Wall Street Crisis Hits Main Street How You Can Improve Your Credit Score Here ph
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In an effort to gain public support for the financial rescue package, politicians have been harping for days on the negative affects the credit crisis will have on the average citizen. The inability to get student, home and car loans has been a favorite topic in speeches by presidential hopefuls Barack Obama, John McCain, Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke and any number of imploring senators and congressmen. News programs have been crammed with stories of bank failures and bailouts in the U.S. and Europe, and the exorbitant interest rates banks are charging each other, but has Main Street felt the impact of the credit crunch yet? It looks like it’s starting to. Job losses have spiked nationwide, auto sales are collapsing, small businesses are finding it hard to secure credit, and the country may soon be facing the largest municipal bankruptcy in U.S. history. In September, layoffs at U.S. companies jumped 33% compared with the same period the year before, and 7.2% more than the previous month, according to a report issued by the employment consulting firm Challenger, Gray & Christmas Inc. (“Factories mired at recession levels, jobs weak,” Reuters, Oct. 1, 2008.) This is expected to get worse, John A. Challenger, CEO of Challenger, Gray & Christmas, was quoted as saying in the report: “It may take several weeks or months for the fallout from September’s Wall Street turmoil to hit the employment numbers.” Meanwhile, a day after getting presidential approval for a $25 billion government loan, U.S. automakers announced that sales plunged in September for cars and trucks. Receipts were down 35% at Ford, 33% at Chrysler and 16% at General Motors, compared to the same period the year before. And American car makers weren’t the only victims of the slowdown: Sales were down 37% at Nissan Motor Co., 32% at Toyota and 24% at Honda as well. (“Toyota, Ford, Honda Sales Tumble on Credit; GM Beats Estimates,” Bloomberg, Oct. 1, 2008)
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The financial crisis has caused lenders to toughen loan standards and consumers to curb spending, according to Tom Libby, an analyst at marketing-research firm J.D. Power & Associates: “It’s a credit story industry-wide,” he told Bloomberg News. “Also, there is a psychological impact of all the news about banks in trouble. If people can wait to buy a car, they’ll wait.” The Wall Street Journal reported late last month that two top U.S. Chamber of Commerce officials complained that some small and midsize businesses are having trouble getting financing for day-to-day operations. “The business community that we represent relies on credit on a daily basis to make payroll, to purchase inventory, to borrow, to expand,” Chamber of Commerce executive vice president Bruce Josten said. Such loans are now less accessible and more expensive, Marty Regalia, the Chamber’s vice president and chief economist, said. Because all banks are linked via the interbank lending market, when banks are hesitant to lend – as they are now – “that limits banks ability to meet their customers’ demands,” he added. (“Small Businesses Can’t Get Cash,” Wall Street Journal, Sept. 25, 2008.) Then news broke today that the most populous county in Alabama, Jefferson County, missed an $83 million payment on its sewer debt. Commissioners said the county simply didn’t have the cash to make the interest payment. Negotiations are ongoing between the state governor and its Wall Street lenders, but it looks likely the sewer board will be forced into the largest municipal bankruptcy in U.S. history. (“Jefferson County defaults on interest payment,” Oct. 1, 2008, WSFA News.) Sources: http://www.reuters.com/article/newsOne/idUSN0150418820081001 http://www.bloomberg.com/apps/news?pid=20601087&sid=ar1qfEilH2ZQ&refer=home http://blogs.wsj.com/economics/2008/09/25/small-businesses-cant-get-cash/ http://www.wsfa.com/Global/story.asp?S=9104417&nav=menu33_2 How will you use this information to the fullest? Tell me and I'll send you a free gift.
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Do's and Dont's of the Credit Card Game Here pf Futhermore: Wall Street Crisis Hits Main Street
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