Agree ! Thanks for your well done comments. Opportunities are all around. the strong banks prove it. Again, and this is the only strong point to make comparisons to the 30's, debt overload it the issue. On the institutional side and on private persons side.
Honestly, why are people on house debt, credit card debt, car finance debt, vacation debt and then wonder if things break lose they will be affected. I understand that there are or have been many banks that were runed lousy by missmanagement and went under or overtaken.
AND there is a western society with that need of having everything NOW, no question how.
The rrot starts at the bottom.
I know many well educated, very polite and friendly human beings. They are financing their vacations with 12% loans (in Swiss Francs, normal interest rate between 1-2% currently) because they just need to fly for 1 week to Thailand ! Why that ?
Talking with Ferrari s.p.a. because of the "Schumacher-Scuderia" driving course, they told me that 50% of the new sold Ferraris in Switzerland are on lease ! Why that ?
I believe the main cause of the problem are we, ourself. The bank in their (understandable) way of searching profit opportunities are creating the "fitting" finance products for our never ending hunger for debt loads
That is so true of the western lifestyle. The banks encouraged people to borrow more and more money, with slick adverts and promotions for low rate loans, credit cards, store cards, low rate introductory offers, 2% minimum payments, 0% balance transfers, release the equity in your home to clear your debts, then go and buy more things on credit and build your debts back up again. Maybe this isn't too much of a problem if you lend to people with good incomes, job security and goo credit ratings. But it goes bad when you encourage people with no income, or no proof of a regular income and a history of non payments to borrow beyond their means. The investment banks were greedy and brought about their own downfall.
I run a mortgage broking business in the UK, our customer base is primarily clean low risk clients. At the end of the last century/turn of the new century Lehmans, Merrill, Investec, Citi ...etc launched their sub prime arms in the UK with brands like Kensington, Future, SPML, Preferred ...etc. Interest rates were low and coming down, property prices were rising, the reps would come and see us and encourage us to find them clients, it didn't matter how dirty they were, or even if they couldn't afford it, they told us to just make up their incomes
Fortunately, we have an ultra strict compliance department who insisted that we provided proof of affordability on our office file (just in case). Therefore, we never really capitalised on this booming market. The old fashioned conervative approach was our business model. In hindsight, that was a smart move, because I still have a job and the reps from the afforementioned companies were made redundant many months ago.
The global credit crisis has crippled the clean mortgage market too, and our business is effected by the downturn, but at least we are still in business, although I have had to let a good proportion of good long serving friends/colleagues go through no fault of their own.
The investment bankers brought about their own downfall, and are going to bring financial hardship for 10's of millions of ordinary honest hardworking people in the US/EU. The reps from these lenders encouraged brokers and clients to lie. The bosses of these banks should be prosecuted and thrown into jail. The regulators have failed in their responsibility to protect consumers, but then again, they are all ex bankers and they have tried to protect their mates in the city. They should be prosecuted too.
Going forwards, the best policy is to save up for your dreams, if you haven't got the cash to buy it outright, you can't afford it and shouldn't have it, the exception being a mortgage for a property.