Word: crunches
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Dates: during 1990-1999
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...into a recession, but Federal Reserve Chairman Alan Greenspan has steadfastly maintained that rates must be kept up to hold inflation at bay. Last week Greenspan blinked. In testimony before the Senate Banking Committee, he acknowledged for the first time that many banks are causing a credit crunch by being overly stingy in granting loans. As a result, Greenspan said, the Federal Reserve may act to "offset" the credit tightening by engineering a "modest" drop in interest rates...
Donald Trump is not alone in his misery. Hapless borrowers, crushed by debts they assumed during the go-go 1980s, have made the term "cash crunch" a byword of the '90s. The average U.S. company is so loaded down with loans that it must spend fully 50% of its pretax earnings on interest payments, vs. 32% in 1980. "The major issue facing the nation is that people and companies can't live off debt indefinitely," says Louis Masotti, a professor at the Stanford and Northwestern business schools...
Small companies are particularly vulnerable to a credit crunch. Unlike major corporations, which can sell bonds or borrow on Wall Street, smaller firms rely on banks for most of their loans. Yet such companies may lack the well- established credit records or other evidence of reliability that increasingly nervous lenders demand...
...recent Government effort to persuade banks to make more loans is an encouraging sign that the credit crunch will not be allowed to strangle the U.S. economy. In Washington last week a conference of New England lawmakers, lenders and economists cited the May 10 meeting between regulators and bankers as evidence that the credit crisis in the Northeast may be easing up. Nonetheless, the experts said the region's economy has been so weakened by the scarcity of credit and other problems that it is likely to remain sluggish for the next 18 months...
Beset by new regulations and bad old loans, lenders cut back and customers feel the crunch. -- Attacking the lucrative drug-accessory trade. -- Andrew Tobias dissects a savings plan...