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john said:
but it’s powerful enough to throw this economy out of balance.
Some would argue that the economy has been thrown off balance a long time ago. The credit crunch is actually going to get things back into balance.
SQT,
Sorry to hear about your parents. I remember a time when it sounded like things were going to work out sort of OK for them.
Not knowing the situation, I don't know what to say. It sounds like you definitely need to keep a strong boundary with them in order to avoid giving more than you have available to give. Difficult, that. But, yeah, you probably don't want to have them living in your house. Or borrowing your money. It sounds like advising them in any way is really difficult, too.
It is always possible that they will change enough that you will be able to help them in some way in the future--advice if they are able to accept it, maybe helping them to find their way into a budget and reasonable housing (not yours). Or maybe just giving them love and no additional rope.
@Steveoh
In the graphic for this thread, what is the asterisk after “Free Helicopter Inside!†denoting?
Straight answer to your question can be found in the Wikipedia article that describes why Bernanke is derisively called "Helicopter Ben" by his critics. Note that his actual remarks were more nuanced than what critics have attributed to him. Furthermore, an argument could be made that stealth inflationary injections of the sort he described in his remarks are exactly what has been transpiring this month.
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In this age of fast moving information, some catchy phrases get very quickly regurgitated by clueless journalists. First it was Goldilocks and now it is the scary monster called "Credit Crunch".
Problem is, I don't see it. I don't doubt that it is happening at the intitutional level where financial institutions are afraid of lending money to each other.
But at the individual borrower level, things seem fine. Now "fine" is a relative word. Things are definitely not fine if you consider recent past as any benchmark. But recent past is simply not a good benchmark.
It should be hard for borrowers to get loans without proving their incomes. It should be hard for borrowers to get loans 10 times their incomes for an asset that is likely to depreciate. It should be hard to to get a negative amortization, 100% loan.
If that is what is happening, then it is simply a return to normal lending standards. This is not credit crunch. This is what it should have always been and I hope this what it will be for a long long time.
When a double income, 800 FICO family finds it impossible to get a loan without 30% down payment - I will call it credit crunch. That may happen very soon, or may take a while.
What do you say ?
StuckInBA