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Banks are lending. Indeed, it would be stupid not to do what earns you money.
That said, they have higher lending standards now. That is not hard to understand, as they just spent two years being beaten to a pulp with loan defaults, band failures etc.
If I were running a bank, I would do the same thing: cut the default rate.
How hard is this to figure out?
That is the supply side.
Demand is also weak. We are in a period of deleveging which is a good thing for the average schmo. Only Paul Krugman doesn't get this issue.
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Rich Belloff
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