Thread: Credit continues to tighten

A report issued by the Fed today shows that consumer credit continues to to be restricted; dropping at a nearly 6% annual rate.

U.S. Consumer Credit Fell By $12 Billion in August (Update1) - Bloomberg.com

Take into account inflation and the fact that available credit is going down by tens of billions of dollars every month makes and it appears we are really getting the short end of the stick when it comes to all this bailout money we gave the banks.

Originally Posted by fffresh

A report issued by the Fed today shows that consumer credit continues to to be restricted; dropping at a nearly 6% annual rate.

U.S. Consumer Credit Fell By $12 Billion in August (Update1) - Bloomberg.com

Take into account inflation and the fact that available credit is going down by tens of billions of dollars every month makes and it appears we are really getting the short end of the stick when it comes to all this bailout money we gave the banks.

If this is the same effect I think it is the reason is NOT because people are being denied credit. The "problem" is that people are saving more and paying down their credit cards.

When people spend less it is good for them individually but bad for the overall economy in the short term.

“Demand for credit has just gone through the floor,” is a key quote from the article. It is not supply of credit from banks that is the problem. It is demand from consumers.

We HAVE gotten the short end of the stick in the bailout.

Originally Posted by DoingHomework

If this is the same effect I think it is the reason is NOT because people are being denied credit. The "problem" is that people are saving more and paying down their credit cards.

When people spend less it is good for them individually but bad for the overall economy in the short term.

“Demand for credit has just gone through the floor,” is a key quote from the article. It is not supply of credit from banks that is the problem. It is demand from consumers.

We HAVE gotten the short end of the stick in the bailout.

Yeah, last month there was an article (can't remember where) talking about how US consumers had decreased their revolving credit debts at a much faster rate than economists had projected. My initial response was, "wow, people are finally taking responsibility for themselves, great". Unfortunately much of that reduced debt burden was in the form of write offs from the CC companies and even the debt being paid down legitimately is a bad sign for the economy.

It's one of those damned it you do and damned if you don't

I just got a notice that the line of credit on my American Express Blue card is being cut.