No Lending - A Personal Story

So I hear on all the shows CNBC, Fox Business, etc that banks are starting to lend again to free up backlog and get the consumer out there spending cash, so we can continue to pursue our "comfortable" lifestyles. The problem, I recently encountered was that lending comes at a rather steep price. My family and I are in the process of hiring a landscaper to redo our backyard. Rather than tap into savings, I started to look around for a home improvement loan through various outlets. I'm amazed to say that even going through various credit unions, the cost was over, 10% for a loan up to approximately $20,000. If I wanted a loan for over $25,000 then the rate decreased a bit, but was also tied to a variable rate.

We have "outstanding" credit and both employed, so the issue is not based on credit score or ability to repay the existing loan, the problem is there are still many institutions who are deathly afraid to loan to the individual consumer. At a time when banks can borrow from the fed and one another at an astronomically low rate, I would argue the government expects that to be passed on to credit worthy consumers, so we can stimulate the economy in a positive way. However, as a credit worthy consumer, I can honestly say this is still not "trickling" down to the consumer.

The First for 2009

I was a behind the powercurve coming into 2009 with my post. I blame all my holiday travel....yeah that's the excuse. Anyhow, I'm going to hit it hard for the rest of 2009. My carry-over from 2008 was my January put on DRYS, which looks like it will expire worthless as they have had a nice run-up. Their move was primarily based on the Baltic Dry Index. Obviously, as rates increase (which they have) the more a company increases their profits, plus traders realized just how crazy it was to see DRYS in that low of a range.

Going forward....I'm still negative on the retailers in general and positive on the metal and miners. On the macro-level, the big 800-lb gorilla in the room remains the looming stimulus plan and how that will be pushed forward as Obama's team takes office.