The economy has definitely turned. It was heading straight down and now its got its good months and its bad months but its not heading straight down anymore.
Banks are borrowing money from the discount window at 1% and buying 2% treasuries with them. But access to credit is not the most important factor for most businesses as fara as I can tell. According to participants in the recent small business conference in DC they are far more concerned about demand than lending.
Think back over the last two or three years, I bet you’ve been buying more from large retailers rather than small retailers because teh alrge retailers have more pricing power. They can squeeze their small business suppliers and pass on savings to consumers. When demand is higher, they can’t get away with this.
There may be a liquidity problem in mortgage lending but the piquidity problems in small business lending is not the bottleneck that some people think.
http://www.mcclatchydc.com/2010/07/12/97368/fed-chief-to-banks-find-a-way.html Actually not getting lending is hurting small business. Bernanke is trying to force banks to lend and Obama has called them out. They still resist. The banks may have fucked up the economy but the don’t feel any responsibility to help fix it. They have to be taken over until we get things working again.