To start, here's a chart of US credit card serious delinquency rates for subprime borrowers.
Subprime credit card delinquencies have risen 7 percentage points in just ~15 months.
These borrowers reflect a WHOPPING ~23% of the consumer credit market, according to Fed data. pic.twitter.com/mNUaNwc0GB
— The Kobeissi Letter (@KobeissiLetter) January 2, 2025
Meanwhile, US multi-family serious delinquency rates jumped to 0.6% in November, the highest since the 2020 pandemic.
Delinquencies have doubled in 18 months, rising at a similar pace as in 2009.
Outside of the pandemic, delinquencies are at their highest level since 2011. pic.twitter.com/01Dw8G3gAQ
— The Kobeissi Letter (@KobeissiLetter) January 2, 2025
In fact, delinquency rates on these loans are rising twice as fast as during the 2008 Financial Crisis.
There were more than $2 billion in office loans that became newly delinquent in December 2024.
Delinquency rates on these loans are up 9.4 percentage points in 2 years.
— The Kobeissi Letter (@KobeissiLetter) January 2, 2025
To top it all off, US credit card loan defaults hit their highest since 2010 in 2024.
Credit card lenders wrote off $46bn in seriously delinquent loan balances in the first nine months of 2024.
This is up a massive 50% year-over-year, according to BankRegData. pic.twitter.com/eqTe489Icf
— The Kobeissi Letter (@KobeissiLetter) January 2, 2025
The reality is that these trends will impact ALL markets, not just lenders.
As the Fed navigates a rebound in inflation, we expect even more pressure on consumer spending and borrowers.
Subscribe at the link below to see what we are trading into 2025:https://t.co/SJRZ4FrNBc
— The Kobeissi Letter (@KobeissiLetter) January 2, 2025
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