Tuesday, February 23, 2010

and the Fed wants to tighten this??

yesterday the St. Louis Fed released its latest monthly look at commercial and industrial loans at major banks -- a measure that some would say represents the essence of the US banking system. this measure is still falling like a knife -- a bad sign for the ongoing health of the economy…

also not what we were promised when we bailed out the banks….

chart of the day, Commercial And Industrial Loans At All Commercial Banks

chart from the business insider

the following excerpt  is one of several articles from the past couple weeks describing planned Fed actions…

Fed to Outline Future Tightening Steps - WSJ - Federal Reserve Chairman Ben Bernanke will begin this week to lay out a blueprint for a credit tightening, to be followed once the Fed decides the economy has recovered sufficiently. The centerpiece will be a new tool Congress gave the central bank in October 2008: an interest rate the Fed pays banks on money they leave on reserve at the central bank. When the Fed is ready to tap the brakes, it plans to raise the rate paid on excess reserves. The higher rate would entice banks to tie up money they otherwise might lend to customers or other banks. The Fed expects such a maneuver to pull up other key short-term rates, including the federal-funds rate—long the main tool for steering the economy.

1 comment:

  1. http://www.bizjournals.com/phoenix/stories/2010/02/22/daily18.html?s=industry&i=commercial_real_estate

    IMO: This is very optimistic, from what I have been seeing. Commercial vacancies will stay high as long as there are no jobs, and the foreclosures continue.