vagrant_joe

The Dysfunctional Credit Market

Hi Felix, I enjoy reading your articles although I don't always agree with them. In this instance, maybe we could be more clear as far a WHO's credit is drying up.

By saying that credit in general is drying up, we ignore very interesting data issued a week and a half ago from the Fed showing EXACTLY the OPPOSITE
-as in Mark Perry's article earlier today (seekingalpha.com/artic...).

Someone is lying. Either the data is wrong (from the FED) or Paulson et. al. is wrong. Someone's shoveling crap and I wouldn't be surprised to see it be either one.

Close to me, my brother & some of my friends have had no problem getting approved for home-loans recently and my ex-girlfriend just got approved for a $350k loan -even though she's only been working at her job for 8 mos. with no prior history in the field (she's a nurse). Not bad for a dried up credit market with gears that have ground to a halt and no-one trusts anyone anymore.

I don't see credit drying up. I see the Fed pumping a TON of money into the system, pulling off these bogus "swaps" with other central banks to lull folks into thinking the currency isn't being devalued at the same time, and I see more and more people that have worked themselves into a position of becoming uncreditworthy (defaulting on home loans and not paying credit card bills had that sort of consequence way before Paulson yelled "fire" in a crowded building).

So, many banks have worked themselves into that same uncreditworthy situation that many of their borrowers had. It happens. I wouldn't lend a buddy money again if he didn't pay me back the first time & did the same thing with 11 other buddies. And so it is between banks -maybe. Either they get their life/business together and make some cuts in the surpluses of their lives (inflated bonus's, branches on every corner, fancy lighting and fancy buildings) or they declare bankruptcy (like their customers) and someone else gets those branches, lighting, and buildings. Life goes on. Nothing to see here. Just a few folks waving socialist flags and having a little parade -hey, there's my congressman... that bastard...!