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Yes, I do get it that the greed and sleaziness of big banks were one factor in the economic meltdown of this country in 2007/2008. I, too, retain a bad taste in my mouth about that.
And yes, I also get it that people whose homes were foreclosed on would resent the banks who gave them their loans which shouldn't have been granted in the first place, in many cases.
And yes, I also get it that the resentment of the "too big to fail" banks and their federal bailouts is a natural thing even though the bailouts have been largely repaid, and I even share that resentment. Hundreds of smaller banks were allowed to fail, so where is the fairness?
Yes, I too have moved some of my banking business to locally owned banks and credit unions as a statement of my views.
However, having said all that, I have been brought up short time and time again by the virulence of the hatred of the big banks as expressed here on City-Data, both in the Economics main forum and in the Personal Finance sub-forum. I am talking about foaming-at-the-mouth, exaggerated, bitter anger. Who can help me explain it? Have some people who have lost their jobs and suffered greatly on a personal level focused on the big banks as a sole cause?
There must be something more that I am not taking into account.
hreck the public has to blame someone for the fact they were greedy . the financial industry had to satisfy that greed with products paying higher rates that never existed before.
cdo's ,credit default swaps and cmo's were all products created and offered to the public feeding their demand for higher yield.
folks bought more and more of a home thinking they would flip it at even higher prices.
suddenly the thinking was buy a house and let the wealth pour in.
it wasnt the few morons who got loans by banks and should not have that collapsed us.
they were paying those loans right from day 1. it was only after the perfect storm of all these things and products meshed that things started to collapse.
credit default swaps were supposed to let banks hedge risky loans.
if you loaned john 1,000 bucks and thought you may not get payed and told a mutual friend that friend may say ,nah i think john will pay you..
so you say want to bet?
so your friend bets you that john will pay you.
that bet will offest some of the loss if you dont get paid .
now your hedged.
but now imagine other friends want in on the action.
suppose you now have 1 million dollars in bets on the fact you may or may not get paid back that measly 1000 bucks.
credit default swaps turned into a vegas style betting parlor.
trillions of dollars were bet as to whether loans a fraction of that size would get repayed.
when those long shots started to pay off institutions and banks on that side of the bet lost huge sums of money. some lost more then they could even spare.
the biggest brokerages were hurt big time by the loss of huge amounts .
other products like cdo's were created.
imagine taking a bundle of mortgages and selling it to investors . that paid 4%.
then you sell an identical package to another group at 6% . only difference is they dont get paid until all of group 1 gets paid.
they then sold it to another group and paid 8%. same deal , you only get paid after group 1 and 2 do.
well when things started to look a little shakey and even though each group got their payments those in groups 2 and 3 wanted out.
well that froze the credit markets as no one wanted to buy them.
there was so much involved on all fronts as to what caused the collapse that we still dont even know what happened.
those that point the finger are usually just ignorant of all the factors that caused it and the reasons. most of which the public generated by their own greed.
how many here were even aware of thse products?
but if blaming the banks ,the political parties or even your 401k adminstrator makes you feel better then by golly blame someone.
Last edited by mathjak107; 12-09-2012 at 07:20 AM..
There must be something more that I am not taking into account.
Yes, you're missing the fact that most people need a scapegoat to conveniently blame for all the short comings, rather than to look for the true source of their problems - their own lack of self discipline and poor choices. It's very difficult for people to look in the mirror and realize that their problems are mostly their own doing, and for the last four years, the government and their media lapdogs have done a very good job of turning the banks (and corporate America in general) into that scapegoat and giving people the target to blame all their woes on. What shocks me is that the majority seems to actually believe it, when it's government greed, corruption and incompetence that has driven this country into it's current morass.
Have we all forgotten the old warning, "I'm from the government and I'm here to help." Wake up people!
I don't have a foaming at the mouth hatred of big banks.
However, I do despise their fees, their laughable interest rates that you often need a microscope to see, and their often abysmal customer service.
When I first opened an account at Chase, I loved the idea that I could have access to thousands of ATM's and locations. Until I saw those $6 "maintenance fees" rolling in. I hear they've since been increased to $12. My opinion of that bank dropped pretty quickly.
I also despise the doctrine of "too big to fail" which constitutes a massive wealth transfer from the taxpayer to the bank. There's a reason why the bank's building is 'that big' and your house is as small as it is. Once upon a time, if a bank failed, that was the end of it, and the government insured the depositors. But not anymore.
Because they privatize the profits and socialize the losses. We as tax payers do not get any part of the dividends but they wanted us to bail them out with all their extreme bonuses to the top management. Screw the bastar ds.
Once upon a time, if a bank failed, that was the end of it, and the government insured the depositors. But not anymore.
Well, who is really to blame for that - the banks, or the government? It's the governments job to regulate these banks in the first place. If they were doing their jobs, why did we need massive bank bailouts to begin with? The government failed in their job as regulators, and then rode to the rescue with your money, claiming to be saving the economy and blaming the people that they themselves were tasked with watching over. And don't even get me started on Fannie and Freddie, which is where this entire disaster really started. But there was nothing wrong there, and it was okay to force them to loosen their lending standars despite what their managements said, right Barney Frank? Ask yourselves where the real failures were in all this - Wall Street is a bunch of rank amateurs compared to Washington DC.
How anyone cannot be angry at big fractional bankers that make fortune by lending money (at interest) that they don't have? For all practical purposes big banks are legal counterfeit operations. More than that, bankers who make FORTUNE by lending money they don't have seemingly cannot satiate themselves, we go from one bank "inspired" crisis to another.
Just put yourself in the shoes of big bankers. Let's say big bad Federal Government granted you authority to "create" and lend 1-2% of nation' money supply per year. You don't need to work, you don't need to sweat, you don't need to risk your health and life in the lines of work that wage slaving America has to offer. All you have to do - maintain faith in public resource #1 - money, in other words all that we ask you - be a parasite that doesn't hurt host too much. Nope, banking psychopaths cannot get enough, they are willing to hurt (even to kill) their host in order to have even more of bits and zeros.
Do you remember Greenspan disbelief over banking crisis? I understand him. The System gave those people free MEGA MEAL ticket, and yet they were prepared to hurt bad such a generous host in order to have even more.
Well, who is really to blame for that - the banks, or the government? It's the governments job to regulate these banks in the first place. If they were doing their jobs, why did we need massive bank bailouts to begin with? The government failed in their job as regulators, and then rode to the rescue with your money, claiming to be saving the economy and blaming the people that they themselves were tasked with watching over. And don't even get me started on Fannie and Freddie, which is where this entire disaster really started. But there was nothing wrong there, and it was okay to force them to loosen their lending standars despite what their managements said, right Barney Frank? Ask yourselves where the real failures were in all this - Wall Street is a bunch of rank amateurs compared to Washington DC.
Big Finance owns big government. Big bad government scrapped most regulations to comply with "free market" paradigm pushed by big finance. 4 years after crisis big bad government did nothing to restrain big finance. You cannot hurt yourself, can you?
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