Mike “Mish” Shedlock
Businesses do not want to lend, consumers do not want to spend, financing approved projects (even large projects in supposedly “recession-proof” Las Vegas) is difficult. Unemployment is soaring, demand for credit ratings is dropping, there is no driver for jobs, the service sector is shot and that is going to put still more pressure on consumer discretionary spending and business borrowing. The credit crunch is not only pervasive, it has now reached critical mass where it will start feeding on itself. The Fed is powerless to stop it. Expect to see corporate bond yields soar and treasury yields to drop as the credit crunch picks up steam. Those looking for inflation can find it in their rear view mirror. More
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