Quote:
Originally Posted by stonegossard
The banks are FINALLY admitting/unwinding some of the steep losses they have been hiding. Probably gonna rattle the market for the short term. Ya might be able to pick off BAC in the single digits again soon.
Market is basically range bound now. Probably will go test the 9600 area in The Dow. If that holds will probably head back to 10,400. If it does crack 9600 and stays below there could get real ugly.
The main problem is the banks. They are still in bad shape, which leads them to not lending to the consumer (without consumer spending economy isnt goin anywhere), and not lending to the small businessman. Until they open up and start acting like banks again, economy isnt goin anywhere.
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The government never put any incentive for a bank to make business loans even when they were forcing tarp money down everyone's throat. If anything, they continue to hinder small business loans with excess capital requirements and loan loss reserves. Obama has tried to help but this congress really doesn't understand business (as if any do).
So your choices really are a.) Lend unsecured to small business and and risk not only default but also getting railed by the regulators.
or
B). Taking no risks and getting yield only on consumer stuff that is paying pretty nicely with the cost of funds at basically zero.
What would you do?
If the government wants to control banking, they have to facilitate some form of risk in order for there to be growth.