Credit Crunch Likely to Hit Consumers the Hardest

[tricky]

This is complete bullshit. Is not being able to buy shit you don't need on credit at 15% interest instead of having a nest egg really that bad for the economy? come on....They shouldn't have been buying the shit in the first place. We're a nation of fucking morons with no fiscal responsibility at all.


The credit freeze, which is shifting into overdrive heading into the holiday season, is expected to hit consumers harder than corporate America.

AP

As banks continue to refuse credit even to qualified borrowers, business will feel the pinch but consumers will feel it even more. Companies have alternate ways to raise money, such as selling stock and bonds. But consumers have few options besides bank loans and credit cards, which are harder and more expensive to get.

So they will borrow less and thus spend less, setting up a potentially ugly fourth quarter not only for corporate earnings but the entire economy.

"The consumers just don't have anything to spend right now," says Rick Pendergraft, market analyst at Investor's Daily Edge newsletter. "As long as that's the case, we're not going to see any improvement in the economy."

Because consumer spending accounts for roughly two-thirds of economic growth, a sharp slowdown could push the US into a recession.

"If consumers can't spend and make acquisitions of goods," Pendergraft adds, "that's not going to help corporate earnings at this point in time unless they're doing a lot of business overseas."

http://www.cnbc.com/id/26956466

[Deff Gordon]

i'm glad i'm virtually debt free.

[Damnsammit]

Originally Posted by tricky

Is not being able to buy shit you don't need on credit at 15% interest instead of having a nest egg really that bad for the economy? come on....They shouldn't have been buying the shit in the first place. We're a nation of fucking morons with no fiscal responsibility at all.

I agree with this 100%.

I try to stay away from credit by all means possible.

The only lines of credit I have is a mortgage (a $83k mortgage that I can afford), a car note (also affordable), and 2 cards that I only use for military/government purposes.

Screw credit.

[St. Stalin the Apathetic]

Originally Posted by tricky

This is complete bullshit. Is not being able to buy shit you don't need on credit at 15% interest instead of having a nest egg really that bad for the economy?

Yes.

Our economy relies on people buying things.

Your rant about being fiscally responsible... preaching to the choir.

[Tortures Dionysos]

Originally Posted by St. Stalin the Apathetic

Yes.

Our economy relies on people buying things.

Your rant about being fiscally responsible... preaching to the choir.

Right. But are we really buying stuff when we put it on a credit card the store hands out with 0% interest for X amount of years?

[St. Stalin the Apathetic]

Originally Posted by The Blob

Right. But are we really buying stuff when we put it on a credit card the store hands out with 0% interest for X amount of years?

Well, if you took the thing home and obligated yourself to pay for it (regardless of rate of interest or date that payment is due) then yes, yes you are really buying stuff

[matias]

I think people fail to understand that we're a credit based economy and it's the only way that the economy can keep up with job needs and growth in the 21st century

I think the important thing to note is that money needs to keep flowing and credit ensures it will not only flow, but grow through interest rates