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Originally Posted by Octavian
Also Stu - isn't it the interbank lending that's the real issue? Some companies simply can't roll their paper into the market place because there are no buyers.
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Yes but what I can’t figure out is…if banks really aren’t lending to each other…how can they fund loans to anyone else? We should see this in the data as a sharp drop in lending to corporations and consumers but we don’t.
If consumers are really taking out large chunks of cash and banks aren’t lending to one another…how are they funding loans? I imagine they are going to the discount window…which means they really wouldn’t need overnight loans from other banks.