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To: TimF who wrote (103673)	2/9/2009 9:31:01 PM
From: Sam	Respond to of 542009

Tim, back in October-November, as Slacker said, no one was sure what the financial liabilities of big or even medium sized banks were, and how those liabilities were reserved. There was definitely a crisis of confidence. There was definitely a severe credit contraction. Whether one would call that contraction a "freeze" or not, I won't quibble--as you wrote, it is impossible to "prove" one way or another. But it was a very large mess, and could become a similar mess in the future.

To: TimF who wrote (103673)	2/9/2009 9:42:15 PM
From: slacker711	Respond to of 542009

I disagree, but I'm not sure there is anything either of us could easily note and link to to show the other person's claim as obviously false. It is obviously going to depend quite a bit on how we define "credit". I am sure that home loans and various other types of credit still continued at substantially reduced rates. However, I think it is impossible to say that the corporate bond market was anything but frozen. Here is a number from RealMoney's Tony Crescenzi on October 14th. This would represent around a 85% decline in issuances. I'm not sure how much more of a contraction you might need to get to the point that you would call it a freeze. Over the past four weeks, only $11.2 billion of bonds have been issued in the U.S. corporate bond market, well below normal levels of about $4 billion per day. I guess it is possible to argue that this freeze was due to the markets waiting for government action, but at a certain point the markets force the government's hand. You would need to set up a near certainty of no government action long before the crisis to insure that the markets not act in this manner....which is basically an impossibility under the current political system. Slacker