Credit Crunch Is a Sham

For more commentary from Tony Crescenzi and his instant reactions to the latest economic news, check out his blog on RealMoney.com. For more information about subscribing to RealMoney, please click here.

Whenever investors begin to obsess over a particular factor and their anxieties start driving market prices, it's time to take a step back and assess whether the market's movements are justified by fundamentals.

When doing this exercise in the past, I've made my best calls on the markets, primarily because my macro approach forces me to look at the fundamentals of a given situation and gauge any disconnect between perceptions and reality. The goal is not necessarily to see whether the markets are wrong in terms of direction but to see whether their moves are excessive and unsustainable.

Right now, the hot topic is the subprime market. One of the biggest questions is whether this sector's problems will spill over into other areas of lending. In other words, will problems in the subprime market crimp overall lending and cause a credit crunch, which would then harm economic growth and potentially lead to a recession?

On RealMoney, I report regularly on a variety of data that answer the question of whether any credit crunch question is developing. For example, the nation's bank-lending statistics can either refute or validate the bears' concerns that the subprime woes will spread to other areas of lending and cause lending activity to flatten or weaken. Fortunately, these data are available on a weekly basis.