Mushroom Cloud Spreads to Small Banks

The New York Times has an interesting story in today's business section on the credit crisis spreading to small and midsize banks. The article highlights that the banks were unprepared for the residential downturn and are highly exposed to a commercial real estate downturn.

The take away I get from this story is that the Fed's are going to be tightening credit underwriting on all the banks, not just the ones in trouble. This credit squeeze will affect everyone!