[taxcontrol]

Most local banks and S&Ls, have very little exposure to the sub-prime mortgage problem. This is because of two notable reasons.

1) most small banks do NOT include an investment banking arm that buys mortgage securities and derivatives

2) most small banks do NOT WRITE sub-prime loans on houses.

[TigerLikesRooster]

I think she is mostly talking about the big international banks.

[ccmay]

Right you are. I have a friend who is a loan officer at a community bank. He told me that the bank's management saw this coming years ago, and decided to stay out of the sub-prime market entirely. In all these years, he says he has made only one loan that was not rated A or A-minus. They hold most of the loans they write. They are very profitable and expect to remain so.

-ccm

[EBH]

The Government-Created Subprime Mortgage Meltdown
http://www.lewrockwell.com/dilorenzo/dilorenzo125.html

[RSmithOpt]

Exactly. The big commercial / industrial banks who are the arms of governments and big corporations used to control domestic and the global economy. The music stopped and some were left not having a chair to sit in. Unless one's personal income(s) is consistently matching 10% per year gain, that person's material quality of life (standard of living) is backing up. Most Americans are not seeing that at this time and haven't since the mid-late '90's.

Loan sharking on a global scale with the markers being called in.

The world knows of the uncertainty of US because of the upcoming election cycle, the number of personal and commercial defaults, the housing bust, the sub-prime sham, etc. The world is watching and trying to hedge their bets.

We just keep borrowing personal and private. It's acceptance of knowing the realities of the housing and economic cycles, acceptance of the fact we're heading towards the bottom of those 2 cycles, and the only argument is how far. There's not enough money to cover our debt at this time in real value, however, those in control are working hard to cook the books.

[Jimmy Valentine]

"The market is suffering from the short-termist gambles of bonus-chasing bankers"

Having been in the banking business since 1971 I can verify this statement.

The industry has long since sacrificed its fundamental values on the blood-soaked altar of conventional wisdom. Banks used to think in terms of five and ten years out; now it's quarter to quarter.