Top Takes From RealMoney

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1. Bank Lending

By William Furber
3:59 p.m. EST

I continue to hear commercial lending is starting to happen again, to the point where there might even be a little competition for good deals. It is early, but it may begin to show up in asset growth over the next couple of quarters.

Vince Lombardi once started a practice after a particularly disappointing game by holding up an elliptical brown leather object and saying, "OK, fellas, THIS is a FOOTBALL." In that vein, I will point out that, the spread between deposit rates and securities -- such as treasuries, agencies, mortgage-backed paper, and so on -- is lower than the one between deposit rates and real live loans to customers, and that this will boost bank profits. (For the cynical, who say, "Not when bank loan officers do the credit work," I would argue that conservatism is probably in good supply at most banks these days, and fresh-loan losses won't show up for a year or so anyway, though that last is no excuse.)

With all the noise, it's sometimes hard to remember how this all works: The Fed lowers short rates, the yield curve steepens, banks make easy money, and while they use it to pay for their past mistakes, they see the end of the tunnel, and start getting back to business.

Making loans to customers is the one activity the current government wants the banks to perform. (You could argue the timing of their other salvos doesn't help much right now.) It's just possible that banks might start making some money the old-fashioned way.

Position: Long BAC, C