About bloody time, the idiot!

I remember when the commercial bankers who used to post in this thread argued that commercial banks operated for the good of the public.

They sold too many Residential Mortgaged Backed Securities and bought the economy down. But earned massive fees & bonuses for doing so.

Then they received billions (trillions?) in taxpayers' hard earned to bail them out.

It's now emerging that the commercial banks gamed Liebor (whilst they were the recipients of the biggest benefit scrounge of history). But earned massive fees & bonuses for doing so. It's starting with Barclays. They were all in on it. The next news items will be how the Commercial Banks colluded to manipulate Liebor (the rates the 99% pay on our loans, credit cards and mortgages) amongst themselves. The Commercial Banking Oligopoly operates to earn fees and bonuses.. The really astonishing thing (to those who somehow thought that Commercial Banking was honourable or worthwhile) is that they manipulated Liebor to game the same benefits they scrounged off the world's governments.

It's also now emerging (in the UK) how the Commercial Banks forced their clients to bet on Interest Rates Derivatives (taking the other side of the Commercial Banks' bets of course) in order to get their loans.

I can go on.

Now the veil is being lifted (of the net benefits to society of commercial banking), to those of you who work in the industry, is it really worth it? Why spend your life doing these things?

It's sad that the Commercial Banks have lured the best and the brightest away from doing anything worthwhile or productive into shuffling paper to the detriment of society.

You must see the damage that your companies are doing, at a crucial point in the decline of the west.

Please consider doing something, if not beneficial to other people, then at least less harmful. e.g. Hedge funds obviously use the same insider knowledge to some extent, but at least they are not scrounging taxpayers' earnings, and do some work towards relatively honest price discovery.

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Why must we spend decades of our lives paying the bankers' interest on [debt|money|credit] that they magicked out of nothing but thin air?

Uh-oh Carver....
The damage theses banks did in manipulating the LIBOR rates is soort of a mixed blessing, especially when you look at it from the perspective of a home or business owner.
The banks colluded to keep the rates artficially *low* in order to avoid being singled out as being in trouble.... which then translated in to lower rates for thousands of mortgages or business lines of credit.

No - the worst part of this mess is that it underscores the fact that a big part of these markets is rigged because of enormous vested interests. What worries me most is that the man in the street pays lip service only to the money, so he (she) is loathe to take a contra stance vs. the investment banking system.

Cheers

Paul

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For most people, high interest rates are far more preferable to low ones. Low interest rates only benefit people who are overextending themselves or engaging in overly risky behaviours.

Unreasonably low interest rates - that is, the unrealistically low pricing of debt - are one of the big reasons the world has dug itself into this massive hole.

They do it because society rewards them for turning off their moral compass.

And they're greedy.

Some are trying to merely pay the rent, but even for them there are alternatives without feeding the machine. The rest may well gain intellectual stimulation and even identify themselves through their work, but the glittering palaces of corporate delight will continue to attract sociopaths and you're generally judged by the company you keep.

I am totally with you when we're talking about the speculators and those who try to scalp their way by use of excessive leverage. I firmly believe that in the wake of the '08 crash, the regulators and the general public should have indeed forced the whole financial system to renounce to the practice of diving into markets - the periphery EU sovereign bonds are *the* perfect example (!) - with 20x 30x leverage. But had the markets had their true way of pricing LIBOR rates, we would have seen them skyrocket. Many homeowners in good standing would have had problems as a result, whereas the rentiers would have earned more.... It's really a complicated mess, and probably the only way to understand who benefitted (in economic terms) and who lost out would be to count and divide the outstanding libor-limked products (e.g. mortgages, revolving lines of credit, libor-linked structured products, etc). I don't think it's really feasible....it would probably take too much time and effort (remember, the System hardly seems capable of tracing where the $$ of the MF Global default went to!).
In the meantime we're at the mercy of a banking system that's holding on to the funds that should be used to alleviate the credit crunch that afflicts the real economy...That IS where they are deleveraging!!

(ok...rant mode turned off now)

Paul

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It's very easy to understand who benefited. Follow the money. The people who benefited were the individual traders who made massive bonuses first selling RMBS, then gaming liebor to increase their personal bonuses.

They manipulated Liebor as it suited them. Both too high and too low at times. You do have a point that they mostly manipulated it too low, but they did this to help their own positions, and those of their employers. Further encouraging the 99% to take on more debt isn't any better than manipulting Liebor the other way in the long term.

Lowering Liebor actually benefits the commercials, as the spread between Liebor and retail rates is scooped up by the oligopolists, allowed by the central banks to enable recapitalisation.

The really appalling thing is that the fraudsters who did this have got away scot free. The Barclays fines (and the many that will follow) only hurt the shareholders and Barclays retail customers (who will pay in the end through higher fees and the spread between liebor and retail overdrafts, credit cards and mortgages).

The fraudster traders in the commercial banks are directly responsible for the current mess, and should pay for it personally through clawbacks of their ill-gotten bonuses and by going to prison.

But the commercials induce and enforce lax regulation through the (commercial bank sourced) government advisors, JPM directorships for people like Blair and threats to abscond any jurisdiction that tries to make their traders personally accountable.

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Why must we spend decades of our lives paying the bankers' interest on [debt|money|credit] that they magicked out of nothing but thin air?

And then they went quiet.

My arguments on this discussion thread have been as follows:

(1) The Commercial Bankers (en masse) created this crisis through overselling Residential Mortgage Backed Securities (in order to own bonuses for the few)
(2) The Commercial Banking oligopoly are the biggest benefit scroungers in all of history (to get the 99.999999% to pay for the losses from (1) with their taxes)
(3) The Commercial Banks did this through: (virtually all government banking advisors being ex-commercial bankers, huge payoffs for the 'right' politicians, armageddon-is-here threats if their own trades played out to the end, etc, etc, etc.)
(4) It has now emerged that many Commercial Banks use their oligopolistic powers to manipulate markets in order to help them to do (2) and recover from (1).

I'd welcome any discussion on the above points.

The really sad thing is that the Commercial Banking oligopoly has lured the brightest & best away from worthwhile endeavors. How will history remember the Bob Diamonds vs. Tim Berners Lee and Peter Higgs? Those of you in CH who work for the Commercial Banks are the brightest and the best in the west. That's why *they* hired you.

Did you see much of these bonuses?

Please consider walking away, and going on to do something that will use your undoubted talents to do something useful, and change the world for the better this time around.

Or at least, please consider working for a hedge fund, who live or die in the open, (relatively) fair and unbacked market that capitalism is supposed to be about.

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Why must we spend decades of our lives paying the bankers' interest on [debt|money|credit] that they magicked out of nothing but thin air?

Seems pretty clear to me that the banking system has failed miserably. Without state support (privatise the profits, socialise the losses) much of the crumbling edifice would have collapsed in 2008 and ever since then it has been on life support, with the economy limping along as a result.

It would also appear that aside from the whole debacle over securitization of debt (a process designed to get around rules which made the system safer), many banks have been participating in market rigging and ripping their customers off.

We certainly need A banking system, what we don't need is THIS one. Time to let free market capitalism take its course - purge the malinvestment, let the fools who stupidly extended credit go bust and sell off their assets at a discount to those who can hopefully do a better job.

Unfortunately, this is also going to be accompanied by a very nasty economic shock which has been kicked down the line since 2008 by a series of policies designed to keep plates spinning at the cost of making the eventual outcome worse somewhere in the future. But hey, that's what politicians specialise at.

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Member #14!

You're right that we need a better banking system, but it's too much of a free market that has got us where we are today.

We first need to enforce the Glass-Steagall type rules to split out investment banking from retail and wealth management style banking. Only then can we start talking about letting banks go to the wall and even then it should only be IB style banks that should be let go.

The little RBS blip, should be enough to give us a picture of what can happen when major retails banks start to go down.

Hopefully this will happen now. The artificial internal firewalls have now been revealed for what they are - virtually nonexistant. The Barclays board is now talking about spinning off BarCap as what it is; a hedge fund.

The UK has been the leader in letting-the-commercial-bankers-do-whatever-they-feel-like. Gordon Brown, advised by the likes of former UK head of Goldman Sachs Gavin Davies, led the regulatory dash for the bottom. The US had to compete by repealing Glass-Steagal.

It is no coincidence that the Lehmans, AIG, Bear Stearns & Barclays trades that largely contributed to their downfall happened in London. The Commercials follow the path of least resistance to insane trades. That was London.

Gordon Brown seems to have been a well meaning patsy - perhaps the Commercial Bankers don't take advantage to the same extent of fellow Bullingdon Club members - their reunions with David & George wouldn't be so much fun.

The only answer is to completely separate the 'casino' or hedge fund type parts of the Commercials from the retail parts of their operations.

A complete separation, so that when the hedge funds such as BarCap erroneously stick all their chips on red or black, then they can bear the consequences of their own trades without bringing down the financial system; if they go horribly wrong, go bust - rather than scrounging off the taxpayer to make good their bonuses.

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Why must we spend decades of our lives paying the bankers' interest on [debt|money|credit] that they magicked out of nothing but thin air?

morgan Stanley are forecasting even larger fines for UBS & CS re Libor than Barclays paid

http://www.reuters.com/article/2012/...86C16H20120714

Is there anything that the commercial banks didn't rig, anyone they didn't rip off?

Since you ask, about HSBC from today's Guardian

"Lawmakers hammered the British-based bank over the scandal, demanding to know how and why its affiliates had exposed it to the proceeds of drug trafficking and terrorist financing in a "pervasively polluted" culture that persisted for years.
A report compiled for the committee detailed how HSBC's subsidiaries transported billions of dollars of cash in armoured vehicles, cleared suspicious travellers' cheques worth billions, and allowed Mexican drug lords buy to planes with money laundered through Cayman Islands accounts.
Other subsidiaries moved money from Iran, Syria and other countries on US sanctions lists, and helped a Saudi bank linked to al-Qaida to shift money to the US."

Finance industry's multimillion-pound lobbying budget revealed
Investigation shows sector spent £92m in 2011 to secure favourable policy changes as part of 'economic war of attrition'

http://www.guardian.co.uk/politics/2...udget-revealed

&
"Standard Chartered named in scathing report by regulators today which claims it helped Iranian clients skirt US financial sanctions"
Alleged to be only around $250Bn....

& last night
"Barclays took another major hit to its already bruised reputation last night when a US regulator threatened the bank with a record $470m (£290m) penalty for allegations that it attempted to manipulate the US electricity market."

& it looks like the bill for British banks for mis-selling payment protection insurance will reach at least £10 Bn

Lovely people, big banks

Don't worry about them. They all have FPI (Fine protection).

Also known as the taxpayers.

UBS - U Been Sacked!

& meanwhile in Afghanistan, from the Telegraph;
Kabul Bank 'diverted £540 million to group of 12 in massive fraud'

Afghanistan's biggest private bank was a massive fraud scheme from its founding, with £540 million ($861 million) diverted to a clique of beneficiaries including the president's brother, a British-funded audit has found.