Thursday, April 03, 2008

Bankers, Is Very Appropriate As Rhyming Slang

In the wake of the Northern Rock and Bear Stearn crises I was wondering how hard it is for a bank to go bust, I mean if the Commonwealth Bank of Australia aren't bust despite their insane lending policies how screwed up were the Rock and Bear Stearns?:
The bank gave Deng Gatluak a $20,000 car loan, even though he did not speak English, had no job and no concept of finance.

His wife Nyatut - who still speaks virtually no English and has no assets - was made the guarantor on the loan.
The man also had eight dependents. The criticisms that the greed* of the banks is responsible for the crisis seems mistaken to me. They may or may not be greedy, but the point isn't that they want to make money, it is that they like many others convinced themselves the long period of growth that came with the period of globalisation and the internet in the 1990s was permanent and that the economic cycle had been abolished and that the old rules of lending no longer applied.

Via Swinish Capitalist at Tizona.

* Greed like selfishness is a concept the media only ever apply to the wealth producing sector. The vast increase in taxation that the UK has undergone in the last decade is never attributed to the greed of ministers and the public sector.

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