Posts Tagged ‘financial crisis’

Synovus Looks at Government Offer to Buy Shares

October 15, 2008

   While the nation’s nine largest banks have signed an agreement to sell shares in their banks to the government, smaller banks will also be a part of the action. Richard Anthony, Chairman and CEO of Synovus told me today that his company is “looking at” the offer.

Richard Anthony, Chairman and CEO, Synovus

Richard Anthony, Chairman and CEO, Synovus

  “Do you need it?” I asked,.

  “Well, not right now, but, looking to the future, we can never not be interested in capital sources.”

   He likes the idea of the government buying equity as opposed to pouring tax dollars into toxic mortgage securities, which is what it appeared would happen when Congress first agreed to the $700 billion banking bailout. 

  “So the government is going to have some ownership in banks,” I said.

  “Well, yes, but it will not be voting stock. It will be preferred stock.”

Stephen A. Melton, CB&T President and CEO

Stephen A. Melton, CB&T President and CEO

   And how has this financial crisis affected business at Synovus’ Columbus Bank and Trust Company? President and CEO Stephen Melton says business is slower, but it’s not because CB&T has changed or tightened its loan policy. That hasn’t changed, he said. “We are making fewer loans simply because demand is lower.”   

  Anthony said that the biggest problem is in the housing industry. He said that once that gets back up and running again things will get better. He was inducted into the Rotary Club of Columbus as a new member today.

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Another, and Quite Interesting, Perspective on the Financial Crisis

October 1, 2008

  I’ve decided that another comment I have received to a post is important enough to run it as an article post. Redoubt, of the Sin City blog, who makes a lot of sense about a lot of things, has an interesting explanation of the stock market drop, and his last paragraph also makes a good point. So here it is.

 

1.      If I may…

“Hardly anyone is using the word “crash” because it brings back the specter of the 1929 crash, but when the market plunges more than 700 points, the largest drop in history, the term does come to mind.”

The numbers are a bit deceiving because while a 777 point is indeed the biggest POINT drop in history, it is far from the largest percentage of total market volume drop. In truth, the crash of 1929 was far larger in scale to the actual size of the market at the time, than yesterday’s fall. In other words, 10 cents off of 1 dollar is ten percent, but even 70 cents off of 100 dollars is but seven tenths of one percent.

Another noteworthy item would be that the markets have rebounded somewhat today… closing up almost 500 points (CBS News), even without $700 billion US taxpayer dollars.

The outcome is going to be tough either way but, we only have ourselves to blame if we bankrupt the nation trying to save those institutions that, basically, created the mess to begin with.

Personally, I’d rather see the money go to the consumer and those in peril of losing their homes, than to hand it over to those who held out the rotten carrot.

 

Barnes Effort to Prevent this Financial Crisis was Overturned by Sonny Perdue

September 29, 2008

  Former Governor Roy Barnes saw this financial debacle coming and had the Georgia legislature pass a law to prevent it happening in Georgia. It held lenders accountable for their lending policies. Bill Shipp reports that K Street lobbyists in Washington tried to get Barnes not to do it, but they failed. In order to stop what Barnes was doing because it could have spread to other states, Wall Street bankers and K Street lobbyists poured money into the Sonny Perdue campaign. Once Perdue won the election, he saw that the Barnes’ law was dismantled.

  You can get the details by reading Shipp’s column. Just click on this link.

The Fruits of Ignoring the Economic Lessons of the Past

September 18, 2008

    Now we are staring the big green monster in the eye and seeing what Mr. Greed can do to us…again. Mr. Greed has been very successful in transferring billions of our tax dollars into his coffers, and he continues to get away with it.

  He took big lending risks in order to rake in big profits, and he did. Now his risky practices have come a cropper and he is being bailed out with our tax dollars. Some of his mammoth financial institutions are now nationalized, but what does he care? He’s already transferred the billions he has made, including golden parachute millions, into Swiss bank accounts.

  How did this happen? Simple. Deregulation. He was able to change the government’s rules in order to take big chances with other people’s money.

  Yes, history does repeat itself, mainly because some do not take heed of what happened in the past. What happened in 1929 is happening right now. Easy credit and risky loans encouraged consumers to go deeply into debt.  When consumers stopped buying in order to make payments on their loans, demand plumeted, businesses failed, out of work consumers defaulted on debts and financial  institutions went under.

  This Great Depression caused a rebirth of government regulations to prevent this disaster from happening again. But, the deregulators took  power again, and here we go again.

  I said the rebirth of regulations because they really started in earnest in 1906 when Republican President Teddy Roosevelt decided to take on big business, breaking up a lot of monopolies. The pro-monoply crowd regained power and we’ve had a lot of mergers in the last few decades. So, in that area, here we go again, also.

  The powers that  be are now trying to prevent another depression by having the  government step in and bail out the banks and those who insure loans. Let’s hope it works. This didn’t have to happen, though. Poper regulation could have prevented it.

  Santayana and Anonymous got it right when they said:

  “Those who cannot learn from history are doomed to repeat it.”
George Santayana 
 

  “History repeats itself  because no one was listening the first time.”
Anonymous