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but by the 1980's the banks were wanting to be unshackled, and finally, after intense lobbying, Glass-Steagall was repealed in 1999, and off to the casino they went.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.

Competition is GOOD!

Competition

I just saw an American Express ad on TV urging its members to do business with small, local businesses and not just the mega corporations.  Awww....it's that nice of them, looking after the little guy like that?  How sweet.  What's that....ulterior motive?  Why yes, yes they do.

This reminded me of a conversation I had with a high-up-the-ladder marketing guy with Lowe's a few years ago.  He told me that consumers had the impression that, because of their volume, Lowe's (and Home Depot) received better pricing from appliance manufacturers than the smaller local retailers.  He said that was not true, and that they in fact paid a bit more.  I asked why that was?

He told me that the two large box stores combined already accounted for something like 50% of all appliance sales.  The appliance manufacturers understood that if they allowed the small retailers to disappear, and Lowe's and HD had it all to themselves, the two big boxes would effectively OWN the appliance makers.  They would bark "jump", and the manufacturers would have to reply, "how high, sir?"  Therefore they gave the small retailers a slightly better price to keep them competitive and in business. 

Until recently American Express was the only credit card the giant members-only store Costco accepted.  Ten percent of all Am Ex cards were issued thru Costco, and 20% of Am Ex total loan portfolio was with Costco.  Feeling like they had the power to pull American Express's strings, Costco demanded that Am Ex cut their processing fee and raise their rewards program, both benefitting Costco and hurting Am Ex.  

American Express realized the folly of having too many of their eggs in one basket and bid Costco adieu.  Now they're trying to boost their business with thousands of small retailers so as to never be held hostage like that again.  And that's, as Paul Harvey would say, "The rest of the story."

So with this in mind, please tell me why we let the Big Six banks (JP Morgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs, and Morgan Stanley) control roughly half of all American banking, with the other half divided up among roughly 6,000 "others"?  Tell me again why we shouldn't break up the Big Six?

Who do YOU bank with?

S

Hillary's worst nightmare

Saturday Night Live's Hillary Clinton: "You have a choice in this election.  You can vote for a Republican, or you can vote for Donald Trump."

Hillary Clinton is enjoying an embarrassment of riches.  She has her limited hard-core base of traditional Democrats, the support of maverick Democrat (?) Bernie Sanders and most of his millennials....and the support of much of corporate America.

Wikileaks has given us the transcript of what Hillary told a group of Goldman Sachs VIPs in a speech they paid her a cool QUARTER MILLION $$$ to hear.  That is....big shock....that she is a two-faced politician.*

During her primary campaign against Bernie Sanders she wanted us to believe she was a progressive's progressive.  Even after she took him out she enthusiastically embraced Bernie's "break up the big banks, no (TPP) trade deal, free college for everyone, etc" agenda.  She even agreed to make it a part of the official Democratic Party platform.  But what about what she told Goldman Sachs, and by inference the business community?

She told them that she had a face for public consumption, and a face for behind the magic curtain, and it was the latter that they should pay attention to.  Yes, she would push for "banking regulation", but the banks would have a say in writing it.  Which really meant "don't you guys lose any sleep."

At the time she said that Republicans were firmly in control of both the Senate and the House of Representatives.  If she could some day become President she could deliver on her promise to her progressive friends to champion their traditional Democratic values, all while knowing a Republican controlled Congress would never go along with any meaningful change in the status quo.  Win/win....votes from traditional Democrats, money from traditional Republican business interests.  SWEET!

As it now turns out several years later she appears to be coasting to a presidential victory, and the odds are pretty good that she might, just might, get a Democratic Senate, too.  

But what if the Democrats could pull off a modern miracle and win the House of Representatives also?  Her Democratic faithful/Bernie Sanders coalition would then expect her to live up to her promises to them....she would have the votes in Congress to do pretty much whatever she wanted....while the business community would still be expecting her to stand aside for them, too, and they don't take kindly to being stiffed for a couple of hundred million $$$.  YIKES!

Hillary's "happy dance" could well turn into a "tap dance".  Hey, stranger things have happened.

S

* I know, I know.  I used "two faced" and "politician" in the same sentence.  It goes without saying, huh?  :)

If it acts like a crook and talks like a crook....

This is what politicians would look like if they had to wear campaign donor logos the way NASCAR drivers do.

Money drives politics, fact.  My giving $5 or $50 or even $1,000 isn't a problem.  The problem comes when someone, or some special interest, gives $1,000,000.  If I call the office of the POTUS and say "Lowandslow here, a $100 campaign contributor, and I need to speak to the President", do you think they would put my call through?   

Now if someone representing Goldman Sachs or Monsanto or Exxon Mobil called and asked for the President's ear, what do you think their chances of getting connected might be?

Popular wisdom is that big business supports Republicans, and trial lawyers and labor unions support Democrats.  That is mostly, but not entirely, true.  Most special interests wisely (?) contribute to BOTH political parties, just in case their preferred candidate/party loses.  It's called hedging your bets.

There is another problem with how our current political process is funded:  We don't know who is giving or how much they are giving.  Individual contributors to candidates are listed and the amount they can contribute is limited and must be made public.  But contributions to groups who advertise for a candidate (by 527 tax-exempt organizations....that means you and I are subsidizing their political views), are kept secret from the public.  We don't know who they are or how much they are giving.  The process is about as clear as mud, by design.  

Likewise for money donated to either PARTY.  The party does not have to divulge who they received donations from or how much they gave, yet the party can forward funds to any candidate they want, in whatever amount they want, and it is completely NON-transparent.  Do you see where there might be some room for abuse?

I've been watching the Clinton/Sanders debate I recorded last night and I heard Hillary Clinton say something that made my jaw drop.  She said she has never been swayed by campaign contributions she has received from special interests.  (In fairness, probably all candidates from both parties will say the same, except maybe Donald Trump and Bernie Sanders, who don't rely on big special interest donations.)

Wha...wha...WHAT?

Really?  You can call Goldman Sachs or Monsanto or Exxon Mobil or any of the rest of them a lot of things, but STUPID is not one of them!  No special interest is going to give millions of dollars to a candidate without having a reasonable expectation of getting something in return.  

Do politicians think we're really dumb enough to believe that? 

S

Le Big Mac

Ahh, Paris....we have a problem.

Q.  What do you get when you cross a diet of Big Macs with the French railway system? 

A.   Trains that are too fat to fit between the station platforms.

"Mind the gap", the traditional warning to be careful and not step into the gap between the door of the train and the concrete platform will apparently no longer apply at thousands of French train stations.  It seems the railway operator SNCF just spent $20.5B buying 2,000 new trains, only to find they won't fit between some station platforms.

"We measured the gap at a number of stations and that's where we got our dimensions.  We sorta forgot that a lot of the older stations were narrower" said VP Engineering, Inspector (Jacques) Clouseau, whose previous career highlights included designing ignition switches for Chevy Cobalts.

~~~~~~~~~~~~~~~

To show their strong civic involvement, JP Morgan Chase Bank has announced that they will be committing $100M over five years to aid revitalization in Detroit.  They said they would donate the profit they make on their credit card operations next Monday morning between 8am and 8:15 to help bankrupt Detroit get back on their feet.  

They said they would like to do more, but that's all they could afford to piss away, what with the sky-high legal bills they're incurring trying to keep themselves out of the penitentiary.  

Not to be outdone, Goldman Sachs announced they would chip in $20M, too.

And dats today's (slightly embellished) news.  :)

S

And my dossier at the NSA just gets bigger and bigger

I don't understand all the stink about Benghazi.  It seems that in trying to police the world....north Africa in this case....we botched security at one of our diplomatic missions.  A bunch of #$%^& Libyans attacked and killed 4 Americans.

At the time, it seems that an Administration official at some level decided that the American people wouldn't care if they thought our people were killed by a crowd spontaneously angered by some movie or some such nonsense vs an out-and-out terrorist attack, which would be horrible.  So they lied.

Why would one be worse than the other?  Our people are still dead, regardless.  

"Hello, Mrs. Widow.  I have some good news and some bad news.  First, your husband's dead.  But the good news....it was just a spontaneous demonstration."

So a bunch of politicians lied.  Lying is what they do.  *yawn*

Somebody please tell me again why we give a rats ass what happens in Libya?  The f__kers just fight for the sake of fighting.  That seems to be the #1 pastime in that part of the world.  Why don't we seem to get that?  You scramble an ant pile with a stick, you're gonna get stung.

Why was security botched in the first place?  Didn't Congress vote to cut back funding for State Department security to help reduce the deficit?  Then this happened, and they're surprised?  Really?

Attacks on Americans overseas have been happening since the Reagan days, maybe before....I can't remember.  Here's one for you:  How come every time something bad happens in their back yard the Europeans expect the US to come and "fix it"?  Do we ask them to come over here and slap around the drug cartels in Mexico for us?

Republicans are just looking for something to throw in the face of the Democrats, just like the Democrats had a field day complaining about how NJ Governor Chris Christie (R) caused a traffic jam on some bridge to NY.  This whole thing is just sleazy politics.

You're on a slippery slope, Republicans, feigning outrage over Democrats lying about Benghazi.  Talk about the pot calling the kettle black!  You ALL lie!  Nixon lied, Reagan lied, Clinton, Bush, and Obama lied also.  And it is with great confidence that I can predict the president after Obama will lie to us, too.

Instead of distracting us with more Benghazi BS why not get your house in order?  Do your job....let me rephrase that.  Do the job THE AMERICAN PEOPLE sent you to Washington to do.  NOT the job the special interests (think: Goldman Sachs & Friends) are paying you to do now that you're there.

S

King For A Day

Yes, I've once again put back on my CEO hat for a few days.  I must keep the empire rolling.  OK....I've gotta sit here and wait for the phone to ring.  Don't laugh.  The waiting can be intense.

This month my sister-in-law is having a certain momentous birthday (50), so my bro is surprising her with a trip to a resort in Mexico.  Her family and a few close friends are also going.

Let's review.  It's August.  Yesterday it was 104 in Dallas, and today it's expected to be 108.  And bro is taking a vacation, traveling even CLOSER to the equator.

See, even their logo shows a cactus, a blazing sun, and some little native guy burned to a crisp.

I thought I taught him better than that. *shaking head*

~~~~~~~~~~~~~~~

I see in today's news that there is growing momentum in Washington to wind down Fannie Mae and Freddie Mac, the two home financing institutions taken over by the Feds back in 2008 when the housing market collapsed.  In the pre-2008 days private financiers made 60% of all mortgage loans, with Fannie, Freddie, and FHA making the other 40%.  More recently the latter have been making 87% of all mortgage loans.

President O'bama recently echoed Congress when he said, "I believe that our housing system should operate where there's limited government role and private lending should be the backbone of the housing market...."  

Good....the "free market" is back!  The banks say they are ready to resume their role as the nation's primary source of home mortgages.

In other news, it was announced today that the Justice Department is suing Bank of America, accusing them of defrauding investors by vastly overestimating the quality of some $850 million worth of mortgage-backed securities.  

B of A now joins Goldman Sachs, Citi, JP Morgan Chase, Wells Fargo, Barclays, HSBC Holdings, and Credit Suisse, among others, who have/are being sued for similar mortgage securities fraud.

Ummm.....

(What's that definition of insanity?...."Doing the same thing over and over again, expecting a different result.")

S

The "Free Market" isn't free at all

Parasites all in a row.

It's Monday, and like many of you I have a burr under my saddle.  Where most of you are just pissed it's Monday, my heartburn is a little more complex.  The heat source of my slow burn?  The Big Banks....again.  They've found another way to screw us, and of course, since Congress gave them a wink and a nod, it's completely legal.  But should it be?

They've taken a page from the business plan of 'ol John D. Rockefeller.  He didn't actually drill for oil....he just had a stranglehold on the pipelines (and the refining process).

It seems a group of financial players, most notably Goldman Sachs, owns many of the warehouses where aluminum bought/sold on the spot market is stored.  *yawn*  I know.  

It's been one of those sleepy little secrets that hasn't drawn attention until now, but has cost us consumers big time....$5B over just the past 3 years.  Yet they've added absolutely NOTHING to the economy in the process.  They are the absolute definition of "parasite".

Huge 1500 lb blocks of aluminum that will ultimately be used in beverage cans, cars, etc, sit in one of the Goldman Sachs-owned Detroit area warehouses.  An end user, say Coca Cola, buys a bunch of them and they are shipped out.  This process before Goldman bought the warehouses took about 6 weeks.  Now it takes about 16 months.  

Why the delay?  Because Goldman's warehouses alone hold 1.5 MILLION tons, and they charge $.48 per ton per day storage fee.   Other big banks have similar schemes at play, too.

Coca Cola and other end users complained to the London Metal Exchange (who somehow is charged with setting the rules) and the LME issued an edict:  Warehousers must move out at least 3,000 tons per day.  

And now they do....from one of their warehouses to another of their warehouses down the street.  It's just a big shell game.  Oh, and it isn't as if the LME is truly impartial.  They get 1% of all storage fees collected.  *stinky*

And it gets worse.  Thanks to intense bank lobbying, the Securities and Exchange Commission has approved a plan that will allow JPMorgan Chase, Goldman Sachs, and BlackRock to buy up to 80% of the copper on the market.  They also have "interests" in oil, wheat, cotton, electricity generation, and more. 

Just FYI, JPMorgan is currently negotiating the terms of a $500M settlement with the Feds for electricity rate rigging.  *I'm not feelin' the love*

Experts say that by owning oil pipelines, port facilities, and warehouses, it gives them inside info on who's producing, moving, buying, and selling commodities, enabling them to make timely speculative purchases for themselves. It amounts to virtual "insider trading".  (A 2011 internal Goldman memo suggested that speculation drove up the price of a barrel of oil by a third, or about $10 per fill-up for the average driver.)

To my super-conservative friends who say we need less regulation and government interference (which I must admit sounds very good on paper), understand this:  The "free market" isn't free.  It's rigged.  

The bankers have simply set themselves up as middlemen.  They are adding NOTHING to the economy.  They are just parasites sucking the life out of society's producers.  Just because it's "legal" doesn't make it right.

S

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

Screwed again, and we didn't even get a kiss

So our politicians tell us that we're broke....way past broke, actually....because of all the old-timers now signing up for their Medicare and Social Security, which, by the way, they PAID for over their working lives.  (And if the tax rate was insufficient to keep those trust funds properly topped off, whose fault is that?)

But wait....now we find out that a cool $76 BILLION DOLLARS in special-interest tax credits was included in the recent "fiscal cliff" legislation.  Lobbyists such as the firm headed by former Senator's John Breaux (D-LA) and Trent Lott (R-MS), representing companies like General Electric and Citigroup, secured for them an extension to the provision that allows multinational corporations to defer US taxes by moving profits into offshore financial subsidiaries.  (Their profits are all credited to subsidiaries in low-tax countries like Luxembourg where they might have nothing more than a PO Box.  They then pay Luxembourg taxes, not US taxes.)

Known as the "active financing exception", this is the tool that GE (and quite a few others, too) uses to avoid paying nearly all US corporate taxes.  Also blessed with sweetheart tax breaks were companies like rum distiller Diageo, Goldman Sachs, Morgan Stanley, the American Wind Energy Association and the Motion Picture Association of America. (I checked and Park Place Custom Homes didn't get crap!)

Obviously their shareholders are ecstatic, but how is the taxpayer's interest served here?  

This scam was one the Obama administration insisted be included, and the Republicans feebly and quietly objected to, then voted "aye" anyway.  ("I'll vote for yours if you'll vote for mine?")  I wonder if we went back over the past 30 years or so and looked very carefully how much of our $16 TRILLION DOLLAR debt could be attributed to these kinds of giveaways?

No....no kiss, or dinner, or a movie, or even cab fare home.  Just a plain old fashioned screwing.  "I feel so....so used."

S

Who says crime doesn't pay?

It made a lot of Goldman Sachs execs rich....even richer than they were before.  It seems that with the Statute of Limitations governing fraud and the economic collapse of 2008 rapidly approaching, it's now-or-never time for the Justice Department to either prosecute Goldman or walk away.  They're walking away.  They say they don't have enough hard evidence to prosecute.  

By all accounts Goldman has been sweating bullets over this one.  I say Goldman's lawyers are better at hiding things than the government lawyers are at finding them.  Goldman has already paid Rockefeller-sized fines for their shady dealings, but they just paid the fines and didn't have to admit guilt.  There was a reason they accepted that plea bargain.  This is that reason.  (Uncle Sam...I think you were just "out lawyer'd"!)

Party time in the Hamptons!

~~~~~~~~~~~~~~~

It's party time in Dallas, too.  After yesterday's record 108 degrees, today's 96 seems downright cool!  Yea!  ;)

S

Bidness History 101

Not that I expect anyone to actually read this....


Here's how our economy went over the cliff:  Historically banking was a fairly mundane business.  Banks paid depositors a small percentage interest, charged borrowers a higher rate of interest, and the gap in the middle was their profit.  They matched up those who had an excess of money (depositors) with those who needed money (borrowers).  It was called 3-6-3 banking...they paid depositors 3%, charged borrowers 6%, and were on the golf course by 3pm.  Every small town had their own bank and everyone knew the banker and the banker knew all the townspeople.  They knew who was a good credit risk and who wasn't.  They thought long term, hopeing to help you start and grow a business and become your banker for life.  Banking was NOT a "get rich quick" profession.


Occasionally they strayed and began bankrolling speculators in exchange for higher returns for themselves, but things usually ended badly.  (Think:  The Great Depression)  After that fiasco the government passed all kinds of new laws hopeing to prevent a recurrence, the big one being the Glass-Steagall Act.  It said commercial banks (the ones where you put your paycheck) were given FDIC protection, but were limited to the very mundane types of banking ONLY (see above).  Investment banks such as Goldman Sachs, Bear Stearns, etc were NOT given FDIC protection, but were allowed to gamble with their "investors" money with the hope of hitting a home run....higher risks, higher returns.  Brokerage firms could buy and sell securities, but could not do what commercial or investment banks could.  These firewalls kept our financial system out of serious trouble for the next 50 years.


With the wave of deregulation begun by Jimmy Carter and Ronald Reagan these various types of financial service companies began eyeing and envying the others.  The firewalls began to spring leaks.  Commercial banks wanted to be able to gamble like the investment banks hopeing for a home run for themselves.  The investment banks thought if they had the HUGE piles of depositor's money to play with like the commercial banks did they could before long own the world.  With individual investors, mutual funds, and pension funds, etc, seeing the potential for nice returns on Wall Street, the volume of stocks traded went from a few million to eventually several billion a day.  And remember, brokerages are paid by the number of shares traded, NOT whether the market goes up or down.  The banks wanted some of that, too.


Little by little they were allowed to stray a bit farther from their roots.  The small town banks were largely bought up by the regional "downtown" banks, who were in turn absorbed by the "money center" banks such as Citi and Bank of America.  Their power became enormous and they learned how to exchange "campaign contributions" for Washington favor.  Finally, in 1999, Congress passed the Gramm-Leach-Bliley Act which killed off Glass-Steagall.  The firewalls were removed.  Banking became a highly desirable "get-rich-quick" profession.  Banks became less focused on helping their neighbors establish and grow businesses and more focused on devising new products to sell (such as "derivatives") which could generate almost unimaginable profits for their stockholders and immense commissions for themselves.  There was little reason to make "prudent" loans (well, they had to look prudent at least long enough to sell them) as the risk was passed on to those who eventually bought these new financial products.  


Greed ruled.  And then the wheels came off.  Some other time I'll explain what happened next.


S


NOTE:  I would welcome any feedback correcting this post if I have gotten something wrong.  Factual constructive criticism would be appreciated.

Chuckles

I'm sorry, but I can't help but chuckle when I read that the brokerage house MF Global is in bankruptcy.  The MF CEO *chuckle* is former Goldman Sachs CEO and ousted crooked politician Senator/Governor Jon Corzine, MF. *chuckle*  Now we learn that up to a BILLION dollars in customer deposits is missing.  I guess that makes the MF CFO a MF, too. *chuckle*  What if they had bought the naming rights to a stadium or an arena?  Imagine....MF Arena.  Catchy.  *chuckle*  See, this is just too easy.  :)


I do, however, feel sorry for the rank and file MF'ers who are losing their jobs, especially right before the holidays.


In a similar vein, there is actually a ceiling fan company named "Big Ass Fans".  As you might expect, their fans are huge, up to 8 feet in diameter, hence the name.  So if they bought the naming rights to a sports facility, you think they'd call it Big Ass Stadium?  (Aren't they all?)  *chuckle*


I think I need coffee.


S