Lance Roberts
While Central Banks have gone all in, including the BOJ with additional QE measures of $100 billion, to bail out financial markets and banks following the “Brexit” referendum, it could backfire badly if the US dollar rises from foreign inflows. As shown below, a stronger dollar will provide another headwind to already weak earnings and oil prices in the months ahead which could put a damper on the expected year-end “hockey stick” recovery currently expected.
Delinquency Rates Rising – Is A New Banking Crisis imminent?
The delinquency rate on loans is key in understanding banking. It answers one question: what percentage of loans is overdue for payment? The delinquency rate is by far the most useful indicator for “credit stress.” It seems, however, as if delinquency no longer counts. Few are paying attention to the quick and sudden rise of the delinquency rate. What does it tell us and is a new banking crisis imminent?

A clear danger sign: delinquency rates on commercial and industrial loans are creeping up. Source: St Louis Fed
In dollar terms the shift is even more pronounced. This is of course the result of our staggering debt levels, which are not apparent in the relative numbers. Source: St Louis Fed
In line with increasing loan delinquencies, charge-off rates on commercial and industrial loans are picking up as well (charge-off rates tend to lag somewhat). Source: St Louis Fed
Even if we are on the verge of a new banking crisis, the headline number will never tell us so.
Former FDIC Chair Sheila Bair expects more pain ahead for US banks
“I think it’s been ill-advised to rely on monetary policy, but that still appears to be the only game in town.”
Gerald Celente-Panic Of 2016 At The Doorstep

Published on Jul 10, 2016
At the beginning of this year, Gerald Celente, the publisher of the Trends Journal, put out a magazine cover that predicted the “Panic of 2016.” How close are we to the “panic”? Celente says, “We are at the doorstep, and it’s ready to go. Look at gold prices. Look at how they have been going up. They are up 28% year to date. I ask people, would you buy a bond where you know you are going to get less back than what you paid for it in 10 years? Or, do you think gold prices will be higher in 10 years than they are now? That’s why you are seeing gold as the safe haven.”
Join Greg Hunter as he goes One-on-One with Gerald Celente, publisher of The Trends Journal.
All links can be found here:…

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