Perhaps Not Every Morning

When I was thirteen years old, I would get up in the morning and put my Phylacteries (Tefillin) on my left arm and my head and say the morning prayers that Jewish men have been saying for thousands of years. There is something to be said for repeating practices and words of wisdom and thanks. Too often old wisdom is tossed aside only to be replaced by greed and deceit.

In the news again today is the discussion of credit and the banks. The bankers are meeting with President Obama at The White House to talk with him about the interest rates they are charging consumers on their credit cards. In that credit cards play an important, if not vital, role in our economy today, and in that these major banks have received money (credit) from the Federal Government, it makes sense that the Obama administration would take an interest in the fees the major credit card issuers are charging the American consumer.

Yes, I am back talking about credit because in the 21st century, credit is money. If I drew a diagram showing how credit moves through the economy, how borrowers and lenders are brought together, you might then get the picture as to what credit and the credit rating agencies mean to our economy. Several days ago I wrote that if money was the life blood of our economy, then the fraud committed by the credit rating agencies is the Leukemia that froze the system of credit and in turn the growth of our domestic economy.

I am still calling for the Federal Government to place the responsibility of credit ratings with the Federal Reserve Bank. This is the proper place for the measurement of credit risk to be done. No shopping the three major credit rating agencies for the triple-A rating. No more not inspecting the file before slapping the sought after triple-A rating on any piece of junk that has a nice fee attached to it. The measurement of credit must have the confidence of the ultimate buyer of the credit note. Without confidence in the product, there is no expansion of the credit markets and no growth of our domestic economy.

The big banks are also spending Federal bailout money to pay for their lobbyists to lobby for them in the halls of Congress. I am sure they are not asking Congress for more regulations. The culture of Wall Street is to take advantage of the “mark” and never look back. Shooting fish in a barrel is the way Wall Street goes fishing. New regulations are needed to protect the consumer and the overall economy from another financial crisis. Make no mistake, change will not come easy. These bankers will fight hard to preserve and protect their hunting territory.

One of these days the people in Congress may wake up to the war they are in, until then, I will continue to talk about credit. Perhaps not every morning, but enough to keep you thinking about it.

Stay tuned.