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Has the Credit Crunch Affected You Yet?

Our Ask the Readers A Question About the Current Crisis went so well yesterday, we thought we'd try it again today.

The heart of this crisis is the seizure of the credit market -- lawmakers and financiers are saying that if the proposed $700 billion Wall Street rescue plan is not passed, regular folks won't be able to get car or student loans, and businesses won't be able to get loans to meet payroll, buy merchandise and so forth.

We'd like to hear from you, particularly if you own or manage a small business.

Here's the question: Have you felt the effects of the tightening credit market yet and, if so, what steps have you taken in response?

As with our question yesterday, we'll post all of your comments then, at the end of the day, we'll summarize them in another blog entry and reprint some of your greatest hits.

-- Frank Ahrens

By Frank Ahrens  |  October 1, 2008; 1:43 PM ET
Categories:  The Ticker  
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Next: Breaking: House To Vote Friday on Rescue Bill

Comments

Well my stock portfolio is down even after the market rebound. Maybe I'm not as diversified as I should be. But with all these expert opinions out there I don't know if it will or how much it will. In principle I don't believe in bailouts for big companies but ultimately I know I'll be affected one way or another. It'd be nice if someone put all in this plain english but not in little words thinking I'm stupid. I get this things just am not a financial expert.

Posted by: Confused | October 1, 1908 1:53 PM | Report abuse

I haven't tried to take out a loan in the past couple of weeks (who in their right mind would?), so I can't address the question directly (although the low-rate credit card offers keep coming in the mail, if that is any indication). But here is what I don't get: If the problem that got us into this mess was too many easy, cheap, "toxic" loans, it is hard to believe that a solution that involves taxpayers buying up these toxic loans so that banks can extend more easy, cheap credit -- to one another and to us --could possibly fix the problem. How could making it easier for banks to offer loans fix a problem generated by too much borrowing?

Posted by: Not convinced | October 1, 1908 1:53 PM | Report abuse

www.daveramsey.com. Cash is King!

Posted by: Anonymous | October 1, 1908 1:59 PM | Report abuse

i think the lobb is pushing the president to get the taxpayers to bailout the rich they know their is enough people wih money buy all the banks and othersif they had a firesale i vote dont bail them out if they do vote ever body in office out

Posted by: frank bailey | October 1, 1908 2:09 PM | Report abuse

Not really. I have a sense that things have tightened up and wouldn't dream of seeking a loan right now. But if this is going to have an effect on those of us at the bottom, it will take a little time. There have been no immediate layoffs, and no immediate shortages of cash flow. And it does make you wonder if the opponents to the bailout are right: that no bailout is really just going to be a necessary adjustment for risky behavior. How can the average person tell when even the leading economists disagree?

Posted by: olav | October 1, 1908 2:10 PM | Report abuse

Even if the bailout passes, it doesn't address the fundamental underlying issue.

The majority in this country 'LIVES BEYOND THEIR MEANS.'

Credit is the culprit here. The more credit you extend the more prices go up. People in this country need to start living within their pay class, not beyond it. There is a saying 'DONT BUY STUFF YOU CAN'T AFFORD' and that holds true here. This is what got us into the housing mess.

We had many millions of people who had no business buying a house. The safe guards of the banks were broken. When you can't afford a house, someone at the bank is supposed to tell you, I'm sorry, but you just don't qualify because you don't have X saved and your job only pays Y amount. That was gone. We also had people lying about their salaries but again, that should have been checked by the banks. Down payments should not have been able to be loans...they should have had to be cash in hand. All these things along with others (Fake appraisals, insider schemes to inflate values) cause the housing mess which is also tied into the credit mess. The housing market in NOVA, DC is EXTREMELY over-valued and honestly going to crash hard. When you have 1BR condos in Arlington going for $400k and yet those same condos were $150K and amazingly, all condo projects have been ceased, what do you think really happened here and what else do you think is going to occur...a SERIOUS correction.

You want things to even out, well thats not going to happen for years and years. This will be a long drawn out recession because the last 8 years were nothing more then an elaborate pyramid scheme on credit.

Posted by: James (Arlington, VA) | October 1, 1908 2:12 PM | Report abuse

why isnt congresss investigating fanny and freddy, they investigate nine justices being fired, they investigate who outed valerie plame, they investigate our own military, they even investigated steriods in baseball for heavens sake, WHERE ARE THE INVESTIGATIONS? why doesnt media outlets like this one not look into it? kinda makes you wonder why everythone is trying to sweep all this under the rug. try checking into who tried to point out problems within these companies four years ago, and check to see who defended them and where they are now, i dare you.

Posted by: annoyed | October 1, 1908 2:13 PM | Report abuse

if the credit market is freezing up as they say how is the govt going to BORROW the 700 billions to give back to the market? oh I get it the govt is creditworthy. so it's not the lack of money that is the problem. it's the quality of the borrowers that is.

so how does giving WS 700 billions make the borrowers better risk?

Posted by: Anonymous | October 1, 1908 2:14 PM | Report abuse

Well, I don't know about most everyone else out there, but I've been feeling the economic downturn for a least a couple of years. It didn't help that since Reagan was in office, everything that the already wealthy could do to maximize their wealth at taxpayer expense has breezed through a comlpliant one party system. More to the point:

I can’t begin to state my outrage. Suffice it to say that the wording of this bill, in more instances than I can mention here, is enough to move me toward a revolutionary mindset. Any changes to the bill in order to garner a majority in any future vote that do not treat the Wall Street manipulators as the criminals they are will result in my active opposition.

That the investor class would so brazenly and crassly manipulate the “people’s” government is sickening to behold. Any elected politician that has aligned themselves with the investing class against the legitimate interests of the people as a whole in this, and other related matters, is, in my opinion, a traitor – and should be prosecuted as such.

There is only so much I am willing to countenance. I expect a certain level of graft – there’s a tradition of it going back to before the founding of our country, but it has now gotten out of hand. Imagine the audacity of those who would decide my future for me – without my own input into the conversation. It is outrageous, and unacceptable.

Posted by: QT | October 1, 1908 2:15 PM | Report abuse

so the bill failed on Monday. and they will lard it up with goodies to get more congressmen to vote for it again. the usual democracy in action in DC eh? throw all the bums out. the whole thing is a scam. a scare tactics just like iraq. except this time they will blow thru the money in six months instead of six years.

Posted by: Anonymous | October 1, 1908 2:21 PM | Report abuse

I have lost almost 20% of my life savings. I am retired and rely on Social Security and a modest portfolio of investments to maintain a modest lifestyle.

My portfolio was diversified among different asset classes and according to the "experts" advising me conservative and pretty secure. Several times over the past year I asked "shouldn't I go to cash." They said "No. We'll take care of you and you will be OK over the long haul." Ha!!!

I have virtually no prospect for making any more money working. So even if in 10 years I get back what I lost over the recent weeks, it is likely my twilight years will be far more modest than now or I had planned for.

Anyone in my situation - and there must be hundreds of thousands across the US - faces the same bleak prospects.

The USA has been living on borrowed time and borrowed money for almost two decades. No one in politics, the media or business has had the courage to tell the truth.

I am ashamed of what the country I love has done to itself. It is surely not morning in America. Unless radical change comes soon, a long cold and hard midnight may be what we all face.

Posted by: Richard Rust | October 1, 1908 2:29 PM | Report abuse

I got a 20% increase in my Mastercard credit limit on Monday. Yesterday I got some of those 0% special offer checks in the mail from another credit card. Discover is harassing me to transfer balances to their card.

Looks to me like responsible borrowers and responsible lenders have no problem getting credit. If the irresponsible are having trouble, that's their problem. Yes, there will be a ripple effect if bad borrowers can't get loans to finance their foolish purposes. It's time to clear that dead wood out of the economy, and stop pretending that we're wealthy when we're living on borrowed money.

Posted by: AK | October 1, 1908 2:31 PM | Report abuse

"Some argue against debt as an instrument and institution, on a personal, family, social, corporate and governmental level. Islam forbids lending with interest even today, while the Catholic church allowed it from 1822 onwards, and the Torah states that all debts should be erased every 7 years and every 50 years."-- Wikipedia

I learned early that being in debt was painful. As a young single parent of two. I found that the credit cards, the mortgage and the car payment were painful burdens. The interest, fees, late payments consumed most of my free money and there was little extra for the kids.

I set out to be free of debt. It took a few years but I payed it all off. Now I own everything free and clear. I am able to run a technology company without debt. I am able to run my life with out debt.

In our society, the money lenders would have everyone believe that one can not do without them. I am here to say, "Yes you can" and you will be richer for it.

Frederick

Posted by: Frederick | October 1, 1908 2:33 PM | Report abuse

"I have lost almost 20% of my life savings."

See, that's part of the problem right there: you didn't lose 20% of your "life savings." The imaginary value of some imaginary assets went down an imaginary 20%. Your "life savings" was just numbers on a computer screen. And those were inflated as high as they were by buying products and services on credit.

You didn't lose 20%. You never had it in the first place!

Posted by: AK | October 1, 1908 2:35 PM | Report abuse

Question:
Wouldn't it be much better to wait for the new president to take action in this crisis?
After all.... even if the rescue plan get's the go ahead tonight or Friday.... the results will not start paying off before the inauguration in January now will they? And the new president will be stuck with a solution he might not even have supported in the first place.
It's only what.... 5 weeks till the election starts?
I'm sure this crisis will not be solved in 5 weeks, nor will it be solved in 5 months; bail out or no.
I say vote no and wait for the new president to settle the matter.

Posted by: Just Me | October 1, 1908 2:37 PM | Report abuse

because when the money is gone with bush they will escape the blame. they hope. these two NEW guys don't dare take a firm stand right now. so much for maverickity and changity we can believe in.

Posted by: Anonymous | October 1, 1908 2:43 PM | Report abuse

Not really any big effect to date. Pretty much living on a pay as you go system now (that was not always the case). However taxes are high. Despite lots of deductions, we are still paying around 25k in taxes per year.

Posted by: Anonymous | October 1, 1908 2:43 PM | Report abuse

Economically speaking, the current conditions could very well be our century’s definitive black swan for Wall Street. Even though productivity hasn’t been immeasurably hit yet, one can only hope government intervention will assuage what appears to be almost certain gridlock for credit lines between banks and corporations. However, government intervention that doesn’t account for further behavior involving moral hazard is misguided, but there really isn’t a lot of time left. I simply hope something is done soon.

Posted by: Ben Zavadoski | October 1, 1908 2:45 PM | Report abuse

The bailout is a very bad plan!!!

Posted by: nancy nichols | October 1, 1908 2:49 PM | Report abuse

that's why they now call it a rescue plan. lipstick on a pig.

Posted by: Anonymous | October 1, 1908 2:51 PM | Report abuse

It hasn't affected me much, not really looking to buy anything anyway. Everything else has gone up so much that it's harder just to get by for the month, if you look at food and fuel costs, by the end of the year you're ending up with less.
The small company I work for has showed a considerable slowdown, it's a heating and a/c company, not involved with new construction. People are generally nervous about spending large amounts of money on anything. We've been taxed out of existence here in the Chicago area, time to move out of here soon!

Posted by: Davesopinion | October 1, 1908 3:07 PM | Report abuse

Anyone think this was a plan when the Republicans figured out they might be out of office in January. they brought this to light to predict doom and request money as a last ditch effort to swindle the taxpayer before being voted out of office.

Posted by: dcm | October 1, 1908 3:17 PM | Report abuse

I lost money in mutual funds, but it was well worth it to finally see Congress listening to voters, R & D alike. A big step for democracy.
Like many others, I know very well that the economy needs fresh capital, but not with a shotgun bailout to buy up trash from financial institutions that made billions from the bubble party.

Posted by: a loss for the better | October 1, 1908 3:20 PM | Report abuse

I am appalled at the insensitivity exhibited by so many in this country. I've got mine- go find a way to get yours. It is unfair to blame new homeowners as the source of this nightmare. They didn't stand a chance to buy a home they could afford because of the bad advice from the regulation free predatory lenders. Shame on all of you!

Posted by: Lorraine | October 1, 1908 3:32 PM | Report abuse

Ironically, I received an unrequested e-mail from my credit card company yesterday telling me that my credit limit was being increased by about $10,000 for being such a good customer. At least somebody has money to lend.

Posted by: Who'da guessed? | October 1, 1908 3:32 PM | Report abuse

This thing was hawked to the American people the same way time shares are sold in Cancun.


When I was about younger my brother and I were at home getting ready to eat some corn flakes....

We poured them in the bowl and poured the milk over them..

immediately we noticed the milk was soured....

no matter how much sugar we put on it, the milk was still spoiled and we added a LOT!

This is the problem.

The system is spoiled.

No matter how much sweetener we add in the form of money..we are still going to have a rotten deal.

NO BAILOUT- NO WAY- NO HOW

Posted by: dano | October 1, 1908 3:33 PM | Report abuse

My small business hasn't felt the crunch, nor do I expect it will.

I save my profit so I can afford, if and when I desire, to build my business; be it a new building, a new vehicle or a retooling, or a new employee.

I own everything, a bank doesn't.

My employees don't worry about getting paid because I am solvent.

I don't use credit, extend loans or speculate with other peoples income.

I pay for what I can afford.
I owe nothing.


When implementing such a simple, viable and profitable concept; it is totally beyond my comprehension that we, as individuals, communities and the country as a whole, should even be having this discussion. But, there is no accounting for basic stupidity.

No pun intended.

Posted by: toms | October 1, 1908 3:42 PM | Report abuse

As a small business owner (12 employees), here is what I have lived through in the past week: one employee's husband has received a 25% pay cut as part of a restructuring economic move at his company and another's husband lost his family health insurance. A third may lose his job when his whole department is cut next week. All will affect our company due to increased requests/pressure on us to step in. No, I have not tried to get credit - I will just be hoping to help us all make it through the last quarter.

Posted by: kristin | October 1, 1908 3:49 PM | Report abuse

It hasn't affected me one bit. By the way the media talks about it, it sounds like I got the last car loan in America last weekend. This is a made-up crisis. Wall Street has billions, let THEM fix it.

Posted by: baseballguy2001 | October 1, 1908 3:57 PM | Report abuse

The week before last I tried to refinance my mortgage that I took out 2 1/2 years ago: 10 percent down, 10 percent home equity, 80 percent interest only with interest rate to increase in 5 years. I still have 2 1/2 years before I have to worry, but began to worry anyway with everyone else facing foreclosure, and thought I'd like to take advantage of lower interest rates now to switch to a 30-year fixed. No such luck. Even with my 806 credit score, my $92,000/year salary, and my 18 years on the job, they wouldn't let me refinance: my house has lost too much value. So we'll see where things go, but I'd sure like to see a plan go through where they would allow people who had taken out mortgages in the last 5 years to refinance at 6% as was suggested by a couple of Washington Post Writers today. Now that would be a bailout plan that meant something to me. All I want is to keep being able to pay my mortgage (and taxes--lets not forget property taxes!) and be a productive member of society. Good luck to me!

Posted by: hcpf | October 1, 1908 4:03 PM | Report abuse

I haven't felt it yet, but did notice that car loans at my credit union increased 1.75% since last week.

True understanding of the crisis is over my head, but wall street seems like a drug user asking for more drugs. Shouldn't we change the behavior and our expectations before we give the "addict" what it wants?

Posted by: oakleygirl | October 1, 1908 4:07 PM | Report abuse

The down turn in the economy hit me 2 years ago. I dumped my 401(k) that was losing money faster than I could put it in, I dumped all my stocks and invested in me. I now run my own company, do not use credit in any way shape or form. My customers only get 30 days of credit from me to pay their bill and if they cannot swing that, I will not do business with them.

Sure there have been days when it is not pretty and store brand Tomato soup with water instead of milk is all that is on the table, but now that I have learned to only deal with solvent companies that do not live on credit, my life has gotten much better.

This did not just hit overnight. I am not the brightest business-headed bulb in the pack, but I saw this coming years ago.

Being in debt is almost as bad as being a convicted felon and there is no right in the Constitution ensuring you have access to cheap and easy credit.

Where is Ben Franklin when we need him most? Can someone get Miss Sylvia to channel him?

Posted by: Sierra | October 1, 1908 4:07 PM | Report abuse

Yes. I am trying to sell my home, but can't find a buyer who is able to get financing. I am willing to sell for what I owe, or even less if I have to, but the foreclosures in the area have driven down all home values. This is a 1949 Craftsman cottage, not a big, new McMansion.

Posted by: Suzanne G | October 1, 1908 4:11 PM | Report abuse

I am in the process of buying my first home at age 49. We have made an offer on a great home at a great value, and I am prequalified for the loan.

We are getting FHA guaranteed financing @ 5.5%, on a 30 year fixed mortgage with 3% down and seller is covering closing costs.

My credit is not stellar, but I have paid my bills on time for the last three years and my wife works part time.

We will pay only $120 more per month than renting a 2BR apartment in Denver, and this is before the interest tax deduction.

I am opposed to the banker broker bailout. It is my understanding that if we were trying to attain a mortgage for $400k or more, it would be much more difficult.

So, check back in another week, but the crunch is not crunching me yet...

Posted by: vaporland | October 1, 1908 4:11 PM | Report abuse

It's not a credit crunch if you're trying to get a loan based on the value of an asset that's worth less than the amount of money you're asking for. You should be applying for an unsecured loan.

Posted by: Les | October 1, 1908 4:12 PM | Report abuse

I know of two friends/neighbors who have been laid off from jobs in the last two weeks. Here in California, there is no question there is a recession NOW, and it's going to be deep, regardless of what the clowns in Congress do. If they do nothing, the credit crisis will be beyond scary. There seems be a lack of political will in Washington to lead the nation out of this, supported by an appalling lack of understanding of how seriously this will affect the man/woman on the street who have e-mailed their idiotic outrages to their spineless, ideologically driven Congressmen. They are voting on these measures for re-election purposes, not on what is good for the country. Stop the finger pointing, save it for later.

Posted by: snark | October 1, 1908 4:13 PM | Report abuse

If the problem (that got us into this mess) is that lending was too easy because credit was cheap then how will a bailout help us when its purpose is to make credit cheap so lending will be easy?

At best this just delays the sh*t hitting the fan by a few months. This might be the goal of the lawmakers voting yes, to push this mess beyond election day.

Posted by: No Bailout | October 1, 1908 4:17 PM | Report abuse

Shakespeare's line in Hamlet, "neither a lender nor a borrower be" is proving to be very sound advice. It's very unhealty to have an economy so heavily based on lending. We should be encouraging people to save for that inevitable "rainy day." Living on borrowed money is the root cause of this mess. I haven't paid a dime of interest in over 20 years (other than for my low, fixed-rate, very affordable mortgage) and I'm richer for it. I have savings to cover extraordinary expenses, vacations, etc. It's not that hard to live a good life without selling your soul to the creditors.

Posted by: Judy in Fairfax | October 1, 1908 4:25 PM | Report abuse

How will making credit cheap help us when cheap credit got us into this mess?

BTW, I think the clowns at Congress shut down the email servers. There is no way to send email to the congressmen. Their email server is not working since the vote Monday. The funny thing is that I worked a few years as system administrator of email systems and I do not believe that the "high demand" of the servers is causing the problem. I think House leadership decided they need to reduce the number of emails to the lawmakers so they are not reading 1,000 NO email for every one YES email. They just wanted to reduce the psychological pressure coming from constituents on the lawmakers before the next round of voting. Clowns!

Posted by: No Bailout | October 1, 1908 4:26 PM | Report abuse

"has the credit crunch affected you yet". it started affecting me two years ago! Where has the government been? It seems as if our country is burning on their watch and they are all worried about being re-elected (as well they should).

It affected me when i was late with a payment, not by months, not by weeks, not by days, but literally by an hour. After not missing a payment for the 60 months previous. I spoke with everyone to no avail. My apr shot up, the payment shot up, adding insult to injury, the company then decided that there was too much available credit on that account so they adjusted it and by doing so adjusted everything I had. For the last two years I have been cash only and all I can say is IT IS THE BEST CHANGE I HAVE EVER MADE. It is still paycheck to paycheck living, but i don't worry about bill collectors. That is a real stress buster.

Posted by: lorac58 | October 1, 1908 4:26 PM | Report abuse

No, the credit crisis has not affected us. Last Friday, we unexpectedly got new credit cards in the mail from Citi Bank. They extended our credit until 2011 and gave us new benefits that we had not asked for.

I am really surprised at the Washington Post. I cannot remember a bigger power grab in my lifetime than the one Henry Paulson attempted last week asking for sole control over $700 billion dollars. If you are not going to call him on that, you need to apologize to Richard Nixon.

Posted by: Georganne | October 1, 1908 4:29 PM | Report abuse

Affected by the credit market? NO. I could care less about credit. If I want to buy something, I pay cash.

What will affect me, though, is this crazy bailout bill, if it somehow passes. Do people stop to think what the effects will be? One word comes to mind: inflation.

I just got back from the grocery store. In case people haven't noticed, the prices on things are beginning to really jump. And Helicopter Ben's money hasn't even really hit yet.

And to make matters worse, the Department of Labor cooks the books on the inflation numbers. What about the people on Social Security or with a pension indexed to inflation? Is it really OK to screw them over, just to pay extortion money to Wall Street? I don't think so.

Posted by: John | October 1, 1908 4:29 PM | Report abuse

This crisis should be put on hold after november election because the effect of the outcome will not be seen till the right choice is taken by the new administration in power. And, It would give back the confidence to the taxpayer to decide what would be right to solve it. It's very questionable that this is happening close to the end of the Bush administration especially when he has been question about so many misterious event during his term. He have created big doubt about the whole event.

Posted by: Alfonso Cotto | October 1, 1908 4:29 PM | Report abuse

The banks aren't lending to anybody, including each other. This "bailout" won't make lending cheap, it will help confidence to generate some lending under stricter market conditions. Right now, Joe Consumer can't get a car loan even if he's got a FICO of 700 or better. That means dealerships are going under right now, people will lose auto related jobs, etc., and the cascade will go on. This country doesn't run on cash. Capitalism in this country runs on access to credit -- from GE to Main Street -- and the global economy relies on access to credit markets on a daily/hourly basis. If those markets don't work, nothing moves.

Posted by: Anonymous | October 1, 1908 4:29 PM | Report abuse

The government needs to step aside and let the market correct itself. Stop trying to manipulate the market, all we are doing is prolonging the problem.

The lending institutions made bad investments by issuing credit to anyone, now they are faced with mounting debts by defaulting loans and scarred to issue loans.

All of use are living beyond our means. Think of this, 10 years ago how many Mercedes, BMW and Lexuses did you see on the road, not many unless you live in Great Falls.


Quoted from a earlier post
"They didn't stand a chance to buy a home they could afford because of the bad advice from the regulation free predatory lenders. Shame on all of you!"

If you are that irresponsible to research and do homework for a homeloan, you shouldn't even own a home!!

Posted by: What happened!! | October 1, 1908 4:37 PM | Report abuse

I'm thinking that perhaps a recession wouldn't be the worst thing for the US. It seems to me that using this "mark to market" accounting, the reality of the economy growing really wasn't as strong as we were all led to believe. This is part of what led people to believe that they were more well off and that they could live beyond their means because they always expected their home and stock values to continually go up.

Maybe this reality will force people to live within their means and have a more realistic view that the latest gadgets or luxury vacations aren't any true representation of what the american dream is.

It took a good 15 years after the start of the great depression for the economy to really boom again, but I think it make take that long to "unlearn" all the bad habits of the past 3 decades for people to learn fiscal responsibility.

Posted by: Anonymous | October 1, 1908 4:43 PM | Report abuse

The fact that people on the street don't see an immediate effect is part of the problem. It's exactly the sort of situation that doesn't show up right away ... like have termites. But if we wait until we are affected, will that be too late?

Posted by: cb11 | October 1, 1908 4:44 PM | Report abuse

Richard Rust - you pretty much have said it all.

I got out of all credit years ago and I hold only a very little in the market. I live simply, and I have never trusted the BS from all the so-called financial advisors. I cashed out my 401K in 2003, and I have never looked back.

I am really sorry for people like you; I just hope that these bozos don't bail out the Wall Street gods....it will not help you!

Posted by: madman | October 1, 1908 4:48 PM | Report abuse

Where do I start? We are in better shape than most. No credit card debt and we own our house. My husband is in a new start-up company that depends on sales of commercial real estate. His company has had to lay off about 1/2 of their staff and although the officers take a very small (minuscule)salary, they may cut back on this. We still have health insurance. And our mutual funds for our retirement are falling. We need to sell our house to live nearer the new company. There are people in much worse situations. I am extremely worried.

Posted by: Evelyne | October 1, 1908 4:50 PM | Report abuse

pearlstein is right! People just don't get it. The crisis is really simply and an issue we all can understand. Many, maybe too many, US companies require short-term loans to maintain a level of cash flow. companies even borrow to make payroll. The 1st issue is banks and financial houses get these loans based on their asset portfolio. Part of that portfolio has home mortgages and other assets. now this is the part I do not agree with, they call these il-liquid assets when a house and land always have a value. I understand losing value, but the whole portfolio. (that's why ever is saying the government might make money if they buy them now and sell them later.) but since these assets have been devalued, it's like the banks know you or I have taken a pay cut and won't do business with us anymore. so the bottom line is the banks and financial houses don't have the cash and they aren't able to borrow. Soon American companies of varying sizes will not be able to get the short term loans they need for cash flow either. they'll start missing payroll for instance. thus layoffs. they don't fix the copier, cancel contracts, etc. This is the real trickle down effect! That is when America will feel it. it seems like some others are starting to feel it now. the only thing that happened to me is my home equity line was closed, but I had not used it in 2-years anyway.

Posted by: RobGreg | October 1, 1908 4:53 PM | Report abuse

toms - you are one of the REAL heroes. We need a million more like you every week!-madman
......................
toms wrote:
My small business hasn't felt the crunch, nor do I expect it will.

I save my profit so I can afford, if and when I desire, to build my business; be it a new building, a new vehicle or a retooling, or a new employee.

I own everything, a bank doesn't.

My employees don't worry about getting paid because I am solvent.
I don't use credit, extend loans or speculate with other peoples income.
I pay for what I can afford.
I owe nothing.
When implementing such a simple, viable and profitable concept; it is totally beyond my comprehension that we, as individuals, communities and the country as a whole, should even be having this discussion. But, there is no accounting for basic stupidity.
No pun intended.

Posted by: toms | October 1, 2008 3:42 PM

Posted by: madman | October 1, 1908 4:53 PM | Report abuse

I can't believe it. Banks want you to use credit cards which in effect makes you indentured slave, unless you're paying off balance each and every month. This sort of easy money mentality is why we're where we are. Chinese and Japanese own us. Wake up! I feel like asking people in shops, malls if they have cash to pay for what they're buying. If not, LEAVE THE STORE IMMEDIATELY, YOU CANNOT AFFORD IT!

Posted by: pelohoki | October 1, 1908 4:53 PM | Report abuse

Our economy runs on credit. We need the "life fluid" of credit to keep everything moving. Admittedly bad loans were the culprit, which bad banks accepted and passed along to Freddie and Fannie.

But why were the banks allowed to do it? Because our Government embraced deregulation over the past 10-16 years.

We need to solve two problems: liquidity and credit, and add back in meaningful regulation to correct unscrupulous and bad behavior.

Posted by: Tom | October 1, 1908 4:53 PM | Report abuse

The credit crisis has not effected me at all. I don't need credit,and I don't like borrowing money unless absolutely necessary. I nevertheless understand that this is a VERY serious crisis that can effect the whole economic structure of this country which is why Congress needs to pass the rescure legislation.

Posted by: Lisati | October 1, 1908 4:55 PM | Report abuse

Of course, this disaster is affecting everyone..whether it's actual or feared. The reason the news media is not investigating the causes of this disaster is because Freddie and Fannie have been the products of the liberal Democrats like Barney Frank, Chris Dodd, Ted Kennedy and the only career for Barack Obama....getting benefits for minorities through organizations such as ACORN, whether we can afford them or not. From now on, I will make sure that I do not vote for anyone who wants to initiate programs for the "poor." Poor is code for minorities. We have given and given to minorities for as long as I can remember and we seem to get nothing back. And that's exactly what we'll get with the bailout.

Posted by: Anonymous | October 1, 1908 4:56 PM | Report abuse

"The week before last I tried to refinance my mortgage that I took out 2 1/2 years ago: 10 percent down, 10 percent home equity, 80 percent interest only with interest rate to increase in 5 years. I still have 2 1/2 years before I have to worry."

No, you should have started worrying the day you took out a interest only loan with only 10% down. You make $92,000. Cut your living expenses to $42,000 and pay back $50,000 of your loan each year for the next two years. Then you will be able to refinance. If you are unwilling to cut back on your living expenses, rent. The taxpayers don't owe you a house. You make $92,000. Live within your means.

Posted by: bkl | October 1, 1908 5:03 PM | Report abuse

Yes, I have a contract to sell a house in California. Only catch, the buyer has a "glitch" in her loan. She has satisfied every demand that the lender has placed upon her; but they won't make final approval. The realtor says that it is tough getting deals done these days.

Congress needs to act and act now. Put out the fire. Pass this legislation.

Then, root out the fraud, lobbysists and all of the corruption in Wall Street, Washington and yes,Main Street..

And I agree with many comments here, folks have overextended themselves.

Another question - I have no debt. Where is my reward? I pay my taxes and do not live beyond my means. Can I get a lifelong free ride on not paying taxes?

Posted by: Marcella | October 1, 1908 5:05 PM | Report abuse

I'm sorry, but comments like this one frustrate me no end:

HCPF @ 4:03pm: "The week before last I tried to refinance my mortgage that I took out 2 1/2 years ago: 10 percent down, 10 percent home equity, 80 percent interest only with interest rate to increase in 5 years. I still have 2 1/2 years before I have to worry, but began to worry anyway with everyone else facing foreclosure, and thought I'd like to take advantage of lower interest rates now to switch to a 30-year fixed. No such luck. Even with my 806 credit score, my $92,000/year salary, and my 18 years on the job, they wouldn't let me refinance: my house has lost too much value. So we'll see where things go, but I'd sure like to see a plan go through where they would allow people who had taken out mortgages in the last 5 years to refinance at 6% as was suggested by a couple of Washington Post Writers today."

Why should you get a chance to get out of the deal you willingly signed 2 1/2 years ago? You agreed to the price of the house. You agreed to an interest-only loan, knowing that might leave you with a big interest rate increase and a shorter time to repay the principal balance. You agreed to a variable interest rate. You chose to put down only 10% cash and gamble with an 80/10 on the remaining balance. Why should you now get a mulligan on this contract?

You could have gotten a 30-year fixed 2 1/2 years ago. Those loans were available then, but you chose another type of loan. You gambled on being able to refinance and you lost. That's the way it goes. Why should this be everyone (anyone!) else's problem?

When my husband and I signed the contract on our home (3 1/2 years ago), the interest rate was about 5.25%. By the time the house was built, it was up around 6.5%. That's the way it goes. We didn't take out some gimmick loan or gamble on an ARM, we bought down the loan with points to 6%, paid the 20% down, and did the 30-year fixed.

You didn't walk into that loan blind. You're savvy enough to know how to set up a layered downpayment. You're financially aware enough to go looking for a refinance early. Why should you get relief from a deal you signed willingly?

House values go up, and sometimes they come down for a while - sometimes a very long while. You got bit by one of those downsides and now you're stuck for a while with the gimmick financing you agreed to. I'm sorry, but it's not the rest of the economy's responsibility to get you out of your mistake.

Sorry, folks, I just get frustrated with people wanting do-overs. Life doesn't come with do-overs.

Posted by: LB | October 1, 1908 5:07 PM | Report abuse

I'm perfectly fine! My sales (high end stone & Tile) were the best ever in my 6+ year company history. We have no debt and don't need any, so as long as our sales continue (looks like sales this year will be 30% over last year), we'll do just fine. Our crappy government is still trying to rile by scare tactics. It's not working on me.

Posted by: Earl | October 1, 1908 5:13 PM | Report abuse

I never recovered from the one that happen during the Reagan years. These same people and large businesses had no sympathy for myself and my family when they enjoyed living off of high fees, high interest rates, excessive fees, usury fees that Credit Card companies, Utilities, Banks, and some Mortgage lenders (not all)charged for just about anything. We are now working to pay fees and high taxes and we will restore the Wallstreet bad actors to their high living standards. Germany bet against the American people and no one said a word. Tears on our pillows every night while the AM radio stations made it so we had no voice. Everyone was taking part in the wild wild new west or new gold rush. It is defined as “Siphon money from the middle class, as much as you can in hidden fees” because no one was looking and congress turned a blind eye. We told them about the predatory lending and they said pull yourself up by your bootstrap. Market Bubbles teach you a lesson you will never forget and remember millions of us already went through this and yet no bail-out for us. We will get more of the same because we are invisible to you. Fox news and AM radio statios were from sun up to sun down to commit character assassination of these people often betraying them as lazy and poor as well as suggesting we were Jealous of the rich. We are not jealous of the rich, what we did not like was the way these companies were going about to make their riches. The miss characterization continues through-out the media today with no one left to debate the lie.

Posted by: GAPRDDESC | October 1, 1908 5:15 PM | Report abuse

Both of my credit cards have jumped the minimum payments to between two to three times the prior rate.

So, yeah, it's affected me.

Posted by: Will in Seattle | October 1, 1908 5:16 PM | Report abuse

My wife and I are looking to buy some investment property right now. Perhaps, as was earlier stated, we are not in our right mind but we see this as an opportunity for smart investors (aka people who live within their means). Our pre-approved loan is still good but we have not looked into a renovation loan in case we buy a distressed property. We may find ourselves locked out if we need a reno loan but we'll just buy a move-in ready place. Even when we buy, we have planned the purchase so we can pay the additional mortgage, utilities and taxes independent of rental income and STILL save money from our salaries. If one or both of us lose our jobs, we will take our lumps and learn from our mistakes.

It may sound like we are wealthy, but we really aren't. I have lived on the edge several times. We both now have jobs in education and we live well below our NET pay line. We live in the Chicago burbs and the cost of everything was already high when we moved here 7 years ago. We drive economy cars that are fully paid. Our current home was purchased with nothing down on an 80:20 so we were part of the mortgage fiasco. However, we didn't buy a big, fancy home that we couldn't afford and we paid off the 20% loan within 4 years. Our mortgage is well below the suggested % of gross that "economists" and "bankers" recommend. We instead focused on % of NET and kept it to

For those of you that are hurting, I am sorry. I did my best over the past few years to help many people who were facing financial difficulties. My advice (and cash) didn't take. It seems some of us ignore common sense and live the extravagant lifestyle when times are fat. We all know that lean times usually follow fat times so some of you are reaping the rewards of poor planning.

However, most of you are suffering through little fault of your own (through layoffs, medical expenses, etc). I am particularly sorry about that. There is plenty of blame to go around and no single source is the entire culprit. My advice is to dig in, commit to reducing your lifestyle to the bare bones and live lean for a while. I have done it in the past and I fully expect to do so again several more times before I die. If this ends up being a long gray recession, it actually may drive a long period of prosperity in America because we'll stop living like fools and we may stop allowing politicians to play us as fools.

Good luck to us all.

Posted by: Major Pain | October 1, 1908 5:18 PM | Report abuse

What credit crunch? Each day for the past week I have received at least one mail offer (often from banks, etc. with whom I already have accounts, so it's not fly-by-night scams) with a new or increase-your-limit credit card offer, a set of blank checks to draw against my credit card limits, a mortgage refinance offer (uh, no thanks, I'm in a 15-year fixed rate that is just fine thankyou), or an offer for financing a new car and trading in my perfectly-fine, 30-mpg, 2-year old one (one offer from my credit union and another one from the car company's finance arm).

Maybe, just maybe, those banks and businesses and individuals who can't seem to get access to loans, are simply not good credit risks, and the lenders are finally doing a good job when making their lending decisions. Oh, I forgot, we're all ENTITLED to buy what we can't afford -- it's the American way. NOT.

Posted by: Anonymous | October 1, 1908 5:21 PM | Report abuse

When I bought a home three years ago with a substantial down payment and an excellent credit score I had no trouble obtaining a low fixed interest rate. During the first part of this year, due to family issues I again pursued the purchase of a house, again with a substantial down and the same excellent credit score. However, in spite of the fact that the feds had lowered the prime rate several times, ostensibly to prime the home mortgage busines that was already problematic,I had to go through all kinds of hoops to get an interest rate that ended up higher than the one before even though the prime rate was lower. Lesson learned? That government benefits, bailouts, and subventions to industry never trickle down to the consumer. Greed runs rampant at the top, thus, even if this financial crisis should affect me, the bailout will not help me. Regardless of all the populist talk, it will just ensure golden parachutes to the architects of this catastrophe. Those of us that end up without jobs, and unable to get credit, in spite of the bailout, will just be told to wait for the benefits to trickle down and they never will. I hope the vote is "no" for the bailout. "For they have sown the wind, and they shall reap the whirlwind..." ~Hosea 8:7

Posted by: Elen | October 1, 1908 5:22 PM | Report abuse

Responsible borrowers and responsible lenders have no problem getting credit. If the irresponsible are having trouble, that's GOOD.

That is the solution. Responsibility.
Bring back responsibility. To others. To the community. To our children and grandchildren.

Not excusing debt.

Posted by: Greed is Evil | October 1, 1908 5:22 PM | Report abuse

An economy built on bad debt is an economy built on quicksand. Let hedge funds go. Debt, mandated by K Street and Madison Avenue, got us in this quagmire. It won't get us out.

Posted by: Sinking Sands | October 1, 1908 5:25 PM | Report abuse

Within the last 15 days the interest rate on our business line of credit has increased by 70 basis points (.7%). This will increase our cost of capital significantly and if the trend continues will require us to begin reducing costs especially if our customers begin experience similar impact.

The credit market have not been functioning since around 9/15. The initial impact has been restricted to the financial service sector but without Congressional action this week all sectors of the economy will begin to contract without the smooth exchange of funds required to operate most organizations

Posted by: Anonymous | October 1, 1908 5:30 PM | Report abuse

Vote with your money. Put it on the sidelines and starve the beast. The ravenous financial industry lives by picking the flesh off our corpses -- e.g. this bailout bill. Stop giving financial "advisors" a chunk of your hard-earned money...

Posted by: Steve | October 1, 1908 5:46 PM | Report abuse

Define Subprime and expose the recipients of subprime, right now!!! The greatest lie on earth is being communicated by suits and there is no Great Debater to counteract this farce or lie! We are spending 10 billion a month for a war, yet I am supposed to believe we are the eve of depression? You describe depression as no loans for cars, houses , school and the American people said that is how we live now. You made sure the TAX code phased out all deduction when you made a certain amount of money. You charge us a penalty when we withdraw our own money to stay afloat for the last 15 years. Congress continues to spend and we are to give our last dime we have and our posterity future. Who the heck lives off of Credit? And if you live like that, shame on you!!! The banks denied a whole socioeconomic segment of the population and Congress said nothing and the courts ran a cattle market calling off the American peoples name one by one awarding Judgment. And if that was not enough someone said don’t let them file bankruptcy. There is no oversight on the Three big Credit scoring companies who was the lynch pin in this mess. Scores never changed. Mortgage companies never reported the paying as agreed which set you up for the subprime category. The so called act of loaning money defined as “subprime” was marketed to people who made over 6 figures and were flipping homes. Don’t be fooled by the hype. Speculation with oil and now Speculation with market we watch some strange behavior as if someone has a string they can pull. In a card game we call this cheating or someone is counting the cards. Now there was a media blitz today to put lipstick on corporate welfare because the boogie man is coming. Who gives out money without understanding what they are getting into? You had two weeks to get the best and the brightest people to audit this situation and you did nothing but stick us with the bill. The media could have sent out their investigators to find out the truth. Is this how we are supposed to run our household? The rules the American people live by are not the same for this segment of the population you want me to bail-out. We weren't getting the loans, the credit for anything for the last 15 years. We were laid-off so many times I cannot count, yet there is no bail-out for those who are still wounded from the last market down turns. You dressed it up and put lipstick on it, yet the stench is so bad that we can see through the costume. What really happened? This question is not a philosophical question. Try to walk into to court and use that sorry argument.

Posted by: GAPRDDESC | October 1, 1908 5:51 PM | Report abuse

Credit crunch for normal people like me and businesses who pay their bills? No, and I don't expect to. I don't try to take out loans I can't afford to pay. My home has lost value, but honestly, it was inflated lately anyway. I am refinancing that home to a better rate (no cash out), only because the rates are so much better now than I currently have. And yes, I have mortgage companies lining up to get me to sign. My credit rating isn't even great, just ok. So people who are a high credit risk (sub-prime, or in numbers, below 620 in most cases), people without sufficient income to pay back their loans, and people who have already mortgaged themselves to their teeth will feel the pain. People will need to go back to worrying about paying their bills on time to keep their credit rating acceptable. This is a good thing. Banks will only loan money to people who can prove they are capable of paying it back. This is a great thing. So people will have to actually work and SAVE their money for a minimum down payment on their homes, YAY! Let the correction happen now. Let's stop with the false security of living on lines of credit instead actual income.

Posted by: cyrix1 | October 1, 1908 6:01 PM | Report abuse

For 2 weeks now we've been told daily if we don't do something today, financial armageddon will arrive tomorrow. Every day we get by though and the stock market isn't plummeting 2,000 points as many have suggested. In addition, my neighbor just obtained a $150,000 credit line for new business dealings showing credit isn't as bad as we are led to believe. We are certainly in a financial mess, and things need to be done.

However, we must be smart in how we solve this mess, or we will only be doing this all over again in 5-10 years. Congress should be holding hearings with economists and other leaders to really figure out the best manner to fix our problems. In addition, our so called leaders have now added to the bill to go before the Senate today. It includes funding for foreign banks and to name just a few:

New Tax earmarks in Bailout bill

- Film and Television Productions (Sec. 502)
- Wooden Arrows designed for use by children (Sec. 503)
- 6 page package of earmarks for litigants in the 1989 Exxon Valdez
incident, Alaska (Sec. 504)

Tax earmark "extenders" in the bailout bill

- Virgin Island and Puerto Rican Rum (Section 308)
- American Samoa (Sec. 309)
- Mine Rescue Teams (Sec. 310)
- Mine Safety Equipment (Sec. 311)
- Domestic Production Activities in Puerto Rico (Sec. 312)
- Indian Tribes (Sec. 314, 315)
- Railroads (Sec. 316)
- Auto Racing Tracks (317)
- District of Columbia (Sec. 322)
- Wool Research (Sec. 325)

Take 1 minute and tell Congress to Vote NO on this bailout. Call (202) 224-3121 or email them at wwww.VoteNoBailout.org. It is time our leaders work on a real plan that truly solves this financial crisis for decades to come.

Posted by: Brian | October 1, 1908 6:04 PM | Report abuse

There needs to be responsiblity in this country.

The media needs to be reponsible to provide accurate and factual information - not hype to sell papers and get viewers.

The Congress needs to be responsible with taxpayer money - their delibertaions and the the plan needs to be completely transparnt to all citizens in terms that are meaningful.

The lenders and banks need to be responsible in their lending practices and not give high risk loans out to citizens who cannot demonstrate they have the capability to repay the loans.

The citizens need to be responsible with their eanrings and for their debts - they should not be financing an unrealistic lifestyle on credit.

It all goes back to responsbility - something this country has been lacking and is now looking to me to foot the bill.

I have not had summer vacations and I drive a used car and have worn furniture in my home - but now I am supposed to pay for the irresponsibility of others?

I am willing to do it if the root cause is addressed and responsibility is enforced.

I am not willing to do it if the media, Congress, financiers, and fellow ciizens go back to living the high life on false pretenses and bad debt.

Posted by: Responsibility | October 1, 1908 6:13 PM | Report abuse

Richard Rust,

There is a quick cash place on every corner willing to loan you $200.00 at 300% every two weeks, if you need money. If your car breaks down and you have no savings say like many of us from the Reagan market down turn then catch a ride to work. If you need gas money you will be surprised how far you can drive on fumes with a stick shift . If you have a car in the garage, tow it out and see if someone will fix it for you so you can make another day. You will have to go back to work getting up at 3:00 am in the morning and work all day to make it. If your legs aren't working properly you will have to do mind over matter. This is a technique many of us learned when the great bubble burst the last 3 times and financial hardship occurs due to no fault of our own while Congress turned a blind eye. Try not to listen to the AM 6.30,5.30 radio stations and Fox news because they will say you are lazy and you did it to yourself and that you should pull yourself up by your bootstraps and heaven forbid if you are person of color. Just look at the million dollar man mocking the middle class and people of color every day with his fat cigar. If you need food , plant a garden like the rest of us and live off the land. Learn to hunt and fish. All the financial advisors told people don't lend money to family, so that won't work. If they cut your gas off and charge you $600 deposit then try to borrow a friend's shower for hot water and use lots of blankets this winter. If you can't qualify for the overdraft protection at the banks due to this market downturn and financial hardship that you will suffer as a consequence of this 8 year reoccurring phenomena , don't worry they have a product just for you. They will give you $500 over limit however, if you use it they will charge you $29.00 each time. Will you get out of this hole? I'm sorry to say there is no way out. Once you enter these gates, there will be so many predatory type lending to prevent that, laws are in favor of throwing the book at you due to the premise that you did it to yourself and you need to learn someone’s lesson while the t never learns. Congress is too busy trying to give Wall Street $700 billion dollars of the American Tax payer hard earned money to even consider what the invisible market down turn veterans from the last time. Finally, this too will pass, so if you don't panic your money will come back years later. This is the time to buy although if you are like the rest of us, we are too busy paying high interest rates, excessive fees , usury fees, and Alternative tax to live. This will cause a large amount of stress from sun up to sun down so remember to pray for grace and mercy because in this particular capitalist society none will be shown to you. This is the time we must be innovators and pioneers. Hang in there and know that you are not alone. You are now a so called "risk". CRA made sure you remain the risk despite the fact that you were laid-off and lost everything from the last economic down turns and pay everything you owe and make more money than most. No one will ask you how you how you became a risks and this day will be long forgotten. you will now become invisible and made fun everyday even though you make more than they do and live by cash. There is no such thing as living by loans and credit in this socioeconomic sphere. Remember the S&L failures. There is nothing new under the sun.

Posted by: GAPRDDESC | October 1, 1908 6:30 PM | Report abuse

dcm,
YES.
The Media gets their cue cards from the top 5 % and you better believe, this card will not be on the evening news.

At Midnight Republicans were nailing the Democrats saying they caused this fiscal and media said nothing and the same day later in the morning they twisted the truth and set off to marginalize Pelosi. Hopefully she is a strong woman and will stand her ground and also understand that this is bullying 101. Do not let any member of congress stifle your debate , you represent the people and we have a voice in this great Democracy and we are a free people!!!! Yes! America is still the greatest county on earth. Why be nervous it is here where my ancestors persevered despite the often inhuman conditions around them. They made America a better place and we can too. We can make it if we as a people are willing dream again and learn to invent something instead of living off of credit.

BTW, we can't get loans for cars and homes since the Reagan years. This is nothing new.

Posted by: Anonymous | October 1, 1908 6:44 PM | Report abuse

James,
I see you fell for the hype and lies. This is very unfortunate. We live by cash and have been denied credit even unto this day. Try finding out how the CRAs made a new segment of the population a target and believe me it is not the traditional race people love to target despite their accomplishments here in America. There is no bank or mortgage company in the world who would loan you money with 0% down, and no job and inability to pay, etc.
This is a farce!!! Media you have an obligation to investigate and expose the truth and counteract this lie before is stays in the public debate for years to come. Stop remaining silent when this lie is communicated. Try finding out what really happened like people took money they made from selling their homes and purchased a $600,000 home and now the house is upside down and upset People purchased 8 homes to flip and now they can’t sell them nor can they get a loan.

Posted by: GAPRDDESC | October 1, 1908 6:54 PM | Report abuse

AK,
Keep believing that lie. We did have $20,000 to $200,000 and we did lose it all in the last economic down turn but if it makes you think more highly of yourself than you ought, then keep on believing the lie. So you want me to pay for the risk you took? May you learn to live by cash and pull yourself up by your boot straps. Don’t take food from my table to pay for your risky behavior. You took a gamble and you loss. Such as life.

Posted by: GAPRDDESC | October 1, 1908 7:00 PM | Report abuse

blogger "What Happed," Wrote the following:
If you are that irresponsible to research and do homework for a homeloan, you shouldn't even own a home!!
Posted by: What happened!! | October 1, 2008 4:37 PM


_______________
GAPRDDESC Response,
If you are that irresponsible to research and do homework on where to invest your money, you should not have invested your money in the first place. You took the risk and you pay the consequence. Don’t look for welfare to save you now. BTW, mine 401k! is just fine.

Posted by: Anonymous | October 1, 1908 7:09 PM | Report abuse

What credit crunch? I can go to any local bank or my credit union and get a loan for any purpose. Why? Because they lend their money responsibly. Its the FAT CAT banks that are hurting. Let them go down, bigger sharks will eat them..

Posted by: steven | October 1, 1908 7:40 PM | Report abuse

I activated a renewed major bank-issued credit card yesterday. And much to my surprise, an agent came on the phone and offered a "low-interest" (8.99%) line of credit! I declined, of course, as my minimal debt is financed at much lower rates. Those of us that have lived within our means are not affected, despite all the lobbyists stating "no one can get a loan right now". Balderdash!

Posted by: Scott | October 1, 1908 8:55 PM | Report abuse

I HATE the answer that congress and Paulsen keep coming back to. I hate the way the media pigeonholes those who reject the bill as just not understanding the situation and reacting to a defense of CEO's. The only thing congress might be able to affect is short term credit, and a little loosening of of certain regulation through the crisis. It's not Mainstreet Vs. Wallstreet, this bill will not help the need for short term lending that the economy needs on a day to day basis. That is the problem congress needs to solve. Get credit flowing by supporting or even inventing one(at least) bank or new entity that has clean balance sheets with access and willingness to lend to clean banks, there are a number through-out the country that sold their mortgages up, and could start lending to support payroll and other short term needs. They would do this if they know their customers, and if they can borrow cheap(the discount rate has been dropping fast)and lend high. 700 billion is about the GDP of the Netherlands, if the entire nation of the Netherlands could send the equivalent of their product to support our banking with many that will fail anyway, would it be worth it? And that is Gross Domestic Product( not a very liquid thing). What does that say about the number? Most bankers say we need this. Most economists agree that this might save banks, but not help credit. We need some kind of bailout but this is a breakout. If they want to spike inflation there are a number of ways to do it so you could at least help GDP the next huge issue we will face.

Mainstreet abused the system more than as much as the Wallstreet banks did. We all saw 19 year olds that could have been working at Mcdonalds, driving Cadillac Escalades, fully loaded, working as originators, people without any proven skills were able to live infomercial dream-like wealth with as little effort, all throughout the mortgage and lending industries owners of small mortgage companies, sold them to bigger entities, and further up, all got rich from the extra cash. People flipping property for 200% in a year, for several years all through out the country, providing no value. The CEO’s enriched them selves, true, but millions of Americans took and maybe stole far more, and did far less. That money is gone, we all have to address reality and end blind banking.

Posted by: mike | October 1, 1908 9:38 PM | Report abuse

My husband and I are relocating and trying to sell our house. We have made numerous improvements but are only asking what we paid for it. It's been on the market for 6 months and we have only had 4 people look at it. I think 1 house has sold in our town in the last 6 months. Everyone seems to be talking about helping all the people in danger of foreclosure, but what about the people who are trying to sell their house. At this point I don't think there is anybody who is even looking to buy a house.

Posted by: Anonymous | October 1, 1908 9:41 PM | Report abuse

I would like to sell my townhouse and buy a single-family home. If mortgage lenders shut down, I won't be able to do that. However, that would be preferable to spending my tax money to pay for the losses of greedy, naive and/or unethical people, especially those who bought homes based on fraudulent documentation. I have been struggling to pay my own bills, but I haven't cried foreclosure - I've paid everything that I owed, including some late fees, because they were my responsibility. Now that I have learned how the economy really works and how badly mismanaged it is from Wall Street to Congress and down, I plan to pull all of my investment money out and shove it in an FDIC-insured bank account until the stock market and housing prices go back down to their true values. Sure, my townhouse will drop in value and I might not get that single-family home - but I don't expect a bailout to help with that, anyway. It's not designed to assist those of us who have taken responsibility for our own finances. Even the much-hyped part of the bill that would provide more construction jobs in transportation infrastructure wouldn't really help Americans who need work; those jobs are normally handled by hiring under the table and American taxpayers will pay those costs, along with many losing their homes to highways, too; it will be like the ICC project on steroids.

Posted by: FedUp | October 1, 1908 9:55 PM | Report abuse

I went from having a credit score of 800 three years ago, which allowed me refinance my small 150K mortgage (on a house supposedly valued at 680K) into a large home equity loan (450K) in order to put money down a new home (700K) without having to wait for the other one to sell, and a large mortgage (450K) on the new home, fully intending to use additional proceeds from the sale of first home to pay down mortgage on second home. Long story short(family illness, having to leave a job, awful realtor), I was left holding 2 mortgages for over a year, draining my savings and retirement money, running up debt. I finally sold the first house for far less than expected (529K), which left me nothing to pay down the mortgage, not to mention the other debts. To this day, my credit is awful and I can't refinance my 5 year interest only loan. Now, before people say I was irresponsible, I want to say that, yes I took on more than I should have, but that the whole industry shares the blame - from my real estate agent who would say anything to get a client, to the wild participants in the real estate boom, to the mortgage agents and lenders who were willing to accept anything as long as they were paid, to the credit card companies who at the first sign of trouble pull the rug out from under you (raising rates and changing terms) so you are doomed to stay in debt. I could go on, but it pains me to think of the catastrophic effects of this perfect financial storm on the whole of americans.

Posted by: Anonymous | October 1, 1908 9:58 PM | Report abuse

I am a college student at a small, private school in Indiana and frankly, most students seem to be unaware of the national crisis at hand. On behalf of my student body, the credit crunch has not affected us - yet. One of the most dreaded things about being in college is filing the FAFSA. Give it until the FAFSA's due date - then we'll pay attention to the credit crunch.

Posted by: Karen | October 1, 1908 10:42 PM | Report abuse

I haven't been effected directly as of yet however the issue is Credit itself and the fact that we the people are no in control of our government as we should be. We don't have the knowledge we should because the media is controlled by the same powers pushing and urging this Bill be passed. Research FEMA camps, Brigades right here in the US ready to protect when Martial Law for the people is called on...well that's going happen very shortly. Wake up people vote for Chuck Baldwin...reasearch!!!

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Posted by: Digivix | October 2, 1908 3:00 PM | Report abuse

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