The old saying about how banks only loan money to people who don’t need it seems to be coming around again. This after the disaster that followed a policy of lending money, and lots of it, to people who really needed it but weren’t likely to pay it back.
But as often happens, it seems the pendulum has swung a bit too far. Elizabeth Campbell of Bloomberg reports that Ben Bernanke, former Fed chairman and current high dollar speaker at events like one yesterday in Chicago where he:
… told moderator Mark Zandi of Moody’s Analytics Inc. -- “just between the two of us” -- that “I recently tried to refinance my mortgage and I was unsuccessful in doing so.”
The audience laughed, which tells you something about the sort of crowds he is playing to … and being richly paid for doing so.
Mr. Bernanke then extrapolated from the personal to the general, saying:
“I think it’s entirely possible that lenders may have gone a little bit too far on mortgage credit conditions.”
Come on. Really?