Believing that “cost of drivers” will be a critical driver in this recovery is ONE HUGE JOKE!!
By Daniel at 27 January, 2010, 2:08 pm
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Consumers are still recovering from their spending binge, are scared, saddled with a HUGE upsidedown asset in a deteriorating housing market and aren’t thinking about buying more big ticket items.
It isn’t just credit price but availability. Banks are increasingly risk averse, have tightened lending standards, have swung to the opposite extreme, all with the hope of not exacerbating their problems and building capital.
The ones who BENEFIT from low rates are the BIG BANK traders. JPM, GS, etc earned their money at the trading desk, not from increased spread on increased loan volumes. If anything loan outstandings are contracting.
Cost of funds as a motivator to spur investment and spending “in this economy” is one tired joke, but seemingly an effective illusion of hope!!
- Gorm
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