Archive for 13 December 2008
More on the Mythical Credit Crunch
| Peter Klein |
The mainstream media finally picks up the meme. From a Reuters story (via Jeff):
* Overall U.S. bank lending is at its highest level ever and has grown during the current financial crisies.
* U.S. commercial bank lending is at record highs and growing particularly fast since May 2007.
* Corporate bond issuance has declined but increased commercial lending has compensated for this.
As for the interbank market, [a new report] says:
* lending hit its highest level ever in September 2008 and remained high in October and that overall interbank lending is up 22 percent since the start of the financial crisis, taken to be mid-2007.
* The cost of interbank lending, as measured by the interest rates banks charge each other for lending overnight Fed funds, dropped to its lowest level ever in early November and remains at very low levels. . . .
[C]onsumer credit . . . was at a record high in September, the latest date for publicly available data. Local government bond issuance had continued at similar levels to those before the credit crisis, while bank lending for real estate reached a record level in October 2008. . . .
All of [this] drove the Celent report to conclude that the U.S. and other governments may be throwing good money after bad for want of a better idea of what is really happening. “Just like a doctor contemplating an obviously sick and suffering patient, a massive surgical intervention based on a misdiagnosis can only worsen the patient’s condition.”
As usual, you read it here first.
Organizations and Markets 
Recent Comments