Banking Archive

Comments on crude pricing, the economy, and the banking system

Crude pricing The Saudis are the ‘supplier of last resort’/swing producer. Every day the world buys all the crude the other producers sell to the highest bidder and then go to the Saudis for the last 9-10 million barrels that are getting consumed. They either pay the Saudis price or shut the ...Read More

Weekly credit update comments

I got this email supporting the idea that bank credit expansion has been at the expense of non bank lenders, with low total credit growth. As previously discussed, I don’t see the credit growth necessary to sustain the 3%+ GDP growth being forecast. Instead, I see the q1 negative growth and H1 ...Read More

Who’s ‘we’?

And they still are? The idea that the deficit is too small remains a non starter for the mainstream. In the face of all evidence to the contrary, including over 2 decades of it in Japan, they continue to believe ‘monetary policy’/low rates and QE supports aggregate demand. Full size image ...Read More

The first L shaped US ‘recovery’

Some 5 years ago when the talk was about whether the US recovery was going to be V shaped or U shaped, I suggested that it would be more L shaped, as a 0 rate policy requires a larger deficit, etc. That is, after a sharp fall it would go sideways. Here ...Read More

today’s observations

Not much sign of any move towards higher deficits today. Just talk of more bank liquidity, which doesn’t matter, and more to weaken the euro, which doesn’t work either. Hard to say why the euro has been going down, but it’s not ECB policy per se which, while meant to weaken the ...Read More

Comments on Professor John Cochrane’s – A Few Things the Fed Has Done Right

A Few Things the Fed Has Done Right The Fed’s plan to maintain a large balance sheet and pay interest on bank reserves is good for financial stability. By John H. Cochrane Aug 21 (WSJ) — As Federal Reserve officials lay the groundwork for raising interest rates, they are doing a few ...Read More

Bank lending weekly update

What was touted as an acceleration of growth seems to have leveled off over the last few weeks, and is looking more like a dip in growth (cold winter?) followed by a recovery that’s leveled off. More troubling, however, is the late cycle pattern of a slowdown in the growth of lending ...Read More

Bank lending accelerating

From DB: The weekly bank lending data just came out and we continue to see an acceleration in credit growth, see also the chart below. The latest observation in the chart is April 23 2014. Full size image Yes, lending has picked up some. Here’s some longer term perspective and note how ...Read More

Comments on Martin Wolf’s banking article

Strip private banks of their power to create money By: Martin Wolf The giant hole at the heart of our market economies needs to be plugged Printing counterfeit banknotes is illegal, but creating private money is not. The interdependence between the state and the businesses that can do this is the source ...Read More

The BoEs sharp shock to monetary illusions

The BoEs sharp shock to monetary illusions ...Read More