How can there be any successful banks during this time? Weren’t they all greedy?
No.
Via National Review, SC Conservative has the scoop from BB&T CEO John Allison. These are suggested guidelines for the bailout package. He submitted this list to all members of Congress.
Here are a few highlights:
1) Freddie Mac and Fannie Mae are the primary cause of the mortgage crisis. These government supported enterprises distorted normal market risk mechanisms. While individual private financial institutions have made serious mistakes, the problems in the financial system have been caused by government policies including, affordable housing (now sub-prime), combined with the market disruptions caused by the Federal Reserve holding interest rates too low and then raising interest rates too high.
2) This is a housing value crisis. It does not make economic sense to purchase credit card loans, automobile loans, etc. The government should directly purchase housing assets, not real estate bonds. This would include lots and houses under construction.
