Is There Really a Credit Crunch?

Collarspace Discussion Forums

Home Login Search

Is There Really a Credit Crunch?

View related threads: (in this forum | in all forums)

Logged in as: Guest

All Forums >> [Casual Banter] >> Off the Grid >> Is There Really a Credit Crunch?

Page: [1] 2 next > >>

Message

<< Older Topic Newer Topic >>

Is There Really a Credit Crunch? - 12/25/2008 12:26:51 PM

celticlord2112

Posts: 5732
Status: offline

Is There Really a Credit Crunch?

Ya know, it's a damn good question to ask.....

quote:

But during all of that, there was also persistent anecdotal evidence that lending to credit-worthy borrowers was doing just fine — it seemed every other day some community bank CEO was on CNBC talking about how many loans his institution was making to small businesses and people who wanted to buy cars or houses.

_____________________________

Profile

Post #: 1

RE: Is There Really a Credit Crunch? - 12/25/2008 12:33:23 PM

popeye1250

Posts: 18104
Joined: 1/27/2006
From: New Hampshire
Status: offline

CL, I doubt it.
Ford Motor Credit has "plenty of money" to lend to people who want to buy their vehicles according to the service manager I talked to here in the last week.

_____________________________

"But Your Honor, this is not a Jury of my Peers, these people are all decent, honest, law-abiding citizens!"

(in reply to celticlord2112)

Profile

Post #: 2

RE: Is There Really a Credit Crunch? - 12/25/2008 1:23:41 PM

corysub

Posts: 1492
Joined: 1/1/2004
Status: offline

Absolutely, there is a credit crunch in that banks are being very selective in lending but people and companies with solid credit worthiness are still able to get money. Even failed mortgage companies like IndyMac are making loans and have seen tremendous re-fi applications over the past two weeks as rates went below 5%. Can everyone get credit..No....does everyone deserve credit...No...credit is not something you deserve but something you earn!
When we purchased our first home you had to have 20% down payment or you might as well forget about getting a loan...than it gradually scaled down over the years to 5%...no money down...interest only...and the rest is history. Getting back to sound credit, income check discipline by the banking system is the first step and is putting homes into stronger hands of people who can actually afford them...and the lower prices are stimulating foreclosure sales and should help bolster new home sales in 2009 if rates continue on their current path.
The major "fly in the ointment" would be Congressional interference with agenda driven policies and pork aimed at strengthening a political party rather than the country. The makets will see throught that in a blink and than...well..and than all bets are off and just buy gold and put a mattress against your front door.

(in reply to popeye1250)

Profile

Post #: 3

RE: Is There Really a Credit Crunch? - 12/25/2008 1:35:44 PM

LaTigresse

Posts: 26123
Joined: 1/15/2006
Status: offline

That's a good question CL. Personally I haven't a clue as I haven't made any attempt to borrow money since I bought the Mazda a year ago last October. I am also not planning on borrowing any in the near future.

I just remembered that the bank our company banks with, has assured us they are willing to loan anything we should need. However, we are not planning on making any major equipment purchases anytime soon.

< Message edited by LaTigresse -- 12/25/2008 1:38:02 PM >

_____________________________

My twisted, self deprecating, sense of humour, finds alot to laugh about, in your lack of one!

Just because you are well educated, articulate, and can use big, fancy words, properly........does not mean you are right!

(in reply to celticlord2112)

Profile

Post #: 4

RE: Is There Really a Credit Crunch? - 12/25/2008 3:36:14 PM

Owner59

Posts: 17033
Joined: 3/14/2006
From: Dirty Jersey
Status: offline

Many of the business closures and failures are because there in no "commercial paper" available to make monthly/bi-monthly payrolls and deadlines.

This form of short term borrowing by businesses/institutions is their life blood.Many/most business don`t have enough money to cover months and months of over-head,waiting for income streams to arrive.

There`s little to no liquidity in those funds/money pools called "commercial paper"right now.They are locked up.

There are many many forms and types of credit,not just car loans and credit cards.
Ones we never see or know about,but that affect us all the same.

< Message edited by Owner59 -- 12/25/2008 4:02:42 PM >

_____________________________

"As for our common defense, we reject as false the choice between our safety and our ideals"

President Obama

(in reply to LaTigresse)

Profile

Post #: 5

RE: Is There Really a Credit Crunch? - 12/25/2008 3:39:50 PM

Lorr47

Posts: 862
Joined: 3/13/2007
Status: offline

quote:

ORIGINAL: celticlord2112

Is There Really a Credit Crunch?

Ya know, it's a damn good question to ask.....

quote:

But during all of that, there was also persistent anecdotal evidence that lending to credit-worthy borrowers was doing just fine — it seemed every other day some community bank CEO was on CNBC talking about how many loans his institution was making to small businesses and people who wanted to buy cars or houses.

The only particularized area of lending I have read about is lending for "contractors." (not just home builders but anyone building or repairing any type of physical structures) The articles related to Fifth Third which had been player in that area and suddenly cut off everyone, including long term borrowers. The across board cut bankrupted a number of companies including one that was 80 years old and had a good track record. The owner was in Arizona at a conference when the bank cut off everything including credit cards.

(in reply to celticlord2112)

Profile

Post #: 6

RE: Is There Really a Credit Crunch? - 12/25/2008 3:43:50 PM

celticlord2112

Posts: 5732
Status: offline

quote:

The only particularized area of lending I have read about is lending for "contractors." (not just home builders but anyone building or repairing any type of physical structures) The articles related to Fifth Third which had been player in that area and suddenly cut off everyone, including long term borrowers

So is the "credit crunch" a phenomenon primarily of the tanking housing market?

_____________________________

(in reply to Lorr47)

Profile

Post #: 7

RE: Is There Really a Credit Crunch? - 12/25/2008 4:25:33 PM

Lorr47

Posts: 862
Joined: 3/13/2007
Status: offline

quote:

ORIGINAL: celticlord2112

quote:

The only particularized area of lending I have read about is lending for "contractors." (not just home builders but anyone building or repairing any type of physical structures) The articles related to Fifth Third which had been player in that area and suddenly cut off everyone, including long term borrowers

So is the "credit crunch" a phenomenon primarily of the tanking housing market?

No. As I stated several times my daughter purchased about $50,000 stock each year in December on an American Express card and paid it back in January. This year when the account was at a zero, she received a notice that her credit line was reduced to $5,000. She called and asked what she did to cause the reduction and the person told her that she did nothing; that her history would in past years have merited an increase. The person said that American Express simply would not have the money to lend in December..

I thought you were asking about publications that discussed industry wide problems. I particularized my response to various areas of all construction. Is the construction of radio towers and water towers the "housing market?"

The downturn of sales in the semi tractor industry has been linked to the lack of lending. For example, about 42,000 tractors sold by Volvo AB in the third quarter of 2007 vs 155 sold in third quarter of 2008. Sure there is also a demand aspect.

And, there is the best example of no lending ever being in the instance of the Auto Industry vis a vis Wall Street or vis a vis Chapter 11. CL you have admitted that the final lender in that instance probably would have to be the Fed. What happened to Wall Street and all the banks? (Look at your mail sent.)

(in reply to celticlord2112)

Profile

Post #: 8

RE: Is There Really a Credit Crunch? - 12/25/2008 5:12:38 PM

Evility

Posts: 915
Joined: 12/19/2007
Status: offline

No credit crunch at my house. I'm getting more than the usual number of offers in the mail wanting to lend me money. As long as the loan is not for real estate it doesn't seem to be much of a crunch. I wouldn't want to be a real estate investor trying to line up loans right now. They seem to be having a tough time of it.

(in reply to celticlord2112)

Profile

Post #: 9

RE: Is There Really a Credit Crunch? - 12/25/2008 5:32:18 PM

TNstepsout

Posts: 1558
Joined: 8/3/2005
Status: offline

I don't know if there still is, but at one time it was pretty bad. I remember one guy who bought a home in a very high end community to resell. He had a buyer and it was all set to close, but the mortgage company that approved the loan could not get the funding so it fell through. It was a jumbo mortgage, over 400k and was not an isolated incident. We saw a lot of sales fall through. I have noticed that foreclosure homes seem to be selling VERY quickly. It used to be that mortgage companies would own them for 6-8 months, but now they being resold in 3-6 weeks. I guess there has to be money somewhere.

(in reply to Evility)

Profile

Post #: 10

RE: Is There Really a Credit Crunch? - 12/25/2008 6:07:50 PM

ScooterTrash

Posts: 1407
Joined: 1/24/2005
From: Indiana
Status: offline

Personally, I don't have a clue, been debt free for several years and and intend to stay that way. As for the rest of the world, if you believe everything on the news, it's a terrible crunch, but from what I see here and on other forums, it apparently hasn't hit too many on the homefront.

_____________________________

Formal symbolic representation of qualitative entities is doomed to its rightful place of minor significance in a world where flowers and beautiful women abound.
-Albert Einstein

(in reply to celticlord2112)

Profile

Post #: 11

RE: Is There Really a Credit Crunch? - 12/25/2008 6:29:59 PM

Lorr47

Posts: 862
Joined: 3/13/2007
Status: offline

quote:

ORIGINAL: celticlord2112

Is There Really a Credit Crunch?

Ya know, it's a damn good question to ask.....

quote:

But during all of that, there was also persistent anecdotal evidence that lending to credit-worthy borrowers was doing just fine — it seemed every other day some community bank CEO was on CNBC talking about how many loans his institution was making to small businesses and people who wanted to buy cars or houses.

In this thread you are saying that a bank CEO is the source of accurate and truthful information In other threads you say that Wall Street and bankers are scum sucking lying maggots Are you claiming that scum sucking maggots sometimes tell the truth? How can you tell when the CEO is being honest or being a maggot? Oh, this one paid you for the advertising? Since you are in compliance with the conservative principles of Rush Limbaugh journalism that makes it alright. .

(in reply to celticlord2112)

Profile

Post #: 12

RE: Is There Really a Credit Crunch? - 12/25/2008 6:38:24 PM

NormalOutside

Posts: 622
Joined: 1/8/2008
Status: offline

Particularized? ......?

Anyway, never had a call from the credit card company before, but BOTH my Mastercard and Amex earned me a phonecall in November. Amex wanted to let me know I was a few days late with my last payment, and not to do it again. Mastercard froze my account even though I've always kept it up to date, and said I can't unfreeze it until I verify my income, send them a signed form in the mail, blah blah blah. I've had credit cards for 15 years and it would seem like a strange coincidence that the only time they've called me up is the very month the credit bubble burst.

Yes, it's hard to get credit for me right now. If you are all still able to, great, rack up those bills! :)

_____________________________

I won't see your reply, because I don't use this account anymore.

(in reply to Lorr47)

Profile

Post #: 13

RE: Is There Really a Credit Crunch? - 12/25/2008 7:08:06 PM

Lorr47

Posts: 862
Joined: 3/13/2007
Status: offline

quote:

Particularized? ......?

Past tense of verb "particularize." "To be specific about" I was attempting to be be clear in the first reply that I was speaking about the entire construction industry as opposed to the home construction industry. Of course, CL still boiled it down to the home construction industry. Conservatives have a problem distinguishing between what the eyes see and what they want to see. Probably not best word to use but I was watching "Cartoon Carnival" and that took precedence in responding to the nonsensical ruminations of a conservative .

(in reply to NormalOutside)

Profile

Post #: 14

RE: Is There Really a Credit Crunch? - 12/25/2008 7:38:03 PM

celticlord2112

Posts: 5732
Status: offline

quote:

Are you claiming that scum sucking maggots sometimes tell the truth? How can you tell when the CEO is being honest or being a maggot?

Even pathological liars tell the truth on occasion, so it would not surprise me that scum sucking maggots occasionally tell the truth (Democrats, lawyers, and politicians excepted).

Are the bank CEOs being totally honest and forthcoming about their lending? I honestly do not know, and I am not certain I have reliable means to make that determination.

But therein lies the question. If CEOs are being honest, and some banks are lending to some people/businesses, why are other banks not able to lend to those same borrowers, and why are some borrowers no longer able to borrow? Is it truly a "credit crunch" if sub-prime borrowers are no longer allowed to borrow funds where there is a substantial risk of not being repaid? Is it a "credit crunch" or are credit standards merely returning to some baseline norm from which they should never have departed?

Or is the "credit crunch" an expression of the inevitable pain felt in the marketplace as credit availability contracts towards said baseline norm? Are we seeing too little credit, or the come-down from too much?

_____________________________

(in reply to Lorr47)

Profile

Post #: 15

RE: Is There Really a Credit Crunch? - 12/25/2008 7:43:28 PM

popeye1250

Posts: 18104
Joined: 1/27/2006
From: New Hampshire
Status: offline

quote:

ORIGINAL: Lorr47

quote:

Particularized? ......?

Past tense of verb "particularize." "To be specific about" I was attempting to be be clear in the first reply that I was speaking about the entire construction industry as opposed to the home construction industry. Of course, CL still boiled it down to the home construction industry. Conservatives have a problem distinguishing between what the eyes see and what they want to see. Probably not best word to use but I was watching "Cartoon Carnival" and that took precedence in responding to the nonsensical ruminations of a conservative .

Lorr, to be fair you could apply the above to liberals and lefties also.

_____________________________

"But Your Honor, this is not a Jury of my Peers, these people are all decent, honest, law-abiding citizens!"

(in reply to Lorr47)

Profile

Post #: 16

RE: Is There Really a Credit Crunch? - 12/25/2008 10:07:32 PM

Lorr47

Posts: 862
Joined: 3/13/2007
Status: offline

quote:

ORIGINAL: celticlord2112

quote:

Are you claiming that scum sucking maggots sometimes tell the truth? How can you tell when the CEO is being honest or being a maggot?

Even pathological liars tell the truth on occasion, so it would not surprise me that scum sucking maggots occasionally tell the truth (Democrats, lawyers, and politicians excepted).

I am not a "democrat" per se or a politician. I have become an ultra liberal but given my beliefs the democratic party would not want to be associated with me. I believe when I characterized myself the other night I said: from the Corp to SDS to Libertarian to Anarchist. I consider violence an acceptable means to effectuate an end to human suffering. I consider Obama the best last chance to achieve those ends peacefully.

Calling me a "politician?" Where is my glove and the dueling pistols.

Are the bank CEOs being totally honest and forthcoming about their lending? I honestly do not know, and I am not certain I have reliable means to make that determination.

You are being disingenuous: In numerous threads you call bankers dishonest, lying and scum sucking maggots and then when you need "authority" you cite bankers as an honest source of irrefutable fact?

But therein lies the question. If CEOs are being honest, and some banks are lending to some people/businesses, why are other banks not able to lend to those same borrowers, and why are some borrowers no longer able to borrow? Is it truly a "credit crunch" if sub-prime borrowers are no longer allowed to borrow funds where there is a substantial risk of not being repaid? Is it a "credit crunch" or are credit standards merely returning to some baseline norm from which they should never have departed?

I believe one of my first examples above was my daughter. Let's use my daughter's experience. Let's see. Is she a "sub prime" maggot who has preyed on your poor mortgage brokers and bankers? Well maybe not. Her net worth is over $1,000,000; she owns her own home worth $500,000 free and clear; she is purchasing another home of comparable worth nearby for her x husband so her daughter has a nice place for visitation; and she owns her business outright; including the building, free and clear. Oh yes, when American Express said that it wouldn't have the money to loan this year, she took the money out of a savings account. How does she fit into your category of a sub prime maggot borrower preying on your poor bankers and who is not a good risk? The difference between me and you is that I continuously hate bankers, wall street types and most conservatives (excepting Pat Buchanan and Greenspan). I seldom switch. (And yes my daughter contributed to Obama, worked at Obama's office up to the election and worked with Obama's office on election day on the street getting the vote out. She has great karma.)

Or is the "credit crunch" an expression of the inevitable pain felt in the marketplace as credit availability contracts towards said baseline norm? Are we seeing too little credit, or the come-down from too much?

The intellectual honesty of your question reminds me of another conservative on this site who called the CEOs of the Auto makers "Liberals." In any case, are you angling for a statement that this entire economic crises is merely a correction? By your definition is a depression merely a correction?

I almost made it to mid night and then you went and did it again. I was more conservative than you less than a decade ago. Then I started working with the poor. As I started to hate the causes of the suffering; I started hating conservatives. You do not appreciate what is happening because you are not suffering yourself and you do not see those who are suffering. Name one way this depression impacts you.

Hippiekinkster: " Average people who are one paycheck away from crashing are invisible to righties except when they want their vote or their money."

Well put. Amen.

CL, Merry Christmas.

< Message edited by Lorr47 -- 12/25/2008 10:49:19 PM >

(in reply to celticlord2112)

Profile

Post #: 17

RE: Is There Really a Credit Crunch? - 12/25/2008 10:14:11 PM

Lorr47

Posts: 862
Joined: 3/13/2007
Status: offline

quote:

ORIGINAL: popeye1250

quote:

ORIGINAL: Lorr47

quote:

Particularized? ......?

Past tense of verb "particularize." "To be specific about" I was attempting to be be clear in the first reply that I was speaking about the entire construction industry as opposed to the home construction industry. Of course, CL still boiled it down to the home construction industry. Conservatives have a problem distinguishing between what the eyes see and what they want to see. Probably not best word to use but I was watching "Cartoon Carnival" and that took precedence in responding to the nonsensical ruminations of a conservative .

Lorr, to be fair you could apply the above to liberals and lefties also.

Popeye, when I deal with CL the concept of "fairness" disappears.

< Message edited by Lorr47 -- 12/25/2008 10:42:23 PM >

(in reply to popeye1250)

Profile

Post #: 18

RE: Is There Really a Credit Crunch? - 12/25/2008 10:52:10 PM

celticlord2112

Posts: 5732
Status: offline

quote:

By your definition is a depression merely a correction?

Strictly speaking, yes. Economic contractions are necessary to restore equilibrium in the system.

_____________________________

(in reply to Lorr47)

Profile

Post #: 19

RE: Is There Really a Credit Crunch? - 12/25/2008 10:59:49 PM

celticlord2112

Posts: 5732
Status: offline

quote:

Name one way this depression impacts you.

I'll name several:

Clients go out of business.
Clients cancel/delay projects
When cultivating new clients I am under greater pressure to discount my rates

The first two represent a decrease in the aggregate hours my company bills every month. The third means I have to bill more hours to sustain a given revenue level. Each of them means less money coming in.

Lean economic times have a dramatic effect on my business. As the business owner, my responsibility is to respond to changing circumstance, and to adapt. 2009 is not likely to be a banner year for my company, but I am in no way, shape, or form, going to just give up and go under. It may be a difficult year, but it will be a survivable year, and I am determined to be in business come 2010.

_____________________________

(in reply to Lorr47)

Profile

Post #: 20