Thaindian News

By Ranjan Bhaduri
Dec.12, (THAINDIAN NEWS) Analyst Dennis Gartman referred to the cult movie Animal House when talking about American Banking System in the latest edition of The Gartman Letter. His comparison of US banking system to the character played by Kevin Bacon in that all time classic movie is partly funny but very close to truth. Kevin Bacon’s first words in the film Animal House were referred by Gartman. The line left a lasting impression on the viewers in the movie. What Gartman means to say is that the American banking giants are saying the same thing to Federal Reserve Bank nowadays.

After the recession and economic turmoil the biggest banks of the USA were on the verge of failure and bankruptcy. It was the much disputed stimulus package given by the Obama government that helped them survive. There is no doubt that the financial entities landed themselves in a mess because of unrestrained loan giving and unethical practices. While the economy has recovered to an extent and the stagnant investment sector shows signs of recovery the banks need to act cautiously.

Surviving on taxpayer’s money was a hard choice that the US government had to take. However, they should not rely on stimulus only and start thinking of positive steps that can attract the investors once again. The housing and investment segments were the worst affected during the economic meltdown. Now the situation has improved but a lot depends on ethical lending practices by the biggest financial entities of USA.