Market Movers: Meredith Whitney on the small business credit crunch and NY Fed’s Empire business conditions index PLUNGES…

The double dip is coming baby, believe it, and the Congress Critters attempts to ‘help us’  are making it worse…Read the entire piece by Meredith Whitney for the coming layoffs at the state level..

WSJ:

…Unless real focus is afforded to re-engaging small businesses in this country, we will have a tragic and dangerous unemployment level for an extended period of time. Small businesses fund themselves exactly the way consumers do, with credit cards and home equity lines. Over the past two years, more than $1.5 trillion in credit-card lines have been cut, and those cuts are increasing by the day. Due to dramatic declines in home values, home-equity lines as a funding option are effectively off the table. Proposed regulatory reform—specifically interest-rate caps and interchange fees—will merely exacerbate the cycle of credit contraction plaguing small businesses.

If banks are not allowed to effectively price for risk, they will not take the risk. Right now we need banks, and particularly community banks, more than ever to step in and provide liquidity to small businesses. Interest-rate caps and interchange fees will more likely drive consumer credit out of the market and many community banks out of business….

…It is important now to support any and all lending activities that would enable small businesses to begin hiring again. If the regulatory reform passes with rate-cap and interchange regulation amendments incorporated, small businesses will be hurt rather than helped. Politicians and regulators need to appreciate the core structural challenges facing unemployment in the U.S….

Empire State general business conditions index- CNBC:

…The New York Fed’s “Empire State” general business conditions index fell to 19.11 in May from 31.86 in April.

Economists polled by Reuters had expected a May figure of 30.00….

...The new orders index fell to 14.30 from 29.49 in April….

May 17, 2010. Tags: , , , , , , , , , , . Economy, Finance, Obama Administration, Politics, Taxes, Unemployment Statistics, Wall St.

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