Thursday, February 7, 2008

Credit Crunch?

So is there really a "credit crunch" out there? What of these two facts:

Warren Buffett, the billionaire investor said "money is still available and reduced interest rates make it quite cheap."

Two additional questions were asked in a special poll of the ISM non-manufacturing panel in January. (From ISM report dated Feb 5, 2008)

Question - Is the turmoil in financial markets having any effect on your firm's ability to obtain regular or additional financing?

Yes — 14.6%
No — 85.4%

1 comment:

Jay Walker said...

Well, there's two sides to this. Firstly, there's no doubt that credit is cheap. It's been cheap for some time, and until inflation upticks, appears it will continue to be cheap for some time.

The other side is availability. It appears readily available to traditionally credit-worthy customers. However, lending standards have lowered in the past five years; and those customers who previously had difficulty obtaining cheap financing are finding that it's "Back to the Future".

Overall availability doesn't appear to be too bad on historical standards. But if recent economic activity has been built on loose credit ... then yes, it is a "crunch"

Jay Walker