Credit conditions

As we are now one year in to the credit crunch, it is obvious to anyone how widespread and deep this credit crisis really is. I have been doing a lot of thinking about the ‘light at the end of the tunnel.’ Quite frankly, there is none. Credit conditions now are worse than they were a year ago — and this despite massive amounts of easing from the U.S. Federal Reserve and liquidity from a host of central banks.

What does this mean for the global economy and the malaise we are now suffering? This is an issue I plan to tackle in the next few weeks. But, needless to say, the U.S. has not avoided the Japanese story. As much as the Fed thought it was different, things are looking very Japanese in the U.S. economy right now — clearly, a case of hubris when it comes to U.S. monetary policy.

The issue to take aim at is the very different nature of property-induced slowdowns versus previous workouts the Fed had previously faced.