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And that form of a personal attack would be the propaganda that one would expect from a bank, or banker.
No, what that is called is usery. One only needs to look at the example of the moneychangers in the temple in Roman Palestine 2,000 years ago. Jesus Christ called them a den of thieves. I agree. Banks produce nothing. They are leaches on society.
By the same argument that you make, you could accuse any profitable business of "making money out of thin air" because they charge more than what they put into producing a product or a service.
Banks have a legitimate service - Lending money at interest.
That money does trickle down to the smaller banks.
So those smaller banks are using money that was printed out of thin air. On the basis of nothing more than what started out as a Government bond.
You cannot refute their publication.
Lending money at interest is a "service." Wow, you're right, they are truly noble in their efforts to steal property.
Originally posted by CookieMonster09
Then please take a look at the most recent catechism of the Catholic Church, which recognizes that modern banking serves a practical function in modern society, and has retracted its opinions regarding traditional banking.
Did the Church Change Its Stance on Usury?
As far as dogma in the technical Catholic sense is concerned, there is only one dogma at stake. Dogma is not to be loosely used as synonymous with every papal rule or theological verdict. Dogma is a defined, revealed doctrine taught by the Church at all times and places. Nothing here meets the test of dogma except this assertion: that usury, the act of taking profit on a loan without a just title, is sinful. . . . This dogmatic teaching remains unchanged. What is a just title, what is technically to be treated as a loan, are matters of debate, positive law, and changing evolution. The development of these points is great. But the pure and narrow dogma is the same today as in 1200. (Noonan, 399–400)
In other words, Catholic teaching still holds that usury is morally impermissible, but it does not follow from this (and the Church never did teach) that any charge above principle on a loan is always wrong. The Catechism of the Catholic Church reiterates the condemnation of usurious actions:
The acceptance by human society of murderous famines, without efforts to remedy them, is a scandalous injustice and a grave offense. Those whose usurious and avaricious dealings lead to the hunger and death of their brethren in the human family indirectly commit homicide, which is imputable to them. (CCC 2269)
Read more: Catholic.com
Originally posted by CookieMonster09
Bank of America, JPMChase, and Citi all are Wall Street investment banks. They also have retail banking in place as well.
Easy money? For brokers, yes. Yeah, the GSE's were funding like crazy for these bad, sub-prime loans. But GSE's aren't banks, are they?
Indeed, the last great economist to address the subject was J. M. Keynes, back in the 1930's. Keynes, who was no friend of the Church, surprised himself by finding that the Church's restrictions on usury made perfect economic sense, a sense ignored by classical economists:
"Provisions against usury are amongst the most ancient economic practices of which we have record. The destruction of the inducement to invest by an excessive liquidity preference was the outstanding evil, the prime impediment to the growth of wealth, in the ancient and medieval worlds. I was brought up to believe that the attitude of the Medieval Church to the rate of interest was inherently absurd, and that the subtle discussions aimed at distinguishing the return on money-loans from the return to active investment were merely jesuitical attempts to find a practical escape from a foolish theory. But I now read these discussions as an honest intellectual effort to keep separate what the classical theory has inextricably confused together, namely, the rate of interest and the marginal efficiency of capital." [ The General Theory , 351-2]
What Keynes is saying in this somewhat technical language is that when returns to pure loans are higher than returns to actual investments, you will have a problem; if you can make more money lending to consumers at 25% than to auto makers at 10%, then the money for making things will dry up, and loans will shift to consumption and speculation.
Read more: It's all about Usury
Be careful when stating what the Catholic Church says about things around here, there might be Catholics around to correct you.
Were any of them founded as an investment bank ?
To say that the proliferation of derivatives compounded the crisis would be an understatement. As an insurance policy of sorts, the CDS for example provided a platform for commercial banks to engage in excessive risk-taking.
Originally posted by CookieMonster09
Be careful when stating what the Catholic Church says about things around here, there might be Catholics around to correct you.
Read here:
www.newadvent.org...
Lending money at interest gives us the opportunity to exploit the passions or necessities of other men by compelling them to submit to ruinous conditions; men are robbed and left destitute under the pretext of charity. Such is the usury against which the Fathers of the Church have always protested, and which is universally condemned at the present day. Dr. Funk defined it as the abuse of a certain superiority at the expense of another man's necessity; but in this description he points to the opportunity and the means which enable a man to commit the sin of usury, rather than the formal malice of the sin itself. It is in itself unjust extortion, or robbery. The sin is frequently committed.
"There has never been at any time any prohibition against the investment of capital in commercial or industrial undertakings or in the public funds."
What the Church condemns is consumer loans such as car loans, credit cards and even residential home loans. Charging interest on these has always been condemned.
Originally posted by CookieMonster09
Modern traditional banking is not usury. Credit cards that charge 30 percent interest is usury.
Read your edit. I think we are on the same page now.
One reminder: Residential mortgages - as utilized by investors and speculators - were business investments expected to earn a profit. They would not qualify as usury.
Originally posted by CookieMonster09
Got it. However, the problems with these bad loans are that they were sub-prime loans. You typically go and see your local mortgage broker if you have shady credit, not your traditional brick and mortar bank which typically takes AAA credits only.
When you have bad credit, do you visit your local bank? No. You visit Guido Brothers Mortgage Company.
I understand that some retail banks may have brokered these kinds of loans to the GSE's, but historically, this role was better served by the broker, not a traditional bank. Banks don't typically want to deal with these kinds of bad credits.
Originally posted by CookieMonster09
Better yet, don't borrow beyond your means. How's that for a concept?