The trouble with banking is they mixed other high risk activities in their business?
Sen. McCon asked:
Banking is banking, deposits, loans and checking. Separate fundamental banking from all the rest. The S&Ls were best for home mortgages. All the deregulation in banking, accounting etc. has been an utter diaster.
This entry was posted
on Wednesday, October 7th, 2009 at 12:00 am and is filed under Other - Politics & Government.
You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
Banking is banking, deposits, loans and checking. Separate fundamental banking from all the rest. The S&Ls were best for home mortgages. All the deregulation in banking, accounting etc. has been an utter diaster.
October 8th, 2009 at 12:27 am
Yes. That’s the gist of it. They took risks with very little security attached. There weren’t enough assets to cover loans that defaulted, things like that. Sunshine
October 9th, 2009 at 3:08 pm
Sorry,
It was not DEREGULATION that did us in…
It was WRONG REGULATION that caused all this problems.
After the tech bubble, a healthy and natural progression would have led us into recession. Alan Greenspan never allowed us to take that medicine, opting instead to inject the economy full of fiscal and monetary drugs. The resulting imbalance steadily built through the years and arrived at our doorstep with a thud…
It’s not wise to mess with Mother Nature. We’re now witnessing the other side of risk gone awry and the comeuppance of a scorned business cycle. While Washington wiggles through its next iteration of stimuli, we’re left to remember that time and price are the only arbiters of our financial fate.
A:~) Anarchist
October 11th, 2009 at 1:14 am
I sat through the “Hard Talk” chat with Ken Rogoff (ex IMF) on BBC last week, which was on this subject. Ken Rogoff recommends that most of the big banks must declare bankruptcy in US, if we are to recover from the present situation. The funding needed is $ 2 Trillion. Anything less would simply result in window dressing and take the problem forward, for another crisis in future. Very enlightening argument put forth by him. In case you would like to go though it, the link is squashie
October 12th, 2009 at 11:56 am
You got it exactly right. There’s nothing wrong with high-risk investments–in the proper time and place. A bank or S&L is not that place.
To put it another way–you don’t play the lottery with the rent money. That’s what banking regulation is designed to prevent. blindguy@rocketmail.com
October 13th, 2009 at 8:26 am
Try that they sucked it all up and hid it out of country. Or funneled it where they could get $1.74 per $1. Don’t you hear the tone of ‘Oh, Geez, I think we’ve beaten her enough…?’
They had their way and couldn’t stop when they planned to.
A classic painting way back at the start of this and they gave him Hell: Alex Ross. Look up George W. Bush as Dracula sucking the life out of the Statue of Liberty. Tells the whole story and it was just starting. Whiskeybone