- Retail Sales (RSAFS): +0.71% m/m, new all time high.
- Industrial Production (INDPRO): +0.28% m/m.
- Total Bank Credit (TOTBKCR): +0.12% (+20B) w/w, bounce off year-low.
- Fed Balance Sheet (WALCL): -0.24% (-18.9B) w/w, new 2-year low.
- Strategic Petroleum Reserve (WCESTUS1): unchanged.
- 30 Year Mortgage Rates (MORTGAGE30US): 7.63% (+6 bp w/w), 23-year high.
We saw some strong retail sales numbers this month – most likely due to inflation. That’s just a guess. The Fed continues to shed Treasury bonds, and we saw a new high for both the 10-year yield, as well as 30 year mortgage rates. Bank credit growth is still mostly flat.
So as we know, banks have a lot of debt they bought (and loans they made) a while back when rates were very low. And now, rates have screamed higher. This causes “unrealized losses”. There was an interesting news item this week about “unrealized losses”:
Bank of America’s unrealized losses on securities rose to $131.6 bln (Source – Pfizer/Reuters); “Bank of America had reported early $106 billion in paper losses in the second quarter.”
Simple math says: 131.6/106 = 24% increase q/q. So I went and hacked the FDIC quarterly gain/loss spreadsheet – I applied the BOFA loss increase (124%) to the overall unrealized losses suffered by the US banking system in Q2 2023 [you can get the spreadsheet yourself here (chart7.xlsx) and you can do this at home!]
Long story short: it shows a new all time high in unrealized losses. I had to increase the axis and the cell count to see the data properly. Kinda cool I can modify an FDIC report, huh?
Note that FRED pulled the plug on the (related) series (NUGACBW027NBOG) back in early 2022. Its almost like they knew these “unrealized losses” were going to pile up like crazy, and they wanted to “protect” us from becoming bank-deposit-hesitant. Or something. “You Will Own Nothing – and You Will Be Happy.” Ze Great Reset. Eat ze Bugs. Martin Armstrong says, “Great Reset” is code for a sovereign default. No Pension For You, little people.
by richcabot