U.S. Banking, Greenspan Commentary

U.S. Banking, Greenspan Commentary

U.S. Banking

An article today titled 'Time to Relax Frannie's Underwriting Criteria' is a commentary on, and criticism of, a New York Times article that apparently was critical of government policies it claimed were less lenient than they should be - and that as a result potential 'investors' in, who would then become 'renters of', U.S. residential real estate are participating less in the current U.S. Housing market than they otherwise might.  I think the author of the 'Time to Relax ...' article makes good points, and suggest you read it here - reading time 3 minutes.  I added the following comment to it:

Presumably those 'investors' with adequate income and capital to covenant new loans are able to borrow for whatever purpose they have in mind. Whether U.S. residential real estate is a good investment in this environment is, of course, another question altogether.

As I see it, one of the principal reasons the U.S. banking system is in the 'jam' is because it seemed from 1999 - 2008 to forget about (abandon may be the far better word) the importance of borrower income and underlying asset loan covenants. Why would now it make sense for U.S. banks to lower covenant requirements in the face of high unemployment, an uncertain consumer environment, and a loss in manufacturing jobs that aren't very likely to return?

I am a strong believer that while the current U.S. Administration inherited a 'complete economic mess', its stimulus packages and administration of them has done two things:

·        created false hope for many of meaningful U.S. economic recovery, with the chickens now again returning 'to the roost'; and,

·        wasted money that if it was to be spent at all, might better have been spent in thoughtfully subsidizing the private sector - particularly in the area of 'niche manufacturing'.

While I hope I am wrong, I will be surprised if we don't see more U.S. Government stimulus in the coming months, which I expect to again result in possible short-term economic gains - and almost certainly as I see it, likely even greater long-term economic pain.

Greenspan Commentary

An article today titled 'In Defense of Alan Greenspan: 'The Age of Turbulence' Revisited, Part 2' is a very long treatise that essentially says 'Greenspan is a good guy, not a bad guy'.  I did not read Part 1, and while I have provided a link to today's article, I don't recommend it to you unless you from a distance either love Greenspan or hate him.  That said, I commented on the article - largely because I started to read it, ended up scanning most of it, and thought the following comment - particularly the second paragraph - worth saying to what must be a large 'Greenspan audience':

Can all of this not be simplified by saying something like: (1) Alan Greenspan was an important person (note: not the only person), presumably of influence, who had a hand on the tiller during the period when the U.S. banking system succumbed to 'greed over reason', (2) by his own admission he didn't 'see the problem' until too late, largely as I understand it because he thought U.S. bankers would behave responsibly, (3) he either did a very poor job in his Fed tenure after 1999, or was undercut by others who had their respective 'hands on the till' and had 'more power' - or a combination of those two things, and (4) for sure he was almost certainly as I see it the wrong man in the position he held - for reasons others (including me) 'who weren't there' can write 'volumes' about, and likely from lack of 'being there' never 'get it right'.

Finally, does criticizing/complimenting Alan Greenspan really matter? I don't think so. One can't change the economic and other events that have occurred to date, and it seems to me to be a 'waste of precious energy' to worry one way or the other in hindsight about Mr. Greenspan's exploits or lack thereof. American's (and everyone else) in my view needs to 'move on' as best they can in what I see as a very changed and changing 'macro-economic environment'.

It is the last paragraph of my comment I consider important.  To me, people who waste time and energy reflecting and worrying about the past do just that - waste time and energy.  That is not to say that one ought not to draw on their good and bad life experiences to help them plot their future course.  Which of course, when it comes to how one thinks about their investments and investment prospects cause me to continuously say "increasingly use all the possible research tools available to you, think for yourself, and take as much personal responsibility as you are able when managing (or contributing to the management of) your own investments".

Company Research - Today's Featured StockResearchPortal.com Data Component

Linkedin Mining and Oil & Gas Stocks Groups

Consider joining the Mining Stocks and Oil & Gas Stocks Groups on Linkedin by clicking on one or both of the following images.

                       

*          *          *          *          *

Linkedin Investor Relations Executives Mining Group and Oil & Gas Groups

 

If you are an Employee of, or Investor Relations Consultant to, a Mining or Oil & Gas Company consider joining the applicable Linkedin Group by clicking on one of the following images.

                   
       
                    

*          *          *          *          *

 

As always, please forward ideas to me as to how we can improve StockResearchPortal.com at info@stockresearchportal.com.

 

Best Regards,

Ian R. Campbell

President

StockResearchPortal.com

Notes to Readers

This email and its content is in no way to be interpreted as an endorsement of one or more of the companies mentioned herein, a suggestion as to the future direction of the stock price of one or more of them, or a suggestion or recommendation to buy or sell the shares of one or more of them.  Rather this email is simply a short overview commentary and tutorial demonstrating the type of information available on StockResearchPortal.com and how to access it.

The owners of Stock Research DD Inc. (the owner of StockResearchPortal.com and StockResearchPortalBlog.com) or their families, entities in which they have ownership interests, and officers, directors, employees, agents, partners, affiliates and partners of Stock Research DD Inc. may beneficially own securities and participate in Private Placements of companies referenced in this E-mail. The fact that one or more companies are referenced or discussed in this E-mail should not be construed as an endorsement or investment recommendation with respect to those companies or their securities.