Continued headwinds

The writedowns of financial assets continue creating strong headwinds in the US economy.

Credit has tightened dramatically and interest rates for loans relative to US treasuries are high.

Yesterday a global consortium of government financial ministries got together to add $40 Billion to the global financial system to increase liquidity.

Unfortunately I do not see an end to tight lending standards until asset prices stop declining and foreclosures peak.

This will probably not occur until late 2008 or 2009.