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The Watercooler
Theory on economy?
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<blockquote data-quote="witzend" data-source="post: 319195" data-attributes="member: 99"><p>It was deregulation of banks and investment houses. For example, it used to be that a bank could not invest the money that you had in savings. That changed. It used to be that insurance couldn't use bank loans. That changed. It used to be that banks could lend out $12 for every $1 they held. (I know this may seem wrong, but when you figure in interest, and that MOST borrowers will repay, it worked.) They changed it to $34 for every dollar, spread it too thin and lent to people who couldn't afford to pay the loans back. Then it didn't matter that they were charging people 30% interest because you can't get blood from a stone. It looked good on the books but nothing from nothing leaves nothing.</p><p></p><p>They let the fox watch the henhouse. They haven't fixed it yet. Having the first TARP go to the banks without oversight was a <em>big big</em> problem.</p></blockquote><p></p>
[QUOTE="witzend, post: 319195, member: 99"] It was deregulation of banks and investment houses. For example, it used to be that a bank could not invest the money that you had in savings. That changed. It used to be that insurance couldn't use bank loans. That changed. It used to be that banks could lend out $12 for every $1 they held. (I know this may seem wrong, but when you figure in interest, and that MOST borrowers will repay, it worked.) They changed it to $34 for every dollar, spread it too thin and lent to people who couldn't afford to pay the loans back. Then it didn't matter that they were charging people 30% interest because you can't get blood from a stone. It looked good on the books but nothing from nothing leaves nothing. They let the fox watch the henhouse. They haven't fixed it yet. Having the first TARP go to the banks without oversight was a [I]big big[/I] problem. [/QUOTE]
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Theory on economy?
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