John Mauldin passes along a good excerpt from one of David Rosenberg’s research. As regular readers know, the de-leveraging theme has been an extremely important one to understand over the last 5 years and what we’re finally beginning to see is some real signs of a return to normalcy there. As Rosenberg notes, bank lending is actually gaining momentum:
“U.S. banks may say in the Senior Loan Officer Survey that they remain tight in their credit scoring, but they are still managing to find borrowers to whom to extend loanable funds. Commercial bank lending, on net, rose $26.7 billion in the May 21st week and have expanded now in 12 of the past 13 weeks. We have not seen back-to-back increases of this magnitude (was $18.7 billion in May 14th) since the beginning of January last year. On a 13-week rate of change basis, total loans and leases have accelerated at a 9% annual rate, and the gains have been broad-based: commercial & industrial loans up at a 12.7% annualized rate, commercial real estate up 7.3%, housing loans swinging to a positive-2.9% rate, and consumer credit up to a 8.1% annual rate. Tough to square these data points with a moribund economic backdrop.”
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.
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