I'm Venting, But Hear Me Out

For the record, I play a major role with a major financial institution. I'm not ashamed of that fact even as my conservative colleagues within that organization have razzed me in the past for my liberal/Democratic point of view. We had a photo-op with a prominent Utah Republican official and I was subjected to kind-hearted harrassment that "my liberal friends would be appalled by my gracious appearance with this official."

I've been involved in the financial services industry since the early 1990's. I am a big believer in safety and soundness, and articulated that conviction tirelessly since my assuming the role I currently play. I remember discussions in board meetings regarding whether to give 100% equity loans to those who had impeccable credit scores. And yes, we did grant some loans under that basis, most of which panned out. But we did no sub-prime lending nor did we give any interest only loans.

However, in our financial institution, we had internal auditors who were quite willing to second guess loans that didn't seem to fall within the parameters of a responsible lending practice and policies were set that required loans to fit certain parameters. Those who worked on commission knew, that ultimately, their loan would face oversight and would be subject to scrutiny. How different was it for some of our competitors? I'm still sifting through that.

For the record, I am a big believer in the capital markets. I've seen wise lending practices grow small businesses to medium businesses, and medium businesses to the point where they could go public. These are success stories that I savor. They give meaning to my efforts and help me sleep at night.

Now, we have an unreliable, and proven corrupt executive branch, that wants to bail out those who didn't act with the same restraint, and based their strategy upon a risky policy of continual real estate inflation. They based their actions upon a paradigm that lacked a sound basis of economics and basic economic history. There was only one scenario that could possibly justify the loans they granted. There was a lack of documentation regarding incomes. There was collusion of the most nefarious sorts, between developers, appraisers, and mortgage brokers.

First of all, as a licensed appraiser, I am appalled at how worthless my profession has become. Securing a deal with a developer renders you worthless to make a independent opinion of value. Go back to your basic USPAP courses you morons. You have contributed to this mess, and if I had it my way, your annual renewal of your license should be quadrupled, while the entrance fee for newcomers into the profession should be a fraction of that fee.

In the end, alot of people made alot of bad decisions for the wrong reasons. People of modest means, here in Utah, wanted to live in Celestial Wards on Telestial salaries. So how did that work for you? Not so good I suppose. But the financial institutions, whether they are banks, credit unions, mortgage companies, or whatever others who would loan you money, some did so judiciously, and some did so with poor documentation and with tragically bad advice to their clients. And in the end, insurance companies, eager to link their revenue streams (which are long term) with their payouts of mortgages (which are long-term) failed to grasp just how tragically inept people had been up the line. Mortgaged backed obligations (MBO's) became the portfolio of many and the doom of many.

I've been involved in the financial services industry since 1990 (18 years), and I will tell you this, that nothing makes less sense, than what the federal government, under the Bush Administration, is proposing. If companies that make bad decisions are bailed out and rewarded for those decisions, I can guarantee you that a wise and prudent use of our nation's capital shall not occur in the forseeable future. For we shall reward incompetence, and taking risks that are not justified.

The idea of giving the Treasury Secretary, (under Bush or Obama), the ability to buy out failing companies is deeply disturbing. The current secretary, asking for $700 billion, our nation doen't have, to bail out bad decision-making privately held companies makes me really uneasy. I understand the importance of public confidence in our financial markets, but it is unreasonable to suggest, that the federal government should shore up companies with public dollars, without extracting reasonable returns on that money. And now, under this scenario, you have interjected the government, not in a regulational role, but as an ownership interest. Conservatives, through their irresponsible policies, may actually create the socialistic paradigm that they say they fear. Should the government give carte blanche support to those who have made disastrous financial decisions? If so, should they demand an equity interest? From the government's perspective, acting like a business, it should secure it's loans to these corporations with the collateral necessary to justify these loans/buyouts. Is our nation ready for a government equity interest in our major financial institutions?

This is business courted socialism, and even as a liberal, I'm very concerned.