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Bank Charge-Offs Meet or Exceed Charge-Offs During The Great Depression!


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It will take time for the toxic assets to be wrung out of the financial system.  It's good to see this happening with another 12-18 months before we come out the other end.  Clarity brings certainty in pricing and we'll start to have a resumption in lending as banks get a better picture of their capital requirements.  Most of the money delivered by the Fed has gone into reserves without impact to the wider economy.  Once banks start lending, we will see a noticeable pickup in the pace of recovery.




Bank charge-offs of uncollectible loans are at 2.9%, which is higher than in 1932.  Annualized rates are at 3.4%, which is on par with 1934.  Cheers!



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