Monday, September 29, 2008

New Banking Data: Where's The Credit Crisis? Total Bank Loans and Leases Exceed $7T For First Time

New banking data were released today from the Federal Reserve on bank loan volume through September 17 (for weekly data and August for monthly data), showing that "Total Loans and Leases at All Commercial Banks" reached an all-time high of $7.026 trillion (reported weekly) in mid-September, going over $7 trillion for the first time in history (see graph below).

Consumer loans (reported monthly) hit an all-time high of $845 billion in August:

Real estate loans (reported monthly) peaked out this year at about $3.642 trillion, and increased slightly in August from July:

Commercial and industrial loans at large commercial banks (reported weekly) were close to an all-time in September, just slightly below record levels reached in July:

Q: Where's the credit crisis?


At 9/29/2008 4:57 PM, Anonymous Anonymous said...

Q: Where's the credit crisis?

A: Are you blind? Those graphs look scary to me.

At 9/29/2008 4:58 PM, Anonymous Anonymous said...

Are you serious? Man, someone is really living in la la land. Go look at credit spreads. Look at junk bond yields. Go look at all the institutions that failed because short term liquidity disappeared.

Look at 3 month treasuries. 10 year treasuries.

We're in a massive deflation right now and it ain't pretty.

This is not the time to go with the Larry Kudlow line that everything is rosy. It's just embarrassing.

At 9/29/2008 5:28 PM, Anonymous Anonymous said...

Yes, he is serious. I can't speak for Mark, but his post is general evidence that we are facing a complete stopage of all credit.

This is a real concern of many...a fellow econ/finance professor just today was worried that no one would be able to get a car loan or a credit card.

Mark's data shows that to be bunk.

At 9/29/2008 5:28 PM, Anonymous Anonymous said...

should have said "NOT" facing...

At 9/29/2008 5:32 PM, Blogger bobble said...

ok, you can subtract about $500 billion from those charts.

the commercial paper market has imploded. it has contracted by $500 billion in the last year.

commercial paper charts

total loans are not increasing. this is just an involuntary shift from commercial paper to bank lines of credit.

At 9/29/2008 6:03 PM, Anonymous Anonymous said...

Folks - get a clue. Yes, things ain't great but go out and TALK to people in lending businesses and transactions are happening.

At 9/29/2008 6:30 PM, Anonymous Anonymous said...

The credit crisis is in the funny money shadow CDS market, it's going boom.

At 9/29/2008 6:37 PM, Anonymous Anonymous said...

While the banking system is clearly impaired by its mountain of bad debt, it is still expanding credit at a modest pace. For example, credit card debt grew at a 3.5 percent annual rate and a 4.8 percent rate in July. This growth is not consistent with a credit freeze up.

At 9/29/2008 6:38 PM, Anonymous Anonymous said...

Interbank lending is a different story.

At 9/29/2008 6:39 PM, Anonymous Anonymous said...

How can interbank lending be frozen while other types of lending are ok?

At 9/29/2008 8:18 PM, Anonymous Anonymous said...

How can interbank lending be frozen while other types of lending are ok?

It's a sign of the CDS meltdown. The banks trust their customers to repay their debts more than they trust each other to stay solvent.

At 9/29/2008 8:18 PM, Blogger SBVOR said...

Dr. Perry,

Aw come on…

You could have given me a “Hat Tip”.

Or, do our minds just travel the same highway?

Just today, I updated my post of 9/24/08 to include some of the data extending to 9/17/08 (two of the charts). Both of those charts show MORE LENDING than the previous week.

Based on when the timing of the TED Spread spike (it peaked on 9/18/08), the data released one week from today may be very telling.

P.S.) I’m just ribbing you. If you are still reading my blog, I am still honored. Thanks for all you do! And, besides, I got the idea for my post from an earlier post of yours. So, it all works out.

P.P.S.) This post is going viral (well, relative to my still meager hits as compared to yours).

At 9/29/2008 8:41 PM, Blogger SBVOR said...

I just added a third chart updated through 9/17/08.

At 9/29/2008 9:38 PM, Blogger K T Cat said...

A link is coming from a post I've got scheduled for tomorrow as well as a link due to the sage comment from the Kentucky Packrat.

At 9/29/2008 9:43 PM, Anonymous Anonymous said...

Makes sense. Thanks, Kentucky. Thought it would have been something more high-fallutin.

At 9/29/2008 9:43 PM, Anonymous Anonymous said...

Total bank credit is at an all time high. Commercial and Industrial loans - all time high. Consumer loans - all time high. Even Real Estate loans are just off their all time high. Yep, it looks like a credit crunch to me!

Oh, and the people who are bringing you the credit crunch are the same people who knew where to find WMDs.

At 9/29/2008 10:21 PM, Anonymous Anonymous said...

This post is truly uninformed.

It's almost like putting up a graph of bank loans and saying: "This chart proves there's no such thing as Mafia loansharks."

The entire point of today's lending market is that it's not in those graphs. It's off balance sheet in special investment vehicles.

You know, ENRON accounting that the press wails about, but when Fannie and Freddie do it for former Democrat Congressmen, it's OK.

You won't ever see this type of lending on your graphs. It's all done in the shadows. That's the point of the meltdown ... nobody can see what's going on because all the banks are hiding their real loan portfolios.

Good luck in your career as an economist. You're about as informed as the rest of them.

At 9/29/2008 11:09 PM, Blogger Badmojo said...

Interesting side point...

I bought a car yesterday - as in on 28 Sept - and had a pair of banks fighting for my business. It wasn't quite the rates that I got 4 years ago when I bought a new car, but it was pretty respectable and I was pretty happy with it.

Of course, I have excellent personal credit - "amazing" to quote the financing agent - so maybe people who have poor credit are having more problems... but I guess that's one of the benefits of making good decisions. ;)

At 9/30/2008 8:19 AM, Anonymous Anonymous said...

Florida -

It might be as bad as you say in the "shadow" market. But if consumers and businesses can still get loans (even if businesses need to go to bank lines of credit rather than their preferred commercial paper) then business can still get done, can't it? Agina, where's the credit crunch?

At 9/30/2008 6:46 PM, Anonymous Anonymous said...

Here is a thought for you:
Lending is at an all time high. What is the collateral worth? Granted, you also must consider what the people are worth.
Many of them are invested in the Market, with "safe" investments. Maybe with Lehman Bros, or Bear Sterns. Yeah, the credit crunch is crap. So is the thought of us being in a recession. Just doomsday talk. We would have to see things like net worths decreasing, or a fall in the Stock Markets, or a rise in unemployment. No, no there is no recession! Government charts say so. So, no credit crunch, doesn't fit the charts. Makes sense. Just like my vote counts.

At 10/07/2008 6:16 PM, Anonymous Anonymous said...

I was really surprised today when I got a letter from my credit card company (Chase), saying they were raising my credit limit from $6000 to $9000, and had a "check" with the amount of $7000 that could be used with 0% APR for 6 months. WTF? I keep hearing people talking about how people won't be able to get a car loan, then, my credit card company gives an unemployed, college student a $9000 limit. IDK, it just blows my mind.
So, I guess the financial crisis hasn't hit "Main Street" (god, I hate political catchphrases) yet. It's very sad that our economies have turned into debt economies. It does have to crash sometime though. Same thing with Capitalism too. I think Capitalism will collapse when growth stops, which is inevitable since the earth's resources are limited, and economies can only grow so much.

At 10/08/2008 9:17 AM, Anonymous Anonymous said...

Thanx for the charts.
Looks serious to me.
Maybe I will link to this.


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