We just had a card limit raised last week too, and this summer our bank called us to restructure our credit with them, effectively increase our limits and lower our interest rates. And talked us into a no cost, very low interest home equity line of credit which we aren't using.

We have assets (our house is nearly paid off, we have some retirement savings left after putting our daughter through a very expensive private college), but our income and future prospects aren't exceptional - in fact they're looking marginal. We've just never missed a payment in nearly 40 years of borrowing - sounds like your sister and husband are the same.

is to continue extending credit to all kinds of people and corporations who can't afford to repay the debt, effectively making the shitpile higher.

But that's not a credit crunch - that's a return to responsible lending practices (as opposed to irresponsible lending practices, which are one of the things that got us where we are). It's your money the bank's lending out.

A credit crunch is when there's no money left to lend to even good customers. And that's not happening.

I believe in a right to a fair trial, a right to a decent home and job, a right to health care, even fair bankruptcy laws, but I don't believe in a right to go so far into debt you can't get out.

You don't achieve a sustainable high standard of living by writing bad loans (as we're in the process of proving). That comes about through decent jobs at decent wages and market regulations that insure bubbles don't price necessities out of reach. All of which our elected representatives continue to pay absolutely no attention to. It also comes from some fiscal self-restraint, from the top to the bottom.

and it's the first one I've seen that does (if MA's credit is good, which I assume it is).

I assume you're referring to the overnight LIBOR, which I think I heard dropped to around 5% from around 6.8%.

But here are the 1,3, 6 and 12 month LIBOR rates, along with the Call Money rate (what brokers pay for money used for margin on stock purchases), and if you compare to a month ago, the rates have gone up slightly. On the other hand, credit was apparently tighter (rates much higher) 12 months ago. Rates are 2% to 3% lower now.

Must've been a credit crisis last year*, because the rates still look like this year they're having a hard time giving the stuff away (or is that what the crisis is - no one borrowing?).

* I believe that's when Bernanke created a crisis by raising rates.

It turns out I have about $15,000 outstanding with Advanta on a low interest rate cash advance, and as of the current bill, the rate hasn't increased. So we have that "what" above where Dykstra's Advanta rate went up, but not really the "why" - "Dykstra says", given the normal quality of reporting, isn't especially convincing - it's another case of extending credit without verification or documentation.

I think the "why" really is more obvious in the article I quoted - each case seems to be one where people didn't qualify for what used to be the normal requirements for getting a loan. That isn't a credit squeeze - it's a return to rationality.

As to whether businesses with decent credit histories will be able to continue to get credit - tightening there is a possibility in the future, but there isn't any reliable way to predict the future. Considering we're well into this crisis (it's been obvious for well over a year - probably 3 or 4), and large failures have already occurred, it seems likely the credit markets have already discounted the future. Credit card issuers will use the sun rising as an excuse to raise rates - esp with a Democratic Congress and increased regulation on the horizon.

To pretend we can continue to lend - whether mortgages, car loans, credit cards or commercial lending - using the extremely lax standards that have recently been applied is to simply postpone and deepen the crisis when the excrement finally contacts the ventilation device. Some people are going to have to change lifestyles and quit living off their credit - home equity, cards, whatever. The solution isn't to keep throwing them more and more credit - it's to make sure they have the wages necessary to obtain necessities and on their part the willingness to live within their means.

Not being able to have both HBO and Showtime isn't an humanitarian crisis, and there are people who'll have to make more of those kinds of choices rather than keeping food on the the table. At the Federal level, a concern for people's well-being is a fairly new development and of questionable sincerity. Had it been an ongoing concern, we might not be where we are now. What about people who couldn't put food on the table last year or for the last 5 years or more? Didn't seem to be a problem back then.

At any rate, presuming the worst does happen and credit gets really tight (in which case lenders are cutting their income streams), I'd think the way to deal with a credit crisis is by making credit available, just as the way to deal with a mortgage crisis is to address the mortgage, not the derivitive, problem. Expecting liquidity to trickle down by bailing out the failed investments of irresponsible financiers seems like Hooverism to me. And after we've taken the Hooverism course, there isn't going to be any money left for real solutions.

that would be the problem, all the way around.

Do you ever wonder why?

That would be the fear explanation, and the conventional wisdom.

The other explanation (see Sterling, cited here) would be greed.

After all, if all you had to do, to gain a trillion dollars of money that's not yours, was to give some painful shocks to small businessmen and 401(k) holders, what would you do? Of course, that would presume that torture had been normalized in our ruling circles. Oh, wait...

[ ] Very tepidly voting for Obama [ ] ?????. [ ] Any mullah-sucking billionaire-teabagging torture-loving pus-encrusted spawn of Cthulhu, bless his (R) heart.