U.S. Banks "Very Liquid" -- with $1.2 Trillion in Cash

Today’s Goldman Sachs Global Investment Research paper on U.S. banks is five kinds of fascinating-spelling out as it does that banks are currently cash-rich, yet still fairly lending-averse. (Consumer loans were, however, up slightly in December, which is a yearly bump.) While sitting on $1.2 trillion in cash-$1.2 trillion is also the total value of China’s exports in 2009, by the way!-GS notes that, in the fourth quarter, “Loans were down slightly after 3Q’s 4% decline.” How are they filling this big kiddie pool up with cash? A good chunk of it is your card use fees, various “late” and service fees, and, natch, that old standby, credit card interest. In case you speak bank, then you can understand this, and can translate in the comments: “Credit card early delinquencies have turned, and consumer is 40% of provisions for large banks. We think the next product to turn in 2010 will be commercial (C&I;) with improving corporate defaults.”