US Bank Lending Drops over $105B, Largest Decline Since 1973 | Hacker News Reader

US Bank Lending Drops over $105B, Largest Decline Since 1973

morningtendies.co

35 pointsJohnWetter7 comments

This is some hair on fire analysis.

1. These are seasonally adjusted numbers. The unadjusted numbers are smaller.

2. The article does not account for the $60b in loan sales (unadjusted) to nonbanks the week of 3/22.

Lending definitely tightened up the week ending 3/22, but not to the extent the article suggests

Table 9 is the important one (banks outside the top 25, not seasonally adjusted), and you want to focus on the commercial loans (in assets). Also look at what’s happening in deposits in liabilities

https://www.federalreserve.gov/releases/h8/current/default.h...

Are banks pulling back on lending or are their customers pulling back on applying for credit? I think that's an important distinction, and I really believe it's the latter.

Also note that US housing inventory is incredibly low at the moment: https://fred.stlouisfed.org/series/ACTLISCOUUS

This was the whole point of raising rates, why are people freaking out?

The function of raising rates is to destroy money to reduce money supply - so there is less money to cause inflation, and that means reducing both credit and deposits via deleveraging

This is going to drop the housing market. California is offering to pay the 20% down payment now. Crazy times.

https://www.kcra.com/amp/article/california-dream-for-all-lo...

> This is going to drop the housing market.

Can you expand on this idea, because I can't follow your logic here.

Well for most Americans the biggest loan they’ll take out in their life is a loan for a home. Home prices since haven’t dropped to a reasonable level. Rents have increased everywhere. Most people are barely scraping a down payment together to get into a house.

If banks aren’t lending, then people cannot buy overpriced homes, thus the homes will sit on the market longer and typically drop in price. That’s the housing market dropping.

Now we have California paying the 20% down with 0 interest if you make less than 211k/yr.

The issue is in commercial lending

Reply on news.ycombinator.com