U.S. bank-wide delinquency rates hit a fresh 18-year high in the first quarter, rising to 5.60% from 4.64% in the fourth quarter and 2.86% a year ago.  The data is obviously coincident as opposed to leading, but there is no sign that default rates have peaked for the cycle.

In addition to credit cards, commercial real estate delinquencies are the next major cloud over the outlook for financials.  The delinquency rate rose to 5.6% in the first quarter from 4.64% in 2008Q$ and double the 2.86% rate a year ago.  Of all the various lending classes, this area likely has the furthest to rise – the prior peak in the early 1990s broke above the 12% barrier.  We would not be surprised at all to see that prior peak taken out this cycle.

Who said that we are out of the woods ?