Bank Loan Growth – Latest Available

From Torsten Slok’s “Recession Watch” chartpack today:

If you are thinking we are currently in, or were recently in, a recession, this is a picture you should be contemplating.

45 thoughts on “Bank Loan Growth – Latest Available

  1. ltr

    August 20, 2022

    Chinese mainland records 639 new confirmed COVID-19 cases

    The Chinese mainland recorded 639 confirmed COVID-19 cases on Friday, with 578 attributed to local transmissions and 61 from overseas, data from the National Health Commission showed on Saturday.

    A total of 1,715 asymptomatic cases were also recorded on Friday, and 20,053 asymptomatic patients remain under medical observation.

    The cumulative number of confirmed cases on the Chinese mainland is 238,822, with the death toll from COVID-19 standing at 5,226.

    Chinese mainland new locally transmitted cases

    Chinese mainland new imported cases

    Chinese mainland new asymptomatic cases

  2. AndrewG

    Econbrowser post: US bank loan growth remains robust; important context for the “are we in a recession now?” debate


    1. Barkley Rosser


      I bet you never saw before that there have been 4 deaths per million from Covid in China, such a revelation!

      1. Ivan

        China has been good at keeping the infection rates down but frankly doesn’t stand a chance against Omicron B5. They will sooner or later find a large proportion of their population having been infected. Alternatively, they will permanently damage their economy with Xi’s zero Covid madness,

        The fact that they are still early in the development of “high population exposure rates” completely explains their low death numbers.

        The relevant numbers are the actual number of deaths per number of cases.

        China death rates: 1 per 46 diagnosed cases
        US death rates: 1 per 90 diagnosed cases
        Australia death rates: 1 per 742 diagnosed cases

        So, in China where a majority of the population will be getting their first diagnosis of Covid in the next few years, the rate of death from that diagnosis is much higher. China is between a rock and a hard place, but the squeeze has hardly begun. The damage to the rest of the world will probably be another round of supply chain disruptions – hopefully sufficiently slow that smart companies can adapt and shift their suppliers in time.

        1. AndrewG


          I didn’t know this. Thank you. Any good links for these data? OWID has a nice graph I bet.

          In any case, this is evidence of massive undercounting of cases, of course. No surprise there. I wonder what the TW numbers are in comparison.

      2. rjs

        quoting a tweet i just saw:

        Amazing. We are 4% of the world’s population, 25% of global Covid deaths, 20-25% of Covid cases, 35% of MPX cases. American exceptionalism!

        if 20% of our workforce ends up with brain fog from long Covid, China’s going to look pretty smart…on the other hand, at least we can say we got through it without interrupting anyone’s shopping experience..

        1. AndrewG

          In the US, the people not vaccinating themselves or their children are at the bottom of the skills distribution. College-educated Americans – who are thriving right now – are overwhelmingly vaccinated.

          China’s fudged numbers aside, economic nationalism dictated that they develop their own, second-rate vaccine. Guess what? It doesn’t work very well. And now we’re in the Omicron phase, they’re dependent upon extremely costly shutdowns – just so save face so ltr can give us her propaganda posts.

          India, Brazil, Indonesia and many other places completely lost track of cases and even deaths. India alone likely has millions – MILLIONS – of Covid deaths unreported. Modi’s attempts to do a DeSantis and suppress the data didn’t help.

  3. Macroduck

    Note the timing difference between the two most recent actual recessions and prior two. In the housing crash and the Covid recession, credit grow dropped (y/y) once recession had begun. In the prior two, credit growth slowed ahead of recession. This suggest lenders did not anticipate (in a behavioral, revealed preference sort of way) the two most recent recessions.

    If you go back further, you’ll see that growth in bank lending very often slows before recession begins, but also sometimes slows mid-expansion, givng false signals:

    The only case of bank credit not slowing during recession was the Covid recession. From a “recession watch” perspective, that’s probably relevant.

    Speaking of “recession watch”, I offered Johnny H the opportunity to back up his recession-mongering a few posts back, but he chickened out. Here’s the challenge again:

    “Make you a deal, Johnny. If, after the first three quarters of 2022 GDP data are available in “final”, all three are reported down, I’ll stop commenting here for 3 months – all of Q1 2023. That’s on the condition that if all three quarters aren’t reported as having fallen in final, you stop commenting for all of Q1 2023.

    “Come on, Johnny, you’ve already got the advantage. One quarter down in final. One quarter down in advance. And you seem giddy at the prospect of a decline in Q3. I’ve got one hand tied behind my back. Come on, Johnny, put up or (please, please, please!) shut up.”

    Are you unwilling to back up your trash-talk about the economy? ‘Cause I’m willing to stand by my views. Prove to us you believe what you say.

    1. Macroduck

      By the way, if you check the lending data on a quarter-over-quarter basis, instead of y/y, credit slowed ahead of the Great Recession. On that basis, the only failure of bank credit to signal recession was the Covid recession. False positives are the only real weakness of this series as a recession forecasting tool.

      1. Barkley Rosser


        It is not surprising no drop before the Covid recession. No one saw that one coming at all.

        Regarding the Great Recession, it seems to be sort of complicated. It looks that there was a noticeable drop in 2006, which probably coincided with the peak of the housing bubble and the beginning of the decline in the housing market, which probably led to that. What is odd is it seems that there was some increase again before things really went downhill, which is kind of odd.

        1. AndrewG


          I don’t think it’s odd. The financial crisis was a qualitatively different event from the recession that would have/could have/kind of did happen simply due to the housing bubble bursting. Unloading bad debt can take time and can certainly cause a recession if that debt is big enough, but that alone is not going to cause a financial crisis. Not knowing your exposure, then panicking (either all your own, or running because others are) when there’s a revelation about, say, the government’s willing to back you up, or about new bad debt (which may be the same thing — that’s a financial crisis.

          1. Barkley Rosser


            The problem in 2008 was the explosion of derivatives that were ultimately based on housing morgages that went bad when the housing bubble burst. It took some time for them to blow up, but they did.

          2. AndrewG

            OK, now we’re getting somewhere.

            They “blew up” because of the panic. The actual losses due to the speculative bubble bursting were nowhere near the size of the losses due to the panic. That’s the nature of a financial crisis – asymmetric information, asymmetric losses. How else do we explain the two-year delay? And it’s hardly a coincidence that the panic happens not after Bear Stearns is bailed out, but later, after Lehman is conspicuously not. ($1000 says that’s why Ben Bernanke, a pioneer of finance macro, doesn’t have a Nobel Prize.)

            Journalists, including Michael Lewis, *love* to demonize complex derivatives, but they have no answer for a) why they still exist around the world and their use has only expanded, and b) why we haven’t had a financial crisis since then, even during unprecedented the Covid shock. The best answer is a) the market finally learned how to read these contracts (Lewis’s story hinges on their *not* being able or even interested in doing that), and b) better regulation of the financial industry.

            The story of the Great Recession is not really housing (though it’s the ultimate cause of all the bad debt) — it’s the panic. Without the panic, we’d have a recession, even a protracted one – but it wouldn’t be Great. The numbers just don’t add up – without a panic.

          3. AndrewG

            The housing bubble, the credit crunch, and the Great Recession: A reply to Paul Krugman
            Ben S. Bernanke Friday, September 21, 2018

            Why was the Great Recession so deep? Certainly, the collapse of the housing bubble was the key precipitating event; falling house prices depressed consumer wealth and spending while leading to sharp reductions in residential construction. However, as I argue in a new paper and blog post, the most damaging aspect of the unwinding bubble was that it ultimately touched off a broad-based financial panic, including runs on wholesale funding and indiscriminate fire sales of even non-mortgage credit. The panic in turn choked off credit supply, pushing the economy into a much more severe decline than otherwise would have occurred. My evidence for this claim is that indicators of panic, including the sharp increases in funding costs for financial institutions and the spiking yields on securitized non-mortgage assets, are strikingly better predictors of the timing and depth of the recession than are housing-related variables such as house prices, market pricing of subprime mortgages, or mortgage delinquency rates.

            In a recent post, Paul Krugman gave his take on the causes of the Great Recession. His inclination, contrary to my findings, is to emphasize the effects of the housing bust on aggregate demand rather than the financial panic as the source of the downturn. In a follow-up response to my paper, Krugman asks for evidence on the transmission mechanism. Specifically, if the financial disruption was the major cause of the recession, how were its effects reflected in the major components of GDP, such as consumption and investment? In this post I’ll offer a few thoughts on Paul’s questions.

            I’ll start with some observations on the transmission mechanism. Certainly, a reduction in credit supply will affect normally credit-sensitive components of spending, like capital investment, as Krugman notes. But a broad-based and violent financial panic, like the one that gripped the country a decade ago, will also affect the behavior of even firms and households not currently seeking new loans. For example, in a panic, any firm that relies on credit to finance its ongoing operations (such as major corporations that rely on commercial paper) or that might need credit in the near future will face strong incentives to conserve cash and increase precautionary savings. For many firms, the fastest way to cut costs is to lay off workers, rather than to hoard labor and build inventories in the face of slowing demand, as they might normally do. That appears to be what happened: Job losses, which averaged 120,000 per month from the beginning of the recession in December 2007 through August 2008, accelerated to 670,000 per month from September 2008 through March 2009, the period of most intense panic. The unemployment rate, which—despite the fact that house prices had been falling for more than two years — was still around 6 percent in September 2008, shot up almost 4 percentage points over the next year. These are not small effects. Workers, in turn, having been laid off or knowing that they might be, and expecting a lack of access to credit, would likewise have had every incentive to reduce spending and to try to build up cash buffers. Indeed, research has found significant increases in precautionary savings during the financial crisis for both households and firms. In Krugman’s preferred IS-LM terminology, the panic induced a large downward shift in the IS curve.

            Although isolating the effects of the credit shock on individual spending components is difficult, it’s nevertheless interesting to follow Krugman and examine how key components of GDP behaved during the recession. The chart below shows real residential investment and real GDP (all data below are quarterly, at annualized growth rates) for the period 2006-2009. As Krugman points out, there were large declines in residential investment in 2006-2007, prior to the major disruptions in financial markets. That’s consistent with his “housing bust” theory of the recession. However, note two points. First, despite the decline in residential investment in 2006-07, real GDP growth remained positive until the first quarter of 2008 and declined only very slightly over the first three quarters of that year, giving little hint of what was to come. However, after the crisis intensified in August/September 2008, GDP fell at annual rates of 8.4 percent in the fourth quarter of 2008 and 4.4 percent in the first quarter of 2009. That precipitous decline ended and began to reverse only as the panic was controlled in the spring of 2009.

            (Note that Bernanke’s argument is not quite the one I’ve made here – I’m arguing more pure financial effects. But it’s hard to argue with his elaboration.)

  4. Macroduck

    Speaking of lending trends, here’s a ready source for Eurozone bank lending, which is rising, overall:

    This particular link should show total household bank lending, short-term and longer-term lending to corporations. I chose this combination because it seems to show corporate borrowers shortening the duration of borrowing. If that’s right, it represents an increase in roll-over risk. Lending figures for individual countries are also available.

    We’ve already seen that credit growth in China slowed sharply in July, prompting the PBOC to cut rates.

    U.S. bank lending data are from July, but more recent weekly data are also available. China’s data are for July. Eurozone data are for June; as fast as condition can change, the Eurozone’s good news may be outdated.

  5. ltr

    August 17, 2022

    Walensky, Citing Botched Pandemic Response, Calls for C.D.C. Reorganization
    Among other flaws, public guidance during the coronavirus pandemic was “confusing and overwhelming,” the agency said.
    By Sharon LaFraniere and Noah Weiland

    WASHINGTON — Dr. Rochelle P. Walensky, the director of the Centers for Disease Control and Prevention, on Wednesday delivered a sweeping rebuke of her agency’s handling of the coronavirus pandemic, saying it had failed to respond quickly enough and needed to be overhauled.

    “To be frank, we are responsible for some pretty dramatic, pretty public mistakes, from testing to data to communications,” she said in a video distributed to the agency’s roughly 11,000 employees….

  6. ltr

    I bet you never saw before that there have been 4 deaths per million from Covid in China, such a revelation!
    I bet you never saw before that there have been 4 deaths per million from Covid in China, such a revelation!
    I bet you never saw before that there have been 4 deaths per million from Covid in China, such a revelation!

    [ Imagine having such disdain that rather than learning from the dramatically successful public health experience of China, the New York Times and Washington Post could repeatedly lead America in showing disdain for China through a continually tragic public health failing in America. Imagine having and repeatedly expressing such ultimately self-harming tragic disdain for an entire people. ]

    1. ltr

      I bet you never saw before that there have been 4 deaths per million from Covid in China, such a revelation!

      [ By comparison, the deaths per million from COVID-19 in America have passed 3,200, the deaths per million in New York have passed 3,660, while the deaths per million in Arizona have passed 4,250. Harvard economist David Cutler, writing in the Journal of the American Medical Association in May 2022, was estimating the cost of Long Covid as in time reaching beyond $2.5 trillion. The American Academy of Pediatrics and Children’s Hospital Association now count the number of Covid cases of children at beyond 14 million. Rochelle P. Walensky of the CDC is troubled. Possibly then there is a revelation in looking respectfully beyond the American experience. ]

      1. Barkley Rosser

        Now noa, ltr, you are really making yourself look completely foolish with this attempt to shame me. There is nothing in my point that remotely involves some “disdain for an entire people.” This is just stupid and insulting on your part.

        What I am pointing out is a serious vice you have had pointed out to you many times, your tendency to repeat posts so many times here. Of course this particular factoid is not a post, just something that sticks out because you have posted it so many times, well, it is long beyond losing count how many times.

        Let me see, perhaps I should take to posting every other thread Menzie puts up here the number of Nobel Prize winners from the US there have been with me frequently listing numbers from other nations, just to emphasize the glorious superiority of the US, especially over the PRC with its near zero such recipients, which I would periodicallly list as well.

        Then if you showed up to make a wisecrack about me doing so, I would post a ludicrously embarrasing piece of pompous and inaccurate garbage about how you were exhibiting disdain for the entire US populatiion.

        Acrtually, lre, you shoujld not only be embarrassed at making yoiurself look so foolish, you should be ashamed of yourself. You went way beyond the pale on all this repeated posting of all this stuff, and your overblown attacks on people who criticize your doing it are often indefensible, although occasionally justified. But you have so way overdone them that when your complaints are justified, as they occasionally are, nobody takes them seriously, nobody.

      2. Barkley Rosser

        Let us be clear here, lte, I am not expressing disdain for the Chinese people, for whom I have the deepest respect, and you know that I know a lot about Chinese history and culture. It is you I am mocking with your repetitious postings and your overdone attacks on people who disagree with you.

        1. Barkley Rosser

          So, just for the record, here is some data on Nobel Prizes.

          The top three nations in terms of total Nobel Prizes received are US at 400, UK at 137, and Germany at 111. Of the top 10, only one nation is not in or predominantly derived from Europe. That would be #7, Japan, which has received 29. As I have indicated here, I think that Japan deserves at least a few more, notably in economics.

          How many has China received? Zero. Allow me to repeat that: China has received ZERO Nobel Prizes. And unlike Japan I am unaware of anybody from China who deserves the prize who did not get it.

          If you keep repeating your 4 per million number, I shall start repeating this particular factoid when you do so. Got it, ltr?

          And, I shall remind you. You in fact do know that I know far more about China and its culture and history and much else than almost anybody commenting here, and a good deal more than I have let on that I know. And out of that I have great respect for it. But that does not mean that the PRC government is above being criticized for some of its policies or that you are above criticism for overly repeating things and making overblown accusations against people disagreeing with you.

          1. AndrewG

            Slightly off topic:

            Of the 400 US Nobel laureates, many, many of them are immigrants, or children/grandchildren of immigrants, and very many are ethnic minorities. (Similar story when it comes to successful US business and political leaders.) When I teach US economic history, I make a big point about this.

            Liberalism: It’s what’s for dinner. Free society is innovative society – certainly so in the long run.

            Just saying.

    2. Macroduck

      Your harangue ignores Ivan’s point that China’s death rate among diagnosed cases is high. How is that a public health success?

      Quarantine doesn’t prevent eventual infection with a pandemic virus this contagious. Quarantine slow the spread so the medical care system isn’t overwhelmed. A high death rate among diagnosed cases means a high number of deaths over time.

    3. Macroduck

      “Learning from the dramatically successfull…”

      This is part of Xi’s propaganda effort to glorify China. How would free societies learn anything useful from the totalitarian policies of China? Locking entire cities in their homes, spraying useless chemicals on surfaces when we know surface transmission is a trivial contributor to disease spread.

      Let’s keep in mind, quarantine is necessary because of vaccine failure. Both western and Chinese vaccines are having their share of failures against Omicron variants. U.S. vaccines allow significant levels of breakthrough infection, but do reduce the severity of infection on average. China’s high death rate among diagnosed cases is evidence that Chinese vaccines offer less, if any, reduction in severity. And the need for quarantine bespeaks a failure even to prevent a tolerable share of cases.

      So what, other than the lack of freedom among Chinese citizens, have we to learn from China’s “dramatically successful” ability to impose house arrest in millions?

      1. JohnH

        Gotta get rid of that stupid automatic spell checker… I’m sure the China bashers here will find something to vilify China with.

      2. ltr

        April 9, 2022

        While life expectancy is rebounding in parts of the world, white deaths drive a further U.S. drop.
        By Alex Lemonides

        Life expectancy in the United States continued to drop in 2021, while rebounding from the pandemic in many other high-income countries, according to a new preliminary analysis that found the U.S. decline was driven largely by deaths among white Americans.

        Life expectancy is the age to which newborns could expect to live if every year of life were identical to their birth year. In 2020, that expectation dropped sharply in the United States, as it did across many nations rocked by the pandemic. In 2021, as more and more people became vaccinated, many “peer nations” began to see life expectancies rebound, according to the new study, * which has not yet been peer-reviewed.

        The researchers — public health experts in Colorado, Virginia and Washington, D.C. — thought they would find a similar trajectory underway in the United States. But that wasn’t so. The study estimated that U.S. life expectancy continued to drop in 2021, by a total of 2.26 years from 2019….


    1. Ivan

      You really are addicted to websites designed to dupe the dopes.

      “Policies that kept people indoors, scared them away from hospitals and deprived them of treatment and primary care are finally taking their toll”

      No it was not the “policies” it was the virus. Those extra deaths were not caused by “policies”, but by the fact that a deadly pandemic was raging and people were afraid to mix with other people. There were no “policies” of you cannot go to the doctor. Actual policies worked at the edge of self-restriction by making sure that the morons who didn’t get it, were restricted in how much they could harm the rest of us – but the wast majority of people restricted themselves, regardless.

      1. Bruce Hall

        Your response is exactly what Jay Bhattacharya and Scott Atlas discussed in the link in my comment below.

        Did you bother to go to the link in Cowen’s post? Here’s a portion:

        Prof Robert Dingwall, of Nottingham Trent University, a former government adviser during the pandemic, said: “The picture seems very consistent with what some of us were suggesting from the beginning.

        “We are beginning to see the deaths that result from delay and deferment of treatment for other conditions, like cancer and heart disease, and from those associated with poverty and deprivation.

        “These come through more slowly – if cancer is not treated promptly, patients don’t die immediately but do die in greater numbers more quickly than would otherwise be the case.”

        The Government has admitted that the majority of the excess deaths appear to be from circulatory issues and diabetes – long-term, chronic conditions that can be fatal without adequate care.

        Such conditions were also likely to have been exacerbated by lockdowns and work-from-home edicts that increased sedentary lifestyles and alcohol intake at a time when Britain was already facing historic levels of obesity and heart disease.

        Dr Charles Levison, the chief executive of Doctorcall, a private GP service, said: “People really, really struggled and so many did not get the help they needed. That has caused lasting damage.

        “It is time that we had a proper national debate about this, with a full government investigation.”

        Yes, the elderly with multiple co-morbidities were certainly at risk from the virus; people with cancer and heart conditions were certainly at risk from government policies and fear mongering..

        1. pgl

          You are quoting quacks who offered some of the most dangerous comments ala the Trump era. Are you proud that your stupid commentaries led to hundreds of thousands of needless deaths?

        2. pgl

          Doctorcall. Bruce Hall once again fails to do any real research:

          But others pointed the finger away from lockdown as a contributing factor to excess deaths. The writer Frances Coppola said it was not “lockdown effects” that were to blame but “underfunding-of-public-services effects”. Stuart McDonald, founder and co-chair of the Covid-19 Actuaries Response Group, tweeted that blaming lockdown was “divisive and unhelpful”. And Twitter statistician Adam Jacobs said that linking the excess deaths to lockdown restrictions was “total b***ocks” because “there were never any lockdown restrictions forbidding people from going to hospital or their GP”. The problem was that “health services were overwhelmed treating patients with Covid” and therefore, he argued, it was not lockdowns but “Covid itself” that has caused the problem.

          Brucie, Brucie, Brucie – this is what Ivan said. Now I get your MAGA hat tendency to tell any lie at any time – but DAMN!

        3. Ivan

          “Such conditions were also likely to have been exacerbated by lockdowns and work-from-home edicts”

          That postulate is your “evidence” that the lockdowns were at fault rather than the self-restrictions people instituted because they were scared of getting a deadly disease?

          Sure all of those mentioned secondary damages are real and its not surprising if they eventually show up in mortality numbers. What is not real is the postulate that they are due to government lockdowns and edicts. They are well known and predicted results of people being scared of going out – even though there were never any edicts or recommendations that people should stop going to the doctor.

    2. pgl

      Tyler Cowen may be a right wing nutcase but this sentence might make sense:

      Experts believe decisions taken by the Government in the earliest stages of the pandemic may now be coming back to bite.

      In the early stages President Trump declared this virus would go away by Easter 2020, discouraged mask wearing, ignore test and tracing, and told people to take bleach. Funny thing – Bruce Hall back then agreed with all of these incredibly stupid “decisions by the Government”. Take a bow Bruce – you helped kill hundreds of thousands of Americans. MAGA!

    1. pgl

      Wow 57 minutes of lies pushed by Cafe Hayek, Rand Paul, and the National Review including these nut jobs:

      Atlas’s book has exposed a scandal for the ages. It is enormously valuable because it fully blows up what seems to be an emerging fake story involving a supposedly Covid-denying president who did nothing vs. heroic scientists in the White House who urged compulsory mitigating measures consistent with prevailing scientific opinion. Not one word of that is true. Atlas’s book, I hope, makes it impossible to tell such tall tales without embarrassment.

      I see – Fauci lied to us and Trump did all the right things. Hey – take your bleach Brucie and keep bringing us such utter BS as we need a laugh.

    2. pgl

      The Brownstone Institute is one of the right wing nutjobs pushing this intellectual garbage peddled by Bruce Hall. It took me all of 10 seconds to find out about this group which included this review:

      Failed Fact Checks
      19 Studies On COVID Vaccine Efficacy Do Raise Doubts On Vaccine Mandates – False

      Hey Bruce – did you refuse to get your vaccines? I guess that is why you have lived in your mother’s basement for the past 30 months. Since she has to buy your groceries, I hope she got her vaccines.

    3. pgl

      I was trying to remember what role Scott Atlas played during 2020 and here is what Wikipedia claims:

      Atlas was selected by President Donald Trump in August 2020 to serve as an advisor on the White House Coronavirus Task Force. In that role, Atlas at times spread misinformation about COVID-19, such as theories that face masks and social distancing were not effective in slowing the spread of the coronavirus. His statements and influence on policies caused controversy within the task force. Contrary to the recommendations of most of the scientific community, Atlas recommended establishing herd immunity by allowing or encouraging low-risk people to get COVID-19 while attempting to protect more vulnerable people. He advocated that states should not engage in COVID-19 testing of virus-exposed but asymptomatic individuals, He called for faster reopening of schools and businesses and encouraged residents to resist or “rise up” against state restrictions adopted to prevent the spread of the coronavirus.

      Trump listened to this moron and so the virus got completely out of control. And Bruce Hall still thinks this disaster deserves to be listened to? Ivan is spot on.

    4. AndrewG

      Besides your casual white supremacy, what hurts your credibility in the comments on this website is your continued citation of the most incompetent people. Scott Atlas for crying out loud.

      You could far more credibly make your (overall correct) point about shutdowns by citing credible studies by credible authors. Instead, you stick to those approved by the GOP Politburo.

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