The Credit Problem
I have said on this blog before that bankers are lemmings. Before the credit crisis bankers could not make loans fast enough. No credit was rejected when loans were backed by the false security of securitization and bogus credit ratings. Now in the credit crisis, no credit is strong enough. Here is a New York Times article that encapsulates the warped mind of bankers. Bankers are foreclosing on developers with excellent payment histories when these developers could not raise more collateral, not because they missed a payment. Bankers set the rules and then changed them in the middle of the game. This short-sighted, lemming mentality is making the financial problem worse and hurting the economy.