A Less Interest-Rate-Sensitive US Economy; A Less Investable Mexican Economy

The US economy has been evolving, and it’s time to retire some old rules of thumb about how it works. Sources of financing have diversified so much, Eric reports, that banks’ lending standards imply less about credit conditions than they used to. And the shift from a mostly goods-producing economy to an increasingly services-providing one means that credit conditions in turn imply less about the state of the economy than they used to, as services providers depend less on credit than goods producers do. So banks’ tightening lending standards no longer presage credit crunches or recessions. … Also: Melissa ventures to Mexico, where drug cartels are so entrenched in the economy that some might consider the country increasingly uninvestable.