Your Questions About Save Loan Crisis

Thomas asks…

Is what the Federal Reserve and Congress doing after the election to save us state capitalism or socialism?

Some critics have mistakenly complained that the US government has turned to socialism for a solution to the current financial crisis in a capitalistic system. Yet what the US government has done is merely turn failed market capitalism into state capitalism. Nationalization alone does not lead to socialism. Socialism is not merely collective ownership of the means of production. It must also subscribe to an operative goal of fair sharing of the fruits of the economy through collective ownership of the means of production.

In a socialist state, state-owned enterprises are the venue of socialist ownership of the means of production which is deployed to support the interests of workers. But in a capitalist state, state-owned enterprises do not entertain such populist goals. State capitalism continues to oppress workers for the benefit of capital while the state represents the interest of capitalists rather than workers. State capitalism subscribes to the trickle-down theory – saving the banks to save the citizenry. What is needed is for government to save the citizenry by direct assistance with job creation and wage guarantees, not inter-bank loan
guarantees. from C.K. Liu’s article 10/29/08

John answers:

I strongly urge you to watch this video! It answers your question!

William asks…

did democrats or republicans control congress in 1989?

did democrats or republicans control congress in 1989 (during the saving and loan crisis)?
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, not just the crisis itself

John answers:

I think I remember it was Democrats…

Ruth asks…

Is there too much debt in the global financial crisis?

I don’t understand something about the global financial crisis. I am not an economist but from my limited understanding, the global financial crisis was caused by people, businesses and governments borrowing and financial institutions lending too much such as in sub-prime loans. That being the case, why is so much effort being put on “getting the credit markets flowing again” & lowering interest rates to make borrowing easier. In other words shouldn’t we be concentrating on saving as opposed to more borrowing and making it easier to borrow worldwide. It seems governments are pushing the exact opposite of what we should be doing. Help!

John answers:

Actually you are right.
Unfortunately the leaders are only using knee jerk reactions, and not their heads making decisions, and just pouring money into a broken vase.
Here are two short articles on the topic:
I hope it helps, all the best.

James asks…

Is John McCain’s own son about to be involved in a Keating-type bank scandal?

Almost exactly 20 years ago — in the middle of the saving and loan crisis — federal regulators seized Lincoln Savings and Loan Association of Irvine, California. The takeover took place more than a year after five United States senators had tried to hold-off a government investigation by the Federal Home Loan Bank Board into Lincoln’s risky loan practices regarding home loans.

Those five senators included Sen. John McCain (R-AZ) and the chairman of Lincoln was Charles Keating — who was not only a top McCain donor but was Cindy McCain’s business partner in a real estate deal in Arizona.

…In 1991, the Senate Ethics Committee rebuked McCain, finding that he had “exercised poor judgment in intervening with the regulators.”

Why is this relevant?

20 years later, we’re back in the middle of another banking crisis and federal regulators have already begun seizing insolvent banks, and this advisory ran on the wires over the weekend:

Silver State Bancorp (NASDAQ:SSBX), the holding company for Silver State Bank, announced today that Andrew K. McCain submitted his resignation today as a director on the Boards of Directors of Silver State Bancorp and Silver State Bank, citing personal reasons.

Mr. McCain previously served as a director of Choice Bank in Scottsdale, Arizona from 2006 to April 1, 2008 when Choice Bank merged into Silver State Bank. Mr. McCain had been appointed to the Boards of the Company and Silver State Bank in February, 2008 and had served on the Audit Committee.

Andrew is none other than the son of John McCain.

Be mindful that while Silver State Bancorp has not been seized by federal regulators, it isn’t hard to conclude that they’re near the top of the watch list.
So what is going on? Why did McCain leave the bank’s board so suddenly?

It was pointed out above that Andrew McCain served on the bank’s audit committee — the entity which would know most about the bank’s financial situation and its portfolio of increasingly bad loans. Is McCain fleeing the bank, knowing that federal regulators are likely to seize it in short order and did not want his name attached to a collapsing bank right in the middle of a presidential race where his dad is the trailing nominee and whose own political history is soiled with unethical actions involving a bank collapse during the last great banking crisis?

John answers:

Right now that is pure speculation.

If John Mccain’s son had done anything that was in the least even questionable it would be all over the news because his father is a Presidential Camdidate.

The fact that it is not all over the news tells me that there is not much there.

I would say that it is highly doubtful that John McCain’s son has been involved in anything that would be questionable or unethical.

Paul asks…

Due to the economic crisis is it possible to get a business loan?

Since march i have applied to every retail , food mart in los angeles, sent thank you notes for interviews etc to obtain a second job to pay off my delinquent debts to improve my credit. In the interviews i am not finding that of course there are 60 people that applied to the positions and they actually may only have 5 places to fill!! I call the managers weekly and resubmit applications. I must say the companies call but i have found the companies at the time may be able to hire and then they receive a freeze. The economy is so bad. My credit is 595 on experian. I cant obtain a second job to pay off the delinquent accounts but maybe once a month i placed the money i saved to pay off the small bills that never should have got on my credit. . I have a great business plan for a franchise and i am obtaining info to open under a c corporation. HOw can i get a business loan if i can’t improve my personal credit fast enough. I really am tyring to pay the delinquent loans and i have the pay to delete requests ready to go and all the credit addresses. . Due to the economy i just can’t get the second job needed and i have sold everything i could to help pay the items at hand ( it really helped! ) i have nothing else to try! I tried prosper and i thought your score had to be 540 but they told me i couldn’t apply to get the loan before i even posted? I have market research, business plan and a consultant and we are all just waiting to see if i can get financed . ARe there any suggestions to get a business loan. I have maybe 9 items on my credit but score is still low. I have actually got things off my credit ( thanks to online help!) i research the bad credit loans but 90 percent are scams! Please sincere help please. The franchise i am opening is in medical field. Help!! I am still looking for a second job as we speak. NO one has any money to loan as well I have tried friends and family but all are in a bind. I applied to the credit union and of course they said no. I don’t know what else to do and i am really trying to get my credit right. I have begged for more hours but my own job cut back so overtime will not be issued until the first of the year so i am paying the small bills i have right now .
Lets do a bit of editing here. I have a degree, in management as well as training in health field. That is still not helping the situation obviously. The bills i am paying are small but my question is hypothetically after the recession will it really be hard to obtain a loan after bringing my score up. The jobs are not out there for a second job.

John answers:

Obviously the first order of business shouldbe to repair your poor credit and bring up your credit score. Then try to understand what banks are looking for when granting business loans so you stand a better chance of getting the loan

Some banks extend what they call “small business lines of credit” often through credit cards. Those are easier to get and can be based on your credit history alone. They typically are up to $100,000.

For example, Wachovia’s has various business lines of credits,,446_612_1399,00.html Their business line of credit can even be approved overnight,

However, if you’re applying for a loan and if it is a big amount, banks and even the SBA may consider other factors aside from your business credit:

– A business plan explaining what the business is

– Your background and experience in the business — in my experience, this is KEY in the eyes of the bank because they want to make sure that you know what you are doing and that you can make the business work. If you don’t have any experience with the business, have someone on board that knows the business to give banks assurance that someone will guide you

– Your credit factors because it shows your dependability and how well you handle credit. They will do a credit check on you and poor credit history may be frowned upon, or even reason for the disapproval of your loan application

– Your collateral. Banks, even SBA guaranteed loans, want the borrower to show collateral. They want to be guaranteed that somewhere somehow they can get payment from you

-Condition or terms of loans. Banks would want to know three important things: “How much money are you requesting? What will it be used for? And For how long will it be needed?” Banks oftentimes prefer to approve loans for items that can be identified, has lasting value, and can be repossessed and sold if things fail.

– Equity investment as banks want to see that you believe in your business enough to invest in it

Aside from banks I suggest you consider microloan providers. They typically fund up to $30K Read about the SBA Microloan Program

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