In a recent address to Congress, U.S. Federal Reserve Chairman Ben Bernanke announced that the United States is on the brink of recovering from the recent recession. Directly on the heels of this bold statement was the follow-up comment that there would, indeed, be "further sizable job losses" (Globe and Mail). Bernanke went on to state the very obvious fact that the impact from the recession has been astronomical with a very muddled end in distant sight.
Bernanke expects the "...economic activity to bottom out, then to turn up later this year," but this doesn't ease the troubled minds of consumers that are hanging onto jobs by a thread (Globe and Mail). Since Canada's current economic crisis is a direct result of the situation occurring within the United States, Canadians can expect the economic situation within the next year or so to be just as bleak (if not bleaker) as it presently is.
The lesson to be taken from Bernanke's remarks is that the economic state within both Canada and the United States has not yet hit rock bottom. While Bernanke optimistically hopes that this bottoming out will occur soon enough, many others project that the next few years will prove to further weaken the economy. In short, that "bottom out" period is nowhere within immediate sight. This is a lesson that traditional lenders have a good grasp of.
Bernanke's statements aren't loosening the iron grip that traditional lenders are currently holding over all private loans. Banks aren't willing to gamble on consumers that might not be able to pay back loans, which means that a lot of consumers have been left dangling. Given the fact that both Canada and the United States have not yet seen the true bottom of this depleting economic ocean, lenders are not likely to begin issuing out loans any time soon.
This reality has caused many consumers to turn their sights upon non-traditional lenders that are not denying loan applications. Unlike traditional lenders, private asset based loan companies are not swayed by the signs (or forecasts) of the current times. Instead, these lenders base approved borrowers upon conditions other than past credit blunders. Thus, the private loan company has become more important than ever before.
While banks continue to turn away consumer after consumer, private lenders are offering consumers a certain lending shelter from the economic storm. Whether or not the end of the current recession is, indeed, in sight remains to be seen, but (at least consumers can find some solace within the walls of non-traditional lenders.
Bernanke expects the "...economic activity to bottom out, then to turn up later this year," but this doesn't ease the troubled minds of consumers that are hanging onto jobs by a thread (Globe and Mail). Since Canada's current economic crisis is a direct result of the situation occurring within the United States, Canadians can expect the economic situation within the next year or so to be just as bleak (if not bleaker) as it presently is.
The lesson to be taken from Bernanke's remarks is that the economic state within both Canada and the United States has not yet hit rock bottom. While Bernanke optimistically hopes that this bottoming out will occur soon enough, many others project that the next few years will prove to further weaken the economy. In short, that "bottom out" period is nowhere within immediate sight. This is a lesson that traditional lenders have a good grasp of.
Bernanke's statements aren't loosening the iron grip that traditional lenders are currently holding over all private loans. Banks aren't willing to gamble on consumers that might not be able to pay back loans, which means that a lot of consumers have been left dangling. Given the fact that both Canada and the United States have not yet seen the true bottom of this depleting economic ocean, lenders are not likely to begin issuing out loans any time soon.
This reality has caused many consumers to turn their sights upon non-traditional lenders that are not denying loan applications. Unlike traditional lenders, private asset based loan companies are not swayed by the signs (or forecasts) of the current times. Instead, these lenders base approved borrowers upon conditions other than past credit blunders. Thus, the private loan company has become more important than ever before.
While banks continue to turn away consumer after consumer, private lenders are offering consumers a certain lending shelter from the economic storm. Whether or not the end of the current recession is, indeed, in sight remains to be seen, but (at least consumers can find some solace within the walls of non-traditional lenders.
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