How Bad Off is Our Banking System?
Published by Bob Foster
For some reason, the mainstream media never made much mention (at least I never saw or heard it) of how close we came to a total collapse of our banking system and the world economy as well.
Listen to what Rep. Paul Kanjorski (D-Pennsylvania) told an interviewer on C-Span recently. It doesn’t get frightening until about 2:24 into the video.
Maybe we were too harsh in our criticism of Secretary Paulson when he changed courses when spending the bank bailout money. We also may be too harsh in criticizing Secretary Geithner when he said it would take a lot of time, and a lot of money to get us out of this mess. It appears the economic crisis was-and is-much more serious than we thought.
I just wish government would tell it to us straight and give us some detailed assurances that they know what the problems are and that they know how to correct them–and what it might cost. Hopefully President Obama and Secretary Geithner will be doing that shortly. The American public needs to know just how bad things are, and what it is going to take to correct our economic problems. If it is going to take $3 trillion, tell us now.
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6 Responses to “How Bad Off is Our Banking System?”
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Bob – Thank you very much for that!
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We will continue to get closer to eminent collapse if we can’t step in and do more than just scold the banking execs for taking over $1.5 Billion in bonuses and do something to regulate how the money is being used. You can’t fix a leaking dam by putting more water in the reservoir.
The view from the bottom up isn’t pretty either – with unemployment/underemployment at record highs and climbing, and the banks are all raising their interest rates (admittedly, to congress yesterday) to existing loans and credit cards, then when do people just default and the bank gets nothing in return.
It’s a mess. I haven’t heard anyone yet say that it’s going to be all fine. I would like to see a plan and just HOW the bailout is actually going to bail us out (as in a leak in the boat) – or it it merely just prolonging the inevitable?
Judith – Thanks for your comment. I am still shocked that we came so close to a total banking collapse and never heard about it until now, and then from just one Congressman.
Bob Foster’s last blog post..How Bad Off is Our Banking System?
Jeff – I’m afraid no one has a plan to fix the banking system. The big banks are all publicly owned, and the boards and shareholders have allowed them to spin out of control to satisfy the executives personal greed. Sadly, the bank executives at the hearings didn’t even get the kind of tongue-lashing the auto execs received.
Using your analogy, the bailout was only a temporary measure to put some water in the reservoir to buy time to fix the leak. Now, if only someone knew how to fix the leak.
Thanks for the comment–we need more people to be thinking about this.
Bob Foster’s last blog post..How Bad Off is Our Banking System?
Bob – I have listened to this video a few times and it’s just still really shocking. It becomes even more so when we consider that nobody seemed to know. Right?! In fact, when I got into real estate some 10 years ago I was alarmed at the people who came into suburb of Detroit to get loans. And I was new to the business! It was quite obvious that many of those who came in did not even have jobs and secured their loans through the likes of utility bills and cell phone–honestly!
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Judith – Yes, it is scary. I had never given serious thought to an electronic run on the banks–it really could happen in the proverbial “blink of an eye,” as it very nearly did. I does seem strange that we never heard anything about this through the media–where were these folks?
The “loans without qualifications” program started a long time ago, and no government effort was ever made to curb the madness, and certainly the mortgage companies were not going to make the effort–they only had to move the loans over to Freddie and Fannie.
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