Remember another article said to look for the 26th for gold to make big move!
http://www.shtfplan.com/headline-news/the-chart-that-proves-a-recession-is-just-weeks-away-the-u-s-finds-itself-on-the-verge-of-an-ominous-inflection-point_06112017
The Chart That Proves A Recession Is Only Weeks Away: “The U.S. Finds Itself On The Verge Of An Ominous Inflection Point”
Tyler Durden
June 11th, 2017
ZeroHedge.com
The following report was originally published by Tyler Durden at ZeroHedge.comU.S. Weeks Away From A Recession According To Latest Loan DataWhile 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.
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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%.
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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.
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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.
Via ZeroHedge.com