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View Full Version : Is there a credit crises?



we_are_toast
02-10-09, 09:33 AM
The TARP proposal, soon to be released by Geithner, is supposed to be an effort to get the banks to free up credit. This assumes there is a credit crises caused by a lack of supply from the banks. That was certainly true last summer and fall, but is it true today? Have we past a point where the bank caused credit crunch is no longer true and there simply is no demand for credit from banks? LIBOR rates are down along with the TED spread.

If there is some credit demand that is not being filled by the banks, isn't the Fed's TALF program filling the demand? And won't the new expanded version fill most of the needs?

What this is all boiling down to is: what will the TARP plan really do to increase credit? If it's not going to increase credit, what possible reason is there for the plan?

Does anyone know of a government, or private statistic, that directly measures credit demand? Or is there a more direct measurement that would indicate whether credit demand is being filled?

don
02-10-09, 10:02 AM
What this is all boiling down to is: what will the TARP plan really do to increase credit? If it's not going to increase credit, what possible reason is there for the plan?

Could it be that TARP 2 is another cover to feed more public funds to the chosen few, who need it to stave off the calls on their collapsing CDO/Derivative Dark Matter, that's rumored in the 10s of Trillions, so large there is no quick fix :rolleyes: