When Money Goes Into Hiding

A punchy description of where the economy is at:

Risk aversion is ascendant. Risk taking is shunned. Capital is a resource to be husbanded and conserved. Banks which have just funded a special purpose vehicle to provide liquidity to themselves will not be racing to make risky loans to Main Street or Wall Street. Leverage will be disdained and shunned.

Every revolution from the French Revolution to the sexual revolution has ended in excess. So ,too, will this revolution in the financial industry as banks and traders painfully and reluctantly reeducate themselves in the art of prudent risk taking.