Americans need financial literacy
Re “Banks hit by fallout from the crisis at IndyMac,” July 15
It’s fitting that the banks are only now responding to a crisis so easily anticipated. Almost anyone with any sense could see two years ago that home prices were severely inflated in direct correlation to falling interest rates. The banking institutions took advantage of the situation and created a market on a foundation of smoke and mirrors.
Banks spend countless dollars projecting the financial future. Too bad they don’t listen to themselves, because the unfortunate truth is that banks and insurance companies live in an actuarial world and only deal with realities after the fact. They should instead anticipate market conditions and make adjustments to their strategies as necessary. These are smart (and greedy) people who run these banks. Didn’t they see the writing on the wall two years ago? Oh wait, I forgot -- these geniuses touted the junk-bond market too.
Bernard Lax
Los Angeles
After seeing the pictures of worried depositors waiting to withdraw their money, I wondered why they panicked, seeing that the Federal Deposit Insurance Corp. covers most of their funds.
I concluded that the American public is terribly uninformed about money matters. The time to learn money essentials is in school.
Children should be taught the pitfalls of easy credit and the rudiments of basic business law. Teach arithmetic percentages by relating them to credit card interest charges. Teach young people to read all the fine print they’ll encounter. Make them aware of the dangers of signing on the dotted line without understanding what they are signing.
Our young people are ill-equipped to deal intelligently with finances. They deserve to be better educated.
Ruth Hattersley
Rancho Palos Verdes
Once again, we are all reminded too late that there is no free lunch. Someone has to pick up the tab when false economies are created and then go bust.
As usual, that “someone” is the taxpayers of this country. No amount of spin from the government can hide that fact.
Rex Altman
Los Angeles
