A sign of our times

If you've had the opportunity to travel around the US much, and if you've been paying attention, you've probably noticed how much one place looks like every other.  If you want to go out for dinner, you'll find lots of Olive Garden's, Outback's, Chili's, Applebee's, McDonald's and Taco Bell's, but you'll have to look hard to find a Mama's Cafe.

Most towns will have multiple branches of Bank of America, Citibank, Chase, and Wells Fargo, but it's doubtful you'll still find a local First National Bank.  You'll find lots of Chevy, Ford, Dodge, and Toyota dealers that may have a sign that says "Proudly serving _____ since 1974", but if you'll Google it you'll probably find it's now owned by one of the hundred-dealer auto conglomerates.

You probably won't find a local Tip Top Grocery, but you'll find plenty of 7-11's, Quick Trip's, and RaceTrac's.  And almost all sell gas, too, which has put the locally owned and operated 4-pump Exxon's and Texaco's out of business.  Grocery stores are now dominated by big names like Walmart and Kroger's.  Find yourself in need of a pair of pliers or a screwdriver?  You'll likely find a Lowe's or Home Depot before you find a Floyd's Hardware.

Have an unexpected day free for some fishing?  You'll burn up a tank of gas looking for Bubba's Bait and Tackle, while you drive right past Cabela's, Bass Pro Shop, Academy, and Dick's.  Need a dress shirt?  Ken's Man's Shoppe is long gone, replaced by Men's Wearhouse, Dillard's, and Joseph A Bank's.  Rick's Furniture was killed off by the likes of Nebraska Furniture Mart and Haverty's, who are themselves now keeping a wary eye on Wayfair.

This is true for every midsize and large city I've been to in recent years.  It may or may not be true if you're in some place like East Bull Turd, Alabama.  Even then, if East Bull Turd happens to be within 30 or 40 miles of a major city, it will soon be a growing suburb and will see this phenomenon, too.  And if it's too far away to attract city commuters, then it will likely continue to just wither away.

The little guys don't stand a chance these days, and even the big guys are now feeling the heat from the 500-pound gorilla in the room....Amazon.  I guess it's true what they say:  "The only thing constant is change."  *sigh*

S

Be afraid, a__holes. Be VERY afraid!

Have you heard the funny saying, "Some people are alive only because it's against the law to shoot them"?   I think they were referring to bankers.

Now and then I tend to get off on a vitreol-laced rant about The Banksters.*  Some have asked me why I get my panties in such a wad over them?  Fair question.  Here's why:

Back during the Great Depression thousands of banks went broke, with depositors losing their life savings in the collapse.  The misery was unimaginable.  To restore confidence in the banking system, FDR/Congress did things like create the FDIC (to insure that even if banks go broke in the future, the depositors will still get their money back), and passed the Glass-Steagall Act.  This separated the commercial banks (like the First National Bank of Gooberville) from the investment banks (think Shark Tank in a 3-piece suit).

Commercial banks were regulated, only allowed to loan to solid, credit-worthy borrowers, usually for things like homes or cars or small businesses.  These were usually to locals, and the borrowers were well known to the banks.  It was safe, but not all that lucrative for the bankers. Investment banks could gamble big on just about anything, but with their higher risks (they weren't covered by FDIC insurance) came much higher rewards, too.  This separation worked well, but by the 1980's the banks were wanting to be unshackled, and finally, after intense lobbying, Glass-Steagall was repealed in 1999, and off to the casino they went.

They began an intense home loan campaign, and they had many well-qualified takers.  But after a while all the well-qualified borrowers who wanted a home had a home, so the banks lowered their standards and kept throwing out money.  Not long after, they ran out of even marginally-qualified borrowers, so they just kept loaning to anyone who could fog a mirror.  

If borrowers couldn't afford to make payments based on a 6% interest rate, they gave them a 2% loan....for 4 years, then it skyrocketed to make up for the early-years rate-break.  The banks frankly didn't care if the loans were paid back or not, as they had devised a way to pass along the risk to investors downstream.  They took all their loans, sliced them and diced them, and repackaged them as "derivatives".  These were essentially packages of 10,000 little pieces of 10,000 separate home loans.  

Problem was, the investors they sold them to (often employee pension funds, etc) couldn't easily figure out which homes they had an interest in or who owed them, which is exactly what the banks were hoping for.  The banks LOVE working in the dark!  The senior banksters made literally $$$BILLIONS of dollars for themselves personally with this fraudulent scam!

By 2008 the House of Cards collapsed, and investors worldwide were holding worthless paper.  But....haha....the banks were, too!  They still had BILLIONS in their loan portfolios waiting to be sliced and diced, but the collapse happened before they could get them all out the door.  Oops!

Here's where it gets personal for me:  In their typical bureaucratic knee-jerk over-reaction, the banking regulators pretty much told banks to say "NO" to any real estate loans.  Unless the borrower was solid gold and had a HUGE down payment...NO!  This applied coast-to-coast, regardless of whether an area participated in the fraud or not.  WTF?

Many in my industry were forced to close their doors, losing everything.  (We managed to stay afloat because over the years we had developed nice relationships with many affluent professionals who didn't need any bank financing.)  Plumbers who might once have had 20 employees could then only afford to keep 3 or 4.  The same with electricians, insulation and drywall contractors, etc.  It was to them like Armageddon.  Then it spread to our neighbors who might have needed to sell their homes for whatever reason, but couldn't because there was little mortgage financing available.  They were all defaulting on their homes and cars left and right, EVEN THOUGH THEY HAD NOTHING AT ALL TO DO WITH THE BANKSTER'S FRAUD!

Meanwhile, while millions of middle-class families were being devastated, the guilty bankers still had their ranches in Montana, their estates in the Hampton's, and their penthouse apartments on Fifth Ave.  They still vacationed in Europe, still bought Bentley's, still had their hundreds of millions of dollars hidden away from possible angry plaintiffs. AND  NOT  ONE  EVER  WENT  TO  PRISON!  Their lives didn't suffer one twit!

And they're still at it today.  They still put together fraudulent deals, pricing in a few hundred million bucks to cover the fines they know the Feds will slap on them....not bad considering the few $$$BILLION they scammed in the process!

I truly believe a day of reckoning is coming. At some point in time fed up middle class Joe's and Jane's will invade the Ivory Towers and haul these well-scrubbed criminals off in chains.  And there will be rejoicing in the streets.  :)

S  

*  Not all bankers are Banksters.  The little guys and gals at the local corner bank are NOT who I'm speaking of here.  I'm talking about the BIG BANKS....B of A, JP Morgan Chase, Wells Fargo, Citibank, Goldman Sachs, Capital One, Morgan Stanley, etc.

He who has the gold....needs to be watched carefully

Just kidding.  Not really.

If there was an Academy Award for "Most Despicable Way To Screw The Public" it would have to go to the big mega-banks.  This was in the weekend newspaper:

The FDIC and the Consumer Financial Protection Bureau are investigating the big banks for their role in helping the internet payday lenders rip off consumers.  The big banks don't loan money directly to ignorant/desperate borrowers (too much bad press), but they do enable the offshore-based payday loan sharks to withdraw money directly from borrowers accounts, even in those states (15 of them) where payday loans are illegal.

So what's in it for the banks?  People desperate enough to go to payday lenders generally have next-to-nothing in their bank accounts at any given time.  So the payday lenders withdraw money from borrowers accounts whenever they find a few dollars there, which means many of the customer's other checks are likely to bounce later.  

That triggers overdraft fees, bringing in hundreds of millions of dollars (soon billions as the internet payday lenders expand) to the banks.  Cha-Ching!

Even when consumers instruct their banks to NOT allow further withdrawals from their accounts (which by law they can do), the banks often take months before they begin following their customer's orders, charging their fees in the interim.

These payday lenders are being pursued by state attorney's generals for charging 500-1,500% interest, so they're moving away from their traditional brick-and-mortar storefronts to places such as Grenada, Belize, Malta, and the West Indies where they operate online out of reach of regulators, plus they get "lawsuit protection and tax reduction."  Nice folks, huh?  And the banks play an instrumental role in this ripoff.  Without their complicity the whole scam is pretty much straitjacketed.

Yeah, yeah, I know....nobody puts a gun to people's head and makes them borrow from these crooks.  And nobody makes addicts buy drugs from pushers, either.  Some people are just desperate, ignorant, easy marks.  These people aren't being served, they're being preyed upon.

And this very minute the banks are lobbying feverishly, asking us to trust them and relax the regulations that keep them in line.  They say they can "self regulate".

So big banks....you want us to trust you?  Then quit pulling crap stunts like this.

S

Maxine's advice to all politicians...

Had enough politics yet?  The Republicans have been shoveling it deep and stinky this week, and next week it's the Democrats turn.  Oh joy.

I see that Citibank has agreed to pay $590M to investors they defrauded by selling them near-worthless sub-prime loans a few years back.  So they make a couple of billion gross profit, they give back $590M...pretty sweet, huh?  Nowadays banks just figure in fines and lawsuit settlements as part of the cost of doing business.  Just like the light bill and the phone bill.  I guess this is the new Business 101.

Just curious....Do politicians start out in banking to learn the art of sleaze, or do bankers learn how to defraud people with a straight face after doing a stint in Washington? 

All is not lost, though.  There is some good news out there:  It's football season!  And I mean REAL football....college football!  You know, the kind where your team finishes the season with the same players it started with.  Where players play for the love of the game.  And a new car and a couple of thousand dollars a month "laundry money".  *wink*

S