The Credit Conundrum

We've been hearing about the credit crisis for months now, and still things are frozen. Lord knows the Fed and Government have thrown everything possible at the problem to find a solution. However, credit is still hard to come by for even the best customers...and a home loan? Ha, that's probably the most difficult. Which brings us to the dilemma - the Feds want banks to offer more credit, make loans and start doing what banks 'do' to make money. However, the de-leveraging process, or paying off/writing off debt continues. So, what is it...the expansion of credit or new credit...or the unwinding of current credit? Having our cake and eating too, perhaps. I just can't see these two situations co-habitating in an uncertain world.

Banking on China? Hmmm...

China has grown to an enormous size, and we don't mean geography or population (they have the most people of any country in the world). Their economy is no longer secondary. The world has shifted to the tigers it seems. Relying on this mammoth country to stimulate world demand is really quite a task. They are in their own tailspin, and after the incredible surge in demand leading up to the 2008 Olympics, a slowdown is not unusual. Can China be enough to work the world out of its global recession?

Speaking of Banks

There seems to be surprise around every corner these days. Whether it's Citi (C) or BAC trying to justify the Government investment or some other enterprise justifying expenses, there really is only ONE thing to know: bank issues are not going to be solved with the wave of a magic wand. In fact, I think banks are being more RESPONSIBLE if they are not offering credit to those who may not return it, regardless of the government guarantees. It's going to take time - plenty of it - before this crisis is resolved. In the meantime, the struggle continues.

Obama: Using the Previous Failures

A new leader, a new future, why not blame it all on the past regime? Of course, President Obama can take the high road, and usually does. However, he has taken down some of the wonderful principles of capitalism and slapped us hard on the wrist for our excesses of the past. Given the recent rhetoric about wall street and bankers alike, the 'tough love' stance continues to spook our democracy. For example, the changes announced for healthcare and education ripped a hole in these stocks. The socializing of such programs seems to be the future, and perhaps that's what is needed.

Comments

[PainfullyAware:]

Both Health Care And Education will soon become the opposite of their intended purpose once the "Governmental Mandates" are initiated.

Government Does Nothing Well.

Government is for leveling the playing field; not playing the game.

Mar 12 07:33 PM