Posted on 10/05/2010 7:03:22 AM PDT by Rational Thought
As new regulations push banks toward safer investments and lending practices, the middle class will suffer the most, banking analyst Meredith Whitney told CNBC.
The 26 percent of mostly low-income Americans who don't have bank accounts—as well as the wealthy—are only marginally affected by tighter credit from more stringent banking regulations, Whitney said.
But those in the middle class who have relied on access to credit will suffer as banks that "can't price risk now" become increasingly afraid to make loans.
(Excerpt) Read more at cnbc.com ...
This is one of the major reasons the economy cannot recover.
Don’t Marxists want to destroy the middle class? Isn’t the middle class the borgoise that stands in the way of worker revolution? Don’t they want two classes? Rulers and peons?
The marxist agenda demands that the Glorious Revolution starve out the pesky Bourgeoisie.
Credit for everyday things is a relatively new concept.
I grew up in the 1950s and 1960s. My family did not have credit as we think of it today. Credit was for big items such as a car or a house, not everyday items.
You had three choices back then, lay-a-way, cash, or do with out.
Any credit you might have was from friends or relatives and the amount was small, and the terms very short, pay back next pay day or you will never get another loan.
One exception was the local grocer would on occassions allow known good customers to carry a balance but only until the next pay day.
This may seem harsh, but in truth it was the best thing going. No one had the opportunity to get themselves too far into debt and ruin their life.
I was in my mid 20s before I got my first credit card. It was for emergencies only (but you would be surprised how many emergencies occured when money was easy).
Because I had not been taught how to use money I soon got myself into trouble with credit. By the time I was 30 I was in (what I consider deep debt) for around $30,000 and nothing to show for it. It took me several years to clean that mess up (and happy to report I did and have been responsible with credit every since).
Credit by itself is not a bad thing but it can be abused with bad results for everyone (even those that do not use credit as prices have to rise to cover the loss when people do not pay their bills).
So it is a good thing that credit is being tighten up a little. I do not know if we will ever return to the day credit is not used, but my advise to a young person, pay cash or do without.
Title should read: Middle Class whiteys suffer the most through Obama/CRA/ACORN mortgage scam aka reparations.
This whole mortgage thing is about to get a lot worse.
The hell you say.
Obviously what we need here is new legislation! Aimed at protecting The Middle Class from these eeeeevil banks who pass these new draconian bank rules on to their customers.
Evil bankers! Stop passing legislation on to your customers!
Somebody ping Conress! There ought to be a law!
/end rant
When credit stops flowing from the top (trickle down as it's called) the weakest suffer.
I've seen quite a bit of this type of anti-capital sentiment here on FR as well and I don't like it at all.
exactly. I was out of work and fell behind on my second mortage. I get a letter that states under the new Obama laws I may be able to restructure the loan. But NOOOO!! I make too much money!! Evidently not enough money to pay my loan but too much to qualify for a hardship WTF.
If our economic system would have been left alone, it would have recovered by itself. That's one of the beauties of Capitalism.
This time around, a severe recession has been amplified and pushed to the brink by Government.
Some may think banks are evil. I don't argue that point (in many circumstances). But, as evil as banks may be perceived, Government (in this case) is the real evil.
I agree with you...
But, we have a business level built on easy money and lax credit. If we limit it now (and I agree, we should) it's going to cause a long-term slow down in business as we all deleverage.
I've been very pleased to see that my son, who just graduated with a Finance degree, abhors the idea of going into debt. He has NONE now... and,he doesn't want it. He saved money to buy a computer... now, he's saving money to buy a car. Wish I had done that when I first got out.
When Whitney speaks... I listen.
If you have ever been real sick, you know the road to recovery is long and painful, but the alternative is a lot worse.
I personally think you’re right. I have ot wonder, how many people who are considered ‘wealthy,’ are actually such with cash in the bank or living on credit, keeping up appearances. Credit should only be availabe in small amounts and you should have to prove that you have at least half of what you want to spend in the bank. Unless it’s for emergency medical expenses.
I acutally thought that a percentage of your paycheck should be deducted to go towards paying for loans and any credit debt.
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