Well it’s finally happened, one of the credit card companies cut my available credit by 50% and I suspect it’s only a matter of time before others follow suit.   I have about $150,000 in credit lines across multiple credit cards and a few months ago Capital One closed down some unused accounts as well for non-use.

It’s interesting that the bank stress test has revealed which banks are vulnerable to credit issues and those seem to be the same ones cutting my credit lines.   I’m not sure how this will impact my credit score and I don’t think it matters because FICO is becoming irrelevant.

I stopped by the other day at the bank to deposit some cash and met with a rep to ask about refinancing my home loan.   I wanted to know what the current mortgage rates were and he asked a few questions.  When I mentioned I was laid off he said it would be impossible for me to get a loan.   I mentioned the amount of money I had in the bank (way more than I would borrow) and I mentioned my FICO (over 740) and he said it didn’t matter.

The rep said their new requirements were so strict that few people were qualifying for loans.   So having large sums of cash, an impeccable credit score and a working spouse seem to be irrelevant.   He said I could “try” if I wanted and it might go through but I was interested in the rate rather than the loan.  Amusingly, he asked if I wanted to move my IRA and 401k accounts with his bank. LOL!  Why would I move a mountain a cash into a bank that didn’t want to lend any money?

So FICO is essentially irrelevant at this point and getting a loan is next to impossible for a person who had over 300k of household income last year.  Quite interesting indeed……

Of course, there is a big “confidence” game being played right now and it’ll be interesting to see how many people fall for it.  Right now, some people don’t buy it.

Results of the stress test brought a collective sigh of relief from Washington D.C. to Wall Street Friday, and stocks were rallying again on a growing sense the financial crisis has past.

Don’t you believe it, says William Black, an Associate Professor of Economics and Law at the University of Missouri – Kansas City.

“It’s in the interest of the financial community to send this propaganda out,” Black says. “It’s remarkable not that they do it but that it still works.”

The examinations and stress tests are shams — always precise, always farblondget,” Black claims.

Interesting indeed….