The News Time

What ails the US economy and how to cure it

noreply@blogger.com (credit cure) — Thu, 20 Oct 2011 17:08:00 +0000

As the economic slump that began in 2007 persists, the question on everyone's minds is obvious: why? Unless we have a better understanding of the causes of the crisis, we can't implement an effective recovery strategy. And, so far, we have neither.

We were told that this was a financial crisis, so governments on both sides of the Atlantic focused on the banks. Stimulus programmers were sold as being a temporary palliative, needed to bridge the gap until the financial sector recovered and private lending resumed. But, while bank profitability and bonuses have returned, lending has not recovered, despite record-low long- and short-term interest rates.

The banks claim that lending remains constrained by a shortage of creditworthy borrowers, owing to the sick economy. And key data indicates that they are at least partly right. After all, large enterprises are sitting on a few trillion dollars in cash, so money is not what is holding them back from investing and hiring. Some, perhaps many, small businesses are, however, in a very different position; strapped for funds, they can't grow, and many are being forced to contract.

Still, overall, business investment - excluding construction - has returned to 10% of GDP (from 10.6% before the crisis). With so much excess capacity in real estate, confidence will not recover to its pre-crisis level anytime soon, regardless of what is done to the banking sector.

The financial sector's inexcusable recklessness, given free rein by mindless deregulation, was the obvious precipitating factor of the crisis. The legacy of excess real-estate capacity and over-leveraged households makes recovery all the more difficult.

But the economy was very sick before the crisis; the housing bubble merely papered over its weaknesses. Without bubble-supported consumption, there would have been a massive shortfall in aggregate demand. Instead, the personal saving rate plunged to 1%, and the bottom 80% of Americans were spending, every year, roughly 110% of their income. Even if the financial sector were fully repaired, and even if these profligate Americans hadn't learn a lesson about the importance of saving, their consumption would be limited to 100% of their income. So, anyone who talks about the consumer 'coming back' - even after deleveraging - is living in a fantasy world.

Fixing the financial sector was necessary for economic recovery, but far from sufficient. To understand what needs to be done, we have to understand the economy's problems before the crisis hit.

First, America and the world were victims of their own success. Rapid productivity increases in manufacturing had outpaced growth in demand, which meant that manufacturing employment decreased. Labor had to shift to services.

The problem is analogous to that which arose at the beginning of the 20th century, when rapid productivity growth in agriculture forced labor to move from rural areas to urban manufacturing centers. With a decline in farm income in excess of 50% from 1929 to 1932, one might have anticipated massive migration. But workers were 'trapped' in the rural sector: they didn't have the resources to move, and their declining incomes so weakened aggregate demand that urban/manufacturing unemployment soared.

Source by: Economictimes.indiatimes.com

How long does the bankruptcy process take?

noreply@blogger.com (credit cure) — Fri, 20 Nov 2009 06:35:00 +0000

For Chapter 7s, once the filing is made, an automatic stay prevents further collection activity against you, with a few exceptions, such as child support proceedings. You will have a creditors meeting the following month, and you will get your discharge within three months of the creditors meeting. For Chapter 13s you will have a creditors' meeting and a plan confirmation meeting. Once your plan is confirmed, you will be required to make monthly payments to the Chapter 13 trustee for a minimum of three years, maximum five years, and receive your discharge upon completion of your payments.

For either chapter 7 and chapter 13 you will have to get a second certificate — known as a financial education or debtor education certificate — from one of the court approved credit counseling companies proving you took a class (online, by phone, or in person). We will file that certificate with the Court for you.

Bankruptcy Information

noreply@blogger.com (credit cure) — Wed, 04 Nov 2009 01:40:00 +0000

Bankruptcy is a legal term to formally identify an individual as bankrupt. It refers to the inability of any debtor or organization to pay their creditors. In majority of the cases, bankruptcy is initiated by debtors or organization themselves.

New Bankruptcy Laws?

There is now a new law for bankruptcy that was passed called the "Bankruptcy Abuse Prevention and Consumer Protection Act". People struggling to pay their credit debts are now going to have to deal with this new bankruptcy law.

Bankruptcy Can Stay On Your Credit Report For 10 Years

The new bankruptcy legislation, which took effect on Oct 17, 05, has made the process of filing for bankruptcy a more laborious task, for attorneys and debtors. Of course, that's one side of the coin and the shift is undoubtedly geared towards benefiting the end customer; the debtor.

Some Easy Steps to Get Home Loans

noreply@blogger.com (credit cure) — Thu, 22 Oct 2009 23:18:00 +0000

For More Details You Can Visit :- http://thecreditcure.com/

You are planning to buy a home. We will go through the necessary steps to get home loan: some before you apply for it and some after you apply for it.

# Before you begin shopping for your home, it’s good to figure out your budget. This prevents any of those nasty surprises later on, making home ownership enjoyable rather than an overwhelming burden.

# 2 Get Pre-qualified for a home loan: Getting pre-qualified for a home loan is a good idea because it gives you an idea how much you can borrow.

Easy Home Loans When You Have Credit

noreply@blogger.com (credit cure) — Thu, 22 Oct 2009 01:55:00 +0000

These days its fact that its not hard to get home loans. Either its home equity loan or its mortgage loan and availability of easy home loans is in full bloom.
Home Loans safe for all loans are given at the residence of the borrower. All the valuables may be placed into the safety of the loan lender.

This is the basis for obtaining property lender as the security of the home loans for all can be consulted by all. So the loans may be made by the borrowers who want smaller or larger, depending on their own debt assets. You can choose from a financial background, all approved for home loans easily. A major advantage of home loans to all loans carry lower interest rates for each borrower and therefore loans are rarely a repayment burden.

You can source for everything from home loans to banks, financial companies. Make sure to compare interest rates before a specific lender. Online lenders have lower prices as competition in the loan market.