Turn out the money changers...

Sitting over here on the porch I'm experiencing the current economic mess in the US as a double victim: Recession in the US exacerbated by the sub-prime meltdown, and inflation in Australia from a too hot economy.

But I have to say, my annoyance at the sub-prime meltdown has no bounds. Why? Because I think it can be summed up in one word: greed. Greed by mortgage banks to issue loans to people whose credit did not support them or worse used predatory lending practices; greed by the borrowers who counted on the housing and real-estate bubble to continue unabated; and greed by the commercial banks who sold creative investments heavily based on these dubious loans.

And my annoyance continues at Alan Greenspan, who only now that he is ex-Fed Chairman is a claxon of doom about it and yet was eerily quiet about it when holding the office.

Now the banks are all crying about how much money they're losing and how they need bailing out. But if you think about it, the money didn't really exist anyway but was all on paper: write-downs of future profit based on these loans. It's not that the banks won't be making record profits, but rather it will be less.

It seems to me what's really hurting the banks right now is that they are all now too wary to lend money to each other anymore, I guess afraid the borrowing bank will just use the money to pay off bad debt.

If only they had all used this much caution in the first place.

- Farmer Ted