What Is The Endgame?

In the last three weeks, I have had conversations with 6 different people in the banking profession. All of them are at the middle management level and all of them have over 20 years of experience. I was doing my own informal survey of people who at least work in banking because I honestly don't understand what the banks are doing. And, I don't understand what our government is doing with the banks.

So, here are my questions with a summary of answers. My questions are in blue.

If the banks are what got us into the current financial mess (nobody disagreed) then why is our government spending trillions to prop them up and save them?

  • "They have no other choice."
  • "Good question. I don't know either."
  • "What else can they do?"

Why can't the government just let the banks sink or swim on their own? Just like any other business is expected to do?

  • "The economy would collapse."
  • "People would lose all faith in the government."
  • "I'd lose my job."

How do you know the economy would collapse?

  • "Well, that's what we've been told by our government."
  • "It might not collapse but it would prolong the recession."

How do you know it would prolong the recession?

  • "That's what we've been told."

I could see at this point in my questions that I wasn't getting too far past the dogma we've been fed by all the financial services companies and almost all of our government. I took a different approach became I had a couple of burning questions.

Is your bank loosening up credit for small business and consumers?

  • Not really
  • No
  • A little bit but it has been very slow in moving.

Have you personally had a credit card interest rate raised in the last few months?

My bankers all opened up now and they were not happy. All 6 of them have had a bank with whom they have had a long-term relationship raise their rate to the mid-twenties for no reason. All of them called the banks in question and got the same response – pay the rate or pay it off. Some paid it off and canceled the card and swore never to do business with that bank again.

The banks who raised rates were not these bankers' employers. They were the three biggest pigs at the trough of TARP – Citi, Chase, and Bank of America.

Final questions – Are you seeing this enormous raise in interest rates happening to your customers? Why do you think these three banks are doing this? And, what do you think will be the long-term effect on consumers and small business?

  • "I think were going to see more and more people filing for bankruptcy."
  • "I have no idea what the banks are thinking. They are putting people into a position of financial unsustainability. People are going to quit paying and the banks will end up writing off the total debt rather than getting some."
  • "It is a mystery. I've talked about it with lots of customers and I don't have an answer as to why they are doing this."
  • "They know they can do it so they are. But, that doesn't make it right and in the long run it is going to lose them thousands of customers."
  • "Small businesses are in trouble. People already were carrying too much debt on their cards when the rates were single digits. Now the rates are into the mid-thirties for some businesses. Nobody can pay that kind of interest and survive."

If these people with over 150 years combined banking experience don't understand why our government has chose to save the same companies that have caused this crises, how do we understand?

If they don't know what the big banks' strategy is with raising rates putting people into default, how do we find out?

The backbone of the American economy, small business, is being slowly squeezed to death by both the banks and our government.

Just what is their endgame?

We need to find out – and quickly.

2 thoughts on “What Is The Endgame?”

  1. I have a couple of friends who would agree that is the game. I’m either more
    naïve or optimistic than them. Or, the thought of the ramifications is too
    difficult to consider.

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