Wednesday, October 22, 2008

Bits bucket for Wednesday, October 22

Please post your thoughts, links, and MLS/Craigslist finds here.

1 comment:

  1. Here's some Federal Reserve Board data published by economists at the Federal Reserve Bank of Minneapolis in an article entitled "Four Myths about the Financial Crisis of 2008". The following are MYTHS:
    1. Bank lending to nonfinancial corporations and individuals has declined since the fall of Lehman.
    2. Interbank lending is largely nonexistent.
    3. Commercial paper issuance by nonfinancial corporations has declined sharply and rates have risen to unprecedented levels.
    4. Non-small, nonfinancial corporations that borrow money in an interest-bearing way depend on getting most of that money from banks.

    Each of these myths is refuted by the Fed data, which is presented in easy-to-read charts at

    Commercial, industrial and consumer loans by banks have actually *increased* since the fall of Lehman and today are at all-time historical highs! See charts 1, 2 and 3.

    Interbank lending has declined since the fall of Lehman, but its volume nevertheless remains above the average of the past six years (Chart 5).

    Chart 6 shows that the value of nonfinancial commercial paper outstanding today is higher than at almost any time over the past six years, and is twice as high today as it was in January 2004, and is essentially the same today as in January 2008. And today's interest rate is attractive for the commercial paper issuers, in comparative historical terms.