The recent Senior Loan Officer survey results confirmed a shift in credit standards Hedgeye saw coming well over a year ago: conditions are tightening incrementally for commercial and consumer borrowers alike.
“We’re now at a level that’s as low or lower than anywhere we got in 2001 or 1991, and really only at this point eclipsed only by the Great Financial Crisis,” explains Financials analyst Josh Steiner in this clip from The Call @ Hedgeye.
For the fourth consecutive quarter, commercial lending standards tightened, spreads widened and demand fell.
“If you were only to go back six quarters ago when Hedgeye made this call, #FullCycle Investors were shorting credit, shorting high yield and junk bonds, getting out of growth. You’re good. You don’t have to have a panic attack today,” adds Keith McCullough.
“If some of you are new to this as of this year and you’re looking at year-to-date, that doesn’t mean that we didn’t identify this literally right at the top. What they’re figuring out now is that, ‘It’s the cycle, stupid.’”
Watch the full clip above.