Busted: Bankers and The Global Economy

March 6, 2009

Arguing About Unemployment

Filed under: economy, politics, security — Tags: , , , , , , , , , , , — digitaleconomy @ 8:41 am

unemployment-adsYes, the job scene is bad for America. 650,000 jobs were lost in February alone. The economy is in a tailspin and confidence is low, if not non-existent. The pundits and experts continually want to argue about the measuring stick. As a writer, I have done the same. The truth can be an annoying reality.

Read commentary on MSNBC

January 9, 2009

A TARP Bailout Program for Consumers?

furrowed political brows

furrowed political brows

The failed U.S. TARP bailout program legislated by the EESA last year has been ungoing review by the Obama Ascension Team and the likes of Treasury Secretary-elect Timothy Geithner, former Fed member and sycophant. Furrowed brows and eye bags have become a way of life in politics. Managing the program has become an impossible and failed task. President Obama will be responsible for determining what to do with the remaining unspent TARP funds. The Obama Team is examining ways to expand the government program to generate loans to municipalities, small businesses and consumers.

Many in Congress seem to agree that the existing government program should be revamped rather than refunded. Many elected officials agree that the remaining money should be used to stop the national foreclosure crisis instead of a continuation of current policy where Wall Street firms receive continued assistance to pay bonuses to executives and dividends to shareholders as promoted by the Bush administration.

monopoly-moneyAs if the U.S. needs yet more government agencies, Geithner is considering creating a new bureau within Treasury to oversee the existing TARP funds. Adding oversight personnel to government measures has proved to be a failed premise, especially since any provision lags far behind the need. Any potential for work backs up due to lack of staffing, if staffing is ultimately provided over the long haul. Such provisions are more like a governmental agency employment and monetary ponzi scheme than professional organization. So far, overseeing TARP funds has been a disaster, largely made secret because of banking bailouts.

Meanwhile, banks in Britain are laying off staff while bringing malleable interns into the fold as underpaid and temporary junior staff, a move that could catch on in the United States: a cost-saving and control-oriented corporate move that has been all the rage outside of banking. British banks are counting on business picking up after the recession, rationalizing that young blood needs to be on tap for the occasion. Swiss-owned banks are notorious for this practice.

be an intern

be an intern

Corporate America has caused the economic crisis and now that they have been bailed out with taxpayer money, are seeking to continue to take advantage of people with the damage they have caused. Government seems to back up this thinking, which is ultimately destructive rather than constructive. Self-serving behavior continues unabated in government and corporate life. Now that truly is worldly wisdom at its’ worst. Anyone that chose to run personal finances in the same way wouldn’t last long, hence the benefits of corporate/governmental leveraging and power borrowed from the taxpayer.

Whether the American taxpayer can possibly benefit from all the confusion remains to be seen. ~ E. Manning

April 7, 2008

Bankers Reap What They Sow

Banks are being overwhelmed by the U.S. housing crisis. Recent federal law enacted by President Bush is supposed to prohibit bankers from making dramatic moves against home buying borrowers during the crisis. As a result, the predatory lending that bankers have engaged in has come full circle. As homeowners stop paying mortages, more banks are often looking the other way.

This new approach by bankers presents problems for being able to effectively measure the banking crisis as well as violating their own by-laws and internal economics. The poor real estate market presents a major adjustment problem for bankers as home value continue to drop. Bankers have began to rationalize that owning an empty house that vandals can destroy or having homeowners trash homes before they leave as a result of ill will is not desirable.

The reality is that bankers are dramatically behind on dealing with the crisis. As a result, a record number of borrowers are at least 90 days late (more…)

April 5, 2008

Banking Sees Downturn In Revenue Growth

For the first time in living memory, the U.S. commercial banking industry faces a decrease in growth and revenue, resulting in the need for draconian cuts. As additional proof of a flaring crisis early last year, the entire financial services sector, consisting mostly of commercial banks, quietly fielded job cuts that totaled a record 153,000. This is expected to be followed up with another 200,000 job losses in the banking industry alone and the effects from the subprime crisis set in. Considering that approximately 2 million jobs exist within the U.S. commercial banking industry, a job loss of 10% in one year is noteworthy.

Financial services companies collectively announced in January of 2008 that they were cutting 16,000 U.S. jobs and would remove 6,000 more positions in February. March figures at this date are unavailable. August of 2007 saw a peak bloodletting level of 36,000. Labor market analysts expect an increase in cuts this year as the economy worsens and further cost cutting measures are required. Despite huge losses in the double-digit billions, the industry is resisting significant layoffs. Larger layoffs in the securities industry are expected as well with the collapse of Bear Stearns. Huge layoffs in the tens of thousands from any one large company haven’t happened yet, but are expected at any time while the industry takes a close look at its internal health.

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