Ka-ching! Stock Market vs. Credit Market

Near as I can tell, the “bailout,” “rescue,” or whatever, is about shoring up the “credit market.” Banks have to make loans, and they have to have money to make loans. Some pundits are saying that the stock market plunge we’ve been seeing, including the dramatic dive happening today, is not a measure of the prospects for this $700 billion rescue gamble. That’s because they’re splitting off what’s happening on Wall Street with the real problem that is all about credit.

I’m not convinced that the two are unrelated. I’m more inclined to think that the near-panic we’re seeing as people pull their money out of stocks means that people will be very slow to take out new loans, even with the bailout/rescue.

Who wants to borrow money in today’s climate? Time will tell.

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About Doug Geivett
University Professor; PhD in philosophy; author; conference speaker. Hobbies include motorcycling, travel, kayaking, sailing.

One Response to Ka-ching! Stock Market vs. Credit Market

  1. Crambone says:

    Good note. But tie in oil. Gramtically the oil spike predicated the collapse. You must accept that – and sometimes times is that simple! Take out the flow-through of energy and once melding outer edges become brittle, and light and hard to sustain. Look at 77 to December 1979 adjusted for inflation, does anything look familiar? What! Look at it! Energy, bother, energy… the breath of God. With out it, what matter turns and spins, and devises eyes? … and my traps, *****!

    Like

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