The Clenching Of U.S. Credit Markets

Here are some scary facts. The Federal Deposit Insurance Corp. recently warned that bad real estate loans could hurt the banking industry. A growing number of banks, including Bank of America and First Union Corp., are talking about problem loans. Bank liquidity has fallen to its lowest level since the end of 1989. The growth in bank lending has dropped sharply, to a 1.7% annual rate of increase. The trend is worrisome.

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