So why am I so mad at banks? Because they have gotten federal bailout monies to start the lending process for borrowers who are distressed and to create new loans. Instead, they have used the money to fatten their bottom line. Have you tried to get a loan for a home lately? Even if you want an equity loan, you need to have a credit score in the upper 700’s, full documentation of your assets and income.
Now how does this grab you for arrogance? A direct quote from a the chairman of Whitney National Bank of New Orleans, quoted from the New York Times:

“At the Palm Beach Ritz-Carlton last November, John C. Hope III, the chairman of Whitney National Bank in New Orleans, stood before a ballroom full of Wall Street analysts and explained how his bank intended to use its $300 million in federal bailout money.

Make more loans?” Mr. Hope said. “We’re not going to change our business model or our credit policies to accommodate the needs of the public sector as they see it to have us make more loans.”

I’ve talked to several people with good credit scores and good income and the banks seem to just put off the loans. In short, the banks do not want to make loans, they want to buy assets. For example, Bank of America has recently bought Countryside, Merrill Lynch and in 2002 they bought FleetBoston Financial for $48 billion. Now, they have received $20 billion to shore up its purchase. Here’s a quote from the BBC News:

“The objective of this program is to foster financial market stability and thereby to strengthen the economy and protect American jobs, savings and retirement security,” the US Treasury said.

In addition to the $20bn cash injection, the Treasury will “provide protection against the possibility of unusually large losses on an asset pool of approximately $118bn of loans”.

If that dosn’t make you mad, let’s start a bank.