BarroMetrics Views: The St Louis Fed Reserve

RoboYak asked:

“So from this graph how can you tell when banks start lending to main street, will the value start trending lower, say below 2,000? ”

Figure 1 shows the deposits in the St Louis since 1910. We see an exponential rise from 800 at the start of the sub-prime crisis.

Figure 2 shows that the ascent is stalling. My benchmarks:

  1. A break below 2000 would be warning that lending has resumed.
  2.  A break below 1600 would be reflected in the CPI
  3. A break to 800 would mean banks are lending freely.

ANNOUNCEMENT

My blogs will be affected over the next few days as I prepare for the event in Singapore. It looks as though it will be a fine affair though somewhat crowded. We have space for 600 and have received over 1000 applications!

12-5-2010-1-26-39-pm-st-louis-fed-reserve.jpg

FIGURE 1 St Louis Fed Reserves from 1910

12-5-2010-1-30-01-pm-st-louis-fed.jpg

FIGURE 2 St Louis Fed Reserves from 1985

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