Saturday, December 19, 2009

Bankers III

Moral: Wherein one has to question if there is such a thing as an honest banker upon whom the consumer can rely and to ask this question seriously.


So, we may not have 'The Economy' but do have some economic reality to contend with. For instance, we know that there is the utilitarian role for banks that is necessary in a modern society. Then, there's the whole thing of banks being creative, misusing financial engineering, and then getting into trouble.

We also all know how the taxpayers are always bailing out the system and losing in the game, though the vast majority of those taxpayers have to scrape by on next to nothing in order to support the 'fat cat' (thanks, President Obama) lifestyle of the best and brightest.

What can be so hard about this stuff, folks? Where has gone common sense? Actually, in light of the current season, where has gone human decency in business?

Actually, in retrospect, we probably ought to have just nationalized these financial entities, straightened them out, and then re-started the game with better oversight. We'll be looking at that further, through time (hopefully, in a hypothetical sense only).

But, for now, let's just re-iterate some of the types of malfeasance that we see with banks. All of the below is paraphrasing but can be sourced easily by web searches.
  • Big pay and bonuses - especially is this grating when one entity (actually several) would have been bankrupt without our assistance. Why then the pay for them? Do they not know that both bond holders and equity stackholders have lost oodles due to their manipulations that aren't any better morally than old Madoff's fun and games?
  • Picking on the little folk - we all know about the $35 fine for a $10 overspending (those who push payday loans - $15 for $100 -- love this story). However, how about banks trying to rook widows ought of their due. What? Yes, manipulating the situation in order to keep money that may be in IRAs (and CDs) and that was left by the woman's husband for her.
  • Hovering like vultures (over the dead peasant) - okay, that animal provides a prime role in clean up, however when did the Insurance industry get so crazy as to allow banks to hold life policies (from the 02/09 time frame, needs to be updated) for someone who does not even work for them any longer? Of course, it's not just banks, as there seem to be many financial minds that want to pick the bones of the hapless dead.
  • Mortgage morphing - how about a bank (okay, a mortgage handler, yet of the same ilk) selling out to a 'shark' when the mortgagee is undergoing the trial by using a loophole in the Treasury wording? Here's an example. Home sold in the 300K. Now worth 99K. Sold for 78K to a shark who then is foreclosing. If the firm can take that loss, why not give the homeowner a new mortgage at an intermediate value? Like 150K, or so? Near zero says only close to win-win, but this would be a good example.

02/12/2013 -- We ought to have nationalized these guys' playground.

12/02/2010 -- Banking is a utility (but we also need plumbers - a few, not an army).

05/14/2010 -- Oh yes, smartest guys in the economy.

01/22/2010 -- Bankers IV. Plus, Lordly Prince.

12/21/2009 -- Never easy: Redos failing + underwater'd + some walk + should they? + can they?

Modified: 02/12/2013

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