35 replies to this topic

[U.F.O.]

The credit crisis is a ploy to get a version of debt forgiveness, if you will, through the Congress. In order to get a premium for their underwater securities, tier one financials, via Paulson, quit lending downstream. Now they have their hands on (or will) 800bb of our money. We got screwed...once again. U.F.O.

[AChartist]

There is a psychological effect of overspending during inflation because it
costs more tomorrow, if that is continuing it is a remnant of a 6 year habit.
It's a deflation now, which follows an inflation, but they dont know it yet.

hey james. I don't think credit crisis means credit cards.

Try checking out about 100 businesses or so in various sizes from 10 million in revenue to maybe a 1 billion in revenue. Many of my customers fall into that range, and they are having difficulty getting short term borrowings in which they need to operate. Not all of course but a surprising number. Some have trouble meeting payrolls because of it. Silly thing_ they have cash in the bank. Consumer credit is a different animal. Also try getting cash at your local bank and ask to withdraw more than $10,000. I bet ya $100 they don't have it. You will have to have it special ordered. I've been making the rounds and there are several banks in our area with the same problems.

depositors are withdrawing. many are taking smal chunks $5000 to $10,000 at a time over days, and just doing it repeatedly.

Why do you think Bushie is wanting to guarantee all deposits in full ? Because withdrawals are heavy. They get larger as the market falls.

They can't stop the hemoraging of money flow out of the banks but they are also loathe to report on it, bc they don't more people to do it and panic. One thing i believe is happening also, is that many people are keeping the money out of the banks and maybe buying silver or gold, but then also spending the money too. Maybe that is what you are seeing as far as a business pick up at the malls and such.

Its subconscious. People are spending as a last hurrah of sorts before the big depression. Might as well spend it while the dola is worth something.
Im spending a lot and doing my darndest to keep the economy afloat. i suggest you all do the same. the dola will be toilet paper soon. Might as well buy [bleeeep] while you can afford it.

[James Quillian]

nimblebear
All of that is what I keep hearing. The deal is that if it was happening, M1 would be falling.

Talking about businesses that can't borrow is like Robin Hoods men talking about ghosts. They knew they there, no one had ever seen one but there was no doubt that they were in the forest.

Its time to start naming some names and putting numbers on the table.
And, if people are withdrawing cash from banks, lets look at the overall numbers.

All of the numbers I can get show that there is plenty of liquidity and plenty of lending.

James

hey james. I don't think credit crisis means credit cards.

Try checking out about 100 businesses or so in various sizes from 10 million in revenue to maybe a 1 billion in revenue. Many of my customers fall into that range, and they are having difficulty getting short term borrowings in which they need to operate. Not all of course but a surprising number. Some have trouble meeting payrolls because of it. Silly thing_ they have cash in the bank. Consumer credit is a different animal. Also try getting cash at your local bank and ask to withdraw more than $10,000. I bet ya $100 they don't have it. You will have to have it special ordered. I've been making the rounds and there are several banks in our area with the same problems.

depositors are withdrawing. many are taking smal chunks $5000 to $10,000 at a time over days, and just doing it repeatedly.

Why do you think Bushie is wanting to guarantee all deposits in full ? Because withdrawals are heavy. They get larger as the market falls.

They can't stop the hemoraging of money flow out of the banks but they are also loathe to report on it, bc they don't more people to do it and panic. One thing i believe is happening also, is that many people are keeping the money out of the banks and maybe buying silver or gold, but then also spending the money too. Maybe that is what you are seeing as far as a business pick up at the malls and such.

Its subconscious. People are spending as a last hurrah of sorts before the big depression. Might as well spend it while the dola is worth something.
Im spending a lot and doing my darndest to keep the economy afloat. i suggest you all do the same. the dola will be toilet paper soon. Might as well buy [bleeeep] while you can afford it.

Edited by James Quillian, 11 October 2008 - 06:59 PM.

[securelstmile]

While I agree with everyone here, I have not seen signs of a credit crunch in my very small world. I have the same offers for from credit cards. I have a very good friend who is a small business owner who said he has seen this coming for months due to the credit squeeze. I also know that the ease and tightness of credit is cyclical and it always swings from very easy credit to very tight credit. Anyone who has been investing in real estate over the last 20 years knows this. So, I am left to wonder, is it something we will see later. Not that this has anything to do with stocks. Credit was still pretty loose in 87 during the crash but got tight in the early 90s. As I recall.

[outsider]

No problem getting 15k cash from my credit union in San Antonio yesterday. Ironically, putting it back in cash later may be more troublesome if they are still flagging >10k deposits... Out

[atlasshrugged]

No problem getting 15k cash from my credit union in San Antonio yesterday. Ironically, putting it back in cash later may be more troublesome if they are still flagging >10k deposits...

Out

darn outsider...taking a trip to mexico are we???

[IndexTrader]

I too get consistent credit card offers. But I would also say that I have not taken any of them. Nor do any of the other posters in the thread say they have taken any. The point is that banks may well have ongoing advertising that does not jive with what they're actually doing. During the Countrywide debacle, I got repeated offers for credit lines secured by a second mortgage on an investment property I own. No appraisal. No income verification, etc etc. I didn't pursue it, but I'd have to believe this advertising was not factual. My sources tell me that credit is available right now to people who have good credit. What has happened though is that credit has tightened relative to where it was prior to this. If you want to do a subprime loan, you're probably not going to get one right now. If you want to buy a car and your credit is not all that good, you're probably not going to get one. I hear annecdotal stories about credit lines being reduced...I hear alot of those. I also hear you can still get working credit lines (as opposed to personal credit lines), but the terms have tightened significantly. I don't think there's any doubt that credit has tightened (meaning restricted to those with less than very good credit). I can't explain why M1 shows what it does. But I find it amusing James that you actually believe the government numbers after some of your prior postings. Government is clearly adding liquidity. Whether it is being used in the manner they all hope however is another question. Everyone is fearful...including bankers. IT

[James Quillian]

I can't explain why M1 shows what it does. But I find it amusing James that you actually believe the government numbers after some of your prior postings.

I don't think that M1 can be faked. If the Fed is lying about M1 then I'm not sure about anything. It certainly isn't a phantom number.
M1 cannot increase unless credit is expanding. Maybe it is the non anointed who are getting money but credit is still expanding.

The only arguments that I have seen that there actually is a credit crisis are based on what is called the fallacy of composition.
That is, pointing to a few occurances of something happening and concluding that what was observed is happening everywhere. Its like finding poor old Joe who has lost his mortgage crying and assuming that everyone is losing his mortgage.
There is just no evidence being offered that money is not being lent. I have been waiting for months to see some evidence. I don't think our lawmakers saw any either. There isn't any evidence.
This is a simple case of passing losses.

[outsider]

Stories of all immigration going down, repatriation increasing. Now it will be interesting to see how Americans would react if Mexico and Canada decide to build walls to keep Americans out.

Out

No problem getting 15k cash from my credit union in San Antonio yesterday. Ironically, putting it back in cash later may be more troublesome if they are still flagging >10k deposits...

Out

darn outsider...taking a trip to mexico are we???

[bullshort]

okay. let's say there is no credit crisis here or abroad. just why exactly do you figure we are being lied to ?

ed rader

Ed
You tell us. I'd like to hear your take. The record for two straight weeks in M1 indicates that everyone is lending with both hands. I can be taught. All I need are a few facts.
With respect to the 90 billion or so increase in M1 during the last two reporting periods, I suppose it could be the sum of two mammoth sized deposits by the fed and its sitting in dealer accounts unlent.
Unless that is the case, M1 cannot increase unless money is being loaned. It is not possible mathematically

James

James,

I'm not seeing the same statistics you are. Perhaps you can explain. I see the 90 billion increase in M1 as reported by the Fed for the two weeks ended 9/29/08. But I also see that government borrowing increased by some 262 billion over that same period, as reported at http://www.treasuryd...ov/NP/NPGateway

That implies a net reduction in private lending of some 170 billion. What am I missing?

Bullshort