PPCC: Pisitófilos Creditófagos. Verano 2023

[Cadavre Exquis]

WeWork Raises 'Substantial Doubt' About Its Future
Posted by msmash on Wednesday August 09, 2023 @12:00PM from the tough-luck dept.

WeWork warned there's "substantial doubt" about its ability to continue operating. The company cited sustained losses and canceled memberships to its office spaces. From a report:

The co-working business will focus over the next 12 months on reducing rental costs, negotiating more favorable leases, increasing revenue and raising capital, WeWork said in a statement Tuesday. The warning comes mere months after WeWork struck a deal with some of its biggest creditors and SoftBank to cut its debt load by around $1.5 billion and extend other maturities. Its bonds trade at deeply distressed levels. The company's 7.875% unsecured notes due 2025 last changed hands for 33.5 cents on the dollar, according to data from Trace.

The market cap of WeWork, once valued at $47 billion, fell below $300 million on Wednesday.

Saludos.

[puede ser]

Las ideas no importan una mierda. Y las religiones aun menos. Son reflejos de un tiempo pasado en el que la Fe era la base de las vidas humanas, y que ya no existe. Hoy hay internet y técnicas de manipulación sofisticadísimas que han creado una realidad plástica, maleable y líquida, de usar y tirar. Y ya cuando entramos en lo cuántico, en la opción de que realmente seamos una matrix digital resultado de las colisiones de campos de diversas dimensiones... Y aliens.

Lo realmente importante son las instituciones. Los estados, las leyes, la división de poderes, el código civil, las soberanías, las fronteras nacionales, la moneda... cosas que son el resultado de un penoso y sangriento juego de prueba y error que se desarrolla siglo tras siglo (no generaciones, ciclos seculares de unos 1.500 años, 750 de desarrollo y 750 de derrumbe). Y ESO ES LO QUE ESTÁ EN JUEGO AHORA, NO LAS HISTORIETAS DE CAPITALISMOS PLANIFICADOS ABSOLUTAMENTE ABSOLUTOS O NEOLIBERALISMOS CONSERVARIZADOS DEL SÉPTIMO SELLO.

España no está tan mal. Tampoco lo estaba en 1790, en 1860 o en 1930, Es el juego de las ambiciones personales, los espejismos ideológicos y las fantasmagorías de los sillones el que nos va a llevar, otra vez, al desastre.

Te contradices. Las instituciones, estados, las leyes, la división de poderes, el código civil, las soberanías, las fronteras nacionales, la moneda...; todo eso SON IDEAS.

Y para quien -teniéndolas- ni siquiera las entiende se convierten en creencias (llámalo religiones si quieres).

[puede ser]

WeWork Raises 'Substantial Doubt' About Its Future
Posted by msmash on Wednesday August 09, 2023 @12:00PM from the tough-luck dept.

WeWork warned there's "substantial doubt" about its ability to continue operating. The company cited sustained losses and canceled memberships to its office spaces. From a report:

The co-working business will focus over the next 12 months on reducing rental costs, negotiating more favorable leases, increasing revenue and raising capital, WeWork said in a statement Tuesday. The warning comes mere months after WeWork struck a deal with some of its biggest creditors and SoftBank to cut its debt load by around $1.5 billion and extend other maturities. Its bonds trade at deeply distressed levels. The company's 7.875% unsecured notes due 2025 last changed hands for 33.5 cents on the dollar, according to data from Trace.

The market cap of WeWork, once valued at $47 billion, fell below $300 million on Wednesday.

Saludos.

https://www.eleconomista.es/mercados-cotizaciones/noticias/12401868/08/23/wework-se-desploma-un-30-en-bolsa-tras-admitir-que-tiene-dudas-sobre-su-supervivencia.html
Lo mismo pero en cristia..., en español.

[puede ser]

https://www.elconfidencial.com/tecnologia/2023-08-09/google-empleados-vuelta-oficina_3715968/

La última locura de Google para acabar con el teletrabajo: duerme junto a la oficina por 99 $
La compañía, al igual que otras tecnológicas, está intentando que los empleados vuelvan a la oficina varios días por semana. Después de asegurar que la presencialidad contará para las evaluaciones, ahora propone dormir en el campus

También, ya colgada esta noticia pero ahora en españ... en castellano.

Por cierto 99 dolares al día, no a mes.... 

[Benzino Napaloni]

https://www.elconfidencial.com/tecnologia/2023-08-09/google-empleados-vuelta-oficina_3715968/

La última locura de Google para acabar con el teletrabajo: duerme junto a la oficina por 99 $
La compañía, al igual que otras tecnológicas, está intentando que los empleados vuelvan a la oficina varios días por semana. Después de asegurar que la presencialidad contará para las evaluaciones, ahora propone dormir en el campus

También, ya colgada esta noticia pero ahora en españ... en castellano.

Por cierto 99 dolares al día, no a mes.... 

Pues para que ese precio sea "atractivo", imaginen lo que costará vivir por la zona.

Las noticias "tecnológicas" de hoy, pues un poco como siempre. "Faltan trabajadores". Pues invierno demográfico y falta de inversiones. Una de las dos al menos. A menos que los trabajadores tecnológicos sean otros vagos como los camareros y prefieran las paguitas a trabajar. (Sarcasmo)

WeWork hizo una apuesta demasiado agresiva, porque el concepto de oficina compartida sí ha funcionado. Ahorro de espacio y se permiten desplazamientos puntuales de trabajadores. Pero apostaron todo al rojo... y ya se sabe lo de los huevos y la cesta.

[Asdrúbal el Bello]

Te contradices. Las instituciones, estados, las leyes, la división de poderes, el código civil, las soberanías, las fronteras nacionales, la moneda...; todo eso SON IDEAS.

Y para quien -teniéndolas- ni siquiera las entiende se convierten en creencias (llámalo religiones si quieres).

Nada hay más material que una frontera, una ley, una prisión y una moneda. Existen más allá de lo que crea, y las uso y se me aplican las conozca o no.

[Derby]

https://www.bnnbloomberg.ca/china-sprints-ahead-in-race-to-modernize-global-money-flows-1.1956673

China Sprints Ahead in Race to Modernize Global Money Flows



(Bloomberg) -- A new platform to expand the reach of China’s digital yuan and other central bank digital currencies is moving closer to reality, raising eyebrows among some defenders of a system long dominated by the dollar.

The Beijing-backed digital prototype for sending money around the world without relying on US banks is advancing so quickly that some European and American observers now view it as an emerging challenger to dollar-denominated payments in global finance.

The mBridge project, which is being developed by China, Thailand, Hong Kong and the United Arab Emirates, will likely have a basic working product ready by year-end, four people familiar with the initiative said. It’s a joint effort with the Basel, Switzerland-based Bank for International Settlements — a hub of global central-bank collaboration.

The stakes are enormous. The dollar features in an estimated $6.6 trillion of foreign exchange transactions every day, while half of the approximately $32 trillion in global trade each year is invoiced in dollars, according to BIS and United Nations data. mBridge could eventually make it easier for China’s yuan to be used as a dollar alternative by enabling its digital form to settle large corporate transactions.

While the platform has been under development publicly since 2017, some American and European officials who monitor it are increasingly worried that it’ll help give Beijing a head start using digital currencies to revolutionize wholesale payments across borders.

A digital alternative to dollar-based settlement, critics say, could make it easier to evade sanctions, taxes and rules on money laundering, while fragmenting global payments into competing systems that further kindle geopolitical tensions.

Josh Lipsky, director of the Atlantic Council’s GeoEconomics Center, said it has “raised eyebrows” in Washington that mBridge is taking shape at the BIS.

“Taken in isolation it may seem strange because this project raises questions about China’s ambitions to reduce reliance on dollar-based settlement systems,” Lipsky said. “But China, like dozens of other central banks, is working with the BIS because this is where some of the most advanced research in the field is happening.”

Ross Leckow, deputy head of the BIS Innovation Hub that’s coordinating the project, said there’s no timeline yet for an operational system after the current stage of development. The next step, he said, is to see if the prototype can turn into a minimum viable product.

The Hong Kong Monetary Authority said there’s a shared goal of launching a minimum viable product next year, adding that the effort builds on the “G-20 priority to experiment with using new technologies to deliver cheaper and safer real-time cross-border payments and settlements.”

The Bank of Thailand praised the initiative’s goal of addressing “pain points” in cross-border transfers and said the BIS “continuously approaches additional jurisdictions to join the project.”

The People’s Bank of China didn’t respond to written questions about mBridge, nor did the Central Bank of the UAE offer a response.

mBridge is among at least six ongoing projects at central banks examining how digital currencies, also referred to as CBDCs, could be used to improve cross-border payments. Even as development plows ahead, their viability as a comprehensive alternative to the correspondent banking system that now links lenders around the world remains in doubt.

Even so, mBridge is considered so advanced that the International Monetary Fund hosted discussions in April on how to bring such a critical platform eventually under the control and supervision of an international organization, according to people familiar with the matter, who asked not to be identified discussing private information. The IMF wants to avoid having the project morph from technical solution to geopolitical tool, one of the people said.

In response to written questions, Federico Grinberg, a senior economist in the IMF’s monetary and capital markets department, said that it’s not planning on bringing any existing platform under international control or supervision, adding that the spring discussions were “technical” in nature and didn’t refer to mBridge specifically. “The IMF considers it essential that its wide membership is involved in this discussion given the disproportionate benefits of improving cross-border payments for emerging and lower-income countries,” he said.

A BIS spokesperson said the meeting did not discuss bringing mBridge under international control or supervision, nor was that the purpose of the meeting.

The flow of digital money is a hot area of research because it can still be cumbersome to move funds over borders. Transfers require an orchestrated set of messages between private banks and central banks initiating and then confirming each step in the process. While many such transactions can settle within an hour, some can take days, especially if they involve smaller countries and currencies.

Because of the dollar’s liquidity and relatively stable value, companies around the world rely heavily on the greenback.

US Oversight

That affords the US significant economic and political advantages. Among other things, it means that an enormous proportion of cross-border financial flows must pass through banks licensed in the US that are subject to US regulation, its sanctions regime and tax system.

But moving dollars over borders is just as clunky, if not clunkier, as other transfers. Settlement typically happens during US working hours and can be held up by a holiday in any of the involved countries, providing an opening for a platform like mBridge — a name that refers to a multiple CBDC bridge.

The argument is that if the transactions happened on a digital rail enabled by blockchain technology, it could all be much easier.

The mBridge project report says trade financing is among the biggest planned uses, with about $564 billion worth of goods and services flowing among the participants.

It’s aimed at enabling large transfers and foreign-exchange deals directly between participating commercial banks after they have exchanged cash for tokenized currency at their central bank. And by using distributed ledger technology – similar to the foundation upon which Bitcoin operates – those transactions could happen almost instantly, any time or day of the week.

In August and September of last year, mBridge’s partners and commercial banks in their respective countries conducted a pilot trial facilitating about 160 transactions totaling $22 million in value, according to the latest project report.

Using the system, a company in China could pay a vendor in the UAE by having its bank issue a digital e-yuan token through the People’s Bank of China on the mBridge blockchain, or ledger. There, this token could then within mere seconds be credited to the vendor’s bank in the UAE, which would in turn credit the vendor’s account with dirham, the local currency.

According to two people with direct knowledge of the project, the technological backbone of mBridge is a Chinese-built blockchain.

Leckow disputed that assertion, saying the project is a collective effort and “several distributed ledgers were created with input from the four central banks” and the BIS. The application “would not be scalable by any one single party without participation from the others,” he added.

He also said “each participant commercial bank involved in testing on the mBridge platform is obliged to comply with applicable laws and regulations, including those related to tax compliance, money laundering and sanctions enforcement.” The project has a total of 23 international observers, including the US Federal Reserve and the European Central Bank, according to the BIS.

Days vs Seconds

If adopted and operational, mBridge would let commercial lenders in one country have access to a currency issued by another nation’s central bank instead of having to go through intermediaries or correspondent banks. While critics caution that it would give the parties a much better chance of dodging the dollar and circumventing sanctions or taxes, backers say the setup would remove significant friction.

Thailand’s central bank said mBridge can reduce cross-border transfer times from as many as five days to “several seconds,” according to an e-mailed response to questions from Bloomberg. It would also “offer more benefit to end-users and commercial banks if there are more participating jurisdictions to join.”

The US Treasury, which oversees sanctions compliance, the White House and the Federal Reserve, which directs monetary policy and oversees the country’s payments system, all declined to comment on the implications of the project.

Eswar Prasad, a professor at Cornell University and the author of “The Future of Money,” said the US government appears to be confident in the dollar’s preeminence and there’s little reason yet to be alarmed.

“Such initiatives could chip away marginally at the dollar’s dominance as an international payment currency,” he said. But, he added, it will leave China’s currency “well short of being in a position to seriously rival the dollar.”

The Atlantic Council’s Ananya Kumar, in an April post on China’s digital currency ambitions, also pointed to specific obstacles that could constrain mBridge’s impact, like the yuan’s liquidity.

It is unclear what will happen to mBridge once the development phase is finished. Technology built in past BIS Innovation Hub projects were used by participating central banks to build products of their own, for example the wholesale CBDC the Swiss National Bank plans to launch.

But there is no playbook for what happens if work from there becomes politically controversial.

The BIS confirmed that the global head of the Innovation Hub, Cecilia Skingsley, recently visited China, Hong Kong and Singapore for talks with the central banks involved in mBridge. A BIS spokesperson said the main purpose of Skingsley’s visit to Asia was to meet and engage with stakeholders involved in the many BIS Innovation Hub projects. Discussions with the team from mBridge were not the main or the sole purpose of the trip.

The BIS’s Leckow said the hub’s core mandate is to test technologies, circulate the results and share lessons learned with the central banking community.

“We show what the technological possibilities are,” he said. “It is a matter for national authorities to decide whether to develop further or implement particular technological solutions.”

[Derby]

https://www.statista.com/chart/18344/year-over-year-change-of-the-consumer-price-index-for-all-urban-consumers/

U.S. Inflation Ticks Up Slightly in July

Inflation in the U.S. ticked up slightly in July, as the Consumer Price Index for All Urban Consumers (CPI-U) increased by 3.2 percent compared to the same month of last year. That's up from 3.0 percent in June but still lower than in any other month since March 2021, when inflation was just beginning to heat up. Compared to June, consumer prices increased by a modest 0.2 percent, in line with expectations and unchanged from the previous reading.

Meanwhile, the core CPI excluding food and energy continued its downward trend, increasing by 4.7 percent year-over-year - the lowest rate since October 2021. By far the largest driver of inflation in July was the cost of shelter. With rents and owners' equivalent rents of residences increasing 8.0 and 7.7 percent in July, respectively, the index for shelter accounted for more than 90 percent of the all-items increase. In fact, excluding shelter, inflation would have been just 1.0 percent last month, falling even further to 0.0 percent when excluding food and shelter, two of the main drivers of price increases over the past 12 months.

Back in the spring of 2021, when inflation took off, the high readings could largely be explained by the so-called base effect, as prices had fallen sharply at the onset of the pandemic a year earlier, when demand for many goods and services had suddenly dried up. Due to that initial dip in consumer prices, year-over-year comparisons were exaggerated for a while, but towards the end of 2021 inflation became a real concern, which turned into a global crisis when Russia attacked Ukraine, resulting in surging food and energy prices.

[Derby]

https://newleftreview.org/sidecar/posts/zombie-economy

Zombie Economy, HO-FUNG HUNG

(...)Beijing has long known what must be done to alleviate this crisis. An obvious step would be to initiate redistributive reform to boost household income and hence household consumption – which, as a share of GDP, has been among the lowest in the world. Since the late 90s, there have been calls to rebalance the Chinese economy in favour of a more sustainable growth model, by reducing its reliance on exports and fixed asset investment like infrastructure construction. This led to some reformist, redistributive policies under the Hu Jintao and Wen Jiabao government of 2003–13, such as the New Labour Contract Law, the abolition of agriculture tax, and the redirection of government investment to inland rural regions. But the weight of vested interests (state enterprises, as well as local governments thriving on construction contracts and state bank loans fuelling those projects), and the powerlessness of social groups who stand to benefit from such rebalancing policy (workers, peasants and middle-class households), meant that reformism did not take root. The minimal gains in inequality reduction in the Hu–Wen period were duly reversed after the mid-2010s. More recently, Xi has made clear that his ‘common prosperity programme’ is not a return to the egalitarianism of the Mao era, nor even a restoration of welfarism. It is, rather, an assertion of the state’s paternalistic role vis-à-vis capital: increasing its presence in the tech and real estate sectors, and aligning private entrepreneurship with the broader interests of the nation.

The party-state has been bracing itself for the social and political repercussions of this dire situation. In official policy speeches, ‘security’ has become the most frequently uttered word, eclipsing ‘economy’. The current leadership believes that it can survive an economic downturn by tightening its control over society, eradicating autonomous elite factions, and adopting a more assertive posture on the international stage amid rising geopolitical tension – even if such measures serve to aggravate its developmental problems. This helps to explain the abolition of the presidential term limits in 2018, the centralization of power within Xi’s hands, the relentless campaign to root out Party factions in the name of anti-corruption, the construction of a growing surveillance state, and the shifting basis of state legitimation: away from the delivery of economic growth and towards nationalist fervour. The current weakening of the economy and hardening of authoritarianism are not easily reversible trends. They are, in fact, the logical outcome of China’s uneven development and capital accumulation over the last four decades. This means they are here to stay.

[Derby]

https://www.ft.com/content/6402c2dd-a806-4592-8ed9-307ed9345f60

US inflation edges up to 3.2% in July

Smaller than expected annual increase supports case for Fed to hold interest rates steady in September

(...) Shelter costs, which are associated with housing, were the largest contributor to the monthly headline figure, accounting for more than 90 per cent of July’s increase. House prices and rents have on the whole been cooling in recent months, and the improvements are expected to eventually show up in the data.

“Though shelter inflation is sticky, the CPI lags market rents by roughly a year. Therefore, we know that the CPI for shelter is set to moderate noticeably through the remainder of this year,” said Ryan Sweet, chief US economist at Oxford Economics.

[Derby]

https://www.hellenicshippingnews.com/shipowners-look-to-avoid-panama-canal-as-wait-times-reach-21-days/

Shipowners look to avoid Panama Canal as wait times reach 21 days

Wait times at the Panama Canal have continued to mount, reaching up to 21 days as of Aug. 8, up from 18 on Aug. 4, causing clean tanker owners to avoid going through the canal, shifting their preference to book routes to the Atlantic Basin.

As the dry season has continued to wreak havoc on the water levels at Gatun Lake, canal wait times have increased sharply amid draft restrictions and a reduced number of transit allotments.

The most recent draft restrictions, announced June 22, put the maximum authorized draft for the Neopanamax locks at 44 feet and 39.5 feet for the Panamax locks. Under normal conditions, with no draft restrictions, the maximum draft authorized for the Neopanamax locks is up to 50 feet and up to 39.5 feet for the Panamax locks.

According to shipbroker and shipowner sources, wait times for ships looking to transit the Panama Canal northbound have hit 20-21 days, while southbound wait times have reached 18-21 days. Subsequently, shipowner preference has shifted to routes that avoid the Panama Canal altogether.

Multiple shipbrokers indicated that shipowners may be willing to take slight discounts on rates from the US Gulf to Brazil or Europe in order to avoid the canal.(...)

[Derby]

https://www.americanbanker.com/payments/news/diebold-nixdorf-discusses-what-comes-after-bankruptcy

Diebold Nixdorf discusses what comes after bankruptcy



As the payment and ATM company Diebold Nixdorf prepares to exit bankruptcy, it is looking for opportunities for both its traditional services and emerging payments technology.

On Wednesday, Diebold Nixdorf said it anticipates emerging from Chapter 11 and Chapter 15 bankruptcy on Friday, with trading on the New York Stock Exchange resuming Monday, Aug. 14 under the symbol DBD.

Moving ahead, the company plans to compete with traditional rivals such as Ingenico and NCR, as well as payment-oriented fintechs, by focusing on financial inclusion and enabling cash access in relatively underserved markets, while expanding digital payments as well.(...)

[Derby]

https://www.marketwatch.com/story/moodys-downgrades-chinese-developer-country-garden-deep-into-junk-territory-after-company-misses-interest-payments-82523622

Moody’s downgrades Chinese developer Country Garden deep into junk territory after company misses interest payments

Moody’s Investors Service downgraded Country Garden Holdings Co. Ltd.’s rating to Caa1 from B1 early Thursday, after the Chinese developer failed to make interest payments on dollar bonds earlier this week.

“The downgrade reflects Country Garden’s heightened liquidity and refinancing risks in view of its deteriorated liquidity and financial flexibility, sizable refinancing needs and still-constrained access to funding,” said Kaven Tsang, a Moody’s senior vice president, in a statement. The developer missed $22.5 million of interest payments that were due Monday on debt with a face value of $1 billion, as the Wall Street Journal reported. Prices of the two bonds, that mature in 2026 and 2030, promptly fell below 8 cents on the dollar and remained at distressed levels on Wednesday. The news raised fears about China’s struggling property sector after other defaults including from China Evergrande Group in the last two years. Country Garden has a 30-day grace period to make the payments. If it fails to do so, it would dampen market confidence and impair its access to funding, said Moody’s.

[Cadavre Exquis]

Colleges Spend Like There's No Tomorrow
Posted by msmash on Thursday August 10, 2023 @12:04PM from the closer-look dept.

The nation's best-known public universities have been on an unfettered spending spree. Over the past two decades, they erected new skylines comprising snazzy academic buildings and dorms. They poured money into big-time sports programs and hired layers of administrators. Then they passed the bill along to students. From a report:

The University of Kentucky upgraded its campus to the tune of $805,000 a day for more than a decade. Its freshmen, who come from one of America's poorest states, paid an average $18,693 to attend in 2021-22. Pennsylvania State University spent so much money that it now has a budget crisis -- even though it's among the most expensive public universities in the U.S.

The University of Oklahoma hit students with some of the biggest tuition increases, while spending millions on projects including acquiring and renovating a 32,000-square-foot Italian monastery for its study-abroad program. The spending is inextricably tied to the nation's $1.6 trillion federal student debt crisis. Colleges have paid for their sprees in part by raising tuition prices, leaving many students with few options but to take on more debt. That means student loans served as easy financing for university projects.

It has long been clear to American families that the cost of college has gone up, even at public schools designed to be affordable for state residents. To get at the root cause, The Wall Street Journal examined financial statements since 2002 from 50 universities known as flagships, typically the oldest public school in each state, and adjusted for inflation. At the median flagship university, spending rose 38% between 2002 and 2022. Only one school in the Journal's analysis -- the University of Idaho -- spent less. The schools paid for it in part by pulling in tuition dollars. The median flagship received more than double the revenue from undergraduate and graduate tuition and fees it did 20 years prior. Even accounting for enrollment gains, that amounted to a 64% price increase for the average student, far outpacing the growth in most big household expenses.

Saludos.

[Derby]

https://www.aol.com/massive-home-price-appreciation-might-162113889.html

Massive home-price appreciation might be the secret to keeping consumers afloat as savings dry up

Homeowners' equity is the highest it's been in 25 years, which could provide a cushion as consumer savings dwindle.

Wells Fargo economists say that huge price appreciation means homeowners have a lifeline they can tap.

Soaring home prices looks like an "underappreciated tailwind" for consumers, they said.

Decades of rising home values have created an expensive and competitive housing market — but that may be exactly what's keeps consumers afloat as household savings dwindle and borrowing costs climb.

The Fed's ambitious rate hiking campaign has made everything from credit card loans to mortgage payments more expensive, and that's eating into the savings Americans built up through the pandemic.

Now, however, with inflation still above target and a recession still in the cards, home equity could provide a much-needed extra line of defense for consumers, according to Wells Fargo.

The total value of the US single-family market surpassed $40 trillion last year, and the amount of homeowner equity versus debt has trended higher for the last decade, economists Tim Quinlan and Shannon Seery explained in a note this week.

Importantly, home values have surged while the total amount owed on mortgages has not.

"Homeowners have more equity in their homes today than they did at any point in the 35 years between 1987 and 2022," the economists said. "Yes, higher rates make borrowing more expensive, but a home loan generally carries far lower interest than credit card debt, especially after accounting for the tax deductibility of interest on a mortgage."

In short: Americans can always borrow against the equity in their steadily appreciating homes, and at a lower rate than what's offered on most other kinds of consumer debt.



Through the Fed's rate hiking campaign, Americans' spending has stayed remarkably resilient, and that's been a boon in staving off the recession that Wall Street has been forecasting over the last year.

That trend could be set to continue as the massive accumulation of home equity provides a lifeline that consumers can tap into if things get tough.

"[T]he fact that home equity is near a multi-decade high means that there is untapped potential for consumers to rely on home equity lines of credit to sustain spending should the need arise," the economists wrote.

Bankrate data shows that home equity lines of credit, or HELOCs, are currently carrying an average rate close to 7%. That's well below the 20.6% interest rate applied to "all borrowers" on credit card debt for the second quarter, per central bank data.

Home equity revolving credit balances climbed for the fourth straight quarter leading up to March 2023, which presents another factor that could help sustain consumer spending.



To be sure, about two-thirds of household assets are tied to financial assets. But climbing home values have given real estate an outsized boost through the pandemic. Now, real estate accounts for about 25% of total household assets, and despite deteriorating savings, still-rising equity presents a potential path forward for consumers to keep spending, Quinlan and Seery said.

"Fiscal packages at the onset of the pandemic ensured that the pandemic-induced recession was not a balance sheet one for households, and the lasting effects of that have supported consumer spending even as stimulus has ceased," the economists continued. "Increased home equity due to the rapid rise in home values and a jump in mortgage refinancing are two additional factors that may support household staying power in the years to come."