Forum Post: Even Wall Street Insiders Hate Wall Street
Posted 12 years ago on Dec. 2, 2011, 8:58 a.m. EST by enough
(587)
This content is user submitted and not an official statement
"The financial industry has strayed far from being an intermediary between companies that want to raise capital so they can sell people things they want. Instead, it is a machine to enrich itself, fleecing customers and widening income inequality. When it goes off the rails, it impoverishes the rest of us. When the crises come, as they inevitably do, banks hold the economy hostage, warning that they will shoot us in the head if we don’t bail them out."
The banks are shaking us down. The government hands over our money to them when their greed gets them in trouble. No indictments. No jail time.
Why are there no arrests of those responsible for taking of houses from people that are up to date on their payments? Seems pretty clear to me how steep the battle for fairness and equality really is. If I invaded someone's home and told them to leave I would go to prison but bank CEOs get bonuses. Go figure.
Did that really happen? I'd like to read more about this, if you have the sources.
Here is just one example.
http://www.care2.com/causes/bank-of-america-settlement-for-wrongful-military-foreclosures.html
If you do a little investigation on google you will find many stories about wrongful foreclosures. But this story is just plain illegal that they foreclose on military personnel.
Where is the internal uprising in the banks? Where are the leaks?
Bank employees usually sign non-disclosure agreements and/or do not want to go public because of the notoriety. Nonetheless, your questions are good ones. You would think there would be a few of them who would come forward publicly and blow the lid off this mega-scandal or, at least, leak information to the media. For all we know many of them have already leaked off-the-record to the media, given the number of scathing articles that have been written on this subject. I suspect, if and when the Justice Department ever sees fit to prosecute the banksters, they would start rolling over on each other in order to get off with lighter sentences. After all, the banksters are just a bunch of sniveling crooks who think its okay to rip-off honest Americans with impunity but, once real pressure is applied, they will fold like a cheap suit. The problem, of course, is that the government will not indict any of them, not the least reason of which is that the government itself will be found culpable of aiding and abetting the banksters.
Firstly, I had hoped that after reading the article you wouldn't generalize all "banksters" as "sniveling crooks" the way some generalize the OWS as "hippies."
Second, it depends on what you mean by honest but we got into this mess also because of a majority of Americans who spent more than they could afford. Yes, the banks enabled them but they took them loans!
Third, what do you mean by the mega scandal? Because if you're talking about the greed and hustling for money, we all know that's happening. It's all in the open but that doesn't make it illegal. The problem is the regulators don't have clear guidelines on what they can and can't prosecute--and there is such a high bar to determine something as criminal. Moreover, the regulators are under-staffed and under-resourced to take on the big financial firms.
Lets get a few thing straight here, yes there was a speculative bubble in real estate started by Greenspan's lowering of interest rates, repeal of glass/Steagall and deregulation of derivatives. The speculation directly relates to lower interest rates because that lowers the monthly payment and causes the home price to rise just like during Reagan's real estate bubble.There was a big hard sell by banks because wall street had found a way to turn simple mortgages into complex bonds that hid the underlying risks. There were also massive side bets on those bonds and massive bank leverage 30/1. The total $ number of sub prime mortgages out there was 1.4 trillion, the problem and bailout due to the side bets totaled14 trillion, 10 times the mortgage problem alone. Wall street did drink their own Kool-aid as often happens in speculative bubbles, thus the fall of Lehman, Bear Stearns and Merrill Lynch. My question is how do we stop the next speculative bubble from taking down the whole economy? I think bringing back Glass/Steagall would be a great start.
Totally agree. The only explanation why Glass-Steagall hasn't been reinstated already is that most of our elected officials are in the tank for Wall Street. Main Street can go to hell as far as the politicians and bankers are concerned and that's why the popular unrest will not end until both of parties are held to account.
I think banks could have a brokerage accounts where customer could keep their 401k's and buy and sell stocks as part of their services, it's the risky derivative's trading that should not be allowed in our banking system. It puts our bank deposits at risk, our tax dollars and it diverts funds from main street to a bunch of high stakes gamblers who have no fear of loosing now that they've gotten access to the fed window.
Any arrangement whereby depositors' funds at banks can be commingled and put at risk through investment banking should be prohibited. Bankers should never again be allowed to bring down our economy when their bets go against them. Never again socialize their losses.
And regulate who can lend what, and how much, to who.
Exactly ! Are you old enough to remember LTCM the hedge fund that needed a fed bailout back in the late 90's ? http://en.wikipedia.org/wiki/Long-Term_Capital_Management Hedge funds now are allowed 15X leverage.( I still don't quite get who gives them that leverage) so lets take a simple oil futures contract. The contract is for 1000 barrels of oil at say $100 a barrel. That's 100 thousand dollar's worth of oil. The margin requirement for that contract is $7,425. The trader makes or looses the value of the1000 barrels. If oil goes up $2 a barrel for example the trader makes $2000 profit over that $7,425 they put up for the trade. The margin requirement in this example is at 13X leverage for the futures contract ,now remember they are already allowed 15X leverage. I haven't run a hedge fund so I'm guessing but I'd think that means they could be using more than 100X leverage to trade with I know that a credit default swap has more than 100X leverage for a worse case scenario. This is a lot of risk taking, and I really don't care if wall street banks want to lend each other money to play with that kind of risk. I don't want my bank doing it or my FDIC being tied to that or my countries federal reserve system being responsible for losses incurred by the risk takers.
Agreed!
Sorry, sniveling crooks principally applies to the executives who run bank operations. The hippies cannot hide behind law enforcement officials like the banksters can because #OWS doesn't pay-to-play. No one is saying anything about people who took on more mortgage than they could afford. Two wrongs do not make a right. People whose homes entered into foreclosure lost their homes and their credit. Bankers haven't lost anything yet; in fact, they have been rewarded with their freedom and their huge bonuses. There have been numerous posts on this forum and articles, if you care to check, on why what the bankers did is clearly criminal and why they should have been arrested and jailed a long time ago for criminal fraud. It appears criminal justice only applies to little people. The regulators are over-staffed with cronies from Wall Street. Regulators like the SEC make believe they are regulating the big banks and the big banks make believe they are being regulated. Anyone paying attention knows it is a sick joke.
OH HEY look what I found: http://dealbreaker.com/tag/layoffs/
Some bankers have lost their lifelong career and their fortune in the mess. See Lehman, see Bear Stearns.
What the bankers did were horrible and cruel and downright despicable, but most white collar crimes are CIVIL charges. Moreover, fraud is when they outright lied to people which most of them didn't. Some did. Most of the people who bought the instruments and saw it explode in their faces simply didn't read the 120923012-page prospectus and didn't do enough homework and didn't fucking understand the risk--when it's their JOB to assess risk. Here's looking at you, AIG.
TL;DR, yes it's a sick joke but if they didn't outright lie then it's not fraud, even if they buried the truth in page 9872.
Correction on the SEC. The regulators are generally people who want to but can't get into Wall Street, but when they get to work on the bigger regulations, Wall Street usually hires the negotiators because those people know the deets and can help them find loopholes. The SEC is as mad at Wall Street as the rest of us but they also want to be them, like some of us too if we're honest enough.
The bankers who caused this economic meltdown are as criminally culpable, if not more so, as the bankers who caused the S&L crisis of late 1980s and went to jail in large numbers. Yet, not one big bank executive has been indicted. There are no excuses. The government is in bed with the bankers. Why wouldn't government officials be in the tank considering the huge amount of political contributions they solicit and accept from Wall Street? Pay-to-play rules. Main Street is just background noise whose sole purpose is to be manipulated and exploited. The SEC couldn't hit its ass with either hand with the lights on and are less than useless. The SEC is harmful because it gives the false appearance of protecting investors when, in fact, they provide cover for the banksters. There will be no rest until Wall Street is held to account and that's what most people in this country want.
I don't know enough about the S&L crisis of the 80s to say. And I agree that the government is "in bed" with the bankers but what do you expect with the kind of money they wield? Lobbying is allowed by the same rule that allows us to speak out.
The SEC may give this false appearance of the stock market being a safe place for retail investors, just like Jim Cramer and Warren Buffett, but I wouldn't go so far as to call it harmful. Without the SEC and Wall Street's wariness of them, there would be more rampant cheating going on and the market will be even more unfair and inefficient.
Lastly, a minority of people may want to hold Wall Street accountable because it's the right thing to do, but the majority just wants to get even or get richer, which is very different.
Sorry, I cannot agree with your last point. The rule of law should apply to everyone, particularly when bankers through their unbridled greed, have inflicted so much pain on so many Americans. It is not a question of getting even, it is a question of even justice under the law.
That's the thing, if you can prove that what they did was criminal then this would be simple. Sure it sounds bad enough that it should be criminal, but the fact stands that making lots of money because they were the smartest guys in the room isn't a crime. Some things they did were civil offenses and they got a slap on the hand for it, which seems too small for the damage their recklessness caused, but until there's a regulation for it? It's not a crime.
Besides, the greed doesn't stop at Wall Street. Main Street was just as greedy during the boom years, so then the rule of law against greed should apply to everyone.
Nice try. This isn't even close. They committed crimes and they need to be held to account. If and when the bankers, who perpetrated these crimes, are arrested and placed on trial, you can represent them and separate them from the money in the process. Bring on the indictments and let a judge and jury decide whether they are guilty or innocent.
There's a few books I'd like to see opened up. Like where did all that money go when we gave Hank Paulson billions of "no questions asked" taxpayer dollars ? What CDS are still on our banks books and what other off balance sheet horrors are still hiding out there ? What's in the fed's books? I bet there's some shredders working overtime !
Even Wikileaks didn't publish the Bank of America files.
Will you read it if they did?
http://www.sec.gov/cgi-bin/browse-edgar?company=&match=&CIK=bac&filenum=&State=&Country=&SIC=&owner=exclude&Find=Find+Companies&action=getcompany
http://phx.corporate-ir.net/phoenix.zhtml?c=71595&p=irol-baselarchive
Good point. Perhaps, Wikileaks was bluffing or perhaps they are waiting for a more opportune time to release the information. Who knows.