To the question of whether banks are lending to businesses and the flip side of what’s the demand for loans, from Friday’s Federal Reserve data for the week ended Sept 2nd, Commercial and Industrial loans outstanding fell for a 9th straight week and is at the lowest level since Jan ’08. Fortunately though for many publicly traded companies, the capital markets have filled the void of the banks in a major way as corporate bond issuance in 2009 may hit a record high. Year to date issuance for both investment grade and high yield is $927b vs full year 2008 issuance of $926b and $1.21t in 2007. Thus, if one has access to the capital markets, the spigot has been wide open for companies to both refinance and borrow for growth but for small companies that only have its banks to tap for financing the credit crunch is more apparent.

Category: MacroNotes

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

3 Responses to “Capital markets/bank lending”

  1. Novemberrain says:

    Reports further state that investors would get enough opportunities at significant discounts and these golden opportunities should be grabbed by availing discounted loans. Cutting energy expenses could be a huge priority to save money and hence the “go-green” initiatives would be taken up in full-swing.

    Lenders must force the troubled owners to become good sellers. Government intervention introducing systematic overhaul measures to reduce foreclosures can also help recover the situation. With the current situation, stringent lending practices and the weak economic situation is continuing the drain the buyers from affording to buy their own homes. Hence, the housing condition is at a risk where quick fix may not be easily expected.

    Read more: http://www.housingnewslive.com/us-housing-news-articles.php

  2. leftback says:

    Good point, Peter, small business is dying – this is why there is recovery on The Street, but not on the street.

  3. cvienne says:

    After the 2001 recession, there was the “jobless recovery”…

    The jobs that were lost after the stock market bubble of the late 90′s never came back… The economy morphed into small “service oriented” businesses that borrowed to get started (and/or on the back of home equity)… So despite losing jobs, people were able to hang on…

    Now it has come full circle and those JOBS are finally lost… The only thing keeping anything alive are benefits and incentives by the Government… Soon the ‘tax bill’ will come for that largesse…

    I can’t really even imagine what the impact will be because I’m still trying to comprehend the government having acted to BAILOUT a system in an unprecedented way in the first place…

    There is no MARKET anymore…