United States to World: 'Keep your Boats'

[schoonerdog]

A leading broker/importer here in Annapolis just mentioned that all imports have stopped because there are no financial letters of credit to cover the passage from Europe, et. al. to the United States. So this broker at least is shut down fo now.

[Zanshin]

Those financial letters of credit refer to that particular broker's financial ability. Just means that this one brokerage doesn't have sufficient credit rating.

[usa-068]

I'm not sure what you're saying. Documentary Letters of Credit are a normal course of business. There's no reason for banks to stop issuing them for their clients. They're among the easiest and lease complicated an account that one could ask for. Likely that this particular importer is casting false rumors to explain his loss of credit with his overseas supplier of boats.

Like they said...

The broker is either ignorant of the situation, or is lying to you to cover his own problems. There is no reason to stop isssing Letter of Credit, they frequently are not even credit, but rather confirmation that depsits have been committed and available at that numer of dollars.

If he can't get letters of credit, he doesn't have any money. It doesn't effect anyone else except his customers. He just wants them to think it's somebody else's fault.

[roverhi]

The banking system is locked up. Banks are afraid of committing to any possible outflow of cash. Just had an escrow held up for 3 weeks because bank could/would not fund the loan to a qualified buyer. At this time, normal business practices just aren't happening because everyone, including the banks are in panic mode.

Aloha
Peter O.

[Reality Check]

Same here, I've had two closing fail due to lenders not funding Pre-Approved loans... buyers are out big bucks for inspections and surveys on homes (not boats). Banks now saying they may be able to fund next week or week after.

Other buyers have walked away from escrow deposits due to cold feet or in one case the stocks they were going to sale to buy a house are now worth about 60% or less that what they were 3 weeks ago.

Local car dealerships indicate they are not getting lines of credit to order the new 2009 cars due in this month.

Check your local banks... some are now offering 4.5 to 5% on CD's. That is a bad sign that they are running short of operating funds and are in a panic to get additional funds deposited.

While many business credit line will not buy as much as it once did... all the problems are not just with the business... capital funding for anything including inventory is much harder to get.

All we need is talk of increasing taxes on business and we will have a bigger problem than most expect. May be a good time to hit the seas for a few years???

[DeepFrz]

Seems like Great Ketch is a little out of touch with the reality of the situation.

Government in Canada had to buy up a whole bunch of mortgages so the banks would start giving out business loans and renewing qualified mortgages. The world financial situation is very grave indeed. I'm sure that pleasure craft is not very high up on the list of government or bank priorities right now.

Strange how the "free enterprise" institutions always seem to be first to the trough...

[Chief Engineer]

I've got my beans, rice, sailboat and tools.......and fishing gear

[Pblais]

At this time, normal business practices just aren't happening because everyone, including the banks are in panic mode.

Pretty much. It's now global. People that always had credit don't have it. People that always paid on time - can't. It's time to sit back and wait and hang on to all your cash.

[AnchorageGuy]

Letters of credit have nothing to do with loans pre-approved or any other kind. They have nothing to do with mortgages or real estate loans.

[S/V Antares]

The Pope said Sand. Little did we know it was Quicksand!

This fire is being fueled by the media who live for disaster and fabricate when lacking substance.

The NYSE is frought with overvalued companies that should be weeded out.

I would rather see a return to reality then prop up these "Takers".

Any stock kept over a year should have no Cap gains tax.

There are plenty of well founded solvent banks still out there.

Lastly...Who ever heard of a broker making excauses? ( Ha Ha )

I am heading south where the news does not go and will see what happed when I get back in the spring. Chief! I have some nice onions for the rice and beans

[Chief Engineer]

I like to chop up those little green onions.

Black Beans, Yellow Rice, Green Onions

(Hey I think there is a buffetesque song there!!!!) I better copyright the title now!!!!!

[GMac]

I deal with Letters of Credit a lot and all they are is your bank promising to pay the other guy if you don't. Obviously your bank will only issue one if you do have the coin to pay the other bloke, they have no intention of having to pay up themselves.

Gotta love this big clean out. About time many who were living in fantasy land mucking the real people around, found reality.

I see Australia is going into meltdown big time now as well. Even though it (and NZ) have a very different banking system than the US and EU. It's the Chinese who have started cancelling massive orders for steel and other commodities that has had the Aussie economy rocking along. Their reserve bank cut the ORC by a full 1% and it didn't do anything, their market is still in free-fall.

[GordMay]

Originally Posted by Reality Check

... Local car dealerships indicate they are not getting lines of credit to order the new 2009 cars due in this month...

A sign of the times?

Capital One Suspends Auto Dealer Floorplan Lending in NY, NJ

“ Capital One Financial Corp.'s (COF) auto finance arm is suspending lending funds used by auto dealers to stockpile inventory in the states of New York and New Jersey. The suspension is effective Nov. 1.

This turns up the heat on financially strapped dealers, and indirectly makes it harder for consumers to get loans, particularly for new cars...

... Capital One's move follows similar ones made by the finance arms of Detroit's Big Three auto makers -- Chrysler Financial; GMAC LLC, which is partly owned by General Motors Corp. (GM); and Ford Motor Credit. These lenders are also selectively tightening credit to many auto dealers...”

Goto: Capital One Suspends Auto Dealer Floorplan Lending in NY, NJ - Capital.gr

[jcmcdowell]

I am (was) a residential real estate developer in Georiga in 2007. I built 3.4 million in real estate between loft redevelopments and residential housing. So I'm small potatoes. I design, develop, general contract, and sell the projects.

First the banks politely notified me they were revoking my equity lines despite no payments issues what so ever.

Then mortgage companies after 10 months and 8 different companies said they could not refinance my construction loan into a permanent loan.

Then my credit card companies send me a very nice letter they are reducing my credit limit to below what I currently owe.

Now we can't even get a qualified buyer a loan that will actually close. In effect, we are self financing the loans simply to put people in homes.

The end result- the banks killed all my liquidity, no more room to do business, but they expect their payments every month regardless. I'm out of reserves, all the equity is gone, and I'm out of business. Not to mention, I've lost 10 years worth of capital investments.

But hey it's not all gloom and doom! I'm healthy, I'm capable, I have a loving family, and I have a boat that's paid for!

Very good time to get on a boat.