Morning Brief – US Consumer Credit

Humphrey Percy
Chairman and Founder
Fri 19 May 2023

US Consumer Credit

Back in 2000 US consumer credit stood at USD 1.6 Trillion. Clearly near zero interest rates for the past 10+ years plus easy credit conditions have lulled US consumers into a sense of borrow now repay tomorrow. Except that the repay tomorrow part seems to be getting lost with US consumer credit now at USD 4.5 Trillion and interest rates no longer anywhere near zero. 2 Year US Government Bonds now yielding 4.18% and 3 months USD Libor at 5.37%. That compounding interest effect on non repayments is one to watch.

EUR/USD 1.0790.

British Telecom

With a staff force of 130,000 of which all but 20,000 are in the UK, BT has not been slow to announce that in the next few years they plan to shed 55,000 staff of whom 20% will be replaced by Artificial Intelligence. Which ever way you look at this, BT has made it plain that they are capable of generating huge efficiencies in the business and, given the customer care they have to offer, it is hardly surprising that some of that can be replaced with AI technology. So, instead of speaking to someone in India, get ready for a chatbot coming to speak to you soon.

GBP/USD 1.2420.


On the face of it good news that Japan is investing GBP 18 billion in the UK of which GBP14 million is wind farm related by Marubeni Corporation and Sumitomo Corporation, and a significant increase from the current level of trade and services worth GBP 27 billion.

USD/JPY 138.25.


Back down to $1976 and a new range of $1970 to $2020 being talked about. Still some gold bugs out there who are looking for a break out on the upside which would be predicated for example by a failure in the US to agree a new debt ceiling. Be careful what you wish for!

Circle of Life

Can it be that it is only 5 years ago today that Prince Harry and Meghan Markle tied the knot at Windsor Castle and Elton John played many of his best songs at the Royal Reception including this one when clearly Megarry did not listen to the ninth line of the song :

From the day we arrive on the planet
And blinking, step into the sun
There’s more to see than can ever be seen
More to do than can ever be done

Some say, “Eat or be eaten.”
Some say, “Live and let live.”
But all are agreed
As they join the stampede
You should never take more than you give

In the circle of life
It’s the wheel of fortune
It’s the leap of faith
It’s the band of hope
‘Til we find our place
On the path unwinding
In the circle, the circle of life

Some of us fall by the wayside
And some of us soar to the stars
And some of us sail through our troubles
And some have to live with the scars

There’s far too much to take in here
More to find than can ever be found
But the sun rolling high through the sapphire sky
Keeps great and small on the endless round

In the circle of life
It’s the wheel of fortune
It’s the leap of faith
It’s the band of hope
‘Til we find our place
On the path unwinding, yeah
In the circle, the circle of life

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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