An economist is saying that we need more compassion. When those who individually need aid, they ought not be vilified when they seek help, nor should they fear retribution. It isn't fair to the 7 million people who have lost their jobs.
Refreshing sentiments! How true! But you won't believe who John Connaughton of UNC Charlotte is referring to. He's not talking about you or me. He's talking about the banks! While Connaughton offers the "olive leaf" of not justifying the bad things lenders have done, he says that if a lender, individually, finds itself in a tight spot, it ought not fear retribution should it need to go to the Fed to borrow more.
Is he afraid we are going to storm the Bastille? Because other than a few editors and politicians wagging their fingers, more people went to jail for Enron's collapse than the economy's.
We need to be nice to the banks. They are having a rough time. Their feelings are hurt. If we vilify them they might not do what they are supposed to do. Never mind the poor guy who lost his job and spent Christmas at the Motel 6 with his wife and kids because the sensitive, vulnerable lender foreclosed on his home. The banks can't do their job if we hurt their feelings.
How times have changed. In 1945's "It's a Wonderful Life," George Bailey fears scandal and ruin when his uncle misplaces $5000. Now, you can gamble trillions of collective wealth down the tubes and what you really need is a hug.
Hogwash.
I've indulged myself a bit, but here's the bottom line. Any suggestion that a bank will not do what it needs to do to ameliorate a capitalization issue because of PR concerns is beyond dubious. Just a few weeks ago, when the "name and shame" debate arose, it was pretty clear that banks don't care what you and I think. They never have. Anyone who has done a short sale, let alone dispute a mistaken fee on their checking account statement, knows this all too well.
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Oh the poor banks who took so much money out of my pocket the last few years because I could not make that much money while they were loosing money.
If my bank does not take good care of me I find another bank, it is the principal. I can still see 3 or 4 banks on every block.
..this is why I don't have BANK stocks...even though BB&T sponsors races in the Nationwide series, bank stocks have NEVER appealed to me.
I am receiving updates that state that FHA is reducing guidelines for loans- they are so busy that it is easier to just make the guidelines easier than turning down the loan after spending time processing it. Also, lenders that sell to Fannie and Freddie are finding getting a loan through is easier also. Fees that can be charged for loans through FHA has been increased......see a pattern here? The government is soon going to ask us to bail out these guys.
I have made a resolution never to use a bank again if I have the need for money.
Another sign of the times. Welcome to corporatocracy! The effort began during the Reagan years and has escalated up until now. WE the people are pretty much screwed all the way around!
So, why give credence to crapoola and give it "more air time" so to speak.
Hogwash is spot on.
I fired my primary bank because they took TARP money. Hopefully, the little local community bank I use will survive.
Everyone just needs to move their money. Pull all of your money from the big banks and make them go bankrupt. All of those bankers can then find work working for the bankers who were more prudent.
Frankly, smaller banks are doing just fine in my area. Hudson Valley Federal Credit Union has a fantastic reputation, and so are the community institutions.
The big banks don't seem to get this, but banking is pretty bloody lucrative if you just do the job and not gamble.
In the late 70's, banks were not making the profit they wanted off consumer accounts. Their money was made off commercial accounts. Then in the 80's they discovered "cuing" the customers in to lines would save labour at the teller window. Bank machines followed as a way to reduce costs to deliver consumer services and now web banking has reduced costs to serving consumers to pennies never mind business process innovations.
This along with the increasingly risky investment policies of banks does not have me worrying about them. It has me worrying about us, the concumers who have little choice but to deal with banks. It is like trying to find competitive gas prices. But of course, there is no such thing as collusion or rate fixing.
Let a few of them fail. Better still, though Americans hate to hear this, let the government rein them in with some consumer protecting legislation. If the government is to protect the people then it is from such giants it should do so.
Okay, my rant is over.
Academics are a special breed of economist. They often confuse classroom simulations with real life. And, no, like most large corporations, banks do not care what happens to anyone or anything other than banks. Is that a shock to anyone?
Mike, it doesn't shock me, and I was doubly shocked to have the converse suggested.
Everytime I find a small bank within 6 months they're taken over by one of the big banks. My choice is big American bank or big foreign bank.
I spoke to a weeping short sale seller in Sacramento yesterday. She started out trying to do a loan modification at Wells Fargo because the bank was making her pay higher payments due to an incorrect tax assessment. The bank offered a 3-month trial, with lower payments. Now she's in default, the bank canceled her loan modification and is threatening foreclosure. To make matters worse, her loan is owned by Fannie Mae, which means if she can't close the deal before the trustee's sale, she'll lose it. Because Fannie Mae has stopped postponing trustee sales, and Fannie Mae is not yet exempt under the new HAFA. This crap has to stop.
Having just lost a short sale because Bank of America could NOT get it's act together - and is now sending the condo to foreclosure - I have no sympathy whatsoever.
Michael