“Stunning Divergence”: Latest Bank Data Reveals Something Is Terminally Broken In The US Financial System, by Tyler Durden

Banks have tons of deposits, but they’re not lending them out. From Tyler Durden at zerohedge.com:

There was a remarkable disclosure in the latest JPMorgan earnings report: the largest US bank – an entity historically best been known for making loans to the broader population at least until the Fed nationalized the bond market – reported that in Q2 its total deposits rose by a whopping 23% Y/Y and up 4% from Q1, to $2.3 trillion, while the total amount of loans issued by the bank was flat both sequentially and Y/Y at $1.04 trillion.

In other words, only for the second time in its history  – Q1 2021 being the first one – JPM had 100% more deposits than loans, or inversely, the ratio of loans to deposits is now 50% (it did post a modest rebound from an all time low in Q1).

An even more epic divergence between total deposits and loans, emerges at Bank of America where deposits similarly hit a new all time high of $1.91 trillion, even as the bank’s loans have continued to shrink at an alarming, deleveraging (and deflationary) pace and are now at $927 billion, nearly $100 billion below their level as of Sept 30 2008: in other words, there has been 12 years with zero loan growth at Bank of America, while the bank’s deposits have doubled!

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