henarl

How the Fed Is Making Banks Lend

First off, once a credit junkie - always a credit junkie. Given an opportunity, these junkies will borrow to the hilt to continue living beyond their means. It's the American way! Credit card defaults will cure the banks of supporting this stupidity much longer.
Next: Banks, credit unions, mortgage brokers, etc. were able and eager to make home loans to the barely breathing because they could then sell them to the securitizers over and over thus generating initiating fees and not having to worry about credit worthyness. That game is over and these lenders don't yet want to worry about keeping the loans they make. Maybe someday we will get back to lenders keeping the loans they make but until then the mortgage credit markets will remain frozen.
Finally: Business loans are the best hope for a return of money velocity but until the current massive layoffs and business failures subside, don't look for much of that in the immediate future either.