Thursday, July 9, 2009

Aviation Week blasts Wall St.

From the Viewpoint editorial on the last page of the July 6 issue.

"In the past decade commercial banks have forgotten their main purpose - lending capital - and have invented self-serving new ways to make money. They have created products and services of no value to the economy, which they buy and trade among themselves, racking up profits, commissions and bonuses."

Services of no value such as mortgage backed securities which ruined the housing industry and credit default swaps which crushed Merrill Lynch, Lehman Brothers, Bear Stearns and AIG.

"Yet there is a bright spot for the smaller aerospace companies. While the big banks repay their TARP infusions so the can quickly increase their executive pay packets, small banks are jumping in to help companies in their local communities."

" These banks, numbering in the thousands, do not pay hefty executive bonuses for outrageous profits made through incestuous dealing. Their governance models, including community involvement, reward management for lending based on well-understood risk analysis tied to concentrated due diligence. Smaller players in the aerospace sector should end their fixation with Wall Street lenders and concentrate their credit hunt on Main Street."

Aviation Week is the bible of the aerospace industry. They have been around for ever. They are required reading at the airframe companies, the airlines, the avionics companies and the Air Force. The magazine speaks for its readers in a way the New York Times never has. The American aerospace industry is large, dominates the world markets, and exports to the entire world. We oughta listen to them, they are onto something. Namely Wall St banks bear great responsibility for Great Depression II and after $750 billion of taxpayer bailout, are doing little to bring us out of it.

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