Economy impacts financial titles

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Last month, JPMorgan Chase CEO Jamie Dimon told a group of economists that the negative impact of the U.S. housing slump and subprime lending woes was already working itself out. Oh, really? The collapse of subprime lending is now infecting other segments of banks' routine lending activities, including loans to small and midsize businesses. Undoubtedly, this was a key factor in the Federal Reserve's decision to make a rate cut on Jan. 22. Meanwhile, one financial institution after another—Citibank, Merrill Lynch and Washington Mutual—has been announcing massive biggest business write-offs.

But maybe Dimon is right. After all, stability is one of the banking industry's strongest assets, and lending to good credit risks is actually increasing. And to the extent that advertising activity in an industry signifies the sector's overall health, a look at ad results in the banking sector suggests that things may not really be too far from normal.

Banking's year-end 2007 results, compiled by IMS/The Auditor, shows that while big players in some other categories have been taking big hits, three of the four largest titles in the banking group registered gains. The gainers were led by Investment News (published by Media Business parent Crain Communications Inc.), which showed a surge of 265 ad pages (+21.6%). Credit union titles seem particularly buoyant. Credit Union Management (+30.8%), Credit Union Magazine (+10.8%) and Credit Union Journal (+8.8%) all posted gains.

On the downside, the four largest mortgage titles in the group suffered losses. If the housing crisis doesn't straighten out, this could well worsen in 2008. And economic woes could prompt another flurry of banking mergers, with the strong devouring the weak and thereby reducing the advertising base for some titles in the category.

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