Bank con exposed on MSNBC!

reply to post by CookieMonster09


Some people just refuse to get it.

1. Banks have assets - receivables in the form of loan assets, liquid cash assets, investments, ownership in real estate, and fixed assets such as computers, equipment, etc.

None of these are hard assets, they are all liquid assets, all nothing more than promises to pay. The computers and actual real estate are minuscule compared to the liabilities. Loans on real estate will require considerable legal action, which is extremely costly, and under this last downturn, will result in large losses.

Not facing the reality is as ridiculous as claiming the banks were forced to take the loans. They took the money gladly until restrictions in exec bonuses were added. Then they borrowed at higher rates, at the cost of their investors to insure their bonuses.

Wake up people.

reply to post by CookieMonster09

My guess is that these Eastern European banks got caught holding bundles of investments in toxic sub-prime real estate loans that went bust. That, or they had very lax lending standards when investing in their own backyard.

I repeat: these are Western European banks.

(By the way, the Glass-Steagall Act applied only to American banks, not European.)

Of course it did. Yet it was the repeal of that US law that opened the door to the irresponsible lending practices which in turn led to American toxic assets being sold on around the world. This meant the US sub-prime fiasco seriously weakened banks in several other countries, with some requiring massive government intervention just to survive.

The fact that so many US banks have gone down (with more added weekly) is just more evidence of what I have been saying.

None of these are hard assets, they are all liquid assets, all nothing more than promises to pay. The computers and actual real estate are minuscule compared to the liabilities.

Unless you plan on changing GAAP - Generally Accepted Accounting Principles - assets are assets. You can't tell me that the loan assets of the bank don't count as assets. I can assure you that a loan asset - notarized and signed by a borrower - is fully enforceable in a court of law. It is most definitely an asset. And, it is no different from any other contract utilized in business for the repayment of debt.

Loans on real estate will require considerable legal action, which is extremely costly, and under this last downturn, will result in large losses.

Only in the event of default does a loan require considerable legal action. Nowadays, banks hire Loan Workout Officers that work with borrowers to take a short sale, a deed in lieu of foreclosure, etc. - for the purpose of avoiding costly foreclosure litigation.

As a percentage of assets, most loan losses are small. The loan losses are growing - naturally due to the recession - but there are still plenty of AAA borrowers that are paying their mortgage on time.

In the event of a bank failure, the FDIC takes on the losses. The acquiring banks gets the deposits and well-performing loans.

Banking, next to the oil companies, has historically been one of the most profitable businesses in the world.

Not facing the reality is as ridiculous as claiming the banks were forced to take the loans. They took the money gladly until restrictions in exec bonuses were added.

TARP has already been repaid - with interest mind you, by most banks. Moot point. And yes, some banks, such as Chase, didn't need TARP funds and were heavy handedly pressured by the Treasury Secretary to accept the TARP funds for the "safety of the banking system" (that is, to regain trust and credibility in the banking system as a whole).

I repeat: these are Western European banks.

or

This is taken from a study on banks with exposure in Eastern Europe:

You tell me. Does it matter?

Yet it was the repeal of that US law that opened the door to the irresponsible lending practices which in turn led to American toxic assets being sold on around the world. This meant the US sub-prime fiasco seriously weakened banks in several other countries, with some requiring massive government intervention just to survive.

Agreed. In fact, nationalization of the banking system is not a bad idea. I don't have a problem if my local bank started operating more like the Dept. of Motor Vehicles.

reply to post by iamoverrated


Thanks for answering the question - that's a great answer. But it begs the question - what are we backing up our currency with right now if it's not with something tangible like gold? Promisory notes? IOUs? Credit (please don't tell me it's credit to another country like China). I thought the U.S. had gold out the wazoo stored in places like Fort Knox.

[edit on 10-4-2010 by sos37]

reply to post by sos37


Um if you read Professor Jack Weatherford's book MONEY -- published a few years back -- he details how paper money was invented in China. How was paper money enforced? By war!

That's how the U.S. works as well -- in fact any standardized math-based currency has relied on expanding territory to collect booty.

Well the booty goes to the elite of course -- while the poor get massacred.

Originally posted by CookieMonster09

The madness started when the politicians decided that anyone and everyone was entitled to the American dream of owning one's own house. The pressure was put on the banks to lessen lending standards - Hence the madness of sub-prime loans, interest only loans, no down payment loans, and all the rest. This has stopped now for some time, and it's much more difficult to obtain a loan without the proper documentation and a 20% down payment. We have swung in the other direction - where lending is so tight that it is crippling the economy.

True, however the availability of free to low interest credit by the Federal Reserve gives banks the incentive to loan such money out. Think banks were truly against such legislation? Why would they if they were guaranteed bail by public funds and a Fed that can print bailout money and distribute when needed and without prior warning to Congress?

I'm shocked someone hasn't picked up a riffle and started taking these people out.

Originally posted by Misoir
That's exactly why I always watch MSNBC. Ratigan is not an Obama lapdog, he is very strongly against corporations and if that means being against Obama he will expose it if he can.

Great find, S/F

Does this mean this corporation will get in serious trouble?

Ratigan shorted the market beliving it world go down instead it went up and he lost loads of money, and now he is pissed. If he can start a run on the banks and the markets go south he can recoup some of his cash.

reply to post by CookieMonster09


I don't have to change GAAP, they already categorize different types of assets differently. A promisary note is considered different from hard assets like property. Look it up if you don't want to believe me.

Currently, loan losses are large, which is why so many banks are going bankrupt.

Banking's recent success is primarily due to poorly written laws under republican leadership that has lead to widespread white collar crime.

All that success is due to special privileges granted by free market economics that has robbed the middle class.

TARP was repaid by borrowing money from other sources at a higher interest rate.

All of this was so that the execs could still grant themselves their huge, undeserved bonuses.

Time to take the beast down.

Disgusting!!!!!

Now I know what waterboarding should be used for. Alan Greenspan needs to be arrested & have bamboo shoved under his fingernails until he cries like a little girl & begs for his mommy.

Foreclosures need to stop NOW! I think that anyone who has had their home taken from them should charge the gov't & Fed Reserve with Grand Theft.

Everyone in our gov't needs to stand up & voice their disgust at this or start running to find a place to hide. The villagers with their flaming torches & pitchforks are coming & we are PISSED!!!

There is great info in this thread so it stands on it's own for content.

However, it's primary reason for existence is based on a house of cards,

That MSNBC rant did not even make the footnotes, not on MSNBC, or any other News or Financial publication or blog. It's really all old news anyway and we know it was a contributing factor to the # we are in today.

As for Greenspan? - Guilty as charged, but.... we also already know that.

Originally posted by hawkiye

Originally posted by mryanbrown
MSM was in on it.

Ever seen Prestige? The Tesla / Magic movie.

The elaborate trick has been performed. But their EGO is having them tell us the magic trick."See how we fooled you."

Informing us, is the setup for the next trick. "See how we let you think you took back government? The guys in power who were on your side and against us, were working for us!"

I was thinking perhaps they are ready to collapse the system and introduce thier new plan to save us all and this is why they are now allowing it to be exposed because nothing gets on mainstream news that isn't planned since they own media also.

MSNBC was established by NBC executive Tom Rogers.
Rogers recently served as the Senior Operating Executive for media and entertainment for Cerberus Capital Management.
Cerberus Capital Management is perhaps best known for two big gambles that went spectacularly wrong: Its acquisitions of Chrysler Corp. and GMAC, both of which ultimately required huge government bailouts and lost billions for Cerberus and its partners.

It smells like corporate war to me

I don't have to change GAAP, they already categorize different types of assets differently. A promisary note is considered different from hard assets like property. Look it up if you don't want to believe me.

No, you said that a bank cannot count a loan asset as an asset. That line of thinking is patently false, and totally 100% against generally accepted accounting principles (GAAP).

A signed contract for repayment of debt - signed by a borrower and notarized by a legal notary - is an asset any way you look at it. Just because you don't think it "should be", doesn't mean it's true.

As far as "different categories of assets", an asset is an asset. On the balance sheet of any bank, they will break down what the different types of assets are. They might be property, cash, investments, equipment, etc. It doesn't matter. Because at the end of the column is a line called "Total Assets". And these are the Total Assets of the bank. Period.

Yes, property is considered a hard asset because it is tangible. A promissory note, however, is still considered an asset just like property or real estate. Cash is an asset. Investments in the stock market are assets.

Just because an asset is in the form of a legal contract, doesn't negate its validity as an asset.

You can't show preferential treatment to some assets and not others. Some assets have different features - yes, agreed. For example, real estate is highly illiquid. Cash is not. It doesn't matter. They are both assets.

To suggest that a bank doesn't have any assets on their books is totally ludicrous. Banks have assets. A large portion of which are typically loan assets. That's their business - lending money. That's what they do. That would be like penalizing a construction company for holding too many equipment assets on their books. Similarly, you can't penalize a bank for holding too many loan assets. (Talk about bias!)

Banking's recent success is primarily due to poorly written laws under republican leadership that has lead to widespread white collar crime.

Recent success? Banks are failing left and right. What recent success are you referring to?

TARP was repaid by borrowing money from other sources at a higher interest rate.

That's debatable. Frankly, no one knows where and how the TARP funds were utilized. You could just as easily state that those banks that showed a profit - Chase, for example - repaid TARP out of their profits, not from taking on additional debt.

[edit on 11-4-2010 by CookieMonster09]

reply to post by CookieMonster09


NO, I said they are not hard assets, they are liquid assets, and yes they are treated differently in accounting.

Banks have very little capital assets, like other types of businesses like retail or manufacturing.

This link explains this.

smallbusiness.dnb.com...

Banks currently aren't doing very well, but they are still paying out those huge bonuses, and they just finished going through a period of high success, followed by this collapse, where the execs are made out like the bandits they are.

Yes, I do know where they got the money to pay back TARP, it was reported in the news.

When banks are the most profitable of businesses, something is wrong, that is a clear clear sign that something is very wrong.

NO, I said they are not hard assets, they are liquid assets, and yes they are treated differently in accounting. Banks have very little capital assets, like other types of businesses like retail or manufacturing.

This is what you stated earlier:

None of these are hard assets, they are all liquid assets, all nothing more than promises to pay.

A liquid asset is something that can be exchanged for value in a short period of time. Cash is a perfect example of a liquid asset. Real estate is illiquid - The cash value from real estate cannot be liquidated in a short period of time because you have to actually sell the real estate to realize the cash value.

Banks have loan contracts as assets on their books. These are legal contracts, signed by borrowers, and notarized by a legal notary. These loan contracts are upheld in courts of law.

I would argue as to their liquidity. A loan contract with a AAA borrower is probably liquid because it can be sold fairly easily. Loan contracts with delinquent borrowers would be generally illiquid, because there is less of a market for loan contracts with a high likelihood of default. Also, the underlying collateral of these contracts is generally weak - Most loans held by banks are backed by collateral in the form of real estate.

Yes, of course, banks don't have as many hard assets (equipment, machinery, etc.) as manufacturers. That doesn't mean that they don't have assets!

It doesn't matter if the asset is liquid or a hard asset. By accounting standards, a loan asset is still an asset. Why? Because it pays interest, and the loan is a legal contract upheld by the courts. The banks also hold a first lien interest in the collateral for the vast majority of these loan contracts. If the borrower defaults on the contract, the bank is entitled to take possession of the collateral.

To suggest that loan contracts should be thrown out the door - and thus the assets of the bank "don't count" - is patently ridiculous.

Yes, I do know where they got the money to pay back TARP, it was reported in the news.

Fine. Cite your sources.

When banks are the most profitable of businesses, something is wrong, that is a clear clear sign that something is very wrong.

Opinion.

Banks play a critical role in the economy, by supplying entrepreneurs and established businesses with the capital necessary to hire workers, build new plants, expand inventory, buy equipment, etc.

Just ask any business owner whether a good working relationship with their bank is important or not.

Banks currently aren't doing very well, but they are still paying out those huge bonuses, and they just finished going through a period of high success, followed by this collapse, where the execs are made out like the bandits they are.

Wall Street banks (such as Goldman Sachs) are not the same as brick and mortar retail banks in your hometown. Two completely different businesses.

I can assure you that, given the slowdown in the real estate market, and the ensuing losses at most small and mid-size retail banks, that "huge" bonuses are not being paid to Main Street bank executives. Most retail banks are in distress. Payrolls have been cut, as have bonuses. Exceptions? Possible. Not likely. Most of these small banks are trying to survive the crisis and avoid being taken over by the FDIC.

Maybe on Wall Street there are huge bonuses being paid. But definitely not on Main Street. Direct your anger accordingly.

The assets held by banks not not considered capital assets, which means their values are not backed by hard assets. There is a clear difference.

You cite your sources that the TARP loans were forced on these banks, and I will cite my sources that prove you wrong, since you made the claim first.

When the people connecting the investment funds to the entrepreneur are making more money than the people carrying out the enterprise, that is a big problem. Eventually, all the money is going to provide investment money, and none of the money is going to actually create anything. Thus you get these huge bubbles that we have been experiencing since Newt and the neocons put this arrangement into place. Same thin happened in the twenties.

Wall street got bailed out, and they are still paying out ridiculous bonuses. It is criminal.

The assets held by banks not not considered capital assets, which means their values are not backed by hard assets. There is a clear difference.

Loan contracts for repayment of debt are backed by a first lien position in hard assets. The collateral held by the bank is a hard asset: real estate, for example. Large banks hold first lien positions in literally tens of thousands of real estate properties, hard asset equipment, inventory, etc.

When you buy a house, the bank that provides the financing places a first lien position on the property.

To say that the assets held by banks are not backed by hard assets is patently false. Real estate is a hard asset. It is also patently false to make a claim that banks don't have assets. They most certainly do.

Basically, what you are saying is that you want to throw out contract law, and GAAP. Sorry, but that may be the fantasy world you live in, but it's not the real world. Banks have assets. Period.

You cite your sources that the TARP loans were forced on these banks, and I will cite my sources that prove you wrong, since you made the claim first.

Ask Jamie Dimon, CEO of Chase.

dealbook.blogs.nytimes.com...

He is quoted widely as stating that he regrets accepting the TARP funds, and that Chase never really needed the funds anyway. Read the book, "Too Big to Fail", by Andrew Ross Sorkin. He goes into quite a bit of detail about the TARP funds and how these funds were forced upon a number of banks that didn't need the money but were threatened and intimidated to take the funds by Treasury Secretary Hank Paulson. Story goes, Paulson rounded up all the CEO's of the 9 largest banks, and basically said "sign the paperwork for the TARP funds or else". Typical of Paulson. He pulled a similar ultimatum on Congress.

Some banks needed the funds. Yes, agreed. But not all. And the manner in which they were originally doled out was pretty intimidating. Dimon said it's kind of odd to stand up against the Treasury Secretary under those circumstances.

When the people connecting the investment funds to the entrepreneur are making more money than the people carrying out the enterprise, that is a big problem.

Nonsense. Business owners profit greatly from good banking relationships. Ask any successful entrepreneur.

Eventually, all the money is going to provide investment money, and none of the money is going to actually create anything.

If the business owner overextends himself, then he loses and the bank loses. Banks take huge losses when loans default. What banks want is a win-win situation with their borrower. They are not in the repossession business. First, it's bad publicity. Secondly, it's not profitable. Thirdly, it's very expensive. Banks want businesses to succeed, not fail. It's much more profitable for the bank if a business grows and expands than if it fails.

[edit on 11-4-2010 by CookieMonster09]

reply to post by CookieMonster09


Loan contracts are still NOT capital assets.

A blog from a CEO isn't reliable evidence, nothing but his opinion, which is obviously might be a bit biased in his own favor. His own words, however demonstrate that his claims are not the truth.

“I personally believe that the government acted bravely and boldly in a very difficult environment,” he said.

But Mr. Dimon also argued that the TARP has since morphed into something more “painful.”

The TARP comes with limits on executive compensation, which have many banks already angling to exit the program. Indeed, because it took part in the TARP, JPMorgan has to give its shareholders a nonbinding vote Tuesday on executive pay.

Here is another article that paints a more accurate Picture.

forum.prisonplanet.com...

Last week was a milestone for US treasury secretary Tim Geithner. He finally got to play the hero. The morning of June 9, Treasury notified 10 financial institutions, including JPMorgan Chase, Goldman Sachs, Morgan Stanley, US Bancorp, and Capital One Financial, that they were "eligible to complete the repayment process" for the capital they received under the Troubled Assets Recovery Program (TARP). In other words, they would be allowed to pay back $68.3 billion. Even though they really owe $229.7 billion. That we know of. But Geithner didn't mention that last bit. Instead, he professed that "these repayments are an encouraging sign of financial repair," with the caveat that "we still have work to do."

The "we" he refers to is himself and Wall Street, both of whom are getting a good deal out of this fractional payback scheme. The agreement frees the banks from restrictions on executive pay or, worse, their general practices, but it still allows them to keep the cash they've received through non-TARP venues like the FDIC Temporary Liquidity Guarantee Program- or the massive sums the banks recovered from AIG (thanks to its own federal bailout) to cover their losses on credit derivatives. Not to mention any cash provided by the mother of all cheap loan programs-the Federal Reserve.

Geithner, for his part, gets to convey the message that things are looking up. "These repayments follow a period in which many banks have successfully raised equity capital from private investors," stated the press release. "Also, for the first time in many months, these banks have issued long-term debt that is not guaranteed by the government."

Well, of course certain banks have raised some money on their own: Firms have a tendency to look a whole lot better when they're backed by government capital and have cheap federal loans sitting on their books. Private investors notice that sort of thing. But more troubling than the misplaced praise is the fine print that accompanied the announcement: "These repayments," the department noted, "help to reduce Treasury's borrowing and national debt. The repayments also increase Treasury's cushion to respond to any future financial instability that might otherwise jeopardize economic recovery."

This statement belies some accounting sleight of hand.

The executives of these companies are more than willing to pay higher interest rates to the detriment of their investors, in order to protect their own bonuses.

www.time.com...

Paying Back TARP: Good for Banks, Bad for Investors?

Read more: www.time.com...

Anyway you slice, the taxpayers still wind up financing their grossly over sized bonuses.

It is clear you don't care about the truth, you just want to spread propaganda.

Business owners do profit from good banking relationships, but the current setup is everything but good for businesses outside of the financial sector which is currently taking far too big of a bite out of our economy, grabbing everything they can get their hands on.

We, human beings, are the ones who give value to things, this includes money, silver, gold whatever.

This is all about principles and people that do not have any.