Credit Availability Is Stretched
Those hoping to seek a home equity line of credit may find the opportunity passing as each day passes, due to the current credit crunch within the US economy. Globaleconomicanalysis reports:
Right now there is a big disconnect between the equity markets and the credit markets. This is not a stable situation. Perhaps we have a hint of what December will bring given a rare November stock market decline and a negative start to December.
But regardless of how December concludes, the current conditions are not going to be resolved by a 50 basis point cut or even a 100 basis point cut by the Fed. We are facing solvency problems, not liquidity problems.
The ability of consumers and businesses to take on credit has been stretched to the limit regardless of what the interest rate is.
A lack of credit is a terrible thing for homeowners, businessowners, and those looking to buy a home in the future. If availability fails to recover, chances are high that a recession will ensue.
This coupled with the nation’s falling dollar spells bad news for the nation’s economic future.
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