Bye Bye Banks and Wall Street

[innerSpaceman]

But how many people are tapping into their home equity right now? How many people are applying for unusual loans?


Until they start calling in peoples' credit card debt, I don't see how most Americans will care? They won't be doing that, btw ... because just as with the Savings & Loan crisis, credit card debt - with jacked up interest rates, fees, and penalties - is how banks are going to eventually get out of this mess. Consumers are going to pay for it one way or another.


Yes, businesses unable to get credit might mean layoffs. Wake me when that becomes widespread.

[wendybeth]

Anyone who tapped into their equity over the past few years- with the thought that their homes were actually worth what the previous market stated- are gonna be in a world of hurt right now. You're in upside-down on your house, which is the average American's main asset. You now owe more than your house is worth, and God help you if you're on an ARM, or have a balloon payment coming up. (There will be no borrowing on the equity to meet that payment). California is probably going to be hit especially hard- this is where Morri can step in and offer her expertise, as I am not as familiar with that market. Construction is way down, which means a lot of people are going to be out of work, etc. It's a domino effect- sooner or later it will hit pretty much everyone in the pocketbook.