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  • From: "Wendy" <crazygardens AT verizon.net>
  • To: <homestead AT lists.ibiblio.org>
  • Subject: Re: [Homestead] Is it serious, or is it not?
  • Date: Wed, 1 Oct 2008 18:51:50 -0400

I often do not agree with James, but here he is dead on. Small businesses, community banks, etc, will not be affected horribly by this mess. If you notice, it is the "wealthy" that are squawking the loudest over this. It is their big fortunes that they have accumulated on paper and have used as leverage for loans and those who live "high on the hog" on cash flow, not cash, that are going to suffer. Well, you know the saying, the bigger they are, the harder they fall.

This proves a point that I have been harping on for years: We no longer have much cash (or real value) in our economy at all -- our country is existing through cash flow and arrogance only. The King has no clothes.

Wendy
(who is actually having a good chuckle over this.)



>Hey, wait a minute, James <G>. I'm as philosophically opposed to any
bail-out as you.


Bob, it's not your philosophy I was referring to but rather your worries as
above stated.


>I'm concerned how even small businesses, in cities, and in small towns, >can
function in a new economic paradigm, thrust upon them with no notice.



Several things about this: This very topic was on a local talk radio program
this morning, to wit; "Gasp! Won't this dry up all the local credit so no
one can buy a house or car or borrow for business." Several local bankers
(bankers of local banks, First Tennessee, Highlands Union, etc.) called in and
said they had plenty of money to lend ON A TRADITIONAL BASIS. That is, if you
wanted a mortgage loan, you had to have at least 20% down and that downpayment
could not be another installment loan. If you wanted to buy a new car, you had
to have a down payment and the approval of the loan would be based on your
income and credit history.

When people clutch their chest having the 'big one' over credit drying up, it
is almost invarialby they type of utterly unwise credit that has been the
coin of the realm for the past decade or so. Good ridance to it.

Some of our cities around here became debt junkies and addicted to
maintaining a good credit rating. They are going to suffer some, and to that I say,
good! Some (like Abingdon, Va) funded most of their projects cash on the barrel
ahead of time and they are going to do fine.

In a word, the notion that people, companies, businesses, and even cities
that have used sound, wise business practices are going to suffer in the absence
of unwise and bad credit is bogus. Those wallowing in the 'credit is good,
more credit is better' mire ought to get singed and mend their ways,
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