Anecdotal Crisis Datapoint of the Day

James Fallows:

Just in the last few days, I've heard separately from three friends who run objectively "viable" businesses that they are on the verge of closing permanently, or laying off much of their staff, because they can't get short-term working capital. One said he was on the verge of having to close a manufacturing facility in the Midwest that, as he put it, "realistically will never open again." And this is from a group of friends that is heavy on writers, political people, academics, etc rather than a lot of business owners. I have never heard stories like this before.

This kind of thing is a lagging indicator: a bank's relationship with these kind of customers is one of its biggest profit centers, and it will generally do anything to avoid cutting off vital short-term credit. Once the credit is turned off, however, the bar for turning it back on again is raised substantially.

In other words, the recession has spread far from Wall Street, and has embedded itself deeply in the real economy. And no announcements in Washington or Paris will change that fundamental fact.