Showing posts with label Lending. Show all posts
Showing posts with label Lending. Show all posts

Tuesday, May 11, 2010

Lending and Bank Solvency

This wholesale trade summary posted earlier today tells me that there is weak momentum behind the growth we have in our US economy. Reliant on consumers for nearly 70% of US GDP, there is still too much potential for another housing price collapse due to the number of homeowners who are underwater, the number of homes repossessed and held back from the market in support of prices of houses already listed, and the Fed is no longer providing liquidity. I expect home loans will get more difficult to qualify for than they are now. That seems to be born out in the graph from the St Louis Fed below.