I doubt highly that you will indeed lend money to my unemployed friend, and/or to my other buddy that has a strong chance of losing his job any day. I don’t blame you; I fully understand you. I only wonder why you want your local community bank or high-flying banks like Citi and BoA to lend you money when you are on the verge of losing a job.
Let’s be real here. If you are self employed, chances are that your business isn’t doing well these days. In this case, why should the bank trust you with money? If you are employed by a firm that recently fried (yes, fried) people, chances are things will get worse and your head might be next. If you are at a firm that did not cut any jobs in the last year or two, you should really watch your head because every industry and business felt this recession, and your place will likely be next. In this case, why should the bank lend you money to buy a car or a house?
The banks shouldn’t lend money, and this is exactly what they are doing. Of course you will say, “If we want a recovery, we need to get the credit flowing again.” I don’t disagree, but if we get credit flowing the way we did until last year September, we will be flowing straight into another crisis, and this is what banks want to avoid.
If you don’t understand the Bank’s point of view, no problem, go ahead and leave me your phone number, and I will send my friend to you. Let me please know in advance how much money you are ready to lend him.
p.s. Banks bailouts were not made for them to lend money without you knowing how to pay it back. Bailouts were installed to keep banks away from bankruptcy, which in turn held back the public from making run- on-banks, which would have caused people to know that the money they think is in the bank, isn’t really there. In turn, we would have had a REAL crisis. No I am not a conspiracy theorist. Read up on the way banks keep and lend money, you will learn startling facts.
