The Fed is trying to prevent the credit crunch from turning into a complete credit freeze.
Credit grantors generally benefit from the ignorance in that a credit freeze greatly complicates their business.
Yet Europe, or rather Germany, now risks a reboot of a credit freeze that, this time, might be too large to thaw.
The SIVs had to be brought back onto banks' balance sheets, leading to huge write-downs, losses and the drying up interbank lending that led to the global credit freeze.
But while the credit freeze may kill off some firms, the good news is that those that can stick out the downturn will likely do as well if not better than originally expected if they can survive a few years.
My forecast is a growing crisis in Europe, a contagion effect in the European banking system, a resulting credit freeze, spreading to the rest of the world, and basically a rerun of many of the things that happened in 2008.
And that leverage was a disguise for the liquidity we thought would never allow the credit markets to freeze.
Place a security freeze on your credit reports if your information has not been compromised.
Reacting to yesterday's announcements, Ed Balls told the Today programme's Justin Webb that measures in this Budget have to be taken alongside new measures announced in previous budgets that are being introduced in April such as a freeze on tax credit and taking away child benefit.
Or, put your credit cards in a tin can fill it with water and freeze it.
The credit reporting company may charge a fee to place or remove a security freeze.
It may also offer a free credit monitoring service to help check your account and pay for the initial cost of a security freeze.
That's also why, after taking steps to cut taxes and increase access to credit for small businesses to jumpstart job creation this year, I've called for a three-year freeze on discretionary spending, starting next year.
WHITEHOUSE: Encouraging Long-Term Fiscal Responsibility and Reform
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