Banks are Showing no Remorse Following the Foreclosure Crisis that they Crafted

It was the banks that crafted the foreclosure crisis and yet the new year is seeing that few of them, especially those that have come out fatter after the crisis, are showing remorse. They have reversed to their old ways and are making use of the cheap dollars being offered by the Federal Reserve and the government to make quick hefty profits.

They made these profits and made up handsomely for the previous loss incurred by taking the cheap money and investing in the emerging economies of other countries that had not been as badly hit by the recession as America; rather the stocks of these countries and property prices were bouyant. Capital rushed to these places from USA causing the bubbling of another boom. The profits were more than what they had ever expected.

For instance by the close of 2009 the stock market in America had come back by 61% in relation to the low of March. The early investors could rake in profits allowing the Dow Jones Industrial Average to be merely 9% less than what its level was ten years ago. It was an extraordinary feat for a country that experienced the worst catastrophe since World War II.
But this pales into insignificance when compared with the performances of the emerging economies that have managed to keep afloat the boom of 2000. The Financial Times reports (1st January 2010) “Russia’s Micex index rose 802 per cent over the decade after a boom in commodities spurred its oil and metals industries. Brazil’s Bovespa, again driven by the commodity boom, climbed 301 per cent. India’s Sensex jumped 249 per cent.” The real estate prices are rising again in the emerging economies.
Thus the recent profits of the “fat cats” of Walls Street can easily be explained. This revival has had the following consequences – the return of profitability in parts of the financial zone that are not dependent for their returns on lending to players in the real economy and  the ability of these firms making profits to purchase back equity from the government so as to get rid of state controls and intrusion. In its turn the government is justifying these sales by saying that rising equity prices, (that have been actually spiked because of the return to profit) are causing these profits.

All this has caused these “fat cats” to prowl around with unashamed cockiness that had been their characteristic prior to the crisis.