42 Replies to “Duck Season! Rabbit Season! Duck Season! Rabbit Season! BANKER Season!”

  1. A lot of vitriol, but kind of pointless.
    I never thought that I-Bankers would go from capitalist heroes to capitalist zeroes so fast.
    What can the governments do other than bail them out and slap on new regulations? Most of North America lives on credit cards anyway, and if the governments allow this to snowball, very many people are going to become very poor very fast because of the fundamental flaws of today’s credit based economy. Its not the bankers who should be shot – it is proponents of the credit system, which is flawed at a very basic level – spending money that you do not have is always going to be a tricky proposition in a world in which very little is guaranteed.

  3. Seems to me that the banks weren’t the most irresponsible here. Fannie Mae and Freddy Mac have much to answer for, as do the policies of the American government.
    What’s more, there were plenty of banks that conducted themselves with intelligence, and as a result are relatively unscathed by the credit scandal.

  4. Nah, bankers in general, and not just the Investment bankers that Captain Capitalism wants to shoot, are proponents of the credit system. But there are many other folk who deserve to be shot with them.

  6. What frustrates isn’t even the bailout (I’m not an American taxpayer) but the lack of accountability of those who caused it.
    I’d like to see a long line-up of “culprits” paraded into the public square and hung (for the really bad cases, tarred and feathered and pilloried first!) Bankers in the stocks would be a consolation to all of this.
    They all leave with the fortunes in commissions and bonuses for what amounts to reckless behaviour intact. The fault lies with management, lack of corporate governance or adequate government oversight, and especially the incestuous relationship between the boards, executives, regulators and lawmakers.
    I am a capitalist and I know what capitalism is NOT: That the businesses reap all the profit while the lowly taxpaying public takes all of the risk.
    What the ideological, corrupt and greedy American elites never get around to is to acknowledge that the government’s place is to regulate the excesses of the market. Even Adam Smith wrote of “market failures” and the need for government to ensure an orderly market. Both the bankers and the government failed.
    Don’t even get me going on the lack of oversight in the hedge fund industry…

  7. When I worked in the Netherlands, a few years ago, my senior colleagues were quite clear in their reading of Dutch history that a strong banking sector is inimical to industry and to trade, and to the economy in general. Henry Ford and Neville Shute Norway made the same point, in the 20th century, on the basis of their own experiences with their own companies.
    The growth of industry and trade is a good thing; that of the financial sector is not. There is entirely too much money to be made in buying and selling companies, and in looting them in various clever ways, for anyone’s good.

  8. the u.s. congress is responsible for not just allowing but forcing the bad paper to be written. it got worse as the bad paper was spun off to other financial institutions. it will not change. there is a little item out there called a derivitive. wait until these puppies start bouncing.

  9. To take a hymn out of the old lefty songbook- This is the privatization of profit and the socialization of risk and loss.
    I say let the bankers do whatever they want (short of lying fraud). They can keep whatever reward, but they also keep the loss. Let them work without a net and they will be careful.

  10. Oh, I forgot to assign some blame to the fraudulent bond rating agencies who compiled a steaming pile of s$$t and called it a triple-A diamond.
    If not for the collusion of the bond rating hacks, the pensions, mutual funds and insurance companies would not have been allowed to buy any of this crap as the laws prevent them from holding junk bonds.

  11. Imethisguy
    The problem with that is that banking isn’t like building crocket mallets. No one is relying on crocket mallets. The entire economy – ALL of it – relies on the banks (and insurance companies and other financials) to facilitate everything.
    From reserve funding, to expansions, to letters of credit, to bond issues, to guarantees… You can’t run an economy without liquidity. Liquidity is the financial system. They are not regular players in the economy. They are special cases and they need to be treated as such.
    On thing though, Freddie and Fannie should never have existed.

  13. I may be wrong here, but could a bank not be sued for discrimination if they denied a loan to a person with no hope of paying it off?

  14. I guess Mr. Obama is doing his bit for the Freddy – Fanny outfit by hiring their former financial guy, Mr. Johnson to run his show. Way to go Obama! Doing his bit for his backers.

  15. Kevin.
    ” …could a bank not be sued for discrimination if they denied a loan to a person with no hope of paying it off?”
    You are not far off the mark. Look at the HRCs and how they work.

  16. A modest proposal: The thing in Times Square that lowers the ball on new years eve is idle for 364 days per year. It could be outfitted with a horizontal beam, from which a half dozen nooses could hang. Every friday, that number of bankers could be raised high for all to see. It might take a few years to work through the inventory of deserving souls, but we’ve got time.

  18. Look to the Community Re-investment Act. It literally forces banks to make loans to those who couldn’t qualify for conventional loans and/or provide a 20% down.

  19. More economic stupidity has happened this past week than in my whole life as an American. They are all morons – the feds, the SEC, Bush, Paulson, Congress, bankers, hedge funds, the mortgage lenders, the morons that used their homes as ATM’s then walked away and want me to pay for their bailout. The Feds basically have nationalized Freddie, Fannie and AIG. When did we become a socialized country? Where’s the money to cover this? The idiots in Congress have a bailout plan that is more money spent. Who’s picking up that tab? Where’s that money coming from?
    Outside of the WOT, Bush has been the worst Republican ever which is why the Republicans have lost the trust of their base.
    My favorite stupidity of the week is the short selling ban. I short stupid bad companies as an offset to the money I’ve lost long on good companies in this market. The da*n banks, Freddie, Fannie and investment firms deserved being shorted into the ground. It’s called an efficient market. Legitimate, not naked, shorting wasn’t an issue.
    After these measures fail, not if but when, what have we got, a deflationary recession for decades like Japan or a inflationary recession as nasty as the Carter years? If the Dems win the WH all of the stupidity of socialists will be unleashed here unchecked. In all of the bluster this week no one in Congress mentioned cutting spending. Amazing.
    We live in the Age of Morons.

  20. “Shoot the bankers.”
    You can tell this guy is American; a Canadian would be jailed for this “threat” based on the complaint of one overly sensitive banker. Saskatchewan is a “zero-tolerance” province, meaning if anyone “feels” “threatened” by this post, the police *must* lay charges, no exceptions.
    The test of what constitutes a threat has shifted from “that which can reasonably be construed by the police as threatening” to “whatever the complainant says makes him/her feel threatened, no matter how ridiculous or non threatening”. Jason Cherniak wrote a surprisingly enlightening post on this point some time back.
    Just another example of how Section 13 of the Human Rights Act is comparatively trivial in the context of challenges to freedom of expression in Canada.

  21. It should be remembered that it was the Clinton Administration that enabled the poor, destitute and financially marginalized to qualify for mortgage funding through his so-called “every American should own a house Act” or some such thing. Notwithstanding that, I put the blame squarely on the lenders who obviously lack the moral integrity to conduct business in a proper manner.
    The lack of teaching of morals, ethics, religion etc. in our schools is probably the prime contributor to this ungodly mess.

  22. In a nutshell: the bankers take my mortgage, “package” it and sell it to an investment firm(Manulife for instance). Then I buy RRSP’s, Mutuals, Hedge Funds, or Group Pension/Saving Plans from these firms. In essense, I am investing in my OWN mortgage! I’m a tradesmen, so don’t look here for answers, but I know manure when I smell it.

  24. The way things are going with the rip offs in government and finance plus the hot culture war between the left and right sides of the political spectrum … I guarantee that there will be shooting soon enough.
    That, will no doubt, hurt some people’s feelings.
    And too f*cking bad! We are overdue for a good cleansing in the Western world.

  25. It is the investment bankers (stock brokerages in Canadian language), not the commercial bankers who are behind this mess.
    The fact that mortgage interest is deductible in the US is also a factor. It encourages stupid consumption.
    Canadian stock brokerage houses have already been bought out by Canada’s commercial banks.
    Anyway, the investment bankers doled out the crack cocaine of mortages by offering low introductory interest rates, then jacking up the rates so that payments were way higher in two years.
    The borrowers would not have qualified under any sensible rules of lending present in the Canadian system.
    Next time you hear a politician or a lefty jackass say that there’s a housing crisis and tosses out that dreaded phrase, the government should do something about it, just look at what’s happened as an object lesson.
    Until somebody has the balls to pass a law in the US stating that mortgage interest is NOT deductible, people will continue to live beyond their means until the next crisis comes along. I’m not betting on that change, but it seems to have worked in Canada.
    The US system is nothing like the solid banking system we have in Canada and should look north for a good role model.

  26. They’re talking of a bailout to the tune of a trillion dollars eh! Seems to me the Annual GNP of the entire US is 1.5 trillion — if my memory is correct. Maybe the Captain is onto something there — iyeeeee captain 🙂

  27. There is lots of blame to go around – the bankers are not alone.
    the politicians are culpable because they played politics in forcing the lenders to lend to high risk clients.
    The borrowers were foolish in applying for credit that they could not afford – ignorance is not an excuse.

  28. set you free – the real problem with US mortgages was when they morphed out of the neighborhood savings and loan bank and became “instruments” that got bundled, good and bad loans together, and sold off to God knows where. The liabilities could no longer be tracked. All banking commonsense was thrown out the window.
    Deducting a mortgage payment puts lots more folks in homes. Homeowners are a stabilizing force in a democracy. They have an investment in the system. You can see it also as a middle class entitlement for better or worse, and, there are worse entitlements to be found. I haven’t a problem with that if they and the banks are responsible.
    The new economic reality of the gov’t assuming all of this risk is horrifying. Where’s the money going to come from? 86 million guaranteed to AIG when no one would buy them at any price???? That could be the first installment into a very deep money pit. And, that’s just one commitment. Both parties are idiots.

  29. Old White Guy has nailed it. The economy will only bend so far. When the hedge funds start collapsing with their over-leveraged derivatives, you don’t want to be standing in front of the fan. I’d get out of the building because it won’t be pretty.

  30. Being sarcastically cynical here I’m friggin surprised that the blame hasn’t been laid at the feet of a union or two.
    It must be nice to have that insurance to have the government bail you out when investments go bad or decisions are wrong.
    Now if I can figure out how to have the economy’s success/failure hinge on my bi-weekly pay cheque and maybe do some willy nilly investments on 6-49 tickets and not make my financial obligations, eventually I should be bailed out.
    As the movie “The Corporation” and I’m paraphrasing here, Corporations are for one purpose and that is to make money by any means.
    The”Corporations” won this round because they got somebody else to dig into their pockets to clean up their mess.

  31. Lack of oversight, failure to ask questions, probably money being paid to regulators AND finally this is what happens when you play with matches (debt)
    Now Senator Dodd was on CNN and painted a picture of real scare the bejusus out of everybody meeting held by Bernake and Paulson. He refused to go into detail, so it was either Dodd being a little girl or there was truely something scarey about to happen.
    As much as I would like to believe the former, I think it was the latter.
    Its the bonuses that these guys made on that stuff that gets me, and I doubt you can just go and target that income…or assign proper blame. The blame should be at the top, but they will say they didnt know, were lied to etc etc. It will never get through.
    There is a good argument for there to be a significant tax at that level of income that is truely astronomical, the 1,000,000 a year or something…..but hey what do I know. There just needs to be proper oversight and the courage to use the tools at hand

  32. Here’s a thought. First, eliminate any law requiring anyone to lend money in any way shape or form — mortgage, personal loan, whatever to anyone. Two, require financial officers to carry liability/malpractice insurance the same as doctors, engineers etc. Three, when they screw up royally, negligently and the patient dies, oops I mean the bridge collapses, oh sorry, I mean the financial house of cards collapses — sue the pants off them! And I don’t mean their companies and shareholders, I mean them personally.

  33. Has Captain Capitalism lost his marbles? Access to capital is the cornerstone of capitalism.
    He used to be so good during ADSCAM. Now he blames bankers instead of the real culprits, the politicians.

  34. “The lack of teaching of morals, ethics, religion etc. in our schools is probably the prime contributor to this ungodly mess.”
    It would be hard for public schools to seriously teach ethics, considering that public education is founded on three very unethical things: (1) taxes; (2) compulsory attendance; (3) a monopoly (unless you pay extra).

  35. There are a lot of points that are correct, and some that are very wrong in this thread. I tried to post a (lengthy) explanation of this last week, but for some reason, “Lance” decided not to allow my post through, and didn’t even have the courtesy to email to explain why. Thanks, Lance.
    Starting at the top:
    rabbit: You’re right, Fanny and Freddy do share some – but not most – of the blame, and their former chief executives should be headed off to prison, not multi-millionaire retirements. If they were in, say, the cold cut business, and had conducted it in the way they did the mortgage business, there would be a lot more than 17 deaths.
    Warwick: Damn straight. You try to sell a couple of ounces of white powder to a guy who wants to buy it because his life is so empty this is the only joy he can find, and the gov’t will seize your house, your car, your bank account, and worst, all your Titleist Pro V-1’s. Where are the f***ing RICO indictments against these Wall St. guys? Why aren’t their Hampton retreats and Greenwich mansions being seized (digression: some Wall St. guys have already had their Hampton places repo’d. Hahahahaha.. oh, my stomach hurts.) and all their boni (is that the plural of bonus?) being forfeited to help pay for this obscene bill? (Oh, and what’s a “crocket mallet”? Is this used to club the guy from Miami Vice?)
    Other Kevin: fair question; Tom gives an accurate answer. It’s only not discrimination if you’re white, working class, and trying to move up in the world.
    Penny: “Age of Morons” – I may steal that as a book title. But I’ll be sure to include a ton of the public, who thought they could buy 10 condos in Miami with no money down, interest only payments, and retire in five years without ever doing a single productive thing.
    Malcolm: Don’t disagree, but the worst culprits were independent mortgage brokers like Countrywide. In 2006, Countrywide underwrote a staggering 20% of ALL mortgages in the US. They had hit on the “perfect” formula; underwrite anybody with a pulse (no income, no job, no credit check, no documentation), and once you had $x million of mortgages, create a new CDO, and sell that off, reducing your exposure to default to the magic number “Zero”. Skim a point or two on the mortgage, a couple of points on the CDO. Rinse and repeat. Former CEO Angelo Mozilo should be in jail, not enjoying his millions.
    azphiks: You’re kinda right, but mostly not. Some mutual funds run by financial institutions contain their stocks, but then, by definition, they have to. Royal Bank is Canada’s largest bank. If you buy Royal’s “Canadian Index” fund, it HAS to contain Royal Bank; it’s the largest bank in the TSX index. But if you buy Royal’s “Oil & Gas” fund, it doesn’t contain one cent of any business owned or controlled by Royal. And for pity’s sake, you don’t buy an “RRSP”; you buy some RRSP-eligible investment. Cripes, spend a little more on the internet or at your library, and find out about “self-directed RRSP’s”; you’ll thank yourself ten years into your retirement.
    setyoufree: Mortgage interest deductability is a non-issue; it didn’t cause the problems. And, as I noted above, it wasn’t the investment bankers who sold those mortgages; it was independent firms like Countrywide, and bankers like WaMu. But I agree, Canada’s banking system, where the bankers have their own money at risk in your mortgage, is more stable.
    Orlin: Nice try; you’re only off by a factor of 10. US GDP is $14 trillion for last year.
    Gord: Don’t really disagree, but I ask you: if you had saved up 10-20% for a downpayment, and then someone came along and offered you a mortgage for zero down, and a low rate for 5 years, wouldn’t you have accepted the deal? I would have, but I would have stuck the extra dough into the market somewhere (figuring I could get a better return than the 3-4% interest charged). The problem was a lot of people took that money, and spent it on a new SUV or whatever instead. But making money off the financial ignorance of both Americans and Canadians is nothing new. I remember a guy from the early 90’s, Raymond Aaron, who specialized in telling you how to pick up distressed real estate. His advice “Give them their price; make them take your terms” was fully based on the premise that to most people, the term “time value of money” is as incomprehensible
    as “Quarks evolved out of a classification of hadrons which grouped together particles with isospin and strangeness using a unitary symmetry derived from current algebra”. Say someone wanted $200,000 for their house. You were supposed to say “Sure, I’ll give you $200,000 – here’s how: a $150,000 vendor-take-back mortgage with zero down, a 30-yr amortization, and no payments for the first three months (to give you time to fix the place up and rent it out), and a $50,000 balloon payment due in seven years.” From your point of view, the rental payments were supposed to cover the mortgage payments, maintenance, and taxes, and in seven years, you were either supposed to sell the place or refi to pay off the balloon. Assuming 4% price appreciation per year, the place should now be worth $260,000, and you’d have paid off a few K from the principal. If you’d jacked up the rents by the max allowable each year – another step in his plan – you’d be putting tons of dollars in your pocket. He used to sell out “seminars” across Canada week after week. Prediction: give it a few months, and you’ll see the re-emergence of similar scams, as job losses mount (and distressed sellers increase). The difference is at the beginning – where you really can make a lot of money doing this if you know a good reno man – the scam artists will keep it to themselves. Only after all the easy pickings are gone will you see the ads in the papers.
    Sorry to be so long-winded, but after a week like this in the markets, I had to vent!

  36. Regulations were in place to prevent this mess. They were not enforced by those responsible and then they were ultimately overridden by those responsible, the US’s political masters.
    Bankers can rightly be blamed for eating the poison apple, but it was the US government nurtured the tree and put the fruit on sale.

  37. So wait, the government is at fault for not regulating the free market?
    Or should we let the free market dispose off these jackasses, because if the free market is allowed to run its course, there will be hell to pay globally, because of the stupidity of a few. If AIG goes under, so does the insurance of thousands of banks globally, and we all know how that will pan out.
    Wait till the credit crunch goes personal on your credit card.
    A lack of government regulation is blamed by some, but governmnt regulations interfere in the free market, and we all know where captain capitalism and the rest stand on that. DareIsay that too much laissez-faire for a few is going to hurt many.

  39. The basis for most of what is going down over the past 15 or so years has been greed. Plain and simple greed – and now those investors who are going to be hurt the most seem to feel that although they have made what has now turned out to be bad investments, they should now be bailed out by the government(s).
    The rewards for the poor shmuks who have chosen to live within their means is zero. In fact these same shmuks get to contribute to bailing out those who have chosen to not live within their means.
    There are one or two Canadian Banks that have apparently been doing not to bad while others have done a lousy job of decision making. They are all put in the mix together and the question becomes – why should those who have done a reasonable job be forced to pay for the lousy decisions made by others. The ABCP bailout is apparently going forward as the courts have rejected an appeal.
    Why now should taxpayers,generally, be forced to pick up the tab for those(a minority) who have made choices to go for a very large return on investment combined with 0 down payments to buy, buy, buy for consumer goods. Yet it is happening.
    While the banks, corporations and the government have been making it increasingly attractive for the general public to live far beyond their means – those who choose to do so must also bear more than a little responsibility. Now there is an expectation that the gov’t must bail them out.

  40. I never heard of the fannie freddie duo until the mtg bubble burst.
    sounds like something started in a garage converted to an office 20 yrs ago by someone trying their hand at mortgage brokering.
    or is it one of those warm fuzzy home-and-hearth name things congered up by the marketing department of an existing big player?
    RCGZ cites the forbidden fruit story. I like that. very apt. a trillion dollaroonies finances a LOT of finger pointing.
    further to garyinwinnipeg: the premise of ‘the corporation’ is that they act like sociopaths and then the movie unfolds in point form. p.s., just how in gawds name *can* you privatize rain water???

  42. Frankly I’m amazed Congressmen and Senators aren’t being strung up by their constituents. It says a lot when a small group of diabolically greedy power mongers make bets (derivatives) on the market, lose TRILLIONS along with the money creation of handing out mortgages to those they know will not be able to pay and when the whole thing unravels it is the TAX PAYER, forced by Congressional decree, who bails them out. The derivatives debts are an illusion. They are a bubble based on increased mortgage lending. When it went the other way these investment bubbles are simply showing negatives where once they showed profits. They don’t exist!!
    Of all the times in recent history for the populations of the world to rise up and take back their economies from the greed and patently illegal manipulations of the BANKS, NOW is the time. The dumbed down sheeple are blissfully unaware of how things actually work and pray that their Congressmen and the “FED” will “save” them from a financial meltdown. Of all the times to return to the good old days of the guillotine and its singularly brilliant way of teaching honesty and humility not just to the bankers but to the morons in government who have been bought and paid for – NOW is the time. It will pass. The “fix” will fail as the damage is just too enormous even for the FED’s printing presses to fix. Our governments will turn to the same bankers who have created this mess and ask to be saved once again and each time this happens the population of the world comes closer to true enslavement.
    Watch the best explanation of the greed of bankers and how easy it would be for our governments to fix and stabilize things if they only understood what they are doing by working for the banks and not you and me or the Constitutions and safety checks all of our societies are now ignoring.
    http://www.brasschecktv.com/page/135.html

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