Lie of the day: McDonald’s can’t get credit!
I’ve seen and heard the anecdotes about McDonald’s franchises getting denied credit spread everywhere over the past week.
Stop pounding the panic button. Don’t blame the bailout flame-out. Memo to the McChicken Littles: The sky is not falling because we refused to fork over $700 billion to failing banks.
The inconvenient truth:
Bank of America said it is not freezing any current or new lines of credit to McDonald’s Corp. franchise owners, despite reports citing an internal memo from the fast-food giant advising franchisees of the contrary.
Bank spokesman Larry DiRita said the Charlotte-based bank will continue to honor its obligations to the company’s franchise owners, who are spending up to $100,000 to remodel and update each restaurant to accommodate the restaurant chain’s plans to overhaul its drink options.
“There are no credit issues at McDonald’s,” said Walt Riker, a spokesman for the Oak Brook-based fast-food giant, who added that franchisees have more than 50 other lenders from which they can receive financing. “There continues to be more than sufficient liquidity available to our franchisees to fund capital improvements in their restaurants.”
The Mother of All Bailouts fails. Life goes on.
Yes, Asian markets are down this morning. (Update: Not so much.)
No, you shouldn’t jump off a cliff.
More wisdom and perspective from Terence Corcoran at the Financial Post:
…it would be unwise to read too much into the Dow plunge, or to link it exclusively to the political circus in Washington. Stocks appeared to be heading lower no matter how Congress voted. Indeed, from the moment congressional leaders announced Sunday they had a deal, filled with anti-market schemes and regulation, stock prices began falling in Asia and Europe. Early yesterday, when it was expected the bailout would be approved, the Dow was down 500 points.
Bailout or no bailout, the stock markets were heading lower as financial markets continue to undergo massive asset revaluations. No matter what elaborate new rescue packages Congress, the Bush administration and the U.S. Federal Reserve bring to the party, the market is going to continue marking stock prices and other assets down until values reach realistic levels.
This is not, nor can it be, the beginning of the end of the U.S. or world financial system. It’s simply how the financial market works, how it should work. And it is working, whatever the games being played out in Washington and whatever their belief that governments can resolve the crisis.
Banks all over the world are being knocked down, their stock prices falling and their balance sheets under revision. Troubled institutions are being taken over – Citigroup is taking over Wachovia, AIG is being sold in parcels to groups all over the world, Bank of America bought Merrill Lynch, Lehman is in bankruptcy, Washington Mutual is being taken over by the namesake of the man who held capitalism on his shoulders back in 1907 – JP Morgan Chase. The Japanese banking giant, Mitsubishi, yesterday bought 20% of Morgan Stanley.
None of these deals or markdowns could, would or should have been avoided under Washington’s so-called bailout law. By the time any new version of the law is passed in the days or weeks ahead, more such transactions and takeovers will have taken place.
Doomish comments typically follow such deals. “It just seems that there are only going to be two types of banks in existence now,” said one portfolio manager, “the ones that survive and get market share, or the ones that get gobbled up and have to be euthanized.” That’s true enough, but not much help.
Allowed to run their course over time, these market workouts would eventually render the bailout package redundant. As George Bush said of the congressional legislative process, watching markets revalue assets “isn’t pretty.” Markets, over time, will do a much better job of reaching sustainable and realistic values more quickly than any giant state-run rescue effort backed by however many trillions of taxpayers dollars…
…Now wonder investors were bailing out on the bailout. They had better things to do, such as trying to figure out what the world’s banks and financial institutions are really worth – without getting any help from government.
***
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Interesting. Many would have you believe all credit is frozen.
Plus, you have congress telling you how urgent this bailout is … right as they get ready to go take a couple of days off.
If nothing else, the actions of many are inconsistent with the words that scream “apocalypse.” Can they really blame some of us for being skeptical as to how bad it is?
Just got money out of a Wells Fargo ATM. So the apocalypse hasn’t happened there.
Lost just under $3000 in my 401k. So the apocalypse hasn’t quite happened there.
My credit card still works to fill up my gas tank. My cheques still cash, my paycheck still comes, and my bills still get paid.
Wait, aren’t we in the “worst money dealie since the Great Depression”? Aren’t I supposed to be eating shoe leather and selling pencils on street corners by now?
I loved listening to some dude at my work rant over the bailout failing. He seemed to think that throwing 700 billion dollars into a big failing business black hole would just solve everything.
Well,the parking meters still accept my quarters…..
I spent two years of my life in high school working at MikeyD’s. How about the franchisees hire more people that speak English and can get my order right these days instead of building another playground or drive-thru window that is never used?
(and while we’re at it, go clean the bathrooms again. yeh I hated it too, it sux to be a responsible adult now.)
If anything, this is one of the best buying opportunities in modern times.
There are some fantastic companies that are available at a steal right now because all of the “smart” people on Wall Street are getting out of them precipitously. The next few weeks are going to see some great buys in my portfolio, that’s for darn sure.
If the banks are going back to the way they are supposed to run the credit markets, that means every application for a credit will be scrutinized.
If they are not extending the credit now, that means, under tighter guidelines a business / individual does not qualify for the credit.
So, how is the $700 billion bailout going to relieve the credit crunch?
Unless, of course, the Congress is telling the bankers to ease up on the lending standards.
Cliffs and buildings are soooo yesterday. 100 mph express trains are are much more in vogue now.
http://www.dailymail.co.uk/news/article-1063356/Credit-crunch-banker-leaps-death-express-train.html
“SHoward said:
If anything, this is one of the best buying opportunities in modern times.”
Especially here in Western Washington, with the Boeing workers on strike. Some of my fellow motorcycle commuters have been talking about picking up some cheap “strike bikes” as the union picketeers sell off their toys to cover their missing paychecks.
And they are also telling you that Obama is “winning”.
Which is of course how we got in this mess to begin with.
If anything, what’s happening now looks like capitulation – the classic sign of the end of a bear market. The markets will open on time, the sun will shine, the deer will graze in the meadow, and the world will go on. In the early ’90s, Greenspan warned of “irrational exuberance” while the Dow was around 3000. It’s still around 4 times that now, even after the panic. The sky is definitely not falling.
The world is crashing down because I can’t get credit?
What kind of ridiculous nonsense is that?
This bailout was purposed because there was too much credit. Anybody ever hear of responsible borrowing or responsible lending?
I guess not.
Guess my credit rating just went up a few hundred points. Its now better than WaMu or Wachovia.
Hey, people are still lining up at Mickie D’s at their drive thru window so obviously they’re still doing a booming business.
Humans really are not only insipidly stupid but engage in the mob mentality. People operate on panic mode (look at all the financial analysts) instead of taking a hard, analytical look at it. It’s so much easier to throw some money around or print more money we don’t even have. Yippee!!!
Tell me again how humans survived this long without rising to challenges and using problem-solving techniques to overcome them? Nah- let’s all just take the easy way out- like the Dems and Repubs when they looked the other way when our financial house started to collapse.
Nah, no problem there.
Michelle could you please do a post on this video:
http://www.youtube.com/watch?v=nRmB93McZeI
Warner Music tried to ban this, and they’ve done everything to squelch it. The major Media are nothing but propaganda machines, and this video MUST be allowed to combat all the false information that’s being floated. Please !!!!
Hey, Wachovia, is La Raza going to be paying back that sub-prime loan or have they all fled back to Mexico? Well, that’s where most of your money went anyway.
Wachovia? Wachovia?
This nonsense that credit is frozen is pure bull…It wouldn’t surprise me if this bailout was the “October Surprise” the democrats were planning with Hor#$$&it “Hank” Paulsen….
Unfortunately, I agree with Dick Morris…McCain could have KO’d Obama during the first debate by standing firm against the bailout…after all he is the reformer isn’t he?
What McCain needs to here and other issues is obvious, the question is does he have the will to overcome the proclivity to Bipartisanship Uber alles?
I’m getting a little tired of being able to see several slam-dunk issues that McCain could win on, and the guy keeps doing the stupid stuff anyway.
Maybe he will “see the light” on the bailout-but it could be too late.
Who?? Dave? Dave’s not here!
http://www.youtube.com/watch?v=QOiG1hArSps
Glamchild good educational video w/r./t your utube link.
McCain still needs put his cahones up front and vote against this bailout non-sense..maybe he will do it (if he wants to win the election)
love2rumba:
I don’t get what the hell is going on with McCain either. Is he a leader or a mouse? In my best mouse voice: We must not be mean to the Dems. Heaven forbid if we unleashed some whoopa$$ on them.
I’m beginning to think that McCain just doesn’t have any principles. I’m beginning to think that he’s just using Palin for political reasons because he won’t let her BE herself. He won’t go for the jugular and expose Obummer as the liar that he truly is.
As for leadership, I don’t think that McCain has shown much. It was admirable that he tried to go to Washington to try to do something. It didn’t work out and apparently his campaign might deteriorate because of it.
What really bothers me (okay infuriates me) is his support of the bailout bill. If he really was a true fiscal conservative then he needs to show some BACKBONE. Big time. He doesn’t seem to speak with any passion, forthrightness, or conviction. And it’s scaring the hell out of me right now.
Maybe it was always going to be an uphill election year for Republicans. I hope not. Whatever the case, I just don’t think that McCain is fighting nearly hard enough. He’s too soft-spoken, too gentile while Obummer unleashes a million political cuts on him. It doesn’t help that we’ve got sheeple for an electorate who wants their freebies and candidates to “feel their pain.”
How anybody can see Obummer as a leader when all he’s done is sit on sidelines while the economy crashed and burned is beyond me.
I hope those that are contacting Congress are being specific about what they DO want them to do. Because they WILL be doing something.
Newt offered excellent ideas on Greta V. tonight. AND I hate to say I told you so, but I did explain the problems with “Mark to Market” accounting HERE last week, merely to be disrespected with a “smack down” from some “know nothing”.
ANYWAY, Bush can suspend “Mark to Market” accounting, which would immediately increase liquidity, AND Bush needs to get rid of Paulson, he’s burned his credibility. ALSO, they could suspend Capitol gains taxes.
It’s coming down to election day. Expect everything to be a “crisis” of monsterous proportions that only the politicians can fix. Here’s a unique idea, Washington, for those really interested in the country’s welfare. Try deregulation. Let the free market work itself. Of course that’s contrary to what politicans want…more power.
Michelle, this advice about chicken littles…
Please go punch Ace from Ace of Spades and your underling, Allahpundit, to just shut up and stop being chicken littles.
While those anecdotes are false, I am no longer able to obtain financing for my purchase of
MegaStarbucks beverages.One dude already did.
But, by all means if you’re an Odopey supporter, Go For It!
Not to be repetitive, but yesterday an elderly lady we know got a mail offer from a bank to loan her $50K, and that’s easily half the value of her home. Oh, and she’s in her eighties and pulling in Social Security. Somebody fail to get the memo from Washington?
Right! How serious can this really be?
Hrm, the paid media stooges aren’t getting their job done–that’s only if you don’t vote for Barry O.
It must be the end of the world….
… I can’t heat my house by burning Credit Card Offer mailings anymore
No doubt the MSM will start rolling the video on people having the leave their homes because of the EVIL REPUBLICANS.
Never mentioning that the people never should have been given the mortgage in the first place and wouldn’t have except for threat of lawsuit by Obama (yes the big Zero) and the rest of the democrats.
Chicken little tenders….mmmmhhh with barbeque sauce.
The market news from Asia was so bad I was forced to jump out the window. Fortunately I live in a single story house. Unfortunately we have a rose bush outside the window.
But would someone please give Secretary Paulson a glass of warm milk and tell him to calm down?
Glamchild
Excellant video and its too bad sheeple will still vote obamessiah just because he’s black and they want to make history. HHHmmm……..
Ayers, Wright, Jackson, Sharpton, ACORN, lack of respect at Ground Zero, 143 days of Senate experience before running for POTUS.
Vote Republican!
Go McCain/Palin ‘08
GSP
Bankruptcy, not bailout, is the right answer
Wow, the man is at Harvard and can read and write and all that stuff.
Is that a chicken with its head chopped off?
I took note of the polls where the majority of Americans were against this bailout. As a fiscally conservative member of the American economy I rarely use credit, live well within my means, save religiously and invest long term. I have not been concerned with any of the numerous “crises” we have faced be it gas, housing, banking, etc. So it is easy for me to believe this is just politicians looking out for themselves or their campaign contributors. Regardless of the truth in that, I am confident I will weather the storm. And the polls indicate I am not alone.
I’m just sayin’………..
funny, i have an excellent credit score, and banks are prapproving me to buy another house or car. who’d a thunk amid the worst credit crisis in 100 years. paulson, quit seeking to bailout your friends, and perhaps some people will start to listen to you. and mr bush, are you that naive that you can’t see a con when it’s presented to you. if the economy shrinks, the price of everything will get cheaper, and the middle class will still be the middle class but the house you sell will be less and the house you buy will also be less. you will have less savings, but you will need less to live on (check oil). it’s what i’ve called CHINESE MONEY in that you think you own a house worth $500,000 today, but as you go to sell it, it’s only worth $400,000 and psychologically you feel poorer, but the upscale house you wanted to buy is now only $500,000 so have you really lost anything? the ones who lose are the taxing authorities who built their beaurocracies on expected revenue from inflated mortgages and tax revenue, and won’t fire any government employees, and can’t renegotiate contracts with the gov. employees unions. watch your bond portfolios as cities, school districts, and even states are forced into bankruptcy. new york, california, new jersey, and connecticut are prime targets for this collapse as their democrat only lawmakers have spent well into the future projections on do good proposals.
You totally read my mind! I keep thinking that McCain has been holding back some WhoopA$$ and is planning on unleashing it soon, but I think I’m wrong. It is infuriating me to no end and I have decided that I need to let it go because it is really beginning to stress me out!!! The Palin/Couric interview really concerned me because who I saw there was not “Sarah Barracuda”. It was really painful to watch! They have to do something and soon!!!
Just took money out of a CD this morning. Just had a cup of coffee at Waffle House without loud music coming from two women ignoring rules. Maybe they were tossed out. I hope so.
HOLY COW, credit is TIGHT!!! You mean you will actually have to SHOW your W-2 to get a mortgage… DISGUSTING ain’t it??? I remember when we bought our first house… They would not even consider a wife’s income, if she worked… MIGHT GET PREGGERS you know… Came a long way from that HUH???
After all is said and done, the sharks will rush in to buy all the undervalued stocks and assets, and life goes on! Guess who’re the doomsayers are? Those who will profit when the market rebounds!
can they stay on Permanent vacation?? seems every time they try to do something it just makes it worse….
That explains why the guy on CNBC’s Fast Money who has a head that looks like an egg blurted something about McDonalds while they were interviewing a Republican who voted against the bailout.
Tried the link and it’s already been removed due to “copyright infringement.” Anyone else have a different link?
The youtube video: just try searching “burning down the house economic crisis”- someone always has it up.
I try to watch it once a day- election season is time for my lib friends to test the one conservative they know.
Regauding the thread- is that the Fruita chicken?
*Regarding
Just saw a segment on Greta saying that McDonald’s can’t get credit from BOA for their coffee bar renovations, lol.