The Economy

Admittedly, I am no economist but quite frankly the babble I hear from those who are (“soft landing”, “consumer confidence”, “downward pressure” blah blah blah) doesn’t exactly convince me that the “experts” have a clue how the economy works either.  Recently, politicos seem to lament that “business” is sitting on all this cash that they refuse to invest thus creating new jobs.  Why they wonder.

Well, if I was a business I would save money so that I have a cushion in the future because I sure can’t rely on a bank loan when I need it.  The US banking system is still broken and Dodd-Frank has done nothing to solve the problem.  For my money (pardon the pun) the problem is two-fold:  (1) the largest banks are too large (blame the repeal of laws in the 1980’s prohibiting interstate banking) and (2) banks are allowed to “marry” insurance companies and stock brokerages (blame repeal of Glass-Steagall in the late 1990’s).

As banking becomes more “globalized” the problem is that a “fever” in Greece infects everyone. 

Finally, it really burns me up that the brokerage houses are now nothing more than trading casinos.  In the old days, they sold securities on behalf of businesses that could grow and they made their money from their investment banking commissions.  Now the “traders” (read “gamblers”) are the “big dogs” who play with the money by trading but make no investments.