Source: Cobden Centre
by Alasdair Macleod
“The relationship between the credit cycle and equity markets is well established. The credit cycle has its foundation in bank credit, which expands while economic conditions first recover, then improve, and finally are backed by widening confidence. Bankers are caught up in this changing sentiment, starting with lending caution, increasing confidence in the trading outlook, and finally competing for loans, perhaps targeting rival banks’ customers or lending to businesses and business sectors to build future banking relationships. This ends with banks cutting their margins to attract business, inevitably fuelling malinvestments.” (11/05/24)
https://www.cobdencentre.org/2024/11/conditions-exist-for-an-equity-market-crash/