Earlier this year I wrote about two articles in the Wall Street Journal that dealt with our world of banking and debt.

Now two more showed up and again reminded me of how our current improving financial times are just part of a never ending cycle. Things get bad, banks do not lend even when they should. Things seem better and banks want to lend and go crazy.

“Shift on NonConforming Mortgages” Wall St. Journal 12/3/13

Banks until recently were very concerned and cautious of who and how they lend money especially on the very mortgages that got them and the whole country in a mess. The article points out that now many banks, and yes, even the ones who were sued by the government and various states for their role in the mortgage crisis (like poor Bank of America), are now starting to make mortgage loans that do not conform to current lending standards. The article states that this might be the old interest-only loan again. Or a loan to someone whose income does not qualify them for the amount borrowed. Or where the bank will not fully document the borrower’s income or assets. To start, bankers claim these loans will only be made to their wealthier, high-end clients.

Well, I assure you this is where it started a decade ago, before we had our mortgage crisis. It starts small and limited. Soon banks, and the infamous mortgage brokers who feed the mortgage industry with new loan applications, will be making most of their loans that are nonconforming or do not meet standards. Last time it ended in a crisis. And we will likely have one in the future as these trends continue.

“Banks Brace for Tighter Regulation” Wall St. Journal 12/4/13

This article deals with the fact that now that the mortgage crisis is over (for this round), the government will finally force banks to limit their overall lending and investments in what we will call collectively “hedging”. In the mortgage crisis, you recall, banks managed to not only make what we called above, nonconforming loans, but they managed to bundle them and sell them multiple times and in parts and pieces to each other and make money doing it. Until they lost money doing it. So the new regulations will restrict how much of this type of trading or investing banks can do.

I have wondered for the last five or six years why these rules were not put in place already. But the banking industry has a very serious lobbying group and are a big source of fund-raising even for Congress people who claim to hate banks. So it has taken forever. It will be watered down.  Bank groups are concerned they will not be competitive with other global banks. And in the end, the new rules will accomplish, sadly, very little. And we will have banks too big to fail, failing again.

A friend in Florida just gave me further evidence to our future reoccurring  financial fate at the hands of banks, mortgages and the housing market. In the last month, he had two real estate people knock on his door and asked if he wanted to sell his condo. He is in a nice area and has an end unit which the brokers claim they have a buyer for.

Real estate agents cold calling. Banks giving out nonstandard loans. And the government unable to meaningfully limit banks and their practices. Have we seen this movie before?

It is just a sign of our financial times. But be care out there in the world of real estate, lending and banking. And in the Business Zoo!