Posted on 01/08/2010 1:49:56 PM PST by AngelesCrestHighway
Americans borrowed less for a 10th consecutive month in November with total credit and borrowing on credit cards falling by the largest amounts on records going back nearly seven decades.
The dramatic declines raised new worries about whether consumers will cut back further on spending, making it harder for the economy to mount a sustained rebound.
The Federal Reserve said Friday that total borrowing dropped by $17.5 billion in November, a much bigger decline than the $5 billion decrease economists had expected.
Americans are borrowing less for a number of reasons. They remain fearful about their job prospects and they are also trying to replenish depleted investments. The government reported Friday that employers cut an additional 85,000 jobs in December, bringing total job losses to more than 8 million since the recession began in December 2007.
Do to your P.C. showing, you forgot another huge reason....No confidence in the bungling disaster in the White House!
They are cancelling credit cards at a record rate.
People are maxing their lines at a record rate.
People aren’t buying as much stuff.
Trifecta.
“Americans are borrowing less for a number of reasons.”
One of which being that the BANKS AREN’T LENDING because they are sitting on the money WE GAVE THEM to allow them to CONTINUE LENDING to supposedly keep the “ECONOMY FROM COLLAPSING” which they are not doing.
In other words, the decline was UNEXPECTED !!! This article belongs in the burgeouning 'unexpected' and 'unanticipated' file here at FR.
a much bigger decline than the $5 billion decrease economists had expected.
So it's 'unexpected' and undoubtedly Bush's fault.
“they are sitting on the money WE GAVE THEM”
No thanks to Obango and his merry band of socialists....
In other words, the decline was UNEXPECTED
With the Obozo administration, it’s all unexpected. With a republican, it would have been a disaster according to the media.
I just purchased a new Honda and got credit like it was nothing...I’m not sure which banks are not lending but it took about 30 seconds for me to get approved. I guess AAA credit is good for something after all...
Oh, and as an aside, I sold my American brand Dodge (made in Canada) and bought a foreign brand Honda (made in Alabama). I’ll never buy GM or Chrysler as long as I live again.
Hehe. I just traded in my Mazda RX8 for a Ford F150 with a low APR a month ago, and today and got prequalified for over $100k home loan at 5.375% so I can upgrade in the coming months.
I am not talking about buying a new car on the individual end. I’m talking about credit lines for businesses to reorder supplies and such.
Yeah, that reminded me. I completely forgot that I refinanced in May (15yr 4.25%) and closed in three weeks...again, that money borrowing thing was still no problem for me...
Go figure? Good credit = money, bad credit = no money...that must be discrimination by the big bad banks.
Ford is the only “America” company I can buy from. I have a 2000 GMC Yukon, when it dies I will seriously look at the F150s (quad cab, I have two kids). I hope they don’t become gov’t subsidized before I need a new truck.
“No confidence in the bungling disaster in the White House!”
Amen! And why should we have any confidence in the feckless federal government? We bought a house in Nov. and qualified for the “First Time Home Buyers Tax Credit.” We went on line and filed the necessary Form 5405 for our $8000 and waited and waited and waited until yesterday when I called to see what had happened to it.
I got a typical IRS employee who confirmed that they had received our paper work, but had no idea why it had not been processed. He suggested I go online and see if I could find a contact number because he didn’t have one for that program. I couldn’t either, but when I clicked for information on the FTHB bill, I learned that as of Nov. 7, the original Form 5405 no longer was valid because Congress had extended the program past the original Nov. 30 deadline. A revised 5405 would be available as of Jan. 8, 2010...today. Was it? Of course not. The dullard I spoke to at the erroneously termed “Help Line” today had no clue about this mystery revision and when it would be available.
So...if you submitted your FTHB Form 5405 on a home bought after Nov. 7, you are not going to get anything until you re-file everything with the revised 5405 that they have not provided yet. I guess they are waiting for Ben Bernanke to print more money before they print the claim form.
I hate this torpid government bureaucracy.
My God!...What a perfect example of this bureaucracy gone completely biserk! My sympathies.....
“Americans are borrowing less for a number of reasons.”
One of which being that the BANKS AREN’T LENDING because they are sitting on the money WE GAVE THEM to allow them to CONTINUE LENDING to supposedly keep the “ECONOMY FROM COLLAPSING” which they are not doing.
I cant' speak for all companies, but I work with (not for) a company in the economically depressed Reading, PA area (they have about 125 employees). They just got a loan for ~1M for equipment upgrade. They had no problems at all.
Why Government Spending Does Not Stimulate Economic Growth: Answering the Critics
And how taxes affect economic growth.
Great article.
JANUARY 8, 2010, 2:57 P.M. ET
“Removing water from one end of a swimming pool and pouring it in the other end will not raise the overall water level. Similarly, taking dollars from one part of the economy and distributing it to another part of the economy will not expand the economy.”
>> credit lines for businesses to reorder supplies and such
Consumers aren’t buying... why should businesses borrow to expand?
It’s a double whammy. Banks don’t want to lend AND businesses don’t want to borrow (or, for that matter, hire).
Except of course “green businesses, which are booming, growing at an annualized 12% rate, and hiring like mad!
(ha ha I just made that last part up for a funny)
We have closed the account and are transferring every penny deposited with the provider bank to a local credit union instead.
If they don't want people who keep significant deposits with them and have always paid on time, with that one exception, then I'm happy to go elsewhere.
>> “...taking dollars from one part of the economy and distributing it to another part of the economy will not expand the economy.”
WHAT!!?!
You mean we CAN’T build a vibrant economy on the sustainable foundation of government employment?
I heard that by expanding education, health care, and government, we could grow GDP at 8% per year FOREVER. Just like China!
They were bailed out to stop them from collapsing which in turn would have caused the economy to collapse or so goes the theory.
The lending practices at the current time are what they should have been all along. Lend to those that can pay back,not because the government is telling them they need to lend to various groups.
Amazingly,all without resorting to unnecessary caps to make my point.
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