US banks are staring at rising loan losses among clients in the private equity markets. These customers, operating conglomerates and other businesses, are struggling on debt repayments as higher interest rates take a toll, according to DICK BOVE, chief financial strategist at ODEON CAPITAL GROUP, in a new report. “You’d be amazed if you subtracted the net increase in debt from the cash flow statements of American companies, at how many are not generating enough cash,” he says. BOVE is forecasting multiple billions of dollars in bank loan losses in this sector in the coming months. “These losses are going to bankrupt a lot of companies,” he adds.

Meanwhile, BOVE says it’s premature to suggest the Fed is ready to call it done in its so far successful campaign to tamp down inflation. In good part, that’s because of the Fed’s tight monetary policy, a policy which has a direct influence on interest rates. Total assets at the Fed have been in steady decline for months. BOVE says the Fed may also raise the Fed Funds rate at least one more time, meaning a hike of 25-basis-points. Higher rates have inflicted financial pain all around, including in debt financing costs of the US government. MAT VAN ALSTYNE, ODEON co-founder and managing partner, says the government has, nonetheless, taken its eye off the financial ball, as political dysfunction rages in Congress.

Elsewhere, we look what it takes to be regarded as “rich and affluent” in America today as the ranks of millionaires swell to record levels. JOHN AIDAN BYRNE presents historical data of how being a millionaire about a century ago in America had a different financial meaning than today. We also look at global events.

Questions & Comments: Podcast@odeoncap.com