Wednesday, December 9, 2009

Lending down but the Economy is Healing?

Anyone remember how TARP was intended to free up cash and enable banks to lend money to prevent the economy from freezing?

The FDIC reports that lending by U.S. banks plunged by 2.8 percent in the third quarter, the largest drop since at least 1984 and the fifth consecutive quarter in which banks have reduced lending.

"We need to see banks making more loans to their business customers," FDIC Chairman Sheila C. Bair said Tuesday.

Same old problems...same old language.

CNN Headline Aug 2009: Geithner: Economy healing, but deficit must go down

Dec 3, 2009

Geithner: "The economy is healing," Geithner said. But he added: "We suffered this enormous trauma."

This was the fifth quarter in a row with reduced lending and the worst report since the data was tracked in 1984.

If this is healing, then we need a little dose of pain.

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