Table One
U.S. Bank Loans (Billions of Dollars)
In August, bank loans to consumers were 9.5% higher than they were a year earlier--the fastest increase since 2004. The year-to-year increase in consumer and industrial loans was 15.5%, down only slightly from a recent record high of 21.6% in March. Real estate loans were up 4.1% for the 12-month period ending this August--flat lately, but not down.
Did bank lending suddenly turn south since August? The latest data is for the week ending Sept.17, when the U.S. expropriated 80% of AIG (nyse: AIG - news - people ) equity and thus tanked most financial stocks. U.S. bank credit hit a record of over $7 trillion in the latest week--up from $6.57 trillion a year earlier and $6.92 trillion at the end of July.
Political scare tactics are misleading tax payers. There is no credit crunch. People are buying fewer cars today because they are scared, not because they cannot get a loan. Mortgage rates are up to 6.1% on a 30-year loans, still at historical lows. If credit was tight, mortgage rates would be much higher.
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