jbde

The Smoking Gun of the Credit Crisis: FICO

And now FICO's are the problem. Everyone is now on the 'tightening of lending rules' bandwagon. Thus lenders immediately limit the market of buyers.
Second, as more and more people have problems, the avergae scores are dropping.
At some point creditors [sellers] will have to lower credit standards or the markets for houses, cars, white-goods and furniture will continue to shrink. Of course they can lower prices. Not just offer lower priced options, but lower prices on the same item - costs are dropping.

And what about the car pirces? House prices come down, commodity prices come down - even food us dropping as shipping costs are lower.

But not those car prices. Discounting is not lowering. When someone actually lowers prices on an established model instead of giving rebates, they will set the new trend as telling it like it is. Peopl will flock to the truth-teller.

As for US legacy employment costs, the unions have caused a wage bubble - no forklift operator should be getting $103K. No person who attaches part A to part B should be getting a 73K package.

There is only one solution - you have to get rid of the union contracts and BR is the only way.
The government then has to do two things - guarantee car warrantees and underwrite the mortgages of the autoworkers who have bought based on their inflated wages and will require mortgage assistance,

This is the cheapest way out! Otherwise, they come back to the trough.