>Gretchen Morgenson's explanation in the NY Times yesterday was that
>an inverted yield curve reduces banks' incentive to lend, since they borrow
>short and lend long. But how much investment is financed by banks, anyway?
More than is financed by bonds or stocks, for sure - especially working capital and inventory investment. But U.S. banks don't lend *that* long - no more than 3-5 years, not 30.
Doug