The Wall Street Journal’s John Carney wrote today in Herd on the Street that “The overall lending picture painted by the Federal Reserve’s latest survey of senior loan officers is one of a credit standstill  [emphasis mine]. As a result, lending is unlikely to boost bank revenue by much in the fourth quarter.â€
It just so happens that I track the Fed’s weekly data on bank lending every week in the Wall Street Examiner Professional Edition Money and Liquidity reports.
I knew that Carney was being carney, with a characterization of the state of bank lending that was blarney. Admittedly, he was reporting on the Fed’s Senior Loan Officer survey, but even if that’s the way the consensus read, a good reporter has an obligation to present the facts if they don’t square with what the subjects of the post were saying.
This is one of those times, where the facts contradict the reporter’s characterizations.
Bank Loans Ex Repo
This chart is from the Fed’s weekly H.8 report of the assets and liabilities in the US banking system. To more closely reflect the type of loans reported in the Fed’s loan officer survey, I have excluded the extremely volatile and large category of repo and Fed funds lending, which has jumped by 14.7% this year. I wanted to give Carney the benefit of the doubt.
This is obviously not a picture of what Carney called a credit “standstill.†It’s a picture of a credit “bubble.†The growth rate of bank lending has accelerated dramatically this year, and it just reached its fastest growth rate since the recovery began, at over 7%.  What conclusion would you draw from such, at best sloppy, at worst, slanted, reportage from the Wall Street Journal. What are they trying to sell here?
