Credit Crisis

As we all know, the last year has been hell on the economy, and in particular, the financial industry. This has had the unfortunate effect of making it very difficult to extend credit to the everyday person. People who believed that they were in good credit standing are now getting their credit limit cut without being told why.

Even though the prices of cars and homes are down, it is too difficult for most people to receive loans, although this time last year banks and credit card companies would have been jumping all over themselves to extend credit to these people. I know that it seems grim but there are still ways that the average person can receive a loan. They just need to know how.

A lot of the professionals out there are starting to sing the joys of Bio Tech since the election of Barack Obama to president. You might be asking yourself what the hell is BioTech? According to wikipedia which has been the easiest to consume definition that I have found it basically means, “technology based on biology, especially when used in agriculture, food science, and medicine“. That is basically what it is in a nut shell. So okay thanks for the definition now what does this have to do with Obama? Ah my young padawan(star wars reference) I am slowly getting there.

In 3 months we have lost 1.2 million non-farm related jobs. The only industry that was up was Government jobs. Ladies and Gentlemen meet recession, recession meet the people. You are hearing reports that the economy is bad. The economy isn’t bad, it’s hell on a hot plate. The highest unemployment got in the 2001 recession was 6.3%, we are already at 6.5% and most economist believe that this recession is only at the beginning.  I am not telling you this to scare you, only to warn you that don’t believe anyone trying to sugar coat what kind of trouble the economy is in.

Before the economy busted you kept hearing the talking heads on TV say the the fundamentals of the economy were good and that the media were trumping the problem up. I have not seen not one of those talking heads say, “oops my bad, I was wrong”. The stock market is indeed influence by news but it also is influence by the realities of what was going on in everyday life. The tech bubble that blew earlier this decade was bad but this recession is a whole different kind of monster. We are talking about housing, the biggest investment most Americans will make in their life. Last year around this time you would keep hearing on TV that the “sub prime crisis was contained”. Obviously they were wrong. This is not the time for I told you so, this is the time to listen to your gut more than any talking heads on television. You know better than any professional whether your financial portfolio is sound enough to start spending and investing again.