Originally Posted by Ken Hill
But if lenders are unwilling to lend, or funds simply are not available, we indeed have a problem.

As I understand it, the "problem" is far beyond the mortgage market. Banks etc have certain regulations they have to follow regarding how much capital they have on hand as against their loan portfolio. Once that drops as it has, they no longer have the ability to lend until they can get more capitol. And if the cannot sell these illiquid loaned, that starts freezing up their loans. And this freeze extends beyond mortgage lending to include normal business lending. And so, as I understand it, we are now in a position where businesses are having a hard time getting very normal sorts of loans that they use to fund their day to day operations. At least that is what I understand.

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