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Despite credit and debt being the root cause of the 2008-2009 financial crisis the world’s central banks including the Fed have responded by issuing even more debt and promoting policies that are designed to increase the use of credit and debt.  Effectively trying to solve a problem using the very thing that caused it in the first place.  One measure of credit is the quarterly Senior Loan Officer Survey that in the first quarter revealed a third consecutive decline in credit quality, amongst other items.  Much of said decline came from the energy sector and regions dependent on the fortunes of the fracking or tight energy complex, no surprises there.  The survey also noted that declining credit quality is spreading to other sectors outside of energy, the result of falling revenues aka sales and profits.  Also of note 3 consecutive quarters of declining credit quality is a good indicator of looming recession, based on recent history.

This is Caleb Lawrence Registered Investment Adviser Inc. Scotts Valley Drive and Willis Road in the Scotts Valley Plaza, Suite 202 or call me toll free at 888-RICH PIG / 888-742-4744.

You can catch me on the radio at noon each business day as well on California’s central coast.  KPIG 107.5 FM in the Monterey Bay or KPYG 94.9 FM in San Luis Obispo.

Advisory services offered through Caleb Lawrence Registered Investment Adviser Inc.

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