· Dow Jones reports Spanish banks will be required to provision 30% against performing developer loans, up from the present 7%.
· Fannie Mae earned 2.7bn in 1Q
- China Apr Passenger Car Sales rose 12.5% vs 11.3% est
- China may delay its five-year congress by a few months because of an internal debate over the size and composition of the nine-member committee.
- Wed: Australia Employment
- Thurs: China Trade Balance, Japan Eco watchers Survey, UK MPC, US Import Prices, Initial Jobless Claims, China CPI, Money Supply
- Fri: China IP, Retail Sales, UK PPI, CanadaUnemployment, US PPI, U Michigan Confidence
- Mon: Swiss Producer & Import Prices, RBA Minutes,
- Tues: French CPI, German 1Q GDP, French Payrolls, German Zew, US CPI, Empire Manufacturing, Retail Sales, NAHB Housing Market Index
- Wed: UK Claimant Count Rate, EU CPI, Swiss ZEW survey, EU Trade Balance, BoE Inflation Report
The deceleration in global growth momentum since the end of March in conjunction with fears of a Grexit continues to make non-tactical directional bets in most markets unattractive. And unless the global macro data starts to get better, market participants are likely to continue focusing on Grexit risks through the mid-June Greek election. Despite the rhetoric, the major players are well incentivized to avoid the catastrophic outcome, but it’s not clear if market dynamics are likely to reflect this without some sort of catalyst. In the meantime, based on price action in precious metals & energy futures, portfolio deleveraging appears to be spreading.
Turning away from Europe, I spent a little time thinking about the ballooning in student loan debt today. We are all aware that it has growth very quickly. (110bn or ~70bps of GDP in the past year) What is less well publicized is what kind of people are borrowing.
Fortunately, the Dept of Education has enrollment data for institutions of higher education, although complete data only exists through 2009. Nevertheless here are some interesting factoids:
– Compared to the 2001-2006 average, total enrollment increased by 110% in 2008 and 225% in 2009. Enrollment increased by 855k in 2008 and 1.3mm in 2009, vs an average annual increase of 408k.
– The surge was especially strong for those older than 22, and strongest for those over 30
– About 60% of the increase came from full-time students.
– 86% of enrollment was at an undergraduate institution
– As a result, there may be a roughly 250k increase in the labor force this summer, composed mostly of graduates older than 22. This figure jumps to 550k in 2013.
– Fortunately, the JOLTS data this week shows job openings continue to increase, suggesting that a large portion of these graduates are likely to find jobs
|Sex, age, and attendance status||2000||2001||2002||2003||2004||2005||2006||2007||2008||2009|
|14 to 17 years old||140||161||162||184||184||210||204||202||193||200|
|18 and 19 years old||3,473||3,561||3,525||3,542||3,560||3,640||3,777||3,912||4,090||4,048|
|20 and 21 years old||3,104||3,291||3,405||3,519||3,634||3,676||3,717||3,751||3,929||3,891|
|22 to 24 years old||2,602||2,769||3,079||3,137||3,211||3,104||3,191||3,310||3,480||3,691|
|25 to 29 years old||1,963||2,023||2,130||2,195||2,306||2,397||2,421||2,561||2,737||3,059|
|30 to 34 years old||1,244||1,284||1,358||1,333||1,354||1,365||1,391||1,422||1,482||1,719|
|35 years old and over||2,786||2,839||2,954||3,001||3,022||3,095||3,058||3,091||3,191||3,820|
|14 to 17 years old Chg||21||2||22||-1||26||-6||-2||-9||7|
|18 and 19 years old Chg||89||-36||17||18||79||137||135||179||-43|
|20 and 21 years old Chg||187||114||114||116||42||41||34||179||-38|
|22 to 24 years old Chg||167||310||59||74||-108||88||119||170||211|
|25 to 29 years old Chg||60||107||66||111||91||24||140||176||322|
|30 to 34 years old Chg||40||74||-25||22||11||26||31||59||237|
|35 years old and over Chg||53||114||48||21||73||-38||33||101||629|
|Avg||% of Avg||% of Avg||% of Avg|
|14 to 17 years old Chg||11||-14%||-89%||69%|
|18 and 19 years old Chg||51||265%||352%||-84%|
|20 and 21 years old Chg||102||33%||175%||-37%|
|22 to 24 years old Chg||98||121%||173%||214%|
|25 to 29 years old Chg||76||183%||231%||421%|
|30 to 34 years old Chg||24||128%||243%||970%|
|35 years old and over Chg||45||73%||223%||1390%|