Floyd Norris, one of the best New York Times writers, says that there are signs of a revival in the credit markets. He cautions, though, that we still have a long way to go. No doubt on that. But he also makes a comment, midway through his column, that made me pause. He says that we risk running a two-tier recovery. My guess is that we’re in the middle of one of those now. From the story:“The grand deleveraging of consumers has to take place,” said Robert Barbera, the chief economist of ITG.One way for that to happen is for people to simply stop buying anything they do not absolutely need. The retail sales figures for December make it look as if a lot of that is happening.“Alternatively,” Mr. Barbera said, “households can reduce debt service without having to slash spending. They can do that if they can refinance, and use some of the tax cuts to lower debt payments.”It must be acknowledged that we risk running a two-tier recovery, in which the most creditworthy companies and consumers find loans cheap and the rest find them almost impossible to obtain.The haves and the have-nots. I see anecdotal evidence of this in consumer lending. If someone put a gun to my head, I would bet that we’re right in the middle of a two-tier recovery. Agree? Disagree?
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