The Gold has Tarnished
Goldman Sachs was beloved by the Obama administration. GS was one of the largest contributors to Obama's presidential bid and Obama has hired numerous GS employees for his administration. For starters, Tim Geitner (The Secretary of the Treasury) and Gary Gensler (Obama's Trading and Futures Commission Head). Now over 50 banks were at the heart of the financial meltdown in the US and World economies between 2006-2008. So now the administration has pulled in one, one out of fifty, entity to hammer in a public spotlight. Ironically this is exactly when the administration is looking to push financial reforms.
Everyone gets bent out of shape when they think of Wallstreet. They think bailouts, they think about their loans, they think about their debt. What seems to be removed from the latter positions is that you, John Q. Public, signed up for those debts. You did not however sign up for a bailout. Bush and Obama signed that for you. Remember back about 18 months when Obama signed in the second level of stimulus and bailout spending to follow Bush. He ran on a platform of NOT bailing out banks but when the majority of your funding is coming from a bank, that tends to change.
The financial market is screwed today because it has involvement by the government. It has government direction saying what quotas it needs to speak to, this is bad in business. Why, because it changes the game. If I run a bank and two people apply for loans, one person with a 800 credit score who wants a 600,000 mortgage and one with a 520 credit score who wants a 200,000 mortgage loan, I'll end up giving the 200K person a much lower rate than the 600K person. Why, conforming loans. A government idea of backing money. Any business minded person knows that the higher ranked individual has better odds of paying back the loan I'm giving him, however the government isn't going to guarantee him. This bending of the rules is the problem. Until this is addressed, issues will always be.
Everyone gets bent out of shape when they think of Wallstreet. They think bailouts, they think about their loans, they think about their debt. What seems to be removed from the latter positions is that you, John Q. Public, signed up for those debts. You did not however sign up for a bailout. Bush and Obama signed that for you. Remember back about 18 months when Obama signed in the second level of stimulus and bailout spending to follow Bush. He ran on a platform of NOT bailing out banks but when the majority of your funding is coming from a bank, that tends to change.
The financial market is screwed today because it has involvement by the government. It has government direction saying what quotas it needs to speak to, this is bad in business. Why, because it changes the game. If I run a bank and two people apply for loans, one person with a 800 credit score who wants a 600,000 mortgage and one with a 520 credit score who wants a 200,000 mortgage loan, I'll end up giving the 200K person a much lower rate than the 600K person. Why, conforming loans. A government idea of backing money. Any business minded person knows that the higher ranked individual has better odds of paying back the loan I'm giving him, however the government isn't going to guarantee him. This bending of the rules is the problem. Until this is addressed, issues will always be.
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