> Between October and December, interbank lending is off by 20%.
> C&I, which had been growing at a 20% annual rate in early 2008,
> is now contracting at a 4% annual rate. Overall bank lending,
> which had been growing at over 10% a year in early 2008, is now
> down to just over 1%. Nonfin CP, which had been growing at a 33%
> annual rate in July 2007, just before the outbreak of the credit
> crisis, was contracting at an 8% annual rate a year later.
... and this all adds up to a (breathless) "frozen" ...?
Sorry, but until/unless some of those numbers are "essentially zero" instead of "down a bit from nosebleed historical highs" I'll continue to have a hard time believing that anything is "frozen" ... nice graphs of Fed data in that paper.
Plus: given that a huge percentage of commercial lending has been used in recent years for share repurchases, they see no reason to believe that _even if there was a freeze_ that it would much impact many capital expenditures.
> And leading indicators haven't been good. Banks are pulling in lines
> of credit on credit cards, and the Fed's surveys of senior loan
> officers show a sharp tightening of standards.
Sure: there's a tightening, which there ought to be given how lax it has been.
But a Trillion Dollar Bailout kind of tightening?
Later you say:
> I'm guessing that most people who are arguing that there is no credit
> crunch are doing so to argue that there's no
> need for a bailout.
*Something* needs bailing out, that's for sure (and the original article agrees). The question is whether the bailout we received was the one we needed, or was it part of an elaborate rip-off? I mean, sure: *something* needed to be done about terrorism and Iraq, too. But did we get what we needed? Or were we lied to and given something that's, frankly, a rip off?
That is: is this just part of a pattern? Or is it 100% above-board?
You seem convinced of the latter.
John Thornton asks:
> What would be the purpose of such a lie and how could you
> convince so many people to report it if it were easily demonstrated
> to be false with a simple graph?
Did you read the paper? The graphs you're talking about are all there. It's 41 pages long, but the "meat" of their point is less than 10 -- you could read it in a few minutes. The rest of the pages are nice looking graphs. I especially like the ones
The purpose of the lie is that people don't read papers written by Fed economists, they just read what Time Magazine tells them. Public opinion is shaped by those that have the microphone, not those that have the facts.
Duh?
/jordan