Thrill of Victory, Agony of Defeat
November 7, 2023
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–Rate futures gave away much of Friday’s surge. For example, TYZ3 settled 107-155 Thursday, 108-115 Friday and 107-19 yesterday. Open interest down 53k in TY. Open interest also fell 36k in SFRZ3 as large sales from a few days ago at 9456 exited, SFRZ3 settle 9461.5.
–I’m not surprised about WeWork, the gig economy darling, declaring bankruptcy, but Chicago area icon Victory Auto Wreckers closing its doors? Now there’s an economic hit. Everyone knows this ad:
Victory, started in 1945 by WWII vets, bought by the current owner in 1967. Apparently the kids don’t want to take it over. The commercial is a metaphor for today’s economy. The doors are falling off.
–Crude oil (CLZ3) sub-80 this morning for the first time since August. Reuters cites weak China numbers and demand.
–Trade balance and Consumer Credit today. Three-year auction.
https://www.federalreserve.gov/data/sloos/sloos-202310.htm
| The October 2023 Senior Loan Officer Opinion Survey on Bank Lending PracticesThe Federal Reserve Board of Governors in Washington DC.www.federalreserve.gov |
In a set of special questions, the October SLOOS asked about banks’ reasons for changing standards or terms for loans across all loan categories over the third quarter. The most frequently cited reasons for tightening standards, reported by major net shares of banks, were a less favorable or more uncertain economic outlook; a reduced tolerance for risk; a deterioration in the credit quality of loans; concerns about funding costs; a deterioration of customer collateral values; concerns about the adverse effects of legislative changes, supervisory actions, or changes in accounting standards; concerns about deposit outflows; and a deterioration in or desire to improve their liquidity positions.
Among the banks that reported easing lending standards over the third quarter, the most frequently cited reasons were an improvement in the credit quality of loans and a more favorable or less uncertain economic outlook.
In comparison to large banks, other banks more frequently cited concerns about deposit outflows, funding costs, deterioration in or desire to improve their liquidity positions, and concerns about declines in the market value of fixed-income assets as reasons for tightening lending standards.
