Tuesday, October 18, 2011

The Banks are Baaaak in the Market (MSM finally figures it out)

Joe Nelson emails:

It look like the MSM is catching on to what EPJ Daily Alert readers have known for months and that is banks have started loaning again. Dealbook has the scoop (link). The article jumps around a bit between bank earnings and loan growth but here are a couple of the money quotes:

"On Monday, Citigroup officials said the bank recorded loan growth, compared with a year ago, in almost every one of its businesses during the third quarter, and in almost every corner of the globe. Wells Fargo executives said new loan commitments to small businesses were up 8 percent, while lending to bigger companies has been growing for 14 months in a row. Across the industry, analysts expect credit card loan balances will start increasing before the end of the year..."

"...Over all, corporate lending has rebounded 7.2 percent after bottoming out in October 2010. Consumer lending, with the exception of housing-related loans, turned positive during the second quarter and has been gradually increasing since then, the data show. All told, total loan balances are near where they stood in mid-2007."
There's no mention of the explosive growth in either M2 or required reserves. Despite the neglect, the effects of money growth appear to be trickling into the data and the word is starting to spread that the banks are back in the market.

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