Correspondent Blog

Treasury yields have moved to near yearly highs with the usual suspects being inflation fears, improving virus/vaccine outlook, and the coming of Stimulus 3.0. One of the tenets in the improving virus/vaccine outlook is that it will drive a rebound in consumer spending and with two-thirds of the economy based on consumer consumption an improving…

  Yields on the Move Again 10-year Treasury yields moved over 1.25% in the early morning hours without any particular reason. After taking down supply last week in a fairly easy manner, some consolidating around the upper teen range was seen as likely but the move this morning has to be respected. Technically speaking, 1.27%…

Visions of inflation have been dancing around investors heads for months now given the amount of present and future monetary and fiscal policy stimulus, not to mention the improving news on the virus and vaccine front. January CPI numbers, however, continue to reflect benign price pressures. The overall rate increased  0.3% for the month versus…

Our first indication of industry performance for 4Q comes to us in the form of earnings disclosures from the top 24 banks. In this article, we break down five lessons learned from analyzing large bank performance for the fourth quarter (4Q) of 2020 compared to 2019 and see how we can turn this data into…

Stimulus 3.0 Gets Closer & Treasury Auctions Just like when Navin R. Johnson got his name in the phone book in the movie The Jerk, things should start happening now with regards to the Biden Administration’s proposed $1.9 trillion Stimulus 3.0 package. After some attempts at bipartisanship, the administration seems prepared to go it alone…

A frustrated bank leader sat alone in her office amidst stacks of analysis showing the slow erosion of the net interest margin – once the bank’s engine of profitability. The leader had watched the margin ebb like the wick of a burning candle, despite the monthly efforts from skilled advisors and analytical staff. New target…

  Economic News The January Employment Report missed expectations of 105,000 new jobs with only 49,000 jobs created. In addition, the prior two months were adjusted lower with 159,000 less jobs than initially reported. December alone saw jobs drop from an initially reported –140,000 to –227,000. January is a notoriously difficult month to forecast with…

The price action driving markets lately has been the outlooks on the latest stimulus proposal in DC, news on the vaccination roll-out, and an eye on the virus variants and whether they are getting a foothold in the U.S.. That being said it is jobs week and this morning we have the ADP Employment Change…

Community banks divide into two groups – those that have shifted their digital marketing to encompass the pandemic and those marketing as if it was business as usual. Do you know which type is by far the least common? That’s right, the first. Do you know which type is by far the most successful? Yep…

One of the biggest mistakes that some bankers make is believing that banks are in the business of making loans.  It is true that banks make loans, but originating a loan is unquestionably an unprofitable business.  Banks earn an acceptable return on capital by keeping loans, not by making them.  We recently worked with our lender on a…

Negotiating Stimulus 3.0 & January Jobs Numbers With the Biden Administration settling into its third week on the job, attention will turn to gauging the outlook on their proposed $1.9 trillion Stimulus 3.0 package. The administration is showing increasing signs they don’t want to retreat from the price tag which Republicans, and a couple Democrats,…

As we try to turn attention away from our GameStop positions and focus on the more sedate trading found in fixed income markets, we are met today with personal income and spending numbers for December. While the fourth quarter GDP release from yesterday incorporated the income and spending numbers, the December report gives us a…