Wall Street Journal (January 14)
“Trump wants to run the economy hot. There’s a good chance he’ll succeed,” but most presidents and Congresses avoid “juicing the economy” for good reason. The short-term results might be appealing, but “the long-term consequences” are real. “Ever-rising debt leaves future generations poorer and risks a debt crisis. Loosening credit and dialing back regulations, when valuations are already stretched, could end in market bust.”
Tags: Congresses, Consequences, Credit, Debt, Debt crisis, Economy, Future generations, Juicing, Presidents, Regulations, Risks, Trump, Valuations
Reuters (December 23)
“EU industries pay power prices 2-3 times higher than those in the U.S. Taxes made up, on average, 23% of the retail electricity price paid by Europe’s energy-intensive firms in 2023.” In addition, energy-intensive industries face “a more fragmented market than China and difficult access to credit.” Lowering taxes might be a way for policymakers “to offer fast relief” to industry.
Tags: China, Credit, Energy-intensive, EU, Fragmented market, Higher, Industry, Policymakers, Power prices, Relief, Retail electricity, Taxes, U.S.
Institutional Investor (November 21)
“After saving $1.6 billion since implementing its high-profile Collaborative Model in 2017, the California State Teachers’ Retirement System plans to focus on even more sophisticated cost savings efforts.” It already directly “manages 85 percent of its fixed income portfolio, and 75 percent of the global equities book in-house.” Now it plans to extends its Collaborative Model to encompass more private investments while shifting “its exposure from global equity to private credit, private equity, and infrastructure.”
Tags: 2017, CalSTRS, Collaborative Model, Cost savings, Credit, Fixed income, Global equities, Implementing, In-house, Infrastructure, Portfolio, Private equity, Sophisticated
Financial Times (July 29)
“Inflation is falling for a number of reasons “beyond the Fed’s control,” like an easing of the worst impacts from “the pandemic and the war in Ukraine.” But the Fed’s rate hikes have effectively “reduced demand for credit.” The results can be seen in mortgage debt and car loans. “Overall, growth in non-revolving credit—the loans you take out just once, like a mortgage—is now just below zero.” There’s one snag on the revolving credit side, where credit growth is still “coming from credit cards.”
Tags: Car loans, Credit, Credit cards, Demand, Falling, Fed, Inflation, Mortgage debt, Non-revolving, Pandemic, Rate hikes, Revolving, Ukraine, War
Financial Times (June 25)
“A long-anticipated reckoning is under way in the US commercial property industry…. Sharply rising rates, a regional banking crisis that curtailed credit and a trend towards remote work are all wreaking havoc. Older office buildings have borne the brunt of the downturn, but other real estate categories have not been spared.” In New York City, the value of office buildings is “estimated to have dropped by $76bn from their most recent sales price.”
Tags: Anticipated, Commercial property, Credit, Downturn, Havoc, Office buildings, Reckoning, Regional banking crisis, Remote work, Rising rates, U.S.
American Banker (November 9)
“Lenders made it harder in the third quarter for both consumers and businesses to access credit,” and this trend looks likely to continue. “If the U.S. economy falls into a recession, more than 80% of banks said they would ‘somewhat’ or ‘substantially’ tighten lending standards for credit cards and loans backed by commercial real estate. More than 70% of banks said they would do the same for auto, commercial and industrial and residential real estate loans.”
Tags: Access, Auto, Banks, Businesses, Commercial, Consumers, Credit, Credit cards, Economy, Industrial, Lenders, Lending standards, Loans, Real estate, Recession, Tighten, U.S.
Wall Street Journal (May 13)
“Well, the party was fun while it lasted. But now the liquidity tidal wave is crashing as it always does when credit conditions tighten. This week’s crypto-currency crash is the first body exposed on the beach, and let’s hope the damage doesn’t spread too far into the financial system and broader economy.”
Tags: Broader economy, Crash, Credit, Crypto-currency, Damage, Financial system, Liquidity, Party, Spread, Tidal wave, Tighten
Chicago Tribune (August 27)
“The middle of a horrendous recession is an odd time to boast about your stewardship of the economy. But it fits with Trump’s habit of taking credit for anything that goes right while taking no responsibility for any bad news.”
Tags: Boast, Credit, Economy, Horrendous, Recession, Responsibility, Stewardship, Trump
Investments & Pensions Europe (August Issue)
“Credit investors would be wise to reflect upon the growing debt burden weighing on the global economy.” Debt has surged since the pandemic and it was already at high levels. “Global debt rose by $10trn (€8.9trn) in 2019 to $255trn. At the end of last year, global debt stood at 322% of global GDP, or 40% higher than before the 2008 financial crisis.”
Tags: 2008, 2019, Burden, Credit, Debt, Financial Crisis, GDP, Global economy, Investors, Pandemic, Reflect, Surged
Investment Week (May 18)
“Credit fundamentals have worsened since the market sell-off began, although central banks could provide some companies with a soft landing and many firms have drawn on their credit lines in a bid to stay afloat.” Even though “the impact is highly correlated across geographies, industries and asset classes…the potential outcomes are too severe to only affect equities and credit-market fundamentals have undoubtedly been impacted.”
Tags: Asset classes, Central banks, Correlated, Credit, Equities, Fundamentals, Geographies, Industries, Market, Outcomes, Sell-off, Severe, Soft landing, Worsened
