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Discussion Starter · #1 ·
"The credit crunch is not nearly as severe as the U.S. authorities appear to believe and public data actually suggest world credit markets are functioning remarkably well, a report released on Thursday says.

As a result, governments are pumping masses of public money into the economy across the world because of the difficulties of a few big, vocal banks and industries such as car manufacturing, which would be in difficulty anyway, according to the report published by Celent, a financial services consultancy."


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"All of which drove the Celent report to conclude that the U.S. and other governments may be throwing good money after bad for want of a better idea of what is really happening.

"Just like a doctor contemplating an obviously sick and suffering patient, a massive surgical intervention based on a misdiagnosis can only worsen the patient's condition."


I have the bail out blues
:
 

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I keep waiting to wake up from this economic crisis and find that it was all a bad dream!
But I dunno. I think the crisis is real.

When I was in college, I remember my jackass unemployed friends getting 10,000 dollar credit lines and wondering, "What the hell is Mastercard thinking?" I didn't get one cause I was scared sh!tless after my roommates brother found that he was twenty thousand dollars in debt at age 21 cause he'd go to Mexico, buy techno toys, DRINKS FOR EVERYBODY, etc on a card with huge interest. Another (nemesis friend of a friend) had to screen his calls for the collection agency. I remember at the time thinking there must be some long-term consequence for the credit card companies, and I barely understood personal finances.

I would LOVE for this credit crunch to be an overblown press story, but I doubt it.
 

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Discussion Starter · #3 ·
I do think we have a credit crisis in the fact that there is an alarming number of people who are seriously in debt (ususally starting in college).

What I see in my life, is the bank I work for still willing to make loans. I get credit card aps in the mail weekly. I also see the banks being more cautious to who they loan, as they should have been all along.

In addition, the number of people who want to borrow right now (who have good credit) is down. People are worried about losing their job, so they are not rushing down to the bank to get a Home Eq loan, new car loan, etc.

What I am wondering is if the credit crunch we are hearing about is really the banks who made bad investments not having the resources to covers their behinds, therefore other banks are not lending to them because they know those institutions are in trouble.

I don't have a full understanding, but the reality I see in my life does not match with the "credit crunch" that is talked about in the news, so I have to question it.

Maybe its true, but I gotta hold an open mind.
 

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That is a debt crunch, not a credit crunch. A debt crunch is when businesses and consumers are so overextended that they (we) stop or reduce borrowing. A credit crunch is when banks refuse to lend for whatever reason. We have the former, but the latter is concentrated in only a few banks.
 
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