No loans, no commercial paper. The credit markets are still frozen.
I am really shocked and amazed that there has not been more coverage of this story by the New York Times. After a $700 billion, er, make that $1.5 trillion bailout, and massive capital injection into our banks, the loan money still is not trickling down to businesses and home buyers.
In it, the reporter is surreptitiously on a conference call with JP Morgan Chase executives. Chase took $25 billion dollars of the bailout money, at Treasury Secreatary Paulson's behest, after initially declining it. Paulson insisted, saying that it would be bad for consumer confidence if the public saw that some banks were more in trouble than others. Go figure.
After being asked by a lower-ranking executive about when Chase would start making more loans, the high-ranking executive running the meeting explained:
[T]he same executive (who I’m not naming because he didn’t know I would be listening in) explained that “loan dollars are down significantly.” He added, “We would think that loan volume will continue to go down as we continue to tighten credit to fully reflect the high cost of pricing on the loan side.” In other words JPMorgan has no intention of turning on the lending spigot.
Translation: NO SOUP FOR YOU.
Apparently, even the world's largest banks are not immune to the credit crisis of their own making. Too bad the CEOs of those companies don't suffer the same consequences.