Treasury/agency debt as a percentage of total bank credit has risen from 12.2% in early 2008 to 18.5% in 2012. Ever wonder why commercial banks have been hoarding treasury and agency debt at the expense of nearly all private credit? A general lack of confidence in the real, jobs-creating economy has diverted capital from risk to risk-aversion. While people chatter about opinions, money flows reflect risk and reward. Inflows into public sector debt (treasury/agency debt), backed by the US taxpayer and infinite liquidity, suggest a lack of confidence in the private, real economy. The real economy must be considered weak until this trend reverses.
Table: Breakdown of Total Bank Credit at All Commercial Banks
Headline: Fewer U.S. states report job gains in March
WASHINGTON – Fewer U.S. states reported job gains last month, reflecting a slower pace of hiring nationwide. The Labor Department says that 29 states reported job gains in March, while 20 states lost jobs. That's worse than February, when 42 states added jobs. Still, the unemployment rate fell in most states: 30 states reported lower rates in March while 8 reported increases. Rates were unchanged in 12 states. Nationwide, the unemployment rate fell to 8.2% in March from 8.3%. But employers added only 120,000 jobs, half the pace of the previous three months. That dip in hiring, along with recent increases in the number of people seeking unemployment benefits, has raised some concerns that job gains could slow in coming months.Source: usatoday.com
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