Are the bankers at fault?

News . ..... I’m rooting for the founder of Kuala-Lumpur-based AirAsia Bhd. This region needs more entrepreneurs like him if it’s going to thrive, and I want Fernandes to succeed.

So it was with a tinge of sadness that I read his recent comments about how difficult it still is to borrow money. His words explain, perhaps better than anything, why the global recession may have a long way to go. .....

My point. The thrust of the article is that the bankers are at fault. They are not lending. The history books are full of cases where the bankers were at fault. Were they?

The current crisis has been precipitated by decades of wrong government policies. Everyone had to own a house. Lending standards were lowered to achieve this purpose. People took advantage of it and forgot the meaning of prudence. The banks were there to benefit from the situation.

It is easy to say the banks are at fault because they are not lending. We are all at fault: the government that followed the wrong policies, the regulators who were asleep at the wheel, the bankers that were not following prudent lending practices, and finally us who took advantage of it.

The outcome is that we all lost. We all lost a sizeable portion of our wealth. Including the bankers.

To find out more about my in depth view of the markets and my strategy just visit our website https://www.peterdag.com/ where you can review The Peter Dag Portfolio. You can also call me at 1-800-833-2782 to discuss your specific money management needs.

I will be happy to speak to your investment group on how the business cycle impacts investment strategies and the choice of asset classes.

George Dagnino, PhD
Editor, since 1977