Bankers who gathered for the American Bankers Association annual meeting were hesitant to dismiss the administration's efforts, but said the government's programs have largely been unappealing for smaller banks.
They won't come out and say what I'm about to say because they don't want to be the victims of liquidity freezes and forced mergers. Lack of creditworthy borrowers and tons of paperwork aren't going to stop politically-driven loans from being made. Washington isn't happy that liquidity injections are tied up on bank balance sheets. They need that liquidity to circulate through the economy so that Americans won't notice their purchasing power disappearing or their middle-class entitlements becoming less of a liability. Inflation has a way of working that kind of magic and right now the mojo just isn't there. That will all change with the right political levers pushing loans to business owners in the ruling elite's favorite demographics. The conduit doesn't matter, although existing SBA-affiliated lenders are the most likely candidates.
Has there ever been such a thing as a bubble in small-medium enterprise (SME) lending? We'll find out soon enough. Here's a thought: Maybe some aspiring mendicants could assemble a REIT that would qualify for government-sponsored lending. That would kill two birds with one stone. It would scratch the government's lending itch and open a new category of liquidity recipient for Treasury's "Plan C" to bail out the commercial real estate sector.
Voila! All problems solved! They don't call me "Supreme Super-Genius" for nothing. Well, okay, that's what I call myself, but you get the picture.
