synapse collapse

This may be the first real positive economic indicator we’ve seen yet. I’m not sure though; the spikes back around the October timeframe could have been related to an influx of cash at the Fed, the bailout, or changing environments. The thing that’s hard to differentiate from a simple graph like this is what it actually means. The lines off the left side are basically immobile for the past 50-100 years, or as long as each piece of data was collected. It’s very easy to take that fact and say the spikes we see today is horrible. But it’s not that easy. Interest rates have also been near zero for several months now, and this may simply represent bank activities where they’re borrowing from reserves. Because it’s cheap money, they can leverage it and re-lend for a few months, returning their loans before the interest rates go up and eat into profits.

I don’t think I know enough about finance and banking to have a better answer, but it is very slightly comforting to see the lines moving in the correct direction to return to pre-2008 numbers.