[speaker001:] the uh whole savings and loan thing seems to be uh a bit of a system whereby the the natural human greed was able to flourish and some people were able to do some things that that uh they they felt that since the government was backing them they could just uh go ahead and make these transactions and make these loans and get all this money as it were and it was rather difficult to catch all if if any of the people that were really responsible for it and even those who were caught didn't seem to get get much in the way of punishment as far as getting a restitution made so it seems like a a really set up you know the whole thing was set up to to be abused and so human nature did so
[speaker002:] yeah I think the oh yeah yeah I think the government is it's own worst enemy about the time it was all going on they were trying to run a loose monetary policy anyhow to stimulate the economy and plus they had cut back on the way of government regulators to even investigate or keep a watchdog on the whole industry and uh I think the whole economic situation was set up to uh put the savings and loans in the position they were in and they mainly the banks too uh economically we had gotten into pretty unsound conditions and so the idea of trying to make the money supply good and loose via whatever medium whether it be savings and loans or banks either one was the order of the day so needless to say they did and uh since they didn't really regulate it well or watch it well uh by cutting back on uh government uh uh uh monitoring in that respect then it did get out of hand and you're right you're absolutely right there were some people who saw the situation for what it was and they took advantage of it and uh because of it you and I are the main taxpayers now are going to have to pay not only for the burden of the bad investments that they made but we're going to have to pay for the uh mistakes in the uh uh taking advantage of the system to some of these well really when you get right down to it crooks uh uh took advantage of the system with and yeah they've seem to caught a few I I've heard on TV or read in uh the newspaper about a couple of these guys I forget the the name of one of them but I heard that they did uh prosecute him and maybe a couple of others I think you all had a major crisis down there in Texas right
[speaker001:] yeah there were quite a few down here mainly by just because of the sheer numbers that were here and you know the and the chances of getting a bad one would be greater just out of the sheer population of them being here and the whole problem seemed to start start toward uh uh not that California was the instigator of it but it seemed to start out that way and then then work its way here and it wasn't kind of funny that it wasn't a national problem until it hit the east coast
[speaker002:] yeah yeah that's always interesting isn't it see he's right
[speaker001:] you know when it started hitting the big New York banks and the up then it became a nationwide problem and Congress got to do something but
[speaker002:] oh yeah
[speaker001:] uh Texas is on basically on the way to recovery as far as uh the banking industry goes and they
[speaker002:] oh I'm glad to hear that because I've been concerned that the banks may be going the same direction that the savings and loans primarily because uh what got the savings and loans in trouble is the same sort of things that's beginning to get the banks in trouble and that was uh the real estate uh backing in investment and just building in general backing contractors and those kinds of uh corporations uh who were trying to build a lot of uh uh rental business space and uh mall type space and things like that and uh it looked like in the seventies that that was going to be a real booming thing uh a infinitum I guess
[speaker001:] um-hum
[speaker002:] and uh anybody if they just stop and use a little common sense would realize well you can't soak up this much real estate uh and continue to have this kind of growth indefinitely I mean you you it's it's like anything eventually reach sort of a plateau where you've overbuilt if you're not careful
[speaker001:] right
[speaker002:] uh and uh it it's as if uh they went crazy just just like in gambling almost
[speaker001:] um-hum
[speaker002:] and there there was no regulation or anything like that uh I I frankly though and and I'm glad to hear you say what you said about Texas because I have been concerned that the banking system uh which is going through some economic difficulty now and with all the foreign investments that they uh put money into also I I've been concerned that the banking system is going to find itself in dire straits or if they even didn't find themselves in dire straits we're going to find ourselves with so much of our money uh lent out to foreign owners who are willing to soak up some of this this uh capital to keep us afloat you might say hoping to make a buck off of us in interest in the future but uh we find our own economic economy even though it may not have slipped into so so some kind of either deflationary or inflationary depression uh we find ourselves having sold out our futures in terms of what we are going to have to pay off all this debt with to foreign investors who have the money to build to buy up all the debt
[speaker001:] um-hum
[speaker002:] and uh I'm glad to hear that you do you know uh how uh they're beginning to get over the feet in Texas are are is a lot of the money in loans and and the like that uh uh is that being covered by foreign investments maybe or or uh
[speaker001:] well part of the problem as I see it uh my family's involved in in both industries as it were I've I've got a grandfather that was in the
[speaker002:] um-hum um-hum
[speaker001:] S and L back in the sixties and the seventies and in another part of Texas and in a uh
[speaker002:] okay
[speaker001:] my immediate parents were both in banking as it were and so uh we've we've kept up with the industry as it were and the the feeling has been in some of the discussions that that get started on that topic has been that you know we went through the the bad times of a number of bad loans and fortunately the the banks and the S and Ls that uh our family were associated with really didn't have that much problem they were fairly conservative and
[speaker002:] um-hum
[speaker001:] they just had to ride out the storm with the the reputational problems that came with the news media as it were and
[speaker002:] yeah
[speaker001:] uh there were a number of banks that made the bad loans and basically it's been a good weeding out process there's just been a lot of people a lot of banks a lot of whole organizations that were going to make these kinds of loans and and they are no longer in business uh so you know you you have some all your bank failures that the government's having to take over you know that's gone up in the hundred and twenty or thirty or so for the state
[speaker002:] yeah it's been quite a few every year
[speaker001:] yeah and that's pretty well leveled off and and the that's
[speaker002:] well do you think maybe it's peaked you think
[speaker001:] yeah yeah I don't think there's going to be that many more of them I I would
[speaker002:] so you you you you would uh predict based on at least your knowledge and experience that in time we'll see the numbers of banks and maybe savings and loans too if they're still failing uh that that that the the number beginning to sort of taper off now instead of a hundred to two hundred a year you begin to see it go down to maybe fifty to a hundred a year and maybe
[speaker001:] right right there's just not that many more
[speaker002:] what kind of time frame frame would you guess that's going to take to wring itself out
[speaker001:] well it's hard to say how many more bad bad systems or bad apples there are out in the system but I would I'd be willing to bet that uh it shouldn't be more than a couple more years that that
[speaker002:] oh you think two years I I would have guessed five to ten but you really think two years
[speaker001:] well the as far as as far as not having this getting over this peak as it is now uh there's still going to be an unusual
[speaker002:] uh-huh uh-huh
[speaker001:] you know it depends on how far back you want to go let's say if you went back ten years and said here's a failure rate we could live with well then it may take us three to five years to get back to that level of failure
[speaker002:] oh okay
[speaker001:] but if you want to just say we're over the hump and we're starting to get better I think in a couple of years it'll be quite obvious that we're over the hump and getting better
[speaker002:] well tell me well all this all these bad loans and debts that uh I I know in the case of the savings and loans we're just going to have to pick it up as American taxpayer
[speaker001:] um-hum
[speaker002:] but even the banks and the likes some some of those are merging and uh uh the the the the basic question I'm trying to get to is all this bad money that's essentially not going to get paid back how's it going to get covered
[speaker001:] I'm not sure if uh
[speaker002:] I mean is inflation going to make some of it go away and the rest of it we're going to pick up the tab as taxpayers or are we going to be able to sell some of these bad loans or pick them up somehow or another uh uh by foreign investors uh buying pieces of our our economy like buying some of our been to some of our banks uh like the things that uh I forget the guy's name downtown here uh was involved in those two banks I think that was in Georgia or someplace uh what what what how do see that this this indebtedness of which is bad loans and the like just not going to get paid back at least by the people who caused the debt uh you you can't just write that off completely you can write off a certain part of it I guess but you just can't just write off the whole somewhere along the line you've got to recoup some of that money some of the even if it's twenty five to fifty cents on the dollar
[speaker001:] right
[speaker002:] how how how's that going to happen
[speaker001:] well like one guy I heard just talking earlier this week on the topic was saying that that there wasn't any one given uh you know sort of like a uh suit guy making a uh suit for you it it's custom made to the individual situation if you you don't try to find well write off all these to the government or have have the the entire uh bank failure covered by the government so you you take each individual situation yeah and if you can find a foreign investor or if you can find any investor that'll that'll finance I guess that's what the majority of the uh RTC is doing is trying to
[speaker002:] uh-huh
[speaker001:] to resolve all these individual cases in any way possible I mean they're looking for
[speaker002:] how good a job do you think they're doing because you know there's been quite a bit in the various news magazines up here and even the Washington Post and various places about uh how they felt that the uh the people on the committee were sort of selling out at uh exorbitantly exorbitantly low prices to some rather astute investors some of this had been misinterpreted who were tending the who were really tend to make the nice killing off that how do you how do you feel about that
[speaker001:] well I was I was talking with another gentleman about that same topic it's hard to get a feel for what's going on in a nationwide uh system like that when the news media reports the segments that they report you know you hear
[speaker002:] yeah mainly they look for the the wild news
[speaker001:] yeah you hear things like uh the