The cost of credit has risen for financial institutions, especially those who created the crisis by leveraging up on asset bubbles.
As these companies fail, the remaining financials will get stronger and eventually the interbank market will recover. If we bail out the sick financials, we will get a lost decade like Japan, AND lower stock prices. Japanese financial stocks fell 90% from 1992 to 2003 BECAUSE the government bailed them all out and prevented failure.
Meanwhile, THERE IS NO CREDIT CRISIS FOR SOLVENT COMPANIES! Borrowing costs for industrials are at the LOWEST IN FOUR YEARS!
Make sure your rep VOTES AGAINST ALL BLACK HOLE SUNK COST FINANCIAL INDUSTRY BAILOUTS!
Industrial Companies Can Thank Banks for Lower Rates (Update4)
By Pierre Paulden
Sept. 29 (Bloomberg) -- The same credit crunch gripping banks, brokers and insurers is providing industrial companies with the lowest short-term borrowing costs in almost four years.
Yields on commercial paper due in 30 days sold by manufacturers and retailers fell to an average 2.14 percent last week, while those for financial borrowers rose to 3.15 percent.
http://www.bloomberg.com/...