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Strategies & Market Trends : ahhaha's ahs

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To: GraceZ who wrote (1612)	3/18/2001 8:10:26 AM
From: Ilaine	Read Replies (1) of 24758

I hadn't thought about whether the loans were callable. That would explain a lot. I've been wondering why the Federal Reserve let the banks fail. I knew it was because the people in charge did not think the collateral was good enough, but I didn't knew why. I keep reading about "speculative excess" and "purging the excess" but that's meaningless to me. A banker who knows you knows whether you are good for the money or not. It's a value judgement, it's subjective, but it's something they know how to do. Like you know which customers to let run a tab and which ones you make before you even start work and which ones you make pay before you hand them the work. A central banker who is the scion of generations of central bankers doesn't have a clue as to whether a Norwegian wheat farmer in Minnesota who's had a couple of bad years is good for the money. They don't understand that money is work. They think money is gold, money is land. They go to college and read about business cycles and Schumpeter and all that crap and believe it. "Every boom is followed by a bust." Hogwash. If you've got too much inventory, you've got to lower your prices, and if no one wants to buy, you need to get into another line of business.

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