Recession In Mid 2024? Bank Credit And Deposit Growth NEGATIVE After The Stimulus Has Worn Out (EU Ordered To Accept 75 Million More Migrants)

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by confoundedinterest17

This headline from Zero Hedge makes me so glad I have eaten heart-healthy Quaker Oats and Cheerios every morning for the last 20 years! Study Finds 80% Of Americans Exposed To Fertility-Lowering Chemicals In Cheerios, Quaker OatsThe chemical (chlormequat chloride) was detected in “92 percent of oat-based foods purchased in May 2023, including Quaker Oats and Cheerios.” But that was nothing compared to this Zero Hedge headline: EU “Suicide Pact” Threatens To Flood Continent With 75 Million More Migrants. Makes me wonder if Biden/Mayorkas are under orders from the UN/WEF/Soros to let immigrants pour across our southern border (including 20,000+ Chinese military age males). But back to the economy.

Both bank credit growth year-over-year (YoY) and bank deposit growth (YoY) are NEGATIVE. Covid resulted in massive Federal government stimulus spending (and Federal Reserve hyper stimulus) in 2020, but as the stimulus wears out, so does bank lending and deposits.

Having seen The Fed’s QT appear to stall in February, as Reverse Repo liquidity withdrawal accelerates, all eyes are once again back on the situation on bank’s balance sheets and how deposits are standing up (‘adjusted’ by The Fed’s magical seasonals).

See also  Fannie Mae predicts housing slump until 2026; 30% price drop needed, 6.6% mortgage rates forecast for 2024.

And after the prior week’s miraculous surge in deposits (again, according to The Fed), last week saw total bank deposits (seasonally-adjusted) drop $57BN – the biggest weekly drop since October…

This data is from the week when Regional bank shares shit the bed thanks to NYCB…

Interestingly, on a non-seasonally-adjusted basis, total bank deposits declined about the same as SA -$58BN (and are down $180BN YTD)…

And, excluding foreign banks, domestic deposits dropped $52BN SA (Large Banks -$40BN, Small Banks -$12BN), and tumbled $65BN NSA (Large Banks -$57BN, Small Banks -$$8BN)

As the chart above shows, on an NSA basis, domestic banks have only seen one week of inflows in 2024.

As one might expect, loan volumes shrank during that week by just over $9BN (Large banks -$4.6BN, Small banks -$4.4BN)…

And finally, as a reminder – despite the rebound off the lows again this week in regional bank shares, which must mean everything is awesome, right? – the regional bank crisis is still very much alive as evidenced by the red line below (without The Fed’s imminently expiring BTFP facility)…

…what else are big banks (green line) going to do with all that cash burning a hole in their pockets?

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The bottom line is – this looks a lot like a ‘Small Bank’ crisis. The last time this happened, the crisis sparked a sudden $300BN ‘run’ in small bank deposits…

Is The Fed ‘hoping’ for a controlled bank-run this time – so as many small bank deposits are drained voluntarily, before they are drained all at once in a panic (and the Reverse Repo facility is empty, unable to provide any cushion)?

It is looking like a recession in mid-2024 as Covid Stimulypto has run its course. Is the US economy so lame that is requires constant Federal government and Federal Reserve manipulation??

Joe Biden (President of the top 1% of Americans) and his likely replacement “Greasy Gavin” Newsom, wrecker of the California economy. Two economy wreckers on the same stage.

Remember when Democrats were the party of the working man and Republicans (like George HW Bush) were called “Country Club Republicans”? Now Biden and Democrats represent the elitist top 1% of wealth and Trump/Republicans (that Biden snidely calls “Maga Republicans”) represent the bottom 99%. Who woulda thunk??

BTW. Congrats to Iowa’s Caitlin Clark who set the all-time NCAA women’s scoring record with a PERFECT shot.

 

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