Credit Crisis and Bank Problems

[chaobender482]

Well seeing how the Economy is starting to collapse on us, have you guys recently seeing a trend recently knowing the recent Fed Cuts have led to a bigger Credit Crisis as well as seeing Banks Charge unfair overdrafts just to keep those places going, have you guys been going through budget problems because of this latest issue with the economy?

What are your thoughts on it?

[Chibi Chan-o]

All I know is, if Obama gets elected, he'll make it ten times worse.

Please explain your posts more thoroughly.

[Grimmjow of the Funk]

explain why? plz

[Chibi Chan-o]

Obama is saying he'll raise taxes and will try to add health care for everyone. You know how much money the tax increase will cost for everyone? And the US will be put in more debt than ever if he tries to give everyone free health care. All of his ideas are EXPENSIVE.

[CountessRachel]

Your post has little to do with the credit/bank topic of this thread. You might be better off posting this in the McCain or Obama thread.

What the Federal Reserve needs to do is lower the interest rates on loans and promote investment at some point. On top of that, people need to stop buying cheap junk from Wal-Mart (which siphons money out of the American economy) and invest it back into the country.

Funny thing about companies and credit: Based on economic trends, companies offer credit to customers, and then, when juggling the books, they predict a certain percentage of money loaned that they don't expect to get back and write it off as lost revenue. So a lot of businesses can adjust themselves for many financial issues they're gonna face when dealing with customers.

Credit goes a long way if used properly. But I don't think people (especially young people) are taught financial matters and the dangers of credit and often end up learning the hard way.

[Lil' Cheney]

I think a simple rule should be applied if you are appling for a credit card...

If you have been past due on any card in the past 3 months, no card for you.

I also think that people arn't recognizing gases roel in this. Higher gas prices means less people buing gas... that means they have to drive thier cars less,so they only have money to et the basic nessesities and stay home untilt he workweek starts.

It's a great time to either get a locking gas cap, or keep the car in he garage, heres a story..

My family, 3 yearss ago, in a very bad neighborhood we lived in, we filled the gas tank, and parked the car.. overnight, the tank had empied. Dad knew exactly what happened, so he got a keylocking cap.

The next morning, the following is rubbed in the dirt in the back window

"I a ashole"

[attonbitus]

Actually, this whole credit thing is the market stabilizing itself. The housing bubbles that have been growing since the 90's was created upon risky credit policy by the banks.

I used to work for a sub-prime lender and let me tell you there's definite risk involved. It's cyclical based on the well being of the economy. The trick is to know how much you can lend with out putting yourself in a hole if those loans get defaulted.

The company I worked for learned this the hard way during the dot com bust when people that supposedly were going to be the next ebay/yahoo/amazon. After that they set up very strict risk analysis formulas to make sure they'd never get stuck in such a bad hole again. Also they made sure that even if their stock tanks they'd have the ability to keep functioning till there was an upswing in the economy.

Really the biggest problem right now is inflation and the increasing cost of living. While 3% used to be the increase in wages to keep in line with inflation it's definitely not adequate to keep up with fuel cost. Over the last year there's been about a 25-30% increase in gas prices and over a 10 year term it's gone up 400%.

Even if they stabilize the interest rates, it's not going to increase everyone's pay to compensate for the increased fuel costs. At this point alternative fuels would take at least 10 years to create the impact we want them to have AND be wide spread enough to be useful to all.

As far as bank policy is concerned, fees are just part of their overall income. I wouldn't say they're only dependent on that. Personally, I like credit unions more since their non profit. The trade off is that you don't have many bank locations and atms.