Wednesday, October 22, 2008
Just a reminder that the banking industry has not shut down, despite what you read in the MSM. This chart shows loans made by banks to small and medium sized companies. These now total $1.6 trillion and counting. In the past four years they have almost doubled. There is no shortage of money in the world: all measures of the US money supply are at or very near all-time highs. The problem continues to be a shortage of buyers. People continue to worry about the solvency of banks and other institutions that hold subprime mortgage-backed paper, because it is very difficult to analyze these securities. This will take time to sort out, and it may help when the Fed and Treasury start buying some of the stuff.
Posted by Scott Grannis at 10:30 AM