My Favorite Chart -- October 15, 2023

Locator: 45789BANKS.

Updates

October 23, 2023: from Liz Ann Sonders -- this is very, very scary --

Original Post

The two most important folks right now with regard to the economy: Jamie Dimon and Jay Powell. 

My hunch: Jay Powell is listening to Jamie Dimon's concerns and will act accordingly.

The banks -- the "bedrock" of the nation -- alongside the military and the US Supreme Court -- are in deep trouble. My hunch: they cannot survive another rate hike, or even possibly, "higher-for-longer." 

Watch for more articles on credit-worthiness of your local banks and your regional banks.

Exhibit A: your local and regional banks are taking huge loans from the Fed's emergency window.

Exhibit B: holy mackerel! My favorite chart -- another huge spike and I don't think it will be the last.

My favorite chart. From The WSJ, October 12, 2023:

Higher interest rates have already done a number on banks’ deposits. They might not be done.

As investors prepare for another round of quarterly bank earnings, the hope isn’t for rosy reports about banks’ deposit costs.

Instead, they will be looking for any clarity on whether the worst is over, and when costs might even start to go down. Yes, the rates banks pay to their customers have already risen considerably. So perhaps that process has mostly run its course.

But there are also reasons to think there remains room for banks’ deposit funding costs to keep going up for a while—particularly if the Federal Reserve has truly adopted a higher-for-longer stance, effectively giving depositors more time to change their behavior and adjust to the new environment.

From earlier this week:

Locator: 45746FED.

See the post from last month, as this month’s data starts to get reported.

Link here, last month.

From ZeroHedge today.

From March 16, 2023, this puts the record set this past week in perspective. Link here.

One can see why Jamie Dimon was concerned about the banks a few weeks ago. I assume bankers are still concerned. 

My favorite chart will be updated in a week or so.

Now this, from The WSJ: