Five ways to restore financial trust
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Bill Bradley
Wall Street Journal
Restoring trust in the financial system is the key to solving the current economic crisis. Today, people don't trust bankers and banks don't trust other banks because they know that they have assigned totally arbitrary values to the assets on their own books. The result: Banks won't lend because they don't trust they will be repaid.
Increasingly, it seems as if much of the banking and hedge-fund industry in the last decade was a house of cards built by leverage, irresponsible lending and complicated derivative instruments. What began as a limited subprime crisis has morphed into a $33 trillion drop in global stock markets. In such a climate, a $787 billion fiscal stimulus will be wasted unless we clean up banks' books and get them lending again.
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Filed under: 360° Radar • Economy • President Barack Obama |
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@ Heidi I'm sick of people like you and everyone else expecting a handout. If you couldn't afford the house you shouldn't have bought it in the first place. During the housing bubble people who couldn't afford drove the housing prices into overinflated numbers yet people like you kept buying and now reality is hitting and people are realizing they can't afford a house. I have a excellent credit score above the 800's but I have not bought a house – why? I don't have the 20% down payment. Be responsible people.
@ xtina ask Palin the same question too – she avoided taxes and is still a hobnobbing politician.
Think again about refinancing your home if your not in foreclosure or have lost your job....yesterday I went to look into this and found that I'm not "quailfied" to receive the lowest interest rate available...720 is the guidline credit score for getting the BEST rate....mine is 705 (which happens to be the lowest its been in over 4 years)...I have $35,000. equity in my home ...want to up down %20 of the loan I still owe.... and yet I my interest rate would still be in the high 6%. WHY!!!! I have a mortage payment of $1963.00 mo. If iI were to pay my loan amount down with the %20 @ %5.80...my payment would drop to around $1063.00mo. !!! Isn't that the whole reason behind this stimulas pkg. To get back on track financaily? I guess what I'm trying to say is, that shouldn't EVERYONE be able to benefit from the "NEW" economy...not just the people that are in crisis now because of greed on wallstreet.....What about the people that work hard everyday..... we STILL NEED help to save money also!!!!!!
Not only political challenges will occupy the agenda of
President Obama.
Psychological issues are more complex and difficult challenges of the President Obama.
President Obama deserves our trust in everything that represents. But he assumed the presidency, at a difficult time too.
Return the trust and managing expectations are some of the psychological challenges that the president will have to give much attention, to continue with the American people as its ally in that fight against the crisis.
Good luck, Mr President!
If I don't pay taxes, I go to jail; if someone in Obama's Cabinet doesn't pay taxes, they get to run the country. How is that "change"?
People like the Marine who made $7,900 a year and still took out a $300k plus loan along with the bank that forged his income are to blame for this debacle along with the Madoff's of the world. It's unfortunate that the responsible have to pay for the irresponsible. Oh and let's not forget the people who chose to refinance a house to turn it into a virtual ATM.
I don't feel bad for you Mina of San Bernardino...your house was probably free and clear until you refinanced it to use the money. Since you're on a fixed income, how did you expect to pay it back? The fact your kids are having problems makes me wonder how financially responsible you all are.
Not only "technical" challenges occupy the agenda of President Obama. And perhaps the psychological challenges are the greatest!
President Obama deserves our trust in everything that represents. But he assumed the presidency, at a difficult time too.
Return the trust and managing expectations are some of the psychological challenges, that have to go Mr. President!
Good luck, Mr President!
Call it blind faith, or call me a 'sheep" but I put my faith in President Obama, there I said it, PRESIDENT Obama, which a whole lot of news channels dont give the respect to our President no matter who it is. If I talk amoung friends and family badly about my President thats one thing, but to have a demenstation publicly or be on the radio or TV, It is my privlage as an american to give my respect to our President. Those commentarians should be revoked from public speaking. Its propaganda, in a communistic way.
I could go on and on...All I ask is that President Obama be careful, and listen to his body guards, i worry about him, He is my, OUR hope.
He opens his eyes in the morning and thats better than the last President every did.
The "greedy" banks are a big reason that our economy is in the mess that it's in right now. There were banks and mortgage brokers giving loans to people that did not even have any proof of income. They never expected that the market would burst and now they're paying the cost for it. If we had focused on helping people to stay in their homes years ago when the foreclosures were rising we could of avoided some of this.
The reality is that the foreclosures were not a big issure when it was only low income families losing their homes because everone jsut assumed "they couldn't afford it anyway".
The only way to restore the financial system is to throw out the connected few and the Obama administration should have started with Timothy Geithner.
The connected few made a killing off of mortgage fraud through mortgage backed securities and it now appears that Timothy Geithner is going to get them paid again through his "Private/Public Investment Fund."
Giethner's "private" investors will be his now unemployed colleagues who helped run our nation into the ground the first time around; he's going to have taxpayers and the government pick up the tab as Geithner gets his friends paid a second time off the same fraud.
Unless our nation addresses the root cause of our problems, which is corruption by the connected few, rather than the symptoms, we will continue to fail as a nation.
if the stimulas package pass will the be money in it to help felons also become a asset to society., remembering we are keeping it real mr cooper
I have a better solution- Don't buy on credit, Don't deal with Banks, learn to live & be content with little.Don't buy what you don't need.
I am a 79 year old, grandmother, and have lived in my current home for 38 years. Recently I, as did many other homeowners, refinanced when the market was "ripe." Suddenly, the real estate market did a major U-turn and I, as do many other homeowners, find ourselves paying a mortage that is worth more than the home we own. My limited fixed income, remember my age-79, along with the continuous rising costs of electricity, gas, food, fuel, basic necessities, are driving me to the point that ican't afford my own home any more. I drive a 1989 4 door sedan that is falling apart, I am diabetic, and need to pay the high costs of my medications. In speaking with my lender, they recommended I put my home on the market at a major "below the market price" along with the clusters of others homeowners finding themselves trying to sell their home at lower prices. I don't want to sell my home. I am paying a 10 year interest only mortage, but just barely, and I have nothing left over for my basic necessities. I have no financial reserves to even move into a temporary housing situation. What am I suppose to do? What type of help is available for people like me? I know I won't be alive much longer, and this will considerably shorten my years, but I would like to be able to leave my children who are grown, with financial problems of their own, some type of legacy. Something to remember the home they grew up in, and their mother. Help. Is there anything to help me? Thank you for this forum to be able to voice my concerns, and any help it will bring.
DEMS IN CONGRESS" SET THEM UP–AND NOW PUT THEM DOWN"
When are you going to put Congress under the same microscope you do the bankers? People like Barney Frank,Chris Dodd, and Maxine Waters forced the banks to make loans to people that should not have qualified, then continued to protect the practice when everyone saw the problem coming six years ago. Now Frank, Waters and others are screaming the loudest at the banks for doing what they were forced by Congress to do. Quite honestly, I have more faith in the banks, as bad as they are, than I do this Congress.
A New York Times article published September 11, 2003 described an emerging crisis with Freddie Mac and Fannie Mae and partisan resistance to proposed enhanced oversight of these two entities:
"The Bush administration today recommended.......a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac.......which together have issued more than $1.5 trillion in outstanding debt.......
"These two entities - Fannie Mae and Freddie Mac - are not facing any kind of financial crisis,' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. 'The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."
So you "SEE",this really is the Democrats fault !!!Bush tried to stop the housing collapse,which would have saved the banks,which would have stopped wall street from crashing,which means your 401K would still be worth something,and you wouldn't be laid off,and we wouldn't need this spending bill,etc.
No one will disagree that the finalcial institutions and Wall Street are suffering from "financial sepsis,"--although sepsis, in most instances, can be cured with antibotics--there are no antibotics or antidotes that will cure "GREED," not even more money--it is like MRSA--meticillin resistant stap aureus.
Well you can't blame the banks for not trusting anyone. I mean they were made by law to give loans to low income people to get them into homes. But I do think they took that a bit too far trying to make money. In the end the low income people and ones that tried to live beyond their means couldn't afford their houses so therefore the banks are now finding themselves owners of houses that they can't sell and that the value has greatly depreciated on. No wonder they are afraid to loan money. How are they supposed to know they'll get paid back especially in this economy where people are losing their jobs left and right?
From now on banks do need to be way more careful at who they give money too! I don't want this mess to happen again and for us to have to help bail them out again!
Cindy...Ga.