The So-Called Credit Crunch, Again Some More
It’s really hard to kill this meme. Note the label on this graph from today’s Free Exchange post:
Now change that heading to read “Business borrowing.” Sort of gives a different impression, right?
The idea that the problem’s on the supply side is pervasive, and false or at least wildly overblown. Lending rates are at historic lows. But the credit-crunch storyline gives very effective aid and cover to the financial industry in justifying its inordinate size and power.
I tried to drive a stake through the heart of this vampire squid back when we saw that first dive, back in 2009, and the situation is much the same today. (See also Related Posts at the bottom of that post.)
The Sky Is Falling! Business Lending Down 1.2 Percent!
Cross-posted at Asymptosis.
i have to say that i’m surprised to see that it’s getting worse…lousy year over year over bad year over years is not what i would have expected, given the widespread pretensions of recovery …
Business lending isn’t driving the recovery, which is driving deleveraging.
Basically, there is no credit bubble blown up.
If there isn’t any demand, there no reason to borrow to supply that non existent demand.