Subprime Credit Card Delinquencies Spike to Record High, Past Financial-Crisis Peak, as Other Consumers Relish the Good Times. Why?

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US consumer credit card delinquency 2019 q4

I’m not worried about banks or investors in subprime-credit-card backed securities. If they take a beating, fine. But what does this bifurcation tell us about consumers? By Wolf Richter for WOLF STREET. The rate of credit card balances that are 30 days or more delinquent at the 4,500 or so commercial banks that are smaller than the top… Read More

So That’s the End for Air Italy. And More Airline Money-Pits

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Throwing good money after bad as a business model. By MC01, a frequent commenter on WOLF STREET: On February 10, one of the largest Italian newspapers, Il Corriere della Sera, announced airline Air Italy, Italy’s second largest airline after Alitalia, was facing a liquidity crisis and may not survive long. Less than 24 hours later, Air… Read More

California Auto Woes: New-Vehicle Registrations Fall for 3rd Year, -9.5% from 2016. Bay Area Hit Hardest. Q4 Was Ugly, with Tesla Plunging 46%. But Used-Vehicle Market Grows

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Market share of EVs reaches 5.3%. The registrations data is out in all its glorious detail. By Wolf Richter for WOLF STREET. It was a tough year for selling new vehicles in California. Total new vehicle registrations in California in 2019 fell 5.5% from a year earlier, to 1.89 million vehicles, the third year in a row of… Read More

Coronavirus Slams Chinese Economy

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This post Coronavirus Slams Chinese Economy appeared first on Daily Reckoning. How bad is the coronavirus pandemic in China? It’s worse than the Chinese government knows and worse than the world believes. Here are the official statistics on the coronavirus (technically COVID-19) as of today: There are 75,685 confirmed infections worldwide, with 98% of that… Read More

Not Over by a Long Shot

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This post Not Over by a Long Shot appeared first on Daily Reckoning. Are you tired of hearing about the coronavirus? Well, you shouldn’t be because it’s a serious situation with global consequences. Markets have been following the spread of the coronavirus (COVID-19) closely for good reason. The Chinese economy, second largest in the world,… Read More

When Bubbles Pop, Only the First Sellers Escape Being Bagholders

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Hapless bagholders have two options: buy the dip and be destroyed, or hang on hoping for a reversal and be destroyed. One often overlooked characteristic of the current stock market bubble is the extremely small exit for sellers trying to avoid becoming hapless bagholders. Bubbles always present small exits because once sentiment turns, buyers vanish and… Read More

2020 Forecast for Markets & Elections

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This post 2020 Forecast for Markets & Elections appeared first on Daily Reckoning. Just because impeachment is almost over and it’s an election year does not mean that Congress won’t be the scene of anti-Trump activity. Congress is set to keep up the pressure on Trump on a daily basis, and the attacks will continue.… Read More

Are They Going to Impeach Trump Again?

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This post Are They Going to Impeach Trump Again? appeared first on Daily Reckoning. The Democratic candidates held another debate last night. Michael Bloomberg took a lot of heat from the others, and he did not handle it well. He showed real weakness for the first time. Joe Biden, meanwhile, put in a strong performance… Read More

Covid-19: Global Retrenchment Will Obliterate Sales, Profits and Yes, Big Tech

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If you think global demand will rebound as global debt and confidence implode, you better not be making consequential decisions based on Euphorestra-addled magical thinking. Even before the Covid-19 pandemic, the global economy was slowing for two reasons: 1) everybody who can afford it already has it and 2) overcapacity. One word captures the end-of-the-cycle stagnation: saturation.… Read More

“Conservative Economics”

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dr chart 02 19 20 not much bang for the buck

This post “Conservative Economics” appeared first on Daily Reckoning. We learn of the pending birth of a new organization — American Compass by title. Its existence will serve one high and noble purpose, claims executive director Oren Cass: “Helping American conservatism recover from its chronic case of market fundamentalism.” Just so. Yet we were unaware… Read More

Omens, Portents, Karma and the Mandate of Heaven

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The question of legitimacy isn’t limited to China. what makes humans unique among social mammals? Some say humor, I would nominate superstition: regardless of how hard we promote our rationality and logic, humanity continues to sense portents and omens in events and feel the intangible tug of karma: the consequences of past actions that we arrogantly thought… Read More

HSBC Announces Mass Job Cuts, Huge Write-Down, Asset Sales, Halt of Share Buybacks. Warns of Coronavirus Impact on Credit Losses & Revenues in China & Honk Kong

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These days, markets forgive and forget anything except the suspension of share buybacks. By Nick Corbishley, for WOLF STREET: Global banking behemoth HSBC’s net profit slumped 53% in 2019, to $5.97 billion, after the lender announced a $7.3 billion write-off to reflect weakened conditions in global banking and markets, and European commercial banking. Its shares dropped 6%… Read More

Too Many Eggs in Too Few Baskets

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This post Too Many Eggs in Too Few Baskets appeared first on Daily Reckoning. Never before have so many owed so much… to so few. We refer not to Sir Winston Churchill and the Battle of Britain. We refer instead to the Federal Reserve and stock market. Set aside the latest coronavirus rattles… The market… Read More

The World Is Awash in Oil, False Assurances, Magical Thinking and Complacency as Global Demand Careens Toward a Cliff

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This collapse of price will manifest in all sorts of markets that are based on debt-funded purchases of desires rather than a warily prudent priority on needs. Since markets are supposed to discover the price of excesses and scarcities, it’s a mystery why everything that is in oversupply is still grossly overpriced as global demand slides off a… Read More

Is Private Equity Having its WeWork Moment?

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Funds have invested in PE due to its Madoff-like volatility profile. Ironically, they forgot that this led to a collapse.  By Harris “Kuppy” Kupperman, founder of Praetorian Capital, Adventures in Capitalism: For the better part of a decade, institutional investors have redeemed capital from active strategies and dumped it into Private Equity (PE). What’s the… Read More