Comments on: Commercial Credit Dropping at Fastest Rate Since 1973 http://www.nakedcapitalism.com/2007/11/commercial-credit-dropping-at-fastest.html Mon, 23 Nov 2009 11:04:35 -0500 http://wordpress.org/?v=2.8.4 hourly 1 By: Anonymous http://www.nakedcapitalism.com/2007/11/commercial-credit-dropping-at-fastest.html#comment-1973 Anonymous Thu, 29 Nov 2007 10:47:00 +0000 http://www.nakedcapitalism.com/2007/11/commercial-credit-dropping-at-fastest-rate-since-1973/#comment-1973 http://research.stlouisfed.org/fred2/series/BUSLOANS?cid=100<br/><br/>http://www.federalreserve.gov/releases/g20/Current/<br/><br/>Non financial CP Nov 21= 202bn vs 185bn end June and 195bn end Aug 2007.<br/><br/>Must add in net corporate issuance equity and bonds and notes. http://research.stlouisfed.org/fred2/series/BUSLOANS?cid=100

http://www.federalreserve.gov/releases/g20/Current/

Non financial CP Nov 21= 202bn vs 185bn end June and 195bn end Aug 2007.

Must add in net corporate issuance equity and bonds and notes.

]]> By: a http://www.nakedcapitalism.com/2007/11/commercial-credit-dropping-at-fastest.html#comment-1972 a Thu, 29 Nov 2007 09:00:00 +0000 http://www.nakedcapitalism.com/2007/11/commercial-credit-dropping-at-fastest-rate-since-1973/#comment-1972 Here's the deal. IBs need to borrow money to keep their market operations going. Sell a call to a client, buy the stock, need to get financing for the purchase. In an environment where credit is being rationed, the needs of the market operations must come first, because if one had to liquidate the stock purchase in order to get the cash, the risk to the bank becomes unlimited. So the first to go will be the business clients. Here’s the deal. IBs need to borrow money to keep their market operations going. Sell a call to a client, buy the stock, need to get financing for the purchase. In an environment where credit is being rationed, the needs of the market operations must come first, because if one had to liquidate the stock purchase in order to get the cash, the risk to the bank becomes unlimited. So the first to go will be the business clients.

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