April 20. Soybeans and Silver
–Here’s a headline from the FT: US Bank Revenues Fall by Most Since 2011; Wall St slump also causes profits to tumble 24%.
–In contrast the Daily Shot has a chart of lending by small commercial banks (attached) which indicates strong growth.
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Sort of an interesting Wall Street/Main Street juxtaposition, (as GS revenue plunged 40%). Maybe banks should be in the lending business? Just a thought.
–Yields once again pushed a bit higher with the ten year note adding another bp to 178.2. April to October FF spread edged up 1.5 to 12.75…a 50/50 proposition that the Fed hikes at least once over the next four meetings. Curve slightly flatter with ED green pack weakest at -3.75, while golds were -2.75.
–It’s off to the races for silver and soybeans. Silver exploded yesterday to new yearly highs and is up 13% since the end of March. Soybeans have also been on a tear, with SN almost reaching $10 last night; up 14% since the beginning of March. Of course, S&P’s are up around 15% as well since the middle of February. The humbled Fed has helped weaken the dollar, in turn supporting commodities, EM, stocks, etc. Of course, credit quality has also declined. I saw this line on an economic blog (but have not yet verified), “…the average rating on US Corp debt has now fallen to “BB”, which is already lower than it was at any point during the last financial crisis.” If the record level of corporate debt outstanding can’t be serviced at relatively low rates, what happens next?
