Citigroup, Wells Fargo May Loan Less After Downgrades

Source : Bloomberg

A couple of reports caught my attention today. The first one was the minutes from the previous federal reserve meeting. It was even more cryptic and unclear whether the federal reserve has a proper reading on where things are headed. At least the agreement is that we are slowing because of an excess that took place with irrational lending - we call the normalization now a "credit crisis". Should we get the "lax" lending back and feel prosperous for some more time??? It seems like a pipe dream trying to convince investors that it is really fun just watching your investment blow up in smoke.

The second one was that of Washington Mutual getting funding and selling there shares at a discount of 32% from the current market value. There are 2 parts to this which are that a) Wamu doesn't think their own value is even what they are traded at and b) TPG has also had its share of goof ups with the latest being a blow up of their own hedge fund so I'm not sure if this is a smart buy or Wamu got some cash dressing up their junk well or something else all together that only time will tell.

The final report that caught my attention is the anticipated tightening on part of Citibank and Wells fargo and how that is going to be bad for everyone - Shouldn't it all be considered natural that a result of the lax lending and the losses for the investors, now there is no more easy money available (there is from the fed at 0.33% - no ideas why that's pushing up savings rates at the banks - they can go to the fed and borrow as much as they like right.... why pay savings accounts 5-10 times more ??? - looks like they cannot borrow from the fed and need the consumer afterall to deposit some money ... not just take loans and vanish).