Financial bubble - easy credit
I gained some sympathy for bankers from essay at:
http://europe.theoildrum.com/node/2564
I belong to a credit union, unsure how much better they are. They don't even TRY to offer home mortgages, too small, but operate a car sales fleet, or whatever its called.
Trying to be a "responsible" banker seems a hard place, and in the focus 100% on profits, it can be a race to the bottom. Those who can grab the most investments win, and if there's "too much credit" available, THEN they have to give out riskier and riskier loans to keep the money flowing. AND the more loans given, the more credit is available for other loans.
I can't ever be a "gold bug", seeing the return of a gold standard as acceptable or feasible, or seeing investing/speculation in a resource merely for being rate as prudent.
It would be fun to understand the financial system enough to find out how it works, and how wiser policies could compete.
A START might be to challenge the FDIC protection of savings. I don't know, but without SOME risk, people put their money in banks with the best returns, regardless of the value of the investments made. A bank that supports "community values", says no to irresponsible borrowers, that works with people to live within their means, they won't make as much money.
As always I'll be glad when my mortgages are paid off. THEN I'll be MORE in the position like bankers - cash to invest, and hard choices. At least no one will be pushing me to maximize my profits.
http://europe.theoildrum.com/node/2564
I belong to a credit union, unsure how much better they are. They don't even TRY to offer home mortgages, too small, but operate a car sales fleet, or whatever its called.
Trying to be a "responsible" banker seems a hard place, and in the focus 100% on profits, it can be a race to the bottom. Those who can grab the most investments win, and if there's "too much credit" available, THEN they have to give out riskier and riskier loans to keep the money flowing. AND the more loans given, the more credit is available for other loans.
I can't ever be a "gold bug", seeing the return of a gold standard as acceptable or feasible, or seeing investing/speculation in a resource merely for being rate as prudent.
It would be fun to understand the financial system enough to find out how it works, and how wiser policies could compete.
A START might be to challenge the FDIC protection of savings. I don't know, but without SOME risk, people put their money in banks with the best returns, regardless of the value of the investments made. A bank that supports "community values", says no to irresponsible borrowers, that works with people to live within their means, they won't make as much money.
As always I'll be glad when my mortgages are paid off. THEN I'll be MORE in the position like bankers - cash to invest, and hard choices. At least no one will be pushing me to maximize my profits.
posted by Ares Olympus at 11:26 AM
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