Just like they planned it...

Damn you Hawkins....don't you know we have a reputation to uphold?

For the past few months, and I'm sure for many more months to come, the United States, and much of the rest of the world, too, has been fixated on what Donald Trump and his band of merry men have been up to.  Is Putin using a condom?  Where are Prez Trump's tax returns?  Did he lie?  On and on. 

And in other Breaking News, we're still all hot and bothered about which bathroom transgender people can use, whether same sex marriage should be allowed or smacked down, whether Black Lives Matter more than any other lives, whether or not Kim's butt is getting bigger, whether you pronounce Qatar "Cut-er" or "kuh-Tar", etc.  All those things together pretty much take up all 24 hours of our modern 24 hour news cycle.

But SURPRISE...there's more going on in the world than they've told us about we've been allowed to know, namely that the BANKS have been scheming relentlessly behind the scenes to get control of what little money they DON'T already have.  Example in point, from today's BBC news:

"An international group of bankers, lawyers and stockbrokers - reportedly with links to the City of London [Europe's major financial center]- appears to have fiddled the tax system, employing practices which were at best unethical, at worst illegal [italics added].  Ultimately they may have deprived the state [Germany] of nearly €32bn (£28bn; $36bn)."

And they almost got away with it, until a young administrative assistant in Germany's central tax office noticed that she was receiving claims for huge tax rebates from a single US pension fund.  BUSTED!

Closer to home, the US House of Representatives last week voted to gut most of the Dodd-Frank banking reforms put in place after the financial meltdown back in '08.  The banksters have pretty much already poked D-F full of holes anyway, but this is just their way of kicking the rest of us in the teeth.  While we were all looking left, they quietly ran right for the win.

If you're keeping count, since 2008 the 20 largest international banks have been fined over a  QUARTER TRILLION DOLLARS for their illegal activities....and they're not the least bit ashamed of it!  

Meanwhile we sit here glued to the TV wondering whether Trump's Atty Gen, Jeff "Goober" Sessions, had grits for breakfast this morning?  *sigh*

Let that soak in for a minute.

S

How the big banks screwed us over, in terms you can actually understand...

Mary is the proprietor of a bar in California. She realizes that virtually all of her customers are unemployed alcoholics and, as such, can no longer afford to patronize her bar.

To solve this problem, she comes up with a new marketing plan that allows her customers to drink now, but pay later. She keeps track of the drinks consumed on a ledger (thereby granting the customers loans).

Word gets around about Mary's "drink now, pay later" marketing strategy and, as a result, increasing numbers of customers flood into Mary's bar. Soon she has the largest sales volume of any bar in California.

By providing her customers' freedom from immediate payment demands, Mary gets no resistance when, at regular intervals, she substantially increases her prices for wine and beer, the most consumed beverages. Consequently, Mary's gross sales volume increases massively.

A young and dynamic vice-president at the local bank recognizes that these customer debts constitute valuable future assets and increases Mary's borrowing limit. He sees no reason for any undue concern, since he has the debts of the unemployed alcoholics as collateral.

At the bank's corporate headquarters in New York, expert traders figure a way to make huge commissions, and transform these customer loans into DRINKBONDS, ALKIBONDS and PUKEBONDS. These securities are then bundled and traded on international security markets. Naive investors don't really understand that the securities being sold to them as AAA secured bonds are really the debts of unemployed alcoholics. Nevertheless, the bond prices continuously climb, and the securities soon become the hottest-selling items for some of the nation's leading brokerage houses.

One day, even though the bond prices are still climbing, a risk manager at the original local bank decides that the time has come to demand payment on the debts incurred by the drinkers at Mary's bar. He so informs Mary.
 

Mary then demands payment from her alcoholic patrons, but being unemployed alcoholics they cannot pay back their drinking debts.  Since Mary cannot fulfill her loan obligations she is forced into bankruptcy. The bar closes and her eleven employees lose their jobs.

Overnight, DRINKBONDS, ALKIBONDS and PUKEBONDS drop in price by 90%. The collapsed bond asset value destroys the banks liquidity and prevents it from issuing new loans, thus freezing credit and economic activity in the community. 

The suppliers of Mary's bar had granted her generous payment extensions and had invested their firms' pension funds in the various BOND securities. They find they are now faced with having to write off her bad debt and with losing over 90% of the presumed value of the bonds.

Her wine supplier also claims bankruptcy, closing the doors on a family business that had endured for three generations, and her beer supplier is taken over by a competitor, who immediately closes the local plant and lays off 150 workers.

Fortunately though, the bank, the brokerage houses and their respective executives* are saved and bailed out by a multi-billion dollar no-strings attached cash infusion from their cronies in Washington. The funds required for this bailout are obtained by new taxes levied on employed, middle-class, non-drinkers who have never been in Mary's bar.

~~~~~~~~~~~

*Of course they were saved.  (They always are.)  They can still be found living the high life in the Hamptons.

~~~~~~~~~~~

~sent to me by my friend Kathy via Facebook~

Thanks KM

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.

Too big to give a damn

There is a reason that liberal Democrat Elizabeth Warren was elected Senator from Massachusetts, and liberal Independent Bernie Sanders came thaaaat close to being the Democratic nominee for President.  That reason is they exposed the massive hanky-panky going on in America's corporate suites, and it struck a nerve with voters.  Here's the latest scam just made public:  

Wells Fargo Bank, considered by many investors to be the Gold Standard for banks *a rather low bar* because of their great management, was fined $185,000,000 by the Federales for securities fraud.  It seems Wells Fargo regional managers gave their branch offices daily quotas to “cross-sell” financial products to existing customers. If someone had a checking account, they would sign them up for a savings account. Or a credit or debit card. Or online banking services.  Former CEO Dick Kovacevich invented this target for each customer, calling it the “Gr-eight initiative” — eight add-on products per household.

When some employees couldn't meet their quota, they would just forge signatures and open up accounts without their customer's knowledge or approval.  These 1.5M unauthorized accounts only netted Wells Fargo about $2.5M, so the $185M fine might seem rather punitive, right?

Umm, no.  Here was the real scam:  Wells Fargo constantly bragged in its earnings statements that their "cross-sell results are proof of their superior customer satisfaction."  Investors loved it, thinking the sky was the limit.  Yeah, right.  (The average Wells Fargo retail banking customer had 6.11 products by the end of 2015.)

The fake accounts goosed the stock price....Wells Fargo stock doubled from 2011 to mid-August 2015, the period described in the fraud complaint.   And just coincidentally, John Stumpf, the CEO of Wells, received $155M in stock options between 2012 and 2015 as the share price soared, in part based on the successful cross-selling strategy.  (This is why it was "securities fraud" and not simple "consumer fraud". The investors, not consumers, were the big losers.)

Wanna give 'ol Liz and Bernie heartburn?  Remind them that the executive who oversaw the WF banking unit the entire time those millions of fake accounts were opened is now “retiring” with a $124.6M Golden Parachute, and the 5000 employees who did bad were fired.  Sound fair to you?

I'm a staunch capitalist.  I believe those who work the hardest and come up with the best ideas benefiting both investors and consumers should do very well.  When Fred Smith turned his doctoral project into the reality we know today as FedEx, I think he deserved to get filthy rich.  When Steve Jobs and friends invented a revolutionary new iWorld, I think they deserved to get filthy rich.  The same for Bill Gates and Jeff Bezos and a few others, too.  

But the financial services industry has proven time and again they are all about smoke and mirrors, and little else.  They seem to be masters of just fleecing those who actually do contribute to the creation of real wealth.  They deserve our contempt.  Liz and Bernie just saw the truth before most of the rest of us did.

S

Huh? The clean end of the dirty scale?

It seems the LIBOR banking scandal is becoming more and more....scandalous.  LIBOR stands for London Interbank Offer Rate, and is set daily when a select group of major international banks declare (on an honor's system) what they would have to pay for an unsecured loan from another bank.  It seems that back in 2007-2008 when the world economy was in mid-collapse the banks lied by declaring an unrealistically low rate considering their deteriorating state.  


Big Whoop.  How does this effect you?  Many adjustable rate loans are tied to the LIBOR rate.  Many municipalities, for example, lost millions of dollars (each) because of the crooked bankers.  Same with many retiree pension funds.  In fact YOU may have a loan tied to the LIBOR.  The damage was massive and world-wide.  The fraud was discovered in 2008 and now Barclay's Bank has been fined $450M and the others are circling their wagons.  They claim they were just trying to make their banks look healthier than they really were, but those more cynical say the banks were trying to enhance their profits at the expense of...well...everyone else.


In their defense Barclay's said what they did was "dirty", but that they were on the "clean end of the dirty scale".  Read:  Other banks cheated worse.  (What's that saying?  "No honor among thieves.")  Now their next line of defense to protect themselves from criminal prosecution is that what they did was known by the regulators in both the US and the UK at the time.  They say if criminal prosecution is pursued against them they will tell all they know about their banks and their cozy relationship with the regulators, naming names, etc.  (Told you the whole stinkin' bunch were in bed together!)  


Banks have been caught so many times cheating recently they no longer respond to shame....they could care less what people think of them.  (Their PR guys have become expert at putting lipstick on the pig.)  All they care about is money, and now there's talk all those who lost millions (each) could band together and sue the banks for tens-of-BILLIONS of dollars in damages. 


I'm thinking "group ledge jump".  Pardon me for not shedding any tears.


S