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The Thrill Is Gone? Large Bank Loan Volumes Continue To Shrink Despite Deposit Growth (M2 Money Growth NEGATIVE For All Last Year!)
Confounded Interest ^ | 01/06/2024 | Anthony B. Sanders

Posted on 01/06/2024 7:25:47 AM PST by Kaiser8408a

Yes, BB King was right … about banking. “The Thrill Is Gone” from bank lending,

I observed yesterday that bank credit growth has been negative for the past year. The entire year!

On the bank deposit front, after losing more than a trillion dollars in deposits in 2023 – and seeing usage of The Fed’s emergency funding facility soar to a record high yesterday – total bank deposits rose by $24.2BN in the week-ending 12/27/23 (on a seasonally-adjusted basis) – that is the 4th straight week of deposit inflows…

Source: Bloomberg

On a non-seasonally-adjusted basis, deposits rose almost in line, up $20.3BN (the fifth week of inflows in a row)…

Source: Bloomberg

Interestingly the sizable deposit inflows are occurring alongside sizable money-market fund inflows…

Source: Bloomberg

…now we know where all that reverse repo liquidation cash is going…

Source: Bloomberg

Excluding foreign bank flows, the picture is even rosier with domestic bank deposit inflows of $33.8BN (SA) and $38.7BN (NSA) – the 5th week in a row of NSA inflows…

Source: Bloomberg

While it may surprise some, on an NSA basis, domestic bank deposits are now back above pre-SVB levels…

Source: Bloomberg

Large banks saw $24BN inflows last week and Small Banks $9.4BN (on an SA basis) and for the 5th week in a row both large and small banks saw NSA inflows (+$30BN and +$8.7BN respectively)…

Source: Bloomberg

On the other side of the ledger, loan volumes continued to shrink (despite the deposit growth). Large bank loan volumes fell $8.2BN (the 4th week of falling loan volumes in a row)…

Perhaps we should look at The Fed’s little beige book.

The problem is that The Fed doesn’t know what 7 plus 7 equals. Other than asset bubbles.

(Excerpt) Read more at confoundedinterest.net ...


TOPICS: Business/Economy; Food; Government; Politics
KEYWORDS:

1 posted on 01/06/2024 7:25:47 AM PST by Kaiser8408a
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To: Kaiser8408a
The BTFP-Fed Arb continues to offer ‘free-money’

[BTFP - Bank Term Funding Program]

**************

Free money for Friends of the Fed, but not for us.

2 posted on 01/06/2024 7:55:09 AM PST by Starboard
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To: Kaiser8408a

I hate those RMDs.


3 posted on 01/06/2024 8:02:57 AM PST by ComputerGuy (Heavily-medicated for your protection)
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To: Starboard
Free money for Friends of the Fed, but not for us.

The rate for these loans is over 5%.

4 posted on 01/06/2024 8:16:59 AM PST by Toddsterpatriot (TANSTAAFL)
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To: Kaiser8408a
M2 Money Growth NEGATIVE For All Last Year...

Yep, that's M2 fiat TP with green ink all over it. OTOH, 2025 US Treasury dollars is on the increase.


5 posted on 01/06/2024 8:28:52 AM PST by C210N (Mundus vult decipi, ergo decipiatur.)
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To: Kaiser8408a

I hear that song on SiriusXM all the time!


6 posted on 01/06/2024 8:38:12 AM PST by sauropod (The obedient always think of themselves as virtuous rather than cowardly.)
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To: Kaiser8408a

More good news being called bad.


7 posted on 01/06/2024 8:44:43 AM PST by SaxxonWoods (Are you ready for Black Lives MAGA? It's coming.)
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To: Toddsterpatriot

Its actually a little under 5% (since mid December) and affords an arbitrage opportunity for banks via IORB.

The BTFP also afforded banks generous loan terms by accepting the face value of securities used as collateral.


8 posted on 01/06/2024 9:49:54 AM PST by Starboard
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