Sunday, December 13, 2009

"These bankers should be shown for what they really are to the public: vulgar robbers, thieves in ties, pickpockets and obstinate kleptomaniacs."
Gordon Brown? Alastair Darling? Lord Mynors? No, Hugo Chávez.
(via Angry Arab's Comments Section)
Posted by at

3 comments:

fleming said...

As a long-time reader of our research and valued friend told us over the weekend, “he [Obama] finally threw the banks under the bus”. While not suggesting the adjectives are undeserved, I am afraid that the U.S. President has invited all consumer borrowers, creditworthy or not, to abdicate their financial responsibility. We now have borrowers as victims.” Ain’t it the truth. And the consequences will be profound. Our friend reminded us that in regard to our theme of “frugality”, the current reality is that “frugal” represents just the first wave in a fundamental change in behaviour towards complete self-interest and risks morphing into something a little more troubling, such as abdication of individual responsibility…….

As we said, the media has no problem in running articles that complain about the lack of credit being extended by the evil banks, even though it was excess debt taken on by a profligate consumer that got us into this mess to begin with. The front page of the Sunday NYT runs with Rates Are Low, But Banks Balk at Refinancing. Basically, 60% of mortgage borrowers carry interest rates that are above the current market cost, but refinancings are still down 57% from year-ago levels because the banks have battened down the hatches on their lending guidelines; “The plight of homeowners has become a volatile political issue”, according to the NYT. Well, that’s probably not the case for the 30 million Americans who own a home with no debt or the countless others who have a mortgage but also know how to live within their means. The article says “the banks that once handed out home loans freely are imposing such restrictions that many homeowners who might want to refinance are effectively locked out.” So, because the banks lent freely in the recent past, and this excess was at the root of today’s problems, then the banks should go back to those days of reckless lending behaviour.

Come again? Nowhere in the article is there any reason provided as to why the banks are “stricter” — maybe it has something to do with the amount of equity the borrower has in his/her house, or what his/her credit-rating has been cut to, among others. The way the media and politicians are portraying the situation is that it is every citizen’s god-given right to have credit. This is amazing. We aren’t exactly recommending a return to Calvin or Kant puritanical behaviour, but what we are seeing unfold right now is very disturbing.

4:44 pm
Jemmy Hope said...

Fascinating stuff, flem (ZZZZZZZ...)

8:16 pm
fleming said...

Read a little deeper Jemmy.

The point is, individual responsibility is losing its "cache" among the elite. Borrowers are "victims"? Before they were being unfairly discriminated against because they couldnt get cheap loans. Now, its the banks fault for doing so.

This kind of thing could well harken the downfall of civilization, ala Ayn Rand Atlas Shrugged. Stay tuned!

2:15 pm

Post a Comment

Subscribe to: Post Comments (Atom)