Busted: Bankers and The Global Economy

January 27, 2011

U.S. Mortgage Crisis Tensions Build

A commission was appointed to look into misconduct regarding the national mortgage and banking crisis, signed into being by President Obama on May 20, 2009. The 10-member panel is after any person that may have violated the laws of the United States in relation to the crisis. The scuttlebutt is that a number of financial industry figures and corporations have been found lacking and are being referred for prosecution. All of this portends to make quite a bit of news in the near future.

The media has been working hard at divining any sources of information. The New York Times claims to have obtained a copy of a 576-page report, concluding that the financial disaster was avoidable while laying blame on federal regulators for the failure to act on knowledge of shoddy mortgage lending and reckless risk taking. Keep in mind that at least some of these shoddy practices continue behind the scenes, building on a proliferating number of foreclosures in the United States.

The idea that politicians hope to project is that the financial crisis is being resolved. The truth is that the national financial crisis is just getting underway.

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August 27, 2008

Desperate Bankers, Desperate Times

witless regulation

witless regulation

To listen to the tone of regulators and lawmakers, you would think that bankers would be on their best behavior, especially with all the arrests early this summer for mortgage and banking fraud. “Crackdown efforts” are apparently failing as desperate bankers continue to commit banking fraud to keep surviving.

Mortgage Asset Research Institute (MARI), the mortgage information gathering arm of information monger Choicepoint is reporting that mortgage fraud is on the rise despite record lows in the number of loans issued. This makes the situation all the more alarming.

The study found that the number of fraudulent loans issued during the first three months of 2008 skyrocketed 42% compared with the same period in 2007. This is true, even considering a much lower loan rate to consumers.

The credit histories of many applicants are no longer good enough to get approved for mortgages in the declining economy, except through the creativity of brokers and loan officers. An identity theft level of as much as 6 percent is also playing a role in the banking chicanery, as the criminal element gets involved in shady and predatory banking.

witless lawmakers

witless lawmakers

Apparently many bankers haven’t learned a thing. Why bother, especially with idea of massive bailout protection by the Federal Government. The number of arrests for banking fraud hasn’t been huge in the banking community itself and many bankers appear to be escaping the net of the Feds. With that in mind, many bankers are willing to keep up the faith in bad banking.

Despite the press, the reality is that the structure of the banking industry has changed not one whit. Commission and loan volume are still the hallmarks of the mortgage banking industry. Overwhelmed regulatory agencies and legal eagles aren’t making a dent in the huge problem. Apparently, the government isn’t up to the task.

If a private institution like Choicepoint can query and discern the truth behind a continued banking and mortgage debacle, surely a public institution like the Federal Government can move in and close down immoral banking with all the subpoena and legal power at its control. Instead, government regulators show that they don’t have the will to deal with the national blight effectively. Bankers are going to continue to practice what they have learned to depend on. The poison must be rooted out of the system in order for the system to continue. In the meantime, “Wild West Mortgage Banking” is on the rise, with a stupified witless government on hand, unwilling or unable to quickly take corrective action.

February 1, 2008

Make Bankers Pay?

Imagine a world that wasn’t threatened by greedy bankers and financial institutions. Imagine a world where financial institutions were actually responsible for what they did and could be held to a standard besides thievery. The repeated occurrences of financial tsunamis is a true indicator that bankers and financial institutions cannot be trusted and shouldn’t be.

brokenbank.jpgThe problem lies in the fact that the finance and banking industry is full of “commissioned salesmen” that have the promise of wealth in front of them every single day if they push more “banking products”. You’ve heard that power corrupts and that absolute power corrupts absolutely. For years, the banking system has been allowed to monitor itself without restraint with the blessing of the current administration. President Bush wanted the “free market” to work and the market certainly has to the embarassment of all. I remember back in 2004 when I heard President Bush glow with pride and confidence in the self-regulation of the finance industry. Remember “Bad Credit? No Problem!” “Zero Percent Down Payment!” just a few years ago? Enter the mortgage broker. Mortgage brokers occupy an unregulated niche of the lending world making a commission for every borrower they refer to a mortgage lender. These brokers became financial drug dealers as they farmed the nation for fresh prospects in a financial meat market.

Then we have world-wise bankers that create investment vehicles out of risky investments to remove the investments from the bank ledgers. Unfortunately, this strategy only conceals the risk for a time. When the money stops flowing, the game is up. Can you imagine having a license to steal and the guarantee that you will be bailed out by the government? There is little incentive for honesty or accountability when you are going to pay for that lack with funding from the Federal Reserve and further increase the national debt.

Wealthy banking chiefs have plundered the country while making millions for themselves as they bend the regulations and laws any way they are able. The fractional reserve that is required for banks is not enough capital to insure liquidity during downturns and reverses in the lending market. The finance industry is no longer interested in the long-term success of any venture, but rather the short-term commissions and profitability. The turnover of employees and managers within the industry virtually insures the worst kind of corruption. The rich commissions made from the “subprime mortgage bubble” have already been made and spent. The banking industry has been caught red-handed once again. What is really being done about it? ~ E. Manning

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