When I first arrived in the States, it was so surreal. I was new to everything and had to learn the way of lives from scratch. It was totally different from where we hailed.
This was the country where dreams came true — a country filled with opportunities.
The thing that bugs me the most, even till date, is the idea of taking a loan just over the phone. That scares me, too much. I’ll explain.
With a finance background, I had a lot of experience dealing with banks and money market in a very regulated environment. There’s no way a single transaction could escape suspicion or investigation without proper filing with our Central Bank of Malaysia. I won’t bore you further.
The financial instituation in this country is totally FLAWED! I immediately spotted this the very first time in 2006. The tell-tale signs were so obvious:-
- There are Tom, Dick & Harry bank, everywhere!!! Heck, what is Orange Bank?
- Loans & credit card applications are conveniently done over the phone!!! Shocker!! I had my credit card application rejected twice in Malaysia — that too, with walk-in applications. Don’t judge.
- Back-dated checks are cleared without a glance!
- Ridiculous bank fees with an extremely inconvenient online banking experiences all due to gazillion presence of banks in the market.
- We put such emphasis by reporting every quarterly earnings to SEC, but over here it’s a joke. SEC seems to take a lot of advantage of the flawed system, so not everyone takes them seriously.
- Fannie & Freddie wasn’t necessary. It was a WRONG decision!!!
- Federal Reserve is yet to set up proper regulations to oversee all transactions, including Wall Street. Aren’t they supposedly the governing body of every financial institutions?
- Then came the question about retirement. Why is everyone’s future in the money market? Why is it that every penny is being reinvested in stocks?
- Lobbying is so overrated. They should be heavily fined for malpractice & wasting a ton of resources.
- Suing is a huge business.
- BAILOUTS! BAILOUTS! UNNECESSARY BAILOUTS!
Image source
I still don’t own a credit card in Malaysia. Our financial system is built without the need or support of credit. If you have the money (cash), spend it.
The reality is simple — America is too much dependent on credit without regulations.
Perhaps this is the time to look out of the window for clear views and solutions. There’s pros & cons everywhere. I am not saying what Malaysian’s have done or are doing, is the best solution. I hail from a country where there’s no freedom of speech. But we have very strong leaders who governs the Central Bank and it’s regulations.
America should learn from examples, before it’s too late. It’s OK to take a back seat sometimes.
Image source
What are your views on American’s financial system? I had very different views before living here in the States. The thought of retirement seems impossible now.
{ 21 comments… read them below or add one }
I’d love to hear more of your experiences first moving here! I’m just learning about all of this stuff now and have A LOT to learn!
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Gina,
There’s just too much, but I don’t want to come off harsh. Just want to educate myself and others out there on what is actually happening in our broken financial system.
It’s time for action. Now.
The cartoons really split me up. The concept of unregulated credit has brought the greatest financial systems to its knee, but are we learning any lessons? My guess is no, and that is also because learning those lessons are against the interests of corporates and financial institutions who thrive on consumption.
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Subhorup,
I am aware those cartoons are quite a distraction — let’s just push it aside for a minute.
Yes, we are learning our lessons, by educating ourselves and being aware of these issues. That is the first step and it’s required. You’d be surprised how people can be so unaware of what’s happening in the financial world over here.
Greed is everywhere. But to eradicate it, we can’t expect corporate and financial institutions to turn into angels overnight. Harsher regulations has to be put in place in order to police.
My aim is that we need to elect leaders in our government that can truly turn things around. There’s no excuse when other countries are doing just that. And there’s no wrong in leading with example.
lovely cartoons
and so true these banks are just taking us for a ride and how come inspite of all these losses and bad debts and all the crisis the Board or the higher ups still get BONUS …
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Bikram,
Because they demand so much by stating it in their contract, so legally they would be paid as per contractual obligations — but its unfair, especially when a company goes into so much loss, employees are sacked etc. While the CEO enjoys a big fat bonus or paycheck.
It sickens me to even fathom the height of corporate greed.
America makes me nervous.
While I live in Canada, I commuted everyday to work in the US. Their banking system was very strange to me, so I decided to take checks and convert them in Canada.
We did set up a US account very easily though…like way too easily.
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Kimberly — I feel the same way. It scares me too much that things are way too easy over here. There should be more policing.
The whole idea of the bailouts really bothered me. I mean, whatever happened to “The Invisible Hand” taking care of everything? Once we mess with the equilibrium things will never bounce back – and this is in my very rudimentary Bachelor’s in Finance opinion.
Great post. I hope your Sunday is going well so far!
Ameena — the whole financial mumbo-jumbo here is out of whack! Someone needs to fix it, stat!!!
I agree with some of the points you made here. Personal financial responsibility is one thing Americans need to learn – from the very beginning. When a whole generation grows up on plastic money – we take money very lightly (a la ‘confessions of a shopoholic’ – those girls were pretty and they had magic cards (read credit cards). As I don’t have a financial background (but being married to an investment banker taught me few things) I won’t go in details but blaming everything to wall street (after the collective wrong decisions of a not only the financial institutions, but individuals and the government) doesn’t seem right!!
BTW, when we first bought a house here, my parents (who live in India) were shocked that we were ‘eligible’ for owning a house even if we don’t give a penny in downpayment!
Very witty post! Nice to meet your blog:-)
-Jyoti
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Jyoti — welcome to Chatterbox and thanks for taking the time to comment.
If you would have read my post word-by-word, you’d understand that I didn’t place the blame on Wall Street, 100%. There’s personal accountability too, I get that. But Wall Street is no angel too. There’s problem everywhere, and our job is to highlight the grey areas and let people in those institutions (Wall Street, Banks, MNCs, Govt, People) to decide the next course of action and faith. Let’s not take this personally, but think rationally and practically. I am not in any way targeting an individual. My background was in investment banking too.
Credit is also becoming a problem here… Taking a creditr is something I would not be comfortable with, therefore I only spend the money I have!
Cheers,
Rosa
Rosa — ditto! That’s what we do in Malaysia too. I used to spend with cash, not using credit cards.
I’m ashamed to say I know little about the financial world. I’m still a college student so fortunately…it’s not time for me to step into that messy world yet. All I know is that nobody really wants to graduate for fear of perpetual unemployment.
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Sophia — lucky you, I miss being in college. Enjoy while it lasts. Being brutally honest here
There’s not only fear or unemployment, but the idea of raking up so much student loans get people thinking about education. It’s sad. Education should be a birth right of everyone. You shouldn’t think twice about getting education. It’s so expensive here!!
That is so true! It is a mad world (getting worse by the day)
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Tanvi — Ditto!
There is always two sides of a coin.On one hand such easy regulations may have helped millions of start-ups to set up their businesses easily.This can explain why America has leading economy in the world.More so,even an Undergrad can start his own business from the Garage (Read Apple ..Microsoft and so on)
While,on the other hand the Housing Bubble bust of 2008-09.My drift is make things easy,but not so easy that People take it for granted.This is what has happened in America.Hope it revives from this depression.The whole world is counting upon them.India well the FDI’s are a must !!
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Amit — beginning a small business doesn’t require any sort of regulations. Small businesses didn’t need any bailouts, so this problem was not created by them. It’s created by large and multinational corporations who look into loopholes in the existing systems and take advantage of it.
The housing bubble is another example of corporate greed. They made the regulations so easy to get a loan so that they could rake up profits in no time. The only loss are those people who bought into that scheme.
In India you don’t get a loan without proving that you actually don’t need one..if you know what I mean
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