I’m not confused by the GDP report. It clearly indicates that the benefits of free trade and globalization outweigh the pain caused by the housing downturn.
An aggressive California lender had problems with some HELOCs? Gee, who knew? What’s the next terrifying revelation, that a Florida based condo builder is having trouble making ends meet?
Corporate profits are growing at 3x the expected rate for the quarter. Credit worthiness is generally determined by assets and income, although apparently CFC disagrees. Corporate balance sheets are flush with cash.
So why is corporate lending such an issue? Because many brain-dead experts, egged on perhaps by the bear paranoia that seems to permeate the web, can’t seem to differentiate between loaning 600K to purchase a depreciating asset to an individual with a BK, an overstated income, and low prospects of rapid wage increase, and lending to a corporation whose income is rising at 10%+/year, with billions in cash on the books (nevermind the assets and equity.)
