The Profit Structure of Banking Improves Dramatically

The decline in the TIPS 10-year yield to -1.0% reduced the 10-year nominal yield to 1.35%. The delay in the expected increase in the TIPS to 0.4% and nominal to 2.0% reduces the 1-year forecast for appreciation potential for large banks to 57% from the initial estimate of 68%, based…

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Credit Unions are a Growing Force with Increasing Risk

Credit unions have grown to become a major factor in the U.S. economy, with assets that have grown at nearly twice the pace of banks’ over the past decade.1 Credit unions are owned by their members and are designed to offer lower borrowing costs and higher deposit rates. In addition, the…

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SPYD Best Diversified Dividend Stock ETFs vs. Inflation

In May, IDC published this article and predictions based on trailing 12-month dividends. These included realized capital gains, so this double-counted the forecast. Following is our corrected forecast. Inflation can erode purchasing power over time, especially in a fixed income investment. Carefully selected dividend stock ETFs, with high yield and dividend…

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The Profit Structure of Banking Improves Dramatically

Return on Equity (ROE) defines the profit structure of the banking industry. ROE is defined by IDC Financial Publishing (IDCFP) as the addition of return on earnings assets (ROEA) and return on financial leverage (ROFL), or operating return plus financial return. ROEA equals all operating income, less operating expenses (before…

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The Long Bull Market in Bank Stocks

Rising German 10-year yields forecast increasing U.S. TIPS yields. This increase in TIPS yields, combined with the copper-to-gold ratio, forecasts a 2.4% yield on the U.S. 10-year T-Note by the end of 2021, 2.8% in 2022 and 3.2% in 2023. The U.S. 10-year is expected to rise significantly, led by the…

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