Wednesday, October 1, 2008

Bank Loans Have Not Dried Up

An excellent opinion piece at dovetails nicely with my most recent piece about bear and bull markets in credit.

From >Bank Loans Have Not Dried Up

Contrary to many comments, consumer and industrial loans actually increased in the latest week. Troubled giant banks have cut back on lending, but smaller banks have picked up the slack. Consumer and real estate loans dipped insignificantly through Sept. 17, remaining much higher than they were a year earlier.

And this one:

Economic journalists seem oddly fascinated with the last column of the table--interbank loans from one to another (aside from fed funds). "Banks won't even lend to each other," said a TV reporter, "so how can we expect them to loan to business or consumers?" But interbank loans are obviously tiny, and banks rightly regard lending to other banks more risky than lending to Main Street. There is no reason to expect the minuscule flow of interbank loans to determine consumer and business loans. That little tail can't wag the big dog.

It's an excellent piece that should be read.

Related Article:

Something Even I Need To Be Reminded Of: It's Not A Bear Market For Everyone


Josh said...

Interesting. Just saw an article in the NYT saying how all these small businesses are failing because they can't get lines of credit with even the best "credentials". Maybe they should head over to a credit union ;)

Credit Matters said...

Josh, they SHOULD head to the credit union! Good advice, pal.

Missed you over here, buddy.

Hope school is going well.

Josh said...

Thanks, busy, hope to resurface around here soon!

Credit Matters said...

Josh, well, nice to see you nonetheless.

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