ETFdesk's  Instablog

Send Message
ETFDesk aims to be an idea factory for Exchange Traded Fund investing with all the necessary tools to research your own investment ideas as well as the ideas of others. Our advanced search feature allows users to search ETFs by asset class, holdings, sector, industry, country of origin,... More
My company:
My blog:
ETFDesk Daily
  • The Credit Crunch is Over? 0 comments
    Feb 17, 2010 7:18 PM | about stocks: KBE, KBW, XLF, IYF

    If we are coming upon a sustainable economic recovery, one which the Gov. or Gov. sponsored programs do not account for the majority of GDP growth, don't we need to see credit expansion? Banks are still hoarding cash at an all time high rate since the FED starting recording this stat in 1975. Now banks are likely keepin high cash stashed for a combination or reasons, namely, uncertainty of a regulatory environment and continued deleveraging from borrowers. This bodes ill for bank earnings, as well as an economic recovery topping current expecations.

    Source: Economist

    More on credit contraction from Dave Rosenberg's Feb. 16 note:

    U.S. bank lending contracted a further $30 billion in the past week and that brings the overall decline to over $100 billion so far this year — a historic 16% annualized decline. Since the credit crisis began, $740 billion of bank credit has evaporated — a record 10% decline. The fact that credit has dropped at a 16% annual rate since the turn of the year is testament to how the credit contraction is actually accelerating. The declines are broadly based too:
    1. Consumer loans down at a 12% annual rate year-to-date (credit card balances have plunged 28%);
    2. Real estate down 13.5% annualized, and;
    3. Commercial and industrial loans have collapsed at a 19.3% annual rate.
    Even when you account for the pickup in commercial paper issuance, total short-term business credit is down $14 billion so far this year, which is puzzling given the widespread consensus view among economists that we are into some new inventory cycle. If that were the case, these measures of working capital financing would be rising, not falling.
    Stocks: KBE, KBW, XLF, IYF
Back To ETFdesk's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


  • WaysToPlay: Canada growth surge lifts chances of rate rise $FXC #ETF #MKT #FX
    May 31, 2010
  • WaysToPlay: OIH And the Oil Trade: A Follow-Up $OIH $OIL $UCO $USL $USO #OIL #ETF #MKT
    May 31, 2010
  • another Friday, another selloff - no one wants to hold into the weekend, sign of more to come...
    May 28, 2010
More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.