Credit continues to tighten

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fffresh
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Credit continues to tighten

Postby fffresh » Wed Oct 07, 2009 3:46 pm

A report issued by the Fed today shows that consumer credit continues to to be restricted; dropping at a nearly 6% annual rate.

U.S. Consumer Credit Fell By $12 Billion in August (Update1) - Bloomberg.com

Take into account inflation and the fact that available credit is going down by tens of billions of dollars every month makes and it appears we are really getting the short end of the stick when it comes to all this bailout money we gave the banks.


DoingHomework
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Postby DoingHomework » Wed Oct 07, 2009 4:05 pm

fffresh wrote:A report issued by the Fed today shows that consumer credit continues to to be restricted; dropping at a nearly 6% annual rate.

U.S. Consumer Credit Fell By $12 Billion in August (Update1) - Bloomberg.com

Take into account inflation and the fact that available credit is going down by tens of billions of dollars every month makes and it appears we are really getting the short end of the stick when it comes to all this bailout money we gave the banks.


If this is the same effect I think it is the reason is NOT because people are being denied credit. The "problem" is that people are saving more and paying down their credit cards.

When people spend less it is good for them individually but bad for the overall economy in the short term.

“Demand for credit has just gone through the floor,” is a key quote from the article. It is not supply of credit from banks that is the problem. It is demand from consumers.

We HAVE gotten the short end of the stick in the bailout.

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Mogul of Pineapples
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Postby Mogul of Pineapples » Fri Oct 16, 2009 12:18 am

That's true.

It's the age old story that the banks only want to lend money to people that don't need it.
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Postby idmd » Sun Oct 18, 2009 8:25 am

DoingHomework wrote:If this is the same effect I think it is the reason is NOT because people are being denied credit. The "problem" is that people are saving more and paying down their credit cards.

When people spend less it is good for them individually but bad for the overall economy in the short term.

“Demand for credit has just gone through the floor,” is a key quote from the article. It is not supply of credit from banks that is the problem. It is demand from consumers.

We HAVE gotten the short end of the stick in the bailout.


Yeah, last month there was an article (can't remember where) talking about how US consumers had decreased their revolving credit debts at a much faster rate than economists had projected. My initial response was, "wow, people are finally taking responsibility for themselves, great". Unfortunately much of that reduced debt burden was in the form of write offs from the CC companies and even the debt being paid down legitimately is a bad sign for the economy.

It's one of those damned it you do and damned if you don't

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Postby 1bootcamp » Wed Oct 21, 2009 3:04 am

I just got a notice that the line of credit on my American Express Blue card is being cut.



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