No Banking Crisis – Quite the Opposite Now

With the Fed easing and the yield curve steepening, bank profits are surging. With deregulation promised, mortgage spreads are now falling, signaling a wider availability for US home lending ahead (see Figure 3). 

The Fed's lending officer survey shows banks are gradually easing standards across the board - though they're starting from pretty tight levels.   Credit delinquencies across all forms of loans have picked up modestly (see Figure 4), but remain historically mild.

 
In some future period of meaningful US job losses, auto lenders will suffer from non-performance.  Yet, it is a great leap to assume the latest news on the fringe of auto finance is the “leading edge” of a soon-to-be realized collapse in credit markets that would threaten the US economic expansion.