This reinforces the deflationary argument, which is largely about how the banks don't want to lend because their is no one creditworthy that they can lend to, and thus the money supply will contract as credit stops being issued and as outstanding debt defaults. The Fed will try to force lending, and will resort to other means of stimulating the economy (which, in their erroneous world, means printing a lot of money and throwing it in). -- KM


Lenders have been pulling back on credit lines for businesses, mortgages, home equity loans and credit card offers, and analysts said that trend was unlikely to be reversed by the government�s money.

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