Economic downturn a myth?
Credit crunch? What credit crunch?
PARIS (Reuters) – The credit crunch is not nearly as severe as the U.S. authorities appear to believe and public data actually suggest world credit markets are functioning remarkably well, a report released on Thursday says.
As a result, governments are pumping masses of public money into the economy across the world because of the difficulties of a few big, vocal banks and industries such as car manufacturing, which would be in difficulty anyway, according to the report published by Celent, a financial services consultancy.
“It’s just stabbing in the dark with trillions of dollars,” Octavio Marenzi, report author and head of Celent, told Reuters in a telephone interview where he questioned the depth of the analysis that preceded numerous fiscal stimulus packages.
Regarding U.S. business access to credit, the report says:
*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.
Then where did all the money go?
December 16th, 2008 at 7:11 am
where did the money go?
um, it never existed. between mark-to-market accounting practices (see also, Enron) and generally inflated net worths on balance sheets, it never existed.
so when you read or hear about Madoff and the question of how $50 billion dollars could “disappear”, realize that most of that $50 billion never existed in the first place.
December 16th, 2008 at 7:22 am
well, there is that.
December 16th, 2008 at 8:24 am
Well, the economic downturn certainly exists, so that’s not a myth. What obviously IS a myth, though, is the same myth we were force-fed back in mid-September with the first “bailout” – that it was necessary to save us. What should have happened is for all credit default swaps to be canceled and let weak institutions go under, so that those instruments cause no more trouble in the future.