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Comment by pbhjpbhj | Hacker News Reader

It sounds like you're rich?

We tried to get a business mortgage - despite being able to show we've paid double the monthly repayment amount in business rent for 7 years no one will even give us a ludicrously bad offer nvm actually accept us as a customer.

This seems like madness to me, add a 25% deposit and an insurance requirement and I think it's impossible for them to lose money on the deal even if we default and they sell off the building - indeed they probably make a pretty good profit that way.

No bank needs my money. There are definitely some auto mechanics that do.

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>>> impossible for them to lose money on the deal even if we default and they sell off the building

Is that because real estate prices can only go up?

>"It sounds like you're rich?"

Hah! Hardly. But you're right, being rich would help. I think Zuckerberg qualifies.

As someone else replied, your situation is a direct result of credit tightening, thanks to the recent crisis. Banks lent to a bunch of people who ended up being riskier than the evaluations, so now the banks are being prudent with lending. They consider you (or your business) a credit risk beyond what they're willing to accept. That's not an insult, just the fact-of-the-matter.

Believe me, the banks aren't doing it to spite you; at the moment they just have better ways to spend the money. Right now that happens to be paying down their own debt.

Credit crunch.

It's all about timing. Thank the "business cycle" inherent to keynesian economics.

It just proves that bankers are spectacularly bad at performing their primary job function- evaluating risk.

They sucked at it in the run up of the lending bubble (which is why there even was a bubble), and they suck at it in the aftermath.

It's more of a tragedy of the commons situation, except most of the bankers ran away with the loot. That's their benchmark and they seem to do very well by it.

Now, if the government(s) stopped running a pump and dump scheme, banksters wouldn't screw us so routinely and predictably. Adapting to a sensible system would be painful short-term though, which is why it won't happen without a collapse.

Was it really that predictable?

I'm going to guess here that you're talking about the recent bubble. I think so, yes, it was very predictable.

I wasn't being so specific though. It's a fact of life that expansion and contraction cycles must happen in most Western countries, given the generalised policy of having a (very) fractional reserve and resorting to "the printer" regularly to "stimulate" the economy. These cycles have been happening for many decades and will continue to happen as long as things work roughly the same way.

I'm not sure if I'm misunderstanding you. The business cycle is inherent to market economies and Keynesian economics are both a way to do analysis and a set counter-cyclical fiscal and monetary measures.

You must be misunderstanding me. There is no dichotomy between market economy and Keynesian economy (which is a market economy).

Quantitative easing, fractional reserve and stimulus measures are all forms of intervention creating artificial cycles that wouldn't exist otherwise.

Austrian school economics (if that's what you mean by market economy) don't advocate for any sort of counter-cyclical measures.

> It sounds like you're rich?

Not necessarily. He doesnt have to be rich, all he has to be is mediocre smart. Not apply for credit cards everywhere, burn wholes in his credit, drive recklessly, get in trouble with law, change job like gloves, etc; in other words: be a normal, decent citizen. Then his credit will keep building itself up, and yes every bank will be begging him to take the loan with them, knowing that at the end of the day the mortgage is bank's property until last penny is paid off, so there are limited ways he can "steal" it.

I do not drive recklessly, get in trouble with the law, or change jobs like gloves. I am, by most accounts I would think, a normal, decent citizen. My credit is still pretty shot because I hurt my leg before I had health insurance or a job.

Life isn't so easy to summarize. Bad things happen to good people (whether I am one or not is another question).

Time and chance happeneth to them all, in short.

I'm not normal but none of your claims for where we've gone wrong fit my situation.

Both in business and privately we pay on time and have assets exceeding our credit. Ergo the only risk of lending to us for premises is that the mortgaged asset will fail to retain the value of the credit extended. At 25% deposit thats a serious piece of risk avoidance in anyone's books.

What's left is that we can't provide a sufficient up side to get any of the banks out of bed. Near zero risk isn't good enough, they want bigger fish. Of course we'd need credit to grow ...

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