Recently it was time for me to renew my real estate license, so I took some online courses. The courses I took had a heavy emphasis on real estate financing, and served as reminders of how very wrong banking / finance have gone in America. When I was in the middle of the online work I decided to re-watch one of my fav films, The Big Short — which I highly recommend to any who may not have seen it.
This morning this ZeroHedge article irritated me enough to prompt me to pull together some thoughts on banking:
Now Americans’ largest nest egg is in the stock market — yes, this is risky (see article here, under Focus), but that’s not the topic on which I’m focusing here.
My real estate classes gave a brief history of some of what happened to make that a reality. If you are interested, below are some historical references that point to the change. This is my read on it: 1) interest rates became too low to make savings attractive 2) banks who got a great spread between the rate at which they can borrow and the rates at which they lend, became the main lenders for housing 3) once banks had control, they were able to do pretty much what they wanted with interest rates, qualification for loans, etc. In other words, banks now hold complete control over who is able to own anything that requires a purchase loan.
As George Bailey well knew, savings and loans where neighbors loaned one another money to build their homes, was the great protection over evil-tempered, people-hating, greedy megalomaniacal bankers like Mr. Potter.
The first article may have a positive bias toward the Federal Reserve System. I offer this as a balance: End the Fed
I don’t fully trust Wikipedia, but I sometimes use it as a reference or beginning point for research and I offer this info from them in that context: Savings and loan crisis