[Zeddicus]

Just finished readng this.

Oh crap.

I’m going to be on pins and needles for the next three weeks, praying my buyer’s financing doesn’t fall apart so I can get the hell out of this house.

Now, you’ll please excuse me while I head down to the bank to make a withdrawal. ;-)

[Petronski]

The posters replying to Denninger’s tickers are a pretty bright bunch most of the time:

http://www.tickerforum.org/cgi-ticker/akcs-www?subindex=Possible%20Credit%20Dislocation:%20Be%20Warned

[Coyote Choir]

Anyone out there speak-ie the Finance language fluently who might interpret this report for Freepers not in business?

[hoosier hick]

•I am hearing repeated anecdotes from multiple areas that foreclosed property held by banks with multiple full-price offers that include a financing requirement are being sold instead to people with actual cash at radical reductions from that price. This implies that these financing contingencies are regarded as not only potentially no good but factually no good, as if the banks know for a fact that the credit pipeline will (not might), within weeks or months (in the time required to close), disappear. There is no other rational explanation for this behavior.

I would interpret this differently. This looks like the banks are desparate for cash NOW, rather than a moneymaking stream of cash flows (as they may not be in business to benefit from a long-term mortgage).....

hh

[steve86]

Probably going back into a bear fund Monday. Prepared for a couple more weeks of chop before a downleg in earnest.

[thefoundersrock]

I’m no financial guru but here’s something that made me go hmmm. I work in the insurance industry and Travelers (which was merged with citicorp) suddenly laid off HALF of their underwriters. Even though Travelers has shown consistent growth. My first thought was “What do they know that I don’t?”

[dirtboy]

The change in terms on credit accounts is NOT confined to Citibank. I have received a fax from a customer of Infibank with substantially identical terms, in which both the standard and penalty rate was adjusted to 29.99%. This strongly implies that whatever Citibank smells the problem is not confined to them.

I disagree with this premise. IMO this happened because the Dem's credit card 'reforms' were trigger that week.

[ctdonath2]

Credit terms are being unilaterally tightened as to be completely untenable. The very customers banks need in the credit market - credit card holders with high balances and reliable payments - are, or will be, squeezed out as interest rates skyrocket and penalties (for even minor transgressions like making payments a day late) become untenable. Customers will either bail out of the cards entirely and choose to not go back (hello), or be crushed out and be unable to return. Goose, golden egg, greed, no goose.

[WashingtonSource]

Is he serious? I don’t think the Citicorp credit card letters have gone out to all customers, for starters. Capital One seems upbeat in its outlook. So, maybe this is not as bad as Karl thinks. (Fingers crossed)

[SatinDoll]

PING for later reading.

[Revelation 911]

Citibank's credit-card terms change implies a willingness to accept and even provoke a complete and intentional destruction of their credit card business as a very high probability outcome, given that nobody in their right mind will accept a 30% interest rate who has an alternative. The obvious implication is that only those who can't transfer balances out will remain and if your credit is that impaired there's a good chance you will default - either intentionally or otherwise. This too implies foreknowledge of a near-complete impending freeze in the credit markets.

I called this week - we have a stellar rating and the rate is still going up - the operator blamed it on the govt...though couldnt cite anything specific. Fortunately, we pay off our balance each month in full.... but will be cancelling soon

[OpusatFR]

Holy Smokes!

This is magnitudes worse than anything else.

Got FRNs under the mattress?

[Glenn]

Citibank's credit-card terms change implies a willingness to accept and even provoke a complete and intentional destruction of their credit card business

I got my letter raising my rate from 5.99% to 29%. I couldn't close the account quickly enough. I seldom used the account and I have sterling credit.

Their loss.

The only question in my mind was, "What was all that consumer credit card legislation Congress passed?"

Don't bother asking me to open a new account when things are better, Citi. I no longer trust your judgment.

[blam]

Sorry Lori.

I missed the fact that you had already posted this article and posted it myself. Here is a link to the same article that was posted by me.

Possible Credit Dislocation: Be Warned

[blam]

"... as this analysis is based on nothing more than observation of behavior by market participants that all point toward their foreknowledge of an event that might happen in the reasonably-near future and is not, at present, backed up with actual significant credit-spread widening or other objective criteria."

Think about what you do and be careful.

This looks like a very speculative forecast in IMO. (He's making forecasts based on what he thinks someone else is thinking?)

[dalereed]

“if you are dependent on credit access and these anecdotes are in fact indicative of actual knowledge of an impending lock-up you are at grave financial risk.”

People like that should be wiped out!!!!

Bring back thq 18% prime rate!!!!

[blam]

Nouriel Roubini: Big Crash Coming