No Recession In Banking & Production

The S&P had another good day today following relatively upbeat reports from the banks about their business. The two largest banks in America say that the economy is still growing. On Monday, BOA CEO Brian Moynihan said, “Consumers are spending, they have money, they are employed and they have good credit.” On Friday, at the end of last week, even JPM CEO Jamie Dimon acknowledged, "Consumers are in very good shape." His main worry seems to be that they are spending their pandemic-related excess saving, which will only last them another 6-9 months, while inflation is continuing to erode the purchasing power of their income.

Meanwhile, net interest income of the banks is getting a big boost from rising net interest margins on record loans on their balance sheets. They certainly aren't rushing to raise their allowances for bad loans so far.