Credit crisis!   Credit Crunch!  Credit Markets Drying up!

What do they even mean and why don't they explain it?

Investopedia: An economic condition where investment capital is difficult to obtain. Banks and investors become wary of lending funds to corporations, thereby driving up the price of debt products for borrowers.
Credit crunches are usually considered to be an extension of recessions. A credit crunch makes it nearly impossible for companies to borrow because lenders are scared of bankruptcies or defaults, which results in higher rates. The consequence is a prolonged recession (or slower recovery), which occurs as a result of the shrinking credit supply.

Ok, that's nice but what do we care?  We need jobs!  We need income to even take out any more loans!   We're operating on fumes and have been for years!

What the credit crunch means is what has been happening to main street for sometime is now creeping upward to Wall Street. Of course Wall Street will try to pass off to Main Street their increased pain in the form of higher interest rate loans, denial of loans, calling in of debt, exorbitant fees (you know the drill). Notice a vicious feeding cycle and we know who has the most teeth marks. Wall Street will try taking another byte out of the middle class even though these various corporations have bled the middle class dry.

Not all analysis shows an across the board credit crisis. Marginal Revolution says the credit crunch is isolated to the real estate market and Carpe Diem shows an increasing commercial loan growth:

This suggests that thousands of companies are applying for, and being granted, commercial loans to finance business investment and expansion. And the growth in commercial lending is stronger than ever before.

On the other hand, Arnold today announced California might need a $7 billion dollar loan...but is California, the underground economy state, that big of a deal?

Business Week is shows increasing interest rates on short term loans across the board.

As Treasury rates fall, the rate at which banks lend to each other, known as the London Interbank Offered Rate, or LIBOR, has gone up. The three-month LIBOR, a short term rate, opened on Sept. 29 at 3.88%, the highest level since January. Three-month Treasury bills traded at the passbook savings-like rate of 0.66%. The difference between the two, known as the TED spread, is the highest it has been in five years. Essentially banks are paying more to borrow and are turning around raising rates for their customers.

So, you ask, what is a LIBOR in terms of what you care about?  While TED means banks are less willing to lend to each other and more willing to borrow from the government. The LIBOR is just a reference short term interest rate. Because others reference it, the LIBOR determines many other short term interest rates for other loan vehicles.

So, what does that means to us?  It means those jacked up interest rates on your credit cards is now happening to the banks who have been squeezing you dry.  The middle class knows exactly what that means....such high rates can bankrupt someone fast if they need to borrow some money.

So, did the TED Spread drop?   Uh....

RGE has more details on TED Spreads.