+ anyone for a spot of money laundering? I do recall there have been one or two cases that have come to light.

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Dave

I think there are examples of bad people in every walk of life and profession.

But more so in banking and finance than possibly any other.

Probably to do with the type of people who go into the industry, the opportunity and the culture of greed, bonuses and lack of moral, ethical leadership at the top. This still does not mean everyone in the field is a wrong 'un. But a lot are.

I make no judgement about Colebatch or any other individual when I say this, unless they have been dishonest or unethical - some will have been prosecuted, some not - and only they will know.

Just sayin', that's all.

You can pick selective events that occur in any set of organisations and then use that to extrapolate that they and everyone who works in those industries is defined by those events. Doesn't make it so.

Take another set of organisations that have garner much negative press of late, churches, judging by the press you would think everyone who works in churches are either pedophiles or covering for pedophiles. This ignores the extensive not for profit work they do in the welfare sector. In my country (Australia) the welfare sector would collapse under the weight of demand if weren't for churches the money and volunteer workers that they deliver.

The crash in the housing market wasn't caused by bankers, it was created by everyday people overpaying for houses. The lending practices that encouraged this were an initiative of the US government to get people into their own houses.

BTW the person who I heard predicting that it would all go pear shaped (and actually gave a specific date) was - wait for it - a banker!

Thats just an incredible statement.

How can you possibly justify that?

__________________

I'd counter that the continuing sexual abuse scandals within the Catholic church worldwide indicates certain fundamental flaws in that institution, as well as in an unacceptably large proportion of individuals among its hierarchy. This goes beyond the actions of just a few.

I'm all in favor of taking personal responsibility. When I took a mortgage at one of the now-defunct giant banks at the heart of the mortgage implosion (chosen because I had a previous mortgage with them prior to their decision to concentrate on re-selling packaged sub-prime loans by deceit), they insisted that I accept highly-deceptive, potentially very destructive loan terms. In other words, they tried their best to deceive me. They then packaged this loan with other of a substantially lesser quality, assigned an inaccurate risk rating to the package, and sold them under even more deceptive terms to investors. There is no mystery about any of this--it's a matter of public record.

In other words, they engaged in fraud at multiple levels--from the executives who adopted that strategy all the way down to the mortgage writer in the local office who tried his best to hide the truth about his product, then admitted that this was all he was now permitted to offer to me. The scale of the fraud at that specific bank ran to many billions of dollars. I don't tar all "bankers" with the same brush, but it seems to me that much of the US banking system has been run similarly, to the detriment of most of the world.

Now, why do you suppose people might be peeved at "bankers?" Why would they be irritated by actions and attitudes within much of the church hierarchy? Do these responses seem unreasonable, in light of recent events (which continue to unfold and most of which presumably remain hidden)?

Railing about the fact that life as we know it would be impossible were it not for "bankers" misses the point. Life as we know it would probably be impossible were it not for scientists, engineers, mathematicians, teachers, farmers, heavy equipment operators, politicians, lawyers and (yes) soldiers as well. That doesn't mean we should maintain a grateful silence in response to institutionalized misbehavior by any of them.

IMHO, of course.

Mark

Far be it from me to cast aspersions about someone I don't know a thing about, then again it just goes to show the infinite depth of your obvious inability to ........ get the big picture! Ever been told to relax your sphincter from the blindingly obvious choke hold it has around your neck ? I wont hold my breath but ........ try decipher some of the following!

The Many Ways Banks Commit Criminal Fraud | Zero Hedge

The Many Ways Banks Commit Criminal Fraud



Submitted by George Washington on 07/03/2012 20:57 -0400




The Libor scandal seems to be waking people up to manipulation and fraud by the big banks. There are many other types of fraud they've engaged in as well ... Here is a partial list:

• Committing massive and pervasive fraud both when they initiated mortgage loans and when they foreclosed on them (and see this)

• Pledging the same mortgage multiple times to different buyers. See this, this, this, this and this

• Cheating homeowners - especially veterans - from laws meant to protect people from unfair foreclosure

• Engaging in mafia-style big-rigging fraud against local governments. See this, this and this

• Cooking their books

• Bribing and bullying ratings agencies to inflate ratings on their risky investments

• Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this and this

• Engaging in unlawful "frontrunning" to manipulate markets. See this, this, this, this, this and this

• Engaging in unlawful "Wash Trades" to manipulate asset prices. See this, this and this

• Otherwise manipulating markets. And see this

• Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here andhere

• Participating in various Ponzi schemes. See this, this and this

• Laundering money for drug cartels. See this, this and this (indeed, drug dealers kept the banking system afloat during the depths of the 2008 financial crisis)

• Owning and largely running the Federal Reserve ... which is itself arguably a Ponzi scheme

But at least the big banks do good things for society, like loaning money to Main Street, right? Actually:

• The big banks no longer do very much traditional banking. Most of their business is from financial speculation. For example, less than 10% of Bank of America’s assets come from traditional banking deposits. Instead, they are mainly engaged in financial speculation and derivatives. (and see this)

• The big banks have slashed lending since they were bailed out by taxpayers ... while smaller banks have increased lending. See this, this and this

• A huge portion of the banks' profits comes from taxpayer bailouts. For example, 77% of JP Morgan’s net income comes from taxpayer subsidies

• The big banks are literally killing the economy ... and waging war on the people of the world

• And our democracy and republican form of government as well

See Drwnite's comprehensive answer & try not to take this discussion personally because it is certainly not meant as a personal slight on you. I have heard of some heart warming stories of bankers such as the one that spent his money on opening an orphanage in India - there just seem to be a lot more about that are blaggards and rotters.

Mark, this is not meant as a criticism--your post is a good addition to this thread--your post brought raised a couple of interesting points (to me): First, what do you mean by your bank "insisted" that you accept disadvantageous loan terms? Why didn't you simply go to another bank, there is no shortage? Second, from your very brief explanation above, it sounds like you chose the bank that you dealt with because it was convenient for you (you had a previous mortgage with them). Once you realized that they were trying to deceive you, did you continue doing business with them, and if so, why? It seems to me that consumers are responsible for determining what is in their best interest, and for not dealing with mortgage lenders, or anyone else, once they've demonstrated that they are trying to hide the ball.

DocSherlock, drwnite, I don't think anyone is denying that there are some bad apples among the banking lot (as in all walks of life) and that the financial system as a whole is far from perfect.

But that doesn't even come close to meaning that there are more bad people in banking and finance than other walks of life. Take your pick--used car salesmen, building contractors, taxi drivers, lawyers, car mechanics, clergy, government officials, etc etc. Don't know about you, but I've encountered plenty of people in these fields that were hardly paragons of virtue, as well as many that were. Bankers just generate more headlines, and indeed bad bankers probably have more impact on the national (international) economy than your average bad plumber, but that by no means demonstrates that there are more bad people among banking than other spheres.

I have worked in Banking, Construction and Technology Industries.

The biggest fraud I witnessed in my time was in the construction industry, should I therefore draw the conclusion that construction industry workers has more bad eggs than any other? Of course not.

Saying bankers have more bad eggs based on Libor thing or Bernie Madoff is the same thing. Remember the LIBOR thing involved a handful of individuals as did Bernie Madoff. I haven't gone through everything Drwnite posted but most of it is rubbish or acts of individuals. Millons of people word wide work in this sector.

Saying CDOs were some sort gross corporate fraud is wrong - I would say it was a too smart by half way of minimising risk, like many things that are too smart by half it didn't quite work out, bit like traction control on dirt bikes, sounds great, until you have to power up a loose hill and the traction control cuts the power.

I just don't buy that these were created to expressly rip investors off, guess what big companies do dumb things.
You can either choose to believe:
- that CDOs were created as part of vast conspiracy, involving boards, CEOs, securities dealers etc all working together to create financial instruments that were designed to fail and sold to investor on this basis.
- or that CDOs were created to repackage debt to better manage default risks, but actually when combined with lax lending practices had the reverse effect.

The first an act of maliciousness on a grand scale, the second carelessness.

To me the second is much easier to believe.

Bank bashing is just lazy.

Want to see a world without banks, look at the former Soviet Union, they had "scientists, engineers, mathematicians, teachers, farmers, heavy equipment operators, politicians, lawyers and (yes) soldiers", in some cases the best in the world, hardly led world living standards (or mostly innovation). Banks and the things the facilitate is the difference.


Anyway, Walter rather than arguing about banking, I believe you have a ride report to complete.

Good Lord !

"A foolish consistency is the hobgoblin of a small mind."

It's difficult to grasp ANY picture when citing or supporting so many arguments that are so FACTUALLY wrong . . . that's it's nearly embarrassing to point it out.

When this sort of thing happened in my graduate classes or in my own training sessions I remember the phrase - "I'm sorry, you've apparently registered for the wrong class. You don't belong here . . . "

Customer deposits are NOT assets ! The only banks which hold a majority of liabilities in customer deposits are either in non-capitalist societies, narco-democracies, or . . . otherwise unsophisticated financial systems . . . which I'm sure we can agree have fewer PUBLIC scandals (about anything). And therefore, if a bank-basher, must be a better place to live, work be educated and seek health care.

Or not.

__________________
Orange, it's the new black.

I was involved in a very time-sensitive purchase at the time, and needed to close quickly. I didn't want to mess around lining up another loan. However, I did rearrange my financial affairs to allow me to get out from under that mortgage quickly, and I stopped working with that bank completely.

I'm a fairly sophisticated consumer of mortgages, and I read the fine print carefully. Had I been otherwise--or had I fewer options--I might have been taken in. Make no mistake about it: that bank was taking advantage of anyone not able to understand, and they were doing it on purpose. They were then colluding with rating companies to defraud the buyers of mortgage-backed securities. Further, a great many banks were doing the same or worse, all across the USA.

Mark

I have little doubt that this is true, although part of the problem (and I'm not referring to you here) was that many of the borrowers either had no idea what they were signing, or were themselves guilty of overstating their incomes or choosing mortgages (interest only, etc.) that they should not have expected to be able to pay. In the big picture, many of the problems only achieved the scale that they did because of this behavior by consumers, so "they" also bear some responsibility.

And of course it is not only mortgages and house buyers; I have a friend, a finance professional BTW, that recently invested a considerable sum into a complex life insurance product. When he tried to withdraw some funds, he found out that if he did so he would lose 80% of his investment due to pre-paid admin fees or something, which apparently the agent did not disclose.

.............. let the buyer beware.

I would like to think that this thread will be of some use to the youthful individuals among us - including those who come to view this in the future (when I am long dead and buried) in order to better understand what they are not taught in their main stream education.

I believe that it is still too early to say if the collaterised debt obligations (CDO) have been as you prefer to view it; to give the benefit of the doubt to that system.
For me, the jury is still out.

Maybe you could elaborate on the "second half" of the circumstances that Markharf suffered under - the credit default swaps that underpinned the risk taking of the CDOs?

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Dave

Partially true. You can demand something bank owes you something (ie the money you deposited), or you can demand something from banks if they broke the law. Best to stay away from absolutes in my opinion as it forces you to really consider what is being said.

However, answering to the spirit of your statement: citizens most certainly have the right to demand better banks/ banking practices. They do so all the time, albeit indirectly, at the legislative level. People even organize to 'demand', directly or indirectly, that the workers of particular industries get paid less or more. Happens all the time in various societies. Dunno if it'll get your toilet fixed any cheaper. I guess what I'm saying is don't give up hope.

Also, as you pointed out, banks are highly important to society. Hence, I think most citizens are obliged to demand ever better banks. How to prevent the populace from shooting themselves in the foot via over-regulation is another issue altogether.

Stating that I am entitled to 'start a better bank' is a non-sequitur. I'm not saying that I could do better, or that new banks should be started. There are better ways of fixing the problems using existing banks. Additionally, profitable is not the same as ethical, beneficial to society, or the conforming to the desires of the people. There is loads to be said about this.

To what extent does the developed world benefit from more capital/ capitalism? For example, inflation adjusted GDP per-capita in the US has tripled in the past 50 years, but results from life satisfaction surveys remain flat over the same time period. Think about that. Fifty years of material and capitol development for no significant increase in subjective well being.


How much regulation should there be?
What aspects of banking should be subject to regulation and by whom?
Should the HUBB be demanding a seat at the next G20 conference?

all good questions.