Largest Banking Branch opening boom I ever seen leads to bust!
Over the past few years, all around Northern New Jersey we have seen banks being built. I suppose it is the same else where. So many Banks, it leads you to believe, how we lived without them. Population has not gone up much to create a greater demand, so there must be another reason. I have said over and over, every time something booms so much it leads to a bust. Then the financial crisis came. Were all these banks being built, showing the disease that the banks have?
Let's try some ideas.
They wanted to grow to get market share and not be left out.
This is a reasonable idea.
They wanted to grow to create a bigger critical mass to sell at a premium to a bigger suitor.
Possible for upstart and smaller banks.
They wanted to grow to be too big to buy out.
Possible for bigger banks.
They wanted more deposits desperately, because they learned how to leverage them up to create big profits and bonuses etc., using securitization and derivatives.
Very likely, deposits are king and they wanted them.
Was it because they could grow and everything seemed great to grow.
This is also possible, sometimes things follow the obvious.
Nevertheless, It was and is unusual and I intend to ask some banking executive what they think was and is the reason.
I feel that there is a correlation here between optimism and the reality of the situation. While banks thought things were good, they were leading to the worst times in almost a century. Why these Bankers were's paid so much money to be wrong, I could not tell you?
What do you think?
Richard
View my new homes for sale and other things.
A Bergen county town of Westwood has 5 new banks and 3 more before the planning board.
Population is lower than 10 years ago.
What's up?
Richard