And the bail out goes right in to the toilet

[smokey the elder]

The enormous increase in the cost of oil, and by extension, gasoline, has caused many Americans to change their driving habits.

I would hazard a guess that the tight credit will cause many Americans to change their borrowing/credit card habits. As usual, the people who get you-know-what seem to be the middle class and lower.

The mortgage mess has such a load of complicated features, going back to the mandates. But there was an awful lot of monkey business with the subprime market, aggressive marketing techniques, etc. playing on people's ignorance. "You can buy a house with no money down and be upside-down on your mortgage! Just call 1-800-WEGYPYU!"

IMO, greed, pure and simple, is the biggest bar on this Pareto chart (geeky statistics tool).

[Edwina's Secretary]

This is about much more than credit cards and home mortgages!

The expression "seed money"? The farmer borrows the money to buy the seed to plant the crops. When the farmer sells the crop he/she pays back the loan with interest. If credit is too tight for the farmer to buy seed, he/she plants less and harvests less. Less food supply means prices go up.

A company makes a product but does not have the income until the buyer of the product pays for it. How do they make the payroll for the people who make the product? A short term loan. Too tight credit means they can't get the money to meet payroll.

Tight credit will not change my use of credit cards one iota (yes I have them and use them. But they work for me. I pay the balance off each month so I get the float without incurring any interest. I have never paid interest on a credit card and I use them daily.)

But tight credit will hamper the ability of businesses to do business.

You rent so who cares about mortgages? Whoever built the structure you rent undoubtably borrowed the money to build it. And the builder borrowed the money for the construction.

And if credit is tight -- the building of housing stock -- rental as well as ownership -- goes down. And if there is less housing stock? Rents go up.

How about cars? Tight credit means you will have trouble getting a loan to buy a car -- new or used. Tight credit also means car dealerships cannot borrow the money to buy the cars to have on the lot for you to buy.

So, if the dealers cannot buy cars to put on the lot the car makers are stuck with inventory they cannot move. If they can't move inventory they won't make more cars. And the car factory workers get laid off. And of course it "trickles down" from there because the auto worker now does not have money to spend.

This is a situation that requires us to look beyond our own backyard. No one is an island and no one -- whether you pay cash for everything or not -- is unaffected by this situation.

[Puckstop31]

ES, I agree with you. I know that just because we do not use credit cards, we will not be effected by all of this. Further, your description of how you use your CC's is wise. Sad that too many people do not use them as you do.

IF banks REALLY decide to stop giving credit to business, that is when things get rough. Jobs will be the first to go. Because if you cannot get credit to aquire product, you need cash instead... It has to come from somewhere. For instance, my company has a large credit line with Dell. This allows us to aquire product from Dell, install it and THEN bill our client. I am sure our business will take a hit if we would need to collect money before we do the work...

This is why I cannot get behind BO's tax plan. How is increasing taxes on big biz going to help this situation?

----

This bail out plan the Senate passed, pisses me off. How DARE they load up the most important piece of legislation in modern history with LOADS of pork spending? Do any of these clowns REALLY get it?

<sigh>

McCain screwed himself voting for it... Mr. "no more earmarks" my rear...

[Grace]

This bail out plan the Senate passed, pisses me off. How DARE they load up the most important piece of legislation in modern history with LOADS of pork spending? Do any of these clowns REALLY get it?

<sigh>

McCain screwed himself voting for it... Mr. "no more earmarks" my rear...

Apparently the Senate feels that by sweetening it up, they would attract more House members to vote for it??

[Puckstop31]

Apparently the Senate feels that by sweetening it up, they would attract more House members to vote for it??

Certainly. But all this proves is our government does not care one cent for US. We should all be outraged and insulted by this bill. AND we should remember who DID vote for it on election day.

We all might just as well write in Mickey Mouse.

Keep your powder dry folks.

[momoffuzzyfaces]

Today the house passed it and the President signed it. I'm already getting emails saying the fed government has approved money for a loan I neither want or asked for.