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US Household Debt Jumps Most Since 2008 Even as Credit-Card Rates Surge
US household debt climbed at the fastest annual pace since 2008 in the third quarter, with credit-card balances surging even as the interest rates that lenders charge to consumers hit a multi-decade high. Households added $351 billion in overall debt last quarter, taking the total to $16.5 trillion, according to data released by the Federal Reserve Bank of New York on Tuesday. That’s an increase of 8.3% from a year earlier, the most since a 9.1% jump in the first quarter of 2008. The debt figures aren’t adjusted for inflation. Most of the latest increase came in mortgage debt, by far the biggest liability on household balance sheets. It rose by $282 billion in the third quarter, and by $1 trillion from a year earlier, to $11.7 trillion. Mortgage and home-equity debt combined are up by $2 trillion since the pandemic began.
Credit-card debt also increased by the most in 20 years, with balances rising by 15% from a year earlier. The surge comes as the average interest-rates on card borrowing has climbed above 19%, the highest in data going back to the mid-1980s, according to Bankrate. Credit-card balances increased more for borrowers between the age of 30 and 59, and those in lower-income areas. Those groups now owe more than they did in December 2019. By contrast, older borrowers between ages 60 and 79, and those in higher-income areas, still have balances that are below pre-pandemic levels, the researchers found. There are 191 million Americans with at least one credit card, according to the New York Fed. Many have more than one: The total number of accounts is estimated at 555 million, up by about 100 million from 2016. In addition to levering up on credit-card debt, Americans are also tapping home equity to help meet spending needs (HELOCs will be the first thing that gets shut off when the implosion begins-that is yer clue and all the big banks have sett aside millions (each one) for the coming wave of defaults). For the second consecutive quarter, home-equity lines of credit increased. With payments and interest on student loans frozen during the pandemic, car debt is on track to overtake them as the second-biggest liability for US households after their home mortgages.
https://www.bnnbloomberg.ca/us-household-debt-jumps-most-since-2008-even-as-credit-card-rates-surge-1.1846711
Balances Are on the Rise—So Who Is Taking on More Credit Card Debt?
https://libertystreeteconomics.newyorkfed.org/2022/11/balances-are-on-the-rise-so-who-is-taking-on-more-credit-card-debt/
Steve Cohen’s Point72 Weighs Limit on Investor Redemptions
Steve Cohen’s Point72 Asset Management is considering putting a gate on investor cash to lock up client capital for longer, emulating other big hedge funds.
The firm is discussing limiting collective client withdrawals to 8.3% per quarter, according to people with knowledge of the matter. Until now, there have been no limits on fund-level redemptions. Point72 had $26 billion under management as of July. A representative for the Stamford, Connecticut-based firm declined to comment. Point72 would join other multistrategy hedge funds that have shifted toward longer-term capital in recent years. It now takes investors five years to pull all their cash from Izzy Englander’s Millennium Management, and four years to fully redeem from Ken Griffin’s Citadel. Stickier capital helps firms invest in technology and infrastructure, as well as recruit and retain talent. And as more hedge funds make the shift, those that don’t risk becoming liquidity sources when investors need cash. If Point72 goes ahead with the fund-level gate, it may impact existing investor-level terms that allow individual clients to redeem 25% of invested cash each quarter. If clients have collectively reached the 8.3% threshold in a quarter, individual investors won’t be (to) pull more funds that period.
https://www.bnnbloomberg.ca/steve-cohen-s-point72-weighs-limit-on-investor-redemptions-1.1846722
FTTDK you don't get ANY swampier or DS than Sullivan & Cromwell
Big Law Firm, Sullivan & Cromwell, Did Significant Legal Work for Bankrupt Crypto Exchange, FTX
According to Reuters, Sullivan & Cromwell has been named as one of the advising law firms to the disgraced crypto exchange, FTX, in its bankruptcy proceedings. Sam Bankman-Fried, the co-founder and CEO of FTX, vaporized the high-profile crypto firm from a $32 billion valuation to smoldering ashes last week.
Reuters reported that Bankman-Fried had moved as much as $10 billion of FTX customers’ money to his separate hedge fund, Alameda Research, through a “backdoor” in its software. Alameda had lost much of the money on wild bets while $1 billion to $2 billion had just “disappeared,” according to Reuters. The Financial Times reported that FTX held just $900 million “in easily sellable assets” against $9 billion “of liabilities the day before it collapsed into bankruptcy.”
The FTX news grew even more bizarre over the weekend with the New York Times reporting that $515 million may have been stolen or hacked from FTX after the bankruptcy filing. This raises serious concerns about the capability of those put in charge of the bankruptcy proceedings to safeguard what’s left of the assets.
Bankman-Fried was replaced as FTX CEO on Friday with the naming of John J. Ray III to replace him, a lawyer serving as the chief counsel at Greylock Partners LLC, who previously oversaw the liquidation of Enron. The selection of Sullivan & Cromwell as a bankruptcy advisor to FTX might be problematic for some of its looted investors and customers, given Sullivan & Cromwell’s past work for FTX.
https://wallstreetonparade.com/2022/11/big-law-firm-sullivan-cromwell-did-significant-legal-work-for-bankrupt-crypto-exchange-ftx/
SHADY24 MC-12W Huron departed Palm Beach Int'l after about 90m on ground from Savannah Int'l and we all know wut began on February 24th, 2022
New York Innovation Center to Explore Feasibility of Theoretical Payments System Designed to Facilitate and Settle Digital Asset Transactions
The Federal Reserve Bank of New York today announced that its New York Innovation Center (NYIC) will participate in a proof-of-concept project to explore the feasibility of an interoperable network of central bank wholesale digital money and commercial bank digital money operating on a shared multi-entity distributed ledger.
This U.S. proof-of-concept project is experimenting with the concept of a regulated liability network. It will test the technical feasibility, legal viability, and business applicability of distributed ledger technology to settle the liabilities of regulated financial institutions through the transfer of central bank liabilities.
"The NYIC looks forward to collaborating with members of the banking community to advance research on asset tokenization and the future of financial market infrastructures in the U.S. as money and banking evolve," said Per von Zelowitz, Director of the New York Innovation Center.
As part of this 12-week project, the NYIC will collaborate with a group of private sector organizations to provide a public contribution to the body of knowledge on the application of new technology to the regulated financial system.
This project will be conducted in a test environment and only use simulated data. It is not intended to advance any specific policy outcome, nor is it intended to signal that the Federal Reserve will make any imminent decisions about the appropriateness of issuing a retail or wholesale CBDC, nor how one would necessarily be designed. The findings of the pilot project will be released after it concludes.
For additional information on this project, visit the NYIC webpage. For information from the group of financial market institutions participating in this collaboration, see here.
About the New York Innovation Center
As part of the Federal Reserve Bank of New York, the New York Innovation Center (NYIC), bridges the worlds of finance, technology, and innovation. Launched in 2021 and established in partnership with the Bank for International Settlements Innovation Hub, the NYIC generates insights into high-value central bank-related opportunities through technical research, experimentation, and prototyping, to drive advancements in central banking and enhance the functioning of the global financial system.
https://www.newyorkfed.org/newsevents/news/financial-services-and-infrastructure/2022/20221115
https://www.newyorkfed.org/aboutthefed/nyic/mission