At Last A Little Good News About The Banksters.

“Fight Against Stupidity And Bureaucracy”

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Don’t get too excited, it is only a little, but it is good news.

In a recent ruling by British regulators, the top executives and managers at banks operating there (which is practically all the major banks) could have their bonuses clawed back for up to ten years after any finding of misconduct. It will also prohibit bonuses for nonexecutive directors and for the managers of companies that are receiving financial support from the government.

The move, which is long, long overdue and still does not go far enough, extends a seven-year clawback period that one regulator, the Prudential Regulation Authority, (part of the Bank of England), introduced for so-called variable pay (read ‘bonuses’) last year as part of tougher accountability rules.

The new rules announced by the authority, which is part of the Bank of England, and by another regulator, the Financial Conduct Authority, are the latest effort by financial regulators in Europe to hold the banksters accountable for improper actions that could play a role in precipitating future financial upheavals.

The regulators say they are trying to “embed an accountable culture” in the City of London, which actually means that the authorities realize that the banksters have learned nothing from their previous catastrophic frauds and thefts. They know when the chance arrives these greedy and immoral people will try to do it all again.

The new British rules, which apply to banks, building societies and investment firms regulated by the Prudential Regulation Authority, including British units of United States banks and other financial firms based outside Europe, mean that senior managers, risk managers and others at banks will also be asked to defer more of their variable pay for a longer period, making it easier for regulators and financial institutions to recover bonuses if misconduct is uncovered.

Other countries in Europe are also enacting new regulations for their banksters. Dutch lawmakers, for example, capped bonuses this year for employees in the banking, insurance and other finance sectors that limits variable pay to 20 percent of their fixed salaries. The Dutch have also banned bonuses for executives at bailed-out banks.

European rules already limit bankers’ bonuses to the equivalent of their annual salaries, or to two times their base salaries if the company’s shareholders approve it. But they know they are so greedy that they will try to find ways round that.

Already some banks are making moves to get round the limits by introducing role-based remuneration and other payments, so the regulators have their work cut out for them keeping a step ahead of the thieves.

What they really need to do is confiscate ALL their ill-gotten gains, impose severe additional financial penalties AND throw these criminals in jail – for a long time.

America, which always likes to consider itself as the leader of the world, should lead in this regard too. It would be better than starting another war in some far off God forsaken country.

Unfortunately I think it will be an equally long time, and a lot more frauds, before they get to that much needed stage.

And you can take that to the bank!

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The Greeks Can’t Afford To Bear Gifts These Days

“Fight Against Stupidity And Bureaucracy”

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I used to love listening to George W Bush when he talked about the ‘Grecians’. He was an idiot, but unlike some holders of his post I think he secretly knew it.

But, enough of that, let’s concentrate on the Grecians.

Their financial crisis is deepening and they’ve shut down all their banks. They’ve also imposed what are called ‘capital controls’, in other words what you can and cannot do with your own money –  assuming you could get to it in the first place.

Several Western countries, including the US and Britain, have issued travel warnings for Greece. Not a warning about the place being very dangerous, just a warning to have enough cash to be able to pay for things now that the banks are shut and presumably their ATMs as well.

This recent activity by the Greek government is because of the breakdown of talks between Athens and the European Union concerning the Grecians’ enormous debt that they clearly can’t afford to pay back. EU finance ministers rejected Athens’ request to prolong a financial assistance program.

It is also about a bit of timely government blackmail.

The Greek government has so far been unable to formulate any meaningful plans to curtail their spending significantly. The Greek people likewise have become used to living beyond their means and are reluctant to tighten their belts. The people are blaming the government and the government is blaming the people and nothing is really getting resolved.

So Greek Prime Minister, Alexis Tsipras, shut the banks and said they would stay shut until July 6, conveniently the day after a nationwide referendum on whether to accept the bailout terms proposed to Greece by its creditors.

Some commentators also think that the banks may have been shut because they don’t have enough cash left. The Greek people think the same and are panicking to get their money out of the banks. Runs on banks inevitably lead to disaster.

As Greece is part of the Euro zone it does not have control of its own monetary system. In other words, unlike America which can simply print more money if and when it needs it, the Grecians have to rely on the European Central Bank giving them cash. and it has refused to give them any more Euros.

That decision could prompt Greece to default which would probably lead to it being kicked out of the Euro zone and possibly out of the EU itself, which would be an historic first and something that would be done very reluctantly.

The rulers of the EU are in what is known as a ‘tight spot’. If they don’t take a tough line on the Grecians they can be sure other poor countries in the EU will follow suit. If they do take a tough line, then the upheaval will undoubted have an impact on the Euro currency.

A Greek default would also be another kick in the greedy teeth of the big financial institutions who own a good part of the massive €300 billion debt – you see there are positives in every situation if you look hard enough.

So it looks like emergency meetings and frantic discussions all over the place in Europe.

Despite the fact that Dubya is long gone from the political scene, I don’t think we’ve heard the last about the Grecians just yet.

By the way, Happy Independence Day to all my American visitors, bet you’re glad you’re not part of Europe these days.

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The Banksters Balls It Up Again!

“Fight Against Stupidity And Bureaucracy”

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I wrote a post a few weeks ago about the effect that low oil prices would have on the banks. (Click here if you want to read it.) and another the week before last about the reasons for the decline in the oil price (click here if you want to read that)

As they always do, the idiots that run these financial institutions saw something they thought was going to last forever and threw their money and their clients’ money at it without reason.

Nowhere was this type of recklessness more apparent than during the sub-prime fraud when the banksters lent money to people who clearly could not afford it and then sold on those loans as bogus ‘AAA’ securities to their wealthy customers and other buyers who mistakenly thought that the banks would not try to con them.

Well the banks have done more or less the same today.

Banks have been lending hand over fist to oil companies and those who service the energy sector. They have lent billions of dollars that  –  now the oil price has plummeted  –  has no chance of being paid back. They have underwritten bonds, lent money on expensive fracking operations and even financed the speculative building of homes for oil workers.

It was good while it lasted. But it didn’t last long!

In the 1980s something similar happened when energy prices also slumped. Texas was particularly hard hit and many banks either collapsed or had to be rescued because of their bad loans to oil companies and to local real estate developers speculating on the oil boom.

It’s going to happen again.

The bankster’s greed and stupidity means that their banks are going to take another financial hit, they are going to lose more of their customers’ money. Time for another round of big bonuses, if the last disaster is anything to go by!

Obviously they have been too stupid to learn from the past. Not surprising really.

But the big question is what will government do this time?

Has it learned anything?

Will the government let the banks suffer the consequences of their own stupidity, as they should have when the sub-prime catastrophe hit?

Or will they again use OUR money to bail the banks out, making some nonsense excuse that these companies “are too big to allow to go under”?

And we are talking about BIG banks. Wells Fargo, for example, a huge financial powerhouse, made approximately 15 percent of its investment banking revenue from the oil and gas industry during 2014. Another biggie, Citigroup, was much the same, with this sector accounting for around 12 percent.

And it’s not just in America that the pain is being felt this time.

In Canada, which largely avoided the worst of the sub-prime debacle, some of their leading banks could face an even sharper decline in revenues, so reliant is the whole country on the energy and resources sectors. One of Canada’s biggest banks, Scotiabank, derives approximately 35 percent of its investment banking revenue from oil and gas companies, according to 2014 figures.

Then there’s Wall Street.

Usually they make loans like these and sell them off to unsuspecting investors, however, with the very public fall in oil prices that everyone knows about, firms that financed energy deals are now finding it harder to offload this debt.

As an example of their problems, according to a recent NYT report, Morgan Stanley, was among a group of banks that made $850 million of loans to Vine Oil and Gas, an affiliate of Blackstone, a private equity firm. They are still trying to sell on that debt, but no one is buying. Goldman Sachs and UBS led a $220 million loan last year to the private equity firm Apollo Global Management to buy Express Energy Services. Not all that debt has been sold to other investors either so they are left holding that baby too.

That’s only loans to the oil companies and speculators. Some of the worst loans made by the banks have been to a multitude of companies that provide services to the oil industry. Some of these services companies, lured by the oil boom, are relatively new and/or small and probably under-capitalized so their debt burden can quickly drag them under when projected profits fail to materialize.

Naturally you can expect that the banksters will use all their lobbying and political power to make sure the government steps in again.

But the truth is the government really does not need to (they didn’t the last time either). The ‘to-big-to-fail’ banks may lose on their energy bets, but they will recoup a lot of that money from ordinary people like you and I.

Lower oil prices means that we need less cash to fill up our gas tanks or heat our homes, so the chances are we will feel a bit freer to use that credit card or maybe even take out a mortgage.

Of course, for the banksters that’s a slow way to riches. They want that business for sure, but they will also want the government to write off their other bad loans too.

Let’s see what happens this time.

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