I am wondering about the accuracy of the media’s reports regarding the supposed tightening of credit markets and credit lines for individuals and small businesses. In my area, banks and other lending institutions have been heavily bombarding the radio and tv with ads stating that there is no credit crunch, that they have ample money to lend, that if you could have gotten a loan a year ago, you still can, etc. -basically they are begging people to come in and get a loan for everything from a house to a car to a 0 personal loan!
Also, the media’s reports of a tightening of credit card lines also seems to be a fable. I have talked to various individuals in my area and have discovered that 4 of my friends and family have had their credit lines automatically increased on their credit cards and so have those of several small business owners that I have talked with.
"Maybe" this is a result of the 700 B. TARP, but I am doubtful of that since one of the major lenders to GM shut down their credit line even when it was looking like they would get their bailout loan (or maybe the lender was just scared to lend to a failing company facing bankruptcy, but I digress).
I am just wondering basically if anyone else is seeing such a push in their local area from lenders trying hard to get people to borrow money. Has anyone seen this? If not, what is the situation that you are seeing. I am on the east coast, by the way.
Bank are still loaning money, but the are being much more picky about who they lend to and under what conditions, You can still get a mortgage but most banks want 20% down, and they are offering credit cards to people who are good credit risks but cutting back on the limits for many people with less than perfect credit ratings. I am getting more offers in the mail, but my son who is a student is no longer getting any. The difference in the interest rates on cooperate bonds and US treasure bonds is at a record high levels and the 3 month treasury sold at auction monday with a zero rate of interest. The interest rates on bank to bank loans (LIBOR) only fell after bail out which allow banks to move money, so thing are getting better but they are still not back to normal.
V. interesting! Yes, it’s true, I’ve seen a lot of advertising for loans here in Japan, too. Not necessarily more than normal, but it hasn’t really tapered off.
I think any smart person knows that this is NOT the time to get a loan, so the banks may be getting desperate for customers, and trying to drum up more business. Which is maybe a good thing for the bank, but NOT a good thing for the poor guy who just got a loan, and now has the sword of a bad economy hanging over his/her head.
In general, I don’t think the economic woes are being exaggerated; I think some hard times are ahead. But, I think the game is being played out in some weird ways before the real crunch hits.