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Credit Crisis Worsens

Published 08/09/08 Dustin Ensinger - Print Article
E-mail - editor@economyincisis.org

Banks are turning away an increasing number of customers, amid growing fears of the problematic credit crisis.

Hoping to rid themselves of troubled loans – much like the ones that contributed to the subprime mortgage crisis – lenders have increasingly been holding borrowers to much higher standards. The higher standards, resulting in fewer loans, leaves far too many unsold homes on the market, but it does not stop there.

Small businesses and entrepreneurs also feel the pain. They are unable to get the necessary money to continue their ventures or purchase the needed materials to supply customers. These actions result in more job losses and a downturn in the economy.

In addition to being much tougher to get credit, it also appears that credit is becoming much more expensive as well.


Source journalgazette.net:

Forget oil and gold. Credit might be the commodity that's in the scarcest supply these days.

Saddled by soaring loan losses, banks have been drastically tightening their lending standards, effectively putting credit out of reach for many consumers in search of mortgages, credit cards or car loans.

"Like the tide, credit goes in and out," said Jeff Davis, a bank analyst and managing director at FTN Midwest. "And right now it's headed out."

Front Page Photo by Liewfc- Flickr © Some rights reserved

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Article Comments From Readers

guest says "CREDIT CRISIS" on 09/05/08
GEE, IF THE DAMN BANKS WOULD HAVE DONE THIS IN THE FIRST PLACE INSTEAD OF GIVING MONIES TO EVERY TOM DICK AND HARRY WHO WAS BUYING A HOUSE, MAYBE JUST MAYBE WE WOULDNT BE IN THIS MESS,THIS IS LIKE CLOSING THE GATE AFTER ALL THE SHEEP HAVE GOTTEN OUT, NO WONDER THIS COUNTRY IS IN BAD SHAPE, PLAIN GREED

guest says "this is not an article" on 08/10/08
i agree with you point, but this is not an article - it's just a few comments

guest says "Credit Crisis" on 08/10/08
I hope that the government helps us....