Capitol Hill Blue Forums Political Issues Finance, the economy & Economics Banks in trouble?

You may have missed the links provided by the author in her essay, leading to demographic ssurveys of three of the hardest-hit urban areas, which coincidentally happen to be more than 50% African-American. Bearing in mind that the total population of African-Americans is less than 20% - well, that should tell you something about who was "hardest hit".

The writer also points out that there were more subprime loans issued to African Americans home-buyers making over $100,000 than to Caucasian home-buyers making under $40,000. So no, income was not the deciding factor. Race was.

stereoman, you may have missed Phil's link which stated statistics from the Acorn Home Lending Program.

I then tried to make the Acorn Home Lending Program understandable:


The program is designed to help low-income borrowers get into a home. Isn't that a good thing?

Giving sub-primes based on race is wrong.

BUMP!!!

The Aha! factor has finally kicked in...
Where was "The Motley Fool" back in the beginning of September when we laid this out for him?

Here's the latest "Aha!"

Bernanke understands... and saves the banks.. with Whose money?

Wanna keep this thread alive until some of the major banks go belly up... just as a reminder that you can fool some of the people all of the time, and all of the people some of the time... but you can't fool all of the people all of the time...

It's what happens when the government feeds the hand that bites it.

How creative!

Didn't China also bail out one of those banks about 6 monts ago for 30some million?

Thanks for your post itstarted. I have some more information to add to your link.

In the real estate industry there is something called a "short sale." A short sale means that the seller found a buyer to purchase the property, but because of declining property values, when the sale goes through, the sale will be short, because it's less than the loan amount owed to the bank by the seller.

The bank then issues a 1099 to the seller and the seller must claim this "short" on the income tax return as "income."

However, Congress changed that rule about a month ago. Banks can no longer issue 1099s to the seller. The bank must eat the difference themselves. (Well, they are the ones that made the loan in the first place, aren't they?)

Bank of America is petitioning Congress to have the American Taxpayer fund banks to make up for these "short sales" so that the bank doesn't have to eat the difference.

So, basically, banks want to be able to be guaranteed to make money, and when they don't, they want a handout from the American people.

Try managing you personal finances that way and see how far you get in life!

I know that Citibank got a HUGE loan from some Arabian peninsula banks.

Bump again...
While it seems that the market goes up and down...and so far, in the past 30 years always seems to bounce back, it's well to consider that this is not written in stone.

As of today... noon on March 14, 2008, we may be seeing an ominous warning. While not a Bank, Bear Stearns has been considered one of the "stable" corporations, and generally above any serious problems.

I would suggest that the trigger for the heavy sell off and attempt to save the company, was not just a rumor based panic... but a true panic. That means that the bank doesn't have the net worth that it claims, and that the investors who have money in the company want to get what they can... while they can.

When the values of the assets are "marked to market"... ie. revaluing what the "claimed" value is to the "real" current market value.

It's leveraged hedge funds and derivatives, more than CDO's.

This problem is NOT limited to Bear Stearns. Almost all of the Brokerage Houses... and probably most of the banks are in the same position.

AND!!!! Here's the point. It only takes a 20 minute "RUN" on a Brokerage House or a Bank... to put it out of business.

Are the banks in trouble?.. Damn right!... and if anyone thinks that this is just a normal up and down situation... they're wrong.

It may not be today, or tomorrow, but we're headed for a shock back to reality, that hasn't happened in almost 80 years. Furthermore, the actual end game, may be much worse than 1929, because the national debt is so much worse.

The failure of the regulatory bodies of the government and the actions of the Fed are the causes of the problem.

"When you're up to your ass in alligators, it's difficult to remind yourself that your original objective was to drain the swamp."

Here's the article from last September that prompted the original post. It's as valid today as is was back then, and is well worth re-reading to see how it happened, and what's next.

"Are the banks in trouble?"

We're in deep, deep trouble... It may be that you'll look back and wish that $4 gas was your biggest problem.

'course, that's just an opinion.

Wow! Not good, not good at all. Thank you itstarted for your post. Now the blame game...

How much of this "mess" can be contributed to the Bush Administration's running of America for the past seven years?

Don't forget the unindicted co-conspirators in Congress...Bush couldn't have done it without them!

Absolutely! Especially Congress between 2001 - and 2007.