The story of the noose that choked credit

Banks and corporations have been going through their own credit crunch which is why risk aversiveness has been an underlying theme in this recessionary charade.

Commercial Banks heavily rely on nontransaction deposits for funding.  These include small and large time deposits:

Repurchase agreements are an important source of bank funds and the most important lenders are corporations which means corporations are lacking idle funds and taking on a more defensive position:

Also Securitization made credit available on a mass scale:

Commercial Paper market had also become a major source of corporate funds:

We are not going to see any growth whatsoever unless funds get allocated from savers to borrowers, and by the looks of it our situation is morbid at best. Show me the money!

Academia May Not Be For Me Afterall...

Greg Mankiw just discouraged me from taking a serious look at academia or from taking academics seriously for that matter.  In other news a man with a sweater vest blog just jumped off the top of Schott Hall today.  Hopefully the crises has taught these academics a thing or two.  On a second thought: after reading this post I can only assume that some academic economists probably didn't even know a recession occurred.