There is a sister thread to this it started out asking what caused the crisis and has evolved into what to do about it.
IMHO the governments should go with hands off because they are only going to screw it up. Funding the people that started this mess is not the answer. Let the rotten investment banks fail they deserve nothing less. This will have long term benefits of letting all the bankers know that if they make bad loans there is no corporate welfare safety net they are going to fall hard.
Credit like respect should be earned not given.
Some one said I sounded like Hoover with a hands off approach to the Great Depression maybe, the fact of the matter is that central banks propping up rotten structures is not a cure it is a band-aid. We are currently putting a Band-Aid on our problems. We need strict regulations on such things as Sub-prime credit.
What we have is:
Lenders who made bad loans
Credit card holders who have too much dept
Inflated home prices
taking too much equity out of homes
In other words lack of responsibility on the part of the lender and the borrower. The solution for the situation is to make both suffer so that they will conduct business in a responsible manner
Or,
we could print a bunch of money and give it to the banks to countinue business as usual. I said on the other thread that I had recieved a dozen calls wanting me to refinance my home.
With that story here is what happened Washington Mutual called me and wanted to adjust my currnet mortgage they would drop my interest rate to 5.5 which is pretty good and shift me form a 30 year to a 15 year mortgage since it was an adjustment of my current mortgage there would be no fees associated with this. Other companies got wind of what I was doing and tried to seal my business from Washington Mutual who has been a good company to deal with over the years.
One company told me that they were going to use the "bail out" money to refinance me. That money was intened to be used by poeople who are in trouble not me. My point here is that the money is all ready being diverted away from the intended purpose if you recall I was against this from the start. This just proves my point they investment bankers can not be trusted to do the right thing. So giving them more money only allows them to dig the hole deeper. They have no intention of fixing the problem only continuing to do business as long as possible.
IMHO the governments should go with hands off because they are only going to screw it up. Funding the people that started this mess is not the answer. Let the rotten investment banks fail they deserve nothing less. This will have long term benefits of letting all the bankers know that if they make bad loans there is no corporate welfare safety net they are going to fall hard.
Credit like respect should be earned not given.
Some one said I sounded like Hoover with a hands off approach to the Great Depression maybe, the fact of the matter is that central banks propping up rotten structures is not a cure it is a band-aid. We are currently putting a Band-Aid on our problems. We need strict regulations on such things as Sub-prime credit.
What we have is:
Lenders who made bad loans
Credit card holders who have too much dept
Inflated home prices
taking too much equity out of homes
In other words lack of responsibility on the part of the lender and the borrower. The solution for the situation is to make both suffer so that they will conduct business in a responsible manner
Or,
we could print a bunch of money and give it to the banks to countinue business as usual. I said on the other thread that I had recieved a dozen calls wanting me to refinance my home.
With that story here is what happened Washington Mutual called me and wanted to adjust my currnet mortgage they would drop my interest rate to 5.5 which is pretty good and shift me form a 30 year to a 15 year mortgage since it was an adjustment of my current mortgage there would be no fees associated with this. Other companies got wind of what I was doing and tried to seal my business from Washington Mutual who has been a good company to deal with over the years.
One company told me that they were going to use the "bail out" money to refinance me. That money was intened to be used by poeople who are in trouble not me. My point here is that the money is all ready being diverted away from the intended purpose if you recall I was against this from the start. This just proves my point they investment bankers can not be trusted to do the right thing. So giving them more money only allows them to dig the hole deeper. They have no intention of fixing the problem only continuing to do business as long as possible.
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