"Eisboch" wrote in message
...
Help me out here.

I hear the economy is frozen. Banks won't lend. No mortgages. Hoarding
their bailout money.

Yet, virtually every commercial break on MSNBC or CNN features at least
one pitch from a major bank or a mortgage company (Ditech comes to mind,
which is a GMAC subsidiary) offering low interests mortgages, loans and
"we have money to lend" announcements.

So, why aren't they lending? Seems to me that this would be an ideal
time for people to re-finance for lower rates, etc.

Economics confuses me.

Eisboch

They are looking for AAA credit. If I have a 300 score loan for $20,000, if
I can get a 900 score new loan for $20,000 I can say the average is 600 for
$40,000. Repackage and send the debt to the markets needing a minimum of
say 500.

Low end debt isn't moving. But say you own your own home and have cash, no
problem.

And they now have lots of cheap money to lend courtesty of future currency
devaluation. A smart person has to ask and evaluate the possible affects of
fiat money, inlfation and future interest rates. Plus the Fed might drop
interest rates to zero. Makes a nice spread if you pay 5% and the
government will bail them out.