Comments on: Is “Credit Crunch” a trigger to have one? http://raiseyourcreditnow.com/is-credit-crunch-a-trigger-to-have-one/ Wed, 17 Aug 2011 05:23:38 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: PETER F http://raiseyourcreditnow.com/is-credit-crunch-a-trigger-to-have-one/comment-page-1/#comment-2795 PETER F Fri, 09 Jan 2009 07:08:51 +0000 http://raiseyourcreditnow.com/is-credit-crunch-a-trigger-to-have-one/#comment-2795 I'm not sure that the credit crunch can be purely put down to people taking about it then panicking. After all there is a very real reason why we are having a credit crunch. Banks lent lots of money to people who were a high risk. Then when these people are unable to repay the loans the banks lose lots of money. So the banks suddenly panic and tighten up on their lending. This means that many people can no longer get big enough mortgages to buy houses at their current prices. We have had a credit boom and this is exactly why we are now having a credit crunch. I do agree though that a lot of what goes on in financial circles is driven by rumour and panic rather than reality. I’m not sure that the credit crunch can be purely put down to people taking about it then panicking.
After all there is a very real reason why we are having a credit crunch.
Banks lent lots of money to people who were a high risk. Then when these people are unable to repay the loans the banks lose lots of money. So the banks suddenly panic and tighten up on their lending. This means that many people can no longer get big enough mortgages to buy houses at their current prices.

We have had a credit boom and this is exactly why we are now having a credit crunch.
I do agree though that a lot of what goes on in financial circles is driven by rumour and panic rather than reality.

]]> By: P. W http://raiseyourcreditnow.com/is-credit-crunch-a-trigger-to-have-one/comment-page-1/#comment-2794 P. W Thu, 08 Jan 2009 20:28:11 +0000 http://raiseyourcreditnow.com/is-credit-crunch-a-trigger-to-have-one/#comment-2794 You're right in stating that the Credit Crunch is essentially in the mind. The lenders in this country do not operate as competitors to each other, but more like a cosy cartel, where they are all looking at what everybody else is doing and then ever so slightly beating them on price. This is perhaps because they have a common source of funding, the Money Markets in the City. The flaw in your argument is that the term Credit Crunch was invented after the event and is thus an effect, not a cause. Therefore walking around talking about a "Credit Boom" will not cause one. You’re right in stating that the Credit Crunch is essentially in the mind. The lenders in this country do not operate as competitors to each other, but more like a cosy cartel, where they are all looking at what everybody else is doing and then ever so slightly beating them on price. This is perhaps because they have a common source of funding, the Money Markets in the City.
The flaw in your argument is that the term Credit Crunch was invented after the event and is thus an effect, not a cause. Therefore walking around talking about a “Credit Boom” will not cause one.

]]> By: Happy Man http://raiseyourcreditnow.com/is-credit-crunch-a-trigger-to-have-one/comment-page-1/#comment-2793 Happy Man Wed, 07 Jan 2009 17:24:55 +0000 http://raiseyourcreditnow.com/is-credit-crunch-a-trigger-to-have-one/#comment-2793 Recession is on its way. Recession is on its way.

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