Correspondent Blog

While the equity market has been looking ahead, and the hopes of better times, we did get April Personal Income and Spending figures and they offered an upside surprise, but some bad as well. Personal income for the month surprisingly rose by 10.5%, the most in the history of the series, and that’s versus –2.2%…

Fiscal Stimulus For States Gets Another Look With the holiday weekend behind us, and summer beckoning in front, trading will take its cues from the relative success, or not, of the partial reopenings in various states and localities. While Kevin Costner built it in Field of Dreams and they came, if shops and restaurants reopen…

It is around this time that many banks are trying to determine the amount of staff and effort that will be required to process all their PPP Forgiveness Applications that are now ready to be filed. Late last Friday, the SBA issued new Final Rules that further outlines what is expected from borrowers and banks…

The future path of the economy is currently unpredictable. Still, the majority of banks have now eliminated two possible scenarios: 1) Best case scenario – that nothing will change from February 2020; and 2) Worst case scenario – that the pandemic will not end in the foreseeable future and banks should avoid loans and invest…

With the market staring at an early close today and the prospects of a three-day weekend, market movement is likely to be quiet as traders square positions and get ready to head for the door. While the Memorial Day weekend has typically signaled the beginning of summer and all manner of outdoor activities, this year…

During the last ten years of economic expansion, prudent bankers were planning for the next downturn. Everyone knew that the economic expansion would end, but no one could be sure when or how. Smart bankers managed their business by accepting that all expansions do eventually reverse. None of us can predict the future, but enterprising…

Coming into the streamed testimony of Fed Chair Jay Powell and Treasury Secretary Steven Mnuchin to the Senate Banking Committee yesterday, the most asked question was how forcefully would Powell be in following up his comments last week that more fiscal stimulus  may be needed. The answer to that question was essentially a repeat from…

While it is too soon to get the data on bank commercial real estate (CRE) portfolio delinquencies and forbearances, we take our benchmarks from the commercial mortgage-backed securities market as of May 14th. As any commercial banker can tell you, hospitality and retail remain under the most pressure, jumping up more than 5x and 3x,…

Last Friday night, the SBA released the long-awaited Paycheck Protection Program (PPP) application, and while it clarified some aspects of the program, its complexity also surprised many bankers. In the SBA’s defense, it is hard to strike the right balance of speed to market, simplicity, and breadth of idea inclusion, so overall, we must give…

Reopenings, Vaccines, and Fiscal Stimulus Much like the last several weeks, trading will once again be focused on assessing the status of the partial reopenings and any virus news. On that latter front, some upbeat news on phase 1 vaccine trials has set the market on a risk-on mood this morning.  Last week, equity markets…

While the equity markets have been trying to look past the current economic numbers and focus on reopenings, and the hopes of better times to come, we did get retail sales numbers this morning and like most of the other April reports it paints a gruesome picture. Given the consumption-focused nature of our economy it…

Investors will be focused on comments this morning from Fed Chair Powell at a live stream event with the Patterson Institute for International Economics. Possibly the most intriguing thing the market will be looking for is Powell’s resolve to resist negative interest rates. No current FOMC member has expressed a willingness to go there but…