US banks still in trouble

Thanks to CommonDreams.org for picking up Paul Krugman's New York Times op-ed piece on the continuing troubles of US banks.

Krugman argues that "while the wheeler-dealer side of the financial industry, a k a trading operations, is highly profitable again, the part of banking that really matters — lending, which fuels investment and job creation — is not. Key banks remain financially weak, and their weakness is hurting the economy as a whole."

As if to prove Krugman's point comes the news of CIT Group's worsening condition. CIT is a lender to small and mid-sized businesses whose collapse could seriously threaten the chances of recovery in the real economy.