Are bankers damned?

koxinga wrote:

Re: Are governments of today like irresponsible parents- selling their kids to the slavery of debt?
Debt in itself is not necessarily evil; it is a integral component of the economy and financing.

It's just like a credit card. Use it responsibly and it can be a useful tool. Abuse it like the Euro-PIGS and you get Greece. Perhaps for politicians there, they got tempted to use credit as a political tool. Everyone want to look generous!

I think that the only thing good abt a credit card is the cashless payment system it provides (online, travel/ hotel booking etc). One however shouldn't seek to profit from such credit as sooner or later, the bank will catch you with the unpaid-debt hook and charge you: 24% p.a. for unpaid debt [from the day of incurring of such debt (i.e. day of purchase)] as well as late payment fees of at least S$50 each month onwards not forgetting the annual membership fee... also the poorer cash paying retail customers are in addition penalized because approx 2-3% of all credit card payments go the the bank and credit card company so those who pay cash are actually subsidizing the purchases of those allowed to use credit cards (at credit card accepting grocery stores that is).

The silver lining in this case however could be in the 'charity' of some banks who allow savings accounts owned by poor/ elderly to bypass the minimum amount requirements (i.e. bank provides such service at a loss).

That said, I believe that any bank which invests clients personal savings deposits in options, sub-prime mortgages and other dangerous derivative investment schemes let alone stock should be put to task as in a downturn, such a bank is unlikely to be able to return clients monies... which is how the sub-prime crisis came about... resulting in the US govt 'bailing out banks' just so that they could repay savings deposits. A closer regulation of bank lending/ investments in the first place would have much curtailed the bailouts made if not eliminating the need for such in the first place.

It is thus no wonder that people criticize bankers for manipulating the system: gamble with savings deposits and get big bonuses if the return is good... if U loose the people's savings, just tell the govt that you are 'too big to fail', force govt to give U a bailout and then say thank you and still keep your job. No wonder why people have a dim view of the conduct of bankers today!

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26Nov2011: Are governments of today like irresponsible parents- selling their kids to the slavery of debt?