The Chart That Proves A Recession Is Only Weeks Away: “The U.S. Finds Itself On The Verge Of An Ominous Inflection Point”

by | Jun 11, 2017 | Headline News | 70 comments

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    The following report was originally published by Tyler Durden at


    U.S. Weeks Away From A Recession According To Latest Loan Data

    While many “conventional” indicators of US economic vibrancy and strength have lost their informational and predictive value over the past decade (GDP fluctuates erratically especially in Q1, employment is the lowest this century yet real wage growth is non-existent, inflation remains under the Fed’s target despite its $4.5 trillion balance sheet and so on), one indicator has remained a stubbornly fail-safe marker of economic contraction: since the 1960, every time Commercial & Industrial loan balances have declined (or simply stopped growing), whether due to tighter loan supply or declining demand, a recession was already either in progress or would start soon.

    This can be seen on both the linked chart, and the one zoomed in below, which shows the uncanny correlation between loan growth and economic recession.

    And while we have repeatedly documented the sharp decline in US Commercial and Industrial loan growth over the past few months (most recently in “We Now Know “Who Hit The Brakes” As Loan Creation Crashes To Six Year Low“) as US loans have failed to post any material increase in over 30 consecutive weeks, suddenly the US finds itself on the verge of an ominous inflection point.

    After growing at a 7% Y/Y pace at the start of the year, which declined to 3% at the end of March and 2.6% at the end of April, the latest bank loan update from the Fed showed that the annual rate of increase in C&A loans is now down to just 1.6%, – the lowest since 2011 – after slowing to 2.3% and 1.8% in the previous two weeks.

    Should the current rate of loan growth deceleration persist – and there is nothing to suggest otherwise – the US will post its first negative loan growth, or rather loan contraction since the financial crisis, in roughly 4 to 6 weeks.

    An interesting point on loan dynamics here from Wolf Richter, who recently wrote that a while after the 1990/1991 recession was over, the NBER determined that the recession began in July 1990, eight month after C&I loans began to stall. “As such, the current seven-month stall is a big red flag. These stalling C&I loans don’t fit at all into the rosy credit scenario. Something is seriously wrong.”

    However, it wasn’t until loan growth actually contracted, that the 1990 recession was validated.  Well, the US economy is almost there again. And this time it’s not just C&I loan growth, or lack thereof, there is troubling.

    As the chart below shows, after peaking in late 2016, real-estate loan growth has also decelerated by nearly half, to 4.6%.

    More troubling still, after flatlining at nearly double digit growth for much of 2016, starting last September there has been a sharp slowdown in commercial auto loans, whose growth is now down to just a third, or 3%, of what it was a year ago.

    While it remains to be seen if C&I loans have preserved their uncanny “recession predictiveness” for yet another turn of the business cycle, the charts above confirm that the US economy is rapidly slowing, and validating the poor Q1 GDP print. Furthermore, one thing is clear: absent a substantial rebound in loan growth, whether for commercial, residential or auto loans, there is no reason to expect an imminent uptick in the US economy. We only note this, because next week the Fed plans to hike rates again. If it does so just as US loan growth contracts, it may be doing so smack in the middle of a recession.



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      1. Sell, Sell, Sell!!!!!!!!!!!

        • John, I don’t know how anyone can still be in the market because it’s rigged. I don’t go to Las Vegas and I don’t play the lottery. I think I’d rather try to win a prize at a traveling carnival than invest in the market.

          Ask yourself, how many people actually leave the Casino with their winnings? It’s all just paper profits until you cash out!

          • Justice,
            Well said.

          • The casino’s wouldn’t stay in business very long if the players won. I’m like you, i don’t gamble, only fools gamble with their hard earned money.

            • The house always wins. Always.

              • And when they don’t, the IRS always does. Every time.

            • I’ve worked for a couple of casino’s in Reno, Nevada – John Ascuaga’s Nugget and Harrah’s. In my discussions with the patrons of the establishments, I’d always remind them that “they don’t build casino expansions from paying out on jackpots”, although single deck card counting in blackjack’s a completely different story. May God bless you with wisdom, strength and faith in the coming tribulations. The Holy Bible’s filled with prophecy regarding these dark days, including “Good will be looked upon as evil and evil will be looked upon as Good (political correctness). Or how about After Obama’s election, the next day’s jackpot numbers in his home state were 666.
              I pray for the people who are blinded to the obvious truth.
              God bless…

          • The entire economy is an illusion. I will know something big is about to happen like a huge crash when I see Gold ad Silver skyrocket. Until then its busiNess as usual pump and dump scam and pull dump people in to play the game.

            I have also been hearing a lot of these House Flipping Scam commercials on the Radio lately. Like you invest $10,000 with us we will hook you up with houses you can flip. All I hear between the lines is, “HEY SUCKER, COME BUY OUR FAT INVENTORY OF OVER PRICED HOUSES AND LOOSE YOUR a$$ HELPING BAIL US OUT OF THESE HOUSES THAT ARE UPSIDE DOWN ON, AND WE CAN’T GET RIDE OF FAST ENOUGH.”



            • CSS, agreed. I’ve also been hearing those same scam ads on the radio lately. I’m already very-well invested in the 5G’S and still stacking.

            • I’ll know when the cash for your gold commercials dominate the tv and radio. They are happy to take the unwanted, broken gold collecting dust in the drawer. They won’t get much this next time around. Too many peeps took them up on their offer last time when gold just kept climbing. Know a guy who tried to unload some sterling jewelry at a pawn shop. They didn’t buy sterling jewelry. But that same pawn shop chomps at the bit when gold jewelry comes in.

          • Justice, BRAVO! I only invest in the things I know will keep me alive along with ‘precious metals’ LEAD AND BRASS to help me keep what I have.

            • Lead and brass are one dimensional. You will need more than that. Are you expecting some kind of civil calamity? If we are entering a severe recession or depression you will need
              supplies and other assets/ commodities to help carry you through. Gold, silver, diamonds,
              etc. Cash on hand rates right up there with protection. A paid off mortgage and money set aside for next years property taxes is also a sound plan.

              • I agree with nameless.. The BEST place to be is out of debt. And add to that, out of town. I already thought about saving up enough for a year’s worth of property taxes. I have that now. Also, have been gardening sustainably, and raise meat animals as well as hunt. Can go off grid at any time, and not counting on a solar array either. Readying my place to live as my grandparents did. Also, planted wild rice around the farm ponds, and rebuilt the deer stands so all is ready to go at any time.

          • Yep, it is all just another of the many illusions. Nothing art all has changed since 2007-08 except the massive cyber printing of more fake dollars to buy our own debt and pump the markets so the brainless think all is well. The only change is far more debt created and the BHO regime was able to fool many more fools.

            There are no real free markets , only the gov hyped nightmare of bots, algos and cronies



          • because no one outside of Houston heard about it until it was on Drudge this morning. Its a non issue so far.

            but your point is taken. I’m enjoying trolling the antifa message boards and watching them talk about training and guns. they have a looooong way to go before they become a physical threat beyond rioting

        • I just spent a week out in the open ocean in a boat.

          I’m off to spend a month in Glacier National Park soon.

          • Lucky man. I’m off backpacking soon again myself

          • Where is there a closed ocean? Wow a whole week in the tropics? LoL. You sound like wetback dryfoot Cuban. Go find your balls and go up in the Northern Bearing Sea and go out for a month and catch some Alaskan King Crab. Like the show Deadliest Catch. Then you got something to brag about. I did a week on a livaboard scuba diving and spear fishing for Grouper, and Lobstering, night dives too in the Dry Tortugas, 80 miles west of Key West. It rained non stop. It was called a vacation.

        • “…The companies tell me unless we get our bomb factories up to full production, the whole economy is gonna collapse. We all agree the time has come for the Big One, so what d’ya say?…” – Kinky Sex Makes The World Go Round, The Dead Kennedys.

          Only one way out, ya know…

          On the other hand, it may just drag out for another decade, and slowly fizzle away to nothing…

      2. Save the Tares ? Or let them burn?

      3. We are now at the third longest expansion (such as it is, and as feeble as it is) in US history.

        What, trees will grow into the sky? No one can predict when GDP will turn south, but it of a certainty WILL. Buy gold.

        • because they don’t compute GDP the same as they used to. if it wasn’t for the fact that created and borrowed money ADDS to GDP, we would be in a depression right now.

          • Yep and even with the phony GDP and UE #s it still is all very weak and has been for 10 years. There has been no recovery except for certain people and cronies, just massive lies and distortions.

      4. I’ve been hearing this for years. I’m not saying it won’t happen, but if you aren’t prepared for it by now, then you never will be. I’ve been prepared and waiting for several years.
        I just refresh my stockpile, food, water, ammo, etc. and keep my BOB with me wherever I go.
        I’ll believe it when I see it. And am ready anytime.

        • When the crap hits the fan all of my smart ass academic liberal commie relatives will be
          down to their last 2 rolls of toilet paper and will only have one box of Ritz crackers in the
          cupboard. They won’t have any cash on hand because they use debit cards for everything.
          Gold or silver? Hahaha- What would they need that for? Oh yes, and I’m the stupid one.
          And of course they depend on ADT to protect the house. Don’t even ask me what they think about guns. Fools do not understand the age they are living in. They think that the
          government will intervene and save everyone if a crisis strikes. Rude awakening coming.

      5. This is going to be an interesting fall season. Probably be a real good idea to call on God for your salvation while you can.

        Imho, I’ll be real surprised if He doesn’t come get His children this year. I freely admit I might be wrong but I’ve just been getting a really strong feeling this year is IT. Too many things lining up in line with Bible prophecy to be coincidence.

        • Agree 100%

        • If your God was really in charge none of this would be happening would it. “Suckers born every minute.”- PT Burnum.

          • Gid gave you free will so you could invest whatever stupid shit you want.

          • GOD is in charge , he is allowing man to destroy his self ,it rains on the just and unjust alike , the difference is god will save the soul of his children , PLEASE respect my GOD if you do not agree with him that is your business we do not disrespect you for being an unbeliever please do not disrespect me for believing . Thank you

          • Hey crack:
            God is in charge and He is the one who is orchestrating all of these events. Read the Book. He said a few thousand years ago that He was going to do all of these things, and now He is. Read the Book. It is all there for you.
            By the way, all these end-time events mean He is just around the corner. Would be a good idea to get to know the God that created you,, and loves you so much that He died in your place, and mine.
            (And it was P.T. Barnum and even they have just gone out of business “after 140 years). I hope you make it. Most won’t. (That’s in the Book to).
            Rev. Roy…….<

            • If you are serious about reading the Bible, then please read up on King David and tell me if his actions are not a script for ISIS when they went to neighboring villages and killed every man woman and child as well as every animal and cut off heads as well ? And it is repeated many times and all right there in the Bible clearly.

              Most supposed Christians read and interpret what they want to read and interpret and rarely see the truth of the Bible. You do realize many books of the current Bible were censored out for a reason when the new testament was created by Constantine and crew from Alexandria ?

      6. Michael Snyder AGAIN? Oh no, wait, it’s Snyder’s BROTHER. We’ve been in a recession since 2008. Just keep stacking.

      7. What’s going on, and why?

        “The Revolution won’t happen with guns; rather it will happen incrementally, year by year, generation by generation. We will gradually infiltrate their educational institutions and their political offices, transforming them slowly into Marxist entities as we move towards universal egalitarianism.”
        – Max Horkheimer of the Frankfurt School

        • You nailed it! That is why nothing is being done to stop it.

      8. And possible Fed rate increase coming which is supposedly unlikely, but IMO it would be just like the Fed to raise rates right before a recession starts, high schooler could make better financial decisions than those idiots.

        • Fed will raise rates to cause the most damage possible to the economy. The establishment doesn’t like to be challenged. Right or wrong this new President is a challenge to the establishment.
          I have said many times before I prefer Depression to inflation and I stand by that. Inflation causes me far more grief than prices slamming downward.

          • but now we got stagflation: when the price of the things you NEED go UP, and the price of the things you WANT go DOWN.

        • Its all about greed,
          Were not part of that club

          • Better them than you. That greed monster is one ugly son of a bitch.

        • The FED ALWAYS raises rates before a recession starts. That’s the trigger. Time to shut the business cycle down; and reorient financial assets towards war on the Korean Peninsula.

          Yeah it’s gonna happen. The Fat Kid is toast !!! 🙁

      9. Only weeks away. Time for one last vacation. No wait, I can’t afford one.

      10. Problems with auto loans. Wow who saw that coming with subprime loans and income tax refunds gone?

      11. Rate hike is priced in. Next stop: S&P 2,600. SORRY BUT Western population continues to rise due to the babies of the illegals and the “refuse” people = rise in welfare/entitlements = rise in total world debt = rise in total demand for useless junk bought using credit = more money goes into the world stuck markets. Nothing is going to stop the train unless war or “act of god.” Prices since 1913 basically tacked on two zeros on the prices… by 2113 it also will be like tacking on two zeros on the end of today’s prices. The game of tacking on zeros can go on for infitity as long as resources remain positive and the population that creates the demand continues to increase. Once again, 100% of the naysayers on the net can eat their hats.

      12. additionally… I’d like to see a chart showing the average weight of adults in the western nations, it keeps going up and up AND UP (co-incidence??? along with the size of the western asses, the western population due to illegals and refuse people, the stock markets, the world debt ::: all also up, up UP). The year the average westerner loses weight by more than 5%… then the jig maybe up. Until then, the western governments will continue and increase the amounts of FREE STUFF to the 40% of their moocher popualtions, all thanks to the stupid working taxpayers. COLLAPSE??? BAHAHA

        • The average height is also going up.

      13. Since President Calvin Coolidge, we have been going down hill. The fact that the statue of President Andrew Jackson was taken down proves to me that we have an alien hostile minority controlling America; and, we are not free.

        Barter as much as you can do that your money is not needed. Money is worthless paper and soon these criminals intend to get their jollies off by pulling the rug out from under us and declaring the worthlessness of cash dollars. It is a ploy to get us chipped and using digitized money.

        Make something!!!!!

        You most become a provider of something needed.

        Either grow enough food that you can sell or barter it, or raise enough rabbits, chickens, goats, bee hives, or make things. Both are going to bypass the system.

        If the big chains close down, there will be opportunity for new restaurants.

        Make something that is needed and wanted. Flea markets, crafts fairs, even sidewalk sales are good ways to learn how to market your products. It is not about getting rich or making a lot of money, it is about learning to be a producer and not just a passive consumer. Sometimes with creativity, an inventive person does get rich, but that should not be your motivation.

        Art, and crafts are good. But practical items will also be important. Knit a blanket or a sweater. Sew dresses for little girls. Make hats and purses, to go bags. Metal work, shoes, belts,etc., etc.


        • There are no chain stores on the island.

          I still get whatever i need and have a little bit of luxury to improve my life.

          You dont need chain stores.

          Stop supporting them.

        • B, I thought my idea to sell #10 cans of dehydrated water would be bigger than the pet rock. Yes, I am old enough to remember the pet rock!

          Or how about #10 cans of Emergency Air! We all know the Rule of 3’s. A person can only live 3 min without air. We’ll sell millions!

          • Justice, you must be close to my age when you mentioned the PET ROCK. One of the stupidest things I ever saw in my whole life.

            • But…people actually paid money for them…

              And how about Cabbage Patch Kids, buying clothes for them, sending them to ranches and camps, to have their pictures taken…

              Lots of goobers in the world…

              • I made cabbage patch dolls for my girls. Made all the clothes too. Even made my own cabbage patch labels for the cabbage patch clothes I made.

                Matching outfits for the girls too.

                Made clothes for their Koosas too.

                Fun 🙂

                • wanna buy some tulip bulbs, grandee?

              • I spent a fortune on beanie babies. Lol.

            • wait ’til you see the SMARTPHONE, braveheart. you think the pet rock was stupid….or how about the spinners?….weapons of mass distraction!

          • Justice:

            If you can put the dehydrated canned water into little bitty cans, I’ll take 1,000.


        • Andrew Jackson made his fortune as a slave trader. His “Indian Removal” policies were used to expand slavery and cotton farming.

          • Yes. Ask the Cherokees, Chickasaws and Choctaws what they think of Andrew Jackson.

      14. There are also rumors of a huge raid on the gold markets that are over leveraged by shorts, for the first week in July. I heard this on King World News, a gold bug web site.

      15. I wonder… does Commercial Auto Loans only track actual loans ? I.E. not leases or cash purchases ? I would assume that it only tracks true loans. I do see an awful lot of very new commercial vehicles on the roads..

      16. Ouch, anyone who thinks they need to borrow tens of thousands of dollars to buy a car is being misled by greedy car salespeople. I buy for cash only from private owners. I never hand any money over to a parasite car salesman. No notes and no repo man to worry about. My old 2000 Honda is paid for, it’s mine, and yes it will even take me out of town. I’ve made my last 6 trips to the BOL and back in it with NO issues. No loans or even credit cards for me. I’m debt-free and loving it.

      17. We’ve all seen every few weeks another chart or graph trotted out to show we are definitely entering an imminent economic disaster. They even place a picture of a newspaper showing the bad news because visuals are powerful, they reinforce the written text. These prophets have been showing them as “proof” for at least the last ten years. If one makes the same prediction (any kind of prediction) again and again and again you may be wrong a thousand times, but given a long enough period of time mathematically the odds are you’ll be right once. Fortunately for these prophets their audience appear to have short memories. Maybe not all readers, most of the rest are just reading what they want to believe. Some articles warning of economic collapse are reprinted almost verbatim from items posted years ago. These type articles are posted frequently because the authors know a lot of people want to read about and see catastrophe, they eat it up, clamoring and salivating for mass chaos and misery as evidenced by many comments to articles featured on this site. If someone is a prepper that’s good, I’m a prepper myself, but only a sociopath or a nut case want disaster to strike.

        • Nobody in their right mind wants it to happen. There is always another crash coming.
          Hard landing or soft landing for each of us depends on how well we prepare.
          Then there is the spiritual factor if you believe that as well.

      18. Another recession?? Dang! I’m still prepping for the 2015 one…

        • Don’t feel bad. I have not recovered from the last two recessions.
          However, we are both still standing so we must have some tenacity.
          That which does not kill us only makes us stronger. Hang in there, Granny.
          Tough times don’t last, tough people do.
          Like Frankie Sinatra used to say, ” riding high in April, shot down in May.”
          Boom or bust, we Americans have seen it all.

      19. Hey Michael, I believe you just be right.


      20. We have been floating along because of heavy manipulation. Sooner or later even that no longer works. We shall see where it goes from here.

      21. A recession or economic collapse is always “next week”. You people need to make up your mind.

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