What In The World Is Going On Here? Key Indicator For Banks Just Cratered

What In The World Is Going On Here? Key Indicator For Banks Just Cratered

ith the Fed hiking interest rates and signaling more rate hike are still to come, what in the world is going on here as a key indicator for banks just cratered?

What Is Going On Here?
Peter Boockvar:  What is going on here with the decline in commercial and industrial loans? See (stunning) chart for the week ended March 8th.

Commercial & Industrial Loans Cratering!


The Business Dictionary defines a C&I loan as “a loan made to a business or corporation, but never to an individual. C&I loans can be created in order to provide either working capital or to finance major capital expenditures. A C&I loan is usually short term in nature and is almost always backed by some sort of collateral.” I can only speculate and we’ll have to wait until upcoming bank earnings where companies can give a full explanation of this phenomenon…

Maybe it follows the large amount of debt issuance via the capital markets seen in the first two months of 2017 where companies are terming out their debt and paying down LIBOR based bank loans where the cost of money is going higher. At least on the investment grade side, companies have issued $254b of paper in the first two months of this year, up 8.5% y/o/y and this compares with the total of $1.28 Trillion last year (thank you Danielle Dimartino Booth, President of Money Strong for that stat). Can it be something more nefarious? Considering the bout of optimism post election both on the banking side and from non financial businesses, I can’t imagine but this is something worth watching.

After a .7% m/o/m rise in January, German PPI rose another .2% m/o/m in February but that was two tenths less than expected. However, the y/o/y gain was 3.1% vs 2.4% in January and the quickest rate of gain since December 2011. This was running negative less than a year ago. No, it was not just energy goosing PPI vs last yr (actually fell m/o/m) as PPI ex energy was higher by 2.2% y/o/y which is the highest rate of gain since November 2011.

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King World News

Interviews with market experts from around the world with a focus on precious metals.