As the U.S. economy continues to slow, the nation's banks are turning off the liquidity spigot on small businesses. An ominous factoid: The last time loan volumes to small businesses turned this negative (on a year-over-year basis) it was December 2007, the exact month the U.S. economy tipped into recession.
Here are the key Chart of The Day takeaways from the Thomson Reuters/PayNet small business data via Hedgeye CEO Keith McCullough in this morning's Early Look:
- "Small Business Loan Volumes have gone decisively NEGATIVE on a y/y (year-over-year) basis"
- "The most recent print is down over -1.5% year-over-year and has been negative y/y in each of the last 3 months"
- "The last time this index looked like this was DEC 2007"
If you run a small business look out. If you're an investor getting long equities into this economic slowdown, go look at returns from October and November of 2007. Those returns might scare some sense into you.