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big lesson in finance from a little bank

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movie zombie

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http://www.washingtonpost.com/wp-dyn/content/article/2009/02/10/AR2009021003583.html?wpisrc=newsletter

this question at the end is worth pondering:

"So here''s a question the House Financial Services Committee might put to the Titans of Finance: How is it that Kim Price, a community banker with an undergraduate degree from Appalachian State University, a tiny executive staff and a pay package that you would consider insulting, somehow managed to come up with a more creative use for his government bailout money than any of you? "

this story points out that where there is a will TO DO THE RIGHT THING, THERE IS A WAY.

movie zombie
 

SarahLovesJS

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Appalachian state what, what! Hehe.
Very interesting article, thank you for sharing MZ!
 

LAJennifer

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Date: 2/11/2009 10:28:17 AM
Author:movie zombie
http://www.washingtonpost.com/wp-dyn/content/article/2009/02/10/AR2009021003583.html?wpisrc=newsletter

this question at the end is worth pondering:

''So here''s a question the House Financial Services Committee might put to the Titans of Finance: How is it that Kim Price, a community banker with an undergraduate degree from Appalachian State University, a tiny executive staff and a pay package that you would consider insulting, somehow managed to come up with a more creative use for his government bailout money than any of you? ''

this story points out that where there is a will TO DO THE RIGHT THING, THERE IS A WAY.

movie zombie
You are absoutely right. Thanks for posting.
 

Beacon

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Toll Brothers offered 3.99 % financing in conjunction with Countrywide this past quarter, so builder/lender structured relationships are not a new thing. In fact, looked at through a different lens, they could be seen as prejudicial and might lead to speculation. In fact, builder/lender collaboration, with kick backs from the builder to support below market rates, have been in place for a long time and perhaps led to some of the speculative excesses on new property that we saw over the past years.

I am all for increased lending and liquidity, but I think this article presents old techniques as new ideas. Since such financing is only available on new homes, and not on refis, it does not address people who are in need of mortgage relief right now.

I do appreciate any positive media presentation, but the front part of the article excoriates larger lenders and they did exactly what this little lender did.

No sale for me.
 

strmrdr

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What they are doing is illegal in many states.
 

tradergirl

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From that article:

"These guys won't be happy until the government agrees to relieve them of every last one of their lousy loans and investments at inflated prices, recapitalize every major bank and brokerage and insurance company on sweetheart terms and restore them to the glory days, so they can once again earn inflated profits and obscene pay packages by screwing over their customers and their shareholders."

Not true. What drives people to sell that non-speech is a lack of detail. What the market wants is to know what the rules of the game are going to be. There are plenty of us who think the banks should be nationalized and all current shareholder and bondholder equity wiped out. But no matter what happens, we just want to know the roadmap and we'll adjust our strategies accordingly. I sold short again yesterday when Geithner spoke, this is going be the easy trade until they step up, state their position and act on it.
 

strmrdr

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Date: 2/11/2009 3:03:41 PM
Author: tradergirl
From that article:


''These guys won''t be happy until the government agrees to relieve them of every last one of their lousy loans and investments at inflated prices, recapitalize every major bank and brokerage and insurance company on sweetheart terms and restore them to the glory days, so they can once again earn inflated profits and obscene pay packages by screwing over their customers and their shareholders.''


Not true. What drives people to sell that non-speech is a lack of detail. What the market wants is to know what the rules of the game are going to be. There are plenty of us who think the banks should be nationalized and all current shareholder and bondholder equity wiped out. But no matter what happens, we just want to know the roadmap and we''ll adjust our strategies accordingly. I sold short again yesterday when Geithner spoke, this is going be the easy trade until they step up, state their position and act on it.
If you want the truth there isn''t a thing the government can do about it that will work other than maybe setting up a parallel banking system.
If anything they are keeping the recovery from happening by keeping everyone in limbo.
 

tradergirl

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I know! That''s the problem! They won''t let market forces do their work. Why are the shareholders and bondholders of these banks entitled to government backing as opposed to the shareholders of Worldcom for instance?

Andy Kessler wrote a great idea yesterday. Nationalize these suckers, wipe out the current equity, create new equity and give every American taxpayer $100 worth of the new stock for every $1K they paid in taxes last year to sell, hold whatever.
 

movie zombie

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Date: 2/12/2009 10:23:57 AM
Author: tradergirl
I know! That''s the problem! They won''t let market forces do their work. Why are the shareholders and bondholders of these banks entitled to government backing as opposed to the shareholders of Worldcom for instance?

Andy Kessler wrote a great idea yesterday. Nationalize these suckers, wipe out the current equity, create new equity and give every American taxpayer $100 worth of the new stock for every $1K they paid in taxes last year to sell, hold whatever.
exactly: the market worked and said wall street and the bankers failed. time for us to believe those market forces, stop bailing out/rewarding those that failed with taxpayer $....unless the idea as expressed by Andy Kessler is implemented. thanks, tradergirl!

mz
 
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