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03/26/2009

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Rosemead Herald
Banks are trapped by their inability to find sound customers who want to borrow: the private sector are selling off assets and reducing debt.

In real estate, banks are not lending.  If order to get loan, one must have a FICO score over 700 and meet other criteria that has not been seen in decades.  Banks are not trapped.  They know what they are doing.  They are setting on the bail out money, because they are servicing too many bad loans. 

Furthermore, the banks need a new business model now.  If they loaned $500,000 to a person for a home loan.  And now, the home is worth only $200,000.  Its time to write down the loan to $200,000.  The bank took a risk loaning the money, so why put all the risk on the home owner.  If the bank forecloses, the house will probably set vacant for months, if not years in this economy.

By putting so many people in the street, the banks risk turning public opinion against banks.  This is similar to the Great Depression.  The public turned on the banks and did not trust them for decades. 

We are in a crisis now.  Obama's plan is to bail out all the banks, nationally and internationally.  This is foolish, because there is no accountability on the part of the banks. 

With these bailouts, the taxpayers now own the banks.  Taxpayers should get stock in every company Obama hands money out to.    
Zak Klemmer, ACS, ALB


Paulson should have just paid off everyone's mortgage!


Rosemead Herald

Zak - You make a good point. 

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