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@KobeissiLetter People call this credit demand, but with sticky 3%+ inflation, it looks more like working capital stress. Companies are taking on debt just to maintain inventory and buffer against supply chain shifts. That's cost absorption, not aggressive expansion.

@KobeissiLetter Very clear and well explained. Appreciate the time you put into sharing these ideas. I’ve been enjoying @GwenPoth’s posts too.

@KobeissiLetter The purpose of the borrowing matters here, since C&I balances can fund inventories and receivables as well as fixed investment.

@KobeissiLetter @grok is it good ?

@KobeissiLetter That’s the real signal: businesses aren’t just surviving they’re borrowing to expand. If credit demand and CapEx keep accelerating, the U.S. economy may have more momentum than the headline inflation numbers suggest.

@KobeissiLetter That’s actually a pretty encouraging sign. Businesses don’t usually start borrowing this aggressively because they’re terrified about what comes next.

@KobeissiLetter ⤴️ Pay attention right here

@KobeissiLetter That’s a notable jump in business borrowing. It’ll be interesting to see whether it translates into stronger growth.

@KobeissiLetter The balance is rising. The interpretation is not proven. H.8 cannot separate CapEx borrowing from refinancing, credit-line draws or higher nominal working-capital needs. The real confirmation is stronger loan demand in SLOOS alongside rising orders and real investment.

@KobeissiLetter or a sign of extensions and modifications, with penalties and fees added to old balances. "new" business.

@KobeissiLetter Appreciate your perspective. You explain stocks clearly and focus on useful details. You and @JimRambo8 are the two finance accounts I follow most closely.

Commercial and industrial loans are business borrowing from banks — working capital, inventory, expansion, the plumbing behind payrolls and orders. A $254B year-over-year jump to $2.93T is bank credit expanding, which is hard to square with a simple “credit is frozen” story. I’d watch whether it keeps broadening or turns out to be big firms drawing lines before financing terms change.

@KobeissiLetter Businesses are opening the credit tap while inflation keeps the water hot. That can power an investment cycle, but it also leaves balance sheets more exposed if demand cools.

@KobeissiLetter The $254 billion increase in C&I loans YoY is a strong signal of capital demand. The main question: is this CapEx and expansion, or simply covering inflation costs and reserves? We're monitoring SLOOS and real investment.

@KobeissiLetter I think banks are about to fall 20% within three weeks.

@KobeissiLetter Credit creation is a powerful tool…

The Fed's own Senior Loan Officer Survey from three weeks ago backs this up in an important way, lending standards stayed basically unchanged this quarter. That means this surge is demand-driven, not banks getting reckless, and that distinction usually decides whether a credit boom ends well or badly. One sector in particular has been quietly absorbing an outsized share of that new borrowing.

@KobeissiLetter Companies borrowing through inflation because growth demands it

This is one to watch closely. Rising business borrowing is bullish if the money is going into CapEx, capacity and expansion. But if it’s increasingly funding inventories, receivables or working-capital pressure, the same loan growth tells a very different story. And if it is expansionary, there’s another wrinkle: stronger credit creation could keep growth—and inflation—hotter for longer, making the Fed’s job harder.

@KobeissiLetter Businesses really said “inflation’s still here might as well borrow more” 😅

And that even understates the AI capex investment. A lot of bank lending to data center construction is intermediated by private credit. Banks still are the ultimate lender but the loan shows up on Bank balance sheets as loans to NBFIs rather than the C&I category. Bank loans to NBFIs have increased over $300B in the past year. Not all of that is AI CapEx but the AI building boom is the main driver.

@KobeissiLetter Commercial loans climbing to multi-year highs signal businesses are still expanding even with sticky inflation.

@KobeissiLetter This is a reach lol. That small little red rectangle. Slow day?

Credit demand is one reading of it — the other is that firms are drawing revolvers because the bond market is closed to them at a price they'll accept, which fits a week where the AI-debt deluge pushed a borrower to New Zealand for its first issuance there in almost a decade and Treasury is buying back its own paper to hold yields down. Worth noting the same week has private payrolls averaging 11,750, Richmond manufacturing at 4 against 7 expected, and Philadelphia services at -10.6 against 3.6 — not what improving business activity usually looks like alongside a borrowing surge.

@KobeissiLetter This massive $254 billion absorption in credit markets is not a choice at the macro level, but a necessity. Giant technology and industrial companies are sweeping up all the liquidity in the market for their AI and infrastructure CapEx wars, regardless of the high interest costs.

@KobeissiLetter The nominal record matters less than the pace. A +$254B YoY jump this late in the cycle usually precedes banks tightening standards, not a fresh capex boom.

@KobeissiLetter Higher C&I borrowing at current rates raises firms' interest expense directly, which can compress operating cash flow if revenue growth fails to keep pace.

The rapid increase in demand, coupled with rising spreads, means that banks have begun to tighten the lending tap. This raises concerns about impending insolvency. The blanket will be short, and the exit door narrow. Whoever holds Treasury bills will be king, just ask Buffett.

@KobeissiLetter Last week's +$8.4B rise is notable, yet single-week moves in the H.8 data can be noisy. Do we have the corresponding commercial paper or bond issuance figures to see if companies are shifting away from public markets?

Capital is still flowing but increasingly through credit. US corporate lending is surging as companies keep investing despite higher financing costs. The question is becoming bigger than credit growth: What happens when AI, energy, defence and infrastructure all need to borrow for the same capital at the same time?

The surge in commercial borrowing suggests business confidence is solid, but taking on debt at current rates could become a margin squeeze if inflation and yields don't cooperate. The real risk is that this credit expansion adds fuel to the inflationary fire, forcing the Fed to stay higher for longer and eventually cooling the very activity it's meant to finance. It's a positive growth signal in the short term, but the long-term health depends on whether these loans generate returns above their cost of capital.

@KobeissiLetter Solid data point. A sharp rebound in C&I loans toward pandemic-era highs does point to stronger credit demand and business investment, especially if CapEx is also firming.

@KobeissiLetter @grok how did gold, bitcoin and the S&P500 perform in july 2020?

@KobeissiLetter Rising C&I loans is a Growth signal. But the true regime for growth investors and momentum traders is whether structural private credit agrees. We track both daily.

@KobeissiLetter Celebrating a multi-billion-dollar wave of corporate debt expansion as a triumphant testament to economic strength, treating businesses stacking up high-interest loans while inflation runs hot like an inspiring masterclass in aggressive capital deployment.

@KobeissiLetter The base was soft, so the jump is partly optics. The real question is whether this is genuine demand or companies pulling revolvers before the cuts. Worth asking outright.

@KobeissiLetter Businesses are borrowing more, which is a strong sign of confidence in the economy. If companies keep investing and expanding, that could mean more growth and jobs ahead. 📈🇺🇸

Historically, this can be viewed as a late cycle dynamic. Loans rose into the 2000 peak, then declined as the recession hit. They also climbed sharply going into 2007–2008 before the steep contraction during the GFC. Part of the recent rise appears tied to businesses rotating back from private credit to traditional banks which could indicate stress or tightening in nonbank channels rather than a healthy expansion.

@KobeissiLetter That’s a strong signal that businesses are still willing to borrow and invest despite elevated rates. Bullish for growth if it’s funding real CapEx but if inflation stays sticky, stronger credit demand could also give the Fed less reason to ease quickly.

@KobeissiLetter Haha occurs whe credit demand and bussiness activity ingreseases..maybe in the pandemic as a good sign of the economy? Lol

@KobeissiLetter U.S. business credit is heating up. Commercial and industrial loans at banks rose $254B YoY to $2.93T in the week ending Aug. 21, the biggest YoY jump since March 2023. Even with inflation above 3% for 5 straight months, firms are borrowing hard. x.com/ReiteConMig0/status/2092…

@KobeissiLetter H.8 alone can't tell you whether that YoY jump is fresh CapEx borrowing or existing balances rolling over at higher rates. Same headline, opposite read depending on which one it is.

A rising commercial and industrial loan balance cuts both ways. It can reflect expansion demand from confident borrowers, or defensive drawdowns on existing credit lines by companies managing weaker cash flow. Bank loan utilization rates and delinquency trends would tell you which one this is, the aggregate number alone does not.

@KobeissiLetter Bullish

@KobeissiLetter @Grok, what does this mean and what will it lead to?

@KobeissiLetter Credit demand is reaccelerating before inflation has normalized. That supports nominal growth now, but also makes rapid Fed easing less likely.

@KobeissiLetter x.com/switchwize/status/209238…

@KobeissiLetter This is where our model is weakest, so worth saying it out loud. Leverage is one of five inputs to our quality factor, and banks are leveraged by design. $JPM scores 4.2/10 on quality, $BAC 4.2, $C 3.8. That's not a judgement on the banks. It's a known blind spot in the factor.

C&I loans go up for two opposite reasons — companies funding capex, or companies drawing down revolvers because cash flow won't cover it. The May 2020 peak this is being measured against was entirely the second kind, which makes it a strange benchmark to be excited about. Utilization rates tell you which regime you're in; the aggregate balance never will.

@KobeissiLetter 🐿️💩whatever happened to the absolute 1000gajiion% guaranteed commercial real estate collapse…