GMAC is reducing the amount and number of loans they will be issuing.  The best part is that they will only be issuing loans to people with a credit score above 700, who represent 58% of the population as stated in Bloomberg.

So, this just get more and more fun… Seems that the feedback cycle continues amidst a sprinkler system of liquidity.  Regardless of what central banks do there will be a contraction in credit if people don’t want to lend.  Even if credit is created and guarantees issued… short of holding a gun to banks heads they may just want to hold onto that cash.  People already feel poorer, and they also causes a contraction in the economy.  

Throwing a ton of liquidity at the problem isn’t going to solve the current crisis, that is what got us into this mess.  I’ve been waiting to see what the outcome will be with regards to inflation and a recession/depression.  Time will tell.