For Banks, It's Mother's Day Every Day.

Ya know, I love banks and bankers, don't you? I love them because they're all such humanitarians. Now I know it's hard to think of a business, an institution, as being human, but banks? Well, they are. Just think back to when, near the beginning of the Great Recession, banks found themselves in very dire straits. Did they act like institutions? No. They acted like a child with a skinned knee after falling from their bike. They ran to mommy (actually, Uncle Sam) to have her kiss that bleeding knee and make it all better. And mommy (again, actually Uncle Sam) did just that, with an infusion of billions in cash. Then the children (actually banks) thanked mommy (again Uncle Sam) and gave her a big hug. Okay you need to fast forward to now. Banks have recovered very nicely, thank you very much. You can't even see the scar on that knee. Unfortunately, the economy hasn't really recovered. At least as it pertains to unemployment and housing. So what does that have to do with banks, you ask? Well, right now the president would like small businesses to expand and start hiring.That's because everyone agrees that's where most new jobs start. Some will, some won't, some would like to but will need some cash to expand so they can hire. That's where banks come in. Or don't come in. See, even though lending is a bank's job, banks seem to be afraid to get caught without lots of money on hand if we have a double dip recession. At least that's the only explanation I can think of. Soooo? So they aren't too willing to loan money to anyone who actually needs it. Now if you already have all the cash you need, they'll consider loaning you all the cash you need. Huh? I know, it is confusing. But if you have what they call collateral (cash or assets that can be converted to cash, like your house) if you have enough of those sorts of things, and you're willing to sign them over to the bank, then they'll be happy to loan you just up to that amount. In other words, banks aren't willing to take any sort of risk on anybody. I guess they'd rather just sit on the money by loaning it to the government at historically low interest rates and in spite of the fact that the government was down graded from AAA to AA+. So even if you had that AAA rating, they like mommy better.