Business loans relative to money supply spikes during periods of recessions. As you can see the law of diminishing returns is creating lower highs, As per this chart there is no indication we are in a recession. Why? I would argue because we are still in a recession since 2020.
You can't fix an insolvency problem with liquidity.
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Business loans as % of Money Supply have completely stalled out. it can't even make it to 15%. Hope this doesn't start crashing if you are a bull. Bad JUJU!
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Business loans as % of Money Supply are starting to weaken here. This is not a good sign for the overall economy.
Bad JUJU!
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Business loans continue to fall despite the money supply falling. Bad JUJU!
When can we look forward to the next market update?
pureSnow62586
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Could the recent downward slope on the chart be due to a sharp increase in m2 over the pandemic?
Linktind
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Interesting observation as always! I find this one particularly hard to interpret. One can also infer that bank's share in commercial lending has diminished due to other available lending vehicles... So, although, I find your conclusion very appealing, I am not sure if we are not missing some important information here.
walidmvp
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This one speaks volumes! So, do you see a V-shaped recovery given the sharp and quick decline down, the same U-shaped pattern as in the past, or something more nefarious being very long and drawn out? Thanks!
RealMacro
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@walidmvp, No V shape. I would even guess it will take a decade to see new all-time highs. key word GUESS
wellthere
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Is this an overall view of return on assets or GDP vs overall debt or GDP vs what the fed prints? I assume that commercial and Industrial $ created = GDP but I am not sure what your referring to with money supply