Archive for the ‘Banks’ Category

“Fight Against Stupidity And Bureaucracy”

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Around this time last month I wrote a post about the explosion of sub-prime credit for people seeking automobile loans they couldn’t afford. Here’s a link if you missed it – click here. 

They say that if you don’t learn from what happened in the past you are doomed to repeat it. And it is clear the banksters have learned nothing, mainly because the government was not man enough to teach them a lesson when they almost brought the country to its knees. Their greed was excused and rewarded, not punished in any meaningful and lasting way.

So now we have the auto loans credit explosion, which is another mini sub-prime disaster in the making. And again it is being egged on by the stupidity and greed of Wall Street who just can’t pass on the chance to reap big profits from those people silly enough to take their high interest loans.

greedy banksters

This time, however, it turns out some of the people in positions of power are beginning to recognize that this is becoming a big problem.

The regulators and prosecutors are starting to worry about the level of lending abuses. Not only that but they are also recognizing the similarities with the home loans fiasco that eventually resulted in the financial crisis.

The Consumer Financial Protection Bureau has recently fined subprime auto lender First Investors Financial Services Group Inc. $2.75 million for knowingly providing inaccurate information to credit reporting agencies for at least three years. It was a “computer error” don’t you know, and, of course, they paid the fine but without admitting any liability – perish the thought!

It should come as no surprise that First Investors Financial Services Group is owned by a prominent New York private equity firm.

And like the mortgage sub-prime fraud, the banksters and other money men are not only screwing the people who take out the loans, but once again they are re-packaging them up as “good investments” for their richer clients too.

A United States attorney in Manhattan, has already begun an investigation into whether lenders have sold questionable auto-loan investments to investors, and has sent subpoenas to General Motors Financial and Santander Consumer USA, to try to find out whether the lenders fully disclosed to investors the creditworthiness of borrowers whose loans made up the complicated securities.

sub prime loans

Last time they got away with it. Will this time be any different? You have a lot more faith in the system than me if you think it will. All that is happening so far is tokenism. They need a lot more than a slap on the wrist.

In China or Vietnam and some other locations banksters committing fraud are stood up against a wall a shot. That’s maybe a little harsh, but at the very least some serious jail time is in order.

The fact is the banksters are doing it again because they think that they can get away with it again. And if they get away with it this time, then they’ll do it yet again in the future. All the time racking up fortunes for themselves and leaving the other poor sods, who didn’t know any better than to take out their loans or buy their toxic investments, a lot poorer.

the expendables

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“Fight Against Stupidity And Bureaucracy”

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We had it with the real estate market. Billions of dollars being lent to people who obviously couldn’t afford it.

We saw the trouble, hardship, misery and financial woes that were caused as credit dried up, real estate prices began to tumble, and bankruptcies and foreclosures increased.

And we know the damage it did to the economy when irresponsible banks and other lenders went bust and almost brought down the entire financial system. 

Smart people would learn from such a situation.

Smart people would never contemplate doing such a thing again.

But despite what they would like to have you believe, bankers are not smart people. They’re dumb and they are greedy, a deadly combination.

bad credit 100 percent financing

As a result of the financial crisis millions of Americans (and people in other countries too) have been left with poor credit scores. Yet remarkably they are now able to easily obtain auto loans from used-car dealers, including some who fabricate or ignore borrowers’ abilities to repay. Even if you are bankrupt or living only on social security, banks like Wells Fargo will lend you thousands of dollars to buy a used car.

It’s called the new sub-prime boom, because the lack of caution resembles the frenzied sub-prime mortgage market before its collapse. And it is already bringing misery to many people who have been suckered into taking out loans that they clearly could not afford.

Worse than that, these sub-prime auto loans often come with terms that take advantage of the most desperate, least financially sophisticated customers, with interest rates that can exceed 20 percent. And many of the loans can be at least twice the value of the second hand cars they are being used to purchase!

wall street car crash

This creates a vicious circle for some borrowers, who still owe money on a car that they are trading in when they purchase another one, meaning that the former debt is rolled over into the new loan and they end up, not just paying too much for their current car, but also continue to pay off the loan on their previous car that they don’t even have!

This is the way loan sharks operate. Eventually you end up borrowing your own money and paying them interest for the privilege!

This surge in sub-prime auto lending is being driven by some of the same dynamics that were at work in sub-prime mortgages. There is a veritable deluge of money pouring into sub-prime autos, as the high rates and steady profits of the loans attract investors.

And just as Wall Street stoked the boom in mortgages, some of the nation’s biggest banks and private equity firms are now feeding the growth in sub-prime auto loans by investing in lenders and making money available for loans.

To quote some of the figures, auto loans to people with bad credit have risen more than 130 percent in the five years since the immediate aftermath of the financial crisis, with roughly one in four new auto loans last year going to borrowers considered sub-prime, that is, people with credit scores at or below 640. Wells Fargo, mentioned earlier, made $7.8 billion in auto loans in the second quarter of this year, up 9 percent from a year earlier, and has at least $50 billion in auto loans on its books.

greedy bankers

Even worse, as was the case with sub-prime mortgages before the financial crisis, many sub-prime auto loans are being bundled up into complex bonds and sold as securities by banks to insurance companies, mutual funds and public pension funds. They are all scrambling for these, which in turn creates ever-greater demand for loans, and leads to the banks issuing more and more sub-prime credit.

Unbelievably it’s the same crooks doing exactly the same thing, including using incorrect information about borrowers’ income and employment, so that people who had lost their jobs, or were bankrupt, or living on Social Security, could qualify for loans that they could never afford.

carbuying credit report

Admittedly, the size of the sub-prime auto loan market is only a tiny fraction of the sub-prime mortgage market at its peak, and its implosion would not have the same far-reaching consequences.

For the banks the investors silly enough to buy their bonds, that is.

But the misery is just as great for the people who are suckered into accepting credit they cannot afford.

Illegal it may not be, but immoral it certainly is.

Political leaders who sit astride high horses and purport to be working on behalf of the ordinary people should be doing something about it.

But, as I’ve said before, don’t hold your breath!

obama used car salesman

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“Fight Against Stupidity And Bureaucracy”

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It’s an interesting question.

But worry not, I am not going to try to sell you an insurance policy nor even recommend one.

Quite the reverse in fact.

Many people have some kind of life insurance for the financial protection of their families if they should be unfortunate to pass away unexpectedly.

It is usually for enough money to pay off the mortgage with a little left over to provide some kind of income for the wife and kids.

At least that’s how it should be.

dead peasants indursnce

But there is a growing trend for employers to insure their employees. A nice gesture you might think at first. Until you find out that the beneficiary of the insurance would not be the survivors or estate of the insured employee, but the corporate pension plan!

It is unofficially known as “dead peasant” insurance, and hundreds of corporations have already taken out policies worth hundreds of billions of dollars, on thousands of employees, providing companies with a steady stream of income as current and former employees die  –  even decades after they have retired or left the company.

And new “dead peasant”policies worth at least $1 billion are being put in place every year!

Unsurprisingly the greedy money-grabbing banksters are especially fond of the practice. Bank of America’s policies have a cash surrender value of at least $17.6 billion; Wells Fargo’s at least $12.7 billion; and JPMorgan Chase at least $5 billion, according to filings with the Federal Financial Institutions Examination Council.

corporate greed

Of course the tax-men are to blame too – aren’t they always? – because so-called company-owned life insurance offers employers generous tax breaks. For example, company-paid premiums are tax-free, as are any investment returns on the policies and the death benefits eventually received. Although having said that it has to be admitted (grudgingly) that the I.R.S. has taken companies including Winn-Dixie and Camelot Music to court for using such policies as tax avoidance schemes.

Many people faced with a request from an employer to consent to such a policy are too afraid not to comply in case it affects their job or promotion prospects. They shouldn’t be because that would probably be illegal as well as unethical. Class-action lawsuits against several companies with such policies are already underway or have been settled. Several companies, including Walmart, settled the suits, paying millions to low-ranking employees who had been covered.

So if you are uncomfortable with the thought that your company might profit from your death, don’t sign up.

And as for the corporations? I’m as fond of making a few bucks as the next man, but you have to draw a line somewhere and I think corporations should be content with the contribution their employees make to their company profits when they are alive, instead of conniving to profit from their deaths also.

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“Fight Against Stupidity And Bureaucracy”

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I was sounding off a bit in last week’s Sunday Sermon about the state of things in Iraq, a mess created by blundering American and British intervention in a situation they did not, and still do not understand.

Last week I concentrated on the fact that ISIS, the al Qaeda splinter group – big name, ‘Islamic State of Iraq and Syria’ – has now seized large parts of northern Iraq, with consequent freeing of prisoners, fleeing of frightened former residents of that area and even unconfirmed reports of ‘mass beheadings’. Other reports of mass executions of official Iraqi army personnel seem to have been confirmed.

Presumably there will be worse to come.

Slaughter in IRAQ

All in the name of an Islamic State?

Well, hold on, maybe not just that.

It turns out that as Iraq descends into what will probably be a bloody civil war, the ISIS-al Qaeda forces have taken time to raid Mosul’s central bank and relieve it of some 500 billion Iraqi dinars, worth approximately $425 million.

Mosul is not only the largest city in northern Iraq, it is an oil hub at the vital intersection of Syria, Iraq and Turkey, thus providing rich pickings for the terrorists.

They also reportedly stole additional $ millions from a number of other banks across Mosul and what has only been quantified as a “large quantity of gold bullion.”

Others towns and cities, like Saddam Hussein’s old home town Tikrit, have suffered a similar fate.

As a result of all this George Bush / Tony Bliar created disaster, the ISIS/al Qaeda chief, Abu Bakr al-Baghdadi, a previously relatively unknown figure, is now the leader of perhaps the ‘world’s richest terror force’.

obama-funding-syrian-rebels-al-qaeda-benghazi

(Quick side note to President Obama – I’m sure he reads this blog :)

- Hi Barrack, you can stop using American taxpayers’ money

to fund these ISIS terrorists in Syria, they have enough money now.)

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In fact, to put the latest cash haul in perspective, at the time of the Sept. 11, 2001, attacks in the US, Al-Qaeda had been working with an operating budget of around $30 million (source ‘Council on Foreign Relations’), so even allowing for inflation they are substantially richer today, and by definition have it in their power to do much more damage not just in the Middle East region, but worldwide.

As regional analyst Brown Moses succinctly put it on Twitter, this recent haul of ill gotten gains will “buy a whole lot of Jihad……For example, with $425 million, ISIS could pay 60,000 fighters around $600 a month for a year.”

It might even do a lot more. ISIS has already attracted 12,000 militants from abroad, 3,000 of whom are from the West. With bought mercenaries on board things can only get worse.

Bush Blair whose Words of Mass Deception created needless death and destruction in Iraq

When Bush and Blair used Words of Mass Deception about Saddam Hussein having Weapons of Mass destruction as a bogus excuse to attack Iraq there were no terrorists and no terrorist threat from that country. Thanks to their lies, deceit and incompetence, there are now.

If this is an ‘improvement’ I can’t see it  –  can you?

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“Fight Against Stupidity And Bureaucracy”

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It’s Sunday so time for another Sunday Sermon.

There’s a famous quote from US President Abraham Lincoln that goes something like, “you can fool some of the people all of the time, and all of the people some of the time, but not all of the people all of the time”.

On the face of it Lincoln’s words seem rather clever and profound – and true. And so they are.

Up to a point.

But what Lincoln didn’t say (and he was a politician after all) is that you don’t have to fool ALL of the people ALL of the time.

What you have to do is fool them long enough to do what you need to do – for example, in the case of a politician, to get yourself elected.  

 

graph Miss Universe

Which brings me to statistics.

Because the best people in the world at playing with statistics are politicians and governments.

Some people believe everything they are told. Others call the figures governments produce ‘disingenuous’ which is being very kind. And some don’t believe a word or a number that they produce. (Take a wild guess at which camp I am in.)

Government statistical results are in effect lies. You can’t call them that – although I just did – because they can find figures to back up what they say, it’s just that they choose the figures that tell the story they want to promote and ignore all the rest that tell a different story.

For example, to get on to one of my favorite rant subjects, there is a thing which I am sure most of you have never heard of called the ‘Special Inspector General for the Troubled Asset Relief Program’ or ‘SIGTARP’ for short.

When the government is challenged about what is has been doing to bring to justice the banksters, who stole and recklessly gambled away our money, they can quote you a statistic or two saying that over the last few years, SIGTARP has put over 100 senior bank executives in jail, each of whom was convicted of stealing from taxpayers.

Although that fact is ‘technically’ or ‘statistically’ true, what they don’t tell you is that the people they have gone after and convicted are all small time crooks, guilty of small time frauds that are seldom above $1m or $1.5 million in value.

All the super crooks who embezzled hundreds of $ billions and almost brought down the entire financial system aren’t even being seriously pursued. More than six years into the SIGTARP investigations there are literally still hundreds of billions of outstanding ‘loans’, from banks including Citi, JP Morgan, Wells Fargo, and Bank of America.

They can quote figures all day long to try to mislead the people and make themselves look good, but a few small time crooks thrown in jail for stealing a million or two dollars here and there isn’t ever going to make much of a dent in the $ billions that were stolen. The politicians know that as well as anyone.

Perhaps Mark Twain’s “There are three kinds of lies: lies, damned lies, and statistics,” might have been a better quote!

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Many Happy Returns Webby!

Posted: May 10, 2014 in bankers, Business, Computers, Current Events
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“Fight Against Stupidity And Bureaucracy”

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World-Wide-Web

The World Wide Web, created by Sir Tim Berners-Lee, turned 25 years old this year, 2014.

There has never been anything like it before, certainly not as regards the impact it has made on society and the way we live our lives. Many of those changes are good, many are not so good and a few are downright annoying.

Here’s my take on some of them.

To concentrate on the good parts first, the one thing the www has done, for those who can use it effectively, is to give access to information that was previously only available to the elite few who managed to claw their way into the lofty heights of academia, or who worked in places where information was readily available. Now the same information is accessible at the touch of a button to anyone and everyone with a smart phone, tablet or computer.

Another benefit, in my view anyway, is that is has sent a massive wake-up call to telephone providers world wide, many of whom were fast asleep, content to rake in healthy profits from antiquated systems. No longer do we have to settle for slow and temperamental data transfer lines. Nowadays, particularly in the last few years, people are demanding systems that can cope with download streams in the gigabyte range. If you are old enough to remember the first modems you will know you wasted too much of your life trying to download at 12Kb/sec., sometimes less.

Freedom is also a welcome by-product of the World Wide Web.

The freedom to work in any country in the world, from virtually any country in the world is one big plus – it is for me anyhow. Another one I particularly like is the freedom to watch TV programs that I like, when I like, no longer tied to the schedules of some brainless bean-counter working for a broadcasting company. And the freedom to have your say on things as and when the mood takes you – they call that blogging don’t you know! – is also a great advantage to the ordinary person.

www words

As is the freedom to disseminate information across the globe instantly, as Mr Snowden ably demonstrated, although I would hazard a guess that the powers that be would not agree with me on that one.

Indeed, this is the one aspect of the www that really bothers big brother.

China for example is one country where access is controlled by the state. Coincidentally this year also marks the anniversary of the Tiananmen Square massacre, you’ll find articles about that if you do a search, but probably not in China. They get away with it because they are not a democracy and do not pretend to be one.

In other countries, like the good old Land Of The (Not So) Free (Anymore)), the powers still like to con their people into believing that they are living in a democratic nation and that the people have the power to vote for this or that. But think for a moment, when was the last time you got to vote on whether to start a war, or whether to give $billions of your money to the greedy banksters to pay themselves huge bonuses and gamble away the rest?

It is because they need to keep the pretence of democracy going, that they do not yet have the confidence to start overtly censoring the internet. But they do all they can to snoop on what people are reading, or writing, or looking at.

This is where the freedom the www and associated technology provides can also be a negative, when it is used by governments to surveil us and record every piece of data they can. If they were doing this selectively and targeting terrorists and criminals no one would be too worried. But they are doing it to all of us, guilty and innocent alike.

big brother is watching

They are also doing everything they can think of to impose taxes on internet commerce – of course they have to coz they’re stoney broke.

The www has revolutionized business practices and created all sorts of new commerce opportunities, Amazon perhaps being the best example of a company that has gone from nothing to a multi-billion dollar business in just a few years.

Communication and social interaction are also areas where the www has liberated the ordinary person – first with email and more recently with social media. In the near future expect to see social media expanding to become much more than individual platforms such as Facebook or Twitter. We are already seeing many new applications that are allowing people to communicate more widely, more easily and more often.

social media

Another negative is that the World Wide Web has unwittingly facilitated the proliferation of pornography and violence, and is teaching a generation of morons all the wrong things. Things that will ensure they become a burden on society, not an asset.

And it has also opened a whole new environment in which criminals can operate. Millions of dollars are being stolen every day through scams, confidence tricks and outright theft.

You could say (and I frequently do) that people dumb enough to fall for these scams deserve all they get, or all they lose, is perhaps a better way of putting it. You know, the idiots who believe they really have won a lottery they didn’t buy a ticket for, or who think that Dr Umbungo Watanga from Nigeria is being truthful when he tells them that someone they never heard of has left them $25 million and all they need to do is send all their personal details and a few thousand dollars to unlock the fortune that awaits them. There really is one born every minute it seems!

All that said, and twenty-five years on, the www is still in its infancy. We have come a long way in the past 25 years, but we have really only scratched the surface as regards what the web has the potential to do to further improve our daily lives.

Where the vision to develop the www will come from in anyone’s guess. The only thing we know for sure is that the initiative won’t come from governments or their bureaucratic servants, simply because the people we elect to those positions do not have the required intelligence.

So its up to you. If you have any great ideas you want to share, send me an email.

Sir Tim Berners-Lee

Sir Tim Berners-Lee, the man who created the World Wide Web.

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“Fight Against Stupidity And Bureaucracy”

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The Sunday Sermon

Bankster pyramid of greed and corruption

They say rats squeal when they are being hunted and nearing capture and they’re right.

None more so at present than the rat banksters and nowhere more so than on Wall Street. If you listen carefully you can hear them squeal even above the noise of the New York traffic.

And the reason for the squealing?

Only that federal authorities are at long last closing in on some of the worst culprits whose greed and contempt for their clients caused the financial crisis we have all be suffering from during the past decade and more.

But before you start clapping the feds on the back, let me say it is too little and too late. None of the banksters are likely to face jail sentences which is what they deserve for their crimes against the people.

Foreclosure-Homes

However, it is something and these days that’s about the best you can hope for.

In terms of the numbers, the banksters are facing fines of something in the region of $63 billion.

Wow, listen to them squeal!

It seems like a lot of money – and it is a lot of money, it could keep all of us blogging away happily for the rest of our lives and then some. But put in the context of what the banksters defrauded their clients out of and what they lost it is just a pittance.

Putting the figures into context, J P Morgan Chase’s $13 billion mortgage settlement in November was probably some kind of record, but they issued more than $460 billion in mortgage securities.

To illustrate it in numbers people can relate to better, that’s like a thief stealing a thousand dollars from you and getting away with it if he paid you back $28.

I bet the amount of the settlement doesn’t seem so big now. Nor is it commensurate with the size of the crime. But that’s what they’ll probably get away with. And they’re not even grateful for this small smack on the wrist, hence all the squealing.

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