PPCC: Pisitófilos Creditófagos. Otoño 2023

[Cadavre Exquis]

https://www.lavanguardia.com/local/barcelona/20231126/9405062/port-olimpic-pone-coto-barcos-usados-viviendas.html

Saludos.

[Cadavre Exquis]

https://www.lavanguardia.com/vida/20231126/9405772/area-barcelona-reune-9-10-km-mas-poblados-europa.html

Saludos.

[Cadavre Exquis]

https://www.lavanguardia.com/local/barcelones-nord/20231126/9405741/santa-coloma-gramenet-suspende-nuevas-licencias-abrir-pisos-turisticos.html

Saludos.

[Cadavre Exquis]

https://www.lavanguardia.com/economia/20231125/9405890/calvino-situa-objetivo-alcanzar-pleno-empleo-efectivo-legislatura.html

Saludos.

[Mad Men]

Es de hace dos días...

El sector fiduciario chino ha vuelto a encender las alarmas con el anuncio de que Zhongzhi Enterprise Group se declara “gravemente insolvente”. El conglomerado con sede en Pekín ha alertado que enfrenta un déficit de 260.000 millones de yuanes, el equivalente a 33.400 millones de euros, y ha advertido del riesgo que este supone en el desarrollo normal de sus operaciones. Zhongzhi es uno de los mayores bancos en la sombra de China e invierte gran parte del dinero de los inversores en proyectos inmobiliarios. La situación de la firma, que no ha dejado de empeorar desde verano, ha evidenciado nuevamente los problemas de liquidez presentes en el mercado de financiación del gigante asiático, valorado en alrededor de 2,7 billones de euros.

https://elpais.com/economia/2023-11-24/zhongzhi-uno-de-los-principales-bancos-en-la-sombra-de-china-se-declara-gravemente-insolvente.html



Es banca en la sombra, por lo visto.

Otra consecuencia de la crisis que sufre China debido a la elevadísima inversión en infraestructuras y edificios, las consecuencias son claras, un elevado nivel de endeudamiento y un retorno bajo de las inversiones. Cada vez se construyen mas pisos que por necesidad del inversor deben subir de precio y cada vez se hacen más infraestructuras con un uso cuestionable. Este modelo (muy similar al seguido por EEUU en los años 20 que provocó el crack del 29, o Japón que provocó el estancamiento de los 90 aún vigente) funciona bien en economías subdesarrolladas con una grave falta de inversiones. Pero con el tiempo el modelo se vuelve contraproducente.


La ruta de la seda tiene como objetivo externalizar las inversiones para buscar mejores retornos, pero ya sabemos que pasa con las inversiones en países subdesarrollados, que muchos no devuelven la deuda.

Un dato el 25-30% de la economía China es ladrillo e infraestructura. No os recuerda a la España del pelotazo?

Saludos

[Cadavre Exquis]

Es de hace dos días...

El sector fiduciario chino ha vuelto a encender las alarmas con el anuncio de que Zhongzhi Enterprise Group se declara “gravemente insolvente”. El conglomerado con sede en Pekín ha alertado que enfrenta un déficit de 260.000 millones de yuanes, el equivalente a 33.400 millones de euros, y ha advertido del riesgo que este supone en el desarrollo normal de sus operaciones. Zhongzhi es uno de los mayores bancos en la sombra de China e invierte gran parte del dinero de los inversores en proyectos inmobiliarios. La situación de la firma, que no ha dejado de empeorar desde verano, ha evidenciado nuevamente los problemas de liquidez presentes en el mercado de financiación del gigante asiático, valorado en alrededor de 2,7 billones de euros.

https://elpais.com/economia/2023-11-24/zhongzhi-uno-de-los-principales-bancos-en-la-sombra-de-china-se-declara-gravemente-insolvente.html



Es banca en la sombra, por lo visto.

Zhongzhi, uno de los principales bancos en la sombra de China, se declara “gravemente insolvente”
El conglomerado comunica un déficit de 33.400 millones de euros y advierte del riesgo de mantener sus operaciones con normalidad.

Inma Bonet Bailén | Pekín | 24 nov 2023

Edificio del Banco Popular de China en Pekín / Getty Images

El sector fiduciario chino ha vuelto a encender las alarmas con el anuncio de que Zhongzhi Enterprise Group se declara “gravemente insolvente”. El conglomerado con sede en Pekín ha alertado que enfrenta un déficit de 260.000 millones de yuanes, el equivalente a 33.400 millones de euros, y ha advertido del riesgo que este supone en el desarrollo normal de sus operaciones. Zhongzhi es uno de los mayores bancos en la sombra de China e invierte gran parte del dinero de los inversores en proyectos inmobiliarios. La situación de la firma, que no ha dejado de empeorar desde verano, ha evidenciado nuevamente los problemas de liquidez presentes en el mercado de financiación del gigante asiático, valorado en alrededor de 2,7 billones de euros.

A última hora del miércoles, Zhongzhi reconoció a través de una carta de disculpas dirigida a sus inversores tener pasivos que alcanzan hasta 460.000 millones de yuanes (casi 60.000 millones de euros), una cifra que duplica sus activos totales, estimados en aproximadamente 200.000 millones de yuanes (unos 25.600 millones de euros). En su apogeo, esta firma gestora de patrimonio llegó a controlar más de un billón de yuanes en activos (128.400 millones de euros).

La propia empresa ha explicado que una revisión preliminar demuestra que la firma “no tiene activos suficientes para cubrir la deuda a corto plazo” y que “el grupo ha enfrentado un riesgo significativo” de no poder operar de manera continua y estable a largo plazo. Además, avisa que la liquidez de la compañía se ha agotado y anticipa una recuperación baja de la venta de activos.

Zhongzhi atribuye el enorme déficit a que la “gestión interna [de la firma] se descontroló” a raíz de la partida de “múltiples ejecutivos sénior y personal clave” tras el fallecimiento en diciembre de 2021 de Xie Zhikun, el fundador de la empresa, quien “desempeñaba un papel fundamental en la toma de decisiones del grupo”. A pesar de los intentos por salvar la situación, “los productos de inversión han incumplido uno tras otro”, lo que ha llevado a la compañía a “pedir profundamente disculpas a los inversores”, resume el texto.

Quejas formales

Los primeros signos de flaqueza de Zhongzhi salieron a relucir en agosto, cuando su filial de inversión, Zhongrong International Trust, incumplió con los pagos de una serie de productos de inversión de alto rendimiento. Aquel impago avivó las preocupaciones sobre un posible contagio al sector inmobiliario chino, que representa aproximadamente una cuarta parte de la economía del país. Este jueves, numerosos inversores minoristas de la empresa han presentado quejas formales ante las autoridades de Pekín, según se hace eco el diario británico Financial Times.

“Las fortunas del sector financiero están estrechamente relacionadas con el inmobiliario, debido a la elevada tasa de endeudamiento de las grandes promotoras”, apunta Ding Haifeng, consultor de la asesora shanghainesa Integrity, citado por el rotativo hongkonés South China Morning Post (SCMP). “Un colapso del mercado inmobiliario provocará una oleada de activos dudosos en bancos, empresas fiduciarias y aseguradoras”, asevera este experto. Desde Everbright Securities International coinciden en que “las empresas fiduciarias privadas seguirán atravesando dificultades, con más posibles quiebras”, pero descartan que “lo ocurrido en Zhongrong represente una amenaza sistémica para el sector inmobiliario o para los sectores financieros en general”, escriben en una nota.

La crisis financiera de Zhongzhi se suma a la inestabilidad que ya prevalece en el mercado chino de bienes raíces. La tormenta en la industria se desató en 2020, cuando el Gobierno aprobó una serie de restricciones para controlar el nivel de deuda del sector. Pero los impagos que se han sucedido desde 2021 por parte de promotoras clave (como Evergrande y Country Garden) han lastrado el crecimiento de la segunda economía del planeta y han sacudido los mercados globales.

Según su informe de resultados del primer semestre, Evergrande, el grupo inmobiliario más endeudado del mundo, registra un pasivo de 308.000 millones de euros, de los cuales 77.500 millones son por viviendas inacabadas. Por su parte, a 30 de junio, Country Garden reportó una deuda con intereses de 33.100 millones de euros, además de 77.500 millones en viviendas pendientes de entrega a los compradores, según su último informe provisional, que recoge el SCMP. En respuesta, las autoridades chinas han aumentado en las últimas semanas la presión sobre los bancos estatales para que impulsen la concesión de préstamos a los grupos inmobiliarios.

Las acciones de las promotoras subieron el jueves, después de que Bloomberg publicase un artículo en el que asegura que Pekín ha creado una lista provisional de 50 empresas inmobiliarias susceptibles de recibir ayudas financieras. Country Garden subió hasta un 22,4%, aunque sus acciones han bajado más de un 60% este año.

Saludos.

[Benzino Napaloni]

El Gobierno vira su política de vivienda y apoyará a los pequeños propietarios

Esperanza empresarial ante una agenda que irá más allá del control de rentas

La segunda legislatura del Gobierno de Pedro Sánchez se ha abierto con signos de un cambio profundo en la política de vivienda que desplegó en la legislatura anterior, que ha abierto nuevas esperanzas en el sector inmobiliario y ha propiciado ya las primeras críticas en políticos y movimientos sociales vinculados a Podemos. Del énfasis en el control de rentas (“Topar el precio de los alquileres sí que es progresista”, llegó a proclamar la anterior ministra, Raquel Sánchez), el nuevo Ejecutivo ha pasado a priorizar el aumento de la oferta de vivienda y a reconocer el papel clave que en ello han de tener los propietarios.

https://www.lavanguardia.com/economia/20231126/9406561/gobierno-vira-politica-vivienda-apoyara-pequenos-propietarios.html

https://www.lavanguardia.com/economia/20231126/9406561/gobierno-vira-politica-vivienda-apoyara-pequenos-propietarios.html

https://www.lavanguardia.com/economia/20231126/9406589/jovenes-primeros-destinatarios-medidas-nuevo-ejecutivo.html

Saludos.

Si yo fuese pequeño propietario, vendería ya mismo. Recuerden 2012 de Roland Emmerich, cuando el político de turno te quiere tranquilizar, es cuando de verdad hay que correr.

Como en 2008, está todo el tumor tan extendido y entremezclado que no es fácil separar el trigo de la cizaña, como dice el relato bíblico. Si es cierto que a diferencia de entonces la banca real y la economía real se han despegado, entonces la masacre está servida.

No olviden los 15.000 milloncejos de ajuste fiscal que le esperan a España. En un contexto en el que el turismo puede perder por la subida de la energía, porque en julio ya no hay quien viva en Benidorm del calor que hace, y porque en Europa tampoco es que esté la economía muy boyante. Y con los boomers jubilándose en masa y sin reemplazo.


No me creo absolutamente nada que no haya sucedido ya y sea verificable. Ahora mismo Santo Tomás es un aprendiz a mi lado. Toda esta catarata de "noticias" sólo evidencia que los rentistas están acojonados. Que los políticos patrios harán todo lo que puedan para que aquí no cambie nada ni se alborote el gallinero, ni lo dudo. La cosa es hasta dónde llega su poder real, porque Europa no va a financiar la fiesta. Nos lo han dejado claro desde hace ya tiempo.

Hagan acopio de palomitas.

[Derby]

https://wtop.com/business-finance/2023/11/empty-bed-bath-beyond-stores-are-hot-real-estate-heres-whos-moving-in/

Empty Bed Bath & Beyond stores are hot real estate. Here’s who’s moving in

New York (CNN) — When Sears, Toys “R” Us and Circuit City filed for bankruptcy in recent years, it was an opportunity for other retailers to move into their old storefronts.

Now, retailers are pouncing on empty Bed Bath & Beyond stores.

“Some of our best stores were created from carved-up Kmart or Sears locations,” Burlington Stores CEO Michael O’Sullivan said earlier this year. Burlington has taken over 44 former Bed Bath & Beyond spaces.

This is the first holiday shopping season in more than 50 years without physical Bed Bath & Beyond stores after the chain went out of business earlier this year and closed its final 360 stores and also 120 buybuy BABYs in one of the largest retail bankruptcies in years. (Overstock.com bought Bed Bed & Beyond’s brand out of bankruptcy and has relaunched it online, complete with the 20% coupons.)

But hundreds of empty Bed Bath & Beyond stores auctioned off as part of the bankruptcy proceedings are turning out to be coveted real estate for retailers and other companies seeking to expand.

Burlington, Michaels, Barnes & Noble, Ollie’s Bargain Outlet, Macy’s, HomeGoods and other chains have replaced old Bed Bath & Beyond stores. Indoor pickleball courts, trampoline parks and bowling alleys have also filled up the vacancies.

Former Bed Bath & Beyond stores are hot, even as retail spending slows a bit, because there aren’t too many new big boxes to move into. There hasn’t been much new retail space built since the 2008 financial crisis, and the rise of online shopping, retail and real estate experts say, all put a damper on building.

The result is that retail vacancy rates are at historic lows.

The majority of Bed Bath & Beyond’s stores are in the suburbs of mid-size and large cities, and are under 50,000 square feet. These are appealing qualities for retailers as some companies favor smaller spaces, instead of mega stores, to save on rent and labor and as shoppers buy more online. Macy’s, for example, is opening its smaller “Market by Macy’s” versions at old Bed Bath & Beyond stores.

While headlines about the “retail apocalypse” have grabbed attention over the past decade, brick-and-mortar stores are still important to many shoppers.

Store growth has been most pronounced in the discount segment of retail as shoppers on tight budgets search for low prices. Other companies are using their stores to ship online orders to customers, which can be more efficient than delivering orders from warehouses. Even brands that started online, such as Warby Parker, have opened stores.

Bed Bath & Beyond spaces have been grabbed up swiftly at rents of up to 50% what Bed Bath & Beyond was paying, according to commercial real estate investment firm CBRE. Landlords are taking advantage of the vacancies, with some dividing former Bed Bath spaces into smaller sizes, said Brandon Isner, CBRE’s head of retail research for the Americas.

“There is little to no concern that any of the spaces will go vacant for long,” he said.

Kimco Realty, a real estate owner with 26 former Bed Bath & Beyond leases, said that new leases were 38% higher than Bed Bath & Beyond rents. Kimco has leased 14 spaces to companies like Burlington and HomeGoods and is in discussions with TJ Maxx, Ulta, REI and others for the remaining 14 stores.

“We have a very strong real estate team that has a lot of experience dealing with retail bankruptcies,” Burlington CEO Michael O’Sullivan said. “Many of our most successful and productive stores today were once upon a time Circuit City, Toys R Us, Sports Authority, Linens ’N Things.”

[Derby]

https://www.ft.com/content/39991750-e14e-45c2-813c-7d220d1bb8cc

China launches probe into struggling shadow bank Zhongzhi

Financial conglomerate had disclosed $36.4bn shortfall to investors last week after missing payments

Chinese authorities have opened a probe into Zhongzhi, one of the biggest conglomerates in the country’s sprawling shadow financing market, days after the group declared that it was “severely insolvent”.

Beijing police said that Zhongzhi was suspected of committing “illegal crimes”, and that “mandatory criminal measures” have been placed on a number of suspects, including one surnamed Xie, the same as its late founder. The statement did not specify the suspects’ alleged crimes or details of the measures being taken.

Zhongzhi had disclosed in a letter to investors last week seen by the Financial Times that it was facing a shortfall of about $36.4bn, renewing concerns over China’s $2.9tn opaque shadow financing sector and its exposure to the troubled property sector and wider economic slowdown.

The company wrote that it had total assets of just Rmb200bn ($28bn) against liabilities of up to Rmb460bn. It added that “internal management ran wild” following the departure of “multiple senior executives and key personnel” in the wake of the death in 2021 of founder Xie Zhikun, who it said had “played a pivotal role in decision-making”.

Zhongzhi and its affiliate investment group Zhongrong missed payments on several products earlier this year, prompting concerns of a spillover from the country’s property sector crisis, which has been rocked by a series of developer defaults, into shadow financing, which often supports real estate development.

Chinese policymakers have rolled out a range of piecemeal support measures in an effort to reverse the slowdown in the property sector, which previously accounted for more than a third of economic growth. This month, regulators instructed state banks to increase credit to cash-strapped private developers to a “reasonable” degree.

Zhongzhi did not immediately respond to a request for comment.

Beijing police said in a statement late on Saturday on social media platform WeChat that authorities were attempting to recover assets and encouraged Zhongzhi investors to report relevant cases and leads to assist in the investigation.

In September, Chinese authorities used the same language in regard to Evergrande chair Hui Ka Yan, saying he had been placed under “mandatory measures” on suspicion of involvement in “illegal crimes” as the world’s most indebted developer was struggling to restructure its offshore debts.

The designation could refer to law enforcement actions ranging from summons to residential surveillance or arrest and detention.(...)

[Derby]

Es lo que se denominaría un "hot seat"...

https://www.bloomberg.com/news/articles/2023-11-25/reidel-turns-down-invitation-to-join-milei-s-team-clarin-says

Reidel Turns Down Invitation to Join Milei’s Team, Clarin Says

Demian Reidel has turned down an invitation to lead Argentina’s central bank in the administration of President-elect Javier Milei, Clarin reported on its website, citing people familiar with the move that it didn’t name.

Bloomberg previously reported that Milei had tapped Reidel and Luis Caputo, two former officials who held key posts during Mauricio Macri’s presidency from 2015 to 2019, to lead his economic team.

[Negrule]

Lo único verificable es que el precio de la vivienda y las rentas del alquiler no han dejado de subir en los últimos 30/40 años, y después del bache de la última crisis mira lo que está pasando.

Veremos que pasa.

salut

No me creo absolutamente nada que no haya sucedido ya y sea verificable. Ahora mismo Santo Tomás es un aprendiz a mi lado. Toda esta catarata de "noticias" sólo evidencia que los rentistas están acojonados. Que los políticos patrios harán todo lo que puedan para que aquí no cambie nada ni se alborote el gallinero, ni lo dudo. La cosa es hasta dónde llega su poder real, porque Europa no va a financiar la fiesta. Nos lo han dejado claro desde hace ya tiempo.

Hagan acopio de palomitas.

[sudden and sharp]

Alberto Fernández se mudará a España tras dejar la presidencia de Argentina en manos de Milei
https://www.eldebate.com/internacional/20231126/alberto-fernandez-mudara-espana-dejar-presidencia-argentina-manos-milei_156397.html
El presidente saliente ha declarado que tiene varias ofertas en nuestro país para trabajar de profesor







¿Le gustará la fruta? Veremos. 

[Cadavre Exquis]

Aunque el gráfico original fue publicado por Bank of America en la página 4 de su informe The Flow Show  del 13 de julio de 2023 ...

... y Game of Trades ya se hizo eco de ello en agosto...

https://twitter.com/GameofTrades_/status/1688188180619567104

... hace unos días en Game of Trades han vuelto a publicar el mismo gráfico ...

https://twitter.com/GameofTrades_/status/1727031622757712140

... y Jose Vizner se ha hecho eco de ello en Negocios TV hace unas horas:

Negocios TV | 225 billones: la salvaje deuda mundial sin vuelta atrás y el escándalo del “gasta como una bestia”

Saludos.

[Derby]

https://www.wsj.com/finance/investing/american-borrowers-are-getting-closer-to-maxing-out-48ae1107

American Borrowers Are Getting Closer to Maxing Out

Credit-card utilization and delinquency rates are on the rise

A happy holiday shopping season might not end up being an especially cheery time for lenders.

Card loans are still growing, on average rising 1.6% in October over September across five big U.S. card lenders, versus a seasonally typical 0.7% increase, according to tracking of the latest monthly data by analysts at Goldman Sachs. The trend suggests that consumers still are willing and able to use their cards, portending well for retailers. U.S. retail sales slowed in October, but by less than feared, and were still at an overall solid level. Some retail stocks have jumped recently on hopes for holiday shopping.

But as far as people paying back those loans, the data so far is less compelling. The average rate of 30-day-plus delinquency across the five big lenders jumped 0.16 percentage point from September to October, above the typical seasonal jump of 0.06 point, according to Goldman’s tracking. Net charge-offs jumped 0.77 point on average, compared with a 0.18-point typical rise.

What all of this highlights is that some Americans’ spending habits might not be sustainable, at least when it comes to their cards. Some people might be starting to consume more of their available credit from month to month—and could hit the wall once those lines are exhausted.

A recent note published by the Federal Reserve Bank of Boston found that as of July, consumers with annual household incomes of less than $50,000 whose accounts were delinquent were on average utilizing 80 to 90 percent of their available credit. This leaves “those consumers with a very small amount of credit left on their accounts to cushion against a deterioration of their financial situation,” according to the paper. Across all cardholder income groups as of July, average utilization rates—the ratio of outstanding card account balance to the account’s credit limit—were above February 2020 levels. 

Keep in mind, too, that many banks are ratcheting back the credit they are willing to offer. The Fed’s latest Senior Loan Officer Opinion Survey for the third quarter found “significant net shares of banks reported tightening lending standards for credit card and other consumer loans.” The Boston Fed review noted that the average card credit limit, adjusted for inflation, was below its level in early 2020.

Of course, many consumers still retain savings cushions, which will help support spending. But one factor threatening to eat away at that buffer could be eventual paydowns of lingering debts.

Notably, the rate at which card companies have collected on charged-off loans has recently been below historical norms. Goldman’s tracking showed that as of the third quarter, five of the big card lenders on average had recovered about 18% of their gross charge-offs, versus a roughly 23% 10-year norm.

It isn’t that the lenders are being generous. Rather, because delinquencies have accelerated sharply, card lenders are just starting to catch up. So some consumers might be facing stepped-up collections just as their student-loan payments are resuming.

The silver lining from a macroeconomic perspective is that challenges could be fairly concentrated within certain subsets of consumers, such as those with lower incomes and student-loan debts. American Express, which tends to have wealthier and more creditworthy borrowers, reported a 30-day-plus delinquency rate as of October of 1.3%, versus over 4% on average across the five lenders, according to Goldman’s tracking. The strong job market also helps ease pressure—though any change there could expose some households.

Beyond sorting loans by borrower income, the timing of loans could also be important. In particular loans made over the prior couple of years could prove more dicey, as some consumers’ credit profiles were bolstered by the pandemic stimulus and recovery. “We’re getting closer to the peak of this massive 2022 vintage of credit, which was a period when several underwriters apparently loosened standards,” says Goldman analyst Ryan Nash.

All of which implies that a bottom for consumer credit is potentially still ahead of us. S&P 500 consumer-finance firms are trading at roughly 10 times forward earnings versus a 10-year average closer to 12, according to FactSet. But investors should be wary about jumping into these stocks simply because consumers are acting all jolly.

[Derby]

https://edition.cnn.com/2023/11/26/business/consumer-spending-slowdown-dg/index.html

American spending has kept the economy going since the pandemic. It may finally be stopping, in charts

Not even two years of soaring prices and mounting interest rates have stopped Americans from opening their wallets and tapping their credit cards.

The consumer’s willingness to keep paying high prices has kept the US economy relatively strong, but that attitude could soon be shifting. Some experts think the combination of high housing costs, rising credit card debt and shrinking savings could mean the end of post-Covid splurges, maybe even as soon as this year’s holiday shopping season.

“Headwinds are going to eventually force the consumer to buckle, and I think that we’re going to see consumers have to pull back on spending for a quarter or two,” said Erik Lundh, a principal economist at The Conference Board.

Here are the pressures consumers are facing that could cause a spending slowdown.

Housing costs are the highest in 40 years

Buying and paying for a house costs Americans more now than at any point in almost four decades. Thanks to strong demand and a limited supply of new homes – even as mortgage rates have more than doubled in the past year – it now takes nearly 41% of the median household’s monthly income to afford the payments on a median-priced home, according to research from Intercontinental Exchange (ICE). The last time housing payments cost that much was in 1984.

Housing payments are only part of the problem. The Freddie Mac 30-year fixed mortgage rate as of November 16 was 7.44%. A new homebuyer in October 1981 carried an 18.45% mortgage rate, or 55% of the median income. But the median home price that month was proportionally much lower than today – $70,399 ($231,902 in 2023 dollars), or 3.69 times the median income. The median home price over the past two years has ranged from roughly five and a half to six times the median income – $445,567, as of October. That ratio is higher than at any point since ICE began collecting data, including during the housing bubble of the mid-2000s.

Americans are carrying more debt than ever

Inflation has also impacted spending on major purchases. Balances on non-housing loans have more than doubled since 2003, totaling roughly $4.8 trillion, according to data from the New York Federal Reserve. More than $500 billion of that debt accumulated just in the past two years – a bigger jump than any other two-year period since 2003, the earliest year available.

Some of that debt comes from skyrocketing car prices, but credit card balances are growing the fastest of all – roughly 34% from the fall of 2021. Student loan and car loan balances have grown by 10% or less over that same period of time, although student loan debt could begin to climb now that payments have resumed.

One important caveat is that this data is not adjusted for inflation, and personal incomes have also grown since the pandemic. The national average wage rose by more than $8,000 from 2020 to 2022, according to the Social Security Administration. That’s the largest increase over two years since 1982.

Keeping up with high prices not only has led to more credit card debt, but also more consumers are falling behind on the payments. During the third quarter, 5.78% of credit card balances became seriously delinquent (90 days or more behind on payments), accounting for the largest share of new serious delinquencies. Since the first quarter of 2022, the rate of newly serious delinquent credit card debt has risen roughly 90%.

Student loan debt previously saw the largest rates of newly seriously delinquent balances until the federal government paused payments in March 2020 because of the Covid-19 pandemic.

Covid-era windfalls have dwindled

A study released by the San Francisco Federal Reserve earlier this year revealed one important clue as to why consumers are continually willing to pay higher prices: High levels of excess savings.

Households were saving hundreds of billions more dollars per month in 2020 and 2021 compared to the pre-pandemic trend, according to the SF Fed. One big reason those piggy banks got so full was the “refinancing boom” that occurred during that time of historically low mortgage rates. From the second quarter of 2020 through the end of 2021, 14 million mortgages were refinanced, resulting in an estimated $430 billion of equity being extracted through either lower monthly payments or cash-outs, according to New York Fed research.

“Under lockdowns and the worst of Covid-19, consumers were afraid to go out,” Lundh said.

That meant all that money that would have been spent on goods and experiences pooled up in people’s piggy banks instead.

As the pandemic waned, consumers unleashed a pent-up demand for experiences denied by Covid, Lundh said. And for the past two years, Americans have been spending all of those savings, even as prices and interest rates have climbed higher and higher.

During the pandemic, consumers accumulated $2.1 trillion in excess savings. As of June 2023, they’ve spent $1.9 trillion of it, the SF Fed concluded.

“The consumer is going to have to take a breather for a little bit,” Lundh said.

And that would mean Americans may be forced to finally pull back on their post-Covid spending spree.

“At a certain point, this debt becomes unsustainable, and there’s no more savings left,” Lundh said. “And that’s what we expect probably to happen to the US consumer, towards the end of this year and into early 2024.”