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So do you feel sorry for BoA, Chase, Citigroup, etc.?

January 18th, 2008 at 02:42 am

I find it pretty amazing that they can have so much loss from bad debt. CEOs and other executives get paid all these millions and they still make fundamental blunders like that? And for those of us working to pay off debts, how does it make you feel to see so many people just get to write theirs off? Sure, it comes with a lot of pain, I'm sure, but it still seems like we are heavily subsidizing people who made bad decisions, whether through the stock market crashing or public bailouts and stimulus packages being tossed around frantically in DC right now.

10 Responses to “So do you feel sorry for BoA, Chase, Citigroup, etc.?”

  1. luxliving Says:

    Ummmmmmm....

    }}}scrapes juice out of the last of the tuna we've had to eat all week*...


    NOOOOOOOOOOOOOOOOOOOOOOOOO!!!!!!


    {{{{/scraping

    *just kidding, sort of!

  2. lost in debt Says:

    The credit card companies would not be in this mess if they underwrote their credit cards measuring debt ratios to be sure that people could afford a maxed out credit card at 29.99%. I can't believe that what they are doing is legal. I had one credit card that I called them about because they were charging me 24.98% so they lowered it to 11.99%, but then lowered my limit below what I owed and started charging me a $39.00 over limit fee - they lowered my card $400 less than what I had charged and I hadn't used the card for months. I guess I don't feel sorry for them; they have a responsibility to consumers and with their rates, fees and etc., they have failed. When I get out of this mess, the only credit card I will have is a prepaid green dot card and my debit card.

  3. Broken Arrow Says:

    No, I can't say I feel at all. They took a risk that, in retrospect, should have been pretty obvious that it was a Bad Deal. But they took it anyway, and now they are reaping its consequences, for better or for worse.

    To be fair, everybody in the financial sector did though. Some just managed to recover better than others. That and it's over some exotic debt instruments that obviously didn't pan out. Perhaps there's a life lesson in there somewhere.

  4. disneysteve Says:

    I have a tough time mustering sympathy on either side of the credit issue. I have no sympathy for lenders who made ridiculous loans to people who couldn't possibly afford them. I also have no sympathy for borrowers who took loans they couldn't possibly afford.

    One couple mentioned in MONEY this month is on the verge of losing their home. They owe $550,000 on the mortgage (the original amount wasn't given). They earn just $120,000. $4,100/month of their $6,000 take-home pay goes to housing payments. So both parties screwed up. The bank had no business making that loan and the couple had no business taking it. How did anyone expect them to be able to live with nearly 70% of their income going to pay the mortgage? They shouldn't have bought a home for more than about $360,000, maybe $400,000 tops, and any loan beyond that should never have been approved.

    So no, I don't have much sympathy.

  5. merch Says:

    I a lot of this miss is buried in structured products (SIV, CDO, etc.). Modeling the risk associated with these products is very difficult to do.

    What I beleive led to this was such pressure for higher returns in a low rate environment. You want 7% rates on mortgages, we need to have banks loan to riskier people. Hence higher returns on bond funds, when things are going good.

    I don't feel bad for the companies but I do feel bad for for the people who invest in mutual funds.

  6. Amber Says:

    For me the answer is no. I feel sorry for people like us because of their blunders we all pay. A lot of those loans were falsified by both parties and the big banks greed is sending us in a downward spiral. To be honest I am very nervous about this whole thing

  7. M E Says:

    Amen to what Steve said!

    If any of you watch / have seen the show on HGTV called House Hunters you will know how true what he said really is.

    It annoys the crap out of me to hear/see 20-somethings, newly married, NO kids . . . yet they need at least 4 bedrooms,(1 for them, 1 for guests and then they each need their own office @@ - - God forbid what's going to happen if/when they have a kid or 2 or more) 3 full bathrooms . . . and 3000 square feet to live in . . . W T H?!!!?

    They currently live in a 3-bedroom, 2 bathroom, 2000 square foot house but simply don't have any space. @@

    And 9 times out of 10, the couples in question choose the most expensive house and/or the one that is the most over their "budget." @@ OY!

  8. Caoineag Says:

    I am not thrilled about paying for the mistakes of both the borrowers and the lenders but I don't feel any incredible sympathy for either of the two.

  9. mulyanto Says:

    In my opinion the only loan one should have are student loans and fixed rate mortgage loans. And I still don't understand why people get into CC debt anyway.

    The reason I don't feel sorry for the financial companies is not because they 'screw people over' as some claim, but because they got just as greedy as the borrowers themselves. However, these companies are so big that they'll probably survive, and it's also in the interest of the American economy that they do survive. On the other hand, the borrower will have a much harder time surviving. So if you ask me, I feel more sympathy for the borrower, but I also feel they are more at fault than the lender companies.

  10. veronak Says:

    I have a friend who over extend herself and her dad had to borrow $35, 000 in order for her and her husband to keep their 3000sq foot home

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