This proxy measure is below its lowest levels since 1998, indicating poor profit potential and fleeing deposits, limiting banks’ ability to lend.

“The last three recessions occurred when this proxy measure was at or near its lowest levels. The current reading is at or below any spread since at least 1998. Couple poor profit potential with fleeing deposits, and the banks’ ability or profit motivation to lend is minimal.”

The last three recessions occurred when this proxy measure was at or near its lowest levels. The current reading is at or below any spread since at least 1998. Couple poor profit potential with fleeing deposits, and the banks’ ability or profit motivation to lend is minimal. pic.twitter.com/kZQ97F9DlH

— Michael Lebowitz, CFA (@michaellebowitz) June 27, 2023

“The Fed doesn’t reverse until junk bond distress reaches the blue line. And by the way at the S&P lows of October, the high yield spread was nowhere near the blue line. Which means we’re going lower than October.”

The Fed doesn't reverse until junk bond distress reaches the blue line. And by the way at the S&P lows of October, the high yield spread was nowhere near the blue line. Which means we're going lower than October. pic.twitter.com/wADOINysxy

— Mac10 (@SuburbanDrone) June 27, 2023

Weak bears have totally capitulated.

Even though it's already over. pic.twitter.com/Rx82QJ1UFo

— Mac10 (@SuburbanDrone) June 27, 2023