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(The Year 2012 In Review)
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|User Info||Making Sure "It" Never Happens Again; entered at 2009-05-18 12:09:14|
Registered: 2007-09-06 Highlands Ranch, CO
As the next step in the analysis, what do you think would be implications for lending if your proposals were followed? I see:
1. Since unsecured lending requires excess capital, there will be less of it, and at higher interest.
2. There will be much less credit card lending, since this is unsecured.
3. There will be less farm lending, since this is lent against the value of the crop. However, it is always somewhat speculative that there will be a crop, or at least a large enough and valuable enough one to cover the loan.
4. Car loans will require a much greater down payment, since many loans these days are underwater the minute the buyer drives off the lot.
There are likely more consequences I can't think of at the moment.
We have a major problem in Colorado now, in that a local bank went bust that did a lot of farm lending. Other lenders are not stepping up to cover these loans, leaving a lot of farmers in trouble.