Comments on: Allan Sloan: Why on Earth Should We Protect Banks From Their Mistakes?

By: Gex

Gex — Mon, 12 Nov 2007 15:33:10 +0000

This happens every time the deregulate the financial industries. Remember S&L?

Although the pain of letting these guys go under would be spread wide, the pain of letting them survive their poor decisions only gives them incentive to keep making them. After all they raked it in during the boom, and their losses get covered in the bust. Nice work if you can get it, but you see how that actually gives incentives for the big players to create bubble economies.

By: » Weekly Blog Roundup, One Week to Flight Edition on Consumerism Commentary: A Personal Finance Blog

Mon, 12 Nov 2007 02:26:27 +0000

[...] Five Cent Nickel: Funding an IRA When You’re Not Sure You Can Afford It Mighty Bargain Hunter: Twelve Bargains That Aren’t Bargains Blueprint for Financial Prosperity: You are a Business, Act Like One! Get Rich Slowly: What to do When Money and Ethics Clash No Credit Needed: What if You Make Maximum Retirement Contributions for 20, 30, 40 Years Free Money Finance: How to Get Rich on $20k a Year AllFinancialMatters: Why on Earth Should We Protect Banks From Their Mistakes? Brip Blap: 67 Ways to Outlive 106 Billion People Mrs. Micah: The Fun and Easy (At Least Rewarding) Side of Personal Finance [...]

By: » Roundup: $1000 bagels and $25000 chocolate sundaes on Blueprint for Financial Prosperity

Sun, 11 Nov 2007 21:56:57 +0000

[...] JLP talks about how this is the season to be frugal. [...]

By: Ernesto

Ernesto — Sun, 11 Nov 2007 20:10:04 +0000

Sorry, I mean can not afford a huge bank crisis. Where ever there is a Central Bank, you´ll findbank crisis.

By: Ernesto

Ernesto — Sun, 11 Nov 2007 20:07:32 +0000

It takes two to Tango. Banks are irresponsible because they known that what ever happens, the country/world/goverment can afford a huge bank crisis.

By: FinanceIsPersonal.com

FinanceIsPersonal.com — Sun, 11 Nov 2007 15:54:41 +0000

A bailout is definitely a bad idea, it really only encourages banks to be irresponsible in the future. The industry as a whole needs to learn a lesson that they should only give out loans to people who can actually pay them back.

By: eraser’s blog » Blog Archive » Allan Sloan: Why on Earth Should We Protect Banks From Their Mistakes?

Sat, 10 Nov 2007 16:45:09 +0000

[...] By JLP Citi wants its money, but instead I say, “Sorry, the house is selling for less than its true value. As soon as it sells for what it should, I’ll send you a check.” What do you think Citi’s reaction would be? How about “Sir, where should … allfinancialmatters.com/2007/11/08/allan-sloan-why-on-earth-should-we-protect-banks-from-their-mistakes/ AllFinancialMatters allfinancialmatters.com [...]

By: Kitty

Kitty — Sat, 10 Nov 2007 15:31:05 +0000

It’s a bad situation either way. It’s unfair to bail them out, and lowering interest rates leeds to inflation, but as Kirt says banks problems hurt everyone else. Just look at the last week at the stock market. Even if you say – it is temporary, this temporary drop affects more than just stock prices.
Banks having problems may lead to layoffs amoung bank employees. A technology company, that sees decreased demand because it sells to banks, may follow suit. So it is a no-win situation.

Now, if we could just outsource banks’ CEOs jobs…

By: Tim

Tim — Sat, 10 Nov 2007 11:55:00 +0000

it’s really a double edge sword that invariably costs the consumer more. Even if the banks free up cash by lowering/getting rid of dividends for a period or issuing more stock, the banks aren’t going to increase the benefits like lowering borrowing rates or increasing savings rates to consumers. They will maintain corresponding rates until their costs are made up. So the consumer doesn’t win out anyways.

If the government jumps in to save the banks by continuing to lower rates, the consumer still gets screwed, because savings rates will drop while borrowing rates will stay static. If anyone has any question to this, notice that the fed has dropped rates by .75%, the banks have responded by significantly reducing savings rates, but holding fast on borrowing rates.

Allan Sloan is gaining some attention for bashing the banks as is popular at the moment, but in reality it really does not matter in the end.

It is too bad people who should know better aren’t heeding their advice about not panicking, because this is exactly what is happening. The fallout is all speculative and guessing. If people would let the actual figures come about, we wouldn’t be in this frantic mess. The banks right now are reacting based off of very aggressive figures for the damage. My assessment is that they are over correcting at the moment, and when all is said and done the actual figures will not be nearly as bad. Besides, the major banks are only writing off about $50-$100billion cumulatively, which is literally pennies in the big scheme of things. So I’m not sure where the severe problem is. I think the subprime and credit crunch are taking a life of their own without actual hard numbers. Another 6 months will tell, which isn’t a very long time frame at all.

By: marianne

marianne — Fri, 09 Nov 2007 19:15:56 +0000

A facet of subprime is a mess. It should be noted that there is a differentiated value for subprime or stated income loans in the commercial lending market. This loan type is not entirely bad despite the abuse of some in the residential lending arena. Oftentimes, individuals that want to start or acquire a small business, purchase a gas station, acquire a motel, open an auto repair shop or any of a myriad of sole proprietor establishments, and do not have the portfolio that would make them attractive to the big box leaders. Lending companies like Ocean Capital in Rhode Island offer subprime and stated income loans by using up close and personal evaluations of the borrower and the opportunity. We need companies like this to support new business opportunities.