In early 2008, though I was only earning about $1200 a month at the time, about a $1,000 a month less than my living expenses, I had access to about $100,000 worth of credit via various credit cards.

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I'm reading this new book by economist Thomas Sowell — The Housing Boom and Bust.

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For more than a decade, US newspapers have editorialized that banks are more conservative than they should be about lending money to blacks. The current foreclosure debacle suggests otherwise.

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Credit rating agencies were spectacularly wrong in the past few years when they tried to assess the worth of mortgage-backed securities.

When thousands of home owners can no longer afford to send in their monthly mortgage payments, all the fancy financial instruments in the world are still going to fail.

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Those are upfront fees.

It's usually not a good idea to refinance your mortgage to pay off student loans. Such loans have a lot of flexibility and fewer penalties than other types of loans.

Read more on A Refinance On A First Mortgage Will Typically Cost You $2,000 To $4,000…

Americans are no longer thrilled to extend their debts. For the last six months, the amount we owe on credit cards, auto loans and other forms of consumer loans dropped, according to the Federal Reserve. That's the longest decline since 1991.

Read more on Recession Reshapes California's Housing Market…

Angelo Mozillo in 2007 noted that the mortgage market was seeing defaults at a rate not seen since the Great Depression. This remark was the first official announcement of our mortgage meltdown and Countrywide stock went in the toilet.

Read more on Corporate Loan Default Rising To Level Of Great Depression…

I am reading the 2008 book by Charles Morris, "The Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash."

He is publishing in February 2009 a revised paperback edition called "The Two Trillion Dollar Meltdown."

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From Bloomberg:

California Governor Arnold Schwarzenegger says his and other states may need emergency federal loans as funding dries up.
Bernanke announced new moves today aimed at easing the lending crunch. The Fed will double its auctions of cash to banks to as much as $900 billion and is considering further steps to unfreeze short-term lending markets.
Gannett, the largest U.S. newspaper publisher, said Oct. 1 it drew on a revolving credit line to ensure it had funds to repay its commercial paper.
Duke, Caterpillar
Lending between banks is also seizing up. Republican Representative Jerry Moran of Kansas, in an interview with Bloomberg Television, encouraged the Fed to consider guaranteeing loans between banks.
Fed Powers
The central bank has power to extend credit to any company under "unusual and exigent circumstances." Investors anticipate the Fed will cut rates in an attempt to lower borrowing costs and encourage banks to lend. State and local governments having trouble meeting cash needs may push for help. "If states can't access the credit markets because of market conditions, then the Treasury should consider providing it," said Ben Watkins, a member of the debt committee of the Government Finance Officers Association, a group of public finance officials.
Services Endangered
Market disruptions forced Oregon to cancel a $21 million sale of bonds for the state university system and several other planned issues are in jeopardy, State Treasurer Randall Edwards said. Since 2005, New York Fed President Timothy Geithner has been pushing to reduce risks in the $54.6 trillion credit-default swaps market.

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From MSNBC:

If you bank with a credit union, make sure that it is insured under the National Credit Union Insurance Fund, which provides similar protections for credit union account holders.
Retirement investments
The FDIC also provides coverage of up to $250,000 for certain retirement accounts, such as IRAs that are held in FDIC-insured financial institutions. Some brokerage firms also have supplemental insurance for certain investments, should their brokerage fail.
Money markets
Money market funds often have been considered a safe haven for stashing cash that you don’t want in riskier investments, such as stocks. Mutual fund firms, also, have taken steps to comfort worried investors, including disclosing money market fund holdings and posting information about their investment decision-making.
Russ Kinnel, director of mutual fund research with Morningstar, said the best way to assure that your money is safe in a money market fund is to choose a relatively large, low-cost fund from a large company. Consumer credit
For many Americans, the credit crunch that is a key factor in the current financial crisis has been a relatively abstract idea, affecting mainly large financial institutions. Business credit
Economists are watching closely to see if the credit crunch is going to make it harder for small- and midsized business owners to borrow money.
Mortgages
The crisis on Wall Street shouldn’t have a direct impact on people who are paying their mortgages on time.

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Floyd Norris writes:

J.P. Morgan has a glum forecast, and its shares fell 9 percent today.

“Given the potential stress on the consumer from the continued downward pressure on housing prices and the elevated national inventory of unsold homes, management remains extremely cautious with respect to the home equity, mortgage and credit card portfolios.”

Read more on The Credit Squeeze…