In 1979, 60 percent of Americans told Gallup they had “a great deal” or “quite a lot” of confidence in U.S. banks.
This month: 21 percent. The graphic below is from the Gallup website:
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In 1979, 60 percent of Americans told Gallup they had “a great deal” or “quite a lot” of confidence in U.S. banks.
This month: 21 percent. The graphic below is from the Gallup website:
Publicity
Again, it shows how people’s opinions are driven by what is given media attention.
In this case it’s big investment banks, which were involved heavily in the housing bubble and employed some of the investment crooks currently under investigation.
Most people’s money, however, is either in small community banks or in the retail divisions of large banks such as Wells Fargo, which are not run by the same people as their investment divisions.
If the question were worded ‘how much confidence do you have in the bank where you keep most of your money’ I suspect that the rating would be quite a bit higher.
Doesn’t the past decade or so kick the bottom out of the “efficient market” hypothesis?
The current crisis emerged based on the faulty analysis by the “smartest people in the room” that, if prices rose fast enough, there was no worry about the borrowers ability to pay.
Well, it’s been a few years from the initial bust, and the main strategy of the big boys is to hope that prices magically recover to unsustainable and unprecedented levels.
Dream on.
Confidence gone–is that surprising.
( By the way, for all you market enthusiasts, don’t yammer on about Freddie and Fannie– the people in the from the first and in the biggest way were the private players. And, for those who don’t seem to know, Freddie and Fannie don’t play outside the US, and those bankers are in even deeper doo-doo with their bad debts.)
The bank bailout
was seen then, and today, as a move by Hank Paulson to bail out his Wall Street friends. The argument to Bush et al was that the banks would use the funds to rid themselves of their “toxic assets.”
Well, that didn’t happen. If the bailout money had gone directly to the home owners, who in turn could have paid off their mortgage with the banks, the banks would have still gotten their money but the taxpayers would have also seen some direct benefit of the trillion dollar transaction.
The politicians involved would have been heroes instead of being seen as idiots who wasted a trillion dollars of taxpayer money and let the bankers off the hook.
For what it’s worth, my bank, Wells Fargo, who didn’t want or need the money, had to be threatened by Paulson to take the money lest the depositors of the other banks start to panic.
Like Ford, who refused to take the auto bail out, there were some corporate heroes throughout that entire shameful period of history and those are the people who I choose to do business with.
Mexico
One of the reasons that Ford didn’t need a bailout was that it had shifted most of the assembly of its vehicles (the labor intensive part) to Mexico. Where was YOUR Ford assembled? What percentage of its parts were made in the United States?
Banking is more complex than the auto industry.
Wells Fargo did benefit from the interest rate spreads maintained by the bailout.
No confidence
For more than 40 years, I’ve avoided doing business with banks of any kind – local, state or national – and instead taken out loans and deposited my modest savings with a series of credit unions. There have been brief periods when circumstances required me to deal with a bank – in Colorado, you had to “qualify” as a credit union member (e.g., state law said that membership in a credit union primarily for teachers was limited to people who were teachers, relatives, or school district employees.) – and until I found a credit union for which I “qualified,” I used a local bank. Personnel there were uniformly cheerful and helpful, and why wouldn’t they be? The bank charged a fee for virtually everything except the use of their pens to fill out deposit forms.
Once a credit union member, I gave up any hope of a free toaster and transferred all my savings and business to a credit union once again. As a result, most of those fees went away, and auto and home loans were at a lower rate than banks could match. Why? Because credit unions are generally socialist… er… nonprofit entities. The owners are the members, and their dividend comes in the form of lower or nonexistent fees, lower loan rates, genuinely free checking, and similar kinds of services. Usually, state law keeps credit unions from doing business with larger businesses, though single proprietorships are often perfectly legal.
I hope I’m never a bank customer again.
Who cares?
As long as the executive bonuses keep rolling in at record levels what difference does it make?
I Have Every Confidence
in banks. Because despite the rhetoric out of Washington, too big to fail is still with us.
I agree with Dennis
And no pigs are flying over my house.
Low bank confidence related to loss of faith in 2 party system?
I believe that the Minn. Post article by Liz Fedor “Americans losing faith in two party system” is part of the same problem as the loss of confidence in the banks.
Both Democrats and Republicans have made a Faustian deal with the financial criminals. The Democrats and the Republicans have silently agreed not to prosecute criminal fraud in the finanacial sector in exchange for campaign contributions by the financial sector.
Ordinary people are persuaded to worry about gay marriage, voter ID, Obama’s birthplace, etc. whilst they are robbed blind by the financial criminals. Middle class net worth has declined 40%. Middle class income has been in steady decline for many years, including the years of the current “recovery.”