The local markets will follow suit soon, as they too will be effected when the remaining liquidity in the system dries up.
It will dry up because as asset values fall or cannot be determined by the market, the banks being regulated institutions must increase reserves for bad debt and for declining asset bases.
In the space of days, and weeks all the credit will be force to cease. Even credit cards. At first they will stop issuing, and then limit charging.....and so forth.
as for right now, I am now aware of several ongoing construction projects that have been told to stop. one of them is McDonalds who was in the middle of a major remodeling.
This is already spreading to main street, and soon enough payrolls of large businesses who need credit lines will find it difficult and or expensive to renegotiate, and some may not be able to get credit at all.
I am not saying you are wrong, I am asking for a SOURCE that backs up your statement. Surely at this point there are concrete examples that have been written about or are public knowledge? Surely they are willing to loan, but possibly at a higher rate?
As a counter- example. Caterpillar (CAT) recently decided to borrow a few billion, and the market did allow them credit. However it was at a higher rate than before.
Quote: On Tuesday, the finance arm of Caterpillar Inc. was able to raise $1.25 billion by selling corporate debt -- but the company had to pay the highest yields in nearly 10 years, noted Atkins.
this is from this article: http://biz.yahoo.com/ap/080924/credit_markets.html?.v=6
The market just needs to find the prices where things (including debt) will clear.
Those prices are lower than today’s prices.
We can rack up a lot of debt just to put off the inevitable price clearing function for a short while.
Not worth it.