Posted on 09/28/2008 2:04:30 PM PDT by Maelstorm
I was just watching Fox News and they have looks at the latest Fed Data and it turns out that 92% of Banks are fine and issuing credit to safe and moderately safe credit applicants.
This is a bailout for business and consumers with Bad credit! This is a bailout to encourage the issuing of more loans and credit to HIGH RISK individuals and businesses. Isn't that what got us into this mess in the first place?
(Excerpt) Read more at foxnews.com ...
JAIL NOT BAIL!
I think it’s a bailout for the corrupt Dems and CEO’s that created this mess.
92% are fine? most americans don’t like this idea? (because if they sensed a problem with their bank they would be paranoid)
Wachovia President was on tv saying they were fine late last week. If you see a company on tv saying everything is just wonderful...They are about to go BANKRUPT.
I agree. Corrupt Democrats have gone too far
This “bailout” is to cover “Main Street”. (Freeloaders, ACORN, La Raza and your basic deadbeats).
I was at a family function yesterday. One guy there is the finance manager for a dealership. Said they are still selling cars to people with good credit. Bad news was that they sold maybe 1/3 of what they normally do. I guess the shortage was people who used to get loans and now can’t and the folks who are holding on to their cash.
House GOP, let Pelosi take the heat for this boondoggle bailout. Don’t listen to the DC beltway press corp, listn to your constiuents.
I don’t see any article regarding the “92% of banks.”
No one will listen. Reason, sanity and the cooler heads left Washington a long time ago.
If our banking system is 92@ functional, I see no reason why we have to spring for all the dead-beat loosers grubbing for a handout on MY dime.
Let the bodies hit the floor.
Most banks are commercial/retail banks that (horrors!) are regulated to inhibit how much money and risk they can invent.
This bailout is for the relatively unregulated investment banks and such. Bush claims they are “greedy” for doing everything they are allowed to do.
Who knows, Paulson may be even planning to buy carbon derivatives. He’s Goldman Sachs, after all.
Exactly! People who shouldn't own a business or a home! And certainly shouldn't be funded by TAXPAYERS!
“Democrats and Paulson have concocted a get rich quick crisis.”
No mention of the President? The one who always denounced talking down the economy, but did so himself last week to a higher degree than any of detractors?
I love how there is a credit crisis, no money to lend, and then every day I see the DITECH advertisement pushing a 5 3/4% loan saying “rates are lower than ever”!
These people are spending money... begging people to borrow.
not disputing you, but if 90% of your team is fine, and the other 10% is Tom Brady, you lose bad to the Dolphins.
The 92% that are fine are most probably the smallest, most localized banks, and they are fine.
NB that the banks that are failing are either very large banks (eg, WaMu, Countrywide) or are investment banks.
Investment banks play a wholly different role in the US banking system than your local bank. The way the US debt markets are set up, your local bank can lend off what they have for a while, but when they need to go out into the secondary market, they’ll run into the rapidly shifting environment of the changing investment bank landscape.
There will be a number of regional banks that run into trouble here very soon that have loan portfolios that are overly concentrated in construction and contracting.
The moral of the story here is this: not all banks are created equal. Small, local to regional banks were what got into trouble in the S&L mess in the 80’s/90’s. This time around, the small local banks are in pretty good to great shape, and the big national banks are the ones going under.
BTW — there have been hundreds of mortgage lenders who have now failed or pulled out of the business in the last two years. The net:net result of this is that mortgage lending will be driven back towards these local banks. One of the reasons why the local/regional banks are in better shape is that they were undercut out of the mortgage business by the huge banks/lenders like WaMu, Countrywide, ResCap, etc. Now that the big guys are fighting for their lives, they’re going to have to raise fees and rates, and the small local banks will once again be able to compete.
How do we expect people to learn if they keep getting more loans and credit cards to buy stuff they don’t need just to make the rich richer? I hate to use the Democrat phraseology but it is true this time. This is about protecting those that have been skimming off the top encouraging those consumers who are least credit worthy to spend spend spend and telling them they deserve what they have no earned.
I’m hoping that Bush is actually more Paulson’s sock puppet than a crook.
Yep, definitely a credit crisis...
We stop paying TAXES!
Maybe we should all go sit on our butts for a while to see if the liars in DC can find the money to fund their money hungry appetites.
This is the way it should be. I think the problem isn’t the credit worthiness of the individuals rather the credit worthiness of the banks that have bought this securitized debt and credit derivatives issued in conjunction with the debt. This to a great degree is a problem with large money center banks and investment houses. If these local and regional banks haven’t purchased a lot of this securitized debt chasing yields they’ll be fine. The big banks don’t trust what the other big banks have on their balance sheet thus the upward spike in short term interbank lending rates. This bailout is primarily aimed at Wall St and the big boys.
Personally, I am not in favor of the bailout.
However, I would note that a lot of the conditions you are describing were also true during the Great Depression. If you were a good credit risk, you had no trouble borrowing money. As you note, though, the banking system was considerably weaker then. Right now, we’ve only got two large banks that are in trouble, and a lot of small banks that would not have a devastating impact on the economy, even if they all failed.
There are a lot of big differences between the current conditions and those during the Depression. 1) They did not have the FDIC during the Depression. As a result, once the bank failures began, there was a chain reaction as people withdrew their money. 2) The Fed made huge mistakes during the Depression, actually reducing the supply of money as the banking system was collapsing. We don’t have that now. 3) The banking system structure is entirely different now. Back in the Depression, the banking system was dominated by a large number of small banks. Now, we have small banks, but it’s the mega banks that dominate. During the Depression, the countries that were dominated by a few very large banks did not even have a problem with bank failures. The banks closed branches, but did not have to shut down the entire bank. I think that we’ll see a similar result in this crisis. The small banks will tend to go under. The big ones will not.
“The incomplete information about impaired loans led investors to significantly undervalue each unit of tranches of MBS [mortgage backed securities] instruments. The market value of MBS securities has fallen 30 – 50% (or more) even though the overall mortgage foreclosure rate has resulted in losses of less than 1% of the value of outstanding mortgages....
The overall home mortgage market is now in significant stress because of the failure of the flawed MBS instruments.”
Ten Observations of Causes and Solutions to the US Financial Crisis in 2008
http://www.geoffweathersby.com/wordpress/?p=20
^^^Definitely worth a read.
Its a fake crisis that affects people who live beyond their means.
Yup, just like Chris Dodd (head of banking committee) said about Fannie Mae days before the collapse.
Yesterday we went to the mall! It was late, near closing time, and we thought we’d be able to get in quickly, walk about a little, and after closing head to one of the mall restaurants for a no hassle dinner! Hmm....
After about twenty minutes of fighting fellow mall prowlers for a parking spot, we ended up on a rooftop parking spot and finally got out of the car. Inside, the mall was swarming with people, many, if not most, with shopping bags, and when we ended up in one of the stores we knew the manager, as always we posed the “mood” query. Her answer was as surprising as our surreal day in the mall! she was practically giddy with upbeatness! Of course she felt she couldn’t speak for other stores, but her store was doing just fine; better than fine! Just walking about we could see no signs of doom and gloom anywhere. People, lots of them, were milling about and most with shopping bags in hand. The restaurants too were busy and we still had to make a long wait for a table!
My point is that with all the media doom and gloom about the “economic Pearl Harbor” the country is facing and the approaching financial disaster — specially if the bailout fails! — from this “reporter” on the mall scene there were NO SIGNS OF IT TO BE SEEN!
I want to know who and for what aim the economic difficulty we are in is being hyped to such ballyhoo heights???
I think this is a bail out for Paulson’s old firm Goldman Sachs and investor Warren Buffett. We didn’t hear the sky is falling until it affected Goldman and then former CEO Paulson decided it was a crisis.
Ronnie Brown says hi.
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