Jim Bianco says, “The bank walk never stopped…and if the bank walk is continuing, and there is no growth in bank deposits, which there isn’t, there’s going to be no growth in lending.”

In his referenced chart, the spread between what a bank will offer and what the money markets are offering is at 4.5% which is the highest we’ve ever scene.  He says, “this is the bank walk.”  So banks are acting as if this is a recession and loans are becoming expensive and harder to obtain which manifested in the latest SLOOS report. The reduction in lending is showing up in the microcaps and smaller companies, because their ability to issue bonds is limited, and they are more reliant on this bank lending.