[lbo-talk] Credit crunch a myth?

[Patrick Bond]

Doug Henwood wrote:
> The loss of "wealth" - a stock - doesn't matter anywhere near as much 
> as the flows of borrowing and spending from day to day... At the same 
> time, the Morgage Bankers Association's index of mortgage applications 
> has tripled over the last few months, so Baker's claim about the 
> number of applications flies in the face of some "pesky evidence." 
> Interbank lending is also in sharp decline.
> I really don't know why people are saying such dumb things.

Dean's point of view:

Dean Baker wrote:
> the relevant index from the MBA is the purchase index, and this has 
> gone nowhere. demand for loans falls in recessions.
>
> and the wealth effect of stock and housing is among the most widely 
> accepted propositions in economics.