From Apollo Academy at Apollo Global Management, Apollo's Chief Economist Torsten Sløk presiding, April 6:
https://apolloacademy.com/the-credit-crunch-has-started/
HT: MarketWatch via Morningstar:
A 'credit crunch' is already under way and may result in a recession, economist warns
Bank lending 'rolled over' after SVB collapse: Apollo's Slok
A trio of bank collapses last month put some economists and investors on the alert for a full-fledged "credit crunch" -- a sudden and sharp slowdown in lending --capable of pushing the U.S. economy into recession.
The squeeze is already being felt, according to Torsten Slok, chief economist at Apollo Global Management. He penned a Thursday note, titled, "The credit crunch has started."
Slok cited a survey of 71 banks in the Dallas Federal Reserve Bank district completed March 21-29, after the March 10 collapse of Silicon Valley Bank, which, he said, "shows a dramatic reversal in loan volumes." (See chart below.)
The Dallas Fed, in the monthly survey released Monday, said loan demand declined for the fifth period in a row as bankers reported worsening business activity. Loan volumes fell, driven largely by a sharp contraction in consumer loans, the survey found.
"The macro impact of the failures of Silicon Valley Bank, Signature Bank and Credit Suisse plus the downgrades of several regional banks has resulted in a crisis of confidence in our banking system," one survey respondent said, according to the Dallas Fed.
Slok last month changed his view on the economy. After previously warning of a "no-landing" scenario in which a resilient economy would initially avoid a recession altogether, forcing the Fed to double down on tighter monetary policy, the veteran Wall Street economist called for a "hard landing" in the wake of the collapse of Silicon Valley Bank....
....MUCH MORE
