bank loans fail to keep pace with increase in non-current loans

John Hussman is a must read this week. The current environment shows exactly the advantage of Hussman's approach. His funds hit all time highs this week.

from this weeks comments:

Consider, for example, the latest FDIC Banking Profile, which was published based on June 30, 2007 data (before the recent liquidity crisis emerged). In that report, the FDIC noted that the ratio of loan loss reserves to total loans remains at a 32 year low. As for the portion of those loans that are in trouble, the FDIC notes “for the fifth quarter in a row, reserves failed to keep pace with the increase in non-current loans.”

read the whole article.

( I do have small positons in both of the Hussman funds and have for several years)