The mortgage market is unchanged, credit available on old-fashioned agency terms and not much else. Rates are about the same, mid-sixes. For every tentative lender toe stuck back into scary water, another bather has run shrieking from the pool, or drowned. The same is true for general, nonmortgage credit: shrinking. The Fed's injections of short-term liquidity have succeeded in preventing the equivalent of a bank run, but otherwise ... zilch. The discount-window theater has been as pointless as forecast here; borrowings as of Wednesday barely hit $1 billion. High-quality borrowers have more credit than they need. The problem is credit quality, not liquidity. The world economy runs on financial innovation, not AAA antiques. The modern "structured finance" market has locked up in a...
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