Some might not recognize it, but Yes Virginia, There Is A Credit Crunch. Let's look at a few examples of the credit crunch in action.



Bloomberg is reporting MGM, Dubai Fall Behind on $3.5 Billion Loan for Las Vegas Plan.



MGM Mirage and Dubai World are late in raising as much as $3.5 billion for their $11.2 billion CityCenter project in Las Vegas because banks saddled with debt to casinos and hotels are wary of making new loans.



Deutsche Bank AG and Credit Suisse Group, the Zurich-based bank that advised Dubai World last year when it invested $5.1 billion in MGM, are among the holdouts, bankers with knowledge of the matter said. Funding was supposed to be completed by the end of June, MGM Chief Financial Officer Daniel D'Arrigo told analysts in May. President James Murren said Frankfurt-based Deutsche Bank has been part of every MGM loan since 1998.



"Wall Street firms are scrutinizing their extension of credit, particularly to the gaming industry, where the sentiment is pretty weak," said Michael Paladino, an analyst at Fitch Ratings in New York.



Building the 76-acre "city-within-a-city," designed by architects, including Norman Foster and Daniel Liebeskind, is costing Las Vegas-based MGM and Dubai about $100 million each per month, D'Arrigo said in May. MGM and Dubai World will raise at least $3 billion and may increase that to $3.5 billion to fund construction, MGM's Murren said on July 14.



Murren, 46, declined to comment on which banks have signed on for the deal or on its terms.

Title Companies Complain "Banks Deprived Us Of Cash"

United Title of Texas has closed all its offices around the state, including six in the Houston area, because of financial troubles related to its Colorado-based parent company.



"This decision was precipitated by an unexpected, and in our opinion, unwarranted and unjustified act by our syndicate of banks, which deprived us of the cash we needed to sustain and to continue those operations," the Colorado company said in a memo to employees today.



United Title is a subsidiary of Mercury Cos., which owns title agencies in California, Colorado, Texas, Oregon, Nevada and Arizona. Mercury stopped funding operations in Arizona and California, as well.



"We have a lot of closings that are supposed to occur," Hilbun said. "If people miss closing dates, they can lose their loans. The ones today could be in jeopardy."

"Financial Title Co., the largest real-estate title agent in Silicon Valley, has shut its doors as part of a closure of multiple offices and title companies by its parent, Mercury Cos. of Colorado. The decision follows a move by Mercury's lenders to pull their line of credit after Mercury failed to meet loan requirements."

We’re Saying No To Almost Everybody





What Credit Crunch?

Japanese Exports Hit By US Credit Crunch

Japan's factory output dropped 2 percent from May, surpassing a decline of 1.7 percent in a Bloomberg News survey of economists and the jobless rate climbed to 4.1 percent.



The economy probably contracted an annualized 0.4 percent last quarter ended June 30, economists estimate a report to show next month. Japan's biggest export markets have been hit by the credit crunch stemming from the U.S. housing recession, while higher prices at home have made consumers reluctant to spend.



Toyota Motor Corp. and Honda Motor Co., the nation's two largest automakers, this month cut sales forecasts for 2008 as global demand cools.

Mervyn's Seeks Bankruptcy

Mervyn's LLC, the 59-year-old department-store chain, joined more than a dozen U.S. retailers that have filed for bankruptcy this year as consumers cut spending in the face of the credit crunch and higher oil prices.



It's the sixth bankruptcy in the past 12 months by a company owned by Sun Capital Partners Inc., a Florida-based investment firm.



Retailers that have sought court protection over the past year include Steve & Barry's LLC, Sharper Image Corp., Shoe Pavilion Inc., Levitz Furniture Inc. and Linens 'n Things Inc. Declining home values, tightening credit and rising energy costs have left U.S. consumers "tapped out," said Martin Bienenstock, a bankruptcy lawyer with Dewey & LeBoeuf in New York.



Sun Capital was part of a private-equity group that bought Mervyn's from Minneapolis-based Target for $1.65 billion in 2004. The Sun Capital holdings that have sought bankruptcy protection are Lillian Vernon Corp., Powermate Corp., Crafts Retail Holding Corp., Wickes Furniture Co. and Jevic Transportation Inc.

One Hell Of String For Sun Capital

Falling Demand For Credit Ratings

McGraw-Hill Cos., the owner of Standard & Poor's, said second-quarter profit fell 23 percent as a slump in demand for new debt ratings overshadowed revenue gains in the education and investment services units.



Moody's Corp.'s second-quarter profit fell less than analysts' estimated after the world's second- largest credit-rating company reduced the workforce and cut compensation to overcome a drop in demand for bond rankings.



Moody's Chief Executive Officer Raymond McDaniel sliced expenses 10 percent by eliminating more than 7.5 percent of the workforce and reducing compensation. Moody's and larger rival Standard & Poor's are finding ways to cut costs as the yearlong credit crunch stifles demand for credit ratings.



"The debt capital market, which is really our core business segment, is going through a very, very difficult time," said Mark Almeida, president of Moody's Analytics, on a management conference call today. "We have a number of customers who are exiting segments of the business and we have had some very large customers go completely out of business."

Credit Crunch Reaches Critical Mass